Re Jiangshan Investment Consortium Ltd: Competing Claims for Dividend Payments in Winding Up

In the High Court of Singapore, Judith Prakash J presided over the case of Re Jiangshan Investment Consortium Ltd (in liquidation) on 5 June 2007, concerning competing claims for dividend payments to Mr. Lam Chang Er, a contributory of the company. Mdm Fong Kam Mui, Mr. Lam's ex-wife, claimed entitlement based on court orders for maintenance and division of matrimonial property. Grandville Hotel and Resort International Pte Ltd and Mdm Tham Lai Ping, claimed entitlement via a Deed of Waiver Release and Instruction. The court ruled that the liquidator should pay $107,200 to Mdm Tham and other designated recipients according to the Deed's terms.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

The court held that the liquidator should pay the sum of $107,200 to Mdm Tham and the other designated recipients in accordance with the terms of the Deed of Waiver Release and Instruction.

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

High Court case regarding competing claims for dividend payments to a contributory in the winding up of Jiangshan Investment Consortium Ltd.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Jiangshan Investment Consortium Ltd (in liquidation)RespondentCorporationNeutralNeutral
Fong Kam MuiRespondentIndividualLostLost
Grandville Hotel & Resort International Pte LtdRespondentCorporationWonWon
Lim Ee AnnRespondentIndividualWonWon
Tham Lai Ping WinnieRespondentIndividualWonWon

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Foo Maw ShenYeo Wee Kiong Law Corporation
Tan Anamah Nee NagalingamAnn Tan & Associates
Ng YuenNg & Koh

4. Facts

  1. The liquidator of Jiangshan Investment Consortium Ltd sought directions on how to pay dividends to Mr. Lam Chang Er due to competing claims.
  2. Mdm Fong Kam Mui, Mr. Lam's ex-wife, claimed entitlement based on court orders for maintenance and division of matrimonial property.
  3. Grandville Hotel and Resort International Pte Ltd and Mdm Tham Lai Ping claimed entitlement via a Deed of Waiver Release and Instruction.
  4. Mr. Lam executed an irrevocable letter of authority to pay Mdm Fong $250,000 from liquidation proceeds.
  5. Mdm Fong obtained garnishee orders against the liquidator in the Subordinate Courts.
  6. The company was ordered to be wound up on 27 October 2000.
  7. The Deed instructed the liquidator to pay a percentage of Mr. Lam's entitlement to designated recipients, including Mdm Tham.

5. Formal Citations

  1. Re Jiangshan Investment Consortium Ltd (in liquidation), OS 101/2003, SUM 1979/2006, [2007] SGHC 91

6. Timeline

DateEvent
Company ordered to be wound up by court order.
Mr. Chia Soo Hien took over as liquidator of the company.
Various court orders were made in relation to matrimonial proceedings between Mr Lam and Mdm Fong.
Mr Lam executed an irrevocable letter of authority to pay Mdm Fong $250,000 from liquidation proceeds.
Liquidator issued a notice calling for proofs of debt.
Mdm Fong had a claim against Mr Lam for bank loan/house mortgage instalment payments from July 2005 to September 2006.
Grandville executed a deed releasing the company from its claims.
The Deed of Waiver Release and Instruction was executed by Mr Lam and other contributories.
Grandville withdrew its application to reverse the rejection of its proof of debt.
Liquidator prepared a schedule setting out the estimated final accounts of the company.
Liquidator applied to court for directions relating to the winding up.
Mr Lam executed a second irrevocable letter of authority in Mdm Fong’s favour for $25,000.
Hearing took place regarding the distribution of dividends.
One of the garnishee orders was made absolute by consent.
Substantive arguments took place regarding the distribution of the remaining funds.
Further arguments took place regarding the distribution of the remaining funds.
Judgment reserved.

7. Legal Issues

  1. Competing claims for dividend payments
    • Outcome: The court held that the liquidator should pay the sum of $107,200 to Mdm Tham and the other designated recipients in accordance with the terms of the Deed.
    • Category: Substantive
    • Related Cases:
      • [1901] 2 KB 199
      • (1889) 24 QB 281
      • 30 CLR 450
  2. Garnishee order against liquidator
    • Outcome: The court determined that no garnishee order may be made against a liquidator.
    • Category: Procedural
    • Related Cases:
      • [1901] 2 KB 199
      • (1889) 24 QB 281
  3. Validity of Deed of Waiver Release and Instruction
    • Outcome: The court held that the Deed was a valid instruction to the liquidator as to how he should deal with the surplus funds.
    • Category: Substantive
    • Related Cases:
      • [1992] 2 SLR 593

8. Remedies Sought

  1. Payment of dividends
  2. Directions from the court regarding distribution of funds

9. Cause of Actions

  • Claim for maintenance and division of matrimonial property
  • Claim based on Deed of Waiver Release and Instruction

10. Practice Areas

  • Commercial Litigation
  • Insolvency Law

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Spence v Coleman (The Inspector-General in Companies Liquidation, Garnishee)Court of AppealYes[1901] 2 KB 199England and WalesCited for the principle that money held by a liquidator is held as an officer of the court and is not a debt that can be garnished.
Prout v GregoryQueen's Bench DivisionYes(1889) 24 QB 281England and WalesCited for the principle that a dividend payable to a judgment debtor in the administration of an estate cannot be garnished.
Webb v Federal Commissioner of TaxationHigh Court of AustraliaYes30 CLR 450AustraliaCited to support the proposition that a liquidator holding surplus funds is not a debtor to the contributories, and there is no debt relationship between them.
Low Gim Har v Low Gim SiahHigh CourtNo[1992] 2 SLR 593SingaporeCited for the principle that a unanimous shareholders’ agreement relating to the distribution of specific company assets in specie had the effect of a unanimous resolution on the part of the shareholders. Distinguished because the Deed was not in Form 52.

13. Applicable Rules

Rule Name
Companies (Winding Up) Rules (R1, 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 1994 Rev Ed)Singapore
Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Winding up
  • Liquidation
  • Dividend
  • Contributory
  • Garnishee order
  • Deed of Waiver Release and Instruction
  • Designated recipients
  • Irrevocable letter of authority
  • Companies Act
  • Companies (Winding Up) Rules

15.2 Keywords

  • winding up
  • liquidation
  • dividend
  • garnishee order
  • deed of waiver
  • companies act

17. Areas of Law

Area NameRelevance Score
Winding Up95
Company Law70
Bankruptcy30
Family Law20

16. Subjects

  • Insolvency
  • Companies Law
  • Civil Procedure