Re Kirkham International Pte. Ltd.

Mr Medora Xerxes Jamshid was appointed liquidator of Kirkham International Pte Ltd on 22 November 2020, after the company was wound up on just and equitable grounds. He did not call a creditors' meeting or form a committee of inspection, preferring to wait for a forensic report from KPMG, which he engaged on 6 September 2021.

Without authorisation from the court or a committee, he used solicitors from Selvam LLC from around 28 April 2021 to advise him and answer correspondence, and appointed a solicitor formerly of that firm to defend the company in Originating Summons No 430 of 2021, a former employee's application for leave to sue, which was dismissed on 12 July 2021. On 20 October 2022 DB International Trust (Singapore) Limited applied in HC/OA 707/2022 to remove him or to compel a creditors' meeting.

In Summons No 4037 of 2022 in Companies Winding Up No 192 of 2020, the liquidator asked the court to authorise his appointment of Selvam LLC with effect from 28 April 2021. An objection by the liquidator of a shareholder was withdrawn, so the application was unopposed.

1. Whether, and on what principles, the court should authorise a liquidator's appointment of solicitors under s 144(1)(f) of the Insolvency, Restructuring and Dissolution Act 2018
2. Whether the court has power to authorise such an appointment retrospectively
3. What the consequences are of appointing solicitors without prior authorisation

Section 144(1) lets a liquidator appoint a solicitor only after authorisation by the court or the committee of inspection, which departs from the former Companies Act and from most other jurisdictions surveyed, such as the UK, Australia, New Zealand, Canada and Malaysia. The judge suggested the authorities may wish to reconsider the requirement. Relevant factors include the need for a solicitor, the impact of fees on the estate, any conflict, and objections from creditors or committee members; the threshold is not high. With no objection, good reasons to have lawyers given the applications facing the company, and the past failure not affecting creditors' present interests, authorisation was appropriate.

The word "after" in s 144(1) was clear, and nothing in the Act allowed retrospective authorisation. The power to give directions under s 145(3), and any inherent power, had to yield to that language. The Hong Kong cases relied on In re Associated Travel Leisure and Services Ltd (in liquidation) [1978] 1 WLR 547, which on a proper reading only allowed the liquidator's costs to be paid out of the estate and did not grant retrospective sanction.

Lack of authorisation did not make the appointments invalid; following Malaysian and English authority, it goes only to whether the liquidator may recover costs from the estate or must bear them personally. The liquidator had acted in good faith, was waiting for the KPMG report, faced some urgency in defending OS 430, and applied promptly after DB's application, so he was not made to bear the fees. The judge warned that future liquidators who skip authorisation risk paying personally.

The court allowed the application in part. It authorised the liquidator to appoint Selvam LLC to assist and advise him, but only from the date of its order, not from 28 April 2021. It ordered that the legal costs of the earlier appointments since April 2021, and the costs of the application fixed at $4,500 excluding disbursements, be paid from the company's assets.