1 HC/B 1734/2026 (“B 1734”) is a bankruptcy application brought by the claimant, Mdm Meng Qinghong (“Mdm Meng”) against the defendant, Mr Neo Bing Hao Colin (“Mr Neo”). The debt in B 1734 (“the Claimed Debt”) arises from an order of court made in an application brought by Mdm Meng in the Family Justice Courts (“FJC”) pursuant to a consent order that was recorded as part of the interim judgment granted in the parties’ divorce proceedings (“the Consent Order”). In the application before me, HC/SUM 2754/2026 (“SUM 2754”), Mr Neo asks that the proceedings in B 1734 be stayed pursuant to s 315(1) of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”) on the basis of an application which he has taken out in the FJC to vary the part of the Consent Order from which the Claimed Debt arises (“the Variation Application”).

2 The issue raised in SUM 2754 is how the court’s discretion to stay bankruptcy proceedings under s 315(1) of the IRDA should be exercised in a scenario where the claimed debt arises from a consent order of court and where the stay is sought on the basis of an application to set aside or vary the consent order. As I explain below, where the application to set aside or vary the consent order has some reasonable prospect of success and is not without basis or totally unmeritorious, the court’s discretion under s 315(1) of the IRDA would be enlivened. The rationale is that, where the grounds on which the debtor relies to seek a stay of bankruptcy proceedings raise a reasonable prospect that the legal foundation of the bankruptcy proceedings is put into question, the debtor would suffer prejudice if a stay were not granted and a bankruptcy order comes to be made, because, among other consequences which a bankruptcy order would have on his livelihood, he would also be deprived of the opportunity to exhaust his legal rights in connection with the grounds on which he intends to challenge the claimed debt. However, the court should only exercise its discretion to grant a stay of bankruptcy proceedings where doing so would strike a balance with the creditor’s pecuniary interests and to achieve that, appropriate conditions may be imposed as part of the stay. One instance in which the imposition of conditions may be necessary is where the grounds on which the debtor relies to challenge the claimed debt, though not without basis, are suspect in terms of its merits, as in this case.

3 On the facts, I am satisfied that the Variation Application has some reasonable prospect of success, but I nonetheless had reservations about the merits of Mr Neo’s case. Considering these circumstances as a whole, I granted a stay of the proceedings in B 1734 pending the determination of the Variation Application at first instance, but on the condition that Mr Neo furnishes security in the sum of 50% of the Claimed Debt (amounting to S$168,331.13) within 14 days from 23 October 2026, in default of which B 1734 is to be restored for hearing (see [41] below). These are my full reasons.

4 In April 2025, following mediation, the Consent Order was recorded as part of the interim judgment granted in the parties’ divorce proceedings in the FJC. Paragraph 3(b) of the Consent Order sets out the parties’ agreement on the application of the sale proceeds of a condominium apartment, which was their matrimonial property (“the Property”). ¹ For full context, I reproduce the material parts of para 3(b) of the Consent Order:

5 It is largely undisputed that, at the time the Property was sold, it was in fact encumbered by two loan facilities granted by United Overseas Bank Ltd (“UOB”): (a) the mortgage, for which a sum of $310,000 remained outstanding (“the Mortgage”); and (b) a “Cost Plus Loan” for which the sum of $336,662.26 remained outstanding (“the Cost Plus Loan”). ² According to Mr Neo, the Cost Plus Loan was a business loan that he had taken out sometime in late 2022, and out of the sum of $350,000 that was disbursed by UOB, $250,000 was injected into a company, EMS Autolink Pte Ltd (“EMS”), in which both Mr Neo and Mdm Meng were shareholders and directors, and the remaining $100,000 was utilised for the family’s living expenses. ³ The proceeds received from the sale of the Property were applied in the manner envisioned under para 3(b) of the Consent Order except that Mr Neo also removed a sum of $336,662.26 (ie, the sum corresponding to the Claimed Debt) to repay the Cost Plus Loan, in addition to applying those proceeds to redeem the Mortgage. ⁴ Mr Neo’s position then was that he is entitled to use the sale proceeds of the Property to repay the Cost Plus Loan pursuant to para 3(b)(a)(i) of the Consent Order because that formed part of “the outstanding housing loan”.

6 In October 2025, Mdm Meng brought an application in the FJC seeking enforcement of para 3(b)(a)(v) of the Consent Order, namely, that the sum of $336,662.26 which Mr Neo had removed from the sale proceeds of the Property to repay the Cost Plus Loan should be paid to her in full and final settlement of the division of matrimonial assets pursuant to para 3(b)(a)(v) of the Consent Order (“the Enforcement Application”). Mdm Meng’s position is that she is unaware of the Cost Plus Loan and in any event, there was no agreement between the parties, as part of the Consent Order, for the sale proceeds of the Property to be used for repaying the Cost Plus Loan.

7 In the Enforcement Application, the issue before the court was how the words “the outstanding housing loan” in para 3(b)(a)(i) of the Consent Order are to be interpreted. On 21 January 2026, the District Judge (“DJ”) allowed the Enforcement Application. The DJ held that the words “the outstanding housing loan” are to be interpreted “according to its plain, ordinary and literal meaning”, which meant that Mr Neo was only entitled to remove from the sale proceeds of the Property the sum of $310,000 that was used to redeem the Mortgage. ⁵ The DJ therefore determined that Mdm Meng is entitled to be paid the sum of $336,662.26 (ie, the Claimed Debt) which Mr Neo had removed from the sale proceeds to repay the Cost Plus Loan.

