DB International Trust v Medora Xerxes Jamshid: Removal of Liquidator in Winding Up

In the case of DB International Trust (Singapore) Limited v Medora Xerxes Jamshid and Kirkham International Pte Ltd (in liquidation), the High Court of Singapore granted the applicant's request to remove the liquidator of Kirkham International Pte Ltd due to a failure to display sufficient vigor in carrying out his duties and a justifiable loss of confidence from the creditors. The court found that the liquidator unjustifiably allowed a former director to act on behalf of the company, causing a dilution of its shares, and failed to undertake personal investigations into the company's affairs. The court ordered the removal of the liquidator and the appointment of new liquidators.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Application Allowed

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court allows DB International Trust's application to remove the liquidator of Kirkham International Pte Ltd due to insufficient vigor and loss of confidence.

1.7 Decision Date

3 April 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Medora Xerxes Jamshid	Respondent	Individual	Liquidator Removed	Lost	Cumara Kamalacumar of Selvam LLC Faustina Joyce Fernando of Selvam LLC Soo Ziyang Daniel of Selvam LLC
DB International Trust (Singapore) Limited	Applicant	Corporation	Application Allowed	Won	Han Guangyuan Keith of Oon & Bazul LLP Ammani Mathivanan of Oon & Bazul LLP
Kirkham International Pte Ltd (in liquidation)	Respondent	Corporation	Liquidator Removed	Neutral	Cumara Kamalacumar of Selvam LLC Faustina Joyce Fernando of Selvam LLC Soo Ziyang Daniel of Selvam LLC

3. Judges

Judge Name	Title	Delivered Judgment
Goh Yihan	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Cumara Kamalacumar	Selvam LLC
Faustina Joyce Fernando	Selvam LLC
Soo Ziyang Daniel	Selvam LLC
Han Guangyuan Keith	Oon & Bazul LLP
Ammani Mathivanan	Oon & Bazul LLP

4. Facts

DB International Trust is the trustee of US$9,000,000 secured bonds issued by Kirkham Finance Limited.
Kirkham International Pte Ltd (KIPL) was wound up on just and equitable grounds.
The applicant claimed to be a creditor of KIPL because KFL defaulted on the Bonds.
The liquidator ratified actions of a former director, Mr. Taylor, which led to dilution of KIPL's shareholding.
The liquidator engaged KPMG to carry out forensic investigations into KIPL’s affairs.
The liquidator did not seek court approval before appointing solicitors.
The liquidator adopted an erroneous position in relation to who a “creditor” is.

5. Formal Citations

DB International Trust (Singapore) Ltd v Medora Xerxes Jamshid and another, Originating Application No 707 of 2022 and Summons No 583 of 2023, [2023] SGHC 83

6. Timeline

Date	Event
2011-01-18	Kirkham International Pte Ltd incorporated in Singapore
2015-06-15	Parent Company Share Pledge Agreement signed
2020-03-15	Event of default on the Bonds
2020-10-01	Kirkham International Pte Ltd applied to be wound up
2020-11-20	Kirkham International Pte Ltd wound up
2022-01-01	BPCI issued share capital increased to 20,000
2022-01-31	Liquidator ratified Mr. Taylor’s actions
2022-05-05	DB International Trust filed Proof of Debt
2022-10-20	Application filed by DB International Trust
2023-01-25	Liquidator gave update to parties who have filed a Proof of Debt
2023-03-13	Hearing held
2023-04-04	Judgment reserved

7. Legal Issues

Removal of Liquidator
- Outcome: The court ordered the removal of the liquidator.
- Category: Substantive
- Sub-Issues:
  - Failure to display sufficient vigour
  - Failure to comply with statutory obligations
  - Justifiable loss of confidence
Definition of Creditor
- Outcome: The court held that a creditor is a person who has a debt provable in the winding up of the company.
- Category: Substantive

8. Remedies Sought

Removal of the first respondent as liquidator
Appointment of Mr. Luke Anthony Furler and Ms. Ellyn Tan Huixian as joint and several liquidators
Summoning of a meeting of the creditors
Admission of Proof of Debts for the purpose of voting

