Hinckley v Sogo: Agency, Trust, and Leave to Commence Proceedings Under Judicial Management
Hinckley Singapore Trading Pte Ltd appealed against the High Court's decision to refuse leave to commence proceedings against Sogo Department Stores (S) Pte Ltd (under judicial management). Hinckley claimed that Sogo held monies collected on its behalf under a concessionaire agreement in trust. The Court of Appeal dismissed the appeal, finding no implied trust and concluding that Hinckley had a simple claim in debt against Sogo.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding whether Sogo held proceeds from Hinckley's goods in trust. The court found no trust, dismissing Hinckley's appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Hinckley Singapore Trading Pte Ltd | Appellant, Plaintiff | Corporation | Appeal Dismissed | Lost | Chan Hian Young, Marc Wang |
| Sogo Department Stores (S) Pte Ltd (under judicial management) | Respondent, Defendant | Corporation | Appeal Allowed | Won | Lee Eng Beng, Melissa Lee Ai-Lin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Judge of Appeal | Yes |
| L P Thean | Judge of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Chan Hian Young | Allen & Gledhill |
| Marc Wang | Allen & Gledhill |
| Lee Eng Beng | Rajah & Tann |
| Melissa Lee Ai-Lin | Rajah & Tann |
4. Facts
- Hinckley and Sogo had a concessionaire agreement from 1 June 1990 until 31 July 2000.
- Sogo operated a department store at Raffles City.
- Hinckley imported and sold Polo Ralph Lauren products.
- Payments for RL goods were made to Sogo's cashiers.
- Sogo was entitled to 20% of the sale proceeds as commission.
- Sogo was placed under judicial management on 18 August 2000.
- A net sum of $212,212.99 was due to Hinckley for sales from May to July 2000.
- Monies collected from sales of RL goods were not kept separate from Sogo's general account.
5. Formal Citations
- Hinckley Singapore Trading Pte Ltd v Sogo Department Stores (S) Pte Ltd (under judicial management), CA 600007/2001, [2001] SGCA 59
6. Timeline
| Date | Event |
|---|---|
| Concessionaire agreement signed between Hinckley and Sogo. | |
| Interim judicial managers appointed for Sogo. | |
| Termination of concessionaire agreement. | |
| Sogo placed under judicial management by order of the High Court. | |
| Order for the winding up of Sogo was made. | |
| Court of Appeal decision delivered. |
7. Legal Issues
- Whether monies collected by Sogo on behalf of Hinckley were held on trust
- Outcome: The court held that no trust may be implied in the contractual arrangement entered into between Hinckley and Sogo.
- Category: Substantive
- Whether leave should be granted to commence proceedings against a company under judicial management
- Outcome: The court held that there was no reason to grant leave to Hinckley to pursue its claim in trust any further.
- Category: Procedural
8. Remedies Sought
- Declaration that Sogo held monies in trust for Hinckley
- Return of sale proceeds
9. Cause of Actions
- Breach of Contract
- Claim for trust over sale proceeds
10. Practice Areas
- Commercial Litigation
- Insolvency
- Judicial Management
11. Industries
- Retail
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Atlantic Computer Systems plc (No. 1) | Court of Appeal | Yes | [1991] BCLC 606 | England and Wales | Cited for principles governing the grant of leave to commence proceedings against a company under judicial management and the objectives of a judicial management order. |
| Royal Trust Bank v Buchler | N/A | Yes | [1989] BCLC 130 | N/A | Cited regarding the balancing exercise the court undertakes when a lessor seeks possession of property. |
| Henry v Hammond | N/A | Yes | [1913] 2 KB 515 | N/A | Cited for the principle that if a person is not bound to keep money separate but is entitled to mix it with their own, they are not a trustee but merely a debtor. |
| Burdick v Garrick | N/A | Yes | LR 5 Ch 243 | N/A | Cited for the principle that where the duty of persons is to receive property and hold it for another, they cannot discharge themselves from that trust by appealing to the lapse of time. |
