Re Castlewood Group Pte Ltd: Third-Party Litigation Funding & Assignment of Proceeds under Companies Act

In Re Castlewood Group Pte Ltd, the Singapore High Court addressed whether a liquidator could assign the proceeds of a cause of action under the Companies Act (Cap 50, 2006 Rev Ed) before the Insolvency, Restructuring and Dissolution Act 2018 came into effect. The court granted the declaration sought by the applicant, finding that the funding arrangement did not amount to maintenance or champerty.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Declaration granted that the funding arrangement does not amount to maintenance or champerty.

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court addresses whether proceeds of a liquidator's cause of action are assignable under the Companies Act, prior to IRDA.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Castlewood Group Pte Ltd (in creditors’ voluntary liquidation)ApplicantCorporationDeclaration GrantedWon

3. Judges

Judge NameTitleDelivered Judgment
Aedit AbdullahJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Clarence Lun YaodongFervent Chambers LLC
Wong Changyan ErnestFervent Chambers LLC
Chua Qin EnFervent Chambers LLC
Andrew Chan Chee YinAllen & Gledhill LLP
Ang MinghaoFervent Chambers LLC
Christopher LimFervent Chambers LLC

4. Facts

  1. The applicant sought orders allowing the liquidator to enter into a funding arrangement.
  2. The funding arrangement involved assigning the benefits or proceeds of claims.
  3. The applicant sought a declaration that the funding arrangement does not amount to maintenance or champerty.
  4. The resolution of the creditors’ voluntary winding up was passed on 29 October 2019.
  5. The application is governed by the Companies Act rather than the IRDA.

5. Formal Citations

  1. Re Castlewood Group Pte Ltd (in creditors’ voluntary liquidation), Originating Application No 29 of 2022, [2022] SGHC 117

6. Timeline

DateEvent
Resolution of creditors’ voluntary winding up passed
Hearing date
Judgment reserved

7. Legal Issues

  1. Assignment of Proceeds from Causes of Action
    • Outcome: The court found that it was not possible to assign the proceeds from post-liquidation causes of action under the Companies Act.
    • Category: Substantive
    • Related Cases:
      • [2006] 2 SLR(R) 717
      • [1998] Ch 170
  2. Maintenance and Champerty
    • Outcome: The court found that the funding arrangement did not violate the rule against champerty or maintenance.
    • Category: Substantive
    • Related Cases:
      • [2015] 4 SLR 597

8. Remedies Sought

  1. Orders allowing the liquidator of the applicant to enter into a funding arrangement
  2. Declaration that the funding arrangement does not amount to maintenance or champerty

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Commercial Litigation
  • Insolvency Law

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Neo Corp Pte Ltd (in liquidation) v Neocorp Innovations Pte LtdCourt of AppealYes[2006] 2 SLR(R) 717SingaporeCited as controlling the issue of whether post-liquidation causes of action vesting in a liquidator are property of the company and hence assignable.
Re Fan Kow HinHigh CourtYes[2019] 3 SLR 861SingaporeCited regarding the distinction between pre and post-bankruptcy assets.
In re Oasis Merchandising Services LtdChancery DivisionYes[1998] Ch 170England and WalesCited for the ruling that a liquidator could only sell pre-insolvency assets.
Re Vanguard Energy Pte LtdHigh CourtYes[2015] 4 SLR 597SingaporeCited for the approach in determining whether a funding arrangement violates the rule against champerty or maintenance.
Tan Cheng Bock v Attorney-GeneralCourt of AppealYes[2017] 2 SLR 850SingaporeCited for the principle that “Parliament shuns tautology and does not legislate in vain”.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore
Section 310 of the Companies Act (Cap 50, 2006 Rev Ed)Singapore
Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018)Singapore
s 144(1)(g) of the Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018)Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Liquidation
  • Third-party litigation funding
  • Assignment of proceeds
  • Maintenance
  • Champerty
  • Creditors’ voluntary winding up

15.2 Keywords

  • Insolvency
  • Liquidation
  • Litigation Funding
  • Companies Act
  • Singapore

17. Areas of Law

Area NameRelevance Score
Winding Up95
Insolvency Law90
Company Law70
Third-party litigation funding60
Contract Law30
Civil Procedure20

16. Subjects

  • Insolvency
  • Litigation Funding
  • Company Law