It is significant to note that a statutory demand is technically not a court proceeding and should be permitted. Any hearing conducted from April 7, 2020 to May 4, 2020 will be conducted through electronic means unless otherwise directed by Court. Contact expert statutory demand solicitors now. A Cease and Desist will also generally assert that the sender would take legal action if the acts alleged of continue beyond the deadline set. In this regard, SMEs should engage their banks to explore options made available by the individual banks (if any) for example, deferment of principal repayment with a waiver of late charges. * Before filing a Bankruptcy Application, a creditor will issue a notice known as a Statutory Demand, demanding payment from a debtor. Singapore |  This includes guidance on when a statutory demand may be used against a company or an individual, how to draft and serve a statutory demand, the potential consequences of serving a statutory demand and the requirements for presenting a bankruptcy petition or winding-up petition. However it is possible that non-contractual claims may arise from the breach of contractual obligations. Global | A statutory demand against a company is usually a precursor to a winding up application from the creditor. A statutory demand is essentially a written notice from a creditor to a debtor, informing the debtor that bankruptcy proceedings may be initiated if payment is not made. Rollover of working capital facilities which tend to be rolled over annually come to mind. On July 14, 2020, US President Donald Trump issued Executive Order 13936 and signed into law the Hong Kong Autonomy Act 2020. Where relevant to the Singapore context, the blog also discusses legal news from other parts of the world, particularly the Commonwealth jurisdictions. In cases where the statutory demand is served on or after 20 April 2020, the statutory period for debtors to respond to the demands will also be extended from 21 days to 6 months. Any Scheduled Contract entered into before March 25, 2020 with contractual obligations to be performed on or after February 1, 2020 will be subject to the Temporary Measures. Assuming the contract is a Scheduled Contract and the timing of performance of such contract falls within the abovementioned criteria, the party claiming that its inability to perform its contractual obligations is to a material extent caused by a COVID-19 event must issue a notification for relief on the counterparty(ies) to the contract and any guarantor of its obligations under the Scheduled Contract. The time period to satisfy or set aside a statutory demand is increased from 21 days to 6 months. The hearing of the application will usually be held within two weeks from the date of filing the application. December 2, 2020. A creditor has served a statutory demand on the company for a sum of S$15,000 or above, and the company fails to pay the sum, or to secure or compound it to the creditor’s reasonable satisfaction, 3 weeks from the date that the demand was served; Lengthening the statutory period to respond to demands from creditors; Directors will be temporarily relieved from their obligations to prevent their companies trading while insolvent if the debts are incurred in the company’s ordinary course of business. Where a Statutory Demand is served on an individual after the commencement of the Act and during the prescribed period, the debt would have to be for at least $60,000 and would have to remain unsatisfied for at least 6 months after the Statutory Demand is served. If the application to set aside the Statutory Demand is dismissed by the … Read more at The Business Times. mtG�;`cUh�P����!ñ����ݹi�Q1�k�'Q �W��c����Br�I���¤�/別�Pv{��1rh ��^0��%#q��h��e�2Ȗ�pm�� ���τ�W]�%6: �dH�8�س�S-���D[z�C�:0q"��.�aUe�[x%R�WR���QF�&øwRf��Pcn��#�|��ރ���(�BNy�S��ޓ �������hb�ĕ�V In which case how far back does one go? If a debtor wishes to set aside the Statutory Demand served on him, an application to set aside the Statutory Demand must be filed within 14 days (or if the Statutory Demand was served outside Singapore, within 21 days) from the date of service of the Statutory Demand. Such matters include certain criminal matters, applications for urgent injunctions, applications for the arrest or release of a vessel, applications under the Building and Construction Security of Payment Act and requests for urgent hearings for matters assessed to be urgent. MAS has thus recommended that SMEs take into account any late charges and higher interest, and the possibility that they may end up paying more in the future. You can make a statutory demand to ask for payment of a debt from an individual or company. Introduction Bankruptcy – the “financial death” of a person – brings with it numerous obligations and disabilities on the part of the