Eversendai Engineering v Synergy Construction: Statutory Protection in Voluntary Winding-Up
In Eversendai Engineering Pte Ltd v Synergy Construction Pte Ltd, the High Court of Singapore addressed whether an attachment order should be made absolute against Synergy Construction, a company undergoing voluntary winding-up. Eversendai Engineering, a sub-contractor, sought to attach monies due to Synergy from the Ministry of Education. The court, presided over by Assistant Registrar Vincent Leow, dismissed the attachment application, holding that the voluntary winding-up had commenced upon the filing of the declaration under Section 291(1) of the Companies Act, thus triggering statutory protection against such proceedings.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Attachment application dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court considered if attachment proceedings could proceed against a company in voluntary winding-up after provisional liquidators were appointed. The court dismissed the attachment application.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Eversendai Engineering Pte Ltd | Plaintiff | Corporation | Attachment application dismissed | Lost | Brandon Choa |
| Synergy Construction Pte Ltd | Defendant | Corporation | Attachment application dismissed | Won | Ray Shankar |
| Ministry of Education | Other | Government Agency | Neutral | Neutral | Mentioning |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vincent Leow | Assistant Registrar | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Brandon Choa | Acies Law Corporation |
| Ray Shankar | Tan Kok Quan Partnership |
| Mentioning | Attorney-General's Chambers |
4. Facts
- Eversendai obtained a judgment of about $350,000 against Synergy on 13 May 2004.
- Synergy's directors resolved on 4 May 2004 that Synergy was unable to continue its business due to its liabilities.
- A declaration to this effect was filed with the Accounting and Corporate Regulatory Authority and the Official Receiver on 4 May 2004.
- Provisional liquidators were appointed concurrently on 4 May 2004.
- Eversendai applied to attach monies due from the Ministry of Education to Synergy on 24 May 2004.
- The shareholders’ meeting had not been held at the time of the attachment application hearing.
5. Formal Citations
- Eversendai Engineering Pte Ltd v Synergy Construction Pte Ltd, Suit 358/2004, SIC 2843/2004, [2004] SGHC 129
6. Timeline
| Date | Event |
|---|---|
| Directors of Synergy resolved that Synergy was unable to continue its business. | |
| Declaration filed with the Accounting and Corporate Regulatory Authority and with the Official Receiver. | |
| Provisional liquidators appointed. | |
| Eversendai obtained judgment against Synergy. | |
| Eversendai applied to attach monies due from the Ministry of Education to Synergy. | |
| Attachment application heard. | |
| Shareholders’ meeting and creditors’ meeting fixed. | |
| Judgment issued. |
7. Legal Issues
- Commencement of Voluntary Winding-Up
- Outcome: The court held that voluntary winding-up commences upon the filing of the declaration under Section 291(1) of the Companies Act and the appointment of a provisional liquidator, not requiring the resolution to be passed first.
- Category: Substantive
- Sub-Issues:
- Interpretation of Section 291(6)(a) of the Companies Act
- Effect of appointment of provisional liquidator
- Statutory Protection During Winding-Up
- Outcome: The court ruled that attachment proceedings commenced after the commencement of a creditors’ voluntary winding-up are void under Section 299 of the Companies Act.
- Category: Substantive
- Sub-Issues:
- Validity of attachment proceedings after commencement of winding-up
- Application of Section 299 of the Companies Act
- Discretion of Court in Attachment Orders
- Outcome: The court stated that even if voluntary winding-up had not commenced, it would have discharged the attachment order nisi due to the court's discretion to prevent unfair advantage to one creditor over others.
