Valid creation of charge and secured creditor status upheld despite unregistered deed, with no fraudulent preference finding.

A charge over immovable property may arise from the parties' conduct and resolutions even if the written deed is unregistered and cannot itself operate to affect the property. The surrounding transaction, including prior authorisation and subsequent corporate filings, can establish that the charge was created independently of the inadmissible instrument, with the result that the creditor is treated as secured. A charge is not a transfer attracting fraudulent preference rules where it is supported by good faith and valuable consideration as part of an earlier arrangement, so the winding-up avoidance provisions do not apply. The claim was recognised as secured against the specified property.

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Issues: (i) Whether the petitioner became a secured creditor by creation of a valid charge over the company's property despite the unregistered written instrument; and (ii) whether the charge was void as a fraudulent preference or otherwise hit by the winding-up provisions.

Issue (i): Whether the petitioner became a secured creditor by creation of a valid charge over the company's property despite the unregistered written instrument

Analysis: A charge may be created orally, and if reduced to writing the written document may require registration if it seeks to affect immovable property. An unregistered document cannot itself operate to affect the property or bring the charge into existence under the Registration Act. However, the court may still look to the surrounding conduct, resolutions, and acts of the parties to determine whether a charge was created independently of the inadmissible document. Here the prior resolution, the later board resolution, and the registration steps with the Registrar of Companies established that the charge was created by the underlying transaction and not by the unregistered deed alone.

Conclusion: The petitioner did acquire a valid charge and was a secured creditor.

Issue (ii): Whether the charge was void as a fraudulent preference or otherwise hit by the winding-up provisions

Analysis: A charge does not amount to a transfer of property in the sense contemplated by the fraudulent preference provisions. The transaction was part of an earlier arrangement under which the company had agreed to secure the petitioner if he and his family applied the sale proceeds to discharge the company's bank debt. The charge was thus supported by good faith and valuable consideration, and the statutory avoidance provisions were not attracted.

Conclusion: The charge was not void as a fraudulent preference and was not avoided by the winding-up provisions.

Final Conclusion: The application succeeded, and the petitioner's claim was recognized as secured against the specified immovable property.

Ratio Decidendi: A charge over immovable property need not be created only by a registered written instrument if the surrounding conduct and resolutions establish an independent oral or consensual creation of the charge, and such a charge is not avoided as a fraudulent preference when supported by good faith and valuable consideration.

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