LaserResearch v Internech: Interpretation of Companies Act s 299(2) and Rules of Court O 21 r 2(6) in Winding Up
In LaserResearch (S) Pte Ltd (in liquidation) v Internech Systems Pte Ltd, the High Court of Singapore addressed whether a statutory stay of proceedings under s 299(2) of the Companies Act excludes the application of O 21 r 2(6) of the Rules of Court, which deems an action discontinued if no steps are taken for more than a year. LaserResearch sought to cancel a banker’s guarantee, arguing that Internech’s action was discontinued. The court held that the statutory stay under s 299(2) takes the action outside the ambit of O 21 r 2(6), dismissing LaserResearch's application.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Originating Summons No 495 of 2010 dismissed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court held that a statutory stay of proceedings under s 299(2) of the Companies Act excludes the application of O 21 r 2(6) of the Rules of Court.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| LaserResearch (S) Pte Ltd (in liquidation) | Applicant, Defendant | Corporation | Application Dismissed | Lost | |
| Internech Systems Pte Ltd | Defendant, Applicant | Corporation | Application Upheld | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | J | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Terence Tan | Rodyk & Davidson LLP |
| Ng Yeow Khoon | KhattarWong |
| Sim Mei Ling | KhattarWong |
4. Facts
- Internech commenced an action against LaserResearch for unpaid invoices.
- LaserResearch admitted to 14 invoices but disputed 11.
- LaserResearch secured a banker’s guarantee as a condition for defending the claim.
- LaserResearch went into provisional liquidation.
- Internech filed a proof of debt against LaserResearch instead of seeking leave to continue the DC Suit.
- LaserResearch sought the return of the banker’s guarantee, arguing the DC Suit was discontinued.
5. Formal Citations
- LaserResearch (S) Pte Ltd (in liquidation) v Internech Systems Pte Ltd and another matter, Originating Summons Nos 495 and 746 of 2010, [2010] SGHC 285
6. Timeline
| Date | Event |
|---|---|
| Internech commenced an action against LaserResearch for unpaid invoices. | |
| LaserResearch secured a banker’s guarantee. | |
| Internech filed an Affidavit Verifying List of Documents. | |
| Last correspondence between the parties’ lawyers. | |
| LaserResearch went into provisional liquidation. | |
| Internech received notice of creditors’ meeting. | |
| Internech filed proof of debt against LaserResearch. | |
| A liquidator was appointed at the creditors’ meeting. | |
| LaserResearch requested the return of the banker’s guarantee. | |
| Judgment reserved. |
7. Legal Issues
- Statutory Stay of Proceedings
- Outcome: The court held that a statutory stay of proceedings under s 299(2) of the Companies Act excludes the application of O 21 r 2(6) of the Rules of Court.
- Category: Procedural
- Deemed Discontinuance of Action
- Outcome: The court held that O 21 r 2(6) does not apply when proceedings are stayed by s 299(2) of the Companies Act.
- Category: Procedural
8. Remedies Sought
- Cancellation of Banker's Guarantee
9. Cause of Actions
- Debt Claim
10. Practice Areas
- Insolvency Litigation
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation) | High Court | Yes | [2004] 1 SLR(R) 671 | Singapore | Cited for the rationale of s 299(2) of the Companies Act regarding the orderly realization of assets and fair settlement of creditors’ claims in liquidation. |
| Tan Kim Seng v Ibrahim Victor Adams | Court of Appeal | Yes | [2004] 1 SLR(R) 181 | Singapore | Cited for the rationale behind O 21 r 2 of the Rules of Court, which is the maintenance of an efficient judicial system. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 21 r 2(6) |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 21 r 2(6A) |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 21 r 2(6B) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 299(2) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) s 19(c) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Statutory Stay
- Deemed Discontinuance
- Creditors’ Voluntary Winding Up
- Banker's Guarantee
- Proof of Debt
- Liquidation
15.2 Keywords
- winding up
- statutory stay
- discontinuance
- banker's guarantee
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 90 |
| Company Law | 70 |
| Bankruptcy | 60 |
| Civil Procedure | 40 |
| Contract Law | 30 |
16. Subjects
- Insolvency
- Civil Procedure
- Companies Law