Fraudulent Preference: antecedent promise supporting security can void charges, but registrar's certificate may validate defective registration.

Whether charges and a mortgage following an antecedent promise constituted fraudulent preferences was decided by applying the principle that a creditor's receipt of security coupled with a debtor's antecedent promise permits an inference of an intention to prefer, placing the burden on the claimant; the court found most charges (except an expressly conceded portion) void as fraudulent preferences. Whether misdated and late-registered charges were invalid was resolved by applying the conclusive effect of the registrar's certificate, treating incorrectly stated dates as mistakes within that certificate's scope and declining to invalidate registration or exercise rectification adversely to the chargee.

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Issues: (i) Whether the charges and mortgage created after 29 May 1961 constituted fraudulent preferences and are void against the liquidator; (ii) Whether the Shaw and Shrivenham charges, executed on 5 June 1961 but falsely dated 23 June 1961 and registered within 21 days of the false date only, are void against the liquidator for defective registration.

Issue (i): Whether the arrangement of 29 May 1961 and the subsequent charges/mortgage were fraudulent preferences.

Analysis: The court examined authorities on section 44 of the Bankruptcy Act, 1914, and related company case law establishing that a creditor who takes from a debtor a promise to execute a charge at the creditor's request gives rise, in ordinary circumstances, to an inference that the parties intended to give the creditor a preference. The burden of proof remains on the party alleging fraudulent preference. The facts showed a promise under standard undertakings at the meeting of 29 May 1961, the prompt performance of that promise, and that the amount secured was disproportionate to the company's benefit; subsidiary motives were found but the dominant intention was to perform the antecedent promise to prefer.

Conclusion: The court held that, except as to the 400 expressly conceded, the charges and mortgage created pursuant to the 29 May 1961 arrangement amounted to fraudulent preferences and are void against the liquidator. This conclusion is in favour of the petitioner (liquidator) as to those parts.

Issue (ii): Whether the defective dating and late registration of the Shaw and Shrivenham charges rendered them void against the liquidator.

Analysis: The court considered sections 95 and 98 of the Companies Act, 1948, and relevant authorities including National Provincial and Union Bank v. Charnley. Section 98(2) was held to render the registrar's certificate conclusive evidence that the statutory requirements for registration had been complied with; precedent was read as covering mistakes in particulars and entries, and the court found itself unable to distinguish a wrongly stated date from other mistakes covered by the certificate's conclusive effect. The court noted the remedial power in section 101 to rectify the register but observed that such power is to be exercised cautiously after liquidation has crystallised rights.

Conclusion: The court concluded that the registrar's certificate under section 98(2) precluded treating the defective dating/late submission as invalidating the registration in respect of those charges; on the registration point the decision favours the respondent (chargee). The court also indicated that, if required to exercise rectification powers under section 101, it would not exercise them adversely to the chargee in the present circumstances.

Final Conclusion: The summons is disposed of by holding that the majority of the charges created pursuant to the 29 May 1961 arrangement are void as fraudulent preferences (favouring the petitioner) except as to the 400 admitted not to be a preference, while defects in registration as to Shaw and Shrivenham are not held to invalidate protection conferred by the registrar's certificate (favouring the respondent); the overall relief granted is therefore partly in favour of the petitioner.

Ratio Decidendi: A creditor's advance coupled with a debtor's antecedent promise to give security ordinarily permits an inference of an intention to prefer such creditor, rendering subsequent charges void as fraudulent preferences under section 44 of the Bankruptcy Act, 1914; conversely, under section 98(2) of the Companies Act, 1948, a registrar's certificate is conclusive evidence that registration requirements have been complied with, including where particulars or dates are incorrect, absent exercise of the narrow rectification power under section 101.

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