Pricewaterhouse Coopers LLP v Celestial Nutrifoods Ltd

CourtCourt of Appeal (Singapore)
Judgment Date08 April 2015
Docket NumberCivil Appeal No 132 of 2014
Date08 April 2015
Pricewaterhouse Coopers LLP and others
Plaintiff
and
Celestial Nutrifoods Ltd (in compulsory liquidation)
Defendant

[2015] SGCA 20

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

Chan Sek Keong SJ

Civil Appeal No 132 of 2014

Court of Appeal

Insolvency Law—Winding up—Liquidator—Whether leave of High Court needed for appeal against order granted under s 285 Companies Act (Cap 50, 2006 Rev Ed) —Whether such order interlocutory in nature—Whether High Court erred in granting such order—Section 285 Companies Act (Cap 50, 2006 Rev Ed)

The appellants (‘the Appellants’), Pricewaterhouse Coopers LLP (‘Pw C’), Mr Tan Boon Chiok and Mr Tham Tuck Seng, were the auditors of Celestial Nutrifoods Limited (‘Celestial’), a company in compulsory liquidation, for the financial years (‘FYs’) 2004 to 2009. The respondent (‘the Respondent’) was Celestial's liquidator. The Respondent brought an application in the High Court under s 285 of the Companies Act (Cap 50, 2006 Rev Ed) (‘s 285’) to compel the Appellants to disclose documents in their custody, power or control relating to Celestial's trade dealings, affairs and property (including those given to the Appellants by Celestial's subsidiaries in the British Virgin Islands and the People's Republic of China (‘PRC’)). The Respondent said that he needed the documents for a proper analysis of Celestial's consolidated financial statements and year-end balances. These documents would enable him to reconstruct the financial records of Celestial and investigate various suspicious transactions which he had uncovered. The High Court granted the Respondent's application. Dissatisfied, the Appellants appealed.

The Appellants argued that first, they would not be able to provide the Respondent with useful information and documents, and secondly, that the order granted by the High Court was oppressive. The Appellants argued that the order was oppressive because: (a) the Respondent's true motivation in bringing the application was to seek discovery to bolster his case in respect of a potential claim against them; (b) it required Pw C to submit their working papers; (c) there was a real risk that the Appellants would be exposed to civil and criminal sanctions in the PRC; and (d) the order was too wide as it covered all documents in the Appellant's possession, custody or control relating to Celestial and spanned the entire period during which Pw C was engaged as Celestial's auditors.

The Appellants also filed a summons for leave to appeal. But when the summons was heard by the High Court, the Appellants' counsel took the position that an appeal to the Court of Appeal lay as of right and that leave was not required. The High Court therefore did not grant leave to appeal. The Respondent therefore raised a preliminary issue of whether the Court of Appeal had the jurisdiction to hear the appeal. His point was that leave should have been obtained and without it no appeal could be filed. In other words, the Appellants were in error in not pursuing the summons for leave to appeal.

Held, dismissing the appeal:

(1) A disclosure order made under s 285 was undoubtedly an interlocutory order, it being made in the course of a winding-up proceeding. This was made clear by an earlier decision of the Court of Appeal in Jumabhoy Asad v Aw Cheok Huat Mick[2003] 3 SLR (R) 99 (‘Jumabhoy’). The holding in Jumabhoy continued to apply even after the 2010 amendments to the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed). First, an order under s 285 did not undermine the substantive rights of the parties as it merely required a party to disclose documents or be orally examined. Secondly, an order under s 285 did not dispose of the entire subject matter in the proceedings: at [27] and [32] .

(2) An order made under s 285 is not akin to pre-action interrogatories for which it was made clear by the Court of Appeal in Dorsey James Michael v World Sport Group Ltd[2013] 3 SLR 354 that leave need not be sought. There were significant differences. First, pre-action interrogatories were taken to seek relevant information for the specific purpose of commencing an action. But s 285 served a wider purpose in enabling liquidators to get documents and/or information for the purpose of determining the reasons for the company's demise. It applied irrespective of whether the liquidator was seeking information for the specific purpose of commencing an action. Secondly, an application made under s 285, unlike that of an application for leave to administer pre-action interrogatories, was made in the wider context of ongoing winding-up proceedings: at [33] and [34] .

