Neo Corp Pte Ltd v Neocorp Innovations Pte Ltd: Liquidator's Right to Continue Judicial Manager's Unfair Preference Action
In Neo Corp Pte Ltd (in liquidation) v Neocorp Innovations Pte Ltd, the Singapore Court of Appeal addressed whether liquidators could continue an action initiated by judicial managers under s 227T of the Companies Act to challenge a transaction as an unfair preference after the company was wound up. The court dismissed the appeal, holding that the right to void a transaction under s 227T is personal to the judicial manager and does not automatically transfer to the liquidator upon winding up.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed with costs to the respondent.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Court of Appeal held that a liquidator cannot continue an action commenced by a judicial manager under s 227T of the Companies Act.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Neo Corp Pte Ltd (in liquidation) | Appellant | Corporation | Appeal Dismissed | Lost | |
| Neocorp Innovations Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of Appeal | Yes |
| V K Rajah | Judge | No |
4. Counsels
4. Facts
- Neo Corp Pte Ltd was placed under judicial management on 5 May 2004.
- The judicial managers applied to set aside a floating charge created by Neo Corp Pte Ltd in favor of Neocorp Innovations Pte Ltd.
- Tay Yong Kwang J made an order winding up Neo Corp Pte Ltd on 18 February 2005.
- The winding up order authorized the liquidators to continue with any legal action commenced by the judicial managers.
- Neocorp Innovations Pte Ltd applied to have the order authorizing the liquidators to continue the action set aside.
- Andrew Phang Boon Leong JC set aside the order authorizing the liquidators to continue with the action.
5. Formal Citations
- Neo Corp Pte Ltd (in liquidation) v Neocorp Innovations Pte Ltd, CA 68/2005, [2006] SGCA 15
6. Timeline
| Date | Event |
|---|---|
| Neo Corp Pte Ltd was placed under judicial management. | |
| Floating charge given to Neocorp Innovations Pte Ltd. | |
| Judicial managers informed creditors of intended winding up proceedings. | |
| Judicial managers applied to set aside floating charge. | |
| Tay Yong Kwang J made an order winding up Neo Corp Pte Ltd. | |
| Papers relating to OS 1535 were served on NIP. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Whether proceedings commenced by judicial manager challenging company transaction on ground of unfair preference or undervalue under s 227T Companies Act may be continued by liquidator
- Outcome: The court held that the liquidator could not continue the action commenced by the judicial manager under s 227T of the Companies Act.
- Category: Substantive
- Whether judge hearing summons in chambers proceedings in High Court having power to set aside order of judge hearing winding-up proceedings also in High Court
- Outcome: The court held that the Judge was not empowered to set aside the order of another High Court judge.
- Category: Jurisdictional
8. Remedies Sought
- Setting aside of floating charge
9. Cause of Actions
- Unfair Preference
- Transaction at an Undervalue
10. Practice Areas
- Insolvency Litigation
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| In re Barrell Enterprises | Court of Appeal | Yes | [1973] 1 WLR 19 | England and Wales | Cited regarding the principle that a judge of equal jurisdiction cannot set aside the order of another judge. |
| Brisbane City Council v Attorney-General for Queensland | Privy Council | Yes | [1979] AC 411 | United Kingdom | Cited for the principle that justice favors giving a party the opportunity to canvass an issue. |
| Tohru Motobayashi v OR | High Court | Yes | [2000] 4 SLR 529 | Singapore | Cited for the principle that the Rules of Court do not apply to proceedings relating to the winding up of companies. |
| In re Oasis Merchandising Services Ltd | Court of Appeal | Yes | [1998] Ch 170 | England and Wales | Cited to support the principle that the right of action conferred upon the judicial manager under s 227T is a right personal to the judicial manager. |
| Re An Application by J G A Tucker and Reid Murray Developments (Qld) Pty Ltd | Full Court of Queensland | Yes | [1969] Qd R 193 | Australia | Cited to support the principle that the objects of judicial management are not the same as those of liquidation. |
13. Applicable Rules
| Rule Name |
|---|
| O 13 r 8 of the Rules of Court (Cap 322, R 5, 2004 Rev Ed) |
| O 1 r 2(4) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Section 227T Companies Act (Cap 50, 1994 Rev Ed) | Singapore |
| Section 329 Companies Act | Singapore |
| Section 227X(b) of the Act | Singapore |
| Section 227Q(1) of the Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Judicial Management
- Liquidation
- Unfair Preference
- Floating Charge
- Winding Up
- Liquidator
- Judicial Manager
- Companies Act
- Insolvency
15.2 Keywords
- Judicial Management
- Liquidation
- Unfair Preference
- Companies Act
- Singapore
- Insolvency Law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Insolvency Law | 90 |
| Company Law | 70 |
| Judicial Management | 60 |
| Contract Law | 30 |
16. Subjects
- Insolvency
- Company Law
- Civil Procedure