Pemegang Serah Hak (Assignee) lebih berhak daripada pemegang amanah terhadap apa-apa hasil dan kepentingan harta serah hak (assignment property)

 SABAH DEVELOPMENT BANK BHD v. PETRON OIL (M) SDN BHD [2020] 4 CLJ 811

FEDERAL COURT, PUTRAJAYA
TENGKU MAIMUN TUAN MAT CJ; AHMAD MAAROP PCA; AZAHAR MOHAMED CJ (MALAYA); NALLINI PATHMANATHAN FCJ; RHODZARIAH BUJANG JCA
[CIVIL APPEAL NO: 02(f)-27-04-2018(S)]
17 FEBRUARY 2020

An assignee Bank who has created an absolute and unconditional assignment with an assignor and has thereby obtained an irrevocable transfer of the latter's legal rights and beneficial interests over a certain third party's contract proceeds, is entitled to recover the remittances and funds due under the said contract. Further, such of its entitlement as a lawful assignee will take precedence and priority over other competing claims to the same proceeds, including, as the case may be, claims by a purported trustee or constructive trustee to the said proceeds. The bank's ability to recover such proceeds at the expense of such trustee cannot at all be unconscionable, as otherwise, the security given by a borrower assignor to a banking institution would be rendered nugatory, or put in jeopardy by a finding of a trust or constructive trust by a third party claiming the same funds.

CONTRACT
Agreement - Sale of goods - Claim for recovery of debt by creditor - Absolute assignment of contract proceeds to bank as security for credit facilities - Effect of absolute assignment - Whether entitlement to recover proceeds transferred to bank - Whether creditor's claim premised on trust and/or constructive trust prevailed over bank's absolute assignment - Whether bank held monies in constructive trust for creditor - Whether freezing of first account and creation of subsequent account affected validity of absolute assignment - Civil Law Act 1956, s. 4(3)

CONTRACT
Assignment - Absolute assignment - Claim for recovery of debt by creditor - Absolute assignment of contract proceeds to bank as security for credit facilities - Effect of absolute assignment - Whether entitlement to recover proceeds transferred to bank - Whether creditor's claim premised on trust and/or constructive trust prevailed over bank's absolute assignment - Whether bank held monies in constructive trust for creditor - Whether freezing of first account and creation of subsequent account affected validity of absolute assignment - Civil Law Act 1956, s. 4(3)

TRUSTS
Constructive trust - Existence of trust - Claim for recovery of debt by creditor - Absolute assignment of contract proceeds to bank as security for credit facilities - Whether creditor's claim premised on trust and/or constructive trust prevailed over bank's absolute assignment - Whether bank held monies in constructive trust for creditor

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