Ang Chek Chin v ANS Import & Export Pte Ltd

• Judge: Audrey Lim J
• Judgment Date: 21 August 2020
• Court: High Court (Singapore)
• Docket Number: Companies Winding Up No 285 of 2019 and Summons No 563 of 2020
• Date: 21 August 2020

Ang Chek Chin

and

ANS Import & Export Pte Ltd (formerly known as Ang Ngee Seng Import & Export Pte Ltd)

[2020] SGHC 177

Audrey Lim J

Companies Winding Up No 285 of 2019 and Summons No 563 of 2020

High Court

Companies — Winding up — Intention to appear and be heard — Locus standi — Whether non-parties should be heard — Whether party neither creditor nor contributory had right to be heard

Companies — Winding up — Power to summon witnesses — Whether witnesses should be summoned for examination and ordered to produce documents — Whether s 285 Companies Act (Cap 50, 2006 Rev Ed) applied before company wound up or liquidator appointed — Whether witnesses should be summoned under s 257(2) Companies Act — Sections 257(2) and 285 Companies Act (Cap 50, 2006 Rev Ed)

Held, disallowing the Non-Parties from appearing, and dismissing SUM 563:

(1) Generally, a person who was not the company, a creditor, a contributory, the official receiver or the liquidator of the company (“the class of persons”) should not be allowed to appear and be heard on an application to wind up the company. The overall framework of the CA gave rights to creditors and contributors to appear and be heard as they were directly affected by the winding up. However, a person who was not of the class of persons should not generally be allowed to appear and participate in a winding up, as otherwise any person could potentially, by serving a notice of intention to appear in compliance with r 28 of the CWU Rules, become a party to the winding up, have a right to apply for orders and directions, and even appeal against the winding-up order: at [15] and [16].

(2) The Non-Parties had no locus standi to be heard as they fell outside the class of persons. This was also not a case in which an exception should be made to allow the Non-Parties a right to be heard. The Non-Parties were not the targets of CWU 285. Further, they were neither seeking to oppose or challenge CWU 285, and hence could not rely on r 30 of the CWU Rules to adduce affidavit evidence, since r 30 provided that affidavits were to be filed “in opposition” to a winding-up application: at [19] and [20].

(3) Section 285 of the CA could not be invoked in the present case because the court's power under s 285 to summon witnesses to be examined or produce documents only applied after the court had ordered a winding up or appointed a provisional liquidator. This was made clear from the legislative history of s 285 and was further supported by r 49 of the CWU Rules. This interpretation also accorded with the purpose of s 285, which was to assist a liquidator in the accumulation of information that would enable or facilitate in the discharge of his duties: at [26] to [31].

(4) It was also unnecessary to invoke s 257 of the CA to order examination of the Witnesses or production of documents. The relevant documents would be accessible by Roland, as a director to the Company. There had also already been numerous affidavits and documents filed to support and oppose the winding up. The central issue of winding up would turn on the proper interpretation of the Company's Constitution and whether Raymond and Roland had properly applied the share buy-out mechanism; there was no need to examine the Witnesses to determine this, or the other allegations in dispute: at [32].

Case(s) referred to

Ambank (M) Bhd v Malaysian Coal & Minerals Corp Sdn Bhd [2016] 11 MLJ 590 (distd)

Bradford Navigation Co, Re (1870) LR 5 Ch App 600 (folld)

China Underwriters Life and General Insurance Co Ltd, Re [1988] 1 SLR(R) 40; [1988] SLR 217 (folld)

Craven Insurance Co Ltd, Re [1968] 1 WLR 675 (folld)

Four Pillars Enterprises Co Ltd v Beiersdorf AG [1999] 1 SLR(R) 382; [1999] 1 SLR 737 (refd)

Mid East Trading Ltd, Re [1997] 3 All ER 481 (folld)

Perennial (Capitol) Pte Ltd v Capitol Investment Holdings Pte Ltd [2018] 1 SLR 763 (refd)

PricewaterhouseCoopers v Saad Investments Co Ltd [2014] 1 WLR 4482 (distd)

PricewaterhouseCoopers LLP v Celestial Nutrifoods Ltd [2015] 3 SLR 665 (folld)

SBA Properties Ltd, Re [1967] 1 WLR 799 (folld)

W&P Piling Pte Ltd, Liquidator of v Chew Yin What [2004] 3 SLR(R) 164; [2004] 3 SLR 164 (refd)

Facts

ANS Import & Export Pte Ltd (“the Company”) was owned equally by two brothers, Ang Chek Chin (“Raymond”) and Ang Chek Poh (“Roland”), who were also the two directors of the Company. Raymond commenced winding-up proceedings against the Company (“CWU 285”), but this was eventually settled. The decision dealt with matters which arose in the course of CWU 285.

