JUDGMENTBY: RAJA AZLAN SHAH CJ (MALAYA)

(delivering the judgment of the Court): On June 6, 1974 the respondent obtained judgment against the first appellant in the sum of $ 95,611.34. It lay unsatisfied. Only $ 1,906 was recovered by garnishment. Execution proceedings by way of judgment debtor summons were taken but proved abortive. On June 1, 1973 the first appellant had entered into a sale agreement for the purchase of a piece of land in Petaling Jaya measuring 1,540 sq. ft. ("the said land") for $ 15,000 and had paid a deposit of $ 5,000. The sale agreement stipulated a transfer to the first appellant or its nominee or nominees, the usual conveyancing phrase. On March 3, 1975 the court approved the sale. On October 13, 1975 the said land was registered in the names of the second and third appellants, the directors of the first appellant, in equal half shares.

On April 12, 1976, the respondent brought an action against all three appellants and another director claiming, inter alia, a declaration that the said land is the property of the first appellant against which the judgment might be executed.

The first appellant entered a defence denying ownership of the said land. It admitted entering into a sale agreement but averred that it did not complete the purchase because of lack of funds, and that the second and third appellants bought it with their own money. Quite predictably the second and third appellants raised the same line of defence. The third director did not appear or deliver any defence.

The learned judge rejected the defence as incredible. He found as a fact that the substitution of the second and third appellants for the first appellant was alleged to be backed by a resolution of the directors, incidentally the second and third appellants, the existence of which was at one time denied, but was subsequently produced in circumstances which would not vouch for its authenticity. He found that it lacked the certification by the companys secretary or secretaries. What the learned judge meant, so we understand, was that the transfer was voluntary and in fraud of the judgment creditors. He therefore gave judgment for the respondent.

The learned judges findings were challenged. It was said that the weight of the evidence showed that the transfer was not voluntary, but for consideration, and that there was no evidence of fraudulent intent. We are of the view that the appellants position as on October 13, 1975 when the transfer was made is relevant. The judgment had been entered on June 6, 1974, some sixteen months earlier; it was unsatisfied. They had done nothing to satisfy their liability under the judgment; the transfer was made in circumstances which gave rise to suspicion over its bona fides; it did not specify the consideration. It was, of course, open to the appellants to show what consideration was paid for it, but they chose not to do so beyond producing a sham resolution. They evidently hoped to convince the learned judge that the respondent had not proved its case. The hope was misconceived. He was not convinced.

In our opinion the inevitable result of the transfer of the said land on October 13, 1975 when taken together with all the surrounding circumstances was to defeat any attempt to execute the judgment. The present case falls squarely within the line of authorities exemplified by Freeman v Pope (1870) 5 Ch App 538 where Lord Hatherley L.C. said (at page 541): "But it is established by the authorities that in the absence of any such direct proof of intention, if a person owing debts makes a settlement which substracts from the property which is the proper fund for the payment of those debts, an amount without which the debts cannot be paid, then, since it is the necessary consequence of the settlement (supposing it effectual) that some creditors must remain unpaid, it would be the duty of the judge to direct the jury that they must infer the intent of the settlor to have been to defeat or delay his c

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