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2022 MarsdenLR 2562
COURT OF APPEAL PUTRAJAYA
BANK ISLAM MALAYSIA BERHAD – Appellant
Versus
GNASEGAR G VENGADASAMY – Respondent
[Civil Appeal No: P-03(IM)(NCC)-79-11-2020]
The court held that public holidays must be excluded when calculating the seven-day period for determining the date of an act of bankruptcy under the Insolvency Act.
Headnote:(A) Insolvency Act 1967 (Revised 1988) – Section 5(1)(c) – Bankruptcy notice – The appellant's creditor petition was dismissed as it was presented out of time regarding the act of bankruptcy – The method for computing time is pivotal – Seven-day period requires exclusion of public holidays, leading to different interpretations regarding the computation of bankruptcy times – Respondent's argument for interpreting computation period without holidays was rejected. (Paras 3-7, 9-20)
(B)
The criteria for determining the date of the act of bankruptcy when calculating the time allowed for the creditor petition was discussed, emphasizing the exclusion of public holidays in certain time frames.
Issues
: Whether public holidays must be excluded when calculating the seven-day period after the bankruptcy notice was served – Court's decision maintained the importance of strict compliance with statutory timelines.
Findings of Court:
The appeal was upheld, ruling the creditor petition should be calculated excluding public holidays, thus within time.
Ratio Decidendi:
The court applied O 3 r 2 of the Rules of 2012 for time computation, favoring the exclusion of weekends and public holidays in specified periods beyond six days.
Result:
Appeal allowed with costs awarded.
JUDGMENT
Introduction
[1] In this bankruptcy matter, the appellant is the creditor, whereas the respondent is the debtor. The appeal is against the decision of the High Court that upheld the decision of the Deputy Registrar who struck out the creditor petition on the ground that it was filed out of time. The issue of time was in respect of the expiry of the 6-month time period within which the creditor petition should have been filed. The expiry of the said period, in turn, was dependent on the date of the act of bankruptcy which was the date of the commencement of the said 6-month period. We shall first set out the background facts before elaborating on the issue of computation of time.
Background Facts
[2] The appellant bank entered judgment against the respondent on 9 August 2005. The judgment remained unexecuted for a long time. On 23 March 2017, the appellant obtained leave to execute it. The appellant filed a bankruptcy notice on the respondent on 13 July 2017. The bankruptcy notice was served via substituted service order by publication in the newspaper on 10 November 2017. The appellant only filed the creditor petition on 30 May 2018. The respondent filed a Notice of Intention to oppose the creditor's petition on 14 December 2018. When the petition came up for hearing on 25 November 2019, the Deputy Registrar of the High Court dismissed it on the sole ground that it was not presented within six months of the act of bankruptcy upon which it is grounded. The learned High Court Judge affirmed the decision of the Deputy Registrar to dismiss the petition on the same ground.
Issues
[3] The High Court held that the creditor petition was not presented in compliance with the time stipulation in s 5(1)(c) of the Insolvency Act 1967 (Revised 1988) (formerly the Bankruptcy Act 1967). The provision reads as follows:
(1) A creditor shall not be entitled to present a bankruptcy petition against a debtor unless:
(c) the act of bankruptcy on which the petition is grounded has occurredwithin six months before the presentation of the petition;
[Emphasis Ours]
[4] The date upon which a creditor petition is presented must necessarily refer to the date of filing in Court as r 100(1) of the Insolvency Rules 2017 reads as follows:
Rule 100(1) The petition shall be filed in the Court in which it is to be presented.
[5] In the instant case, the creditor petition was filed in Court on 30 May 2018. The argument of the counsel for the respondent is that on this date, more than six months had elapsed from the date of the act of bankruptcy. He argued that the date of the act of bankruptcy was 27 November 2017. His argument is based on the following reasoning. Section 3(1)(i) of the Insolvency Act 1967 provides that a debtor commits an act of bankruptcy if he does not comply with a bankruptcy notice "within seven days after service of the notice in case the service is effected in Malaysia".
[6] The substituted service order, which was advertised in the newspaper on 10 November 2017 stated it will be deemed good service after seven days. This means that the service was deemed effected on 17 November 2017. Two public holidays, ie Saturday and Sunday were included in this computation. In calculating seven days "after service of notice", again two public holidays, ie Saturday and Sunday were also included. Therefore, it was argued that the bankruptcy notice period under s 3(1)(i) ended on 24 November 2017 with the effect that the act of bankruptcy was committed on 25 November 2017. As for the time for filing the creditor petition, it was argued that the last date for the Appellant to file the said Creditors' Petition was on 25 May 2018. Since the creditor petition was filed on 30 May 2018 in the instant case, it was said to be out of time. The above argument was accepted by the High Court.
[7] On the other hand, the appellant's argument is that public holidays should not have been included or reckoned with the effect that the service of the b
