SAAG Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) v Shaik Abu Bakar bin Abdul Sukol and another and another appeal

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 30 January 2012
• Neutral Citation: [2012] SGCA 7
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 55 and 56 of 2011
• Year: 2012
• Published date: 09 February 2012
• Hearing Date: 30 November 2011
• Plaintiff Counsel: Tito Isaac, Justin Chan, Ho Seng Giap and Denyse Yeo (Tito Isaac & Co LLP)
• Defendant Counsel: Krishna Morthy and Udeh Kumar s/o Sethuraju (S K Kumar Law Practice LLP),K Anparasan and Grace Tan (KhattarWong),Ramasamy K Chettiar (Acies Law LLC) and Nasser Ismail (Md Nasser Ismail & Co)
• Subject Matter: Companies
• Citation: [2012] SGCA 7

Chao Hick Tin JA (delivering the grounds of decision of the court): Introduction

The present appeals, viz, Civil Appeal No 55 of 2011 (“CA 55/2011”) and Civil Appeal No 56 of 2011 (“CA 56/2011”), were appeals from the decision of the High Court judge (“the Judge”) in, respectively, Summons No 4266 of 2010 in Suit No 717 of 2009 (“S 717/2009”) and Summons No 2768 of 2010 in Suit No 183 of 2010 (“S 183/2010”), wherein he determined the following question of law posed under O 14 r 12 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) in the negative (see Azman bin Kamis v Saag Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) and another suit [2011] 4 SLR 825 (“the GD”) at [1]):

Whether the … causes of action [of the first respondent in CA 55/2011 and the respondent in CA 56/2011] … against the [appellant in the present appeals] have been extinguished and/or barred and/or precluded from being maintained consequent to the Scheme of Compromise and Arrangement dated 3 July 2008 which has been duly completed, performed and fulfilled according to its terms by 4 May 2009.

After hearing the submissions of the parties, we allowed both appeals. The result of our decision was that the first respondent in CA 55/2011 and the respondent in CA 56/2011 (collectively, “the Respondents”) were precluded from pursuing their common law claims for damages against the appellant in the present appeals (“the Appellant”) because of the Scheme of Compromise and Arrangement dated 3 July 2008 (“the Scheme”). We now give the reasons for our decision.

Facts The parties

The Appellant, SAAG Oilfield Engineering (S) Pte Ltd (“SAAG Singapore”), was formerly known as Derrick Services Singapore Pte Ltd (“Derrick”) until Derrick was rehabilitated and taken over by SAAG Singapore pursuant to the Scheme.

The first respondent in CA 55/2011, Shaik Abu Bakar bin Abdul Sukol (“Shaik”), and the respondent in CA 56/2011, Azman bin Kamis (“Azman”), were workmen employed by Derrick. They sustained injuries in the course of their employment, and commenced common law tort actions against Derrick and/or SAAG Singapore. The second respondent in CA 55/2011 had no role in the appeal.

Background to the dispute

The relevant facts giving rise to the claims by the Respondents were not in dispute and may be shortly stated.

The Respondents suffered injuries and lodged statutory compensation claims

On 14 August 2007, Azman suffered an injury due to an industrial accident. On 4 February 2008, Shaik also suffered injuries due to an industrial accident.

Both the Respondents lodged statutory claims for workmen’s compensation under the Workmen’s Compensation Act (Cap 354, 1998 Rev Ed) (“WCA”). Shaik’s WCA claim was lodged on or around 11 February 2008, while Azman’s WCA claim was lodged on 7 April 2008.

Derrick entered provisional liquidation

On 24 March 2008, Derrick entered provisional liquidation. The efforts of the provisional liquidator, M/s Ferrier Hodgson, resulted in the securing of SAAG Singapore as a “white knight” investor prepared to save Derrick from liquidation by acquiring control of Derrick pursuant to an investment agreement conditional upon creditor approval of the Scheme.

The material terms of the Scheme for present purposes were as follows:¹ Definitions 1.1 In this Scheme, except where the context or subject matter otherwise indicates or requires, the following expressions shall have the meaning set out opposite or following the expressions respectively:

Act means the Companies Act (Cap. 50, 2006 Rev. Ed.);

…

Claims Cut-Off Date means 22 October 2008;

Company means Derrick …

…

Court Meeting means the meeting (or adjournment thereof) of the Scheme Creditors summoned pursuant to [an] order of the Court made pursuant to sections 210 and 211 of the Act for such meeting to be convened for the purpose of considering and, if thought fit, to approve this Scheme;

Court Meeting Date means a date not later than 25 July 2008 or, in the case of an adjournment of any of the Court Meetings, the date of the later adjournment thereof;

…

Excluded Creditors means Preferential Creditors hereto and persons to whom any rights of the foregoing persons have been assigned or transferred, and Excluded Creditor means any one of the Excluded Creditors;

