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order. 83 If the value of the asset is reduced due to the act or omission of the creditor,
the same author said the combination of section 241(1)(a) of the UK Insolvency Act
1986, namely the return of the property to the company and to pay the benefit
received under section 241(1)(d) of the same Act reflecting the loss in value. 84 Due
to the similarities in the orders a court could make, the same consequences will apply
in Australia, 85 New Zealand 86 and Malaysia 87
Apart from undue preference, a liquidator can also apply to recover for any
settlement deemed to be at under value. 88 A liquidator is entitled to recover the
difference between the cash paid for the acquisition of the property and its actual
value. 89 The same relief is available to the liquidator in respect of property sold by
the company to its director. 90 Despite having a power under the Act to recover the
amount, section 295 has rarely been utilized by the liquidators.
To date, there is no case being decided under the section and this could be due to
badly drafted sections. 91 The section, for instance, is only applicable to assets which
are sold or bought for cash considerations and parties can avoid the effect of the
83 Keay ―Voidable Preferences‖ above n78 at 253.
84 Ibid.
85 See sections 588FF(1)(b) and (c) of the Australian Corporations Act 2001.
86 See sections 295 of the New Zealand Companies Act 1993.
87 See section 53B(2) of the Malaysian Bankruptcy Act 1967.
88 See section 295 of the Malaysian Companies Act 1965.
89 Section 295(1) -― the liquidator may recover from the person or company from which the property,
business or undertaking was acquired any amount by which the cash consideration for the
acquisition exceeded the value of the property, business or undertaking at the time of its
acquisition."
90 Section 295(2)-―the liquidator may recover from the person or company to which the property,
business or undertaking was sold any amount by which the value of the property, business or
undertaking at the time of the sale exceeded the cash consideration.‖
91 Krishnan Arjunan and Low Chee Keong above n4 at 458.
327