A bankruptcy notice issued more than six years after judgment without prior leave is invalid under the Bankruptcy Act 1967.

[1] This judgment is prepared pursuant to s 78(1) of the Courts of Judicature Act 1964 , as our learned brother, Justice Apandi Ali FCJ has since resigned, upon his appointment as the Attorney General of Malaysia.

[2] In this appeal, the appellant is the judgment creditor and the respondent is the judgment debtor. This judgment concerns the appeal by the appellant against the decision of the Court of Appeal which overturned the decision of the High Court made on 15 June 2011. In its decision, the High Court reversed the decision of the Senior Assistant Registrar who had set aside the bankruptcy notice upon the application made by the respondent.

[3] The background facts leading to the present appeal are these. On 10 July 1998, the appellant obtained a summary judgment against the respondent in the sum of RM11,482,024.19 with interest at 13% from 17 December 1997 until the date of settlement. Based on that judgment, on 18 December 2008 (ten years and five months after the judgment was obtained), the appellant issued a bankruptcy notice. The particulars of the sum claimed in the bankruptcy notice are as follows:

[4] On 21 April 2009, pursuant to its ex parte application, the appellant obtained an order to extend the validity of the bankruptcy notice (from 18 March 2009 until 17 March 2010) ("extension order"). In the extension order, an order of substituted service of the bankruptcy notice was also granted.

[5] On 16 December 2009, the respondent filed an application in the High Court for the following orders:

"(i) that the bankruptcy notice dated 18 December 2008 filed by the judgment creditor (bankruptcy arising from an order dated 10 July 1998 obtained by the judgment creditor vide Shah Alam High Court Civil Suit No: MT1-22-673-1997 ("1998 Order") be set aside;

(ii) that the order dated 21 April 2009 allowing extension of the bankruptcy notice for a period of 12 months from 18 March 2009 until 17 March 2010 and the substituted service of the said bankruptcy notice on the judgment debtor ("order for extension and SS") be set aside;

(iii) that this proceeding be stayed pending the hearing of this application."

[6] In the application, one of the grounds given by the respondent for setting aside the bankruptcy notice was that leave for issuance of the bankruptcy notice had not been obtained by the appellant.

[7] The respondent's application to set aside the bankruptcy notice was allowed by the Senior Assistant Registrar. On 25 July 2012, the learned judge of the High Court allowed the appellant's appeal. The bankruptcy notice was thus reinstated.

[8] On 30 January 2013, the Court of Appeal allowed the respondent's appeal, set aside the decision of the learned judge of the High Court and reinstated the decision of the Senior Assistant Registrar. In other words, the bankruptcy notice was set aside.

[9] The appellant's application to appeal to this Court was allowed on the following questions of law:

(a) Whether the bankruptcy notice stands valid under the provisions of s 3(2)(ii) of the Bankruptcy Act 1967 when the judgment debtor fails to dispute the claim stated in the bankruptcy notice as being excessive within seven days from the date of service of the bankruptcy notice.

(b) Whether the decision of the Federal Court in United Malayan Banking Corporation Bhd v. Ernest Cheong Yong Yin , , which renders a bankruptcy notice which has been filed after six years from the date of the judgment invalid for claiming arrears in interest, continues to be good law in light of the Federal Court decision in Perwira Affin Bank Bhd v. Lim Ah Hee , [2009] 3 MLJ 253 .

(c) Whether a judgment creditor is entitled to cl