Hin Leong Trading v Rajah & Tann: Directors' Powers in Judicial Management
The Singapore Court of Appeal dismissed appeals by Hin Leong Trading (Pte) Ltd (in liquidation) and Ocean Tankers (Pte) Ltd (under Interim Judicial Management) against Rajah & Tann Singapore LLP, concerning the authority of company directors under interim judicial management to initiate legal action. The court held that the directors lacked the necessary authority to commence the injunction applications, clarifying the scope of directors' residual powers.
1. Case Overview
1.1 Court
Court of Appeal of the republic of singapore1.2 Outcome
Appeals dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal clarifies directors' powers during judicial management. Appeal dismissed, affirming limited residual authority.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Hin Leong Trading (Pte) Ltd (in liquidation) | Appellant, Applicant | Corporation | Appeal Dismissed | Lost | Christopher Anand s/o Daniel, Harjean Kaur, Yeo Yi Ling Eileen, Keith Valentine Lee Jia Jin |
| Rajah & Tann Singapore LLP | Respondent | Limited Liability Partnership | Appeal Won | Won | Toby Thomas Landau, Liew Wey-Ren Colin |
| Ocean Tankers (Pte) Ltd (under Interim Judicial Management) | Appellant, Applicant | Corporation | Appeal Dismissed | Lost | Ong Ziying Clement, Suresh s/o Damodara, Chua Jun Yi Leonard, Ning Jie, Lim Dao Yuan Keith |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Justice of the Court of Appeal | Yes |
| Sundaresh Menon | Chief Justice | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| Belinda Ang Saw Ean | Judge of the Appellate Division | No |
| Chao Hick Tin | Senior Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Christopher Anand s/o Daniel | Advocatus Law LLP |
| Harjean Kaur | Advocatus Law LLP |
| Yeo Yi Ling Eileen | Advocatus Law LLP |
| Keith Valentine Lee Jia Jin | Advocatus Law LLP |
| Ong Ziying Clement | Damodara Ong LLC |
| Suresh s/o Damodara | Damodara Ong LLC |
| Chua Jun Yi Leonard | Damodara Ong LLC |
| Ning Jie | Damodara Ong LLC |
| Lim Dao Yuan Keith | Damodara Ong LLC |
| Toby Thomas Landau | Colin Liew LLC |
| Liew Wey-Ren Colin | Colin Liew LLC |
4. Facts
- Directors of HLT and OTPL instructed R&T to apply for judicial management.
- Court placed HLT and OTPL under interim judicial management; appointed IJMs.
- IJMs retained R&T's legal services.
- Directors (the Lims) objected; commenced action to injunct R&T.
- Lims did not seek approval from IJMs or JMs before filing Injunction Applications.
- R&T filed Striking Out Applications, arguing Lims lacked authority.
- Judge dismissed Joinder Applications; allowed Striking Out Applications.
5. Formal Citations
- Hin Leong Trading (Pte) Ltd (in liquidation) v Rajah & Tann Singapore LLP and another appeal, , [2022] SGCA 28
- Hin Leong Trading (Pte) Ltd (in liquidation) v Rajah & Tann Singapore LLP, 202 of 2020, Civil Appeal No 202 of 2020
- In the matter of Rajah & Tann Singapore LLP acting for the Interim Judicial Managers of Hin Leong Trading (Pte) Ltd and/or other relevant parties Between Hin Leong Trading (Pte) Ltd (in liquidation) v Rajah & Tann Singapore LLP, 704 of 2020, High Court Originating Summons No 704 of 2020
- In the matter of Rajah & Tann Singapore LLP acting for the Interim Judicial Managers of Hin Leong Trading (Pte) Ltd and/or other relevant parties Between Hin Leong Trading (Pte) Ltd (in liquidation) v Rajah & Tann Singapore LLP, 4318 of 2020, Summons No 4318 of 2020
- Ocean Tankers (Pte) Ltd (under Interim Judicial Management) v Rajah & Tann Singapore LLP, 203 of 2020, Civil Appeal No 203 of 2020
- In the matter of Rajah & Tann Singapore LLP acting for the Interim Judicial Managers of Ocean Tankers (Pte) Ltd (under Interim Judicial Management) and/or other relevant parties Between Ocean Tankers (Pte) Ltd (under Interim Judicial Management) v Rajah & Tann Singapore LLP, 666 of 2020, High Court Originating Summons No 666 of 2020