bankrupt, as provided for under the Bankruptcy Act, Cap 20 (the “BA”). ! *�]����(�����~]V�@Q���>��s�ҹ���:���2R�7D��#��. The monetary threshold to petition for an insolvency of a business is increased from S$10,000 to S$100,000. The failure to pay the Judgment sum as set out in the statutory demand gives rise to a statutory presumption under the Bankruptcy Act (Cap. %PDF-1.6 %���� When either a company or an individual is served with a statutory demand, the warning bells should be ringing, as failure to act on that demand within 21 days (for debtors based in the jurisdiction of England and Wales) could lead to winding-up and bankruptcy proceedings being commenced against that company or individual, respectively. The COVID-19 Act comes at an appropriate time when businesses in Singapore are struggling to make ends meet, from cash flow to keeping staff. x��;��{�a��g2�F�Qi�$���+�N�*�X �H4�Y����4��Rs�V��Q��D����oŢ˯؝��-^cs����*.�{(,�����!�"�� T�uh@ZІ�Ѕ�a C� Y!O 426 0 obj <> endobj Now that my company cannot pay, will the revised 6 months’ threshold be applicable? #��a�Y����d��j It is possible that even after the end of the COVID-19 pandemic, such alternative arrangements may become a permanent platform for meetings heralding the “new normal” for corporate meetings. The monetary threshold for the Debt Repayment Scheme (a pre-bankruptcy scheme administered by the Official Assignee for the debtor to repay debts over a period of time not exceeding five years will be increased from S$100,000 to S$250,000. A creditor can only file a bankruptcy application against you if you do not comply with a Statutory Demand (that has been served on you to demand for payment). We provide services and advice on debt recovery to individuals and business of all sizes. TRIYARDS Holdings has received a statutory demand from OCBC, dated Sept 5, for about US$11.57 million and 1.13 billion Vietnamese dong (S$67,310), the troubled marine operator announced on Friday after market close. At the end of the prescribed period, those contractual obligations will continue unabated. The Singapore government has introduced the COVID-19 (Temporary Measures) Act 2020 (the COVID-19 Act) with the objective of: These temporary measures (the Temporary Measures) are initially intended to last for six months (the prescribed period) and may be extended for up to 12 months. However, unlike meetings, in order to ensure cases are conducted fairly, not all court proceedings will be conducted remotely. The monetary threshold to apply for the bankruptcy of an individual will be increased from S$15,000 to S$60,000. At Francis Wilks & Jones, we have all the statutory demand experience needed to deal with any type of statutory demand problem. Was the Scheduled Contract executed before March 25, 2020 with obligations to be performed on or after February 1, 2020? Significantly, the banks’ contractual rights to charge fees and interest for non-payment or late payment of loan obligations is not affected by the COVID-19 Act. The document should have the title "Creditor's Statutory Demand for Payment of Debt" on the heading of the front page. Singapore Law Blog discusses the latest Singapore court decisions, legislation and other legal news. Under the law, a debtor is presumed to be unable to pay a debt if he does not comply with or apply to set aside a Statutory Demand. A Singapore Government Agency Website. Debtor who has been served with a Statutory Demand may: (a) within 14 days; or (b) where the demand was served outside jurisd­iction, within 21 days, from the date on which the demand is served apply to court by way of Origin­ating Summons for an order setting aside the Statutory Demand Section 62 BA Debtor is presumed unable to pay debt if: Upon receipt of a notification for relief, the recipient of such notification cannot take any prohibited action mentioned above. You do not need a lawyer. Would those contracts then be considered to be entered into after March 25, 2020 and hence not a contract having the benefit of the Temporary Measures? All social distancing measures will override any current legal requirements concerning meetings. This is supported by the fact that the COVID-19 Act has not prohibited the issuance of statutory demands during the prescribed period, but has instead increased the monetary threshold for the issuance and the length of the period within which a debtor should pay. In the affidavit filed in support of the application, the debtor must: If any counterparty to a Scheduled Contract disputes that the non-performance of the Scheduled Contract was to a material extent caused by a COVID-19 event, such disagreement can be referred to an “assessor” appointed by the Minister for Law. In summary, for a contractual breach to enjoy the benefits of the Temporary Measures: If all of the above are true, a notice of relief may be served on the counterparty to that contract. The prescribed period will commence on a date to be set out in the Government Gazette. �)�H�VՕB�/�J��RӺ@�&}bo�:N��`��T�7���Ԋ\��uR�T��l��z�[ؿ�h0>��� �+) ��P�h�����_���)�@� Contracting parties should be prepared to start performing those contractual obligations at the end of the prescribed period unless a separate agreement has been made for an alternative arrangement before the end of the prescribed period. April 2020. In accordance with well-established and judicially endorsed practice, Rangecroft chose not to serve a statutory demand prior to issuing the liquidation application. 