RBG Resources plc (in liquidation) v Credit Lyonnais

• Judge: Woo Bih Li J
• Judgment Date: 28 October 2005
• Neutral Citation: [2005] SGHC 204
• Citation: [2005] SGHC 204
• Defendant Counsel: Lawrence Teh and Loh Jen Wei (Rodyk and Davidson),Moey Weng Foo (Insolvency and Public Trustee's Office),V Coomaraswamy and Kenneth Choo (Shook Lin and Bok)
• Published date: 28 October 2005
• Plaintiff Counsel: Quek Mong Hua and Matthew Saw (Lee and Lee)
• Date: 28 October 2005
• Docket Number: Companies Winding Up No 60 of 2002
• Court: High Court (Singapore)
• Subject Matter: Creditor of company applying to admit proof of debt against Singapore liquidation estate of company,Section 377(3)(c) Companies Act (Cap 50, 1994 Rev Ed),Whether creditor entitled to be paid before moneys remitted to foreign liquidation estate,Companies,Winding up,Liquidation of foreign company not registered in Singapore

28 October 2005 Judgment reserved.

Woo Bih Li J:

1 RBG Resources plc (in liquidation) (“RBG”) is a company incorporated in England. It was placed in liquidation in England on 12 June 2002. On 7 August 2002, the English liquidators filed a petition being Companies Winding Up No 60 of 2002 (“CWU 60/2002”) in the High Court of Singapore to seek, inter alia, an order to wind up RBG. On 8 and 13 August 2002, I appointed Singapore provisional liquidators of RBG and gave them powers to seize, source, and sell metal goods in various warehouses in Singapore and to place the proceeds of sale in a US dollar account pending the determination of various claims to the metal goods. Eventually the metal goods were surveyed and sold, and their sale proceeds placed in a US dollar account.

2 In the meantime, an interpleader action was filed by Fujitrans (Singapore) Pte Ltd (“Fujitrans”) as both RBG and various parties were claiming metal goods stored in warehouses operated by Fujitrans. Such metal goods were part of those which were the subject of the powers given to the provisional liquidators. On 6 September 2002, I ordered RBG to commence a fresh action as plaintiff and to name the other claimants as defendants. On 4 October 2002, RBG commenced Suit No 1175 of 2002 (“the RBG action”) as plaintiff and named seven claimants as defendants.

3 On 7 October 2002, I made an order to wind up RBG in Singapore and appointed Singapore liquidators.

4 Before the commencement of the trial of the RBG action in January 2004, the Singapore liquidators of RBG reached a settlement with five of the defendants, ie, Banque Cantonale Vaudoise (“BCV”), Westdeutsche Landesbank Girozentrale (“West LB”), ING Bank NV (“ING”), ING Belgique (“BBL”), and GMAC Commercial Finance plc (“GMAC”). One of the defendants, BNP Paribas (Swisse) SA, had earlier withdrawn its Defence and did not participate in the settlement or the trial. Credit Lyonnais (“CL”) was the remaining defendant. CL was claiming the following metal goods (“the CL Claimed Metal”):

(a) copper cathodes;

(b) tin ingots;

(c) cut nickel cathodes; and

(d) uncut nickel cathodes or nickel plates.

5 On 7 January 2004, I made an order in the RBG action that in respect of the sale proceeds of the CL Claimed Metal, and subject to the outcome of the RBG action between RBG and CL, RBG was to pay three of the defendants, who had been claiming the same type of metal goods, the sums payable pursuant to their respective settlement agreements.

6 In respect of the metal goods which CL were not claiming (“the Non-CL Claimed Metal”), I also made the following order on 7 January 2004 in the RBG action:

1. Subject to clause 2 herein, the gross sale proceeds of [the Non-CL Claimed Metal] are to be divided amongst [RBG, BCV, WestLB, ING, BBL and GMAC]as follows:

a. To [RBG] – the sum of US$3,315,416.35.

b. To [BCV] – the sum of US$760,490.65.

c. To [WestLB] – nil.

d. To [ING] – the sum of US$211,247.40.

e. To [BBL] – the sum of US$593,779.33.

f. To [GMAC] – the sum of US$261,682.00.

2. [RBG (in liquidation), BCV, WestLB, ING and BBL] are each to receive their respective share of the said gross sale proceeds as provided in clause 1 herein after adding the interest earned and deducting the expenses of the survey and sale of the said metal cargoes …

7 On 12 January 2004, I made an order in CWU 60/2002 that:

…

2. The Singapore Liquidators of [RBG] be authorised [sic] make the following payments pursuant to the terms of the Order(2) dated 7 January 2004 in Suit No. 1175 of 2002/F:-

a. To [RBG] – the sum of US$3,034,270.02.

b. To [BCV] – the sum of US$722,201.31.

c. To [ING] – the sum of US$200,611.48.

d. To [BBL] – the sum of US$551,697.98.

e. To [GMAC] – the sum of US$261,682.00.

such payments being inclusive of interest …

3. The Singapore Liquidators be at liberty to transmit the sum of US$2,784,270.02 to the English Liquidation Estate upon the Liquidators’ undertaking to retain a sum of US$250,000 from the sum of US$3,034,270.02 in clause 2(a) above to meet the costs and expenses in the Singapore Liquidation.