| Kirkham v Peel | N/A | Yes | (1880) 43 LT 171 | N/A | Cited to show that even with physical assets placed in the hands of an agent, a trust does not necessarily arise. |
| In Re Nanwa Gold Mines Ltd | N/A | Yes | [1955] 1 WLR 1080 | N/A | Cited for the principle that in the absence of an express term creating a trust, the maintenance of a separate account by the agent is crucial to constituting the money as trust money. |
| In re Kayford Ltd | N/A | Yes | [1975] 1 WLR 279 | N/A | Cited for the principle that in the absence of an express term creating a trust, the maintenance of a separate account by the agent is crucial to constituting the money as trust money. |
| In re Bond Worth Ltd | N/A | Yes | [1980] Ch 228 | N/A | Cited for the principle that where an alleged trustee has the right to mix tangible assets or moneys with his own, this is incompatible with the existence of a fiduciary relationship. |
| Neste Oy v Lloyds Bank plc | N/A | Yes | [1983] 2 Lloyd's Rep 658 | N/A | Cited for factors considered in determining whether funds are held on trust, including whether payments were made into a designated account and whether there was an intention to keep sums separate. |
| Re Holiday Promotions (Europe) Ltd | N/A | Yes | [1996] 2 BCLC 618 | N/A | Cited for emphasizing the importance of segregating funds collected on behalf of a principal in determining whether the funds are held on trust. |
| Walker v Corboy | Court of Appeal of New South Wales | Yes | [1990] 19 NSWLR 382 | Australia | Cited for the principle that in the absence of contrary intention, an agent selling produce is not holding the proceeds in trust for the growers, and the relationship is that of debtor and creditor. |
| Re Fleet Street Disposal Services Ltd | N/A | Yes | [1995] 1 BCLC 345 | N/A | Distinguished based on the fact that proceeds were paid into a designated bank account and were to be paid out within five days by separate cheque. |
| R v Clowes & Anor (No 2) | N/A | Yes | [1994] 2 All ER 316 | N/A | Cited for the principle that a requirement to keep moneys separate is normally an indicator that they are impressed with a trust. |
| Geh Cheng Hooi & Ors v Equipment Dynomics Sdn Bhd and other appeals | Supreme Court | Yes | [1991] 1 MLJ 293 | Malaysia | Distinguished based on the fact that a new arrangement was negotiated due to the company's financial problems, and the stores expressly held themselves out as trustees of the proceeds. |
| Palette Shoes Pty Ltd (in liquidation) v Krohn | N/A | Yes | [1937] 58 CLR 1 | Australia | Cited for the principle that a trust is more readily imposed on proceeds from an isolated transaction than in an ongoing trading relationship. |
| Hussey v Palmer | N/A | Yes | [1972] 1 WLR 1286 | N/A | Cited for the principle that the concept of constructive trust may be invoked whenever justice and good conscience required it. |
| Carl-Zeiss Stiftung v Smith (Herbert) & Co (No 2) | N/A | Yes | [1969] 2 Ch 276 | N/A | Cited for the principle that it was not possible to give an exhaustive definition of a constructive trust. |
| Lyell v Kennedy | House of Lords | Yes | (1890) 62 LT 77 | United Kingdom | Cited for the principle that a man who receives the money of another on his behalf, and places it specifically to an account with a banker earmarked and separate from his own moneys, though under his control, is in my opinion a trustee of the fund standing to the credit of that account. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 1994 Ed) | Singapore |
| ss 227B(1), 227C(c) & 227D(4)(c) Companies Act (Cap 50, 1994 Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Concessionaire agreement
- Judicial management
- Trust
- Agency
- Sale proceeds
- Moratorium
- Leave of court
- Proprietary right
- Unsecured creditor
15.2 Keywords
- Agency
- Trust
- Judicial Management
- Concessionaire Agreement
- Companies Act
- Singapore
- Retail
- Insolvency
16. Subjects
- Agency
- Trusts
- Civil Procedure
- Companies Law
- Insolvency Law
- Commercial Law
17. Areas of Law
- Agency
- Trust Law
- Civil Procedure
- Company Law
- Insolvency Law