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Contents

Long Title

Part I PRELIMINARY

Part II CONSTITUTION, PROCEDURE AND POWERS OF COURT

Jurisdiction

Procedure

Part III OFFICIAL ASSIGNEE

Part IV TRUSTEE IN BANKRUPTCY

Part V VOLUNTARY ARRANGEMENTS

Moratorium for insolvent debtor

Consideration and implementation of debtor’s proposal

Part VI PROCEEDINGS IN BANKRUPTCY

Bankruptcy petitions and bankruptcy orders

Protection of debtor’s property

Part VII ADMINISTRATION IN BANKRUPTCY

Bankruptcy

Inquiry into bankrupt’s affairs, dealings and property

Proof of debts

Composition or scheme of arrangement

Effect of bankruptcy on antecedent transactions

Possession, control and realisation of bankrupt’s property

Distribution of property

Part VIII ANNULMENT AND DISCHARGE

Part IX DUTIES, DISQUALIFICATION AND DISABILITIES OF BANKRUPT

Part X BANKRUPTCY OFFENCES

Part XI MISCELLANEOUS PROVISIONS

THE SCHEDULE Transitional Provisions and Savings

Legislative History

Comparative Table

 
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Proof of debts
Description of debts provable in bankruptcy
87.
—(1)  Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust shall not be provable in bankruptcy.
(2)  A person having notice of the presentation of a bankruptcy petition shall not prove under the bankruptcy order made thereon for any debt or liability contracted by the bankrupt subsequently to the date of his so having notice.
(3)  Subject to this section and section 90, any debt or liability to which the bankrupt —
(a)
is subject at the date of the bankruptcy order; or
(b)
may become subject before his discharge by reason of any obligation incurred before the date of the bankruptcy order,
and any interest on such debt or liability which is payable by the bankrupt in respect of any period before the commencement of his bankruptcy shall be provable in bankruptcy.
(4)  An estimate shall be made by the Official Assignee of the value of any debt or liability provable under this section which, by reason of its being subject to any contingency or contingencies, or for any other reason, does not bear a certain value.
(5)  Any person aggrieved by any such estimate may appeal to the court.
(6)  If in the opinion of the court the value of the debt or liability is incapable of being fairly estimated, the court may make an order to that effect, and thereupon the debt or liability shall, for the purposes of this Act, be deemed to be a debt not provable in bankruptcy.
(7)  If in the opinion of the court the value of the debt or liability is capable of being fairly estimated, the court may assess the same and may give all necessary directions for this purpose, and the amount of the value when assessed shall be deemed to be a debt provable in bankruptcy.
(8)  An amount payable under any order made by a court under any written law relating to the confiscation of the proceeds of crime shall be provable in bankruptcy.
Mutual credit and set-off
88.
—(1)  Where there have been any mutual credits, mutual debts or other mutual dealings between a bankrupt and any creditor, the debts and liabilities to which each party is or may become subject as a result of such mutual credits, debts or dealings shall be set-off against each other and only the balance shall be a debt provable in bankruptcy.
(2)  There shall be excluded from any set-off under subsection (1) any debt or liability of the bankrupt which —
(a)
is not a debt provable in bankruptcy; or
(b)
arises by reason of an obligation incurred at a time when the creditor had notice that a bankruptcy petition relating to the bankrupt was pending.
Rules as to proof of debts
89.  With respect to the mode of proving debts, the right of proof by secured and other creditors, the admission and rejection of proofs and any other matters, the prescribed rules shall be observed.
Priority of debts
90.
—(1)  Subject to this Act, in the distribution of the property of a bankrupt, there shall be paid in priority to all other debts —
(a)
firstly, the costs and expenses of administration or otherwise incurred by the Official Assignee and the costs of the petitioner (whether taxed or agreed) and the costs and expenses properly incurred by a nominee in respect of the administration of any voluntary arrangement under Part V;
(b)
secondly, subject to subsection (2), all wages or salary (whether or not earned wholly or in part by way of commission) including any amount payable by way of allowance or reimbursement under any contract of employment or award or agreement regulating the conditions of employment of any employee;
(c)
thirdly, subject to subsection (2), the amount due to an employee as a retrenchment benefit or an ex gratia payment under any contract of employment or award or agreement that regulates the conditions of employment, whether such amount becomes payable before, on or after the date of the bankruptcy order;