8 Mr Neo subsequently appealed to the Family Division of the High Court. Mr Neo’s submissions in the appeal were: (a) first, the DJ had impermissibly effected a substantive variation of the Consent Order through her interpretation of the words “the outstanding housing loan”, as her interpretation effectively imposed a significant personal liability on Mr Neo for the sum of $336,662.26; (b) secondly, the DJ had erred in her interpretation of the words “the outstanding housing loan” as she failed to adequately consider the factual matrix at the time when the Consent Order was entered, which would indicate that the words “the outstanding housing loan” were intended to encompass all loan facilities encumbering the Property, including the Cost Plus Loan; (c) thirdly, the DJ should have made a supplementary order that the sale proceeds of the Property were intended to clear all outstanding loans (including the Cost Plus Loan), which was necessary as the Consent Order had a gap in that it made no provision for a situation where UOB would unilaterally exercise its rights as lender to deduct the outstanding amount under the Cost Plus Loan from the sale proceeds of the Property; and (d) finally, the DJ should have found that the Consent Order was unworkable ab initio because, given Mdm Meng’s claimed ignorance about the Cost Plus Loan, there was no consensus ad idem between the parties and the DJ should have exercised her powers to set aside the affected portions of the Consent Order. In August 2026, the High Court dismissed Mr Neo’s appeal, agreeing with the DJ’s interpretation that the words “the outstanding housing loan” only included the Mortgage and not the Cost Plus Loan.

9 Following the DJ’s decision in the Enforcement Application, Mdm Meng issued a statutory demand for the sum of $336,662.26. While the judgment or order on which Mdm Meng relies in B 1734 is the order made by the DJ in the Enforcement Application determining that Mdm Meng is entitled to the sum of $336,662.26 pursuant to para 3(b)(a)(v) of the Consent Order (see [7] above), the foundation of the Claimed Debt is the Consent Order since the order made by the DJ in the Enforcement Application was premised on an interpretation of para 3(b)(a)(i) of the Consent Order and therefore derivative of the same.

10 As no payment was forthcoming, on 3 June 2026, Mdm Meng filed B 1734 against Mr Neo. At the first hearing of B 1734 on 9 July 2026, the court granted an adjournment pending the determination of Mr Neo’s appeal against the DJ’s decision in the Enforcement Application. After Mr Neo’s appeal was dismissed, he filed SUM 2754 to stay the bankruptcy proceedings in B 1734 and in the alternative sought an adjournment of B 1734 pursuant to r 95(2)(c) of the Insolvency, Restructuring and Dissolution (Personal Insolvency) Rules 2020 (“the Personal Insolvency Rules”).

11 In his supporting affidavits for SUM 2754, Mr Neo put forward two grounds for his stay application:

(a) First, the “legal foundation” of the Claimed Debt is heavily disputed because the Consent Order is fundamentally flawed and unworkable ab initio. Mdm Meng was fully aware of the Cost Plus Loan at all material times, and that ought to be taken into consideration when the words “the outstanding housing loan” are interpreted. Even if Mdm Meng’s case were accepted (ie, that she was completely unaware of the Cost Plus Loan at all material times), then there would have been a fundamental lack of consensus ad idem regarding the true equity of the property being divided. As such, there is a substantial triable issue as to whether the Consent Order is vitiated and/or liable to be set aside due to a fundamental mutual misunderstanding between the parties.

(b) Secondly, “special circumstances” warranting a stay of bankruptcy proceedings under s 315(1) of the IRDA have been shown. This is because he has taken out the Variation Application in the FJC to vary the words “the outstanding housing loan” in para 3(b)(a)(i) of the Consent Order to “all loans encumbered on [the Property]” [emphasis added]. Mr Neo states that there has been a fundamental misunderstanding during the mediation, and he never consented to, and he never had the requisite means, to repay the Cost Plus Loan using his own assets. He had instructed his former solicitors, who represented him during the mediation, that the sale proceeds of the Property should be used to also repay the Cost Plus Loan, and in so far as para 3(b)(a)(i) of the Consent Order only made provision for the “the outstanding housing loan” (which has been interpreted by the court to only include the Mortgage), that was due to the negligence of his former solicitors.

12 Section 315(1) of the IRDA states that the Court may at any time, for “sufficient reason” make an order staying the proceedings on a bankruptcy application, either altogether or for a limited time, on “such terms and conditions as the Court thinks just”. There are two stages in the analysis (see generally, DBS Bank Ltd v Li Yuan [2025] 5 SLR 439 (“Li Yuan”) at [49]). First, “sufficient reason” must be shown to enliven the court’s discretion to grant a stay of bankruptcy proceedings. Secondly, where the court’s discretion has been enlivened, the question is whether this should be exercised in the debtor’s favour, and if so, what conditions ought to be imposed as part of any stay granted to provide sufficient safeguards for the creditor’s pecuniary interests. The legal burden is on the debtor to persuade the court that the court’s discretion under s 315(1) of the IRDA has been enlivened and that it should be exercised in his favour.

13 SUM 2754 raises three issues for determination:

(a) Where the claimed debt in the bankruptcy proceedings arises from a consent judgment or order, does an application to set aside or vary that consent judgment or order constitute “sufficient reason” which enlivens the court’s discretion to grant a stay of bankruptcy proceedings?

(b) If so, how should the court’s discretion be exercised?

(c) Whether Mr Neo is entitled to a stay of bankruptcy proceedings on the basis of the Variation Application, and if so, on what terms should the stay be granted?