444 0 obj <<716721d33892e0ab9168df4e86247e40>]>>stream Following the publication by Institutional Shareholder Services (ISS) of its updated guidelines earlier this month, Glass Lewis (GL) has updated its Canadian proxy voting guidelines for the 2021 proxy season. The monetary threshold for insolvency for businesses will be increased ten-fold, from SGD 10,000 to SGD 100,000. The process of debt recovery is unique to each situation and our lawyers will be able to advise you on the appropriate steps as part of your initial consultation. Social distancing measures apply to court proceedings as well. A Letter of Demand ordinarily demands that you do something, whereas a Cease and Desist letter usually demands that you stop doing something. Loan facilities extended by other lenders not licensed under the Banking Act or Finance Companies Act may not be affected by the COVID-19 Act. A statutory demand is a document that is, or purports to be, a demand served upon a company under the Australian Corporations Act 2001. Background Under Section 254 (2) (a) of the Singapore Companies Act, a company can be wound-up by the court upon the application of a creditor who has served a statutory demand on the company for a debt of SGD 10,000 or more and the debt continues to … About Us. 429 0 obj <>stream The Monetary Authority of Singapore (MAS) has also clarified that a bank’s contractual rights to charge interest including default interest would not be affected during the prescribed period. In other words, they apply retrospectively. There will be no appeals following a determination by an assessor. This website is a PLUS initiative. Legal News & Analysis – Asia Pacific - Singapore – Insolvency & Restructuring - Regulatory & Compliance 10 January, 2016 A failure by a debtor to satisfy a statutory demand for payment is a ground for a meritorious creditor to commence bankruptcy proceedings against the debtor under the Bankruptcy Act (“the Act”). Directors will temporarily be relieved from their obligations to prevent their companies from trading while insolvent if the debts are incurred in the company’s ordinary course of business, during the prescribed period and before the appointment of a judicial manager or liquidator of the company. It should be noted that the Temporary Measures are just that – temporary, or six months (for now). 427 0 obj <>/Metadata 21 0 R>> endobj 428 0 obj /P -1852/V 4/R 4/Length 128/CF<>>>/StrF/StdCF/StmF/StdCF>> endobj 430 0 obj <>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]>>/Annots[ 445 0 R]/MediaBox[0 0 594.96 842.0399]/Contents 431 0 R/Group<>/Tabs/S/StructParents 0/CropBox[ 0 0 594.96 842.0399]/Rotate 0>> endobj 431 0 obj <>stream A “Black Swan Event” requires a “Black Swan Act”. However, any prohibited action cannot be taken against the contracting party till after the end of the prescribed period. Canada | Such assessor has powers to grant relief to achieve a “joint and equitable” outcome. IRB Law offers an affordable, professional, and legal method of debt recovery in Singapore. In cases where the statutory demand is served on the debtors on or after 20 April 2020, the statutory period for debtors to respond to the demands is extended from 21 days to 6 … The statutory demand is one of the most frequently used (and misused) tools utilized by companies and other persons to obtain payment of debts owed… Toggle navigation Search Scheduled Contracts (as currently defined) in relation to secured loan facilities will only include contracts with a bank licensed under the Banking Act or a finance company licensed under the Finance Companies Act as a counterparty. Court proceedings may be conducted remotely including from witnesses and accused. Hopefully the COVID-19 Act goes far enough to support businesses and jobs in these uncertain times. For individuals, the monetary threshold for bankruptcy will be increased from SGD 15,000 to SGD 60,000. Is a Letter of Demand the same as a Statutory Demand? The issuer will also be prohibited from carrying out any of the above actions following such statutory demand during the prescribed period.
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