Singapore legislation

Section 438

of Insolvency, Restructuring and Dissolution Act 2018

Section 438

Transactions defrauding creditors

(1)

This section relates to any transaction entered into by a person (called in this section and section 439 the debtor) with another person at an undervalue.

(2)

For the purposes of subsection (1), a debtor enters into a transaction with another person at an undervalue if —

(a)

the debtor makes a gift to the other person or the debtor otherwise enters into a transaction with the other person on terms that provide for the debtor to receive no consideration;

(b)

the debtor enters into a transaction with the other person in consideration of marriage; or

(c)

the debtor enters into a transaction with the other person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the debtor.

(3)

Where a debtor enters into a transaction at an undervalue, the Court may, if satisfied under subsection (4), make such order as the Court thinks fit for —

(a)

restoring the position to what it would have been if the transaction had not been entered into; and

(b)

protecting the interests of any person who is, or is capable of being, prejudiced by the transaction (called in this section a victim).

(4)

An order under subsection (3) may only be made if the Court is satisfied that a transaction at an undervalue was entered into by a debtor for the purpose —

(a)

of putting assets beyond the reach of a person who is making, or may at some time make, a claim against the debtor; or

(b)

of otherwise prejudicing the interests of any person in relation to a claim which the person is making or may make against the debtor.

(5)

An application for an order under subsection (3) must not be made in relation to a transaction except —

(a)

in a case where the debtor has been adjudged bankrupt under Part 16, by the Official Assignee, the trustee in bankruptcy or (with the leave of the Court) a victim of the transaction;

(b)

in a case where a victim of the transaction is bound by a voluntary arrangement approved under Part 14, by the nominee of the voluntary arrangement or by any person who (whether or not so bound) is such a victim;

(c)

in a case where the debtor is a company that is being wound up under Part 8 or is in judicial management under Part 7, by —

(i)

the Official Receiver;

(ii)

the liquidator or judicial manager (whichever is applicable); or

(iii)

a victim of the transaction; and

(d)

in any other case, by a victim of the transaction.

(6)

An application made under subsection (5) is deemed to be made on behalf of every victim of the transaction.

Read in full context — Insolvency, Restructuring and Dissolution Act 2018 →