Pacrim Investments v Tan Mui Keow: Scheme of Arrangement & Creditor Definition
Pacrim Investments Pte Ltd sought damages from Mainstream Limited (MSL) for failure to register share transfers. The High Court of Singapore, presided over by Justice Lee Seiu Kin, considered whether Pacrim was bound by a scheme of arrangement under Section 210 of the Companies Act. The court dismissed Pacrim's appeal, holding that Pacrim was a creditor within the meaning of the Act and thus bound by the scheme, which extinguished its claim for damages.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal dismissed; the court upheld the Assistant Registrar's decision that Pacrim was bound by the scheme of arrangement.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Pacrim Investments sought damages from Mainstream Limited (MSL). The court addressed whether Pacrim was bound by MSL's scheme of arrangement.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Pacrim Investments Pte Ltd | Plaintiff, Appellant | Corporation | Appeal Dismissed | Lost | |
| Tan Mui Keow Claire | Defendant | Individual | Neutral | Neutral | |
| Mainstream Limited | Defendant, Respondent | Corporation | Judgment upheld | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lisa Chong | Lisa Chong & Partners |
| Andre Maniam SC | WongPartnership LLP |
| Adeline Ong | WongPartnership LLP |
4. Facts
- Pacrim received 70m MSL shares from Desmond Poh as pledge for brokerage fee.
- Pacrim released 20m shares, retaining 50m shares.
- Pacrim submitted transfers for 50m shares to MSL for registration in September 2003.
- MSL refused registration of share transfers.
- Pacrim's initial claim against MSL was dismissed by the High Court.
- Pacrim appealed the High Court's decision.
- MSL was placed under judicial management and a scheme of arrangement was proposed.
- The Court of Appeal allowed Pacrim's appeal after MSL emerged from judicial management.
5. Formal Citations
- Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another, Originating Summons No 165 of 2004 (Registrar's Appeal No 170 of 2010), [2010] SGHC 368
- Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another, , [2005] 1 SLR(R) 141
- Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another, , [2008] 2 SLR(R) 898
- The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd, , [2008] 3 SLR(R) 121
- Re Midland Coal, Coke and Iron Company, , [1895] 1 Ch 267
- Trocko v Renlita Products Pty Ltd, , [1973] 5 S.A.S.R. 207
- Re Glendale Land Development Ltd (No.2), , (1982) 1 ACLC 562
- Re R.L. Child & Co Pty Ltd, , (1986) 4 ACLC 312
6. Timeline
| Date | Event |
|---|---|
| Pacrim received MSL share certificates from Desmond Poh as pledge for brokerage fee. | |
| Pacrim submitted transfer of 20m shares to MSL for registration. | |
| Pacrim submitted transfer of 30m shares to MSL for registration. | |
| Pacrim commenced proceedings against MSL for registration of shares and damages. | |
| Pacrim filed notice of appeal against High Court's decision. | |
| High Court dismissed Pacrim's originating summons. | |
| MSL placed under judicial management. | |
| Scheme of arrangement approved by Scheme Creditors. | |
| Scheme of arrangement approved by the High Court. | |
| Scheme of arrangement took effect. | |
| MSL emerged from judicial management. | |
| Court of Appeal allowed Pacrim's appeal. | |
| Assistant Registrar held that Pacrim was bound by the scheme of arrangement. | |
| Assistant Registrar issued grounds of decision. | |
| High Court dismissed Pacrim's appeal. |
7. Legal Issues
- Definition of Creditor under Section 210 of the Companies Act
- Outcome: The court held that Pacrim, with a claim dismissed by the High Court but pending appeal, fell within the definition of 'creditor' under s 210 of the Companies Act.
- Category: Substantive
- Sub-Issues:
- Scope of 'creditor' to include parties with pending appeals
- Whether a dismissed claim with a pending appeal constitutes a debt
- Binding Effect of Scheme of Arrangement
- Outcome: The court held that the scheme of arrangement was binding on Pacrim, extinguishing its claim for damages.
- Category: Substantive
- Sub-Issues:
- Whether a scheme of arrangement extinguishes a claim for damages
- Effect of scheme on creditors with pending appeals
8. Remedies Sought
- Damages for failure to register share transfers
9. Cause of Actions
- Failure to register share transfers
- Breach of contract
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another | High Court | Yes | [2005] 1 SLR(R) 141 | Singapore | Cited for the High Court's initial dismissal of Pacrim's claim. |
| Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another | Court of Appeal | Yes | [2008] 2 SLR(R) 898 | Singapore | Cited for the Court of Appeal's decision to allow Pacrim's appeal, leading to the transfer of shares. |
| The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 121 | Singapore | Cited for the principle that a scheme becomes an order of court once approved. |
| Re Midland Coal, Coke and Iron Company | Court of Chancery | Yes | [1895] 1 Ch 267 | England and Wales | Cited for the broad approach to defining 'creditors' as all persons having any pecuniary claims against the company. |
| Trocko v Renlita Products Pty Ltd | Supreme Court of South Australia | Yes | [1973] 5 S.A.S.R. 207 | Australia | Cited for the holding that 'creditors' do not include persons with unliquidated claims sounding only in damages. |
| Re Glendale Land Development Ltd (No.2) | Supreme Court of New South Wales | Yes | (1982) 1 ACLC 562 | Australia | Cited for the holding that 'creditors' should embrace all persons with claims which would be entitled to be admitted to proof if the company were wound up. |
| Re R.L. Child & Co Pty Ltd | Supreme Court of New South Wales | Yes | (1986) 4 ACLC 312 | Australia | Cited for reiterating the view that 'creditors' should embrace all persons with claims which would be entitled to be admitted to proof if the company were wound up. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 210 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Scheme of arrangement
- Creditor
- Judicial management
- Share transfer
- Companies Act
- Scheme Creditor
- Scheme Claim
15.2 Keywords
- Scheme of Arrangement
- Creditor
- Companies Act
- Pacrim Investments
- Mainstream Limited
- Share Transfer
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Schemes of Arrangement | 80 |
| Company Law | 75 |
| Judicial Management | 70 |
| Bankruptcy | 60 |
| Breach of Contract | 30 |
| Arbitration | 20 |
16. Subjects
- Company Law
- Insolvency
- Schemes of Arrangement