Superpark Oy v Super Park Asia Group Pte Ltd and others

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JCA
• Judgment Date: 11 February 2021
• Neutral Citation: [2021] SGCA 8
• Published date: 17 February 2021
• Docket Number: Civil Appeal No 160 of 2020
• Year: 2021
• Hearing Date: 04 December 2020
• Plaintiff Counsel: Chan Ming Onn David, Lee Ping (Li Ping), Swah Yeqin Shirin and Lin Ruizi (Shook Lin & Bok LLP)
• Defendant Counsel: Ng Ka Luon Eddee, Kang Weisheng Geraint Edward, Seah Yan De Bryan, Thaddaeus Aaron Tan Yong Zhong and Joseph Lim Weisheng (Tan Kok Quan Partnership),The first respondent unrepresented.
• Court: Court of Appeal (Singapore)
• Citation: [2021] SGCA 8
• Subject Matter: Voluntary winding up,Provisional liquidators,Liquidators,Commencement,Insolvency Law

Andrew Phang Boon Leong JCA (delivering the grounds of decision of the court): Introduction

This appeal arose out of an order (“the Order”) by the Judge below (“the Judge”) given on 29 July 2020 permitting the second and third respondents, who had been appointed as provisional liquidators of the first respondent, to continue with their efforts to dispose of the first respondent’s assets. The Order also stipulated that the appellant, who had resisted the making of the Order, had until 5 August 2020 to either put the first respondent into judicial management or find other means to restructure or rehabilitate it, failing which the Court would allow the “liquidation process … to continue to its conclusion”.

While this appeal bears the trappings of an insolvency-linked dispute, it is more appropriately seen as a conflict between the shareholders of the first respondent. The appellant, the majority shareholder of the first respondent, denied that any creditors’ voluntary winding up of the first respondent had commenced and/or continued to the present. The minority shareholder, one Mark Ananda Kumarasinhe (“Kumarasinhe”), was at least partially funding the second and third respondents, who were appointed as the first respondent’s provisional liquidators on 17 June 2020. On their part, the second and third respondents argued that a creditors’ voluntary winding up had commenced and could not be terminated without a court order specifically stipulating so. The second and third respondents accordingly argued that they should be entitled to continue disposing of the first respondent’s assets.

At the heart of this dispute is the question of the interaction between ss 290(1)(b) and 291(6)(a) of the Companies Act (Cap 50, 2006 Rev Ed) (Version in force before 30 July 2020) (“the CA”). The appellant relied on s 290(1)(b) of the CA to argue that, absent a special resolution by the first respondent’s members, the first respondent could not be voluntarily wound up. As no such special resolution was passed, the first respondent was not in voluntary winding up, and the appointment of the second and third respondents as liquidators was void. By contrast, the second and third respondents argued that under s 291(6)(a) of the CA, voluntary winding up had commenced following the lodgement of the statutory declaration providing for their appointment as provisional liquidators, and that the voluntary winding up commenced did not require a members’ special resolution in order to proceed. Put another way, the second and third respondents took the position that s 291(6)(a) of the CA created a third way for a voluntary winding up to commence, above and beyond the two ways outlined in s 290(1) of the CA.

Having carefully considered the parties’ written as well as oral submissions, we were unable to agree with the Judge’s Order, and allowed the appeal. We now give the detailed grounds for our decision. As no formal written grounds of decision were issued by the Judge for reasons we will canvass below (see especially [41] below), it will be useful for us to first set out the factual background before we explain our reasons for allowing the appeal.

Facts Background to the dispute

The appellant, Superpark Oy, is a company incorporated in Finland as a holding company in the SuperPark Group structure. Superpark Oy is wholly-owned by SuperPark Bidco Oy. Johan Wentzel (“Wentzel”) is the Chairman of the board of directors of Superpark Oy. The SuperPark Group, which is ultimately owned by several individuals and private equity investors, operates several indoor activity parks worldwide.

The appellant is the majority shareholder of the first respondent, Super Park Asia Group Pte Ltd (“SPAG”, or the “first respondent”), holding 78.33% of its shares. SPAG was incorporated in Singapore on 15 May 2018 as a private company limited by shares, and is described as being in the business of sports clubs and associations. SPAG was set up as an investment holding company for the operating subsidiaries of the SuperPark Group in Asia, and wholly owns the following subsidiaries: SuperPark Asia Limited, the Hong Kong subsidiary (“SP HK”); SuperPark ISM Company Limited, the Thailand subsidiary (“SP BKK”); SuperPark KL No 1 Sdn. Bhd., the Malaysia subsidiary (“SP KL”); and SuperPark Singapore SC Pte. Ltd., the Singapore subsidiary (“SP SG”).

