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2018 MarsdenLR 3713
FEDERAL COURT PUTRAJAYA
MOHD KAMAL OMAR – Appellant
Versus
UNITED OVERSEAS BANK (MALAYSIA) BHD & OTHER APPEALS – Respondent
[Civil Appeals Nos: 03(f)-2-04-2017(W) 03(f)-3-01-2017(W) & 03(f)-4-01-2017(W)]
Instalment payment orders modify original judgments, preventing concurrent bankruptcy notices based on those judgments.
Headnote:This Judgment discusses the interpretation of the Debtors Act 1957, specifically regarding the modification of original judgments through installment payment orders. The court found that such orders do modify the original judgment, rendering the bankruptcy notice based on it invalid. Key issues included whether the JDS order constituted an implied stay of execution and the applicability of past cases that inform the current legal position. The court concluded that the bankruptcy notice was null and void based on these findings.
| Table of Content |
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| 1. bankruptcy notices are considered null if based on judgments modified by installment orders. (Para 1) |
| 2. facts surrounding the bankruptcy notice and debtor compliance. (Para 2 , 3 , 4) |
| 3. court's analysis on bankruptcy notice validity. (Para 5) |
[1] These are three appeals by the respective appellants against the decision of the Court of Appeal in dismissing their appeals against the decision of the High Court. The Federal Court had granted leave for the following question of law:
"Whether the making of an Order on a judgment debtor summons pursuant to the Debtors Act 1957 for the satisfaction of an original Judgment by payment of instalments, constitutes a variation or modification of the said original Judgment, thereby barring the presentation of a Bankruptcy Notice founded on an original said judgment having regard to the decisions in Montgomery & Co v. de Blumes [1898] 2 QB 420 and Re H A Pereira; Ex Parte Pagor Singh (Bhagat Singh), ?"
Background Facts
[2] These three appeals by the respective appellants are related and arose from the same judgment of the High Court dated 11 August 2011. On 11 August 2011, the respondent as the Judgment Creditor (JC) had obtained final judgment against the appellants as Judgment Debtors (JD) for the sum of RM79,804,851.04. The JC then commenced a Judgment Debtors Summons (JDS) before the Senior Assistant Registrar (SAR) and obtained an order against the JD on 3 November 2014 ("JDS Order"). The JD appealed against the JDS Order to the Judge in Chambers. On 9 December 2014, the learned High Court Judge allowed the appeal in part and ordered that:
(i) the JDS Order ordering the JD to pay the sum of RM3,520,000.00 forthwith to the JC was set aside;
(ii) the JDS Order ordering the JD to pay the monthly instalment of RM5,000.00 until full settlement and costs of RM4,000.00 to the JC, remained unchanged.
[3] In complying with the JDS Appeal Order, the JD made payments to the JC in the following manner:
(i) on 12 January 2015, the JD paid RM13,000.00 being payment for costs and monthly instalment payment for one month starting from 13 November 2014;
(ii) on 29 January 2015 the JD paid RM15,000.00 being the monthly instalment payment for three months starting from 13 December 2014; and
(iii) on 31 March 2015 the JD paid RM15,000.00 being the monthly instalment payment for three months starting from 13 March 2015.
[4] The JC alleged that the JD failed to comply with the monthly instalment due on 13 March 2015. The JC then filed Bankruptcy Notices ("BN") against the JD on 31 March 2015. The JD subsequently filed an application to set aside the BN via encl 4 on 27 April 2015 on the following grounds:
(a) the JC cannot commence bankruptcy action as the JC had already obtained a JDS Order against the JD. The JD has complied with the terms of the JDS Order;
(b) the BN is contrary to law, null and void ab initio as the sum stated in the BN contradicts the amount awarded in the final Judgment;
(c) the BN is void ab initio as the amount claimed is inaccurate and excessive.
Decision Of The High Court
[5] On 26 August 2015, the SAR dismissed the application (encl 4) to set aside the Bankruptcy Notices. The JD appealed to the Judge in Chambers. On 28 January 2016, the High Court judge dismissed the appeal. In dismissing the appeal the learned judge of the High Court had this to say on the issue of whether the JC can commence bankruptcy action as the JC had already obtained a JDS Order against the JD and the JD had complied with the terms of the JDS Order:
