Deldar Tony Singh and another v Rajinder Singh and others
Jurisdiction | Singapore |
Judge | Colin Seow AR |
Judgment Date | 28 August 2012 |
Neutral Citation | [2012] SGHCR 13 |
Court | High Court (Singapore) |
Docket Number | Suit No 444 of 2012 (Summons No 3260 of 2012 & Summons No 3643 of 2012) |
Published date | 17 September 2012 |
Year | 2012 |
Hearing Date | 03 August 2012,14 August 2012,28 August 2012 |
Plaintiff Counsel | Walter Ferix Justine (Joseph Tan Jude Benny LLP) |
Defendant Counsel | Leng Siew Wei Aloysius and Ooi Jian Yuan (AbrahamLow LLC) |
Subject Matter | Civil Procedure,Companies |
Citation | [2012] SGHCR 13 |
Before me are two summonses (“SUM 3260” and “SUM 3643”) for the striking out of the Statement of Claim in Suit 444 of 2012 (“Suit 444”) on the ground that the plaintiffs have failed to obtain leave of court as required under s 299(2) of the Companies Act (Cap 50, 2006 Rev Ed) (“the Companies Act”) before commencing Suit 444. The applicants in SUM 3260 and SUM 3643 are (respectively) the third and second defendants in Suit 444. The first defendant is not involved in these applications before me.
Background of the disputeThe plaintiffs and the first defendant were directors and are shareholders of the second defendant, a company currently in liquidation (hereafter referred to as “the Company”). The Company was incorporated by the first defendant on 12 June 2008. On 15 June 2011, the Company was placed under voluntary winding up pursuant to a special resolution passed at a general meeting which was convened on the same day. By way of an ordinary resolution passed in the same meeting, the third defendant (hereafter referred to as “the Liquidator”) was appointed the liquidator of the Company.
On 30 May 2012, the plaintiffs commenced Suit 444 against the first defendant, joining the Company and the Liquidator as co-defendants. Suit 444 was commenced pursuant to a dispute which arose between the plaintiffs and the first defendant regarding their respective rightful shareholdings in the Company. In their Statement of Claim, the plaintiffs alleged,
AND the Plaintiffs claim:
and lodges the changes in shareholding with [the Accounting and Corporate Regulatory Authority] within fourteen (14) days of the Order to be made herein, such that the rectified register of members and their respective shareholding and percentage are as follows:
Counsel for the Company and the Liquidator, Mr Walter Ferix (“Mr Ferix”), submitted that the Statement of Claim should, insofar as the Company and the Liquidator are concerned, be struck out because the plaintiffs failed to obtain leave of court to commence Suit 444 against the Company and the Liquidator. In his written submissions,1 Mr Ferix cited ss 247, 248 and 299(2) of the Companies Act as the bases for his contention:
See Section 247 read with Section 248 of the Companies Act (Cap. 50)
Modes of winding up 247. The winding up of company may be either –- by the Court; or
- voluntary.
…Application of this Division
248. Unless inconsistent with the context of subject-matter, the provisions of this Act with respect to winding up shall apply to the winding up of a company in either of those modes....Alternatively see Section 299(2) of the Companies Act (Cap. 50)
Property and proceedings 299. – (2) After the commencement of the winding up no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.[bold in original]
That Suit 444 was commenced against the Company and the Liquidator without leave of court was not disputed by the plaintiffs. However, counsel for the plaintiffs, Mr Aloysius Leng (“Mr Leng”), argues that no leave of court was required for the plaintiffs to commence Suit 444 against the Company and the Liquidator. The thrust of Mr Leng’s argument is that leave is only required where (in the case of a company) a party seeks to commence legal proceedings as a
For the record, Mr Leng also argues that the Company and the Liquidator were named as co-defendants in Suit 444 because they are necessary parties to the action, explaining that “[i]f the 2nd and 3rd Defendants were not parties to this Suit 444, they would not be bound by the Court’s findings in this Suit against the 1st Defendant, which would be a breach of natural justice”.2 However, this argument is of no relevance to the present proceeding because the issue before me is whether leave of court was required to be obtained before Suit 444 was commenced against the Company and the Liquidator, and not whether leave of court should be granted for Suit 444 to be commenced against the Company and the Liquidator.
The decision The action against the Company Materiality of whether the Company is under a creditors’ or members’ voluntary winding upBefore I embark on my analysis, I shall briefly state what are the key differences between a creditors’ voluntary winding up and a members’ voluntary winding up. As will be seen later, it is material for the purposes of the applications before me whether the Company is under a creditors’ or a members’ voluntary winding up.
Under s 4(1) of the Companies Act, creditors’ voluntary winding up is defined as “a winding up under Division 3 of Part X [of the Companies Act], other than a members’ voluntary winding up”. Members’ voluntary winding up is defined under the same provision as “a winding up under Division 3 of Part X [of the Companies Act], where a declaration has been made and lodged in pursuance of section 293”. The said declaration refers to the declaration of solvency which is required to be made in a members’ voluntary winding up under s 293 of the Companies Act:
293.–(1) Where it is proposed to wind up a company voluntarily, the directors of the company, or in the case of a company having more than 2 directors, the majority of the directors shall, in the case of a members’ voluntary winding up before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out, make a declaration to the effect that they have made an inquiry into the affairs of the company, and that, at a meeting of directors, have formed the opinion that the company will be able to pay its debts in full within a period not exceeding 12 months after the commencement of the winding up.
…
The upshot is that a voluntary winding up proceeds as a members’ voluntary winding up only when a declaration of solvency has been made in accordance with s 293 of the Companies Act; otherwise the winding up would proceed as a creditors’ voluntary winding up (see
As can be gleaned from the submissions, Mr Ferix’s case for the striking out of the Statement of Claim lies in s 299(2) of the Companies Act (see [4] above). To recap, s 299(2) of the Companies Act provides:
299.– (2) After the commencement of the winding up no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.
Section 299(2) falls under Division 3 of Part X in the Companies Act which deals with matters pertaining to voluntary winding up of companies. Division 3 is further divided into four subdivisions, each bearing...
To continue reading
Request your trial