(Oral Judgment delivered immediately after submission.)

This is my oral judgment: (ex-tempore)

This is an appeal by:-

(i) the judgment debtor against the dismissal of the judgment debtor's application to set aside the bankruptcy notice (Enclosure 16).

(ii) the judgment creditor against the decision of the Senior Assistant Registrar in allowing the judgment debtor's application for a stay of the bankruptcy proceeding pending an appeal to the judge in chambers (Enclosure 26);

The grounds as submitted by counsel for the judgment debtor are as follows:

1. The Senior Assistant Registrar had allowed the application for the stay on the basis that there would be no prejudice to the judgment creditor. This was said orally when the decision was made. The grounds given by the judgment debtor in making the application for a stay are that the Senior Assistant Registrar had erred in her decision in refusing to set aside the bankruptcy notice and that because of his status as a member of various government committees ie as adviser to the National Implementation Task Force, a bankruptcy order against him would cause irreparable and or irreversible damage to his reputation. We submit that the 1st ground advanced by the judgment debtor goes to the issues relating to the merits of the appeal that is pending before the judge in chambers which is not a relevant factor for the purposes of deciding whether this is a special circumstance.

2. We submit that insofar as the reputation of the judgment debtor is concerned, this is not a special circumstance but rather this is an ordinary and natural circumstance following from any bankruptcy proceedings against a debtor who has failed to pay the judgment debt which in this case amounts to RM12,444,316.66.

3. The judgment debtor had applied to set aside the bankruptcy notice and failed. In the meantime the petitioner proceeded to file the creditor's petition. The Senior Assistant Registrar then postponed the creditor's petition pending the hearing of the judgment debtor's application to set aside the issuance of the creditor's petition. The Senior Assistant Registrar dismissed the judgment debtor's application but allowed a stay of further proceedings pending the judgment debtor's appeal to set aside the bankruptcy notice (Enclosure 16).

Court: The disputes on both Enclosure 16 and Enclosure 26 can be effectively disposed of by the appeal by the judgment debtor on the Senior Assistant Registrar's decision dated 23.8.2006 dismissing the judgment debtor's application to set aside the bankruptcy notice (Enclosure 16).

Enclosure 16

Submission by counsel for the judgment debtor/appellant: (verbatim)

1. The judgment creditor is estopped from issuing the bankruptcy notice. After the judgment in default of appearance was obtained against the judgment debtor the parties had entered into negotiations and the parties are agreed that the judgment debtor would pledge additional shares to cover the judgment sum owed as collateral. The judgment creditor accepted these shares without reserving their rights to enforce the judgment in default. See i) Exhibit "K-2" - letter from the judgment debtor to the judgment creditor forwarding the shares as collateral; and ii) Exhibit "K-3" - letter from the judgment creditor to the judgment debtor accepting the shares but asking the judgment debtor to sign a memorandum of deposit of shares. With the deposit of shares the judgment creditor's recourse can no longer be based on the judgment obtained for a sum of RM42 million (judgment notice was for the sum of RM12,444,316.66 after taking into account proceeds from the sale of pledged shares). See Datuk Mohd Sari bin Datuk Haji Nuar v. Norwich Winterthur Insurance (M) Sdn Bhd [1992] 1 CLJ 68 (Rep); [1992] 4 CLJ 1798; [1992] 1 AMR 4012 per Gunn Chit Tuan SCJ at Held:

"Section 3(2)(ii) of the Bankruptcy Act 1967 (the 1967 Act) did not apply in this case as the demand for payment in the bankruptcy notice was not in accordance with the term

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