The first issue concerned applications made by two employees and an ex-employee of the Company (“Non-Parties”) to appear in CWU 285. They had filed notices of intention to appear as required by r 28 of the Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed) (“CWU Rules”), and also filed affidavits, claiming that they did not side with either Raymond or Roland, but that they were merely seeking to clarify certain facts, and that their evidence would assist the court. They argued that a non-party was not precluded from intervening just because he was not a creditor or shareholder. Raymond opposed this, arguing that the Non-Parties had no locus standi to participate as they were neither contributories nor creditors of the Company.

The second issue concerned Roland's application under s 285 of the Companies Act (Cap 50, 2006 Rev Ed) (“CA”) for the court to summon various related persons (“Witnesses”) to be examined and to produce documents (“SUM 563”). Roland argued that s 285 gave the court a wide discretion to call before it any person it found relevant to the disposal of the case, and that here, the Witnesses were relevant to determine whether the grounds for winding up had been met. Roland alternatively sought to rely on s 257(2) of the CA as the basis for SUM 563. Raymond opposed SUM 563, arguing that the information and documents from the Witnesses were not reasonably required, and that SUM 563 had been taken out for a collateral purpose.

Legislation referred to

Companies Act 1967 (Act 42 of 1967) ss 249, 249(1)

Companies Act (Cap 50, 2006 Rev Ed) s 285 (consd); 254(1)(f), 254(1)(i), 257(2), 257(2)(c), 257(2)(f)

Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed) rr 28, 30, 49, First Schedule Form 8 (consd); rr 7, 27, 28(2), 29

Companies Ordinance (Cap 174, 1955 Rev Ed) s 211, 211(1)

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 1 r 2(2)

Bankrupt Law Consolidation Act 1849 (c 106) (UK) s 117

Companies Act 1862 (c 89) (UK) s 115

Companies Act 1929 (c 23) (UK) s 214

Companies Act 1948 (c 38) (UK) s 268

Companies Act 1961 (Aust) s 249

Companies Act 1981 (Bermuda)

Companies (Consolidation) Act 1908 (c 69) (UK) s 174

Companies (Winding-Up) Rules 1972 (PU(A) 289/1972) (M'sia) rr 28, 29, 30

Rules of Court 2012 (PU(A) 205/2012) (M'sia) O 15 r 6(2)(b)

Koh Choon Guan Daniel and Ng Wei Ying (Eldan Law LLP) for the plaintiff;

Defendant unrepresented;

Ling Daw Hoang Philip and Chua Cheng Yew (Wong Tan & Molly Lim LLC) for the applicant in SUM 563/2020;

Wong Liang Kok and Linus Lin Zhiyi (Tan Peng Chin LLC) for the non-parties.

21 August 2020

Audrey Lim J:

Introduction

1 ANS Import & Export Pte Ltd (“the Company”) is owned equally by two brothers (“the brothers”), Ang Chek Chin (“Raymond”) and Ang Chek Poh (“Roland”), who are also the two directors of the Company. Raymond commenced winding-up proceedings against the Company on the basis that Roland had acted in the Company's affairs in his own interest and in a manner which appeared to be unfair or unjust to Raymond, and that it would be just and equitable to wind up the Company, pursuant to ss 254(1)(f) and 254(1)(i) of the Companies Act (Cap 50, 2006 Rev Ed) (“the CA”) (based on the provision as it stood at the material time).

2 Roland filed a notice of intention to appear to oppose the winding up and applied by Summons No 563 of 2020 (“SUM 563”) for the court to summon various persons (including Raymond) to be examined and to produce documents, relying on s 285 of the CA. Additionally, two employees and an ex-employee of the Company filed notices of intention to appear and filed affidavits. At the hearing before me, Roland agreed to buy out Raymond's shares in the Company and thus the winding-up application was resolved. This decision deals with two matters in the course of the proceedings, namely whether and when a non-party, particularly one who is not a creditor or contributory of the company, is allowed to appear and intervene in winding-up proceedings...