PwC v Celestial Nutrifoods: Appeal on Liquidator's Information Powers Under Section 285

The Singapore Court of Appeal dismissed an appeal by PricewaterhouseCoopers LLP (“PwC”) against a High Court order compelling them to disclose documents to the liquidator, Mr. Yit Chee Wah, of Celestial Nutrifoods Ltd (in compulsory liquidation) under section 285 of the Companies Act. The liquidator sought the documents to investigate suspicious transactions. The Court of Appeal held that the High Court's order was justified, the liquidator had met the threshold requirements for the order, and the order was not oppressive. The court also clarified the principles governing the exercise of the court's power to grant orders under section 285.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal clarifies the scope and application of section 285 of the Companies Act regarding a liquidator's power to obtain information.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
PricewaterhouseCoopers LLPAppellantLimited Liability PartnershipAppeal DismissedLost
Tan Boon ChokAppellantIndividualAppeal DismissedLost
Tham Tuck SengAppellantIndividualAppeal DismissedLost
Celestial Nutrifoods LtdRespondentCorporationApplication GrantedWon

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Chao Hick TinJustice of the Court of AppealYes
Chan Sek KeongSenior JudgeNo

4. Counsels

Counsel NameOrganization
Goh Wei WeiWongPartnership LLP
Chong Wan Yee MonicaWongPartnership LLP
Alvin YeoWongPartnership LLP
Jenny TsinWongPartnership LLP
Lin Wei Qi WendyWongPartnership LLP
Blossom HingDrew & Napier LLC
Ang Yao Long RonnieDrew & Napier LLC
Alphis TayDrew & Napier LLC

4. Facts

  1. Celestial Nutrifoods Ltd was a company listed on the Singapore Exchange.
  2. PricewaterhouseCoopers LLP was the auditor of Celestial for the financial years 2004 to 2009.
  3. Celestial is now in compulsory liquidation, with Mr. Yit Chee Wah as the liquidator.
  4. The liquidator applied to the High Court under section 285 of the Companies Act to compel PwC to disclose documents.
  5. The liquidator sought the documents to investigate suspicious transactions undertaken by Celestial.
  6. The High Court granted the liquidator's application, ordering PwC to disclose the documents.
  7. PwC appealed the High Court's decision.

5. Formal Citations

  1. PricewaterhouseCoopers LLP and others v Celestial Nutrifoods Ltd (in compulsory liquidation), Civil Appeal No 132 of 2014, [2015] SGCA 20

6. Timeline

DateEvent
Celestial incorporated in Bermuda
PwC became Celestial's auditor
PwC ceased being Celestial's auditor
Celestial raised $235m by issuing Zero Coupon Convertible Bonds
Bondholders exercised put options
Cash payments totalling some $16.8m to Power Charm Group Ltd
Payment of some RMB 70m to purchase technical know-how in respect of a bio-diesel plant
Value of returned goods amounted to RMB 437.1m
BNY issued a statutory demand against Celestial
High Court granted a winding up order against Celestial
Surreptitious disposal of substantially all of Celestial’s assets
Cash payments of some RMB 529m without written documentation in relation to the construction of a “Soybean Hi-Tech Industrial Zone” in Daqing, PRC
Respondent entered into a Funding Agreement with several creditors
Funding Agreement was sanctioned by the High Court
Respondent filed Summons No 2473 of 2013 pursuant to s 285
High Court granted the Respondent’s application
Appellants filed a notice of appeal
Appeal dismissed
Decision Date

7. Legal Issues

  1. Liquidator's Power to Summon Information
    • Outcome: The Court of Appeal held that the liquidator's application was justified and within the powers granted under section 285 of the Companies Act.
    • Category: Substantive
    • Sub-Issues:
      • Scope of liquidator's powers under section 285 of the Companies Act
      • Whether the disclosure order was oppressive
      • Whether the liquidator was objective
  2. Jurisdiction of the Court of Appeal
    • Outcome: The Court of Appeal held that the disclosure order was an interlocutory order and leave to appeal was required.
    • Category: Jurisdictional
    • Sub-Issues:
      • Whether leave to appeal was required for an interlocutory order
      • Whether the disclosure order was an interlocutory order

