Tiong Polestar Engineering: Unfair Preference & Liquidator's Rights in Winding Up
In the High Court of Singapore, Woo Bih Li J presided over the case of *Re Tiong Polestar Engineering (formerly known as Polestar Engineering (S) Pte Ltd)*, concerning an application by the liquidator, Mr. Jamshid Keki Medora, to declare certain payments made by Tiong Polestar Engineering Pte Ltd ('the Company') to Tiong Asia Marine Pte Ltd ('TAM') as unfair preferences and voidable under the Companies Act. The liquidator challenged payments made pursuant to garnishee proceedings and payments for rent and utilities. The court found that TAM was not entitled to retain the benefit of the garnishee order and that certain payments of rent and utilities constituted an unfair preference, ordering TAM to pay the liquidator a total of $911,637.98.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application granted in part; payments to TAM declared an unfair preference.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
High Court case regarding unfair preference claims in the winding up of Tiong Polestar Engineering. The liquidator sought to void payments to TAM.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tiong Polestar Engineering Pte Ltd | Defendant | Corporation | |||
| Jamshid Keki Medora | Applicant | Individual | |||
| Tiong Asia Marine Pte Ltd | Respondent | Corporation | Garnishee Order Absolute not entitled to retain | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Mahendra Segeram | Segeram & Co |
| Cheong Yuen Hee | C M Sum & Co |
| Sum Chong Mun | C M Sum & Co |
4. Facts
- The Company was wound up by court order on 24 March 2000.
- The winding-up petition was presented on 24 February 2000.
- TAM obtained a Garnishee Order Absolute against the Company.
- TAM received $330,333.94 pursuant to the Garnishee Order Absolute on 25 February 2000.
- TAM was an associate of the Company.
- The Company made payments of rent and utilities to TAM within two years of the winding-up petition.
- The Company was insolvent at the time of the payments.
5. Formal Citations
- Re Tiong Polestar Engineering (formerly known as Polestar Engineering (S) Pte Ltd, CWU 60/2000; SIC 600915/2002, [2003] SGHC 8
6. Timeline
| Date | Event |
|---|---|
| TAM leased space to the Company for two years. | |
| TAM increased the rent. | |
| TAM increased the rent again. | |
| Start of the period during which payments to TAM were challenged as unfair preference. | |
| TAM issued a Notice to Quit to the Company. | |
| Winding-up petition against the Company was presented. | |
| UOB issued a cashier's order to TAM. | |
| TAM received the cashier's order from UOB. | |
| Court ordered the winding up of the Company. | |
| Judgment issued. |
7. Legal Issues
- Unfair Preference
- Outcome: The court found that certain payments made by the Company to TAM constituted an unfair preference.
- Category: Substantive
- Related Cases:
- [2002] 4 SLR 145
- Liquidator's Rights
- Outcome: The court held that the liquidator had the right to claim the garnished monies.
- Category: Procedural
- Locus Standi of Liquidator
- Outcome: The court held that the liquidator had the locus standi to make the application.
- Category: Procedural
8. Remedies Sought
- Declaration that payments constitute unfair preference
- Order for repayment of monies
- Declaration that TAM is not entitled to retain the benefit of the execution or attachment pursuant to garnishee proceedings
9. Cause of Actions
- Unfair Preference
- Recovery of garnished funds
10. Practice Areas
- Liquidation
- Corporate Restructuring
11. Industries
- Marine Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Show Theatres Pte Ltd (in liquidation) v Shaw Theatres Pte Ltd & Anor | Court of Appeal | Yes | [2002] 4 SLR 145 | Singapore | Cited for the proposition that TAM was connected to the Company and hence an associate of the Company. |
| Re Libra Industries Pte Ltd (in compulsory liquidation) | N/A | No | [2000] 1 SLR 84 | Singapore | Cited to show that the liquidator made the application. |
13. Applicable Rules
| Rule Name |
|---|
| Companies (Winding Up) Rules (Cap 50, R 1, 1990 Rev Ed) r 7(2) |
| Singapore Companies (Winding Up Rules) Rules 5(1) |
| Singapore Companies (Winding Up Rules) Rules 5(2) |
| Singapore Companies (Winding Up Rules) Rules 7(1) |
| Singapore Companies (Winding Up Rules) Rules 7(2) |
| Singapore Companies (Winding Up Rules) Rules 8(1) |
| Singapore Companies (Winding Up Rules) Rules 8(2) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 1994 Rev Ed) s 334(1)(c) | Singapore |
| Companies Act (Cap 50, 1994 Rev Ed) s 260 | Singapore |
| Companies Act (Cap 50, 1994 Rev Ed) s 329 | Singapore |
| Bankruptcy Act (Cap 20, 2000 Rev Ed) | Singapore |
| Bankruptcy Act 1995 s 99 | Singapore |
| Bankruptcy Act 1995 s 100(1)(b) | Singapore |
| Companies Act s 411 | Singapore |
| Companies Act s 410 | Singapore |
| Companies Act s 2 | Singapore |
| Companies Act s 272(a) | Singapore |
| Companies Act s 273(3) | Singapore |
| Companies Act s 4(1) | Singapore |
| Companies Act s 273 | Singapore |
| Companies Act s 288 | Singapore |
| Companies Act s 305 | Singapore |
| Companies Act s 306 | Singapore |
| Companies Act s 227T(1) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Unfair preference
- Liquidator
- Garnishee Order Absolute
- Associate
- Insolvency
15.2 Keywords
- Winding up
- Unfair preference
- Liquidator
- Garnishee
- Companies Act
- Bankruptcy Act
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Unfair preferences | 85 |
| Company Law | 80 |
| Garnishee Proceedings | 70 |
| Bankruptcy | 60 |
| Transaction at Undervalue | 50 |
| Contract Law | 30 |
16. Subjects
- Insolvency
- Winding Up
- Unfair Preference