Management Corporation v Coral Edge: Voiding Dissolution for Defect Claim

In 2022, the General Division of the High Court of Singapore heard an application by Management Corporation Strata Title Plan No 4339 against Coral Edge Development Pte Ltd (dissolved), seeking to void the dissolution of Coral Edge to pursue a claim for building defects at Waterwood Executive Condominium. The court, presided over by Chua Lee Ming J, dismissed the application, finding that voiding the dissolution would be futile as Coral Edge had no assets to satisfy the claim. The court also found that it had no power to void distributions made to Coral Edge's members before the dissolution.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Management Corporation sought to void Coral Edge's dissolution to pursue a defect claim. The court dismissed the application, finding it pointless as Coral Edge had no assets.

1.7 Decision Date

6 October 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Management Corporation Strata Title Plan No 4339	Applicant	Corporation	Application dismissed	Lost	Daniel Tay Yi Ming of Chan Neo LLP
Coral Edge Development Pte Ltd (dissolved)	Respondent	Corporation	Application dismissed	Won
Thio Khiaw Ping Kelvin	Other	Individual	Costs awarded	Won	Sim Kwan Kiat of Rajah & Tann Singapore LLP Wong Ye Yang of Rajah & Tann Singapore LLP
Terence Ng Chi Hou	Other	Individual	Costs awarded	Won	Sim Kwan Kiat of Rajah & Tann Singapore LLP Wong Ye Yang of Rajah & Tann Singapore LLP

3. Judges

Judge Name	Title	Delivered Judgment
Chua Lee Ming	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Daniel Tay Yi Ming	Chan Neo LLP
Sim Kwan Kiat	Rajah & Tann Singapore LLP
Wong Ye Yang	Rajah & Tann Singapore LLP

4. Facts

Coral Edge Development Pte Ltd was the developer of the Waterwood Executive Condominium.
The Management Corporation sought to void the dissolution of Coral Edge to pursue a claim for building defects.
The condominium suffered from building defects, including water seepage and cracks in the external walls.
Coral Edge was placed under members’ voluntary liquidation and dissolved on 28 November 2020.
The liquidators distributed the surplus assets of Coral Edge to its members before dissolution.
The Management Corporation claimed it only found out about the dissolution of Coral Edge in September 2021.
The Management Corporation filed the application to void the dissolution on 6 November 2021.

5. Formal Citations

Management Corporation Strata Title Plan No 4339 v Coral Edge Development Pte Ltd (dissolved), Originating Summons No 1121 of 2021, [2022] SGHC 250

6. Timeline

Date	Event
2013-01-01	Coral Edge Development Pte Ltd incorporated.
2015-12-01	Temporary Occupation Permit issued for the Condominium.
2019-01-01	Residents discovered building defects.
2019-11-07	Members of Coral Edge passed a special resolution to wind up the company voluntarily.
2019-11-16	Liquidators placed an advertisement in The Business Times for creditors to file claims.
2020-04-03	Condominium Manager informed Greatearth about a crack in the external wall.
2020-04-20	Condominium Manager informed Greatearth and Sing Holdings about more cracks.
2020-06-23	Former Liquidators distributed surplus assets of Coral Edge to its members.
2020-07-28	Former Liquidators distributed surplus assets of Coral Edge to its members.
2020-08-28	Final meeting of Coral Edge held; return of final meeting lodged with ACRA.
2020-11-28	Coral Edge dissolved.
2021-08-26	Condominium Manager wrote to Sing Holdings seeking clarification on the external wall defects.
2021-09-13	Sing Holdings replied, stating that Coral Edge was the developer and Sing Holdings was not responsible for any defects.
2021-09-01	Applicant appointed legal counsel.
2021-11-06	Applicant filed application to void dissolution.
2022-02-22	Former Liquidators received a letter of demand from the applicant’s solicitors.
2022-05-05	Former Liquidators were permitted to intervene in the application as non-parties.
2022-08-22	Court dismissed the application.
2022-10-07	Judgment Date

