Re International Formwork & Scaffolding: Provisional Liquidators' Equitable Lien & Priority of Fees
In the High Court of Singapore, Quentin Loh J addressed the application by the provisional liquidators of International Formwork & Scaffolding Pte Ltd for payment of their fees and expenses from the company's assets. The liquidators disputed the extent of the provisional liquidators' equitable lien. The court ruled in favor of the provisional liquidators, confirming their equitable lien over all company assets and ordering the liquidators to pay the outstanding fees and expenses. The court also awarded costs to the provisional liquidators.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Order granted for liquidators to pay provisional liquidators' fees and expenses, confirming their equitable lien over all company assets.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court addresses provisional liquidators' equitable lien over company assets and priority of their fees and expenses in liquidation.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| International Formwork & Scaffolding Pte Ltd | Respondent | Corporation | Order granted for payment of provisional liquidators' fees and expenses | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | J | Yes |
4. Counsels
4. Facts
- Provisional liquidators were appointed due to concerns about misappropriation of company assets.
- A creditor (landlord) initially denied the provisional liquidators access to the company's premises.
- The court ordered the landlord to grant access to the provisional liquidators.
- The provisional liquidators performed extensive work, including reviewing records and managing assets.
- The company was wound up, and liquidators were appointed.
- The winding up order preserved the provisional liquidators' lien over the company's assets.
- The liquidators initially refused to pay the provisional liquidators' fees and expenses.
5. Formal Citations
- Re International Formwork & Scaffolding Pte Ltd, Companies Winding Up No 160 of 2012 (Summons No 2313 of 2013), [2013] SGHC 225
6. Timeline
| Date | Event |
|---|---|
| Timothy James Reid, Tan Aik Kiat and Ng Yau Yee Theresa were appointed provisional liquidators of the Company. | |
| Court granted an order for the landlord to grant the Provisional Liquidators access to its premises to secure its assets and records. | |
| Tay Yong Kwang J made an order winding up the Company. Abuthahir Abdul Gafoor and Chee Yoh Chuang were appointed liquidators of the Company. | |
| Breakdown of the Provisional Liquidators’ fees and expenses was provided, amounting to S$202,270.39. | |
| Provisional Liquidators and their solicitors filed their bills for taxation on 1 February 2013 in Bill of Costs No 15 of 2013 and Bill of Costs No 18 of 2013 respectively. | |
| Notices of Dispute to both BC 15/2013 and BC 18/2013 were filed by the Liquidators. | |
| Provisional Liquidators accepted the Liquidators' proposal that the sums of S$90,000 plus disbursements and S$50,000 plus disbursements be paid “in lieu of taxation” for each bill in BC 15/2013 and BC 18/2013 respectively. | |
| Provisional Liquidators requested payment of S$97,417.67 and S$57,324.59. | |
| Liquidators refused to make payment. | |
| Provisional Liquidators filed an application against the Liquidators for an order that the Company and the Liquidators pay the abovementioned sums. | |
| Court granted an order in terms with costs fixed at $7,500 to the Provisional Liquidators. | |
| Liquidators applied for further arguments to be heard. | |
| Further arguments were heard by counsel in chambers. | |
| Judgment reserved. |
7. Legal Issues
- Equitable Lien of Provisional Liquidators
- Outcome: The court held that the provisional liquidators are entitled to an equitable lien over all the assets of the company out of which they are entitled to be paid their fees and expenses.
- Category: Substantive
- Sub-Issues:
- Extent of equitable lien
- Priority of equitable lien
- Related Cases:
- [1987] SLR(R) 717
- (1991) 5 ACSR 767
- [1992] 1 WLR 517
- Priority of Provisional Liquidators' Fees and Expenses
- Outcome: The court held that the equitable lien of a provisional liquidator stands outside of the statutory scheme of priorities and is superior to other unsecured debts.
- Category: Substantive
- Sub-Issues:
- Ranking of provisional liquidators' claims
- Priority over other unsecured debts
- Related Cases:
- (1991) 5 ACSR 767
8. Remedies Sought
- Order for payment of fees and expenses
- Declaration of equitable lien
9. Cause of Actions
- Application for payment of fees and expenses
- Determination of equitable lien
10. Practice Areas
- Liquidation
- Insolvency
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Pac-Asian Services Pte Ltd | High Court | Yes | [1987] SLR(R) 717 | Singapore | Cited as authority for the proposition that a provisional liquidator enjoys an equitable lien over the assets of a company out of which he is entitled to be paid his just remuneration and expenses. |
| Re Central Commodities Services Pty Ltd | N/A | Yes | (1984) 8 ACLR 801 | Australia | Cited with approval in Re Pac-Asian Services for the principle that a provisional liquidator has an indemnity over the assets of the company in respect of his fees, costs and expenses properly incurred and so is entitled to an equitable lien over them. |
| Shirlaw v Taylor | Federal Court of Australia | Yes | (1991) 5 ACSR 767 | Australia | Cited for the principle that the equitable lien of a provisional liquidator stands outside of the statutory scheme of priorities and is not inconsistent with the statutory scheme. |
| Mellor v Mellor and Others | High Court | Yes | [1992] 1 WLR 517 | England and Wales | Cited for the proposition that a receiver's right to be indemnified out of the assets of which he is appointed a receiver extends to all the assets of which he is so appointed and does not simply attach to those assets which, in the course of the receivership, he is able to bring within his grasp. |
| Ronald John Dean-Willcocks & Anor v Nothintoohard Pty Limited & Ors | N/A | No | (2007) 25 ACLC 109 | Australia | Discussed in relation to the circumstances under which an equitable lien would arise and how this conflict with an earlier registered mortgage should be resolved. Distinguished on the facts. |
| Wings-Aus Holdings Pty Limited trading as Hooters Restaurants Australia & New Zealand (in Liquidation) | Supreme Court of New South Wales | Yes | [2009] NSWSC 667 | Australia | Discussed in relation to the principle that the costs and expenses incurred by the receiver or administrator which are protected by the equitable lien must be such costs and expenses properly incurred for the benefit of the fund or the creditors claiming on them. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 328 | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 28B | Singapore |
| Companies Act s 269(1) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Provisional liquidator
- Equitable lien
- Liquidator
- Winding up
- Fees and expenses
- Priority
- Salvage principle
- Companies Act
- Assets of the company
15.2 Keywords
- provisional liquidator
- equitable lien
- liquidation
- winding up
- Singapore
- insolvency
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Insolvency Law | 90 |
| Company Law | 60 |
| Civil Procedure | 30 |
16. Subjects
- Insolvency
- Liquidation
- Corporate Law
- Civil Procedure