14 As a starting point, for “sufficient reason” to be shown to enliven the court’s discretion to stay bankruptcy proceedings under s 315(1) of the IRDA, the circumstances relied on by the debtor as the grounds for the stay must have a reasonable prospect of either (a) putting into question the legal foundation of the bankruptcy application or (b) resulting in the dismissal of the bankruptcy application (see Li Yuan at [49]). The question here is what test should be applied to determine if an application to set aside or vary a consent judgment or order from which the claimed debt arises gives rise to “sufficient reason”.

15 Where the debtor seeks a stay of the bankruptcy proceedings on the basis of a direct challenge to the claimed debt, the debtor must at least show triable issues in connection with the debt in order to enliven the court’s discretion (see Mohd Zain bin Adullah v Chimbusco International Petroleum (Singapore) Pte Ltd [2014] 2 SLR 46 (“Chimbusco (CA)”) at [18]). The standard of triable issues accords with the requirement for the debtor to demonstrate a reasonable prospect that the legal foundation of the bankruptcy application is put into question. It would be implicit in the standard of triable issues that the court, in determining if the stay should be granted, must make some assessment of the strength of the dispute raised by the debtor (see, for example, Chimbusco (CA) at [22]; Great Eastern Financial Advisers Pte Ltd v Lim Siang Heng [2026] SGHC 203 at [49]). The logic and rationale of this approach is that it would be a waste of time and resources for the court hearing the bankruptcy application to automatically refer parties to the civil court whenever a dispute is raised to the claim debt without any evaluation of its merits, despite the bankruptcy court also being equally well-placed as the civil court to determine that issue (see Chimbusco (CA) at [22]; Chimbusco International Petroleum (Singapore) Pte Ltd v Jalalludin bin Abdullah and other matters [2013] 2 SLR 801 (“Chimbusco (HC)”) at [39]). This explains why the threshold applicable in this context is identical to that applicable to a defendant who seeks leave to defend in response to an application for summary judgment brought civil proceedings (see Chimbusco (CA) at [18]).

16 A debtor can also seek a stay of the bankruptcy proceedings on the basis of (a) an appeal which he has brought against the judgment or order pursuant to which the claimed debt is payable or (b) an application which he has brought to set aside the statutory demand from which the claimed debt arises. Section 316(5) of the IRDA expressly identifies these scenarios as instances in which the court “may, if it thinks fit, stay … the [bankruptcy] application”. In my view, an appeal against the underlying judgment or order from which the claimed debt arises and an application to set aside the statutory demand can be characterised as an indirect challenge to the claimed debt, since the debt is challenged, not immediately within the bankruptcy proceedings themselves, but in a separate forum where the appeal or application is to be determined on its merits. Although the operative provision where a stay of proceedings is granted in these scenarios is s 316(5) of the IRDA, the legal principles are equally applicable to any stay sought under s 315(1) of the IRDA. This is because s 315(1) of the IRDA is a general provision which provides for the court’s wide discretionary power to grant a stay of proceedings in a bankruptcy application, and s 316(5) of the IRDA is intended to identify the specific scenarios in which that power can be exercised (see generally Chimbusco (HC) at [54]–[55]).

17 It is trite that the fact that a debtor has brought an appeal against the judgment or order is insufficient to warrant a stay (see Seto Wei Meng (suing as the administrator of the estate and on behalf of the dependants of Yeong Soek Mun, deceased) and another v Foo Chee Boon Edward [2021] SGHCR 5 (“Seto Wei Meng”) at [24]). Consistent with the requirement that the debtor must demonstrate a reasonable prospect that the legal foundation of the bankruptcy application is put in question in order to show “sufficient reason” under s 315(1) of the IRDA, for an appeal to enliven the court’s discretion to grant a stay, the bankruptcy court must be satisfied that the appeal has some reasonable prospect of success, and that it is not without basis or so totally unmeritorious (see generally, Re Goh Chin Soon, ex parte Oversea-Chinese Banking Corp Ltd [2001] 3 SLR(R) 145 (“Goh Chin Soon”) at [4]). I note that this is also the standard adopted in other common law jurisdictions where their personal insolvency legislation similarly provides for the court’s wide discretion to grant a stay of bankruptcy proceedings similar to that in s 315(1) of the IRDA (see, for example, Thangarajoo a/l Vyran v Denko Industrial Corp Bhd [2012] 7 MLJ (“Thangarajoo”) at [4]; Re Lau Wang Chi Barry [2024] 4 HKC 740 (“Barry Lau”) at [35]; In re Rhodes, ex parte Heyworth (1884) 14 QBD 49 at 51–52; Watts v London Borough of Newham [2009] EWHC 377 (Ch) at [53]). In this analysis, the bankruptcy court does not engage in any adjudication of the merits of the appeal, a matter which is properly left to the appellate court with the benefit of full arguments, but it only engages in a prima facie assessment of the merits (see Seto Wei Meng at [31]) and for the limited purpose of considering whether the debtor’s appeal has some reasonable prospect of success so that it cannot be characterised as being without basis or completely unmeritorious.

18 The same approach applies where the debtor seeks a stay of bankruptcy proceedings on the basis of an application which he has brought to set aside the statutory demand from which the claimed debt arises. In Goh Chin Soon, the debtor sought to stay bankruptcy proceedings on the basis of an application which he had brought to set aside a statutory demand. The High Court held that “[i]f an attack on … a statutory demand is doomed to fail or was made without good faith, the discretion under s 65(4) [the equivalent of s 316(5) of the IRDA] does not come into play”. On the facts, the High Court held that the debtor was not entitled to a stay, noting that the cross claims which the debtor has asserted were not bona fide and asserted merely to prolong the bankruptcy proceedings (at [3]). An application to set aside a statutory demand which is not brought in good faith obviously would also not have any reasonable prospect of success and be unmeritorious (see Barry Lau at [35]). The approach taken in Goh Chin Soon suggests that the applicable threshold where the debtor seeks a stay of bankruptcy proceedings on the basis of an application to set aside a statutory demand is equivalent to that which applies where the debtor seeks a stay on the basis of an appeal against the underlying judgment or order – the court’s discretion to grant a stay is only enlivened where the application has some reasonable prospect of success, and is not without basis or completely unmeritorious.

