An Guang Shipping Pte Ltd v Ocean Tankers (Pte) Ltd

JudgeAndrew Phang Boon Leong JCA,Judith Prakash JCA
Judgment Date21 February 2022
CourtCourt of Appeal (Singapore)
Docket NumberCivil Appeal No 56 of 2021 (Summons No 89 of 2021)
An Guang Shipping Pte Ltd (judicial managers appointed) and others
and
Ocean Tankers (Pte) Ltd (in liquidation)

[2022] SGCA 13

Andrew Phang Boon Leong JCA and Judith Prakash JCA

Civil Appeal No 56 of 2021 (Summons No 89 of 2021)

Court of Appeal

Civil Procedure — Appeals — Leave — Company in liquidation — Whether leave of court required — Section 133 Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018)

Civil Procedure — Striking out — Application to strike out notice of appeal — Whether notice of appeal could be struck out for failure to obtain leave of court

Held, dismissing the application:

(1) Whether leave was required under s 133(1) of the IRDA was to be judged by reference to the nature of the original application. It was the original application that would determine whether a proceeding in court was one that could be classified as against the company or not: at [17].

(2) The only issue which SUM 2085 raised for determination was regarding the priority of the charterhire debts owed to the XH Companies. SUM 2085 was not seeking a ruling on the liability of OTPL to pay the XH Companies the charterhire debts but simply directions as to whether these should be paid before or with the unsecured debts. This was a question of law which the liquidators of OTPL required to have determined in order for them to properly carry out their duties in the liquidation of OTPL. SUM 2085 which concerned the administration of the liquidation could not be considered to be a proceeding against the company within the meaning of s 133(1) of the IRDA and, accordingly, the appeal against the decision there was not a proceeding against OTPL: at [19] and [20].

[Observation: An appeal could not be described as a defensive step at a general level. The purpose of an appeal was for the appellant to challenge a court ruling in favour of the respondent which the appellant did not agree with and replace that ruling with one in favour of the appellant. Described that way, an appeal seemed to be offensive rather than defensive: at [15].]

Case(s) referred to

Hyflux Ltd v SM Investments Pte Ltd [2020] 4 SLR 1265 (refd)

Korea Asset Management Corp v Daewoo Singapore Pte Ltd [2004] 1 SLR(R) 671; [2004] 1 SLR 671 (folld)

Thomas Evan v Mortgage Debenture Ltd [2016] EWCA Civ 103 (folld)

Facts

On 7 August 2020, judicial managers were appointed for Ocean Tankers (Pte) Ltd (“OTPL”). At the time, OTPL was the charterer of over 100 vessels belonging to 40 associated companies (the “XH Companies”) and a substantial amount of charterhire was outstanding. At some point thereafter the XH Companies were also placed in judicial management. After OTPL went into judicial management, the XH Companies' vessels remained on charter for some time.

The XH Companies were of the view that the charterhire accruing during the period of retention should be payable as expenses of OTPL's judicial management. As such, these sums were to be treated as priority judicial management expenses, to be paid ahead of unsecured creditors. The OTPL judicial managers were prepared to admit the charterhire claims as ordinary unsecured debts of OTPL but were not prepared to pay these in priority. The OPTL judicial managers took out HC/SUM 2085/2021 in HC/OS 452/2020 on 1 May 2021 (“SUM 2085”), seeking directions from the court on how the charterhire debts were to be treated.

The High Court judge held that while priority could be accorded to a small part of the XH Companies' claims, the balance would have to be classified as ordinary unsecured debt. That would mean no priority and that these amounts would be settled on a pro-rata basis with the debts of other unsecured creditors.

Dissatisfied with the outcome, the XH Companies filed the notice of appeal in CA/CA 56/2021. Relying on s 133(1) of the Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) (“IRDA”), OTPL sought to strike out the XH Companies' notice of appeal in CA/SUM 89/2021 on the basis that leave to appeal had not been applied for as required by that section in the situation where a litigant was commencing proceedings “against” a company under judicial management.

Legislation referred to

Companies Act (Cap 50, 1994 Rev Ed) s 262(3)

Companies Act (Cap 50, 2006 Rev Ed) s 227B

Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) s 133(1)

Supreme Court of Judicature Act 1969 (2020 Rev Ed) s 55(1)(a)

Thio Shen Yi SC (TSMP Law Corporation) (instructed), Leo Zhen Wei Lionel, Chong Yi-Hao Clayton and Kwong Kai Sheng (WongPartnership LLP) for the appellants;

Narayanan Sreenivasan SC, Rajaram Muralli Raja, Jonathan Lim Jien Ming, Tan Kai Ning ClaireandEva Teh Jing Hui (K&L Gates Straits Law LLC)...

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