A bankruptcy notice cannot be contested on grounds of form unless evidence of fraud or miscarriage of justice is presented, reaffirming the validity of prior judgments.

GROUNDS OF JUDGMENT

This is an appeal against the decision of the Senior Assistant Registrar, who had rejected the prayers of Enclosure 8, submitted by the debtor appellant to have the bankruptcy notice against him be set aside. The foundation of the bankruptcy notice is a default judgment obtained on 5 April 1990, pursuant to Sessions Court summons No. 52-223-89, filed by the respondent against the seven defendants, inclusive of the debtor appellant who was the 5th defendant (hereinafter for brevity merely referred to as the appellant). That default judgment had adjudged that "in default the 2nd, 3rd and 5th defendants do pay the plaintiff RM 87,398.63 and RM 1,421 costs, together with interest....". After topping up the interest, the sum demanded of the appellant was RM 111,578.41. The appellant's main objection to this bankruptcy notice was that his share of the debt should only be limited to one-seventh of the adjudged sum, and not be lumbered with the share of the other defendants. In an oblique way the appellant also wanted the court to go behind the judgment and to inquire into its validity.

Bearing in mind the nature and effect of a bankruptcy order, let alone it being a creature of statute, there is thus a necessity for me to apply the strict construction approach ( Low Mun v Chung Khiaw Bank Lt. (1988) 1 MLJ 263 ). As regards the desire to have the court go behind the judgment, a necessity also arose for me to briefly discuss a few cases before arriving at any decisive conclusion. I begin with the case of Muir v Jenks (1912) 2 K.B 412, which was heavily relied upon [2] by the appellant. Needless to say the outcome of the case sided the latter as the Court of Appeal there allowed the appeal and accordingly set aside the judgment. Having perused the case, a difference could be detected, in that in the above case the creditor knew of the judgment being flawed at the very outset, but had deliberately done nothing to rectify it. Due to the rather peculiar set of facts Kennedy L.J opined "although the matter is a technical one it is important, having regard to the consequences which follow from such a judgment that the question should not be treated as merely a matter of form" (emphasis mine). Vaughan Williams L.J in Re Beauchamp Ex parte Beauchamp (1904) 1 K.B 572 had occasion to say:

"But in the present case no such question arises. It is plain that the objection to the judgment, if any, is one of form only, and the power of the Court of Bankruptcy to go behind a judgment is a power to inquire into the consideration for and not into the form of the judgment. The judgment, in our opinion, is conclusive, unless the consideration can be questioned. The first objection, therefore, fails" (emphasis mine).

Lee Hun Hoe C.J in Sovereign General Insurance Sdn. Bhd v Koh Tian Bee in no uncertain terms commented at page 305:

"In the exercise of his jurisdiction in bankruptcy proceedings, the learned judge cannot go behind the judgment. Thus on an application to set aside a bankruptcy notice, it was laid down as early as 1893 that the court could not go behind the judgment".

In Re Khoo Chee Tong ex p Unik (M) Sdn Bhd (1996) 5 MLJ 39 Haidar J (as His Lordship then was) when endorsing the above cases, again reiterated and confirmed the above view. The court went one step further and established that the validity of the judgment debt would only be inquired into when there was evidence of fraud, collusion or miscarriage of justice. This brave step forward was a far cry from the restrictive interpretation of previous English courts that had consciously [3] shackled their own jurisdiction to set aside bankruptcy notices. They were unwilling to go outside the confines of the Bankruptcy Act and Rules (In Re Cole ex parte Attenborough (1898) 1 Q.B 290;In Re A Debtor (1957) 2 WLR 865). It must be emphasised that this reappraisal of the judgment is an exceptional jurisdiction that is exercisable only in certain circumstances (Re Sebastian, ex

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