(3) Section 285 was couched in very generous terms and should not be interpreted in a restrictive manner. The order under s 285 was not limited to eliciting such information as would reconstitute knowledge which the company once had or had been entitled in law to possess: at [41] .

(4) A two-stage test should be used in deciding whether to make an order under s 285. First, as a threshold, the liquidator had to show that there was some reasonable basis for his belief that the person could assist him in obtaining relevant information and/or documents, and that they were reasonably (and not absolutely) required. Second, the courts had to balance conflicting interests, and in particular, ensure that the order made was not oppressive: at [43] .

(5) The liquidator satisfied the first stage of the two-stage test. The Appellants were the auditors of Celestial for several years before the suspicious transactions happened. They were likely to have with them documents that could shed light on the circumstances of the suspicious transactions: at [50] .

(6) There was no merit in the Appellants' argument that the order granted pursuant to s 285 was oppressive. First, it was legitimate for a liquidator to avail himself of s 285 to investigate whether a claim existed, and if so, to sue the party responsible. Secondly, the mere fact that the working papers were Pw C's property could not, in and of itself, form a basis for resisting the liquidator's application under s 285. The papers should be disclosed so long as they contained information that was of relevance to the liquidator's investigation. Thirdly, the court was not convinced that the Appellants would expose themselves to civil and criminal sanctions under PRC law. Fourthly, it was not uncommon for the courts to grant orders compelling parties to disclose all documents in their possession, custody or control relating to the insolvent company in question: at [57] , [62] , [65] and [67] .

Aberdeen Asset Management Asia Ltd v Fraser & Neave Ltd [2001] 3 SLR (R) 355; [2001] 4 SLR 441 (folld)

Atlantic Computers plc, Re [1998] BCC 200 (folld)

Au Wai Pang v AG [2014] 3 SLR 357 (folld)

Bank of Credit and Commerce International SA (No 12) , Re [1998] Ch 84; [1997] 1 BCLC 526 (folld)

Blenwel Agencies Pte Ltd v Tan Lee King [2008] 2 SLR (R) 529; [2008] 2 SLR 529 (folld)

BNY Corporate Trustee Services Ltd v Celestial Nutrifoods Ltd [2014] 4 SLR 331 (refd)

Bozson v Altrincham Urban District Council [1903] 1 KB 547 (folld)

British & Commonwealth Holdings plc v Spicer and Oppenheim [1993] AC 426 (folld)

Castle New Homes Ltd, Re [1979] 1 WLR 1075 (folld)

Chesterfield United Inc, Re [2013] 1 BCLC 709 (folld)

Chi Man Kwong Peter v Lee Kum Seng Ronald [1983-1984] SLR (R) 700; [1984-1985] SLR 227 (refd)

Cloverbay Ltd v Bank of Credit and Commerce International SA [1991] Ch 90 (refd)

Daltel Europe Ltd v Makki [2005] 1 BCLC 594 (folld)

Dorsey James Michael v World Sport Group Pte Ltd [2013] 3 SLR 354 (folld)

Gold Co, Re (1879) 12 Ch D 77 (folld)

Greys Brewery Co, Re (1884) 25 Ch D 400 (refd)

Jumabhoy Asad v Aw Cheok Huat Mick [2003] 3 SLR (R) 99; [2003] 3 SLR 99 (folld)

Kong Wah Holdings Ltd, Re [2004] 2 HKC 255 (folld)

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

Ling Kee Ling v Leow Leng Siong [1995] 2 SLR (R) 36; [1996] 2 SLR 438 (refd)

Lion City Holdings Pte Ltd, Re [2003] 3 SLR (R) 493; [2003] 3 SLR 493 (folld)

Mid East Trading Ltd, Re [1998] BCC 726 (folld)

Nasco Gem, The [2014] 2 SLR 63 (folld)

New China Hong Kong Group Ltd, Re [2003] 3 HKC 252 (refd)

North Australian Territory Co, Re (1890) 45 Ch D 87 (folld)

Norton Warburg Holdings Ltd, Re (1983) 1 BCC 98,907 (refd)

Official Receiver of Hong Kong v Kao Wei Tseng [1990] 1 SLR (R) 315; [1990] SLR 29 (refd)

Open Net Pte Ltd v Info-Communications Development Authority of Singapore [2013] 2 SLR 880 (folld)

PFTZM Ltd, Re [1995] BCC 280 (refd)

