Victory International Holdings v Borrelli: Receiver's Duty to Account & Legal Fees

In Victory International Holdings Pte Ltd v Cosimo Borrelli and Clifford Chance Pte Ltd, the High Court of Singapore addressed Victory's application for the production of documents, an account of sale proceeds, a report, and assessment of legal fees related to the sale of Victory's shares by the receiver, Mr. Borrelli. Victory sought these orders against Mr. Borrelli and his solicitors, Clifford Chance Pte Ltd. The court allowed the application in part, ordering Mr. Borrelli to furnish a copy of the Minority SPA to Victory, but dismissed the other orders sought.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Originating Application allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses receiver's duty to account to mortgagor and taxation of legal fees. Victory's application partially allowed.

1.7 Decision Date

18 March 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Victory International Holdings Pte Ltd	Claimant	Corporation	Originating Application allowed in part	Partial	Jimmy Yim, Chole Shobhana Ajit, Nikhil Daniel Angappan
Cosimo Borrelli	Defendant	Individual	Originating Application partially successful against defendant	Partial	Nish Kumar Shetty, Krishna Elan, Choo Ian Ming
Clifford Chance Pte Ltd	Defendant	Corporation	Originating Application unsuccessful against defendant	Lost	Nish Kumar Shetty, Krishna Elan, Choo Ian Ming
OPV Pharma Holdings Ltd	Other	Corporation	Neutral	Neutral	Liew Wey Ren Colin, Poon Guokun Nicholas, Chan Michael Karfai

3. Judges

Judge Name	Title	Delivered Judgment
Goh Yihan	Judge	Yes

4. Counsels

Counsel Name	Organization
Jimmy Yim	Drew & Napier LLC
Chole Shobhana Ajit	Drew & Napier LLC
Nikhil Daniel Angappan	Drew & Napier LLC
Nish Kumar Shetty	Cavenagh Law LLP
Krishna Elan	Cavenagh Law LLP
Choo Ian Ming	Cavenagh Law LLP
Liew Wey Ren Colin	Colin Liew LLC
Poon Guokun Nicholas	Breakpoint LLC
Chan Michael Karfai	Breakpoint LLC

4. Facts

Victory and Navis were shareholders in OPV Pharmaceutical Holdings Pte Ltd (OPV SG).
Navis held the majority shares and Victory held 35% of the shares.
Navis exercised its drag-along rights to compel Victory to sell its shares to RV Healthcare.
Victory refused to sell, leading Navis to appoint Mr. Borrelli as the receiver of Victory's shares.
The Minority SPA was executed on 5 October 2023 and completed on 26 October 2023.
Victory sought production of the Minority SPA, an account of sale proceeds, and assessment of legal fees.
Victory commenced an action in the High Court against Navis in relation to the Share Pledge.

5. Formal Citations

Victory International Holdings Pte Ltd v Borrelli, Cosimo and another and another matter, , [2024] SGHC 79

6. Timeline

Date	Event
2017-06-13	Victory and Navis entered into a facility agreement.
2017-06-19	Drawdown date of the facility agreement.
2020-06-19	Loan under the facility agreement was to be repaid.
2021-06-08	Navis sold its shares in OPV SG to RV Healthcare.
2021-07-06	Navis exercised its drag-along rights.
2021-07-08	Navis issued an event of default notice to Victory.
2021-07-26	Navis sent a letter to Victory's solicitors enclosing a draft Minority SPA.
2021-08-13	Deed of Appointment of Receivers.
2021-09-08	Navis confirmed the appointment of Receivers.
2023-07-25	Arbitral tribunal declined to grant Victory's application for an interim injunction.
2023-10-05	Minority SPA signed.
2023-10-26	Completion of the Minority SPA.
2023-10-31	CCPL sent a statement of account to Victory's solicitors.
2023-11-14	Cavenagh Law confirmed the existence of the Deferred Purchase Price.
2023-12-01	Victory commenced OA 1214.
2024-01-12	Registrar's Case Conference held.
2024-01-17	Registrar's Notice issued.
2024-02-06	Victory's solicitors requested that SUM 195 be held in abeyance.
2024-02-07	Hearing on SUM 195 and OA 1214.
2024-03-19	Judgment reserved.

