Re Pan-Malaysia Industries Ltd

• Jurisdiction: Singapore
• Judge: Choor Singh J
• Judgment Date: 10 August 1978
• Neutral Citation: [1978] SGHC 40
• Docket Number: Originating Summons No 175 of 1978
• Date: 10 August 1978
• Year: 1978
• Published date: 19 September 2003
• Plaintiff Counsel: Goh Heng Leong (Allen & Gledhill)
• Citation: [1978] SGHC 40
• Defendant Counsel: P Selvadurai (Rodyk & Davidson)
• Court: High Court (Singapore)
• Subject Matter: Receiver and manager,s 17 Central Provident Fund Act,Conditional sales,Companies,Priority,Priority over the Central Provident Fund Board,Credit and Security,Debentures,Whether debenture holders had priority over sums owing to the Central Provident Fund under the Central Provident Fund Act,s 292 Companies Act,Distribution of assets

Cur Adv Vult

The point in issue to be determined in this originating summons is whether a debenture holder has a prior right than the Central Provident Fund Board to the assets of a company when a receiver of the company has been appointed by the debenture holder.

The facts which are not in dispute are these. The Pan-Malaysia Industries Ltd was summoned to appear in a magistrate`s court on 2 April 1976 on twelve counts of failing to pay contributions to the Central Provident Fund Board in respect of certain of their employees.

The company pleaded guilty and was fined a total of $1,800 being $150 for each of the twelve counts. This fine was paid. In addition, the company was ordered to pay the arrears of the Central Provident Fund contributions amounting to $48,493.30 to the Central Provident Fund Board. The company paid two sums totalling $10,483.25 leaving a balance of $38,010.05 still due and owing to the Central Provident Fund Board.

By a notice of appointment dated 26 January 1977 the plaintiffs were appointed receivers and managers of the company at the instance of the Chase Manhattan Bank (National Association) pursuant to the provisions of three debentures created by the company in favour of the said bank.

On 17 December 1977 the Central Provident Fund Board applied to the magistrate`s court, under s 214(b)(iii) of the Criminal Procedure Code for the issue of a warrant for the levy of the amount of $38,010.05 by distress and sale of the property of the company. A warrant was issued but distress was not levied as a stay of execution was granted pending the determination of the issue of priorities.

All the assets of the company have been realised and the the net proceeds of sale of the whole of the assets of the company are insufficient to meet the claim of the debenture holders in full so that if the claim of the Central Provident Fund Board is postponed until after the claim of the debenture holders have been paid in full there will be no assets out of which payment can be made to the Central Provident Fund Board.

The plaintiffs contend that having regard to the provisions of ss 191 and 292 of the Companies Act (Cap 185, 1970 Ed), a sum of $13,276.16 only falls to be paid out of the assets of the company in the hands of the receivers to the defendants by way of a preferential payment before the claim of the debenture holders are met, while the balance of $24,733.89 is payable to the defendants only after the debenture holders have been paid in full.

The defendants on the other hand contend that the whole of the amount of $38.010.15 is payable to them in preference to any claim of the debenture holders.

To determine the question of priorities it is necessary to look at all the relevant statutory provisions. Section 14 of the Central...