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if the property remained in the company. 80 The same position is reflected in section
588FF(1)(c) of the Australian Corporations Act 2001 and section 295 of the New
Zealand Companies Act 1993.
In New Zealand, section 296 asserts the court should not make for recovery of assets
or its equivalent value if the person who has obtained the property does so in good
faith and had given value for the property or had altered position in reasonable
beliefs the transfer is valid and would not be set aside. 81 Another condition attached
to the section is if it is, in the court‘s opinion, inequitable to order recovery in full.
However, this provision is only applicable to those who have entered into the
transaction in good faith, which is a defence against a claim by a liquidator or an
administrator in all jurisdictions.
In Malaysia, it can be argued the same situation applies because section 53B(2)
accords the right to recover ‗the property or its value or the money or other
proceeds.‘ It is possible for the court to order the creditor to pay the liquidator that
which reflects the value of property at the time the transaction took place. 82
Similar orders can also be made if the value of the property has decreased without
any interference from the creditor. The court could grant an order requiring the
creditor to pay the value of the property at the time of transaction. Andrew Keay
suggested the more equitable solution to this problem is to order the re-transfer of the
property to the creditor and to require him or her to pay an amount reflecting the
benefit he or she has received from it between the dates of transaction to the court‘s
80 Ibid, at 252.
81 See section 296(3) (a) of the New Zealand Companies 1993.
82 See section 296(3) (b) of the New Zealand Companies Act 1993. The subsection of the amended
section 296 also uses both an objective and subjective tests in determining insolvency of a
company. The recovery order would not be made if it is shown that a reasonable person in the same
position would not have suspected insolvency. It must also be shown that the person in question
does not have reasonable grounds for suspecting that the company is insolvent or would become
insolvent as a result of the transaction.
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