Tohru Motobayashi v Official Receiver and Another

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 22 June 2000
• Neutral Citation: [2000] SGHC 113
• Date: 22 June 2000
• Subject Matter: Estoppel,Joinder,Abuse of process,Whether Rules of Court applicable to company winding up,Whether foreign trustee estopped from making application,Whether foreign trustee should have applied to join as party in original proceedings and appealed against previous decision,Whether application an abuse of process of court,Civil Procedure,Winding up of companies,Foreign trustee in bankruptcy making fresh application to determine matter previously adjudicated when Singapore liquidator brought matter before court,Rules of court,Parties
• Docket Number: Originating Summons No 210 of 2000
• Published date: 19 September 2003
• Defendant Counsel: Sarjit Singh (Shook Lin & Bok),Leo Cheng Suan (Chu Chan Gan & Ooi)
• Court: High Court (Singapore)
• Plaintiff Counsel: Michael Hwang SC and Darren Shiau (Allen & Gledhill)

: The plaintiff is the trustee in bankruptcy of Okura & Co Ltd, a company incorporated in Japan in 1911 and registered as a foreign company in Singapore under the Companies Act in 1973.

On 21 August 1998 the company was adjudicated bankrupt by the Tokyo District Court (20th Civil Division). On 3 November 1998 the company filed a winding-up petition in Singapore in CWU 358/98, pursuant to which it was wound up on 4 December 1998 with the appointment of Ong Sin Huat as the liquidator.

On 11 February 2000, Tohru Motobayashi, the Trustee in Bankruptcy of the company appointed in Japan (`the trustee`) filed the present action, naming the Official Receiver and the liquidator as the defendants.

The trustee sought the declarations:

1 That, on its true construction, the effect of s 377(3)(c) of the Companies Act is that a liquidator of a foreign company appointed for Singapore by the court is required to pay the net amount of all sums recovered and realised in Singapore to the liquidator in the country where the foreign company was formed or incorporated after making payment of all preferred debts as defined in s 328 of the Companies Act.

2 That Mr Ong Sin Huat (the liquidator appointed by the Singapore High Court as the Singapore liquidator of Okura & Co Ltd) is required to pay the net amount of all sums recovered and realised in Singapore to the plaintiff (the Japanese liquidator of Okura & Co Ltd) after making payment of all preferred debts as defined in s 328 of the Companies Act.

When the application came before me, I declined to hear it because I found it to be an abuse of the process of court. The trustee is not satisfied with my decision, and I shall set out the developments leading up to the application and my reasons for dismissing it.

Before the trustee made his application an application had been made in the winding-up action for similar relief. On 31 May 1999 the liquidator took out SIC 3525/98 in the winding-up proceedings for, inter alia, a declaration

that the liquidator do remit all the assets recovered and realised for Okura & Co Ltd (Singapore branch), (after paying off the priority creditors and payments as set out under s 328 of the Companies Act (Cap 50, 1994 Ed) including liquidator fees on a time based basis) to the Trustee in Bankruptcy of Okura & Co (Japan) for global distribution to all the creditors of Okura & Co Ltd in accordance with the law of Japan.

In support of the application the liquidator filed an affidavit deposing that

7 I have checked with the trustee and have ascertained that some of the creditors, namely, Bank of Tokyo-Mitsubishi, The Ashai Bank Ltd, and The Fuji Bank Ltd have filed identical proofs of debt with the company and the parent company.

8 The trustee and I anticipate some problems with such filing of identical proofs of debt in Singapore and Japan, because:

(a) In the event of distribution of the assets of the company to the Singapore creditors, there may be double payments in Singapore and Japan.

(b) In law, the company and the parent company have no separate legal entity. Distributions in one jurisdiction may be at the expense of creditors of other jurisdiction.

(c) It will create unfair voting rights for such creditors in Singapore and Japan.

9 At the second creditors meeting of the company held on 23 March 1999, the creditors have instructed me to pursue the foreign debts of the company, but only 54% of the creditors present were in favour of giving me an indemnity against all costs and claims arising from my duties as a liquidator. I also anticipate difficulties in enforcing the indemnity as the creditors in the meeting have indicated that it is not binding on those who voted against the same.

10 My solicitors have drawn my attention to s 377 of the Companies Act. I have discussed the issue with the trustee, and he has, by letter dated 6 May 1999 indicated that he would prefer that I remit to him the nett proceeds of assets of the company realised and recovered, and that he will handle the foreign debts of the company.

The salient part of the letter of 6 May 1999 reads

[W]e would request that you make an application to the Singapore court for the following clarifications and order:

(a) that you, as the liquidator of Okura (Singapore), a branch office of Okura (Japan), with no separate legal entity, do remit all the assets recovered and realised for Okura (Singapore), (after paying off the priority creditors and payments as stipulated by the Singapore law, including liquidator fees on a time based basis) to the Trustees in Bankruptcy of Okura (Japan) for global distribution, so that we would be able to make distribution to all creditors, including creditors of Okura (Singapore) in accordance with Japanese law, provided that proof of claim should be filed to the Tokyo District Court by those Singapore creditors as soon as possible but no later than 21 May 1999.

On 29 July 1999 Judicial Commissioner Lim Teong Qwee refused to grant the order after hearing counsel for the liquidator and the Official Receiver. No appeal was filed against that decision.

When the trustee filed the present application, an affidavit filed by Mr Daren Shiau, one of the solicitors acting for the trustee in which he set out the history of the company and its travails in the Japanese and Singapore courts, and deposed that

On 6 May 1999, the

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