(d)
fourthly, all amounts due in respect of any workmen’s compensation under the Workmen’s Compensation Act (Cap. 354) accrued before, on or after the date of the bankruptcy order;
(e)
fifthly, all amounts due in respect of contributions payable during the 12 months immediately before, on or after the date of the bankruptcy order by the bankrupt as the employer of any person under any written law relating to employees’ superannuation or provident funds or under any scheme of superannuation which is an approved scheme under the Income Tax Act (Cap. 134);
(f)
sixthly, all remuneration payable to any employee in respect of vacation leave, or in the case of his death, to any other person in his right, accrued in respect of any period before, on or after the date of the bankruptcy order; and
(g)
seventhly, the amount of all taxes assessed and any goods and services tax due under any written law before the date of the bankruptcy order or assessed at any time before the time fixed for the proving of debts has expired.
(2)  The amount payable under subsection (1)(b) and (c) shall not exceed an amount that is equivalent to 5 months’ salary whether for time or piecework in respect of services rendered by any employee to the bankrupt or $7,500, whichever is the less.
(3)  The Minister may, by order published in the Gazette, amend subsection (2) by varying the amount specified in that subsection as the maximum amount payable under subsection (1)(b) and (c).
(4)  For the purposes of subsection (1)(b) and (c) —
“employee” means a person who has entered into or works under a contract of service with the bankrupt and includes a subcontractor of labour;
“wages or salary” includes —
(a)
all arrears of money due to a subcontractor of labour;
(b)
any amount payable to an employee on account of wages or salary during a period of notice of termination of employment or in lieu of notice of such termination, as the case may be, whether such amount becomes payable before, on or after the date of the bankruptcy order; and
(c)
any amount payable to an employee, on termination of his employment, as a gratuity under any contract of employment, or under any award or agreement that regulates the conditions of his employment, whether such amount becomes payable before, on or after the date of the bankruptcy order.
(5)  For the purposes of subsection (1)(c) —
“"ex gratia payment" ” means the amount payable to an employee on the bankruptcy of his employer or on the termination of his service by his employer on the ground of redundancy or by reason of any re-organisation of the employer, profession, business, trade or work, and “the amount payable to an employee” for these purposes means the amount stipulated in any contract of employment, award or agreement, as the case may be;
“"retrenchment benefit" ” means the amount payable to an employee on the bankruptcy of his employer, on the termination of his service by his employer on the ground of redundancy or by reason of any re-organisation of the employer, profession, business, trade or work, and “the amount payable to an employee” for these purposes means the amount stipulated in any contract of employment, award or agreement, as the case may be, or if no amount is stipulated therein, such amount as is stipulated by the Commissioner for Labour.
(6)  The debts in each class specified in subsection (1) shall rank in the order therein specified but debts of the same class shall rank equally between themselves, and shall be paid in full, unless the property of the bankrupt is insufficient to meet them, in which case they shall abate in equal proportions between themselves.
(7)  Where any payment has been made to any employee of the bankrupt on account of wages, salary or vacation leave out of money advanced by a person for that purpose, the person by whom the money was advanced shall, in a bankruptcy, have a right of priority in respect of the money so advanced and paid, up to the amount by which the sum in respect of which the employee would have been entitled to priority in the bankruptcy has been diminished by reason of the payment, and shall have the same right of priority in respect of that amount as the employee would have had if the payment had not been made.
(8)  Where any creditor has given any indemnity or made any payment of moneys by virtue of which any asset of the bankrupt has been recovered, protected or preserved, the court may make such order as it thinks just with respect to the distribution of such asset with a view to giving that creditor an advantage over other creditors in consideration of the risks run by him in so doing.
(9)  Where an interim receiver has been appointed under section 73 before the making of the bankruptcy order, the date of the appointment shall, for the purposes of this section, be deemed to be the date of the bankruptcy order.
