In the Court below, the suit was fought by the parties deliberately upon several issues substantially agreed to and framed by learned counsel and the learned judge gave his judgment according to the issues raised. This appeal ought, in my opinion, to be decided on that footing.

The relevant facts pertaining to this appeal have been summarized by the learned judge in his judgment reported in [1987] 1 MLJ 56 at pp 58–61 and there is no need to reproduce them here.

The first issue A reads:

Whether, at all material times before November 1978, the second and third portions of the estate were held by the registered owners upon trust for the first plaintiff.

For convenience, the estate of the first appellant company (first plaintiff in the court below) can be divided into:

(a) first portion,

(b) second portion and

(c) third portion. It was common ground that the first portion was registered in the name of the first appellant, the second portion in the name of Chelliah Paramjothy and the third portion in the name of Wong Peng Fun. The findings of the learned judge are that "the registered owners of the second and third portions of the estate held the properties upon trust for the first plaintiff at all material times before November 1978". In my judgment, there was ample incontrovertible documentary evidence produced at the trial to support these findings and I am in complete agreement with the learned trial judge on issue A.

Issue B is:

Whether the transfers of the first, second and third portions of the estate to the first defendant are void by reason of:

(i) section 53 of the Bankruptcy Act 1967 (as amended) or

(ii) section 223 of the Companies Act 1965.

The findings of the learned judge are that the transfers are:

(a) not void by reason of section 53(1) of the 1967 Act but

(b) void for the purpose of section 223 of the 1965 Act.

The first defendant is the first respondent, Overseas Credit Finance (M) Bhd., and the second respondent is Sungei Perling Holdings Sdn. Bhd. in the present appeal.

In my opinion, section 53 of the Bankruptcy Act 1967 (as amended) is imported into a winding up proceeding of a company by section 293(1) of the Companies Act 1965 which provides, inter alia, that:

"Any transfer … or other act relating to property made or done by … a company which, if it had been made or done by … an individual, would in his bankruptcy under the law of bankruptcy be void or voidable shall in the event of the company being wound up be void or voidable in like manner."

In short, the rules of bankruptcy as to fraudulent preference are applied to the winding up of the company by the court by section 293(1) of the Companies Act 1965.

I think it appropriate at this stage to refer to what Bacon V.C. said about this subject. Speaking of section 164 of the English Companies Act 1862 which is the forerunner of section 320 of the English Companies Act 1948 (ours is section 293 of the Companies Act 1965) in the case of Willmott v London Celluloid Co (1886) 31 ChD 425 Bacon V.C. said (at p. 434):

"The 164th section, however, relates only to a case similar in all respects to that which would arise in bankruptcy, and the very words of the 164th section put this beyond the possibility of doubt. This Act of Parliament, dealing as it does with an insolvent company, that is, a bankrupt company, and making provision for the benefit of the creditors, of the shareholders, and of all other persons interested, declares by the 164th section that a fraudulent preference shall be set aside and held to be void for the benefit of the creditors — that is, the creditors in the winding up. No other persons have any right to raise the question of fraudulent preference…"

Earlier on, Bacon V.C. observed that:

"In bankruptcy, and only in bankruptcy as far as I know, the doctrine of fraudulent preference found a place in the jurisprudence of this country. A winding up is, in point of fact, a bankruptcy, and the doctrine is also applicable to a winding up.