8. Remedies Sought

  1. Disclosure of Documents
  2. Oral Examination of Witnesses

9. Cause of Actions

  • Application for Disclosure of Documents under Section 285 of the Companies Act

10. Practice Areas

  • Insolvency Litigation
  • Commercial Litigation

11. Industries

  • Accounting

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
BNY Corporate Trustee Services Ltd v Celestial Nutrifoods LtdHigh CourtYes[2014] 4 SLR 331SingaporeThe High Court granted the Respondent’s application under s 285, which was the subject of the appeal.
Jumabhoy Asad v Aw Cheok Huat Mick and othersCourt of AppealYes[2003] 3 SLR(R) 99SingaporeCited for the principle that a disclosure order under s 285 is an interlocutory order for which leave is required before an appeal can be lodged.
The “Nasco Gem”Court of AppealYes[2014] 2 SLR 63SingaporeCited for the definition of an interlocutory order.
Blenwel Agencies Pte Ltd v Tan Lee KingCourt of AppealYes[2008] 2 SLR(R) 529SingaporeCited for the principle that the Court of Appeal is only seised of the jurisdiction conferred upon it by statute.
Au Wai Pang v Attorney-General and another matterCourt of AppealYes[2014] 3 SLR 357SingaporeCited for the principle that the Rules of Court is a subsidiary legislation which is subordinate to its parent act, the Supreme Court of Judicature Act.
Rank Xerox (Singapore) Pte Ltd v Ultra Marketing Pte LtdHigh CourtYes[1991] 2 SLR(R) 912SingaporeCited for affirming the Bozson test.
Ling Kee Ling and another v Leow Leng Siong and othersHigh CourtYes[1995] 2 SLR(R) 36SingaporeCited for affirming the Bozson test.
Aberdeen Asset Management Asia Ltd and another v Fraser & Neave Ltd and othersHigh CourtYes[2001] 3 SLR(R) 355SingaporeCited for affirming the Bozson test.
Wellmix Organics (International) Pte Ltd v Lau Yu ManHigh CourtYes[2006] 2 SLR(R) 525SingaporeCited for the principle of determining whether an order is interlocutory or final.
OpenNet Pte Ltd v Info-Communications Development Authority of SingaporeHigh CourtYes[2013] 2 SLR 880SingaporeCited for the principle of determining whether an order is interlocutory or final.
Dorsey James Michael v World Sports Group Pte LtdHigh CourtYes[2013] 3 SLR 354SingaporeCited for the principle of determining whether an order is interlocutory or final.
Bozson v Altrincham Urban District CouncilEnglish Court of AppealYes[1903] 1 KB 547EnglandCited for the Bozson test for determining whether an order is interlocutory or final.
Re Lion City Holdings Pte LtdHigh CourtYes[2003] 3 SLR(R) 493SingaporeCited for the principle that s 285 applies irrespective of whether the liquidator is seeking information for the specific purpose of commencing an action.
Liquidator of W&P Piling Pte Ltd v Chew Yin What and othersHigh CourtYes[2004] 3 SLR(R) 164SingaporeCited for the two-stage test in deciding whether to make an order under s 285.
Chi Man Kwong Peter and another v Lee Kum Seng RonaldHigh CourtYes[1983–1984] SLR(R) 700SingaporeCited as a High Court case on s 285.
Official Receiver of Hong Kong v Kao Wei Tseng and othersHigh CourtYes[1990] 1 SLR(R) 315SingaporeCited as a High Court case on s 285.
In re Greys Brewery CompanyCourtYes[1884] 25 Ch D 400EnglandCited for Chitty J’s description of s 115 of the Companies Act 1862 (c 89) (UK) as a “Star Chamber” clause.
In Re Rolls Razor (No 2)CourtYes[1970] Ch 576EnglandCited for the constricted view on the scope of the English-equivalent of s 285.
Cloverbay Ltd (Joint Administrators) v Bank of Credit and Commerce International SACourtYes[1991] Ch 90EnglandCited for the constricted view on the scope of the English-equivalent of s 285.
Re Gold CoCourtYes[1879] 12 Ch D 77EnglandCited for the expansive view on the scope of the English-equivalent of s 285.
British & Commonwealth Holdings Plc (Joint Administrators) v Spicer and OppenheimHouse of LordsYes[1993] AC 426EnglandCited for the expansive view on the scope of the English-equivalent of s 285.
Re Norton Warburg Holdings LtdCourtYes[1983] 1 BCC 98907EnglandCited for the principle that ‘great weight’ ought to be given to an office-holder, who will have detailed knowledge of the problems which exist in relation to the affairs of the company and the information required.
Re Chesterfield United Inc; Akers v Deutsche Bank AGCourtYes[2013] 1 BCLC 709EnglandCited for the principle that the risk of a respondent being exposed to liability is a matter which is relevant to determining whether there would be oppression, it is merely a factor, and does not present a bar against the making of an order.
Re Bank of Credit and Commerce International SA (No 12)CourtYes[1997] 1 BCLC 526EnglandCited for the principle that the closer a proposed respondent is to being a defined target, the more oppressive an order for examination is likely to be.
Shierson and another v Rastogi and othersCourtYes[2003] 1 WLR 586EnglandCited for the principle that it is oppressive to require someone suspected of serious wrongdoing/fraud to prove the case against himself on oath before proceedings are brought.
Daltel Europe Ltd (in liquidation) v Makki (No 1)CourtYes[2005] 1 BCLC 594EnglandCited for the principle that it is oppressive to require someone suspected of serious wrongdoing/fraud to prove the case against himself on oath before proceedings are brought.
Re Sasea Finance LtdCourtYes[1998] 1 BCLC 559EnglandCited for the principle that attempts to gain undue advantages in the litigation process will also be closely scrutinised to prevent abuse.
In Re Mid-East Trading LtdCourtYes[1998] BCC 726EnglandCited for the principle that the court will give weight to the risk that compliance might expose the respondent to claims for breach of confidence, or criminal penalties in the jurisdiction in which the documents are situated.
In Re North Australian Territory CompanyCourtYes[1890] 45 Ch D 87EnglandCited for the principle that the court should be careful not to make an order that is wholly unreasonable, unnecessary or oppressive to the person(s) concerned.
In Re Castle New Homes LtdCourtYes[1979] 1 WLR 1075EnglandCited for the principle that the court should be careful not to make an order that is wholly unreasonable, unnecessary or oppressive to the person(s) concerned.
Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation)High CourtYes[2004] 1 SLR(R) 671SingaporeCited for the principle that any liquidator making an application under s 285 should be objective.
Re Kong Wah Holdings Ltd (in liquidation)CourtYes[2004] 2 HKC 255Hong KongCited for the principle that the fact that the documents were internal documents did not necessarily mean that they should be excluded from disclosure and that this was merely a factor to be taken into account.
Re New China Hong Kong Group Ltd (in liquidation)CourtYes[2003] 3 HKC 252Hong KongCited as a case where s 285 was applied even though the jurisdiction has in place codified pre-action procedures.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 57 r 16(10)
Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed) rr 49, 52, 55, 56 and 57

