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9.2 Definition
9.2.1 Creditors
Generally, a creditor is a person or company to whom money is owed. 1 Debt is an
obligation or liability to pay or render something, money, goods or services that are
owed. 2 Debts in this context include prospective and contingent debts. 3 The existence
of a debt is essential in order to determine whether a person is a creditor. Hence, in
the situation where there is a bona fide dispute of debts, a person is held not to be a
creditor. 4
There are two types of creditors, voluntary and involuntary. The voluntary or
consensus creditors are those who agree to enter into relationship with the company
by extending credit or supplying goods and services. 5 Involuntary creditors refer to
those who have not agreed to become creditors but become so as a result of the
company‟s action or omission. 6
1 The Oxford Dictionary of English (2nd edition revised) in English Dictionaries & Thesauruses.
at 22 October 2009.
2 Ibid.
3 A prospective debt is a debt which will definitely become due in the future whether at some
determined date or upon the occurrence of a certain event- see Stonegate Securities Ltd v Gregory
[1980] 1 Ch 576 at 579; a contingent debt is referred to debts which becomes due depending upon
event(s) which might or might not happen as a result of an action by the person bound-see Re
Sutherland Dec’d [1963] AC 235 at 249; see also Re William Hockley Ltd [1962] 1 WLR 555.
4 See Morgan Guaranty Trust Co of New York v Lian Seng Properties Sdn Bhd [1990] 1 MLJ 282; Re
Lympne Investment Ltd [1972] 2 All ER 385; Mann & Another v Goldstein & Another [1968] 2 All
ER 769; Emporium Jaya (Bentong) Sdn Bhd (in liquidation) v Emporium Jaya (Jerantut) Sdn Bhd
[2002] 1 MLJ 182.
5 Andrew Keay Company Directors’ Responsibilities to Creditors (Routledge-Cavendish, New York,
2007) at 15.
6 Ibid, at 18.
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