9. Cause of Actions

No cause of actions

10. Practice Areas

Insolvency
Liquidation

11. Industries

No industries specified

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Hong Investment Pte Ltd v Tai Thong Hung Plastics Industries (Pte) Ltd	High Court	Yes	[2010] SGHC 375	Singapore	Adopted principles articulated in Woon and Hicks regarding removal of liquidators for cause.
Sir John Moore Gold Mining Co	N/A	No	Sir John Moore Gold Mining Co (1879) 12 Ch D 325	N/A	Cited for the principle that a liquidator may be removed if there is some unfitness of the person.
Chua Boon Chin v McCormack	N/A	Yes	[1979] 2 MLJ 156	N/A	Cited for the principle that a liquidator may be removed if he refuses to take action against miscreant directors or if it is in the interest of the liquidation.
Re: Charterland Goldfields	N/A	No	Re: Charterland Goldfields (1909) 26 TLR 132	N/A	Cited for the principle that there would be cause to remove a liquidator if he is not independent or impartial.
Re International Properties Pty Ltd	N/A	No	Re International Properties Pty Ltd (1977) 2 ACLR 488	N/A	Cited for the principle that a liquidator may be removed if it appears that the liquidator is in a position where his duty and interest conflict.
Re Adam Eyton Ltd	N/A	Yes	Re Adam Eyton Ltd (1887) 36 Ch D 299	N/A	Cited for the principle that the court has power to remove a liquidator not only because of his personal unfitness, but also on the ground that it is in the interest of the liquidation that he should be replaced.
Procam (Pte) Ltd v Nangle	N/A	No	[1990] 3 MLJ 269	N/A	Cited for the principle that the court declined to order the removal of a liquidator on the ground that it was not in the interest of the liquidation to do so, given the advanced state of the liquidation.
Petroships Investment Pte Ltd v Wealthplus Pte Ltd (in members’ voluntary liquidation) (Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd and another, interveners) and another matter	High Court	Yes	[2018] 3 SLR 687	Singapore	Considered the principles in relation to the removal of a liquidator pursuant to s 302 of the Companies Act.
Liquidators of Ace Class Precision Engineering Pte Ltd (in members’ voluntary liquidation) v Tan Boon Hwa	High Court	Yes	[2022] 3 SLR 539	Singapore	Held that the principles articulated in Petroships in relation to s 302 apply equally to s 174 of the IRDA, which is derived from s 302.
In re Adam Eyton Ltd, Ex parte Charlesworth	N/A	No	In re Adam Eyton Ltd, Ex parte Charlesworth (1887) 36 Ch D 299	N/A	Cited for the principle that the applicant must establish that the removal of the liquidator is in the real, substantial and honest interest of the liquidation and will advance the purposes for which the liquidator was appointed.
Chua Boon Chin v McCormack John Maxwell and others	High Court	Yes	[1979-–1980] SLR(R) 121	Singapore	The High Court removed the liquidators in a members’ voluntary liquidation because one of them was concurrently a director of the company.
Re Keypak Homecare Ltd	N/A	Yes	[1987] BCLC 409	N/A	The liquidator was removed because, despite being in office for three months, the liquidator had, among others, made no examination of the sales and purchase ledgers.
Yap Jeffery Henry and another v Ho Mun-Tuke Don	High Court	Yes	[2006] 3 SLR(R) 427	Singapore	To find that a liquidator had not displayed sufficient vigour in carrying out his duties, it is not necessary to conclude that the liquidator was at fault, or that he has acted wrongfully or ineptly.
Re Edennote Ltd	English High Court	Yes	[1995] 2 BCLC 248	England	The court stressed that, in coming to his decision to remove the liquidator concerned, “no attack has been made on his integrity and good faith”.
City & Suburban Pty Ltd v Smith (as liquidator of Conpac (Aust) Pty Ltd (in liq)) and another	Federal Court of Australia	Yes	City & Suburban Pty Ltd v Smith (as liquidator of Conpac (Aust) Pty Ltd (in liq)) and another (1988) 28 ACSR 328	Australia	There might have been a possibility that the liquidator’s actions have caused loss to the company and its creditors.
Re Kirkham International Pte Ltd (in compulsory liquidation)	High Court	No	[2023] SGHC 19	Singapore	Dealt with the issue of whether to grant approval to the Liquidator’s appointment of solicitors.
Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd (in compulsory liquidation)	High Court	No	[2022] SGHC 312	Singapore	ss 204(2) and 204(3) of the IRDA give the court a discretion to grant a creditor an advantage over other creditors with respect to the distribution of assets.
Pacrim Investment Pte Ltd v Tan Mui Keow Claire and another	High Court	Yes	[2010] SGHC 134	Singapore	The definition of “creditor” in the context of a scheme of arrangement is much broader than that in the context of winding up.
Re Pan Sino International Holding Limited	Hong Kong Court of First Instance	Yes	[2010] HKCU 1147	Hong Kong	The court drew a distinction between the assessment of proof for the purposes of voting at the first meeting of creditors, and the examination of proof with a view to admitting or rejecting the proof for the purposes of distribution of assets.
Re Days International Ltd	Hong Kong Court of First Instance	Yes	[2013] HKCU 2621	Hong Kong	The court held that a preliminary assessment is often undertaken for the purposes of voting without undertaking considerable work.
Re Barings plc (No 6)	English High Court	No	[2001] BCLC 159	England	The court granted the liquidator’s application for an order directing them not to comply with the request for a meeting made by one class of creditors who had met the minimum threshold needed.
Re Keen Lloyd Resources Ltd	N/A	No	[2004] HKCU 731	N/A	The purpose of a COI, which is to assist and supervise the liquidator in a constructive way that is conducive for the liquidation process.
Re Joy Rich Development Ltd	N/A	No	[2016] HKCU 815	N/A	The purpose of a COI, which is to assist and supervise the liquidator in a constructive way that is conducive for the liquidation process.
Re Marseilles Extension Railway and Land Company	N/A	No	Re Marseilles Extension Railway and Land Company (1867) LR 4 Eq 692	N/A	The presence of considerable creditor opposition would be a valid factor in determining if a liquidator should be removed as that would affect the efficiency of the liquidation process.
Re Edennote	English Court of Appeal	Yes	[1996] 2 BCLC 389	England	The court does not lightly remove its own officer and will, amongst other considerations, pay due regard to the impact of a removal on the liquidator’s professional standing and reputation.
In the matter of St Gregory’s Armenian School (in liq)	New South Wales Supreme Court	No	[2012] NSWSC 1215	Australia	A mere loss of confidence, without more, does not justify the removal of a liquidator.
SingTel Optus Pty Limited & Ors v Weston	New South Wales Supreme Court	No	[2012] NSWSC 1002	Australia	The applicant has asked for the Liquidator to personally bear the costs of this application as he has administered the affairs of KIPL unreasonably and improperly.

13. Applicable Rules

Rule Name
Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020
r 85(1)(c) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020
r 97 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020
r 101(1) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020
r 101(2) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020

14. Applicable Statutes

Statute Name	Jurisdiction
Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 125(1)(i) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 139(1) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 150(1) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 204(2) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 204(3) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
s 218(2) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
s 268(1) of the Companies Act (Cap 50, 2006 Rev Ed)	Singapore
s 302 of the Companies Act	Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed)	Singapore
s 2 of the Bankruptcy Act (Cap 20, 2009 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Liquidator
Winding up
Creditor
Proof of Debt
Committee of Inspection
Share Pledge
Insolvency
Ratification
Dilution of shares
KPMG investigation

15.2 Keywords

Insolvency
Winding up
Liquidator
Removal
Creditor
Proof of Debt
Singapore

17. Areas of Law

Area Name	Relevance Score
Winding Up	95
Insolvency Law	95
Company Law	40
Fiduciary Duties	30
Duty to Account	30
Civil Procedure	20
Costs	15

16. Subjects

Insolvency Law
Winding up
Removal of Liquidator
Corporate Law