19 The distinction between the approaches taken by the court where the debtor seeks a stay of proceedings in the bankruptcy application on the basis of a direct challenge to the claimed debt that is raised within the bankruptcy proceedings and where the debtor seeks a stay on the basis of an indirect challenge to the claimed debt (eg, an appeal against the underlying judgment or order from which the judgment debt arises or an application to set aside the statutory demand from which the claimed debt arises), is a principled one. In the latter scenario, full arguments regarding the appeal or application will only be made in the separate forum where the appeal or application is to be heard and the bankruptcy court will not be properly placed to assess the merits of the appeal or application. However, it is necessary to prevent debtors from engineering grounds to stay bankruptcy proceedings by commencing proceedings to challenge claimed debts even where they have no valid legal grounds for doing so, which would frustrate the objective of the bankruptcy regime in securing the repayment of debts and in protecting the pecuniary interests of creditors. Hence, the mere fact that an appeal or an application to set aside a statutory demand has been filed cannot enliven the court’s discretion to grant a stay of proceedings under s 315(1) of the IRDA – the debtor must satisfy the bankruptcy court that his appeal or application has some reasonable prospect of success and is not without basis or completely unmeritorious. That entails only a prima facie assessment of the merits which the bankruptcy court is able to perform on the basis of the material which the debtor has put forward in support of the stay application.

20 I now turn to the present case, where the claimed debt arises from a consent order. In the context of civil proceedings, a consent order or judgment is recorded pursuant to the court’s inherent power, which is incidental to its function as a court of law and to do justice between the parties, to give effect to the parties’ settlement and allow parties to enforce the order in the event of non-compliance without having to institute a fresh action (see Siva Kumar s/o Avadiar v Quek Leng Chuang and others [2021] 1 SLR 451 (“Siva Kumar”) at [56]–[57]). The court’s jurisdiction to interfere with consent orders or judgments is very limited and generally, it can only be set aside if there is fraud or other vitiating factors that would justify the setting aside of a contract (see Siva Kumar at [63]). In this case, the Consent Order relates to the ownership and division of matrimonial assets. Its legal effect flows, not from the parties’ agreement per se, but the order of court made pursuant to s 112(1) of the Women’s Charter 1961 (“the WC”), which in turn has regard to, among other things, the parties’ agreement with respect to the ownership and division of the matrimonial assets made in contemplation of divorce (see s 112(2)(e) of the WC) (see AYM v AYL [2013] 1 SLR 924 (“AYM”) at [15]). The power of the court to set aside or vary a consent order for the division of matrimonial assets is provided for in s 112(4) of the WC, which has a limited scope of operation and comes into play where (a) a court order has become unworkable as a result of new circumstances which have arisen or (b) a court order is unworkable ab initio (see AYM at [22] and [24]).

21 In my view, the approach taken where a stay of bankruptcy proceedings is sought on the basis of an appeal or an application to set aside a statutory demand should also be applied where a stay is sought on the basis of an application to set aside or vary a consent order from which the claimed debt arises. Such an application (regardless of whether it is made in respect of a consent order in the context of civil proceedings or matrimonial proceedings) is similarly an indirect challenge to the claimed debt, and the merits of that application can only be properly adjudicated in a separate forum where full arguments on the merits of that application will be made. Similarly, the mere fact that a setting-aside or variation application has been brought is insufficient, and for the court’s discretion under s 315(1) of the IRDA to be enlivened, it must be satisfied that the setting-aside or variation application has some reasonable prospect of success and is not without basis or totally unmeritorious. Such an approach is also cogent as a matter of principle. Given the starting point that a court would only exercise its jurisdiction to interfere with consent orders in exceptional circumstances in view of the sanctity of contract and the need to ensure finality (a principle which applies generally in the context of both civil and matrimonial proceedings: see Poh Huat Heng Corp Pte Ltd and others v Hafizul Islam Kofil Uddin [2012] 3 SLR 1003 at [18]; AYM at [15]), a court should also exercise its power to stay bankruptcy proceedings brought pursuant to that consent order where it is satisfied that the intended challenge to the consent order has some reasonable prospect of success and is not without basis.

