Vincent Ng J:

Background Facts

[1] The judgment creditor (JC) applied and on 1 June 1995 obtained summary judgment against the judgment debtor (JD) in the High Court at Kuala Lumpur vide Suit No: D1-22-325-1989 before the senior assistant registrar (SAR). The JD then filed an appeal against the SAR's decision to the judge in chambers, which was dismissed with costs. The learned judge's grounds of judgment dated 16 February 2000 has since been reported in the law journal (see Arab Malaysian Finance Bhd lwn. Tunku Maryam Tunku Zainal Abidin, [2000] 3 CLJ 264 ). Dissatisfied with the learned judge's decision, the JD further appealed to the Court of Appeal. Meanwhile, on 24 April 2001 the JC issued a bankruptcy notice (BN) which was served on the JD on 16 July 2001, requiring her to pay the sum of RM248,632.21 owing as at 24 April 2001, being the amount due under the said judgment. On 12 November 2001, the JC filed a creditor's petition (CP) against the JD, which was served on her on 21 March 2002. Over three and a half months thereafter, on 11 July 2002, the JD filed a notice of intention to oppose petition (encl. 12) in Form 16, under r 117 of the Bankruptcy Rules 1969 (the Rules), based on the following grounds:

(i) the outstanding amounts in her account was to be paid, settled and cleared by a third party by virtue of a Sale of Share Agreement (the Settlement Agreement);

(ii) the JC assented to and therefore had full knowledge of the Settlement Agreement, and hence is estopped from making any claims against her let alone to enter any judgment against her;

(iii) the issue relating to the Settlement Agreement could only be disposed of through vide viva voceevidence and she had secured leave to appeal to the Court of Appeal against the judgment upon which the present bankruptcy petition was founded (see para 21 of JD's affidavit affirmed on 22 Jan 2003 (encl 17)) - leave was required because the judgment sum was below the statutory limit for appeal;

(iv) the purported debt had been compromised by virtue of the Settlement Agreement and the JC who is privy to the agreement now seeks to use the bankruptcy proceedings for collateral purpose to deprive her from having the issues ventilated before the Court of Appeal; and

(v) it is a clear miscarriage of justice, if the JC is allowed to pursue the present petition for the debt is unenforceable in law.

[2] Notably, prior to the filing of encl. 12, the JD had also tried to set aside the BN by filing a summons in chambers (encl. 6), which was dismissed by the SAR on 18 December 2002. An appeal to the judge in chambers against the dismissal of encl. 6 was also dismissed by me on 8 May 2003. In another attempt to avoid being made a bankrupt, the JD filed a summons in chambers (encl. 18) to strike out the CP and alternatively, for a stay of the bankruptcy proceedings pending disposal of her appeal to the Court of Appeal. After hearing arguments on encl. 18 the learned SAR refused to strike out the CP but allowed a stay of the bankruptcy proceedings pending the disposal of the appeal to the Court of Appeal. On 14 January 2004, the Court of Appeal dismissed the JD's appeal. There was no further appeal by the JD to the Federal Court. Thereafter, on 22 February 2005, the SAR proceeded to hear encl. 12 and the CP, dismissed encl. 12 and accordingly made the adjudicating order and receiving order (AORO). Hence, this appeal before me.

Show Cause Procedure Against A Creditor's Petition (CP)

[3] The counsel for the JC submitted that the procedure adopted by the JD to show cause against the CP was improper as no summons in chambers was filed. The JC grounded its objection upon the ratio of the then Supreme Court in Datuk Lim Kheng Kim v. Malayan Banking Bhd (Datuk Lim Kheng Kim), [1993] 2 MLJ 298 which was followed and affirmed by the Federal Court in Development & Commercial Bank v. Datuk Ong Kian Seng (D & C Bank); [1995] 2 MLJ 724; [1995] 3 CLJ 307; [1995] 1 AMR 178 (Ong Kian Seng). The pertinent d