- Category: Procedural
- Sub-Issues:
- Equitable considerations in granting attachment orders
- Preference of one creditor over others
8. Remedies Sought
- Attachment of Debt
9. Cause of Actions
- Debt Recovery
10. Practice Areas
- Commercial Litigation
- Insolvency
- Attachment Proceedings
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Kredin Sdn Bhd v Development & Commercial Bank | Malaysian Court of Appeal | Yes | [1995] 3 MLJ 304 | Malaysia | Cited for the principle of protecting unsecured creditors equally during the interim period of winding-up. |
| Fleet Motor & General Insurance Co. (Aust.) Pty. Ltd. v Tickle | Supreme Court of New South Wales | Yes | [1984] 2 ACLC 282 | New South Wales | Cited for the position that a compulsory winding-up does not commence until a winding-up order is made by the court. |
| Re Miles Aircraft Ltd | English Courts | Yes | [1948] 1 All ER 225 | England | Cited for the view that if a winding-up petition is dismissed or withdrawn, there never will have been a winding-up by the Court. |
| Comptroller of Income Tax v GE Pacific | High Court of Singapore | Yes | [1994] 2 SLR 690 | Singapore | Cited for the principle of literal wording of statutes. |
| AR Goel v First National Bank | Punjab High Court | Yes | AIR 1960 Pun 476 | India | Cited for the definition of the word 'deemed'. |
| Sussex Peerage | House of Lords | Yes | (1844) 8 ER 1034 | United Kingdom | Cited for the rule of statutory construction that statutes should be construed according to the intent of Parliament. |
| Re Rothwells Ltd | Supreme Court of Queensland | Yes | [1990] 2 Qd.R 181 | Australia | Cited for the principle that the appointment of a provisional liquidator is interlocutory and designed to preserve the assets of the company. |
| Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation) | High Court of Singapore | Yes | [2004] 1 SLR 671 | Singapore | Cited for the possibility of a voluntary winding up being commenced for less than legitimate reasons. |
| Ex parte Pearson | Court of Appeal in Chancery | Yes | [1868] LR 3 Ch App 443 | England and Wales | Cited for the principle that a groundless winding-up petition would paralyze the trade of the company. |
| Re Dry Docks Corporation of London | High Court of Justice | Yes | [1888] 39 Ch D 306 | England and Wales | Cited for the need to preserve the status quo and prevent any creditor from gaining priority during winding-up. |
| Commercial Bank of Kuwait SAK v Nair (Chase Manhattan Bank NA, garnishees) | High Court of Singapore | Yes | [1994] 1 SLR 197 | Singapore | Cited for the principle that the court's power to make a garnishee order is discretionary. |
| George Lee & Sons (Builders) Ltd v Olink | High Court of Justice | Yes | [1972] 1 WLR 214 | England and Wales | Cited for the principle that an attachment order should not be granted if its effect is to prefer one creditor over another when the debtor is insolvent. |
| Prichard v Westminster Bank Ltd | High Court of Justice | Yes | [1969] 1 WLR 547 | England and Wales | Cited for the principle that an attachment order is an equitable remedy and should not be granted if its effect is to prefer one creditor over another when the debtor is insolvent. |
| Rainbow Moorgate Properties Ltd | High Court of Justice | Yes | [1975] 1 WLR 788 | England and Wales | Cited for the principle that the Court’s aim is to do justice not only between the parties, but also to any person who may be affected by the order. |
| Credit Lyonnais v SK Global Hong Kong Ltd | High Court of Hong Kong | Yes | [2003] 4 HKC 104 | Hong Kong | Cited for the principle of preventing a situation that is contrary to the statutory scheme for the orderly and fair distribution of an insolvent company’s assets to its creditors. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act | Singapore |
| Section 290 Companies Act | Singapore |
| Section 291 Companies Act | Singapore |
| Section 255 Companies Act | Singapore |
| Section 258 Companies Act | Singapore |
| Section 262(3) Companies Act | Singapore |
| Section 293 Companies Act | Singapore |
| Section 295 Companies Act | Singapore |
| Section 299 Companies Act | Singapore |
| Section 334(1) Companies Act | Singapore |
| Section 9A(1) Interpretation Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Voluntary Winding-Up
- Provisional Liquidator
- Attachment Order
- Creditors’ Voluntary Winding-Up
- Members’ Voluntary Winding-Up
- Declaration of Solvency
- Pari Passu Doctrine
- Commencement of Winding-Up
- Statutory Protection
- Section 291 Companies Act
- Section 299 Companies Act
15.2 Keywords
- Winding-Up
- Attachment
- Companies Act
- Insolvency
- Singapore
- Voluntary Winding-Up
- Creditors
- Liquidator
16. Subjects
- Insolvency
- Company Law
- Civil Procedure
17. Areas of Law
- Company Law
- Civil Procedure
- Insolvency Law
- Winding-Up