The questions of who has priority over a bankrupt’s assets and precisely when the priority arises are important ones in bankruptcy. In Abuthahir s/o Abdul Gafoor v Bangkok Bank Public Co Ltd [2022] SGHC 274, a judgment creditor and the bankrupt’s estate both laid claim to the surplus proceeds from a mortgagee’s sale of the bankrupt’s property. The High Court held that the judgment creditor, who had registered an attachment order against the bankrupt’s interest in the property and had issued a writ of seizure and sale prior to bankruptcy, had priority over the surplus proceeds. This was even though the surplus proceeds did not arise from a sale of the property pursuant to the judgment creditor’s writ of seizure and sale.
In reaching its decision, the High Court clarified when the execution of an order against property is deemed to be completed. The Court also highlighted certain seemingly inconsistent provisions in the Insolvency, Restructuring and Dissolution Act 2018 on priorities. This Update provides a summary of the key points of the Court’s judgment.
For more information, click here to read the full Legal Update.
