Voidable insolvency transfer remains effective until annulled by insolvency court; civil court defence unavailable to receiver's purchaser.

A transfer by an insolvent that has not been annulled under the Provincial Insolvency Act remains voidable, not void ab initio, and continues to operate until set aside by the insolvency court exercising special jurisdiction. That annulment power belongs to the court seized of the insolvency proceedings, and a purchaser from the Official Receiver cannot invoke the transferor's insolvency challenge as an equitable defence in ordinary civil proceedings. Where the transfer was for consideration and outside the statutory period for a voluntary transfer, the defence was unavailable and the transfer could not be treated as ineffective in the suit.

---

---

Issues: Whether a transfer by an insolvent in favour of the plaintiff, though alleged to be voidable under insolvency law, could be treated as invalid in a suit by a purchaser from the Official Receiver when it had not been annulled by the Insolvency Court, and whether such voidability could be raised as an equitable defence in the ordinary civil court.

Analysis: The transfer in favour of the plaintiff had not been annulled under the Provincial Insolvency Act. The provisions governing annulment were treated as conferring power on the Court exercising insolvency jurisdiction, namely the Court seised of the insolvency proceedings. A transfer falling within those provisions was regarded as voidable, not void ab initio, and therefore remained operative until set aside by the proper insolvency forum at the instance of the Receiver. The Court also held that the purchaser from the Receiver could not stand in the Receiver's shoes to raise that challenge in ordinary civil proceedings, because the question of annulment belonged to the special insolvency jurisdiction. Since the transfer had been made for consideration and was not within the statutory period for a voluntary transfer, the defence was unavailable in the suit.

Conclusion: The transfer could not be treated as ineffective in the present suit, the equitable defence failed, and the appeal was dismissed.

---