Tohru Motobayashi v Official Receiver: Interpretation of s 377(3)(c) Companies Act on Winding Up of Foreign Company in Singapore
In Tohru Motobayashi v Official Receiver, the Singapore Court of Appeal addressed the interpretation of s 377(3)(c) of the Companies Act regarding the winding up of Okura & Co Ltd's Singapore branch. The appellant, Tohru Motobayashi, the Trustee in Bankruptcy of Okura Japan, appealed against the High Court's decision that his application was an abuse of process and barred by cause of action estoppel. The Court of Appeal allowed the appeal, holding that the appellant's application was not an abuse of process nor barred by estoppel. The court clarified that under s 377(3)(c), a liquidator of a foreign company in Singapore must pay preferential debts and all debts/liabilities incurred in Singapore before remitting the net amount to the foreign liquidator.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal allowed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Court of Appeal addressed the construction of s 377(3)(c) of the Companies Act, concerning the distribution of assets in the winding up of a foreign company's Singapore branch.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tohru Motobayashi | Appellant | Individual | Appeal allowed | Won | Michael Hwang, Daren Shiau, Desmond Ho |
| Official Receiver | Respondent | Government Agency | Appeal Dismissed | Lost | Sarjit Singh, Sunari bin Kateni |
| Ong Sin Huat | Respondent | Individual | Appeal Dismissed | Lost | Leo Cheng Suan, Goh Wei Ling |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of the Court of Appeal | No |
| L P Thean | Justice of the Court of Appeal | No |
| Yong Pung How | Chief Justice | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Michael Hwang | Allen & Gledhill |
| Daren Shiau | Allen & Gledhill |
| Desmond Ho | Allen & Gledhill |
| Sarjit Singh | OAPT |
| Sunari bin Kateni | OAPT |
| Leo Cheng Suan | Chu Chan Gan & Ooi |
| Goh Wei Ling | Chu Chan Gan & Ooi |
4. Facts
- Okura Japan was adjudicated bankrupt by the Tokyo District Court on 21 August 1998.
- Okura Japan is registered as a foreign company in Singapore since 1973.
- Okura Japan filed a winding up petition in respect of Okura Singapore on 3 November 1998.
- A winding up order was made on 4 December 1998.
- The appellant, Tohru Motobayashi, is the Trustee in Bankruptcy of Okura Japan.
- The second respondent, Mr Ong Sin Huat, was appointed the liquidator of Okura Singapore.
- The Singapore liquidator applied to the High Court for directions on remitting assets to the Japanese liquidator.
5. Formal Citations
- Tohru Motobayashi v Official Receiver and Another, CA 51/2000, [2000] SGCA 59
- Tohru Motobayashi v Official Receiver and Another, , [2000] 4 SLR 265
6. Timeline
| Date | Event |
|---|---|
| Okura Japan registered as a foreign company in Singapore. | |
| Okura & Co, Ltd was adjudicated bankrupt by the Tokyo District Court. | |
| Okura Japan filed a winding up petition in respect of Okura Singapore. | |
| Winding up order made for Okura Singapore. | |
| First creditors' meeting of Okura Singapore held. | |
| Appellant wrote a letter to the Singapore liquidator regarding the distribution of assets. | |
| Singapore liquidator applied to the High Court by way of Summons-in-Chambers 3525/99. | |
| Application heard before Lim Teong Qwee JC. | |
| Appellant commenced proceedings in OS 210/2000. | |
| Decision Date. |
7. Legal Issues
- Interpretation of s 377(3)(c) of the Companies Act
- Outcome: The court clarified that a liquidator of a foreign company in Singapore must pay preferential debts and all debts/liabilities incurred in Singapore before remitting the net amount to the foreign liquidator.
- Category: Substantive
- Abuse of Process
- Outcome: The court held that the appellant's application was not an abuse of process.
- Category: Procedural
- Cause of Action Estoppel
- Outcome: The court held that the appellant was not barred from making the application by reason of cause of action estoppel.
