MCST Plan No 4701 v MCL Land (Vantage) Pte Ltd

JurisdictionSingapore
JudgeGoh Yihan JC
Judgment Date09 December 2022
Docket NumberOriginating Application No 555 of 2022
CourtHigh Court (Singapore)
Management Corporation Strata Title Plan No 4701
and
MCL Land (Vantage) Pte Ltd (in members' voluntary liquidation)

[2022] SGHC 308

Goh Yihan JC

Originating Application No 555 of 2022

General Division of the High Court

Courts and Jurisdiction — Court judgments — Written grounds of decision — Parties settling matter and recording consent order before scheduled court hearing — No local precedent on matter — Parties not raising concerns with court issuing written grounds — Whether court should issue written grounds despite consent order

Insolvency Law — Winding up — Dissolution — Deferment of dissolution — Management corporation of property development seeking deferral of dissolution of developer — Developer owing outstanding obligations and liabilities to management corporation — Whether deferral of dissolution should be granted — Section 180(7) Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed)

Held, allowing the application:

(1) The court decided that it was appropriate to issue written grounds to provide guidance on the law, even though the parties had recorded a consent order and did not make detailed submissions. This was because there had not been a local decision on the application of s 180(7) of the IRDA (nor the predecessor provision). Also, the consent order was not a private commercial agreement between the parties, rather, it was made pursuant to the terms of s 180(7). Thus, the court had to be satisfied that it was exercising its discretion in a manner consistent with the law in approving the consent order. The court had also written to parties out of an abundance of caution, and the parties did not raise any concerns with the court issuing written grounds: at [3] to [6].

(2) The analysis under s 180(7) of the IRDA should proceed in two steps. First, the court had to consider who, apart from the liquidator as expressly provided for, was “any other person who appears to the Court to be interested” for the purposes of s 180(7). Second, the court had to consider how it should exercise the discretion under s 180(7) to defer the dissolution of the company and the relevant factors affecting the exercise of discretion: at [15].

(3) A “person who appears to the Court to be interested” as referred to in s 180(7) of the IRDA had to be one who had a legitimate interest in the deferment of the dissolution, and not merely one who had an interest in making the application or one who might be affected by its outcome. This might include a person seeking to maintain a claim against the company or a person who was at risk of the claim being defeated if the company was deregistered: at [23] and [25].

(4) In exercising the discretion under s 180(7) of the IRDA to defer the dissolution of the company, the court would ask whether the continued existence of the company was necessary in order to effect some “proper purpose”. What amounted to a “proper purpose” would depend on the facts of each case. One primary example was where there were pending proceedings against the company which would require the continued existence of the company. However, the mere existence of pending proceedings did not automatically lead to an order for deferment. Even where there was an existence of a proper purpose to seek a deferment of dissolution, that had to be balanced against the liquidator's interest and, possibly, that of other creditors and contributories in bringing the winding up to an end at the earliest practicable time: at [29], [34], [35], [37] and [39].

(5) In summary, the following principles were to guide the proper application of s 180(7) of the IRDA: (a) a “person who appears to the Court to be interested” in s 180(7) had to be one who had a legitimate interest in the deferment of the dissolution, and not merely one who had an interest in making the application or one who might be affected by its outcome; (b) the court had to consider whether the continued existence of the company was necessary in order to effect some “proper purpose”; and (c) the court should assess the facts in the round, and any order extending the time should be for a reasonable period only to eschew unnecessary delay: at [40].

(6) The applicant clearly had a legitimate interest in the deferment of the respondent's dissolution given that there were the two outstanding matters which had not yet been resolved between the parties. There was a close relationship between the applicant (as management corporation) and the respondent (as developer), and this conferred on the applicant a legitimate interest in the deferment. The continued existence of the respondent was necessary to effect some “proper purpose”. While the present case did not concern a pending proceeding against the respondent, it did concern two outstanding matters which could only be resolved by the respondent, either directly or through assignment. While there would be other parties whose interests would be best served by the scheduled dissolution of the respondent, the primary party to whom the respondent was responsible was the applicant. Therefore, it was appropriate to defer the dissolution of the defendant to a date after its outstanding obligations and liabilities to the applicant were resolved: at [42] to [45].

