Interocean Holdings Group (BVI) Ltd v Zi-Techasia (Singapore) Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 13 January 2014
• Date: 13 January 2014
• Docket Number: Originating Summons No 981 of 2013
• Court: High Court (Singapore)

Interocean Holdings Group (BVI) Ltd

Plaintiff

and

Zi-Techasia (Singapore) Pte Ltd (in liquidation)

Defendant

[2014] SGHC 9

Edmund Leow JC

Originating Summons No 981 of 2013

High Court

Companies—Winding up—Company in members' voluntary winding up—Special resolution to stay winding-up proceedings—Whether winding up should be stayed altogether—Whether officers of company could be permitted to resume management of company—Section 279 (1) Companies Act (Cap 50, 2006 Rev Ed)

The plaintiff was a holding company beneficially entitled to all the issued shares of the defendant, a Singapore company. On 12 April 2013, the members of the defendant resolved at an extraordinary general meeting to put the company into voluntary winding up. Subsequently the members changed their mind and wanted to have the defendant company reinstated as it could be profitable from new businesses, there was goodwill in its corporate name, and there were financial and tax incentives that could be enjoyed. On 4 September 2013, an extraordinary general meeting of the company was held, wherein it was resolved by way of special resolution that the company would withdraw its winding-up petition, and that it would seek to revoke or stay the winding-up proceedings. The plaintiff thereupon applied to court for an order that the winding up of the defendant be stayed altogether.

Held, allowing the application:

(1) Section 279 (1) read with s 310 of the Companies Act (Cap 50, 2006 Rev Ed) (‘the Act’) gave the court the power to order a stay of winding-up proceedings altogether, but the exercise of this power was entirely discretionary: at [8] to [10] .

(2) If the creditors, liquidator and members of a company had consented to a stay altogether of winding up, the court should seldom and only with good reason stand in their way, but this was contingent on the party seeking a stay being able to demonstrate in full and forthright detail the reasons for which a stay was sought. There was nothing in the present case that would offend any notion of commercial morality and all the relevant interested parties had been notified and raised no objection: at [12] to [14] .

(3) There was no express provision in the Act permitting a winding up to be set aside or revoked. The only way a company being wound up could be put back into its former state was by way of a court order staying the winding-up proceedings and this was so whether the company had been put voluntarily into winding up or was in such a state by way of court order: at [16] and [18] .

(4) Once winding up had been stayed altogether, this meant that the process of liquidation set out in the Act leading ineluctably to the dissolution of the company had been stayed, including all the statutory duties and activities of the liquidator. It thus followed that the powers of the directors which were in abeyance while the company was in winding up continued. The stay took effect only from the date of the pronouncement of the stay and was not backdated to the date of the winding-up order or the date that voluntary winding up commenced: at [21] and [22] .

[Observation: There remained some questions in the present stay regime dealing with stays altogether of winding-up proceedings that might require legislative intervention to resolve. The first was the procedure if the defendant company or any other in its shoes had to be wound up subsequently. The second was that were the directors of such a company to quit office whether through the efflux of time or by the effect of provisions in the articles of association there could be nobody to take up the reins of the company in the case that winding up was stayed altogether: at [25] and [26] .]

Austral Brick Co Pty Ltd v Falgat Constructions Pty Ltd (1990) 2 ACSR 766 (folld)

American International Assurance Bhd v Coordinated Services L Design Sdn Bhd [2012] 1 MLJ 369 (refd)

Calgary and Edmonton Land Co Ltd (in liquidation) , Re [1975] 1 WLR 355 (folld)

Chimbusco International Petroleum (Singapore) Pte Ltd v Jalalludin bin Abdullah [2013] 2 SLR 801 (refd)

Intermain Properties Ltd, Re (1985) 1 BCC 99555 (refd)

Kim Maxwell Ltd, Re [1992] 1 NZLR 69 (refd)

Krextile Holdings Pty Ltd v Widdows [1974] VR 689 (refd)

Megah Teknik Sdn Bhd v Miracle Resources Sdn Bhd [2010] 4 MLJ 651 (refd)

Telescriptor Syndicate Ltd, Re [1903] 2 Ch 174 (refd)

Companies Act (Cap 50, 2006 Rev Ed) ss 279 (1) (consd) ;ss 291 (6) , 294 (2) , 310, 259

Companies Act 1948 (c 38) (UK) s 256 (1)

Companies Act 1961 (Vic) s 243

Companies Act 1965 (Act 125) (M'sia) s 243 (1)

Companies Act 1985 (c 6) (UK) s 183 (2)

Corporations Act 2001 (Cth) s 482 (3)

Gerald Yee and Jasmin Yek (Colin Ng & Partners LLP) for the plaintiff;

Defendant unrepresented.

Edmund Leow JC

1 This was an application made by the plaintiff for an order under s 279 (1) of the Companies Act (Cap 50, 2006 Rev Ed) (‘the Act’) that the members' voluntary liquidation of the defendant company be stayed altogether and that the officers of the defendant be permitted to resume management of the company. The plaintiff first appeared before me on 15 November 2013; the defendant was not represented but I was shown a letter dated 21 October 2013 wherein the liquidator said for the defendant that it had no objection to this application.

2 After hearing oral submissions I was satisfied that I had the power under s 279 (1) of the Act to grant the stay but I adjourned the matter to consider first, whether I should grant a stay; and second, whether it would have the effect which the plaintiff said it did and therefore whether I ought to grant the second prayer.

3 On the first point, I directed the plaintiff to provide satisfactory answers on why it required the resurrection of the defendant when it would be easier and cheaper simply to incorporate a new company. When the matter was heard again on 30 December 2013, I was informed that there were financial and tax incentives in reinstating the defendant company; the defendant company was part of a larger group of companies, the Zuellig Industrial Group, and such incentives would have to be captured before the close of the Zuellig Industrial Group's financial year. I was satisfied with this reason.

4 In the meantime I had also considered the issue of whether the plaintiff's second prayer had the effect in law claimed by the plaintiff and after reviewing the authorities I came to...