Section 528. Undue preference

(1) Any transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company which is unable to pay its debts, as the debts become due, from its own money in favour of any creditor or any person in trust for any creditor shall be deemed to have given such creditor a preference over other creditors in the event of the company being wound up on a winding up petition presented within six months from the date of making or doing the same and every such act shall be deemed fraudulent and void.

(2) The date of presentation of the winding up petition shall be—

(a) in the case of winding up by Court—

(i) the date of the presentation of petition; or

(ii) where prior to the presentation of the petition a resolution has been passed by the company for voluntary winding up, the date upon which the resolution to wind up the company voluntarily is passed; and

(b) in the case of voluntary winding up, the date upon which the winding up is deemed by this Act to have commenced.

(3) Any transfer or assignment by a company of all its property to the trustees for the benefit of all its creditors shall be void.

(4) Any transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company in contravention of this section shall be void except if it is in favour of any person dealing with the company for valuable consideration and without any actual notice of the contravention.

(5) For the purposes of this section, “valuable consideration” means a consideration fair and reasonable money value in relation to—

(a) the value of the property conveyed, assigned or transferred; or

(b) the known or reasonably anticipated benefits of the contract, dealing or transaction.

(6) For the purposes of this section,“notice”includes knowledge of inability to pay a debt by the company or any winding up proceedings against the company or of the facts sufficient to indicate to the person dealing with the wound up company.