8 On 11 June 2004, I gave my decision on the dispute between RBG and CL in the RBG action. I decided, inter alia, that the CL Claimed Metal was owned by RBG save for one drum of nickel identified as “519-W127”. CL’s appeal to the Court of Appeal was dismissed on 24 January 2005.

9 On 7 March 2005, RBG applied in Summons in Chambers No 1204 of 2005 (“SIC 1204/2005”) in CWU 60/2002 for the following orders:

…

2. That the Liquidators of [RBG] be authorised to make the following payments pursuant to the terms of the Order of Court (2) dated 7 January 2004 in Suit No. 1175 of 2002/F:-

(a) to RBG – the sum of US$8,425.732 and interest thereon up to the date of payment;

(b) to [WestLB] – the sum of US$439,428 and interest thereon up to the date of payment;

(c) to [BBL] – the sum of US$390,503 and interest thereon up to the date of payment; and

(d) to GMAC – the sum of US$1,657,326 and interest thereon up to the date of payment.

3. The Liquidators be at liberty to:-

(a) transmit the sum of US$10,456,023 and interest thereon up to the date of payment to the English Liquidation Estate, or elsewhere as directed by the English Liquidators, upon the Liquidators’ undertaking to retain a sum of US$480,000 to meet the costs and expenses in the Singapore Liquidation; and

(b) transmit the balance of the retained sum of US$480,000, if any, after paying all the costs and expenses in the Singapore Liquidation, to the English Liquidation Estate, or elsewhere as directed by the English Liquidators.

I will refer to the second prayer as “the Payment Application” and the third prayer as “the Transmission Application”.

10 On or about 23 March 2005, CL submitted a Proof of Debt to the Singapore liquidators of RBG.

11 On 28 March 2005, at the hearing of SIC 1204/2005, CL objected to the Transmission Application. Accordingly, I granted an order in terms of the Payment Application only and adjourned the Transmission Application.

12 On 5 April 2005, CL applied in SIC No 1753 of 2005 for the following orders:

1. That the decision of the Singapore Liquidators of RBG, not to admit the Proof of Debt dated 23 March 2005 submitted on behalf of Credit Lyonnais and/or to forward the same to the English liquidators of RBG be reversed.

2. That the said Proof of Debt be admitted wholly as proof of the claim of Credit Lyonnais against the Singapore liquidation estate of RBG.

3. That the Singapore Liquidators of RBG shall pay the sum of US$8,578,379.18 and interest thereon in satisfaction of the liability incurred by RBG to Credit Lyonnais before paying or remitting the amount or amounts recovered from the property or assets of RBG in Singapore to the English liquidators of RBG.

4. That the costs of this application shall stand and rank as part of Credit Lyonnais’ claim and be paid out of the Singapore liquidation estate of RBG in the manner aforesaid.

I will refer to this as “the PD Application”.

13 In essence, CL wanted its debt to be paid from the Singapore liquidation estate of RBG before moneys were transmitted to the English liquidation estate. CL relied on s 377(3)(c) which is under Part XI, Division 2 (“Part XI Div 2”), of the Companies Act (Cap 50, 1994 Rev Ed) (“the Act”). The Singapore liquidators of RBG and a creditor of RBG, West LB, opposed that application and wanted the Singapore liquidators to be allowed to pay the balance of the moneys they were holding to the English liquidation estate of RBG and for CL to file its Proof of Debt with the English liquidators. The Singapore liquidators and West LB asserted that s 377(3)(c) did not apply.

14 I should mention that CL had objected to West LB’s participation in arguments. However, as West LB had been served with SIC 1204/2005 and had indicated its wish to be heard, I allowed such participation in view of r 17(1) of the Companies (Winding Up) Rules (Cap 50, R 1, 1990 Rev Ed) which states:

Subject to any order to the contrary, every petition, notice of motion and summons shall be served upon every person against whom any order or other relief is sought but the Court may at any time direct that service be effected or notice of proceedings be given to any person who may be affected by the order or other relief sought and may at any time direct the manner in which such service is to be effected or such notice given; and any person so served or notified shall be entitled to be heard.

However, I indicated to West LB that it was not to reiterate the arguments of the Singapore liquidators. Also, as the Singapore liquidators would ordinarily already represent the interests of unsecured creditors, unless such interests were in conflict with those of the Singapore liquidators, I also cautioned West LB that if it still wanted to present its own arguments, it might not be granted costs even if its arguments succeeded. Furthermore, if such arguments did not succeed, it might be made liable for part of CL’s costs.

15 It is important to bear in mind that Part XI Div 2 applies only to certain companies. Various provisions of the Act are relevant in construing s 377(3)(c).

16 Section 365 states:

This Division applies to a foreign company which, before it establishes a place of business or commences to carry on business in Singapore, complies with section 368 and is registered under this Division.

17 A “foreign company” is defined in s 4 as:

(a) a company, corporation, society, association or other body incorporated outside Singapore; or

(b) an unincorporated society, association or other body which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose and which does not have its head office or principal place of business in Singapore.

18 Section 368(1) provides that:

Every foreign company shall, before it establishes a place of business or commences to carry on...