Re Halley's Departmental Store Pte Ltd

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: G P Selvam J
• Judgment Date: 25 January 1996
• Neutral Citation: [1996] SGHC 10
• Citation: [1996] SGHC 10
• Docket Number: Originating Petition No 19 of 1995
• Plaintiff Counsel: Michael Moey (Moey & Yuen)
• Subject Matter: Whether scheme to genuinely offer creditors satisfaction or avert independent investigation into affairs of the company,ss 210(1) & (3) Companies Act (Cap 50, 1994 Ed),Factors to be considered,Approval by the court,Schemes of arrangement,Companies
• Published date: 19 September 2003
• Defendant Counsel: Tan Lee Cheng (Lee Bon Leong & Co)
• Date: 25 January 1996

Judgment:

GP SELVAM J

The petitioners, Halley`s Departmental Store Pte Ltd, made this application under s 210 of the Companies Act (Cap 50, 1994 Ed) (the Act) praying that the scheme of arrangement set out in the schedule to it to be sanctioned by the court so as to be binding on the company and all its unsecured creditors. The scheme provided for payment of three cents to every dollar of unsecured debt. The English equivalent of s 210 was s 206 of the Companies Act 1948.

The scheme of arrangement was as follows:

It is proposed that each unsecured creditor will be paid 10 cents to every dollar owed by Halley`s Departmental Store Pte Ltd to them provided full recovery is made from the company`s trade creditors. Three cents to every dollar owed will be paid over two equal monthly instalments. The date for commencement of payment of the instalments shall be deferred to one month after the court order sanctioning the approval of the creditors is granted and the balance at the end of every quarter in proportion to the moneys recovered from the trade debtors less the legal costs incurred.

Section 210(1) of the Act provides that:

Where a compromise or arrangement is proposed between a company and its creditors or any class of them or between the company and its members or any class of them, the court may, on the application in a summary way of the company or of any creditor or member or the company, or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors or of the members of the company or class of members to be summoned in such manner as the court directs.

Section 210(3) of the Act provides that:

If a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members present and voting either in person or by proxy at the meeting or the adjourned meeting agrees to any compromise or arrangement, the compromise or arrangement shall, if approved by order of the Court, be binding on all the creditors or class of creditors or on the members or class of members, as the case may be, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.

In this case the company obtained an order to convene a meeting and subsequently a meeting was held. The company had the requisite number to win the day. One of the unsecured creditors, Twenty Eight Accessories Trading...