- In the matter of Rajah & Tann Singapore LLP acting for the Interim Judicial Managers of Ocean Tankers (Pte) Ltd (under Interim Judicial Management) and/or other relevant parties Between Ocean Tankers (Pte) Ltd (under Interim Judicial Management) v Rajah & Tann Singapore LLP, 4317 of 2020, Summons No 4317 of 2020
- , 452 of 2020, High Court Originating Summons No 452 of 2020
- , 417 of 2020, High Court Originating Summons No 417 of 2020
6. Timeline
| Date | Event |
|---|---|
| HLT placed under interim judicial management | |
| OTPL placed under interim judicial management | |
| The Lims commenced Injunction Applications | |
| The Lims commenced Injunction Applications | |
| Judge granted OS 452 and OS 417 | |
| R&T filed Striking Out Applications | |
| The Lims commenced Joinder Applications | |
| Judge heard the Applications | |
| Appeals filed against Striking Out Applications decision | |
| Appeals filed against Striking Out Applications decision | |
| JMs of HLT filed application for HLT to be wound up | |
| Judge placed HLT in compulsory liquidation | |
| OTPL placed in compulsory liquidation | |
| Court hearing | |
| Judgment reserved |
7. Legal Issues
- Directors' Powers
- Outcome: Directors of company under interim judicial management lack legal standing to authorize action.
- Category: Substantive
- Judicial Management Order
- Outcome: Court determined legal effect of order placing company under interim judicial management.
- Category: Substantive
- Striking Out
- Outcome: Court considered principles for striking out a claim.
- Category: Procedural
8. Remedies Sought
- Restraint of Rajah & Tann from advising and acting for the Companies
- Restraint of Rajah & Tann from advising and acting for the Interim Judicial Managers of the Companies
9. Cause of Actions
- Injunction
10. Practice Areas
- Corporate Restructuring
- Insolvency Litigation
11. Industries
- Shipping
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lim Oon Kuin and others v Rajah & Tann Singapore LLP and another appeal | Court of Appeal | Yes | [2022] SGCA 29 | Singapore | Judgment released simultaneously; terms and abbreviations adopted. |
| Ocean Tankers (Pte) Ltd (under judicial management) v Rajah & Tann Singapore LLP and another matter | High Court | Yes | [2021] SGHC 47 | Singapore | Appeals arise from this decision; applications for Injunction Applications struck out. |
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others | N/A | Yes | [1997] 3 SLR(R) 649 | Singapore | Cited for O 18 r 19(1)(d) of the Rules: court's machinery used improperly. |
| Chee Siok Chin and others v Minister for Home Affairs and another | N/A | Yes | [2006] 1 SLR(R) 582 | Singapore | Cited: grounds for striking out mirror court's inherent jurisdiction. |
| United Investment and Finance Ltd v Tee Chin Yong and others | N/A | Yes | [1965-1967] SLR(R) 349 | Singapore | Cited: striking out warranted with absence of legal standing. |
| Re KS Energy Ltd and another matter | N/A | Yes | [2020] 5 SLR 1435 | Singapore | Cited: court's determination for interim judicial management depends on risks. |
| Re a Company (No 00175 of 1987) | N/A | Yes | [1987] 3 BCC 124 | England | Cited: interim relief appropriate with prima facie case and assets in jeopardy. |
| Re Pacific Andes Resources Development Ltd and other matters | N/A | Yes | [2018] 5 SLR 125 | Singapore | Cited to contrast judicial management with debtor-in-possession proceedings. |
| Re IM Skaugen SE and other matters | N/A | Yes | [2019] 3 SLR 979 | Singapore | Cited to contrast judicial management with debtor-in-possession proceedings. |
| Petroships Investment Pte Ltd v Wealthplus Pte Ltd and others and another matter | N/A | Yes | [2016] 2 SLR 1022 | Singapore | Cited: appointment of liquidator renders directors functus officio. |
| Ayerst (Inspector of Taxes) v C. & K. (Constructions) Ltd | N/A | Yes | [1976] AC 167 | England | Cited: directors lose power to manage company in England. |
