(oral)

Gopal Sri Ram JCA (delivering the judgment of the court):

This appeal raises a short point of procedure in bankruptcy. The appellant before us was the judgment creditor in the court below. It took out a creditors' petition to declare the respondent a bankrupt essentially for non-satisfaction of a debt due under a judgment dated 5 December 1995.

The appellant served a copy of the creditors' petition on the respondent by substituted service but it was not a sealed copy of the petition that was posted on the respondent's premises. It was a mere photostat copy.

The respondent took out an application to set aside the creditors' petition on the ground that the service of the petition was contrary to r. 110 of the Bankruptcy Rules 1969. That rule reads as follows:

Rule 110

(1) If the Court is satisfied by affidavit or other evidence on oath that prompt personal service cannot be effected because the debtor is keeping out of the way to avoid service of the petition or any other legal process or any other cause it may order substituted service to be effected in such manner as it thinks fit.

(2) Where any such order has been carried out the petition shall be deemed to have been duly served on the debtor.

There is no doubt that the rule was breached. But the question is: what is the consequence of the breach?

The appellant argues that the breach only amounts to a mere irregularity under s. 131 of the Bankruptcy Act 1967 which reads as follows:

131. No proceeding in bankruptcy shall be invalidated by any formal or by any irregularity, unless the court before which an objection is made to the proceeding is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by any order of that court.

In Au Yong v. Dicum & Anor[1963] MLJ 349, the Malayan Court of Appeal held that a failure to deliver a sealed copy of the creditors' petition was a mere irregularity and curable under the equipollent precursor of s. 131 of the Bankruptcy Act 1967. The court there distinguished and refused to apply an earlier decision of Sir Percy McElwaine CJ in Muthiah Chettiar ex parte Ramanathan Chettiar[1938] MLJ 233.

The respondent however argues that the departure in the present instance is not a mere irregularity but a nullity and counsel for the respondent cited Re v. David ex p United Asia Bank Bhd[1991] 2 MLJ 127, a decision of Zakaria Yatim J, (as he then was).

It is our judgment, the time has long passed when courts are troubled by the question as to whether in the initiation or prosecution or conduct of proceedings, the breach of a rule of court amounts to a mere irregularity or a nullity. The modern approach is exemplified by the judgment of Lord Woolf MR in Nicholls v. Nicholls[1997] 147 NLJ 61. That was a case of contempt of court where the breach of an order made in matrimonial proceedings was the subject matter of the complaint. It was held, after a discussion of the earlier authorities on the subject, that a breach of a rule of the court, even in such a serious matter as contempt of court, would be overlooked unless such breach produced a miscarriage of justice or serious prejudice to the alleged contemnor. Nicholls v. Nichollswas applied by our Federal Court in the judgment of Mohammed Azmi FCJ in a case concerning the non-observance of the requirements of the Rules of the High Court 1980. See, Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor[1997] 3 CLJ 305.

Further, very recently this court in Maril-Rionebel (M) Sdn Bhd v. Perdana Merchant Bankers Berhad[2001] 3 CLJ 248 took the same approach to a breach of the Companies Winding-up Rules which are not dissimilar in context and consequence to adjectival bankruptcy legislation.

Having regard to the authorities referred to a moment ago, we are satisfied that the decision of the learned senior assistant registrar and the learned judge in granting the respondent the order he sought was an error. We are unable to agree with