Taylor, Joshua James and another v Sinfeng Marine Services Pte Ltd and other matters

• Jurisdiction: Singapore
• Judge: Vincent Hoong JC
• Judgment Date: 18 October 2019
• Neutral Citation: [2019] SGHC 248
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 419 of 2019 (Summons Nos 3666 of 2019 and 3920 of 2019), Originating Summons No 420 of 2019 (Summons Nos 3563 of 2019 and 3998 of 2019), Originating Summons No 421 of 2019 (Summons Nos 3667 of 2019 and 3921 of 2019)
• Year: 2019
• Published date: 22 October 2019
• Hearing Date: 23 September 2019,12 September 2019,15 October 2019
• Plaintiff Counsel: Sim Kwan Kiat, Ang Wei Kiat (Hong Weijie) and Chow Jie Ying (Rajah & Tann Singapore LLP)
• Defendant Counsel: Tan Poh Ling Wendy and Carl Lim Kok Wee (Morgan Lewis Stamford LLC),Benny Jude Philomen and Mary-Anne Shu-Hui Chua (Joseph Tan Jude Benny LLP)
• Subject Matter: Civil Procedure,Appeals,Leave,Interlocutory application,Stay of execution pending appeal
• Citation: [2019] SGHC 248

Vincent Hoong JC: Introduction

By way of Summonses 3666 of 2019, 3563 of 2019 and 3667 of 2019, the defendant in each matter seeks a declaration that it does not require leave to appeal to the Court of Appeal against various disclosure orders (collectively referred to as “the Orders”) made by me pursuant to s 285 of the Companies Act (Cap 50, 2006 Rev Ed) (“the Act”). Alternatively, should such leave to appeal be required, the defendants seek leave to appeal against the Orders.

Summonses 3920 of 2019, 3998 of 2019 and 3921 of 2019 (collectively, “the extension of time summonses”) are consequential applications to grant the defendants an extension of time to file their respective Notices of Appeal (“NOA”) in the event that I grant the declarations sought in Summonses 3666 of 2019, 3563 of 2019 and 3667 of 2019 above.

Background

Coastal Oil Singapore Pte Ltd (“the Company”) is at the heart of all the above summonses. The Company is subject to a creditors’ voluntary winding-up,¹ and the plaintiffs were appointed the liquidators of the Company on 10 January 2019.²

By way of Originating Summons No 419 of 2019 (“OS 419/2019”), Originating Summons No 420 of 2019 (“OS 420/2019”) and Originating Summons No 421 of 2019 (“OS 421/2019”), the plaintiffs took out applications against the respective defendants, seeking disclosure orders under s 285 of the Act.

After hearing the parties, I granted the Orders as annexed in this judgment, in favour of the plaintiffs against the respective defendants. The present summonses arise from the Orders, as the respective defendants seek to appeal against the Orders made.

The issues

The issues that arise for my consideration in this judgment are: first, is leave required for the defendants to appeal against the Orders, made under s 285 of the Act? second, if leave is required, should such leave be granted? third, should there be a stay of execution of the Orders pending the disposal of any renewed application to the Court of Appeal?

My decision

Having considered the submissions and authorities, I declare that the respective defendants do not require leave to appeal against the Orders. In the alternative, if leave is required, I find that there is a question of importance upon which further argument and a decision of a higher tribunal would be to the public advantage, and accordingly grant such leave to appeal.

In relation to the third issue, subject to the undertakings furnished by the plaintiffs as set out in [45] below, I decline to grant a stay of execution of the Orders pending the disposal of any renewed application to the Court of Appeal.

These are my reasons.

Leave is not required to appeal against s 285 orders made in voluntary winding-up proceedings

Section 34(2)(b) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”) read with paragraph 1(h) of the Fifth Schedule of the same states that leave of the High Court or of the Court of Appeal is required where the subject matter of the appeal relates to an “interlocutory application”, save in certain cases which are inapplicable in this case.

The issue here is whether the Orders, made pursuant to s 285 of the Act, were orders made “at the hearing of any interlocutory application” [emphasis added] (paragraph 1(h) of the Fifth Schedule of the SCJA), such that leave of the court is required for an appeal against the Orders.

On its face, the Court of Appeal’s decision in PricewaterhouseCoopers LLP and others v Celestial Nutrifoods Ltd (in compulsory liquidation) [2015] 3 SLR 665 (“Celestial Nutrifoods”) appears to conclusively dispose of the issue. At [27] of Celestial Nutrifoods, it was remarked that “[t]he disclosure order made under s 285 is undoubtedly an interlocutory order” [emphasis added]. Reading the Court’s statement in isolation, it would appear that the court’s leave is therefore required before a defendant can file a NOA against the Orders made under s 285 of the Act.

