Melt butter in a medium saucepan over medium heat, add onion and ham; cook, stirring, for 5 minutes or until onion is softened. Add flour; cook, stirring, for 1 minute or until mixture thickens and bubbles. Remove from heat; gradually whisk in milk. Return to heat; cook, stirring, until sauce boils and thickens. Simmer, stirring, for 1 minute; stir in cheese, paprika and parsley.

Pour mixture into a shallow heatproof dish. Cover, refrigerate for 2 hours or until cold.

Using two dessert spoons, shape tablespoon measures of mixture into quenelle shapes. Dip croquettes in egg, then coat in breadcrumbs. Place croquettes on a tray lined with plastic wrap or baking paper. Cover; refrigerate for 1 hour.

Meanwhile, make tomato sauce. Heat oil in a medium saucepan over medium heat; cook onion, stirring, for 10 minutes or until soft but not coloured. Add garlic and chilli; cook, stirring, until fragrant. Stir in tomatoes and sugar; simmer, uncovered, for 5 minutes or until sauce is thickened. Season to taste.

Fill a large saucepan one-third full with oil; heat to 180°C/350°F (or until a cube of bread turns golden in 15 seconds). Deep-fry croquettes, in batches, for 2 minutes or until browned lightly and heated through. Drain on paper towel.

Serve croquettes with tomato sauce.