A bankruptcy order cannot be annulled unless all debts are fully settled, and failure to comply with statutory filing requirements undermines annulment applications.

Azman Abdullah JCA:

Introduction

[1] These are two appeals by the Lembaga Kumpulan Wang Simpanan Pekerja (hereinafter referred to as "EPF") against the orders of the High Court granted on 12 July 2023 allowing the applications by the Judgment Debtors, i.e,, the Respondents in both appeals, for the annulment of the Bankruptcy Orders dated 11 May 2021 under s 105 of the Insolvency Act 1967 .

[2] Both appeals were first heard on 23 January 2025 and adjourned for continued hearing on 11 April 2025. These appeals are now fixed for decision on 11 July 2025.

Background Facts

[3] Briefly, the EPF is the Judgment Creditor who initiated bankruptcy proceedings against the Respondents, who are the directors of Hawaii Bakery & Food Industries (M) Sdn Bhd., through bankruptcy actions JA-29NCC-827-08/2020 and JA-29NCC-833-08/2020. Following the service of cause papers which was made personally on the Respondents, Bankruptcy Orders were recorded against the Respondents on 11 May 2021, in their absence. The Respondents took no steps to challenge this decision, and no appeal was filed to set aside the said judgments.

[4] Following the Bankruptcy Orders dated 11 May 2021, the Director General of Insolvency (hereinafter referred to as "DGI") issued letters dated 26 October 2021 requesting the Respondents to contact the relevant officer and fix appointments for interviews and preliminary procedures. However, both Respondents failed to do so. Subsequently, the DGI issued a final reminder letter dated 8 November 2021 to Respondents. Unfortunately, the DGI received no response from the Respondents.

[5] Instead of responding to the DGI, in 2022, the Respondents filed applications on 13 July 2022 for an annulment of the Bankruptcy Orders dated 11 May 2021 pursuant to s 105 of the Insolvency Act 1967 via bankruptcy proceedings JA-29PB-409-07/2022 and JA-29PB-410-07/2022.

[6] The Respondents' applications were opposed by the EPF and the DGI. The EPF's objection was based on the fact that there were three (3) other Proofs of Debt ("POD") dated 27 July 2022 (two sets) and 22 August 2022 (one set) wherein the debts remained outstanding. Meanwhile, the DGI objected to the application on the ground that the Respondents had yet to comply with initial procedures and had failed to file their Statement of Affairs.

[7] The Respondents' applications were initially heard before the learned Deputy Registrar, Mr Arun a/I Noval Dass, who dismissed the applications with liberty to file afresh after the Respondents remedied the breaches constituting contempt of Court, ie, by filing their Statement of Affairs pursuant to s 16 of the insolvency Act 1967. No order as to costs was made.

[8] Dissatisfied with the learned Deputy Registrar's decision, the Respondents filed Notices of Appeal to the Judge in Chambers pursuant to O 56 r 1 of the Rules of Court 2012. The appeal was heard by the Judicial Commissioner ("the JC"), who allowed the Respondents' applications to annul the Bankruptcy Orders dated 11 May 2021. The order of JC was made on 12 July 2023.

[9] The EPF, aggrieved by that decision, has now appealed. Based on its Memorandum of Appeal, the EPF raised six (6) grounds of appeal, as follows:

"1. The learned Judicial Commissioner erred in law and fact in allowing the Respondents' appeal via the Notice of Appeal dated 30 December 2022.

2. The learned Judicial Commissioner erred in law and fact in allowing the annulment of the Bankruptcy Order dated 11 May 2021 under s 105 of the Insolvency Act 1967 based solely on payments ma