However, Costank (S) Pte Ltd (“Costank”), the defendant in OS 420/2019, submits that the Court of Appeal’s remarks in Celestial Nutrifoods were made “on the assumption that the s 285 application in question was one which had been made in the wider context of ongoing winding-up proceedings.”³ The present case, being a creditors’ voluntary winding-up, is materially different from a compulsory winding-up application, which was before the Court in Celestial Nutrifoods. This is because, unlike a case of a compulsory winding-up, no winding-up proceedings are in fact ongoing in a creditors’ voluntary winding-up situation. Accordingly, the Orders granted in the present case, which relate to a company in a creditors’ voluntary winding-up, were not interlocutory orders, and therefore no leave ought to be required to appeal against them.⁴ I agree.

In Dorsey James Michael v World Sport Group Pte Ltd [2013] 3 SLR 354 (“Dorsey James”), the Court of Appeal confirmed that an application to administer pre-action interrogatories is not an interlocutory application. This was because (Dorsey James at [60]):

… [An application to administer pre-action interrogatories] is an application made by way of originating summons and its only end is the particular relief sought in the originating summons. Once the application for such relief has been considered and ruled upon by the court, that matter ends and those proceedings are not followed by any other steps leading to any trial or further disposal of that matter. [emphasis added]

In other words, an application for pre-action interrogatories is not an interlocutory application because, unlike an interlocutory application which is “peripheral to the main hearing determining the outcome of the case” (Dorsey James at [58], citing Jowitt’s Dictionary of English Law (Sweet & Maxwell, 3rd Ed, 2010)), “the entire subject matter of that originating summons is spent and there is nothing further for the court to deal with” once the application to administer pre-action interrogatories is disposed of (Dorsey James at [64]).

In contrast with an application to administer pre-action interrogatories, the Court in Celestial Nutrifoods considered that a s 285 application is an interlocutory application. This was because “unlike that of an application under originating summons for leave to administer pre-action interrogatories, [it] is made in the wider context of ongoing winding-up proceedings” [emphasis added in italics and bold italics] (at [34]).

Hence, while both pre-action interrogatories and s 285 applications seek information which may reveal potential causes of action against errant parties, s 285 applications are interlocutory in nature, as they operate within the winding-up proceedings, and the determination of a s 285 application does not therefore dispose of everything in the proceedings (Celestial Nutrifoods at [32]–[34]).

The observations in Celestial Nutrifoods are correct in so far as they relate to compulsory winding-up orders. As s 254 of the Act shows, a compulsory, or court-ordered winding-up order is granted at the order of the court. After the making of such an order for winding-up, a compulsory winding-up order only concludes when the court, on application of the liquidator, orders that the company be dissolved (ss 275 and 276 of the Act). Hence, compulsory winding-up proceedings only come to a close when the liquidator has shown, to the court’s satisfaction, that he has “realised all the property of the company or so much thereof as can in his opinion be realised…” (s 275 of the Act). Therefore, where the company is subject to a compulsory winding-up order, which was the type of winding-up order before the court in Celestial Nutrifoods, a s 285 application plainly operates “in the wider context of ongoing winding-up proceedings” (Celestial Nutrifoods at [34]).

In contrast, a voluntary winding-up is commenced upon the due resolution passed by the members of the company in a general meeting, without any need to initiate court proceedings (s 290 of the Act). The voluntary winding-up also comes to a close “[a]s soon as the affairs of the company are fully wound up” and the liquidator thereupon calls a meeting of the members or creditors, lodging a return of the meeting with the Registrar of Companies and the Official Receiver thereafter. Three months after the lodging of the return, the company is dissolved (s 308 of the Act). Plainly, unlike a compulsory winding-up order, a voluntary winding-up may take place independently of court proceedings, and the court’s supervision of the winding-up is only triggered when there is an application to the court through, for example, a s 285 application.

Given the fundamental differences between a compulsory winding-up and a voluntary winding-up, it is clear that the Court in Celestial Nutrifoods was only focused on a s 285 application made in the context of a compulsory winding-up application, which proceedings necessarily end in the courts. In contrast, in a creditors’ voluntary winding-up, court proceedings need not in fact be initiated, and the liquidation may come to an end without the need to initiate any proceedings. In other words, while a s 285 application in a compulsory winding-up application necessarily occurs within winding-up proceedings, a s 285 application in a voluntary winding-up occurs independently of any winding-up proceedings.

This is reflected by the fact that while a s 285 application is made by way of a summons where there is an ongoing compulsory winding-up proceeding (see, eg, Celestial Nutrifoods at [11]), it is made by way of an originating summons when the company is being voluntarily wound up. This is not a distinction without a difference. As explained in Hengwell Development Pte Ltd v Thing Chiang Ching [2003] 3 SLR(R) 84 at [5], “[a]n originating summons is an originating process. Like the writ of summons it prescribes the plaintiff’s cause of action...