This is an appeal by the third defendant against the decision of the senior assistant registrar given on 28 February 1992 ordering that the third defendant who is an undischarged bankrupt must first obtain the sanction of the official assignee Malaysia under 9 38(1) of the Bankruptcy Act 1967 ('the Act') for the purpose of making an application to set aside the judgment in defaut of appearance.

At the hearing of the appeal, the only issue for the court to decide was whether the bankrupt required the sanction of the official assignee under s 38(1) of the Act in order to proceed with the application to set aside the judgment in default of appearance.

Encik Shaharuddin, counsel for the third defendant submitted that no such sanction was required for the purpose of an application to set aside a default judgment.

In order to determine this issue it is necessary to examine s 38(1)(a) of the Act which states as follows:

(l) Where a bankrupt has not obtained a discharge:

(a) the bankrupt shall be incompetent to maintain any action (other than an action for damages in respect of an injury to his person) without the previous sanaion of the Official Assignee.

The crucial words in the section quoted above are 'the bankrupt shall be incompetent to maintain any action'.

The Act does not define the word 'action'. Under the Courts of Judicature Act 1964 the word 'action' is defined as a civil proceeding commenced by writ or in such other manner as is prescribed by rules of the court. Order 5 r 1 of the Rules of the High Court 1980 provides that civil proceedings in the High Court may be begun by writ, originating summons, originating motion or petition.

It is quite clear that a bankrupt is incompetent to commence an action by writ or by any of the modes provided in O 5 r 1.

The question to be considered here is whether an undischarged bankrupt is competent to make an application by summons-in-chambers to set aside judgment in default of appearance without the prior sanction of the official assignee. The case of Re Khoo Kim Hock was cited by Encik Shaharuddin. In that case, the question before the court was whether a bankrupt could make an application under ss 92(1) and 105(1) of the Act without the previous sanction of the official assignee. Mohd Azmi J (as he then was), ruled that no previous sanction was required for such an application. In his judgment at pp 30 and 31, the learned judge said:

Accordingly, just as right of action in respect of personal damage and injury (which is excluded under s 38(1)(a) from prior sanction) is a cause of action to the benefit of which the estate is not entitled, the application in the present case is one which from its nature does not vest in the official assignee. Under the circumstances, I hold that s 38(1)(a) does not apply to an application under ss 92(1) and 105(1) of the Bankruptcy Act, where a bankrupt is seeking the court's discretion to review, rescind or vary any order made by it, and as such no previous sanction of the official assignee is necessary in the present case.

Encik Shaharuddin next referred to the case of Re Sebastian, ex p Metroplex Leasing & Credit Corp Sdn Bhd in particular to a passage in the judgment of VC George J at p 250. The passage reads:

Now while a bankrupt cannot bring an action to set aside a judgment even if it was obtained fraudulently because the cause of action is vested in his trustee, the bankruptcy court is entitled to enquire into the validity of a judgment on which the bankruptcy proceedings was founded even though it has not been set aside — see Wilkinson & Mair Hunter on The Law and Practice of Bankruptcy (19th Ed) at p 147.

Encik Shaharuddin next referred to the relevant passage in Wilkinson & Mair. Hunter on the Law and Practice of Bankruptcy (19th Ed) at p 147, which was relied upon by VC George J in Re Sebastian. The relevant passage reads as follows:

Where the proceedings are founded on a judgment, the court may inquire into the validity