7. Legal Issues

Voiding Dissolution of Company
- Outcome: The court held that it was pointless to void the dissolution of the respondent because the respondent had no assets to meet the applicant’s intended claim.
- Category: Substantive
- Related Cases:
  - [2015] 4 SLR 1004
  - [1971] 1 WLR 293
  - Stanhope Pension Trust Ltd and another v Registrar of Companies and another [1994] 1 BCLC 628
  - Morris v Harris [1927] AC 252
  - James Smith & Sons (Norwood) Limited v Goodman [1936] Ch 216
  - Butler and another v Broadhead and others [1975] Ch 97
  - In re R-R Realisations Ltd (formerly Rolls-Royce Ltd) [1980] 1 WLR 805
  - Re Kilkenny Engineering Pty Ltd (In Liquidation) (1976) 1 ACLR 285
Interested Person
- Outcome: The court found it unnecessary to decide whether the applicant was an interested person for purposes of making the application.
- Category: Procedural
- Related Cases:
  - [2015] 4 SLR 1004
  - [1971] 1 WLR 293

8. Remedies Sought

Declaration that the dissolution of the respondent be declared void
Leave to the applicant to commence legal proceedings against the respondent for defects in the Condominium

9. Cause of Actions

Breach of Contract
Negligence

10. Practice Areas

Commercial Litigation
Insolvency Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Lee Hung Pin v Lim Bee Lian and another	High Court	Yes	[2015] 4 SLR 1004	Singapore	Cited for the principle that a winding up ought to be reversed if it is necessary to do so to ensure fairness and justice.
Re Wood and Martin (Bricklaying Contractors) Ltd	Court not specified	Yes	[1971] 1 WLR 293	United Kingdom	Cited for the principle that applicants must demonstrate an interest of a proprietary or pecuniary nature in resuscitating the company.
Stanhope Pension Trust Ltd and another v Registrar of Companies and another	Court not specified	Yes	Stanhope Pension Trust Ltd and another v Registrar of Companies and another [1994] 1 BCLC 628	United Kingdom	Cited for the principle that there is usually little point in reviving a company to enable a new claim to be made because all its assets will have been distributed.
Morris v Harris	House of Lords	Yes	Morris v Harris [1927] AC 252	United Kingdom	Cited to construe s 223 of the Companies (Consolidation) Act 1908 (c 69) (UK) (in pari materia with s 343 of the CA).
James Smith & Sons (Norwood) Limited v Goodman	Court not specified	Yes	James Smith & Sons (Norwood) Limited v Goodman [1936] Ch 216	United Kingdom	Cited to explain the effect of declaring a dissolution void.
Butler and another v Broadhead and others	Court not specified	Yes	Butler and another v Broadhead and others [1975] Ch 97	United Kingdom	Cited to show that under the insolvency framework, the applicant in the present case would have no claim against the respondent’s members to recover any of the distributions that had been made to them.
In re R-R Realisations Ltd (formerly Rolls-Royce Ltd)	Court not specified	Yes	In re R-R Realisations Ltd (formerly Rolls-Royce Ltd) [1980] 1 WLR 805	United Kingdom	Cited to support the principle that once liquidators have duly advertised for creditors, any creditor who could have proved his debt in the liquidation has no claim against any of the assets in the hands of the creditors or the members of the company to whom that distribution has been made.
Re Kilkenny Engineering Pty Ltd (In Liquidation)	Court not specified	Yes	Re Kilkenny Engineering Pty Ltd (In Liquidation) (1976) 1 ACLR 285	Australia	Cited for the principle that in deciding whether to void the dissolution of a company, the court is entitled to consider whether good use could be made of it, or whether the order would be made in vain.

13. Applicable Rules

Rule Name
r 91 of the Companies (Winding Up) Rules (1990 Rev Ed)

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
s 308(5) of the Companies Act (Cap 50, 2006 Rev Ed)	Singapore
s 343(1) of the Companies Act	Singapore
s 291(6) of the Companies Act	Singapore
s 295(1) of the Companies Act	Singapore
Insolvency, Restructuring and Dissolution Act 2018 (No 40 of 2018)	Singapore
s 208(1) of the Insolvency, Restructuring and Dissolution Act 2018 (No 40 of 2018)	Singapore
Sections 526(1)(h) and 526(8) of the IRDA	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Dissolution
Voiding Dissolution
Members’ Voluntary Liquidation
Interested Person
Building Defects
Surplus Assets
Liquidators
Companies Act
Insolvency, Restructuring and Dissolution Act

15.2 Keywords

dissolution
void
company
insolvency
building defects

17. Areas of Law

Area Name	Relevance Score
Winding Up	90
Company Law	70
Commercial Disputes	30
Civil Litigation	20

16. Subjects

Company Law
Insolvency Law
Civil Procedure