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2024 MarsdenLR 462
HIGH COURT MALAYA MELAKA
BAHARAT INTERNATIONAL FZC – Appellant
Versus
LAI KIM LIAN – Respondent
[Bankruptcy No: MA-29NCC-52-04/2023]
The court determined that in bankruptcy proceedings, the currency conversion date should be the date of the Bankruptcy Notice, and it cannot evaluate the merits of the underlying judgment.
Headnote:(A) Bankruptcy Notice - Insolvency Act 1967 - The court addressed the appeal against the dismissal of the summons to set aside the Bankruptcy Notice and Creditors Petition, determining the validity of the claims without evaluating the merits of the underlying judgment. (Paras 4, 15)
(B) Currency Exchange - The court held that the currency conversion date in bankruptcy proceedings should be the date of the Bankruptcy Notice, not the date of the judgment or writ, ensuring accurate debt calculations. (Paras 11, 12)
(C) Authority to Affirm Affidavits - The court found no merit in claims regarding the deponent's authority, affirming that clear evidence of authorization suffices for affidavit submission. (Paras 18)
(D) Service of Documents - The court confirmed that service of the Bankruptcy Notice and Creditors Petition complied with legal requirements, dismissing claims of improper service. (Paras 19)
Facts of the case:
The appeal involved a Judgment Debtor challenging the validity of a Bankruptcy Notice and Creditors Petition, arguing various procedural defects and issues regarding currency conversion rates. (Paras 1-3)
Findings of Court:
The court found no merit in the appeal and upheld the decisions of the Senior Assistant Registrar, confirming the validity of the Bankruptcy Notice and Creditors Petition. (Paras 20)
Issues: The main issues included the court's power to review the merits of the underlying judgment, the appropriate currency conversion date, the authority of the deponent, and the service of documents. (Paras 3)
Ratio Decidendi: The court ruled that it lacked the jurisdiction to evaluate the merits of the underlying judgment and that the currency conversion date in bankruptcy proceedings should align with the date of the Bankruptcy Notice, ensuring clarity in debt enforcement. (Paras 5, 11)
Result: Appeals dismissed with costs of RM2,500.00 under each Enclosure.
JUDGMENT
(Enclosure 37, 83)
Matter Before This Court
[1] This is a decision of this Court on an appeal filed by the Judgment Debtor in encls 37 and 83 against the decision of the learned Senior Assistant Registrar ('SAR') in dismissing the Summons In Chambers in encl 13 dated 19 May 2023 to set aside the Bankruptcy Notice ('BN') and Summons in Chambers in encl 49 dated 9 January 2024 to set aside the Creditors Petition ('CP').
[2] Parties will be referred as Judgment Creditor ('JC') and Judgment Debtor ('JD') for the purpose of this appeal.
Issues Before The Court
[3] The same issues which were raised by the JD before the SAR previously was similarly raised in this Appeal. The issues are:
i. whether the Court has the power to go behind the judgment in default ('JID') that was recorded in a Civil Suit No: MA-B52-7-10/2020 dated 21 December 2020 against the JD to consider the merits of the JC's claim;
ii. whether the rate of convertion from United State Dollars (USD) currency to Ringgit Malaysia (MYR) should be at the date of the judgment or the date of the Writ;
iii. wether the request to issue BN dated 11 April 2023 is defective and void as there is no evidence that the JC's officer was authorised to do so;
iv. wether the deponent namely Isayas Dawit Ghirmatsion (Passport No K0055652) who affirmed affidavits on behalf of the JC has no authorisation to do so; and
v. wether the CP was not personally served on the JD.
Whether The Court Has The Power To Go Behind The Judgment In Default ('JID') Dated 21 December 2020 Against The JD
[4] The JD argues that this Court should look at the merits of the JC's claim and find that there are triable issues warranting the setting aside of the BN and CP.
[5] In this case, a JID was recorded against the Defendant in Malacca Sessions Court civil suit No: MA-B52-7-10/2020 on 21 December 2020 which was neither set aside or appealed against. Hence the duty of the Bankruptcy Court is to just determine on the validity of BN and CP. The Court does not need to go behind the judgment to evaluate the merits of the JC's claim against the JD. The only issue for this Court is to determine whether there are any defects on the BN and CP. Therefore, this Court finds no merit on this issue. See the decisions in Per: Liew Jin Hui; Ex Parte: Weng Meng Industries Sdn Bhd; Datuk Haji Mohammad Tufail Mahmud & Ors v. Dato' Ting Check Sii & Ors (Encl 90) and Wan Mohamad Wan Yusof v. Government of Malaysia; [2020] 3 AMR 414.
Whether The Currency Exchange Rate In USD Currency Should Be At The Date Of The Judgment Or The Date Of The Writ
[6] Based on the Writ of Summons dated 27 October 2020, the JID recorded against the JD was for the amount of USD136,500.00 together with interest at the rate of 5% charged from the date of filing of the Writ till full settlement. When the BN dated 11 April 2023 as per encl 2 was filed, the JC converted the USD exchange rate to MYR at the rate of USD1=RM4.1666 which amounts to RM568,659.00. The JD argues that the calculation of the exchange rate should be on the date of judgment which is on 21 December 2020 for the amount of RM552,961.50 00 at the rate of USD1 =RM4.051 and therefore there is manifest error in the calculation of the JD's indebtdness in the BN.
[7] Reference was made by the JC to the decision in Inter Diam Pte Ltd v. PJ Diamond Centre Sdn Bhd; [2002] 7 MLJ 189; [2002] 4 CLJ 715; [2002] 4 AMR 4613 where the Court had referred the decision of Lord Wilberforce in the case of Miliangos v. George Frank (Textiles) Ltd [1975] 3 All ER 801. It was held in Milianggos (supra) that in determining the date of the foreign currency exchange the Court may choose to apply the conversion date to be either on the date of action brought or the date of judgment or the date of payment. In the case of Inter Diem (supra), the Court preferred the date of conversion to be on the date of judgment, it should be noted that the case of Inter Diem (supra) did not de
