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Case:[2010]1LNS1429

[2010]1LNS1429

PER:DATO'DRELAMARANMSABAPATHYEXPARTE:RHBBANKBERHAD
HIGHCOURT,KUALALUMPUR
VARGHESEGEORGEJC
[DALAMKEBANKRAPANNO:D2916982009]
3DECEMBER2010

Case(s)referredto:

Counsel:
Fortheplaintiff/applicant/JC'sCounselHapiziHasimM/sSidekTeohWong&Dennis
Forthedefendant/respondent/JD'sCounselTGunaseelanM/sGunaseelan&Associates
DALAMMAHKAMAHTINGGIMALAYADIKUALALUMPUR
[DALAMKEBANKRAPANNO:D2916982009]
PER : DATO' DR ELAMARAN A/L M
SABAPATHY
(NOK/PLAMA:A0266226)
(NOK/PBARU:660129016171)

...
PENGHUTANG
PENGHAKIMAN

EXPARTE : RHB BANK BERHAD

(6171M)

...
PEMIUTANG
PENGHAKIMAN

GROUNDSOFDECISION
OF
YANGARIFFTUANVARGHESEGEORGE
1. This was an appeal by the Judgment Debtor (JD) against the decision of the learned Senior
AssistantRegistrardismissingenclosure9.Enclosure9wasanapplicationbyJDtosetasideboth
the Bankruptcy Notice dated 30.04.2009 and the subsequently issued Creditor's Petition dated
07.08.2009.
2.TheJD'scontentionswereessentiallyasfollows:
(a) As bankruptcy proceedings were quasicriminal in nature, the requirements of the
BankruptcyAct,1967andtheBankruptcyRules,1969mustbestrictlycompliedwith.(J
RajuMKerpayav.CIMBBhd[2000]3CLJ104CourtofAppeal)
(b) The 'Request for Issue of Bankruptcy Notice' was defective as it was signed by
SolicitorsfortheJCwithoutidentifyingthesignatory.Thisdefectwasnotmerelyaformal
defect but one which went to the substance of that document. Consequently the
BankruptcyNoticeissuedpursuanttothatrequestwasineffective.
(c)TheCreditor'sPetitionwasalsoinvalidasthesignatorytotheCreditor'sPetitionon
behalf of JC, although identified by name (Aznan b. Adnan) had failed to provide his
sourceofauthority(whichhadtobeundersealinanyevent)togetherwiththePetition.
(d)TheAffidavitVerifyingthePetition,accompanyingtheCreditor'sPetitiondidnotalso
havethePetitionitselfannexedtoitandaccordinglytherewasnoncompliancetothe
strictformalitiesrequiredtosustaintheCreditor'sPetition.
(e)IntheAffidavitVerifyingthePetition the Defendant had further used two different
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words'mengaku'dan'mengikrar'indifferentpartsoftheAffidavitandaccordinglythere
aroseaconfusionastowhetherthe"Affidavit"wasbeingswornoraffirmed.TheAffidavit
wasthereforenotinorderandshouldnotbeaccepted.
(f)TheBankruptcyNoticeandtheCreditor'sPetitionbothreferredtotheJudgmentsum
ofRM514,972.63togetherwithinterestandcostsenteredagainsttheJDandtwoothers
inKLHighCourt(BahagianDagang)GuamanNo:D3221580of2006on30.04.2009
asthedebtoftheJD.ThesaidJudgmentwashoweveronewhichwasenteredjointly
against three Defendants in that proceedings. The JD here was only one of the three
judgmentdebtors and the total judgment sum cited in the Bankruptcy Notice and
Creditor's Petition could not be maintained against the JD as the JD's liability to settle
underthatjudgmentwasinanyeventonlyonethirdthatamount,unlikethesituationifit
wasajointandseveraljudgment.
3.AfterhearingrespectiveCounselandaftertakingintoconsiderationthedecidedauthoritiescitedby
them,Iheldassetoutbelow.
4.1. I accepted Counsel for JC's submission that a firm of Solicitors could apply for issue of
BankruptcyNoticeonbehalfoftheirclients.Form4totheAppendixtotheBankruptcyRulesclearly
providesforthisandthedecisioninReLaiHuaKianExParteCreditCorp.(M)Bhd[1990]1LNS38
[1990]2MLJ487supportedthisposition.TheForm4,providedasguidance,clearlysetsoutthatthe
'Request For Issue Of Bankruptcy Notice' could be signed by 'Judgment creditor or solicitor for the
judgmentcreditor'.
ThedecisionoftheCourtofAppealinUMWIndustries(1985)SdnBhdv.LimCheeKian@LimKek