7. Legal Issues

Receiver's Duty to Account
- Outcome: The court held that a receiver does have a duty to account to the mortgagor under Singapore law, but this duty is limited.
- Category: Substantive
- Related Cases:
  - [2024] SGHC 32
Receiver's Duties to Mortgagor/Chargor
- Outcome: The court clarified the scope and limitations of a receiver's duties to the mortgagor/chargor, emphasizing the primary duty to the mortgagee/chargee.
- Category: Substantive
- Related Cases:
  - [2003] 3 SLR(R) 217
Production of Documents by Receiver
- Outcome: The court determined that the production of documents is determined by ownership and 'need to know' basis, subject to the court's discretion.
- Category: Procedural
- Related Cases:
  - [1988] 1 WLR 1231
Costs Taxation - Standing
- Outcome: The court held that Victory lacked standing to request taxation of legal fees under Section 120(1) of the Legal Profession Act.
- Category: Procedural
Costs Taxation - Special Circumstances
- Outcome: The court found that no special circumstances existed to warrant taxation of legal fees under Section 122 of the Legal Profession Act.
- Category: Procedural

8. Remedies Sought

Production of Documents
Account of Sale Proceeds
Assessment of Legal Fees
Report

9. Cause of Actions

Breach of Contract
Negligence

10. Practice Areas

Receivership
Taxation
Commercial Litigation

11. Industries

Pharmaceuticals
Legal Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Fox v Star Newspaper Company	English Court of Appeal	No	[1898] 1 QB 636	England and Wales	Cited for the principle that a plaintiff cannot escape a legal contest after proceedings have reached a certain stage.
Rohde & Liesenfeld Pte Ltd v Jorg Geselle and others	Court of Appeal	Yes	[1998] 3 SLR(R) 335	Singapore	Endorsed the principles for allowing a plaintiff to discontinue a case if no injustice is caused to the defendant.
Covell Matthews & Partners v French Wools Ltd	English High Court	Yes	[1977] 1 WLR 876	England and Wales	Formulated the principles for allowing a plaintiff to discontinue if no injustice will be caused to the defendant.
Tan Sock Hian v Eng Liat Kiang	High Court	No	[1995] 1 SLR(R) 730	Singapore	Cited regarding the concern that cross-examination in an interlocutory matter might give parties a rehearsal ahead of trial.
Syed Ibrahim Shaik Mohideen v Wavoo Abdulsalam Shahul Hameed and others	High Court	Yes	[2023] 4 SLR 903	Singapore	Identified factors that should guide a court in exercising its discretion whether to order cross-examination of an affidavit in an originating application.
Gomba Holdings UK Ltd and others v Minories Finance Ltd and others	English Court of Appeal	Yes	[1988] 1 WLR 1231	England and Wales	Explained the tripartite agency relationship in a receivership involving the mortgagor, mortgagee, and receiver.
Jurong Aromatics Corp Pte Ltd (receivers and managers appointed) and others v BP Singapore Pte Ltd and another matter	High Court	Yes	[2018] SGHC 215	Singapore	Held that a receiver and manager's primary duty is to the debenture holders, and the agency relationship with the company is limited.
BP Singapore Pte Ltd v Jurong Aromatics Corp Pte Ltd (receivers and managers appointed) and others and another appeal	Court of Appeal	Yes	[2020] 1 SLR 627	Singapore	Affirmed that the agency relationship between a receiver and a mortgagor is a limited one.
Silven Properties Ltd and another v Royal Bank of Scotland plc and others	English Court of Appeal	Yes	[2004] 1 WLR 997	England and Wales	Summarized the peculiar incidents of a receiver's agency and the duties owed to both the mortgagee and mortgagor.
Roberto Building Material Pte Ltd and others v Oversea-Chinese Banking Corp and another	Court of Appeal	Yes	[2003] 3 SLR(R) 217	Singapore	Set out the general duties owed by a receiver to a mortgagor, emphasizing the primary duty to debenture holders.
In re B Johnson & Co (Builders) Ltd	English Court of Appeal	Yes	[1955] Ch 634	England and Wales	Cited for the principle that the primary duty of the receiver is to the debenture holders and not to the company.
