Key Points

  • Under rule 98(2)(c) of the Singapore Bankruptcy Rules, the court shall set aside a statutory demand if the creditor holds ‘security for the debt’ claimed in the demand, and the court is satisfied that the value of such security is equivalent to or exceeds the full amount of the debt.
  • This case suggests that the creditor making a statutory demand is not obliged to disclose security offered by a third party, but only by the debtor in respect of the debt.

The Facts

The debtor was served with a statutory demand as guarantor for a debt owed by the borrower (of which the debtor was a director and shareholder). The demand did not disclose security offered by the borrower for the same debt. The debtor applied to set it aside on the basis of non-compliance with rule 98(2)(c) of the Singapore Bankruptcy Rules.

The Singapore High Court held that only security furnished by the debtor needs to be disclosed. Security furnished by a third party (as in this case) is not ‘security for the debt’ for the purposes of rule 98(2)(c) of the Singapore Bankruptcy Rules and need not be disclosed.


The case serves as a timely reminder for directors and/or shareholders to be careful and seek legal advice before agreeing to stand as a personal guarantor to a loan taken out by a company. Such personal guarantees are easily enforceable by the creditor.

The guarantor will not be able to rely on security pledged by the borrower as grounds to set aside the demand.

Chan Siew Lee Jannie v Australia and New Zealand Banking Group Ltd [2015] SGHC 157