Wha [2005] 1 AMR cited by the JD's Counsel should be distinguished on the facts. In the UMW
Industriessituation,therequestwasstatedtobebythecorporationbutnonameoftheofficerwas
statedthereat,andneitherwasitmadebytheSolicitorsonrecord.Itwasthere,onthatparticularfact
scenario,thattheCourtheldthattherewasacontraventionofRule215ofBankruptcyRules,which
provisionrequiredthatanyaction(undertheBankruptcyAct)onbehalfofacorporationbyanofficer
muststatethathehadauthorityundersealtodoso.
4.2.IdidnotfindthattherewasanyconfusioncausedbystatingontheRequestinthiscasethatthe
JC(theCorporation)wastheapplicantwhiletheformbeingsignedforonbehalfoftheentitybyan
identifiedfirmofSolicitors.ThefactthatthesignatoryonbehalfoftheidentifiedfirmofSolicitorsisnot
specificallynameddoesnotalso,inmyassessment,amounttoasufficientgroundtostrikedownthe
Requestandconsequently,theBNitself.ThenamesoftheJCandoftheJC'ssolicitorshadbeen
providedandtheiridentitieswerenotinanydoubt.
5.AsregardstheCreditor'sPetition,theJD'scontentionwasthatitwasnotsufficientfortheofficerof
thePetitionersigningtheCreditor'sPetitiontojustsayhewasanauthorizedofficertodoso.Itwas
arguedthatheshouldstatehehadauthorityundersealandfurthershowproofofsuchauthorityfor
theCPtobeheldtobevalid.
ItwasmyfindingthatthedeclarationbyAznanb.AdnanthathewasanauthorizedofficerofJDwith
hisdesignationorofficeinJCclearlyspeltout,aswasavailableinthiscase,wassufficientinallthe
circumstancetosatisfyRule215oftheBankruptcyRules.TheBankruptcyRulesdoesnotanywhere
requireproofofthe'authorityunderseal'tobemadeavailableatthatstage.
Ifhoweverdeponent'sauthoritywaschallenged,aswasinthiscase,thenitwouldbeincumbentupon
theJCtoshowproofoftheauthorityofthepersonwhohadsignedCreditor'sPetition.Thishasbeen
satisfiedinourcaseandIheldtherewasnomeritinthislineofchallengeaswell,heretostrikedown
thePetition.
6.1.InsofarastheattackbytheJDonthe'AffidavitVerifyingPetition'wasconcerned,thethrustof
the argument was that the Creditor's Petition itself should have been attached to the Affidavit
VerifyingPetition,layingemphasisonthewords'annexed'usedintheAffidavit.InForm11ofthe
BankruptcyRules,('AffidavitofTruthofStatementsinPetition')intheopeninglinesofthesuggested
format,wefindthefollowingterminology:
"I,thepetitionernamedinthepetitionhereuntoannexed,affirm...andsay:....."
6.2. This issue was considered in three cases. In Ooi Thean Chuan v. Banque Nationale de Paris
[1992]3CLJ160(Rep)[1992]2CLJ1225[1992]2MLJ526,EdgerJosephJr.J(ashethenwas),
heldthatRules106oftheBankruptcyRules,andForm11prescribedtherein,requiredthepetitionto
beannexedtoit.Itwasexplainedinthatcasethatthepetition(CP)mustbetiedtoorboundtoor
attachedtoorjoinedtooraffixedtoorstapledtotheverifyingaffidavit,soastoavoidanydisputeas
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towhatexactlyisbeingverified.Itwasheldtherethatfailuretoannexthepetitionwentbeyondmere
irregularityandrenderedtheproceedingsanullity.
The decision of Kamalanathan Ratnam, J in Cho YuLon v. ArabMalaysian Finance Bhd [2003] 2
CLJ 186 [2003] 5 MLJ 289 followed Ooi Thean Chuan and held that a copy of the petition (CP)
introduced as an exhibit to the Affidavit and stapled to the affidavit would suffice to meet the
requirementsofRule106andForm11.
6.3.OntheotherhandKangHweeGee,J(ashethenwas)inRe:PuanSriMonaKishuThiratraiex
parte Affin Bank Bhd [2007] 7 CLJ 657 [2007] 3 MLJ 223, held that the omission to annex the
creditors petition to the affidavit verifying petition was a 'minor infraction' which did not go to the
substanceoftheaffidavit(merelyadefectinformonly)andthatdidnotmakethepetitionineffective.
6.4.Inourinstantcasethe'AffidavitMengenaiKebenaranPernyataanPernyataanDalamPetisyen'