Payment of partnership debts
91.
—(1)  In the case of partners, the joint estate shall be applicable in the first instance in payment of their joint debts, and the separate estate of each partner shall be applicable in the first instance in payment of his separate debts.
(2)  If there is surplus of the separate estates, it shall be dealt with as part of the joint estate.
(3)  If there is surplus of the joint estate, it shall be dealt with as part of the respective separate estates in proportion to the right and interest of each partner in the joint estate.
Right of landlord to distrain for rent
92.
—(1)  The right of any landlord or other person to whom rent is payable to distrain upon the goods and effects of a bankrupt for rent due to him from the bankrupt shall, subject to subsection (5), be available against goods and effects comprised in the bankrupt’s estate in respect only of 3 months’ rent accrued due before the commencement of the bankruptcy.
(2)  Where a landlord or other person to whom rent is payable has distrained for rent upon the goods and effects of an individual to whom a bankruptcy petition relates and a bankruptcy order is subsequently made on that petition, any amount recovered by way of that distress which —
(a)
is in excess of the amount which by virtue of subsection (1) would have been recoverable after the commencement of the bankruptcy; or
(b)
is in respect of rent for a period or part thereof after the distress was levied,
shall be held by the landlord or other person in trust for the bankrupt as part of his estate and the landlord or other person shall, upon being given notice by the Official Assignee to do so, make over to the Official Assignee the amount so held in trust by him for the bankrupt.
(3)  Where any person (whether or not a landlord or person entitled to rent) has distrained upon the goods or effects of an individual who is adjudged bankrupt before the end of the period of 3 months beginning with the distraint, so much of those goods or effects, or of the proceeds of their sale, as is not held by him in trust for the bankrupt under subsection (2) shall be charged for the benefit of the bankrupt’s estate with the preferential debts of the bankrupt to the extent that the bankrupt’s estate is for the time being insufficient for meeting those debts.
(4)  Where by virtue of any charge under subsection (3) any person surrenders any goods or effects to the Official Assignee, that person shall rank, in respect of the amount of the proceeds of the sale of those goods or effects by the Official Assignee or, as the case may be, the amount of the payment, as a preferential creditor of the bankrupt, except as against so much of the bankrupt’s estate as is available for the payment of preferential creditors by virtue of the surrender or payment.
(5)  A landlord or other person to whom rent is payable shall not be entitled at any time after the discharge of a bankrupt to distrain upon any goods or effects comprised in the bankrupt’s estate.
(6)  Any right to distrain against property comprised in a bankrupt’s estate shall be exercisable notwithstanding that the property has vested in the Official Assignee.
(7)  The provisions of this section are without prejudice to a landlord’s right in a bankruptcy to prove for any debt due to him from the bankrupt in respect of rent.
Contracts to which bankrupt is party
93.
—(1)  This section shall apply where a contract has been made with a person who is subsequently adjudged bankrupt.
(2)  The court may, on the application of any other party to the contract, make an order discharging obligations under the contract on such terms as to payment by the applicant or the bankrupt of damages for non-performance or otherwise as appear to the court to be equitable.
(3)  Any damages payable by the bankrupt by virtue of an order of the court under this section shall be a debt provable in bankruptcy.
(4)  Where an undischarged bankrupt is a contractor in respect of any contract jointly with any person, that person may sue or be sued in respect of the contract without the joinder of the bankrupt.
Interest on debts
94.
—(1)  Where a debt which has been proved in a bankruptcy includes interest, that interest shall, for the purposes of distribution of dividend, be calculated at such rate as may be prescribed by the rules, without prejudice to the right of any creditor to receive out of the surplus of the estate after all the debts proved in the bankruptcy have been paid in full any higher rate of interest to which he may be entitled.
(2)  Interest on preferential debts shall rank equally with interest on debts other than preferential debts.
(3)  For the purpose of this section, “interest” includes any pecuniary consideration in lieu of interest and any penalty or late payment charge by whatever name called.