22 A bankruptcy order has significant consequences on the debtor’s life and livelihood as it alters his contracting status and prevents him from pursuing further commercial activity (see generally Re Rasmachayana Sulistyo (alias Chang Whe Ming), ex parte The Hongkong and Shanghai Banking Corp Ltd and other appeals [2005] 1 SLR(R) 483 at [25]; Thangarajoo ([17] above) at [7]). Where a stay of bankruptcy proceedings is sought and the grounds relied on by the debtor enlivens the court’s discretion to grant a stay, the court is satisfied of a reasonable prospect that the legal foundation of the bankruptcy application is put into question. Thus, at this stage, the operative consideration is to avoid the prejudice which the debtor would suffer if a stay were not granted and a bankruptcy order comes to be made, which would, among other consequences on his livelihood, deprive him of the opportunity to exhaust his legal rights in connection with the grounds on which he intends to challenge the claimed debt. This is because a debtor who is adjudicated bankrupt would be precluded from pursuing these legal rights without obtaining sanction from his trustee-in-bankruptcy and it cannot be assumed that such sanction would necessarily be forthcoming (see, for example, Seto Wei Meng ([17] above) at [43(b)(ii)]; Adamopoulos and another v Olympic Airways SA and another (1990) 95 ALR 525 (“Adamopoulos”) at 531). However, this has to be balanced against the pecuniary interests of the creditors and their ability to enforce and protect their rights with ease, which is placed at the forefront at the stage where a bankruptcy application is pursued against a debtor for his inability to repay his debts (see Li Yuan ([12] above) at [39]–[40]). Therefore, in deciding how the discretion under s 315(1) of the IRDA should be exercised, the court must balance the creditor’s pecuniary interests against the prejudice that would be occasioned to the debtor if a stay is not granted (see Chimbusco (CA) ([15] above) at [40]; Seto Wei Meng at [40(d)]; Li Yuan at [49]).

23 Given the broad discretion of the court under s 315(1) of the IRDA, it is not possible to exhaustively identify the factors germane to the court’s exercise of discretion, but I think two broad considerations can be discerned from the case law.

24 First, the specific circumstances of the case in which the application for a stay is brought can suggest that it is not bona fide and brought for a collateral purpose and hence the court should not exercise its discretion to grant a stay. For example, in Seto Wei Meng, the debtor sought an unconditional stay of proceedings in the bankruptcy application which was founded upon a judgment debt pending appeal. Prior to filing the stay application, the debtor had brought HC/SUM 5638/2020 (“SUM 5638”), which was an application for an unconditional stay of execution of the judgment, but the High Court only granted a conditional stay of execution and refused an unconditional stay. The conditional stay of execution eventually lapsed because the debtor failed to comply with any of the conditions imposed. The High Court Registry found that, in the circumstances of the case, the debtor’s application to stay the bankruptcy proceedings was a “blatant collateral attack” against the High Court’s earlier decision in SUM 5638, and further, since there had been no change in circumstances from the time the High Court delivered its decision in SUM 5638 until the bankruptcy proceedings were brought, it refused to grant any unconditional stay of the bankruptcy proceedings (at [42] and [54]). The High Court Registry further held that any conditional stay would have been inappropriate because, among other things, it would be wrong in principle to grant a stay on the same conditions which the debtor had failed to comply with or on more favourable conditions (at [72]). In Seto Wei Meng, since the application for an unconditional stay of bankruptcy proceedings had been sought on exactly the same grounds and circumstances on which the unconditional stay of execution was sought, it was clearly brought for the collateral purpose of making a backdoor attack against the High Court’s decision in SUM 5638. The court’s discretion under s 315(1) of the IRDA should not be exercised in support of an improper purpose.

25 Secondly, the question of whether the court should exercise its discretion to grant a stay of bankruptcy proceedings is closely intertwined with the issue of what conditions the court should impose as part of any stay granted (see Seto Wei Meng at [34]). Although the circumstances of a case may lead the court to arrive at the view that an unconditional stay of bankruptcy proceedings will not reflect the correct balance between the creditor’s pecuniary interests and the need to avoid prejudice to a debtor, the court may conclude that this can be achieved through the imposition of appropriate conditions. For example, where an appeal is brought against a judgment, a debtor would suffer prejudice if he were made bankrupt on the basis of the judgment debt and deprived of the opportunity to pursue an appeal which has some reasonable prospect of success, but that alone may not justify a stay and put in abeyance the creditor’s entitlement to obtain full repayment of the judgment debt through the bankruptcy procedure, bearing in mind that an appeal does not automatically give rise to grounds for stay of execution (see Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd [1999] 1 SLR(R) 1053 at [13]–[14]) and the fact that the judgment would have obtained through a process in which the merits of the creditor’s claim was fully adjudicated. However, case law shows that the balance can be appropriately struck if a stay is granted on the condition that the debtor provides security for the judgment debt (see, for example, Barry Lau ([17] above) at [56]; Re Khoo Kay [1999] 6 MLJ 637). Similarly, where the merits of the dispute raised by the debtor to the claimed debt are suspect and so the debtor may in fact not have a good enough defence to the claimed debt to justify a stay and put in abeyance the creditor’s entitlement to obtain repayment through the bankruptcy process, an unconditional stay would not adequately protect the creditor’s pecuniary interests. Therefore, where the triable issues raised by a debtor are shadowy, the court would require that security be provided by the debtor as a condition of the stay (see, for example, Chimbusco (CA) ([15] above) at [21]). Similarly, where the court is only able to form a tentative view that the debtor’s appeal has some reasonable prospect of success, it would order the debtor to provide security as a condition of the stay (see, for example, Barry Lau at [56]).

26 As to what are the appropriate conditions that can be imposed, the court has broad discretion, and it may “impose any condition which it sees fit and need not confine itself to ordering that security be provided” (see Chimbusco (CA) at [39]). Based on case law, the typical condition is for the debtor to provide security to the creditor, which provides immediate protection for the creditor’s pecuniary interests. The court can also impose conditions as to the duration of a stay or provide that it is to lapse upon the occurrence of certain events. The court can also impose a condition requiring the debtor to prosecute any dispute which it intends to raise regarding the claimed debt diligently and expeditiously. In Adamopoulos ([22] above), the court granted a stay of bankruptcy proceedings pending an appeal against a judgment debt, but on the condition that the debtors (who were also the appellants) “prosecute their appeal … with all due diligence” (at 532).

