D & C Property Pte Ltd v Lew Guan Seng (a bankrupt) and Others

• Jurisdiction: Singapore
• Judge: Christopher Lau JC
• Judgment Date: 09 December 1997
• Neutral Citation: [1997] SGHC 335
• Docket Number: Suit No 1510 of 1994
• Date: 09 December 1997
• Published date: 19 September 2003
• Year: 1997
• Plaintiff Counsel: Tan Liam Beng (Drew & Napier)
• Citation: [1997] SGHC 335
• Defendant Counsel: Gan Kam Yuin (Bih Li & Lee),Siaw Kheng Boon (Siaw Kheng Boon & Co)
• Court: High Court (Singapore)
• Subject Matter: Official Assignee's application to determine nature of interest obtained from bankrupt,Whether second defendant's interest in property obtained from bankrupt via gift,Impeachment of gift,Administration of insolvent estates,Whether proceeds of sale of gift property to be vested in Official Assignee of estate of bankrupt -s 52 Bankruptcy Act (Cap 20),Whether gift valid under provisions of new Act,Presumption of insolvency,Insolvency Law,ss 98, 100 & 101 Bankruptcy Act (Cap 20, 1996 Ed),Bankruptcy,Whether gift obtained within two years of first defendant's bankruptcy

Judgment:

CHRISTOPHER LAU JC

Of the three summonses fixed for hearing in these proceedings, it was common ground that the principal issues were those raised in SIC 4863/97. This was an application by the Official Assignee. The issues that arose for determination in SIC 4863/97, were : (a). whether the second defendant`s interest in a property known as 17B Nassim Road #02-04 Nassim Park, Singapore (the Nassim property) which had since been sold was by way of a gift from her husband, the first defendant, a bankrupt;

(b). if so, whether the gift, which was within two years of the adjudication of the bankruptcy of the first defendant, should be set aside and in that event;

(c). whether the moneys representing the sale proceeds of the Nassim property should be paid to the Official Assignee of the estate of the first defendant after deduction of a sum representing an earlier judgment debt obtained against the first defendant by the plaintiffs in this action.

2.The result of these issues determined the orders to be made in SIC 531/95 and SIC 867/95. In SIC 531/95 the plaintiffs applied to vary the Mareva order for all the sale proceeds to be paid to the plaintiffs` solicitors to hold as stakeholders. In SIC 867/95 the second defendant applied to vary the Mareva order for only part of the sale proceeds to be paid to the plaintiffs` solicitors as stakeholders.

3.The second defendant`s case was that her interest had not been acquired by way of a gift and that even if it had been, the gift was not void as the first defendant did not have an interest in the Nassim property before effecting the gift. On this latter point, the second defendant`s case was that para 6(1) of the Schedule to the Bankruptcy Act (Cap 20, 1996 Ed) (the new Act), which Schedule sets out the transitional provisions in relation to persons adjudicated bankrupt before 15 July 1995, provided that only s 52 of the repealed Act was to apply in the determination of whether the gift was void and under s 52, a gift was only rendered void if the bankrupt, ie the first defendant, had an interest in the property the subject of the gift before effecting the gift. She relied on a passage in the judgment of Yatim J in Official Assignee of the Property of Senator Ibrahim bin Haji Yaakob (a bankrupt) v Siti Ramlah bte Bajau [1991] 2 MLJ 479 at p 482D-F, as authority for this proposition. That case concerned the Malaysian equivalent of s 52 of the repealed Act.

4.The Official Assignee`s position was quite the opposite. On the issue as to whether the second defendant had acquired her interest as a gift, his case was that that issue had already been determined by CR Rajah JC earlier when CR Rajah JC held that the second defendant`s interest had arisen by way of a gift. As for the second defendant`s latter submission, it was the Official Assignee`s case that paras 1 and 6 of the Schedule effectively introduced a two-fold test for the determination of the validity of a gift made by a bankrupt under the provisions of the repealed Act and that there was no basis in law for the second defendant`s submission that under the repealed Act, for s 52 to apply, the bankrupt had first to have an interest in the property before effecting the gift.

5.I determined all the issues in favour of the Official Assignee. I considered that the second defendant`s interest in the property had arisen by way of a gift from the first defendant and that as it was a gift made within two years of the first defendant`s bankruptcy, the gift was void and payment of the moneys representing the sale proceeds...