(2) What is the effect of Damien’s gift to his daughter, Judith?

The issue is whether the bungalow that was given to Judith by Damien in consideration of her
marriage can be vested in the Director General of Insolvency (DGI).

Section 52(1) of the Bankruptcy Act states that any settlement of property done by the
settler and he; within two years after the date of settlement was declared bankrupt, the
settlement will be void against DGI. However there are exceptions to the provision such as
settlement made before and in consideration of marriage. The marriage may be that of the
bankrupt or his child. But in Colombine v Penhall, it was held that if the marriage is used to
defeat or delay creditors by the parties to the marriage, then such transfer may still be
voidable.

In the present question, Damien was adjudged bankrupt on 22nd July 2016 and he gave the
bungalow to Judith in consideration of her marriage on 1st February 2016. By virtue of
Section 52(1), since the settlement of bungalow was made 5 months before Damien was
adjudged bankrupt that is within the time period of 2 years, therefore the conveyance of
bungalow is void against the DGI. However, the settlement was made in consideration of
Judith’s marriage, his daughter. There was no evidence that the conveyance of bungalow was
to delay or defeat creditors although Damien had been in financial difficulties since 1 st
January 2015. Thus as decided in Colombine v Penhall, the conveyance of the bungalow is
not voidable against the DGI.

In conclusion, the bungalow that was given to Judith by Damien in consideration of her
marriage cannot be vested in the Director General of Insolvency (DGI).

(5) Whether the Director General of Insolvency (DGI) can recover the car from Damien upon
his ROAO.

The issue is whether the Proton Wira car which is still under hire purchase agreement can be
passed to the DGI upon Damien’s ROAO.

Goods on hire purchase agreement will not passed to DGI unless and until the last instalment
is paid. The DGI has three options regarding goods on hire purchase; (a) DGI can return the
goods and cease to pay any further instalments, (b) if the value of the goods is more than the
amount of owing by the bankrupt, he can continue to pay the instalments and take over the
goods or (iii) he can assign interests in the goods to a third party.

(6) Whether the Director General of Insolvency (DGI) can recover three service apartments
in Australia upon Damien’s ROAO.

The issue is whether the DGI can recover three service apartments in Australia, Damien’s
foreign properties upon ROAO.

Foreign property will not vest in the DGI. However, the DGI is under obligation to take steps
to secure control over such property in accordance with the law of the country where the
property situated. The DGI for example may call upon the bankrupt to execute power of
attorney necessary to enable him to take control. Failure to comply, the court may commit the
bankrupt to contempt.