There is some uncertainty as to whether SP HK was properly registered as being owned by the appellant or SPAG. This is immaterial to the present appeal, though for ease of reference, we will refer to all the subsidiaries listed above collectively as the “subsidiaries”.

The relevant corporate structure of the SuperPark Group is represented diagrammatically below:

SPAG’s other owners are Treasure Step Global Limited (“Treasure”), and Vintex Oy (“Vintex”). Kumarasinhe is a director and shareholder of Treasure.

Prior to the appointment of the second and third respondents as provisional liquidators, the directors of SPAG were Juha Tapani Tanskanen (“Juha”), who is the appellant’s CEO, Kumarasinhe, and one Goh Ke Ching, the park manager and supervisor of SP SG. Juha was the appellant’s representative on the board of directors of SPAG.

Kumarasinhe was first introduced to the appellant sometime in 2017. He wished to establish a SuperPark in Hong Kong (ie, SP HK), which was to be a licensee of the appellant. However, Kumarasinhe was unable to secure suitable external investors, and it was therefore agreed that the appellant would instead finance SP HK with an equity investment, thus becoming SP HK’s majority shareholder. Kumarasinhe was subsequently appointed as CEO of SP HK.

In May 2018, following the incorporation of SPAG, Kumarasinhe recommended and procured the establishment of SP BKK, SP KL, and SP SG. He was appointed a director of all three subsidiaries. The appellant provided US$3m in loans between October 2018 and January 2019 for the establishment of SP SG, while SuperPark Bidco Oy provided financing for SP BKK after Kumarasinhe failed to generate sufficient cash flow from existing parks or procure funding to fund the construction of the entire SP BKK park. To date, the appellant and SuperPark Bidco Oy have funded approximately US$9m or more to SPAG and its various subsidiaries.

The relationship between the appellant and Kumarasinhe began to break down sometime in or around the latter half of 2019. In November 2019, Kumarasinhe sent a sharply worded email to Juha expressing frustration about the appellant’s slow pace of funding for the SP BKK park. Kumarasinhe described the appellant’s apparent decision to not fund the SP BKK park in the absence of SPAG agreeing to new terms for the provision of debt drawdowns as resulting in great demotivation, and having a significant negative impact on cash positions.

The relationship continued to deteriorate, with the exchange of even more correspondence, and matters came to a head with a strongly-worded email that Kumarasinhe sent to Juha on 25 January 2020. This email, extracted below, speaks for itself:

Im [sic] not doing this for you. This is ridiculous. You guys can make your own dashboard from the forecasts we give you. Like I said to you, I am not going to be the corporate finance analyst for Finland and will not be engaging in the stupidity of reviewing numbers on a day to day basis. If you guys want to do this then fine…we prefer to focus on strategy going forward.

[…]

Juha, you may have come up with the concept and some branded colours but ultimately that is where the development ended but yet we are expected to fork over 6% of our TOP line to [the appellant]…for what? Sorry, this arrangement is not equitable anymore and something needs to be done about it. This is a massive obstacle to working in a transparent and free way with you guys and something that in 2020 I intend to address … one way or the other. I have to say, it was borderline insulting that you questions [sic] aspects of our “concept” […] Its [sic] even more ironic when you reflect on the standard of Europe’s parks with strange trampolines here and there […] run down parks with random pantones […] it’s a joke […]

[emphasis added in italics and bold italics, ellipses not in square brackets original]

On its end, the appellant, through its officers, expressed frustration with Kumarasinhe for not complying with various audit and disclosure requirements. In particular, it was alleged that Kumarasinhe failed to submit financial information regarding SPAG and its subsidiaries in a timely fashion despite being on notice that such information was critical for the appellant to negotiate with banks and investors, fulfil reporting obligations under credit facilities on time, and conduct a group-wide audit. Specifically, in relation to Kumarasinhe’s refusal to prepare for a group-wide audit conducted by the appellant’s auditors, Ernst & Young, Wentzel sent a firmly-worded email dated 27 May 2020 expressing his disappointment at the lack of progress in complying with the requirements for the audit. Wentzel’s email clearly indicated that he wanted Kumarasinhe to co-operate with Ernst & Young for the audit, and that the audit was of “very high importance” to the appellant. This does not appear to have been done, and the relationship appears to have deteriorated further.

The board resolution to appoint provisional liquidators for SPAG

True to his word in his email of 25 January 2020, Kumarasinhe did in fact take action to “address” the working relationship with the appellant. On 17 June 2020, Kumarasinhe tabled a board resolution at a meeting over Zoom to put SPAG in provisional liquidation. No prior notice concerning such a resolution had been given to Juha or the appellant, and the resolution passed with votes from Kumarasinhe and Goh Ke Ching despite Juha’s objections that no notice had been given. Juha’s requests for an adjournment were also...