s 438 Transactions defrauding creditors
438.—(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 permission of the Court) a victim of the transaction;[Act 25 of 2021 wef 01/04/2022] (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.