…

Liability means any obligation, liability or indebtedness of a person whether it is present, future, prospective or contingent, whether its amount is fixed or unliquidated, whether it arises in contract, tort, restitution or otherwise, whether or not it involves the payment of money, which arises at common law, in equity, by statute (in Singapore or in any other jurisdiction) or which arises pursuant to a valid assignment or a valid authority to pay any amount on behalf of a person or in any other manner whatsoever provided that such expression does not include any obligation or liability which is barred by statute or one for which no remedy may be granted or is otherwise unenforceable. For the avoidance of doubt, where any obligation or liability under a contract or policy is void or, being voidable, has been duly avoided, no obligation or liability shall arise in respect of such obligation or liability;

…

Preferential Creditors means any person who has a claim against the Company that would be entitled to priority in the case of a winding-up of the Company as set out in Schedule 1 [Schedule 1 of the Scheme sets out a number of “Preferential Creditors”, the most important for present purposes being creditors for “all amounts due in respect of workmen’s compensation under the [WCA] accrued before, on or after the commencement of the winding up”];²

Proof of Debt means a declaration executed by a Scheme Creditor in respect of the Scheme Claims claimed against the Company …

…

Scheme means this scheme of compromise and arrangement including all such amendments, additions and variations thereto as may be required, approved or sanctioned by the Court in accordance with the relevant provisions of the Act;

Scheme Claim in relation to any Scheme Creditor means the total amount of Liabilities (including any Liabilities that had been agreed between the Company and the respective Scheme Creditor but had not [been] paid prior to 24 March 2008), if any, as at 24 March 2008 for which the Company is or may be liable to that Scheme Creditor (whether contingently or otherwise) after deducting the value of any Security held by the Scheme Creditor, in respect of or arising from any and all act[s], omissions, agreements, transactions, dealings, matters and events whatsoever effected, occurring or otherwise taking place at any time prior to … 24 March 2008, and which determination shall be subject to the provisions of this Scheme;

Scheme Creditor means a creditor of the Company (other than an Excluded Creditor) who has a Scheme Claim;

…

Security means any mortgage, pledge, charge or other security on or against any property, right or entitlement whatsoever of the Company, that a Scheme Creditor has as at 24 March 2008 to secure its Scheme Claim;

… The Scheme

2.1 Preliminary 2.1.1 The purposes of this Scheme which is proposed by the Company are to procure, in consideration of the matters set out in this Scheme the discharge and release of all claims by Scheme Creditors relating to the Scheme Claims against the Company.

…

Payment to Scheme Creditors …

5.4 Notwithstanding anything to the contrary herein, any Scheme Creditor who has failed to submit … a Proof of Debt in respect of its Scheme Claim on or before the Claims Cut-Off Date, shall not be entitled to payment of his Scheme Claim, and with effect from the Claims Cut-Off Date, the Company shall be completely and absolutely discharged from that Scheme Creditor’s Scheme Claim.

…

Effect of Scheme …

7.2 Save as provided for and permitted in this Scheme, no Scheme Creditor shall be entitled to take any action or commence or continue any proceedings against the Company in any jurisdiction after the Court Meeting Date for or in connection with the payment or recovery of any sum in respect of or in connection with the Scheme Creditor’s Scheme Claim.

…

[emphasis in bold in original; emphasis added in italics]

The Scheme

Pursuant to s 210(1) of the Companies Act (Cap 50, 2006 Rev Ed), on 24 June 2008, Belinda Ang Saw Ean J (“Belinda Ang J”) ordered that a meeting of “Scheme Creditors” (as defined in cl 1.1 of the Scheme) be held on 25 July 2008. Notice of the meeting was accordingly sent to all Scheme Creditors (in accordance with s 211 of the Companies Act). Azman allegedly did not receive such notice, nor did he see the notice of the meeting advertised in The Straits Times. In contrast, Shaik did receive notice of the meeting or was otherwise aware of the Scheme.

On 25 July 2008, the meeting of the Scheme Creditors unanimously approved the Scheme, but neither of the Respondents was present at or participated in the meeting.

In accordance with ss 210(3) and 210(4) of the Companies Act, Belinda Ang J approved the Scheme on 25 August 2008, and the court order approving the Scheme was lodged with the Accounting and Corporate Regulatory Authority the following day.

The Respondents did not participate in the Scheme

On 27 August 2008, Shaik was notified that the Scheme had been approved and that he was to file a proof of debt.

On 20 October 2008, the Ministry of Manpower (“the MOM”) notified Shaik that it had assessed his WCA compensation at $29,400, but Derrick’s insurance company objected to this assessment (as did Shaik himself).

By 22 October 2008 (the deadline provided by the Scheme for Scheme Creditors to submit proofs of debt to be dealt with under the Scheme), neither of the Respondents had submitted any proof of debt, and, thereafter, neither of them participated in...