Hour Glass co-founder loses appeal against ANZ

ANZ is seeking to recover the defaults by Timor Global, for which Ms Chan is a director and shareholder, and was acting as a guarantor.
ANZ is seeking to recover the defaults by Timor Global, for which Ms Chan is a director and shareholder, and was acting as a guarantor.

Bank seeking to recover $8.7m in loan defaults by Timor firm from her and other directors

Prominent local entrepreneur Jannie Chan has lost one battle to stave off bankruptcy hearings, but has started another to set aside the judgment that sparked them.

The Court of Appeal dismissed her appeal against the Australia & New Zealand Banking Group (ANZ), which is seeking to recover US$6.5 million (S$8.7 million) in bank facility defaults by Timor Global , for which she is a director and shareholder, and was acting as a guarantor. Timor Global is a coffee plantation and trading company in Timor Leste, with an estate covering about 3,000ha.

Ms Chan is, among other things, co-founder of The Hour Glass, a luxury watch retailer with more than 20 boutiques in various cities in the Asia-Pacific. She served as managing director and subsequently as executive vice-chairman from 2004 to last month, when she retired. She continues as a board director.

Together with two others, she underwrote credit facilities extended by ANZ's Timor branch to the company in October 2012, but when defaults occurred, ANZ moved to recover the outstanding sums from the Singaporean directors.

Ms Chan applied to the High Court to set aside ANZ's statutory demand against her, but failed in January 2014. She then appealed to the Court of Appeal, where her lawyer, Mr Eugene Thuraisingam, argued that the bankruptcy application could be avoided by ANZ going after the securities provided by the principal debtor - Timor Global.

WongPartnership lawyer Chou Sean Yu countered for ANZ that a creditor is not obliged to pursue other remedies available, including enforcement of security provided by the principal debtor, before suing the surety.

The court, comprising appeal judges Chao Hick Tin and Andrew Phang, together with Justice Tay Yong Kwang, agreed.

"It has long been the position that a creditor with several remedies at his disposal can choose whether to enforce and, if so, which one to enforce, at what time, in which order, and in whatever way, subject only to the rule that he cannot recover more than is due to him," Justice Phang wrote in judgment grounds released on Friday.

He said it would be "unwise" legal policy to insist otherwise, noting that a guarantee simplifies the process of enforcing the primary obligation.

The High Court bankruptcy application hearing is due next month.

Meanwhile, Ms Chan - through her lawyer, Mr Bachoo Mohan Singh - is applying to the High Court to set aside ANZ's summary judgment against her that triggered the bankruptcy application on fresh grounds.

ANZ, through Mr Chou, is applying to strike out the case.

A hearing is due this week.

A version of this article appeared in the print edition of The Sunday Times on April 10, 2016, with the headline 'Hour Glass co-founder loses appeal against ANZ'. Print Edition | Subscribe