Rank Xerox (Singapore) Pte Ltd v Ultra Marketing Pte Ltd [1991] 2 SLR (R) 912; [1992] 1 SLR 73 (refd)

Rolls Razor Ltd (No 2) , Re [1970] Ch 576 (not folld)

Sasea Finance Ltd, Re [1998] 1 BCLC 559 (folld)

Shierson v Rastogi [2003] 1 WLR 586 (folld)

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

Wellmix Organics (International) Pte Ltd v Lau Yu Man [2006] 2 SLR (R) 525; [2006] 2 SLR 525 (refd)

Companies Act (Cap 50, 2006 Rev Ed) s 285

Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed) rr 49, 52, 55, 56, 57

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 26 A r 1, O 57 r 16 (10)

Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) s 34 (1) (c)

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) ss 34 (1) (a) , 34 (1) (i) , 34 (2) (d) , 34 (2) (e) , 36 (1) , Fourth Schedule, Fifth Schedule para (e)

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

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

Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (HK) s 221

Corporations Act 1989 (Cth) s 597

Insolvency Act 1986 (c 45) (UK) s 236

Alvin Yeo SC, Lin Wei Qi Wendy, Goh Wei Wei, Chong Wan Yee Monica and Jenny Tsin (Wong Partnership LLP) for the appellants

Blossom Hing, Ang Yao Long Ronnie and Alphis Tay (Drew &amp...

To continue reading

Request your trial
7 cases
  • Roering NO and Another v Mahlangu and Others
    • South Africa
    • Invalid date
    ...3 SLR 164): dictum in para [27] approvedPricewaterhouseCoopers LLP and Others v Celestial Nutrifoods Ltd (in Com-pulsory Liquidation) [2015] SGCA 20: referred to.StatutesThe Companies Act 61 of 1973, ss 417 and 418: see Juta’s Statutes of SouthAfrica 2015/16 vol 2 at 1-234 to 1-235.GD Wicki......
  • Syed Suhail bin Syed Zin v AG
    • Singapore
    • High Court (Singapore)
    • 16 Marzo 2021
    ...[2015] AC 1732 (refd) Pannir Selvam a/l Pranthaman v AG [2020] 3 SLR 796 (folld) PricewaterhouseCoopers LLP v Celestial Nutrifoods Ltd [2015] 3 SLR 665 (refd) R (Black) v Secretary of State for Justice [2018] AC 215 (refd) Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pac......
  • Roering NO and Another v Mahlangu and Others
    • South Africa
    • Supreme Court of Appeal
    • 30 Mayo 2016
    ...3 SLR 164) (W & P Piling) para 27. See also PricewaterhouseCoopers LLP and Others v Celestial Nutrifoods Ltd (in Compulsory Liquidation) [2015] SGCA 20 paras 42 and [26] Ferreira supra n5 para 124. [27] Bernstein supra n6 para 21. [28] Hong Kong Bank supra n24 at 519 (NSWLR). [29] Bernstein......
  • Ang Chek Chin v ANS Import & Export Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 21 Agosto 2020
    ...(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 SL......
  • Request a trial to view additional results
2 books & journal articles
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2020, December 2020
    • 1 Diciembre 2020
    ...(No 2) [1958] Ch 565 at 570. 31 [2015] SGHC 142. 32 Sinfeng Marine Services Pte Ltd v Taylor, Joshua James [2020] 2 SLR 1332 at [47]. 33 [2015] 3 SLR 665. 34 [2021] 3 SLR 1344. 35 [2020] 1 SLR 627. 36 [2005] 2 AC 680. 37 [2020] SGHC 160. 38 See para 18.54 above. 39 See para 18.56 above. 40 ......
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2019, December 2019
    • 1 Diciembre 2019
    ...Cap 50A, 2007 Rev Ed. 12 [2019] 2 SLR 595. 13 Cap 43, 1999 Rev Ed. 14 [2019] 4 SLR 222. 15 [2019] SGHC 248. 16 Cap 50, 2006 Rev Ed. 17 [2015] 3 SLR 665. 18 [2019] 2 SLR 341. 19 [2018] 1 SLR 544. 20 [2019] SGHC 291. 21 [2013] 4 SLR 1116. 22 [1990] 3 MLJ xxxi. 23 [2019] 1 SLR 206. 24 The adju......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT