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2ND YEAR NOTES

NAME :

SUBJECT : C.P.C.II

REF. NO. :

TOPIC : PAULIAN
ACTION

REFER APRIL 2003 – Q5

NATURE & OBJECTIVES

-PRIMARY PURPOSE OF PA – TO ENABLE COURTS TO DECLARE VOID AN ALIENATION OF

PROP WHICH HAS BEEN MADE IN FRAUD OF THE RIGHTS OF CREDITORS

MEERASAIBO V PHILIPPAL
-NATURE OF THE RELIEF: PLTF COULD GET CONVEYANCE DECLARED VOID BUT CANNOT
HAVE CONVEYANCE CANCELLED

-IN SL ACTION AVAILABLE TO INDIVIDUAL CREDITORS UNLIKE RL (FERNANDO V

FERNANDO)

-NOW ASSUMES CHARACTER AS AN ACTION IN PERSONAM

EFFECTS OF PA

GUNARATNE V BILENDAHAMY
-FRAUDULENT DEED NOT ANNULLED BY PA. ONLY DECLARED VOID

PUNCHI BANDA V PERERA

-IS NOT RE-VESTED IN TRANSFEROR BUT REMAINS WITH TRANSFEREE

NECESSARY PARTIES TO PA (GL PEIRIS)

READ!!

TO WHOM PA IS AVAILABLE

1. PERSONS WHO WERE CREDITORS OF ALIENOR AT THE TIME OF ALIENATION

2. ANY PSN DERIVING TITLE FROM THEM

SUPPIAH V MANEEPILLAI
-IF A CREDITOR CAN CLAIM ON THE GROUND OF FRAUD TO HAVE DEED DECLARED VOID,
ANYONE CLAIMING THROUGH THE CREDITOR HAS THE SAME RIGHT

HANIFFA V MOHAMADU
-A PRINCIPLE DEBTOR. B SURETY. GRANTED LAND IN FAVOUR OF C
-A DID NOT MORTGAGE ANY PROP
-B MORTGAGED PROP OF HIS OWN
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-ON DECREE OBTAINED ON THE BOND, A PROP WAS SEIZED AS PROP OF A & WAS
PURCHASED BY DEFT AT THE SALE OF EXECUTION
-BEFORE SALE A TRANSFERRED ALL HIS PROP IN 3 DEEDS
-PROP PURCHASED BY DEFT. WAS TRANSFERRED TO PLTF BY 2ND DEED
-PLTF INSTITUTED ACTION AGAINST DEFT FOR DECLARATION OF TITLE
-HELD: OPEN FOR DEFT. TO SHOW THE DEED IN FAVOUR OF PLTF WAS EXECUTED IN
FRAUD OF CREDITOR

-IS A PSN WHO HAS UNLIQUIDATED CLAIM FOR DAMAGES AT THE TIME OF ALIENATION,
A CREDITOR?

FERNANDO V FERNANDO
-PSN WHO HAS CLAIM FOR UNLIQUIDATED DAMAGES IS NOT REGARDED AS A CREDITOR
-PA CANNOT BE MAINTAINED UNLESS CLAIM HAS BEEN REDUCED TO A DECREE

H’EVER IN FERNANDO V FERNANDO(1949)

-HELD: PRIOR TO THE DATE OF ALIENATION
-A CAUSE OF ACTION OF EX DELICTO HAD ACCRUED TO A PSN
-WHO HAD GIVEN NOTICE OF HIS INTENTION OF BRINGING AN ACTION
-WHERE THE ALIENOR KNEW THAT THERE WOULD BE NO ASSETS…
-THE CREDITOR IS ENTITLED TO HAVE THE DEED DECLARED VOID ON THE BASIS OF
FRAUDULENT ALIENATION

PUNCHI APPUHAMY V HEWAPEDIGE SEDERA

-IT WAS ESTABLISHED THAT WHERE A SUES B FOR UNLIQUIDATED DAMAGES & PENDING
ACTION B FRAUDULENTLY TRANSFERS PROP TO 3RD PARTY WITH INTENTION OF
DEFRAUDING THE CREDITOR
-PA WILL BE AVAILABLE TO A IF, AT THE TIME HE INSTITUTES ACTION, HE AS
OBTAINED A DECREE IN HIS FAVOUR IN RESPECT OF THE CLAIM OF UNLIQUIDATED
DAMAGES.

THE VIEW WAS TAKEN THAT:

-SUFFICIENT IF PLTF SECURED JUDGMENT ON HIS UNLIQUIDATED CLAIM AT THE TIME
OF THE INSTITUTION OF PA
-FRAUDULENT TRANSFER MAY BE EFFECTED BEFORE DECREE IS ENTERED IN HIS FAVOUR

FOR PA TO BE SUCCESSFUL:
-CLAIM OF DAMAGES MUST BE REDUCED TO A DECREE BEFORE PA IS INSTITUTED
-NOT NECESSARY THAT DECREE SHOULD ALREADY BE ENTERED AT THE TIME ALIENATION
IS MADE

MUKTHAR V ISMAIL
-ONLY CREDITOR CAN CLAIM ALIENATION TO HIS PREJUDICE
-CREDITOR – A PSN TO WHOM A DEBT IS OWING BY ANOTHER PSN IN THE FORM OF A
JUDGEMENT DEBT OR CONTRACT DEBT
-T’FORE UNLIQUIDATED DAMAGES DIDN’T FALL WITHIN ‘DEBT’
-IT WAS CONCLUDED THAT PENDING ACTION OF UNLIQUIDATED DAMAGES & DEFT BOUGHT
PROP & TRANSFERRED IT TO 3RD PARTY, THE PLTF (IF JUDGEMENT WAS SUBSEQUENTLY
ENTERED IN HIS FAVOUR) WAS NOT ENTITLED TO PA AGAINST THE DEFT OR
TRANSFEREE
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-DECISION WAS CRITICIZED IN

JAYASURIYA V JEERIS

AGAINST WHOM PA LIES

-AGAINST TRANSFEREE OR ALIENEE OF THE PROP TO DEFRAUD LEGITIMATE CLAIMS OF

THE CREDITOR
-ACTION BROUGHT AGAINST ANOTHER CATEGORY OF PSNS – NOT PA

ATHUKORALA V ATHUKORALA
-PA DIRECTED AGAINST THE TRANSFEREE
-OBJECT IS TO MAKE PROP LIABLE TO BE SOLD TO SATISFY THE DEBT DUE TO THE
CREDITOR
-PA IS ALWAYS EXERCISED AGAINST A 3RD PARTY
(PSN WHO BENEFITS FROM FRAUDULENT ACT)

ESSENTIAL INGREDIENTS OF PA

1. FRAUD
2. INFERANCE OF PAYMENT OR ABSENCE OF CONSIDERATION
3. INSUFFICIENCY OF ASSETS IN DEBTORS HANDS AND
4. ACTUAL PREJUDICE SUSTAINED BY THE CREDITOR