On 30 March 1984, one Dr AS Iaduray entered into an equipment lease agreement, the period of lease being 36 months, with Metroplex Leasing & Credit Corp Sdn Bhd ('Metroplex') in respect of a set of X-ray equipment known as the Universal Mobile Master 30 High Quality X-Ray Catalogue No 3110.30 which set included certain accessories.

On 21 January 1985, with the consent of Metroplex, Dr Iaduray by a deed assigned all his interest in the said equipment lease agreement to Dr Mathew Sebastian.

On 8 October 1985, Metroplex purported to terminate the lease and on 20 November 1985 caused a writ to issue against Dr Mathew Sebastian for the sum of $56,737.53 together with interest thereon at 2% per month from 8 October 1985 until realization and costs. The computation used to arrive at the said $56,737.53 was set out in the particulars of the claim in the statement of claim as follows: Particulars Computation $836.70 x 36$ 30,121.20 Less: $836.70 x 4$ 3,346.80 $ 26,774.60 Add: Tax loss (80% on $36,000)$28,800 Add: Net RV (90:10% on predetermined value of $9,000)$ 900 Add: Late interest charges$ 263.53 $ 56,737.53

The defendant failed to enter an appearance and a draft judgment in default dated 6 March 1986 was presented by the solicitors for the plaintiff to the senior assistant registrar seeking judgment for '$56,737.53 together with interest thereon at the rate of 2% per month from 8 October 1985 to the date of realization and costs $237'. The senior assistant registrar appeared to have approved the draft after amending the rate of interest and the data from which it should be computed to '8% pa from 20 November 1985'. However the judgment that was eventually entered was for $56,737.53 together with interest thereon at 2% per month from 20 November 1985 until realization and costs of $237.

Having obtained the judgment the plaintiff sought on 30 July 1986 to execute it by attaching the chattels of the defendant at his premises pursuant to a writ of seizure and sale. Apparently what the bailiff in fact did was to seal off the premises of the defendant in which the chattels were kept!

In November 1986, the defendant applied to have the default judgment set aside on the grounds that he had a good defence to the plaintiff's claim. The defences relied on were:

(1) that there had been an understanding between the parties that the plaintiff was to obtain a licence for the defendant to operate the X-ray machine, it being understood by the parties that the machine being an irradiating apparatus a licence to use it was necessary pursuant to the terms of the Atomic Energy Licensing Act of 1984 and that since such licence had not been obtained the defendant was not liable to the plaintiff;

(2) that the Ministry of Health had issued a circular on 18 October 1985 prohibiting the use of the apparatus and that accordingly the defendant was not liable to pay any moneys to the plaintiff.

This application was dismissed with costs on 16 January 1987. On 20 August 1987, the plaintiff issued a bankruptcy notice founded on the said default judgment amount and followed that by a bankruptcy petition, the act of bankruptcy relied on being the non-compliance of the demand contained in the bankruptcy notice.

On 7 December 1988, receiving and adjudicating orders were made. On 26 January 1989, the defendant filed an application for leave to appeal out of time the refusal to set aside the default judgment. This was eventually dismissed with costs.

The bankrupt now applies to the bankruptcy court invoking ss 92(1), 105(1) and 105(5) of the Bankruptcy Act 1967 as well as the inherent jurisdiction of the court (to make relevant orders where a miscarriage of justice had occurred). The subsections of those sections are as follows:

92(1) The court may review, rescind or vary any order made by it under its bankruptcy jurisdiction.

105(1) Where in the opinion of the court a debtor ought not to have been adjudged bankrupt, or where it is proved to the satisfact