The bankruptcy proceedings initiated under the Bankruptcy Act 1967 must continue under that Act, even following the enactment of the Insolvency Act 1967, preserving vested rights.

S Nantha Balan JCA:

Introduction

[1] The appeal before us arises out of bankruptcy proceedings which were taken against Mr Liew Hon Kong (the judgment debtor - "the JD"). The JD had applied to the Senior Assistant Registrar ("the SAR") of the Insolvency Court to set aside the Creditor's Petition ("the CP") which had been filed by the respondent (judgment creditor - "the JC"). The SAR dismissed the JD's application. The JD filed a Notice of Appeal to the judge in Chambers dated 29 March 2019 (encl 73) against the SAR's decision. On 22 July 2019, the Learned Judge of the High Court ("the judge") dismissed the JD's appeal. This is the JD's appeal against the judge's said decision dismissing the appeal and refusing to set aside the CP. On 25 May 2021 we dismissed the JD's appeal. This Judgment explains why we dismissed the JD's appeal.

Bankruptcy Notice

[2] In this case, the Bankruptcy Notice ("the BN") was issued against the JD on 20 September 2017. At that time, bankruptcy proceedings were governed by the Bankruptcy Act 1967 ("the BA 1967") and the Bankruptcy Rules 1969. Under the BA 1967, a CP could be filed against a non-social guarantor without leave of the Insolvency Court. It is not in dispute that the JD is a non-social guarantor.

Insolvency Act 1967

[3] On 21 November 2016, the new Bankruptcy (Amendment) Bill 2016 was passed as the Bankruptcy (Amendment) Act 2017 and received Royal Assent on 10 May 2017. By way of the gazette notification PU(B) 466/2017 dated 3 October 2017, the came into force on 6 October 2017. Pursuant to the , the short title to the BA 1967 was changed to the Insolvency Act 1967 (" IA 1967"). The was mainly to strengthen the provisions relating to non-social guarantors and social guarantors and to raise the minimum debt threshold for the filing of a bankruptcy petition. Notwithstanding the changes brought about through such amendments, s 60 of the preserved, among others, the proceedings, actions, or other matters required to be done under the BA 1967 which were still pending immediately before the 1967 came into operation, and those proceedings were to be continued under the BA 1967, as if the BA 1967 had not been amended. Further, in carrying into effect the objects of the 1967, the Insolvency Rules 2017 [PU(A) 305/2017] was enacted pursuant to s 123 of the 1967 and came into force on 6 October 2017.

[4] These amendments brought about important changes to the bankruptcy regime. Under the BA 1967, a judgment creditor could commence bankruptcy action against a "social guarantor", only if he satisfied the Court that he had exhausted all avenues to recover the debts owed to him by the principal debtor. However, the IA 1967 absolutely prohibited bankruptcy proceedings against a social guarantor.

[5] The BA 1967 defined "social guarantor" as a person who provided, not for the purpose of making profit, the following guarantees:

(a) a guarantee for a loan, scholarship or grant for educational or research purposes;

(b) a guarantee for a hire-purchase transaction of a vehicle for personal or non-business use; and

(c) a guarantee for a housing loan transaction solely for personal dwelling.

[6] Under s 5(3) of the IA 1967, the protection for non-social guarantors is that the judgment creditor must obtain leave of the Insolvency Court before commencing any bankruptcy action against the said non-social guarantor. To obtain leave, the creditor must satisfy the Court that he had exhausted all modes of execution and enforcement (including seizure and sale, judgment debtor summons, garnishment, bankruptcy or winding up proceedings) to recover the debts owed by the principal debtor.

Section 5 (3) Of The IA 1967

[7] The only question here is whether leave of the Insolvency Court was required for the filing of the CP in accordance with s 5(3) of the IA 1967 which reads as follows:

(3) A petitioning creditor shall not be entitled to commence any bankruptcy action:

(a) against a social guarantor; and

(b) a