27 Where the court orders security to be provided by the debtor as a condition of the stay granted, it should exercise its discretion flexibly having regard to the circumstances of the case before it and it should not begin with any starting point in determining the amount of security to be provided (see Chimbusco (CA) at [39]). Based on case law, I think three considerations can assist the court in determining the appropriate quantum of security.

28 First, the quantum of security to be furnished by the debtor should be “meaningful” and “substantial” (see, for example, Barry Lau ([17] above) at [65]). After all, one of the purposes of security is to preserve the creditor’s position and ensure that he has recourse to funds for payment in the event that he prevails in any dispute raised by the debtor to the claimed debt (see generally, Wee Cheng Swee Henry v Jo Baby Kartika Polim [2015] 4 SLR 250 (“Henry Wee”) at [111]; Re Sy Chin Mong Stephen [2009] HKCU 366 at [12]; MGF Sourcing US LLC v La Senza Canada Inc [2021] OJ No 1791 (“MGF Sourcing”) at [51]–[54]). Therefore, the court should take reference from the quantum of the claimed debt and fix a meaningful amount of security which adequately safeguards the creditor’s pecuniary interests. For example, in Barry Lau, the court ordered that 50% of the judgment sum (which was about HK$12,900,000) be furnished as security by the debtor. In MGF Sourcing, where the total claimed debt was approximately US$32m, among other conditions, the court ordered the debtor to provide payment into court of US$5m within 60 days and subsequent quarterly payments of US$500,000 until the final resolution of proceedings brought by the debtor against the claimed debt.

29 Secondly, the amount of security to be furnished should not be a sum which, on the evidence before the court, is clearly beyond the means of the debtor. This follows from the principle that the court should not impose conditions which a defendant would find it impossible to comply with (see, in the context of granting conditional leave to defend where summary judgment is sought, Abdul Salam Asanaru Pillai (trading as South Kerala Cashew Exporters) v Nomanbhoy & Sons Pte Ltd [2007] 2 SLR(R) 856 at [44]; Henry Wee at [118(a)]), since that would render the court’s exercise of its discretion in granting a stay an exercise in futility. In this regard, it is for the debtor to fully and frankly disclose his financial position to the court and discharge the burden of demonstrating to the court that it would be impossible, as opposed to merely difficult, to comply with the condition to be imposed (see Henry Wee at [118(b)]–[119]).

30 Thirdly, the merits of the debtor’s challenge to the claimed debt can be relevant in determining the appropriate quantum of security, in the same way that the issue of merits can persuade the court that appropriate conditions should be imposed as part of any stay granted (see [25] above). This is because another objective of security is to require the debtor to demonstrate commitment to the dispute which he has alleged in connection with the claimed debt, and show that the dispute raised is bona fide and genuine and not for the purpose of delaying the bankruptcy proceedings (see Henry Wee at [110]). Thus, the more suspect the debtor’s case is, the more he must put up by way of security to demonstrate his commitment and preserve the creditor’s position in the meantime. This also serves to prevent debtors from engineering disputes which otherwise have no real legal basis for the tactical advantage of obtaining a stay of bankruptcy proceedings and to the prejudice of their creditors (see also [19] above). Therefore, in a case where a debtor successfully shows triable issues in support of his application to stay the bankruptcy proceedings, the more shadowy or doubtful the triable issues raised by the debtor, the more he would be called upon to demonstrate commitment that the defence which he seeks to pursue is genuine and bona fide, and the quantum of security fixed by the court should be responsive to the degree of shadowiness in the debtor’s defence to the claimed debt (see Chimbusco (CA) ([15] above) at [40]). In cases where the stay is sought based on an appeal, an application to set aside a statutory demand or some other application which challenges the judgment or order from which the claimed debt arises, while the court is not in a position to adjudicate on the merits of the appeal or the application, it can make a prima facie assessment of the merits on the basis of the materials which the debtor has put forward (see [19] above) and rely on that assessment in determining if any security should be furnished by the debtor and if so, the quantum of that security.

31 With the principles above, I turn to the facts of the present case.

32 First, I accept that the Variation Application enlivens the court’s discretion under s 315(1) of the IRDA to grant a stay of proceedings in B 1734. The Variation Application is an indirect challenge to the Claimed Debt as it seeks to vary the Consent Order, which is the foundation of the court order made by the DJ in the Enforcement Application pursuant to which the Claimed Debt arises (see [9] above). In this regard, the burden is on Mr Neo to show is that the Variation Application has some reasonable prospect of success and is not without basis or totally unmeritorious, and I find that he has discharged that burden.

33 In sum, Mr Neo’s case in the Variation Application is that the parties’ common understanding was for all loans encumbered on the Property to be discharged using the Property’s sale proceeds, and that includes both the Mortgage as well as the Cost Plus Loan, because UOB had also taken a charge over the Property in respect of the Cost Plus Loan. ⁶ Mr Neo also states that he had instructed his former solicitors, who represented him during the mediation in the divorce proceedings, that the sale proceeds of the Property should be used to repay both the Mortgage and Cost Plus Loan, ⁷ and in so far as para 3(b)(a)(i) of the Consent Order only made provision for “the outstanding housing loan” (which the court has interpreted to only include the Mortgage: see [8] above), that was due to the negligence of his former solicitors. ⁸ In support of these submissions, Mr Neo’s counsel pointed me to documentary evidence (adduced as part of Mr Neo’s supporting affidavit for the Variation Application) which showed that Mr Neo’s former solicitors had treated the Cost Plus Loan as part of the outstanding loans (altogether amounting to $655,776.73) that were to be discharged using the sale proceeds of the Property – these documents include statements of accounts prepared by his former solicitors, as well as a mediation summary document setting out the financial background of the matter that was placed before the DJ who conducted the mediation in the FJC. ⁹

