The court held that transfers made under contested agreements not made in good faith and lacking valuable consideration are void against liquidators under bankruptcy provisions.

[1] This is the trial of an action between Kinda Hardware Trading (KL) Sdn Bhd ("Kinda Hardware ") and Kumpulan A Besik Sdn Bhd ("Besik") which centres on the validity of a transaction between them and another two transactions between Besik and Prinsiptek (M) Sdn Bhd ("Prinsiptek"). All three transaction took place some 24 months prior to Besik being wound up and are as follows:

a. the sale of a two and a half storey terrace house by Besik to Kinda Hardware vide a sale and purchase agreement dated 13 October 2008;

b. the transfer of a sum of RM650,000.00 from Besik's account to Prinsiptek on 14 January 2009; and

c. the transfer of a sum of RM131,200.00 from Besik's account to Prinsiptek on 25 August 2010.

The Facts In Outline

[2] I shall begin by setting out the facts in outline. Save where otherwise indicated, these facts were all agreed or not disputed.

[3] Besik is a company incorporated in Malaysia. It was the licensed housing developer of a housing development known as Taman Bukit Serdang ("the project"). It appointed Prinsiptek as the turnkey contractor for the project for the contract sum of RM26,095,449.00. The directors of Prinsiptek were Dato Foo Chu Jong (DW2) and Mr Foo Chu Pak.

[4] On 13 October 2008, Kinda Hardware entered into the sale and purchase agreement ("agreement") with Besik to purchase a two and a half storey terrace house ("the property") for a total consideration of RM431,200.00. The agreement required the payment of a deposit and provided for the purchase price to be paid progressively according to the third schedule of the agreement. No deposit was paid by Kinda Hardware upon the execution of the agreement.

[5] On 14 January 2009, a company called Prinsip Serasi Sdn Bhd issued a MBB cheque for RM634,888.00 in favour of Besik. The cheque was credited into Besik's HAD account. The relevant payment voucher stated that a sum of RM300,000.00 was made on behalf of Kinda Hardware as part payment of the purchase price under the agreement. Bersik issued an official receipt acknowledging receipt of the RM300,000.00. On the same day, a sum of RM650,000.00 was transferred out from Besik's bank account to Prinsiptek.

[6] On 25 August 2010, Prinsiptek issued a MBB cheque for RM131,200.00 in favour of Besik and the same was also credited into Besik's HDA account. Bersik issued two official receipts for RM21,560.00 and RM109,640,00. The same day, the said sum of RM131,200.00 was transferred out of Besik's bank account to Prinsiptek.

[7] Besik was therafter wound up by a Court Order dated 29 December 2010. By a further Court Order dated 18 August 2011, Wong Weng Foo (DW1) was appointed as the liquidator to substitute the Official Receiver. The winding up petition that led to Besik being wound up was presented on 17 September 2010.

[8] Following his appointment as liquidator, Wong discovered that the documentation in respect of the project was incomplete and still in the position of the former management. Besik conducted a property ownership verification exercise by issuing a notice dated 27 December 2011 to all the purchasers in the project to complete the outstanding transactions. In this regard, Besik issued letters dated 21 December 2011 and 2 February 2012, to Kinda Hardware requesting for copies of documents.

[9] On 27 February 2012, Besik's solicitors received a letter dated 29 December 2011 via fax from Messrs Wong and Co, the former solicitors for Kinda Hardware, enclosing the agreement, quit rent and assessment receipts as well as another sub sale and purchase agreement dated 16 June 2011. The sub sale agreement was between Kinda Hardware and Lai Kit Woon and Ong Ping Ying, as the purchasers. Messrs Wong and Co requested Besik to provide confirmation and undertaking to execute the memorandum of transfer and forward the original document of title of the property direc