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2009 MarsdenLR 5063
HIGH COURT MALAYA KUANTAN
HASNAH CHE HASAN – Appellant
Versus
HONGKONG BANK MALAYSIA BHD – Respondent
[Bankruptcy No: 29-413-1994]
Strict adherence to procedural requirements in bankruptcy is essential to uphold a debtor's rights; failure to do so can result in annulment of bankruptcy orders.
Headnote:(A) Bankruptcy Act 1967 - Jurisdiction to annul receiving and adjudicating orders - Section 105(1) provides that annulment may be considered if the debtor ought not to have been judged bankrupt or where debts are paid in full. (Paras 6, 44)
(B) Service of process in bankruptcy proceedings - Procedural non-compliance must be strictly adhered to as bankruptcy proceedings carry quasi-penal consequences. Failure to serve the creditor's petition properly leads to annulment of the bankruptcy orders. (Paras 9, 12, 44)
(C) Judicial discretion - Courts must exercise discretion judiciously in bankruptcy matters, ensuring that all procedural requirements are met and that justice is done. (Paras 18, 46)
Facts of the case:
The judgment debtor (JD) appealed a decision dismissing her application to annul receiving and adjudicating orders from 1995, citing improper service of bankruptcy notices and procedural mismanagement. (Paras 1, 4)
Findings of Court:
The court annulled the adjudicating order and rescinded the receiving order, finding that proper service of process was not adhered to, leading to procedural impropriety. (Paras 44, 47)
Issues: The core issues included whether the JD was properly served with notice, whether the bankruptcy petition was validly posted, and whether the JD was properly represented in court during the orders made against her. (Paras 9, 23)
Ratio Decidendi: The court concluded that due process was not followed in respect of the service of the bankruptcy notices, undermining the legitimacy of the orders imposed against the JD. Thus, justice necessitated the annulment of the orders. (Paras 44, 47)
Result: Appeal allowed; receiving and adjudicating orders annulled and rescinded.
[1] This is an appeal to the judge in chambers (encl 42) by the appellant/judgment debtor (JD) against the decision of the learned Deputy Registrar dated 16 June 2008 (encl 58). The learned Deputy Registrar had dismissed with costs the JD's application by way of summons in chambers dated 11 January 2007 (encl 21) to annul the Receiving Order and Adjudicating Order given on 21 November 1995. The JD who is dissatisfied with the decision of the learned Deputy Registrar had filed this notice of appeal to the judge in chambers dated 17 June 2008 (encl 42). An appeal to the judge in chambers, the jurisdiction to review, rescind or vary any order made by the registrar under the bankruptcy proceedings is a rehearing.
[2] The grounds raised by the JD before the learned Deputy Registrar in support of the application to annul the receiving order and the Adjudicating Order given on 21 November 1995 by way of summons in chambers (encl 21) are briefly as follows:
(i) The bankruptcy notice and creditor's petition were not served on the judgment debtor at the correct address.
(ii) The cause papers have been tampered with.
(iii) The calculation of the sums claimed was not in accordance with the terms of the consent judgment.
(iv) The request for the issuance of the bankruptcy notice was invalid.
[3] The submissions of learned lead counsel on behalf of the JD in this appeal is that, the learned Deputy Registrar had not exercised her discretion judicially in dismissing the said application (encl 21). By written submission (encl 53), it has been submitted on behalf of the JD, which briefly, is as follows:
(i) The bankruptcy proceedings (BN and CP) were not served at the correct address.
(ii) The documents filed in court (encl 4 & encl 2 and the affidavit of Idris Ismail affirmed on 7 September 1994) had been tampered with and cannot be accepted by the court.
(iii) The calculation of the interest is inaccurate and not in accordance with the terms of the consent judgment.
(iv) Learned counsel on behalf of the respondent/JC through Idris Ismail had no authority to act in enabling the JC to commence bankruptcy proceedings.
(v) Sufficient reasons had been given by the JD in filing the application at this stage.
[4] The submissions of the respondent/judgment creditor (JC) as contained in the written submission (encl 55) is briefly as follows:
(i) The JD was unable to satisfy the judgment debt and the receiving order and adjudicating order was rightly made.
(ii) Service of the bankruptcy notice and the creditor's petition is regular (emphasis by the court).
(iii) Amendment to the bankruptcy notice and affidavit are regular (emphasis by the court).
(iv) The JD's calculation of the amount and interest in the bankruptcy notice was prepared purely in support of the application to annul the adjudicating order and receiving order and is therefore a self-serving statement and ought to be disregarded.
Learned counsel for the JD had referred to the following cases:
1. Tuan Haji Ahmed Abdul Rahman v. Arab Malaysian Finance Berhad , .
2. Chong Chin Shoong v. Development & Commercial Bank Berhad, [1990] 1 MLJ 285.
3. Re Sebastian, exp Metroplex Leasing & Credit Corp Sdn Bhd, [1990] 3 MLJ 248.
4. Gilbert Engineering Co Inc v. Zainuddin Ahmad & Ors, [2003] 6 MLJ 103.
5. Chen Heng Ping v. Intradagang Merchant Bankers (M) Berhad, .
6. J Raju M Kerpaya v. Commerce International Merchant Bankers Bhd, [2000] 3 MLJ 177.
7. UMW Industries (1985) Sdn Bhd v. Lim Chee Hian, [2005] 2 MLJ 239.
8. Re Lim Chooi Sang exp Soon Fay Sdn Bhd, [1999] 5 CLJ 605.
9. Re Khoo Kim Hock , .
10. Re Cheong Sooi Loong, [1992] 2 MLJ 591.
11. CGU Insurance Bhd v. Asean Security Paper Mills Sdn Bhd & Other Appeals, [2002] 2 MLJ 1.
12. Re Lim Tai Nian; ex p Kewangan Utama Bhd, [2001] 4 MLJ 78.
Learned counsel for the JC had referred to the following cases:
1. Bungsar Hill Holdings Sdn Bhd v. Dr Amir Farid Datuk Isahak , .
2. Re Stephen Wong Leong Kiong, ex p HSBC Bank Malaysia Bhd, [2005] 5 CLJ 504.
3. Algemene Bank
