Re Pinkroccade Educational Services Pte Ltd (formerly known as PDA Pink Elephant Pte Ltd)(in creditors' voluntary winding up)

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeLee Seiu Kin JC
Subject MatterPrinciple in Ex p James,Conditions to fulfil before granting of sanction,Whether conscionable for company to keep moneys,Whether principle applicable,Separation of moneys from company's other moneys,Companies,Winding up,Claimants notifying company of mistake before winding up,Whether to impose constructive trust on company,Liquidators' application for court's sanction to refund moneys mistakenly paid to company in liquidation,Trusts,Mistaken payment of moneys to company in liquidation,Constructive trusts
Plaintiff CounselManoj Sandrasegara and Jaime Tey (Drew & Napier LLC)
Published date19 September 2003
Defendant CounselLawrence Quahe and Yeo Khung Chye (Harry Elias Partnership)
Docket NumberOriginating Summons No 529 of 2002
Date21 August 2002

Judgment

GROUNDS OF DECISION Cur Adv Vult

1 This is an application by Liquidators of the Company under s 310(1)(a) of the Companies Act. The Liquidators ask for the following substantive order:

"that the Court sanction the payment of AUD112,472.00 by the Company to P.T. HM Sampoerna TBK"

2 The Claimant, P.T. HM Sampoerna TBK, is a public company in Indonesia in the business of manufacturing, distribution and sale of tobacco and tobacco-related products. Sometime in 1991 the Claimant engaged an Australian company, Pink Elephant International Pty Ltd ("PEI"), to conduct courses for its staff in Indonesia. PEI has some connection with the Company but they are separate entities. After the courses were conducted, PEI rendered an invoice to the Claimant on 19 December 2001. This was sent to the Claimant’s office in Singapore and is for the sum of AUD135,608.00. The Claimant instructed its bank to make payment of AUD112,472.00 on the invoice. But the instruction mistakenly cited the bank account of the Company instead of PEI. It turned out that the Claimant had prior dealings with the Company and its bank account information was stored in the Claimant’s computer records. The mistake was made by human error, presumably due to the similarity in the names. In the event, the Claimant’s bank paid the sum of AUD112,472.00 ("the Monies") into the bank account of the Company on 30 January 2002. As no payment was received by PEI, its representative contacted the Claimant on 8 February to inquire about it. It was then that the Claimant realised that it had made the payment to the wrong account.

3 Meanwhile, things had been going badly for the Company. By January 2002 it was already insolvent and the directors had decided to go for a voluntary winding up. The eventual Liquidators, Mr Michael Ng Wei Teck and Mr Neo Ban Chuan of the accounting firm KPMG Singapore ("KPMG"), were brought into the picture by early March 2002. It was at this time that the Claimant came in contact with the Liquidators-to-be. The Claimant had asked PEI for assistance in obtaining a refund of the Monies from the Company and was referred to KPMG. There followed a number of communications between the Claimant and KPMG. It is not clear from the affidavits how the first contact was initiated, but on 8 March 2002, Mr Phillip Reynolds of KPMG sent an e-mail to the Claimant’s Efiana Chressida requesting for a statement of the exact sequence of events behind the mistaken payment so that KPMG would "have all the facts to pass onto the lawyers." In response to this, the Claimant sent a letter to Reynolds on 12 March 2002 which described the circumstances that I have outlined above. The letter ended with a request to refund the Monies by transferring it to the Claimant’s bank account with ABN Amro Bank N.V. in Surabaya, Indonesia.

4 On 18 March 2002 the Company passed a special resolution to be wound up voluntarily pursuant to s 290(1)(b) of the Companies Act and the Liquidators were duly appointed. The Claimants then instructed M/s Harry Elias Partnership ("HEP") on the matter. On 3 April HEP wrote to the Liquidators to demand the return of the money. The Liquidators’ solicitors, M/s Drew & Napier LLC ("DN") replied on 5 April and requested for a week to obtain their clients’ instructions. Very properly, DN confirmed that in the meantime the Liquidators would not draw down on the money. The parties eventually agreed to take out this application for a determination as to the Claimant’s rights in respect of the Monies. Because the payment was made in Australian currency, the Monies have throughout been kept separate and identifiable from the other funds of the Company.

5 The Claimant based its claim on two alternative grounds:

(1) on the principle in Ex parte James; and

(2) on the basis that the Company is a constructive trustee of the Monies.

The Ex parte James principle

6 Counsel for the Claimant, Mr Quahe, submitted that on the principle in Ex parte James, re Condon (1874) LR 9 Ch App, the Court ought to order the Liquidators to refund the Monies. In Re PCChip Computer Manufacturer (S) Pte Ltd [2001] 3 SLR 296, I had applied the principle in Ex parte James and ordered the Liquidators to refund a sum of money mistakenly paid by the bank to them in the course of the winding up of the company. In coming to that decision I had been guided by the four conditions suggested by Walton J in In re Clark (A Bankrupt), Ex parte The Trustee v Texaco Ltd [1975] 1 WLR 559, viz:

(i) There must be some form of enrichment of the assets of the bankrupt by the claimant;

(ii) The claimant must not be in a position to submit an ordinary proof of debt;

(iii) In all the circumstances of the case an honest person would consider that it would only be fair to return the money to the claimant; and

(iv) The principle applies only to the extent necessary to nullify the enrichment of the estate.

Mr Quahe submitted that all four conditions were met in the present case and therefore the Court ought to make a similar order.

7 I pointed out to Mr Quahe that condition (ii), i.e. that the claimant must not be in a position to submit an ordinary proof of debt, was not met in the present case. This is because the payment of the Monies was made before the Company passed the special resolution for winding up. In Re PCChip, although the bank had mistakenly credited the company’s account before the winding up order was made, the money was paid over to the liquidators only after the winding up order. Merely...

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4 cases
  • Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation)
    • Singapore
    • High Court (Singapore)
    • 16 February 2004
    ...up. While this point was not argued before me, I should at least advert to it. The court in Re Pinkroccade Educational Services Pte Ltd [2002] 4 SLR 867 appeared to accept that liquidators in voluntary liquidation have less exacting obligations than court liquidators appointed pursuant to a......
  • Ho Yew Kong v ERC Holdings Pte Ltd and another
    • Singapore
    • High Court (Singapore)
    • 27 November 2018
    ...case of Re Pinkroccade Educational Services Pte Ltd (formerly known as PDA Pink Elephant Pte Ltd) (in creditors’ voluntary winding up) [2002] 2 SLR(R) 789 (“Pinkroccade”) to mount the argument that a constructive trust had arisen over the $1,000,000. Pinkroccade was a case involving a claim......
  • Public Prosecutor v Chow Wai Lam
    • Singapore
    • District Court (Singapore)
    • 3 January 2006
    ...resided with some other party, did not amount to disposition of property under the Act. b) In Re Pinkroccade Educational Services [2002] 4 SLR 867, the claimants mistakenly paid monies into the bank account of PES which were kept separate and unmixed. Subsequently, PES was wound up voluntar......
  • Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation)
    • Singapore
    • High Court (Singapore)
    • 16 February 2004
    ...up. While this point was not argued before me, I should at least advert to it. The court in Re Pinkroccade Educational Services Pte Ltd [2002] 4 SLR 867 appeared to accept that liquidators in voluntary liquidation have less exacting obligations than court liquidators appointed pursuant to a......

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