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2014 MarsdenLR 1412
HIGH COURT MALAYA KUALA LUMPUR
LOW LEE YOONG – Appellant
Versus
JUPITER CAPITAL SDN BHD – Respondent
[Bankruptcy No: 29-4045-07/2013]
The doctrine of res judicata does not bar the issuance of a second Bankruptcy Notice based on the same judgment, highlighting the importance of finality in litigation and the creditor's right to proceed with subsequent notices.
Headnote:(A) Bankruptcy Act, 1967 - Res Judicata - Bankruptcy Notice - Appeal against dismissal to set aside the Bankruptcy Notice and Creditors' Petition - The court emphasized that the doctrine of res judicata prevents re-litigation of issues once adjudicated, ensuring finality in judgments. (Paras 4, 5, 6)
(B) Second Bankruptcy Notice - A creditor may serve a second bankruptcy notice for the same debt even if a first notice has not been complied with. The court clarified there is no requirement for obtaining leave to file a fresh Bankruptcy Notice on the same judgment. (Paras 9, 11)
Facts of the case:
The Judgment Creditor filed a Bankruptcy Notice against the Judgment Debtor based on a previously adjudicated judgment. The earlier Bankruptcy Notice was set aside, and the Judgment Debtor argued against the second notice citing issues of res judicata and service of process.
Findings of Court:
The court found that the second Bankruptcy Notice was proper and dismissed the appeal, affirming the power of creditors to issue subsequent notices.
Issues: The court addressed whether the second Bankruptcy Notice was barred by res judicata and whether proper service of the notice was executed.
Ratio Decidendi: The court ruled that the doctrine of res judicata does not bar the issuance of a second Bankruptcy Notice in the same proceeding as the earlier notice was set aside for a technical error, and reaffirmed the absence of requirement for leave to reissue.
Result: Appeal dismissed with costs.
| Table of Content |
|---|
| 1. judgment debtor's bankruptcy notice details (Para 1 , 1 , 2) |
| 2. grounds for the debtor's appeal (Para 3) |
| 3. doctrine of res judicata explained (Para 4 , 5 , 6) |
| 4. application of res judicata to bankruptcy (Para 7) |
[1] Enclosure 28 is the Judgment Debtor's (JD) appeal against the Senior Assistant Registrar's ("the Registrar") decision made on 26 February 2014 dismissing the Judgment Debtor's (JD) application to set aside the Bankruptcy Notice (BN) dated 16 July 2013 and/or its service and further and/or in the alternative, strike out the Creditors's Petition and/or its service.
Undisputed Facts
[2] The JC had earlier filed the BN against the JD vide Bankruptcy No 29-1284-2011 based on a judgment dated 30 December 2010 obtained by the JC. On 9 November 2012 the High Court allowed the JD's appeal to set aside the BN in that bankruptcy proceeding. Subsequently on 16 July 2013 the JD filed a fresh BN against the JC based on the same judgment. The BN was served on 20 August 2013. On 25 September 2013 the JC filed the Creditor's Petition.
[3] The grounds relied on by the debtor can be summarised as follows:-
1. The JD did not file any Affidavit in reply to the JD's application to set aside the BN.
2. No leave has been granted or obtained by the JC to file afresh BN against the JD and no request for the issuance of BN was served on the JD.
3. Since the earlier BN has been set aside and no leave obtained by the JC to file afresh BN the JC cannot commence the bankruptcy proceeding against the JD as the matter is res judicata.
4. The JD was served with a copy of the CP instead of a sealed copy of the said CP. No other evidence was tendered by the JC that the person who signed the CP was authorized to act on behalf of the JC.
Decision And Reasons
Res Judicata
[4] Peh Swee Chin FCJ (as he then was) in Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd, at pp 197-203; [1995] 3 CLJ 783; [1995] 3 AMR 2559 explained the doctrine of res judicata:
"What is res judicta? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. When a matter between two parties has been adjudicated by a Court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties, or in other words, the parties should accept it as the truth; res judicata pro veritateaccipitur. The public policy of the law is that, it is in the public interest that there should be finality in litigation - interest reipublicaeut sit finis litium. It is only just that no one ought to be vexed twice for the same cause of action - memodebetbisvexari pro eadem cause. Both maxims are the rationales for the doctrine of res judicata, but the earlier maxim has the further elevated status of a question of public policy.
Since a res judicata creates an estoppel per rem judicatum, the doctrine of res judicata is really the doctrine of estoppel per rem judicatum, the latter being described sometimes in a rather archaic way as estoppel by record. Since the two doctrines are the same, it is no longer of any practical importance to say the res judicata is a rule of procedure and that an estoppel per rem judicatum is that of evidence. Such dichotomy is apt to give rise to confusion.".
[5] In the case of Hartecon JV Sdn Bhd & Anor v. Hartela Contractors Ltd, the Court of Appeal referred to the following passage found in the case of Satyadhyan Ghosel & Ors v. Sint Deorajin Dobi And Another [1960] SC 941:-
"The principle of res judicta is based on the need of giving finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter - whether on a question of fact or a question of law - has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was t
