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2025 MarsdenLR 6403
HIGH COURT MALAYA SHAH ALAM
SIM CHENG YOUNG – Appellant
Versus
3LYON HOLDINGS BERHAD & ORS (ENCLS 18 20 66 & 67) – Respondent
[Civil Suit No: BA-22NCC-171-12/2023]
The court must ascertain a Judgment Debtor's financial ability before enforcing payment orders, ensuring compliance aligns with the Debtors Act 1957.
Headnote:(A) Debtors Act 1957 - Section 4 - Judgment Debtor Summons - The Court issued orders for the Judgment Debtor to make monthly payments and a lump sum in satisfaction of a consent judgment amounting to RM4,369,520.55. The Judgment Debtor's inability to pay the full amount was examined through the testimony of its director, revealing a significant sum collected from investors but difficulties in recovery. The Court is required to assess the Judgment Debtor's means and ability to pay before granting any order of payment. (Paras 10, 12, 13)
(B) Payment Ability - A court must ensure that a Judgment Debtor has the financial means to comply with payment orders, including lump sums or instalments. The director's testimony indicated ongoing collection efforts and projected cash flow from investments. (Paras 8, 12)
Facts of the case:
A consent judgment was issued against the Judgment Debtor for RM4,369,520.55, requiring scheduled payments for compliance. The Judgment Debtor's financial difficulties and recovery plans were examined through oral testimony.
Findings of Court:
The Court ordered the Judgment Debtor to pay RM25,000.00 monthly and RM1,000,000.00 by January 31, 2026, after verifying financial claims made.
Issues: The essential questions were whether the Judgment Debtor had the ability to pay the judgment and the appropriateness of the ordered payment schedule.
Ratio Decidendi: The court concluded that payment orders should only be issued when it's confirmed the Judgment Debtor has the capacity to fulfill them, considering the testimony presented.
Result: Orders made for payment were upheld.
| Table of Content |
|---|
| 1. orders related to judgment debtor summons (Para 1 , 2) |
| 2. court's orders for installment payments (Para 3 , 4) |
| 3. testimony of judgment debtor's director (Para 5 , 6 , 7 , 8 , 9) |
Introduction
[1] The present matter concerns the Orders made by this Court on 16 May 2025, following the examination of one of the directors of the First Defendant, pursuant to a Judgment Debtor Summons filed by the Plaintiff (in encl 20) on 7 June 2024 against the First Defendant. The said Judgment Debtor Summons was filed as a consequence of a consent judgment recorded between the Plaintiff and the First Defendant on 17 April 2024, for the sum of RM4,369,520.55, which was to be paid by the First Defendant to the Plaintiff on or before 31 May 2024 (Enclosure 18).
[2] For purposes of the present matter, the Plaintiff shall be referred to as the Judgment Creditor and the First Defendant shall be referred to as the Judgment Debtor.
The Present Appeal
[3] The Orders made by this Court on 16 May 2025 (in encl 66) were as follows:
(1) Penghutang Penghakiman hendaklah membayar sejumlah RM25,000.00 kepada Pemiutang Penghakiman pada atau sebelum hari ke-7 setiap bulan, bermula dari Jun 2025 sehingga penyelesaian penuh jumlah penghakiman; dan
(2) Penghutang Penghakiman hendaklah membayar sejumlah RM1,000,000.00 kepada Pemiutang Penghakiman pada atau sebelum 31 Januari 2026.
[4] The Judgment Debtor filed a Notice of Appeal against the above Orders made by this Court on 9 June 2025 (Enclosure 67).
The Judgment Debtor Summons
[5] As the Judgment Debtor is a corporation, Ranjeet Singh Sidhu was summoned to the Court in his capacity as one of the directors of the Judgment Debtor to be orally examined. This oral examination before this Court was for the purpose of determining the latter's means of satisfying the judgment debt under s 4 of the Debtors Act 1957 .
[6] The oral examination of the Judgment Debtor took place on 4 March 2025 and 27 March 2025.
The Testimony Of The Judgment Debtor
[7] During oral examination by counsel for the Judgment Creditor on 4 March 2025, the director of the Judgment Debtor had testified, inter alia, that:
1. Monies that have been collected from investors - under the Judgment Debtor's Redeemable Preference Shares Scheme - amounted to about RM130,000.000.00 - RM140,000.000.00.
2. From the sum collected, the Judgment Debtor paid out commissions (to the agents who bring the transactions to the company), set aside 10% for working capital and the balance invested, "through private equity companies, small companies or we do loans through our subsidiary".
3. The Judgment Debtor does not have any fixed assets.
4. "... the company is not doing well because we are not able to collect back the interest from the clients. So, what we are doing is we are trying to structure to redeem all our investors. It is just that it has taken a lot longer than we expected. It is an exercise to redeem all our investors."
5. It would take about 24 months to recover the loans given out by the Judgment Debtor.
6. The Judgment Debtor has not initiated any legal proceedings against any of the borrowers "because we are trying to rehabilitate them and if we go to Court, they're just going to declare they can't pay us and we'll end up losing the opportunity of even collecting back half or 50%.".
7. On the time taken to redeem the investments the Judgment Debtor have made: "... the redemptions from the investing companies back to us, for us to clear all our investors, will take us a maximum of 24 months... ".
8. "We are earning. We are getting money in. But it's not the huge amount that we used to get where we could declare dividends. We are still earning."
9. The Judgment Debtor is "in the midst of doing 2022 audit" and it made a loss in 2022.
[8] The oral examination was adjourned to 27 March 2025 for the Judgment Debtor to produce documents regarding the details of the Judgment Debtor's investments from 2019 - 2023.
[9] During oral examination on 27 Marc