34 Based on the materials which Mr Neo has put before me, I am satisfied that the Variation Application has some reasonable prospect of success and is not bound to fail or totally unmeritorious, because the documentary evidence which Mr Neo has adduced supports the allegations which he intends to raise in the Variation Application. The documentary evidence supports his position that when he entered the Consent Order, his intention was for both the Mortgage and the Cost Plus Loan to be repaid using the sale proceeds of the Property, contrary to what para 3(b)(a)(i) of the Consent Order now provides for. The contemporaneous documents prepared in connection with the mediation, including the statements of accounts prepared by his former solicitors as well as the mediation summary, support his position that his intention at that time would have been made known to Mdm Meng during the mediation. As to why para 3(b)(a)(i) of the Consent Order came to be worded in the way it did despite the alleged intention of Mr Neo, that ultimately turns on whether there is any substance in Mr Neo’s complaint that his former solicitors had acted negligently during the mediation, and that is one of the key issues to be determined in the Variation Application. However, I do not need to make any finding regarding that in order to conclude that Mr Neo has some reasonable prospect of success, and I find that threshold to be met by the documentary evidence put before me which lends some support to Mr Neo’s case in the Variation Application.

35 Mr Neo has stated on affidavits filed in these proceedings and in the Variation Application that Mdm Meng was at all times aware that the Cost Plus Loan was taken out with the Property as collateral, and that the proceeds of the loan was injected into EMS and also applied to household expenses, and so it is inconceivable that Mdm Meng was unaware of the Cost Plus Loan and that it had to repaid with the sale proceeds of the Property (see [5] above). ¹⁰ I note that Mdm Meng has stated in a reply affidavit filed in the Enforcement Application that she was unaware of the Cost Plus Loan and in any event would not have agreed to such a loan being taken out. ¹¹ However, the bankruptcy proceedings in B 1734 are not the appropriate forum for resolving the conflict in the parties’ positions. For present purposes, I reiterate that the documentary evidence lends support to Mr Neo’s case for the Variation Application and on that basis, I find that he has some reasonable prospect of success, and the application cannot be said to be completely unmeritorious. For the avoidance of doubt, the views I have expressed here (and also later at [38]) regarding the merits of the Variation Application is based on nothing more than a prima facie assessment, and they should not be viewed as indicative or conclusive of the full merits of Mr Neo’s case, which is to be determined by the court hearing the Variation Application.

36 I should also add that the proceedings in the Enforcement Application and the appeal therefrom do not go towards showing that the Variation Application has no reasonable prospect of success or that it is without basis or completely unmeritorious. The Enforcement Application mainly dealt the issue of how the words “the outstanding housing loan” in para 3(b)(a)(i) of the Consent Order are to be interpreted and the High Court, in agreeing with the DJ’s decision that those words do not encompass the Cost Plus Loan, made no finding on what the parties had intended at the time of the mediation, and only decided what can permissibly come within the words “the outstanding housing loan” as a matter of interpretation. No part of the DJ’s decision or the High Court’s decision dealt with the parties’ intentions at the time of the mediation and whether the Consent Order properly recorded their agreement, and in fact, the DJ’s oral judgment specifically noted that the parties did not adduce any documentary evidence to show what parties had contemplated, at the time of the mediation, to be the loan amount that was to be discharged by the sale proceeds of the Property. ¹² I note that, in the context of consent orders made in civil proceedings, there is case law which states that a party cannot challenge a consent order on the basis that he was wrongly advised by his lawyer as to the consequences of what he had agreed to (see, for example, Ng Kiam Bee v Ng Bee Eng [2013] 2 SLR 442 at [13]), but I do not think this stands to show that the Variation Application is bound to fail. Mr Neo’s point is not that he was wrongly advised by his former solicitors as to the implications of what he had agreed to; his complaint is that he never agreed to what is set out in para 3(b)(a)(i) of the Consent Order and that his former solicitors had acted negligently in failing to ensure that the terms of the Consent Order were consistent with his intention and what he believed the parties had actually agreed to.

37 Next, I consider whether the court’s discretion to grant a stay of bankruptcy proceedings should be exercised in Mr Neo’s favour and if so, on what terms. There are two relevant points here. First, I do not think that the stay application in SUM 2754 was brought by Mr Neo for a collateral purpose. Mdm Meng has argued that the Variation Application effectively rehashes all the arguments which Mr Neo had previously raised in the Enforcement Application and the appeal therefrom which the DJ and the High Court had rejected, and she seems to suggest that SUM 2754 is brought to delay the resolution of B 1734 and deny Mdm Meng of her entitlement to the Claimed Debt. I am not inclined to agree with this submission. I think Mr Neo can be given the benefit of doubt and I am prepared to accept his submission that the Variation Application was only taken out after it became clear, pursuant to the outcome of the Enforcement Application and the appeal therefrom, that the words “the outstanding housing loan” in para 3(b)(a)(i) of the Consent Order encompassed only the Mortgage but not the Cost Plus Loan.

