Re Sogo Department Stores (S) Pte Ltd

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeJudith Prakash J
Judgment Date09 April 2001
Neutral Citation[2001] SGHC 70
Citation[2001] SGHC 70
Plaintiff CounselChan Hian Young and Adrian Wong (Allen & Gledhill)
Subject MatterWhether moneys from third parties held on trust by agent for principal- Whether circumstances gave rise to trust relationship,Leave to commence proceedings against company in judicial management,Agency,Judicial management,Intention of parties and arrangements made with regard to moneys so received,Whether applicant able to establish proprietary right to moneys claimed,Agency of necessity,Companies
Docket NumberOriginating Petition No 14 of 2000
Date09 April 2001
Defendant CounselLee Eng Beng and Melissa Lee (Rajah & Tann)
Published date19 September 2003

:

Background

I had before me an application by Hinckley Singapore Trading Pte Ltd (`Hinckley`) for leave from the court under s 227C(c) or s 227D(4)(c) of the Companies Act (Cap 50, 1994 Ed) (`the Act`) to determine the following issue between Hinckley and Sogo Department Stores (S) Pte Ltd (`Sogo`), a company under judicial management, namely: whether moneys collected by Sogo, on behalf of Hinckley, pursuant to the concessionaire agreement dated 1 June 1990 between Sogo and Hinckley, were held on trust by Sogo for Hinckley.

As is commonly known, Sogo operated a department store in the Raffles City Complex for many years. In June 1990, Sogo agreed to grant Hinckley, a company which dealt in the import and sale of Polo Ralph Lauren goods (basically clothing and accessories)(`the goods`), a concession to carry on the retail sale of these goods in an area of 72m2 or thereabouts in the department store. This concession commenced on 1 June 1990 and continued until 31 July 2000.

The relationship between the parties was governed by the written agreement dated 1 June 1990. This provided that Hinckley was to use the appropriated area of 72m2 for the sole purpose of exhibiting and selling the goods. In respect of goods sold by Hinckley, the agreement was that the customers would pay the purchase price directly to Sogo`s cashiers stationed within the department store. The agreement also provided that Hinckley would pay Sogo as commission a sum equivalent to 20% of the total net monthly sales of Hinckley`s goods. The monthly commission was to be deducted by Sogo from the moneys which it collected on behalf of Hinckley in respect of the sale of Hinckley`s goods. The balance was to be paid over to Hinckley within 15 days of the end of each calendar month.

For the period between May 2000 and July 2000, Sogo collected more than $200,000 on behalf of Hinckley from the sale of the goods. After its commission was deducted, the total amount payable to Hinckley was $212,212.99.

On 19 July 2000, interim judicial managers were appointed in respect of Sogo. On 18 August 2000, an order was made by the High Court placing Sogo under the judicial management of a judicial manager and the interim judicial managers were appointed, jointly and severally, the judicial managers of Sogo.

On 27 September 2000, Hinckley`s lawyers wrote to the judicial managers of Sogo asking for payment of the sum of $212,212.99 on the basis that the sum was held on trust by Sogo for Hinckley. On 3 October 2000, Hinckley`s claim that the moneys were trust moneys was rejected. Hinckley therefore filed this application for the court`s determination of the issue.

Legal arguments

This application was necessitated as under s 227C(c) and s 227D(4)(c), leave of the court has to be obtained before any proceedings may be commenced against a company which is in judicial management. Counsel for Hinckley recognised that, as established by Re Atlantic Computer Systems plc (No 1) [1991] BCLC 606, in order to obtain such leave, the applicant must show that the application discloses a seriously arguable case against the company in administration (or judicial management).

In the Atlantic Computer case, the English Court of Appeal, in laying down the general guidelines for leave applications under s 11(3) of the UK Insolvency Act 1986 (which the material sections of the Act are in pari materia with), held:

(a) the purpose of the power to give leave is to enable the court to relax the prohibition against the commencement of proceedings where it would be inequitable for the prohibition to apply;

(b) administration is for the benefit of unsecured creditors and should not be conducted at the expense of those who have proprietary rights which they are seeking to exercise;

(c) in a...

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2 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2001, December 2001
    • 1 December 2001
    ...Chapter 1); agency (see eg, Banque Nationale de Paris v Hew Keong Chan Gary[2001] 1 SLR 300 and Re Sogo Department Stores (S) Pte Ltd[2001] 2 SLR 556, affirmed, Hinckley Singapore Trading Pte Ltd v Sogo Department Stores (S) Pte Ltd[2001] 4 SLR 154 (concerning agency in a trust context)); a......
  • Equity, Trust and Restitution
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2001, December 2001
    • 1 December 2001
    ...to be inferred from the surrounding facts. Hinckley Singapore Trading Pte Ltd v Sogo Department Stores (S) Pte Ltd[2001] 4 SLR 154 (CA); [2001] 2 SLR 556 (HC) is an example. In that case, Hinckley Singapore Trading Pte Ltd (“Hinckley”) had a concessionaire agreement with Sogo Department Sto......

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