1964_BANKRUPTCY_ORDINANCE — Page 52

44

Protection of bona fide

transactions

without notice.

1914 c. 59, s. 45.

Recovery of

property transferred without knowledge of receiving order. 1926 c. 7, s. 4.

Validity of certain payments to bankrupt and assignee.

1914 c. 59, s. 46.

CAP. 6]

Bankruptcy

[1986 Ed.

50. (1) Subject to the provisions of this Ordinance with respect to the effect of bankruptcy on an execution or attachment and with respect to the avoidance of certain settlements, assignments and preferences, nothing in this Ordinance shall invalidate, in the case of a bankruptcy-

(a) any payment by the bankrupt to any of his creditors;

(b) any payment or delivery to the bankrupt;

(c) any conveyance or assignment by the bankrupt for valua-

ble consideration;

(d) any contract, dealing or transaction by or with the bank-

rupt for valuable consideration:

Provided that both the following conditions are complied with,

namely

(i) that the payment, delivery, conveyance, assignment, con- tract, dealing or transaction, as the case may be, takes place before the date of the receiving order; and

(ii) that the person (other than the debtor) to, by or with whom the payment, delivery, conveyance, assignment, contract, dealing or transaction was made, executed or entered into has not at the time of the payment, delivery, conveyance, assignment, contract, dealing or transaction notice of any available act of bankruptcy committed by the bankrupt before that time.

(2) Where any money or property of a bankrupt has, on or after the date of the receiving order but before notice thereof has been gazetted in the prescribed manner, been paid or transferred by a person having possession of it to some other person, and the payment or transfer is under the provisions of this Ordinance void as against the trustee in the bankruptcy, then if the person by whom the payment or transfer was made proves that when it was made he had not had notice of the receiving order, any right of recovery which the trustee may have against him in respect of the money or property shall not be enforced by any legal proceedings except where and in so far as the court is satisfied that it is not reasonably practicable for the trustee to recover in respect of the money or property or of some part thereof from the person to whom it was paid or transferred.

51. A payment of money or delivery of property to a person subsequently adjudged bankrupt or to a person claiming by assign- ment from him shall, notwithstanding anything in this Ordinance, be a good discharge to the person paying the money or delivering the property if the payment or delivery is made before the actual date on which the receiving order is made and without notice of the presentation of a bankruptcy petition, and is either pursuant to the ordinary course of business or otherwise bona fide.