Case(s) referred to

ACN 002 408 040 PTY LTD, Re [2013] 94 ACSR 485 (refd)

Barclays Bank plc v Nylon Capital LLP [2012] 1 All ER (Comm) 912 (refd)

BCB Environmental Management Ltd, Re [2021] 1 All ER 1221 (refd)

Billingham re W M Ritchie (Aust) Pty Ltd [2007] NSWSC 325 (refd)

Border Control Solutions Ltd, Re [2022] 1 BCLC 454 (refd)

Campbell-Wilson v Australian Securities and Investments Commission [2017] FCA 391 (refd)

Commonwealth of Australia v Castel Electronics Pty Ltd [2022] FCA 432 (refd)

Deloitte & Touche AG v Johnson [1999] 1 WLR 1605 (refd)

Kerol Pty Ltd v Vergeld Engineering Pty Ltd (30 April 1998, SASC) (Australia) (refd)

Programmed Maintenance Services Ltd v Ranelagh House Pty Ltd [2008] FCA 1974 (refd)

Roehampton Swimming Pool Ltd, Re [1968] 1 WLR 1693 (refd)

Rosaub Pty Ltd, Re [2005] 54 ACSR 371 (refd)

Santos Petroleum Operations Pty Ltd, Re [2016] SASC 201 (refd)

Singapore Shooting Association v Singapore Rifle Association [2020] 1 SLR 395 (refd)

Stanhope Pension Trust Ltd v Registrar of Companies [1994] 1 BCLC 628 (refd)

Steelmaster Pty Ltd, Re [1992] 6 ACSR 494 (refd)

Tan Ng Kuang Nicky v Metax Eco Solutions Pte Ltd [2021] 1 SLR 1135 (refd)

Vasudevan v Icab Pte Ltd [1987] SLR(R) 46; [1987] SLR 201 (refd)

Walker, Re [1999] NSWSC 176 (refd)

Facts

The applicant was the management corporation for the development known as Lake Grande (“the Development”). The respondent was the developer of the Development. This was the applicant's application to defer the dissolution of the respondent pursuant to s 180(7) of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (the “IRDA”).

The applicant first learned that the respondent was in voluntary liquidation when its managing agent received an e-mail from the respondent's customer management manager on 25 July 2022. The applicant believed that the respondent was due to be dissolved sometime in early October 2022. However, there were two outstanding matters that had arisen in June and July 2022 which had not been resolved between the parties relating to: (a) the discontinuation of an app which was necessary for the operation of the video intercom system in the Development; and (b) a list of defects in the common area of the Development to be rectified – most of which remained unresolved.

The applicant became concerned that if the respondent were to be dissolved, then there would be no party responsible for these two outstanding matters. The applicant thus made the present application to defer the date of the respondent's dissolution to until after the respondent's outstanding obligations were discharged, either through amicable settlement or litigation. Alternatively, the applicant applied to defer the date of the respondent's dissolution until its obligations were assigned or novated to a third party.

The parties eventually agreed to record a consent order on 3 October 2022 for the deferment of the respondent's dissolution before the scheduled court hearing. But as there had not been a local decision on the application of s 180(7) of the IRDA and also because the court had to be satisfied that s 180(7) was invoked in a manner that was consistent with the law, the court decided to issue written grounds.

Legislation referred to

Companies Act (Cap 50, 2006 Rev Ed) s 308(6)

Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) ss 180(6), 180(7) (consd)

Companies Act 2006 (c 46) (UK) s 1029(2)

Corporations Act 1989 (Cth) ss 509(5), 509(6)

Corporations Act 2001 (Cth) ss 509(1), 509(2), 509(6)

Insolvency Act 1986 (c 45) (UK) ss 205(3), 205(4)

Tan Siew Bin Ronnie, Twang Kern ZernandSimone Bamapriya Chettiar (Central Chambers Law Corporation) for the applicant;

Chua Sui Tong and Ng Tse Jun Russell (Rev Law LLC) for the respondent.

9 December 2022

Goh Yihan JC:

1 The applicant is the management corporation for the development known as Lake Grande, which is located at 2, 4, 6, 8 and 10 Jurong Lake Link, Singapore 648131 (“the Development”). The respondent is the developer of the Development. This was the applicant's application to defer the dissolution of the respondent pursuant to s 180(7) of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (the “IRDA”).

2 I was originally scheduled to hear the parties on an expedited basis on 5 October 2022. This was because the respondent would have been dissolved on 7 October 2022, rendering any decision after that date moot. However, before the hearing took place, the parties agreed to record a consent order on 3 October 2022. Accordingly, I vacated the scheduled hearing. Further, being satisfied that the draft order was in accordance with the terms of s...

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