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed) s 285Singapore
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 34(2)(d)Singapore
Bankrupt Law Consolidation Act 1849 (12 & 13 Vict c 106) (UK) s 117United Kingdom
Companies Act 1862 (c 89) (UK) s 115United Kingdom
Insolvency Act 1986 (c 45) (UK) s 236United Kingdom
Corporations Act 1989 (No 109 of 1989) (Cth) s 597Australia
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (HK) s 221Hong Kong
Law of the People’s Republic of China on Protecting the State SecretsChina

15. Key Terms and Keywords

15.1 Key Terms

  • Liquidator
  • Section 285
  • Companies Act
  • Disclosure Order
  • Interlocutory Order
  • Working Papers
  • Compulsory Liquidation
  • Suspicious Transactions
  • Funding Agreement
  • Objectivity
  • Oppression

15.2 Keywords

  • Liquidation
  • Companies Act
  • Section 285
  • Disclosure
  • Auditor
  • Insolvency
  • Singapore
  • Court of Appeal

17. Areas of Law

Area NameRelevance Score
Winding Up95
Company Law80
Liquidator's Duties75
Bankruptcy70
Evidence Law60
Auditing40
Contract Law30
Arbitration15

16. Subjects

  • Insolvency
  • Company Law
  • Civil Procedure
  • Auditing