Transbilt Engineering v Finebuild Systems: Garnishee Order and Winding Up in Insolvency Law
In Transbilt Engineering Pte Ltd (in liquidation) v Finebuild Systems Pte Ltd, the Singapore Court of Appeal addressed whether Finebuild Systems Pte Ltd, a creditor, could retain the benefit of a garnishee order against Transbilt Engineering Pte Ltd (in liquidation), the debtor, when Transbilt was wound up before the garnishee order nisi was made absolute. The court allowed the appeal, holding that the winding-up process renders all creditors in an equal position to ensure a fair distribution of the company’s assets.
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 whether a creditor could retain a garnishee order benefit when the debtor company was wound up before the order was absolute. The appeal was allowed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Transbilt Engineering Pte Ltd (in liquidation) | Appellant | Corporation | Appeal allowed | Won | |
| Finebuild Systems Pte Ltd | Respondent | Corporation | Appeal dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of the Court of Appeal | No |
| Choo Han Teck | Judge | Yes |
| Yong Pung How | Chief Justice | No |
4. Counsels
4. Facts
- Respondent obtained judgment against the appellant in the District Court.
- Respondent obtained an attachment order nisi by way of garnishee proceedings against the garnishee for $84,000.
- Appellant commenced a voluntary winding up by reason of its inability to pay its debts.
- A provisional liquidator was appointed on the same day the appellant commenced winding up.
- The High Court granted an order setting aside the liquidator’s rights under s 334(1)(c) of the Companies Act.
- One of the company’s directors, Yang Chun Seng, claimed $6,015,461.97, which would form about 78% of the company’s gross liabilities.
5. Formal Citations
- Transbilt Engineering Pte Ltd (in liquidation) v Finebuild Systems Pte Ltd, CA 115/2004, [2005] SGCA 33
6. Timeline
| Date | Event |
|---|---|
| Attachment order nisi obtained by way of garnishee proceedings against the garnishee for $84,000. | |
| Garnishee notified the respondent that it was indebted to the appellant in the sum of $84,000. | |
| Appellant commenced a voluntary winding up and a provisional liquidator was appointed. | |
| Respondent notified of the creditors’ meeting. | |
| Meeting of creditors endorsed and passed the resolution for winding up the appellant. | |
| District Court granted leave to the respondent to apply to the High Court for relief under s 334 of the Act. | |
| Respondent applied to the High Court and obtained an order setting aside the liquidator’s rights. | |
| Court of Appeal decision date. |
7. Legal Issues
- Garnishee Order and Winding Up
- Outcome: The court held that the winding-up process renders all creditors in an equal position, and the appeal was allowed.
- Category: Substantive
- Related Cases:
- [1983] 2 AC 192
- [1976] 1 WLR 719
- [1964] 1 WLR 541
- [1949] 2 All ER 948
8. Remedies Sought
- No remedies sought
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- Construction
- Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Grosvenor Metal Co, Ltd | N/A | Yes | [1949] 2 All ER 948 | England and Wales | Cited for the principle that the creditor applicant does not need to prove fraud or trickery to set aside the liquidator's rights. |
| re Redman (Builders) Ltd | N/A | Yes | [1964] 1 WLR 541 | England and Wales | Cited to support the principle that an execution creditor who has not completed execution at the commencement of winding up is treated as any other creditor. |
| Burston Finance Ltd v Godfrey | English Court of Appeal | Yes | [1976] 1 WLR 719 | England and Wales | Cited as a case that favored the proposition that a bankruptcy adjudication after an order nisi is not sufficient cause for refusing to make the order absolute, but this view was rejected in Roberts Petroleum. |
| Roberts Petroleum Ltd v Bernard Kenny Ltd | House of Lords | Yes | [1983] 2 AC 192 | England and Wales | Cited for the conclusion that a company’s liquidation was a sufficient cause for refusing to make the garnishee order absolute. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Section 334(1)(c) Companies Act (Cap 50, 1994 Rev Ed) | Singapore |
| s 291(6)(a) of the Companies Act, (Cap 50, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Garnishee order
- Winding up
- Liquidation
- Attachment order nisi
- Provisional liquidator
- Creditors
- Pari passu principle
- Execution
- Insolvency
15.2 Keywords
- Insolvency
- Winding up
- Garnishee order
- Companies Act
- Liquidation
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Insolvency Law | 90 |
| Company Law | 50 |
| Civil Procedure | 30 |
16. Subjects
- Insolvency Law
- Winding up
- Garnishee Order