- Category: Procedural
8. Remedies Sought
- Declarations regarding the interpretation of s 377(3)(c) of the Companies Act
9. Cause of Actions
- Determination of the proper construction of s 377(3)(c) of the Companies Act
10. Practice Areas
- Commercial Litigation
- Insolvency
- Appeals
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Blackbird Pies (Management) Pty Ltd (No 2) | Supreme Court of Queensland | Yes | [1970] Qd R 33 | Australia | Distinguished on the basis that the present case involves an application for declarations, not merely directions under the Companies Act. |
| Re Blackbird Pies (Management) Pty Ltd | Supreme Court of Queensland | Yes | [1969] Qd R 387 | Australia | Cited as the earlier hearing for advice and direction in Re Blackbird Pies (Management) Pty Ltd (No 2). |
| Kuah Kok Kim v Chong Lee Leong Seng Co (Pte) Ltd | Court of Appeal | Yes | [1991] SLR 122 | Singapore | Cited for the principle that the Companies (Winding-Up) Rules and the Rules of Court operate mutually exclusively. |
| Ching Mun Fong v Liu Chit Cho & Anor | Court of Appeal | Yes | [2000] 1 SLR 517 | Singapore | Cited for the principles regarding abuse of process and the permissibility of fresh proceedings between different parties. |
| Gleeson v J Wippell & Co Ltd | Court | Yes | [1977] 1 WLR 510 | England and Wales | Cited for the principle that a plaintiff is not precluded from suing a person at all because the plaintiff failed to join him as a defendant in other proceedings against another person. |
| Ng Chee Chong v Toh Kouw | Court of Appeal | Yes | [1999] 4 SLR 45 | Singapore | Cited for the principle that bringing a second suit is not an abuse of process if the cause of action is distinct from the first suit. |
| Lawlor v Gray | Court | Yes | [1984] 3 All ER 345 | England and Wales | Cited for the principle that dismissing a claim on the ground of abuse of process effectively means shutting out a matter not previously pronounced on expressly in the earlier litigation from determination of the court. |
| Carl Zeiss Stiftung v Rayner and Keeler | House of Lords | Yes | [1967] 1 AC 853 | United Kingdom | Cited for the principle that estoppels must be applied so as to work justice and not injustice. |
| Arnold & Ors v National Westminster Bank plc | House of Lords | Yes | [1991] 2 AC 93 | United Kingdom | Cited for the definition of cause of action estoppel. |
| Carl Zeiss Stiftung v Rayner & Keeler Ltd & Ors (No 3) | Court | Yes | [1970] 1 Ch 506 | England and Wales | Cited for the principle that not everyone who has some interest in the outcome of litigation is to be regarded as privy to some party to that litigation for the purpose of the doctrine of res judicata. |
| Mercantile Investment & General Trust Co v River Plate Trust, Loan & Agency Co | Court | Yes | [1894] 1 Ch 578 | England and Wales | Cited in Carl Zeiss Stiftung v Rayner & Keeler Ltd & Ors (No 3) regarding privity of interest. |
| Re Air Express Foods Pty Ltd (in liq) | Supreme Court of Queensland | Yes | 2 ACLR 523 | Australia | Discussed regarding the interpretation of a similar provision in the Australian Companies Act, but distinguished due to differences in wording. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court O 1 r 2(4) |
| Rules of Court O 15 r 6(2)(b)(ii) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 1994 Ed) s 377(3)(c) | Singapore |
| Companies Act (Cap 50, 1994 Ed) s 328 | Singapore |
| Companies Act s 273(3) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Foreign company
- Liquidator
- Companies Act
- s 377(3)(c)
- Abuse of process
- Cause of action estoppel
- Preferential debts
- Net amount
- Singapore liquidator
- Japanese liquidator
15.2 Keywords
- winding up
- foreign company
- liquidator
- Companies Act
- s 377(3)(c)
- Singapore
- Japan
16. Subjects
- Company Law
- Insolvency
- Cross-Border Insolvency
- Statutory Interpretation
17. Areas of Law
- Insolvency Law
- Civil Procedure
- Company Law