This appears to be the first reported Singapore High Court decision on termination of winding up under s 186(1) of the Insolvency, Restructuring and Dissolution Act (IRDA).
Ascentury International Co Ltd v Viva Capital (SG) Pte Ltd [2024] SGHC 118
Under the old s 279 Companies Act, the Court had no power to terminate winding up, and thus had to resort to set aside a CWU order or stay the liquidation. It resulted in a strange situation where if a winding up has been stayed but a creditor later wants to wind up the company again, it may not be able to do so.
Anyhow, in this case, the parties consented. Claimant bought over defendant creditor’s rights through a deed. Deed didn’t specify who should bear liquidators’ costs. The liquidators applied for directions in this termination application on their remuneration and costs.
The Court noted the factors it should consider in deciding termination of winding up. One of the factors is the liquidators’ interests, including remuneration. It held that a court would only terminate a winding up if it is satisfied that there are safeguards to the liquidator’s fees and expenses.
Generally, the starting position is that a liquidator’s remuneration and expenses ought to be paid out of the company’s assets. the Court may order a petitioner creditor to bear the liquidator’s remuneration and expenses. However, this would only be where it would be unjust for the company to bear the bulk of such remuneration and expenses.
The Court decided to terminate the winding up, to be effective upon the amount of the liquidators’ remuneration and costs being agreed or taxed, which is to be paid out of the company’s assets.