Hang Huo Investment Pte Ltd v Wong Pheng Cheong Martin	High Court	Yes	[2024] SGHC 32	Singapore	Established that a receiver owes a duty to account to the mortgagor under Singapore law.
Gomba Holdings UK and others v Homan and another	English High Court	Yes	[1986] 1 WLR 1301	England and Wales	Explained the limitations on the receiver's duty to account to the mortgagor, including the 'need to know' basis.
Downsview Nominees Ltd v First City Corporation Ltd	Privy Council	No	[1993] AC 295	United Kingdom	Explained that a receiver’s duties owed to a mortgagor/chargor are equitable in nature because the characterisation of such duties as tortious in nature would overwhelm any equitable duty.
Medforth v Blake	English Court of Appeal	Yes	[2000] Ch 86	England and Wales	Extended the duty of care to the situation where the receiver carried on the business of the company concerned.
Boulos and another v Carter and another (as receivers and managers of Tarbs World TV Australia Pty Ltd)	Supreme Court of New South Wales	Yes	(2005) 220 ALR 572	Australia	Agreed that any right of access for documents would be subject to the qualification that it may not be exercised in a way that would prejudice the due progress and completion of the receivership.
Re Geneva Finance; Quigley (Receiver and Manager appointed) v Cook and others	Supreme Court of Western Australia	Yes	(1992) 7 WAR 496	Australia	Summarized the principles with respect to the inspection by receivers and observed that the receiver would be justified in refusing to grant access to the documents where to do so would impede the receiver in the proper exercise of his functions.
Tan Yok Koon v Tan Choo Suan and another and other appeals	Court of Appeal	Yes	[2017] 1 SLR 654	Singapore	Made clear that the label “fiduciary” is a conclusion which is reached only once it is determined that particular duties are owed.
Kosui Singapore Pte Ltd v Thangavelu	High Court	Yes	[2015] 5 SLR 722	Singapore	Observed that the client’s right to have its fees assessed under s 120 of the LPA is not absolute.
Riaz LLC v Sharil bin Abbas (through his deputy and litigation representative, Salbeah bte Paye)	High Court	Yes	[2013] 4 SLR 736	Singapore	Made brief remarks as to who may properly constitute a “party chargeable” under s 120(1) of the LPA.
Kintyre Park Development Pte Ltd v Cooma Lau & Loh	High Court	Yes	[1990] 1 SLR(R) 739	Singapore	Addressed the issue of who is “any person liable to pay the bill” under the LPA.
Loganathan Ravishankar v ACIES Law Corp	High Court	No	[2022] SGHC 135	Singapore	Addressed the issue of overcharging.
Wee Harry Lee v Haw Par Brothers International Ltd	Court of Appeal	Yes	[1979−1980] SLR(R) 603	Singapore	Addressed the issue of special circumstances within the meaning of s 122 of the LPA.
Barclays plc and another v Villers and another	English High Court	No	[2000] 1 All ER (Comm) 357	England and Wales	Addressed the issue of lack of control.

13. Applicable Rules

Rule Name
Order 15 Rule 7(5) Rules of Court 2021
Order 15 Rule 7(6)(b) Rules of Court 2021
Order 16 Rule 6 Rules of Court 2021
Order 16 Rule 3 Rules of Court 2021
Order 6 Rule 1 Rules of Court 2021

14. Applicable Statutes

Statute Name	Jurisdiction
Legal Profession Act 1966	Singapore
Section 120 Legal Profession Act	Singapore
Section 124 Legal Profession Act	Singapore
Section 125 Legal Profession Act	Singapore
Section 122 Legal Profession Act	Singapore
Section 29(2) Conveyancing and Law of Property Act 1886	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Drag-along Rights
Minority SPA
Receivership
Share Pledge
Facility Agreement
Sale Proceeds
Deferred Purchase Price
Loan Adjustment Amount
Sale of the Surplus Land

15.2 Keywords

Receiver
Mortgagor
Duty to Account
Legal Fees
Taxation
Originating Application
Share Pledge
Minority SPA

16. Subjects

Insolvency Law
Company Law
Civil Procedure
Agency Law

17. Areas of Law

Companies Law
Civil Procedure
Legal Profession Act