38 Secondly, in the circumstances of this case, an unconditional stay of proceedings would not adequately protect Mdm Meng’s pecuniary interests as a creditor. As I have mentioned, the material issue in Mr Neo’s case in the Variation Application is whether his former solicitors had indeed acted negligently in failing to ensure that the terms of the Consent Order were consistent with his intention and what he believed the parties had actually agreed to. The burden which Mr Neo must discharge in the Variation Application in order to make good these serious allegations is not an insignificant one, especially where they are raised nearly a year after the Enforcement Application was filed and the dispute arising from Mr Neo’s unilateral deduction of the sale proceeds for repayment of the Cost Plus Loan had crystallised. The legal context in which Mr Neo seeks to vary the Consent Order should also be borne in mind – s 112(4) of the WC, which provides for the court’s powers to vary consent orders for the division of matrimonial assets, has a limited scope of operation and for Mr Neo to persuade the court to exercise that power on the ground that the Consent Order is unworkable ab initio, he must show that there is a fundamental misunderstanding between the parties, apparent on the face of the Consent Order at the time it was made (see AYM at [22] and [29]). Mr Neo also faces the burden of persuading the court that the Consent Order has not been completely effected or implemented, which constitutes the “outer limit” to the jurisdiction conferred to the court under s 112(4) of the WC (see AYM at [22]). Thus, while I find that Mr Neo has a reasonable prospect of success in that the documentary evidence which he has adduced lends some support to his case in the Variation Application (see [34] above), on a prima facie assessment, I do have some reservations as to the merits of Mr Neo’s case.

39 That an unconditional stay of proceedings would not adequately protect Mdm Meng’s pecuniary interests as a creditor is not conclusive of the issue because there is an equal concern at this stage to avoid the prejudice which Mr Neo would suffer if B 1754 were not stayed and he is made bankrupt and deprived of the opportunity to exhaust his legal rights in connection with the Claimed Debt. In my view, the appropriate balance can be struck by the following two conditions which are to be imposed as part of the stay granted. First, the stay should only be limited to the determination of the Variation Application at first instance. In the event that Mr Neo does not succeed at first instance, the proceedings in B 1734 are automatically restored. That is, of course, without prejudice to Mr Neo applying for a further stay of bankruptcy proceedings in the event he wishes to pursue any appeal against the first instance decision, and the appropriateness of a stay would be considered by the court on its merits and in light of the circumstances at that juncture. Secondly, Mr Neo should be required to furnish security by way of payment into court, which I fix at 50% of the Claimed Debt (ie, S$168,331.13). This amount, which is not insubstantial, provides adequate safeguards for Mdm Meng’s pecuniary interests as a creditor and also reflects the degree of commitment which I think Mr Neo should be required to demonstrate, having regard to the reservations which I have articulated earlier (at [38]) about the merits of Mr Neo’s case in the Variation Application.

40 On this point, Mr Neo submitted that he has no financial resources to pay in the Claimed Debt as security, but he is nonetheless prepared to pay to Mdm Meng the costs from the appeal in the Enforcement Application which Mdm Meng is entitled to and which remain unpaid, as well as furnish security for the costs of SUM 2754 and the Variation Application, through financial assistance from his father. I also note that Mr Neo’s affidavits have elaborated at length on his historical financial position in the context of explaining why he required the sale proceeds of the Property to repay the Cost Plus Loan and that he had no means to repay the Cost Plus Loan with his personal assets, ¹³ but these explanations do not shed light on the current state of his financial position and therefore do not show that it would be impossible for him to provide any form of security to Mdm Meng. Considering matters in the round, I do not think Mr Neo has discharged his burden of demonstrating to the court that he lacks means, and that it would be impossible for him to provide security for the Claimed Debt to Mdm Meng in the quantum which I have ordered. In any case, any suggestion by Mr Neo that he lacks means is also somewhat contradicted by Mr Neo’s position that his father is prepared to assist him in paying the outstanding costs orders and in providing security for costs to Mdm Meng. I also observe, parenthetically, that the offer to pay outstanding costs smacks of hypocrisy because Mr Neo ought to have paid up these sums to Mdm Meng in the first place.

41 For the reasons above, I allow prayer 1 of SUM 2754 and grant a stay of proceedings in B 1734 pending the determination of the Variation Application (FC/SUM 2559/2026) at first instance, and on the condition that Mr Neo makes payment of S$168,331.13 into court as security for the Claimed Debt within 14 days from 23 October 2026 (“the Payment Condition”). The stay of proceedings would be automatically lifted in the event of (a) Mr Neo’s non-satisfaction of the Payment Condition or (b) the conclusion of the Variation Application at first instance, whichever is earlier, following which Mdm Meng’s counsel should write to the Supreme Court Registry within three working days to seek directions for B 1734 to be restored for hearing at the earliest available date to be confirmed by the Registry. Mdm Meng’s counsel should also notify Mr Neo of the restored hearing date by serving a notice of adjournment in Form PIR-7 on Mr Neo, in accordance with r 95(3) of the Personal Insolvency Rules. I also think that the appropriate costs order for SUM 2754 is better determined after the outcome of the Variation Application is known. The costs of SUM 2754 are therefore to be in the cause of B 1734 and are reserved to the Registrar having conduct of the proceedings in B 1734.

42 In prayer 2 of SUM 2754, Mr Neo sought, as an alternative, that the proceedings in B 1734 be adjourned pursuant to r 95(2)(c) of the Personal Insolvency Rules. A stay and an adjournment of bankruptcy proceedings are conceptually distinct, and they serve different purposes (see Li Yuan ([12] above) at [61]). I do not think the same grounds which are relied on in support of a stay can necessarily also support an adjournment of bankruptcy proceedings. Given that I have already granted the stay sought by Mr Neo (albeit on conditions), it is not necessary to consider the issue of an adjournment, and it suffices for me to state that I would not have granted any adjournment on the basis of the Variation Application and the grounds put forward by Mr Neo in SUM 2754. I therefore dismiss prayer 2 of SUM 2754.