| Re Union Accident Insurance Co Ltd | English High Court | Yes | [1972] 1 WLR 640 | England | Basis of director's residuary powers; appointment of liquidator renders directors functus officio. |
| Re Swedex Windows & Doors Ltd (in liquidation) and another | N/A | Yes | [2010] IEHC 237 | Ireland | Re Union: appointment of liquidator renders directors functus officio. |
| Andronics Communications Ltd v AIB Group (UK) t/a First Trust Bank | Northern Ireland High Court | Yes | [2020] NIQB 64 | Northern Ireland | Liquidator's task impossible if directors launch legal proceedings. |
| Re Oriental Inland Steam Co Ex p Scinde Railway Co | N/A | Yes | (1874) 9 Ch App 557 | N/A | Winding up order brings directors' powers to an end. |
| Stephen, Petitioner | N/A | Yes | [2012] BCC 537 | N/A | Re Union applied: directors can challenge appointment of liquidator. |
| Closegate Hotel Development (Durham) Ltd and another v Mclean and others | English High Court | Yes | [2014] Bus LR 405 | England | Re Union: directors retain residuary power to challenge appointment of liquidator. |
| Brinds Ltd and others v Offshore Oil NL and others (No 2) | Supreme Court of Victoria | Yes | [1985] 10 ACLR 242 | Australia | Re Union: director's residual powers approved in Australia. |
| O’Connell Manthe & Partners v Vryheid Minerale (Edms) Bpk | N/A | Yes | 1979 (1) SA 553 (T) | South Africa | Re Union: director's residual powers approved in South Africa. |
| Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) | N/A | Yes | [2021] 2 SLR 478 | Singapore | Company has right to appeal winding-up order; directors control appeal. |
| Shanks v Central Regional Council | Outer House of the Scottish Court of Session | Yes | [1987] SLT 410 | Scotland | Conflict of interests may necessitate directors instituting proceedings. |
| Newhart Developments Ltd v Co-operative Commercial Bank Ltd | N/A | Yes | [1978] QB 814 | N/A | Provision empowering receiver doesn't divest directors of power. |
| In re Lehman Bros Europe Ltd (in administration) (No 9) and another | English High Court | Yes | [2018] Bus LR 439 | England | Considered application of UK Insolvency Act 1986. |
| Sri Hartamas Development Sdn Bhd v MBF Finance Bhd | Malaysian Supreme Court | Yes | [1991] 3 MLJ 325 | Malaysia | Re Union: board retains residuary powers to oppose petition. |
| Taman Sungai Dua Development Sdn Bhd (previously known as Supershine (M) Sdn Bhd) v Goh Boon Kim | Malaysian Court of Appeal | Yes | [1997] 2 MLJ 526 | Malaysia | Re Union: company appealing order appointing liquidators. |
| Tan Sri Dato’ Hj Lamin bin Hj Mohd Yunus v Bursa Malaysia Securities Bhd | Kuala Lumpur High Court | Yes | [2012] 7 MLJ 85 | Malaysia | Re Union: directors' statutory duties not absolved by liquidator appointment. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (2014 Rev Ed) O 18 r 19(1)(a) |
| Rules of Court (2014 Rev Ed) O 18 r 19(1)(b) |
| Rules of Court (2014 Rev Ed) O 18 r 19(1)(d) |
| Rules of Court (2014 Rev Ed) O 92 r 4 |
| Rules of Court O 59 r 2(2) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 157A | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227B(10)(b) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) s 92 | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227G(2) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227G(3) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) Eleventh Schedule | Singapore |
| Companies (Floating Charges and Receivers) (Scotland) Act 1972 (c 67) (UK) | Scotland |
| UK Insolvency Act 1986 | England |
15. Key Terms and Keywords
15.1 Key Terms
- Interim Judicial Management
- Judicial Management
- Directors' Powers
- Functus Officio
- Residual Powers
- Striking Out
- Injunction Applications
- Liquidation
15.2 Keywords
- Judicial Management
- Directors Powers
- Insolvency
- Singapore
- Company Law
- Rajah & Tann
- Hin Leong
- Ocean Tankers
16. Subjects
- Company Law
- Insolvency
- Judicial Management
- Directors' Powers
17. Areas of Law
- Company Law
- Insolvency Law
- Civil Procedure