(Enclosure6)didnotattachorannexacopyoftheCreditor'sPetitionatall.
After giving due consideration to the rationales propounded in the differing judgments above, I
preferredthereasoningofEdgarJoseph,J(whichhadbeenfollowedbyKamalanathanRatnam,J)
to that of Kang Hwee Gee, J. I held that the Affidavit Verifying Petition in our instant case did not
complywiththerequirementsoftheBankruptcyActandtheBankruptcyRules.Further,thiswasnot
correctedbytheJCalthoughitcouldhavebeendone.
6.5.Astotheuseofthewords'mengaku'dan'mengikrar'inseparateplacesbutinthesameAffidavit,
IdidnotagreewithCounselfortheJDthatthishadcausedconfusionorhadtheeffectofnullifying
theAffidavitVerifyingPetition.Iwasoftheviewthatevenifthiswasa'defect',itwasmerelyoneof
formonly,andnotonewhichwenttothesubstanceoftheaffidavit.Affidavitscouldbemadeeitherby
affirmationorbyswearingtothecontentsthereof.
TheomissiontoannextheCreditor'sPetitiontotheAffidavitVerifyingPetitionontheotherhand,was
amatterthatwenttothematerialityofthecontentsandhenceasubstantivematter.
7.1. It was the JD's further contention that the sum stated to be owed by the JD both in the
BankruptcyNoticeandtheCreditorsPetitionwasinaccurateandnotthesumsatalladjudgedagainst
the JD in KL High Court Guaman No: D32215802006 proceedings. Counsel for JD's argument
wasthatthe'Penghakiman'of18.11.2008annexedtotheBankruptcyNoticewasajudgmententered
jointlyagainstthethreedefendantsthere.Itwasnotajointandseveraljudgmentandtheliabilityof
theJDwasonlytotheextentofonethirdthatadjudgedamountinanyevent.Hesubmittedthatthe
Creditor'sPetitionshouldbestruckoutonthatbasisinanycase.
7.2. I have perused the certified true copy of the said 'Penghakiman' made on 18.11.2008 and
attached to the Bankruptcy Notice. There is nothing in the said judgment to show that the three
defendantsnamedthere(oneofwhomwastheJD)wasadjudgedtobejointlyandseverallyliableto
paythejudgment:sumtotheJC(thePlaintiffthere).
Intheabsenceofthejudgmentspellingoutexpresslythatthedefendantswerejointlyandseverally
liable to the Plaintiff, the judgment there has, as in the ordinary course, to be a judgment imposing
jointliabilityorobligationonthethreedefendantstomeetthejudgmentsumtogether.Insuchevent
the JD's obligation is only onethird the amount of the judgment sum and not as set out in the
BankruptcyNotice,orforthatmatterintheCreditor'sPetition.
AsimilarissuehadariseninthecaseofYeoAhWanglwnUMBCBhd[1995]1AMR38andShaik
Daud, J (as he then was) held there that where the judgment had been obtained against all three
defendants and they were jointly liable, the notice of bankruptcy could not be issued against one
defendantonlybasedonthatwholeofthejudgmentsum.
8.Accordingly,IfoundthatthereweremeritsontwoofthegroundsreliedbytheJDinhisapplication
tosetasidetheBankruptcyNoticeand/orCreditor'sPetition.Theywerenamely:
(a)theAffidavitVerifyingPetitionwasdefectiveinnotannexing,orinanyothermanner
attaching,theCreditor'sPetitiontothesaidAffidavit(consequentlytheCreditor'sPetition
herecouldnotthereforebeprosecutedfurther),and
(b)thesumclaimedtobeowingbytheJDonthefaceoftheCreditor'sPetitionwasnot
thesumduewhichwasrecoverablefromtheJDonthejointjudgmententeredbytheJC
againstJDandthetwootherindividualsinGuamanNo:D3221580of2006.
9. On those grounds, I allowed the appeal of the JD and struck out the Creditor's Petition. The JC
wasorderedtopayJDasumofRM3,000/asfixedcostshereandbelow.
sgd
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Case:[2010]1LNS1429

(YATUANVARGHESEGEORGE)
JUDICIALCOMMISSIONER
HIGHCOURT(DAGANGNCC)
KUALALUMPUR
Date:3DECEMBER2010

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