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2012 MarsdenLR 840
HIGH COURT MALAYA KUALA LUMPUR
RE ABU BAKAR ISMAIL; ALLIANCE INVESTMENT BANK BERHAD (EX PARTE)
[Bankruptcy No: D1-29-1719-2010]
A judgment creditor can enforce a bankruptcy order against any singular debtor in a jointly and severally liable arrangement, regardless of the presence of other liable parties.
Headnote:(A) Bankruptcy Act 1967 - Sections 3(1)(i) and 3(2)(ii) - Interpretation Acts 1948 and 1967 - Creditor's Petition - Joint and several liability of defendants in judgment - Bankruptcy Notice challenged on grounds of non-compliance with the original judgment sum and interest calculation errors - Court held that judgment against multiple defendants does not permit shirking responsibility - No ambiguity in the judgment, liability remains for full amount. (Paras 20, 24 o., 37)
(B) Appeal - Dismissal of application to set aside Bankruptcy Notice upheld - Proper recourse for challenges against a judgment is in the original judgment court - Failure to comply with statutory notice requirements is fatal to the debtor's claims. (Paras 44, 48)
Facts of the case:
The Judgment Creditor obtained a judgment against multiple defendants, including the Judgment Debtor, for a specific monetary amount. The Bankruptcy Notice issued against the Judgment Debtor was contested on various grounds, including miscalculation of sums owed and joint liability misunderstandings among several defendants.
Findings of Court:
The Court found that the Judgment Debtor remained liable for the full judgment amount based on the interpretation of joint and several liabilities, despite arguments against the validity of the Bankruptcy Notice based on interest calculation errors and lack of knowledge of the underlying judgment. Furthermore, the notice for the petition itself was deemed valid.
Issues: The key issues addressed include the validity of the Bankruptcy Notice based on joint liability interpretation and whether the purported errors in the notice negate the underlying judgment.
Ratio Decidendi: The court reasoned that a judgment against multiple parties does not inherently limit liability to individual shares unless explicitly stated; thus, the Judgment Debtor must be held responsible for the total amount. Additionally, non-compliance with statutory requirements for disputing the notice invalidated claims against it.
Result: Appeal dismissed with costs.
| Table of Content |
|---|
| 1. bankruptcy action following a judgment. (Para 1 , 1 , 2 , 3) |
| 2. disputes over judgment amount and liability. (Para 4 , 5 , 8 , 12) |
| 3. claim of non-compliance with the judgment amount. (Para 7) |
| 4. clarifying liabilities under joint and several debts. (Para 9 , 10 , 18 , 19) |
| 5. clarification on joint and several liabilities. (Para 13) |
| 6. procedural integrity required in bankruptcy notices. (Para 20 , 21 , 22) |
[1] The Judgment Creditor (JC) had obtained judgment for a monetary sum against the Judgment Debtor (JD) pursuant to a summary judgment application heard before the Senior Assistant Registrar (SAR). The appeal to Judge in Chambers was dismissed. Thereafter the JC proceeded with a bankruptcy action.
Prayers
[2] The JD applied to have the Bankruptcy Notice (BN) set aside and for a stay of the High Court Judgment. The SAR dismissed the application and the JD has appealed against that decision vide encl 13 in this Notice of Appeal to Judge in Chambers.
Principles
[3] The various grounds for setting aside the BN shall now be considered.
1st Ground: The Sum Contained In The BN Is Not In Compliance With The Judgment
[4] Learned counsel for the JD submitted that the sum stated to be owing by the JD in the BN is not the sum at all adjudged against him in the Kuala Lumpur High Court Suit No D1-22-1522-2004 ("KLHC D1 Suit").
[5] The judgment as shown in encl 8, exh ABI4 annexed to the BN was a judgment entered against all the four defendants therein. The judgment reads:
"ADALAH PADA HARI INI DIHAKIMKAN bahawa defendan-defendan hendaklah membayar kepada plaintif
1) Jumlah sebanyak RM767,149.18 ..."
[6] As the solicitors Thanggaiya Zawawi & Co had entered appearance for all the four defendants including the JD here as the 4th defendant and as the summary judgment application was against all the defendants, there is no ambiguity arising out of the judgment taken.
[7] It was argued that it was not a joint and several judgment and the liability of the JD was only to the extent of one-fourth of that adjudged amount.
[8] Learned counsel for the JD referred to the recent judgment of his Lordhsip Varghese George JC (as he then was) In Re Dato' Dr Elamaran M Sabapathy; ex p RHB Bank Bhd [2011] 10 CLJ 262 where his Lordship held:
"7.2 I have perused the certified true copy of the said 'Penghakiman' made on 18 November 2008 and attached to the Bankruptcy Notice. There is nothing in the said judgment to show that the three defendants named there (one of whom was the JD) was adjudged to be jointly and severally liable to pay the judgment sum to the JC (the plaintiff there)".
In the absence of the judgment spelling out expressly that the defendants were jointly and severally liable to the plaintiff, the judgment there has, as in the ordinary course, to be a judgment imposing joint liability or obligation on the three defendants to meet the judgment sum together. In such event the JD's obligation is only one-third the amount of the judgment sum and not as set out in the Bankruptcy Notice, or for that matter in the Creditor's Petition.
A similar issue had arisen in the case of Yeo Ah Wang lwn. UMBC Bhd , [1995] 1 AMR 38 and Shaik Daud, J (as he then was) held there that "where the judgment had been obtained against all three defendants and they were jointly liable, the notice of bankruptcy could not be issued against one defendant only based on that whole of the judgment sum."[emphasis added]
[9] I had occasion to consider this same argument in Lim Koon Chow v. Ambank (M) Berhad where I said as follows:
"The JD's contention is that the JC is claiming the entire judgment sum plus interests thereon from the JD solely and exclusively, even though the Judgment is a judgment against the JD and two others. It is not a judgment against the JD alone ..."
Learned counsel for the JD argued that it follows therefore that the BN here is for an excessive sum vis-a-vis the JD. The entire bankruptcy proceeding is for a sum which was not due and recoverable from the JD
