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2025 MarsdenLR 1627
HIGH COURT (KUALA LUMPUR)
AZLAN SULAIMAN, J
Re Lim Sue Beng; – Plaintiff
Versus
Ambank (M) Bhd & Ors – Defendant
BANKRUPTCY NO WA-29NCC-40-01 OF 2021
Lua Ai Sew (Aili Alef Hamimi Aznan with her) (Soo Thien Ming & Nashrah) for the judgment creditors.
Jasneeta Bhullar (Azmi Fadzly Maha & Sim) for the judgment debtor.
The court affirmed that a Bankruptcy Notice cannot be set aside without evidence substantiating claims of excessive amounts and that only grounds stated in the initial applications are valid.
Headnote:(A) Insolvency Act, 1967 - Section 97 - Bankruptcy Notice - Appeals by Judgment Debtor against decisions of Senior Assistant Registrar dismissing applications to set aside Bankruptcy Notice - No evidence presented by Judgment Debtor to support claims of excessive amount due under Bankruptcy Notice - Appeals dismissed with costs. (Paras 11, 20, 33)
(B) Appeal Procedure - An appeal from the Registrar to the Judge involves a re-hearing of the initial application. (Paras 11)
(C) Grounds for Setting Aside - Grounds for an appeal must be stated in the initial application; claims raised after must not be considered. (Paras 14, 16)
Facts of the case:
Judgment Creditors obtained a judgment against Judgment Debtor in a High Court suit, leading to a Bankruptcy Notice due to alleged unpaid amounts. Judgment Debtor's subsequent applications to set aside the Bankruptcy Notice were dismissed.
Findings of Court:
The court found that the Judgment Debtor failed to present any valid evidence justifying the setting aside of the Bankruptcy Notice.
Issues: The core issues included whether the amount claimed in the Bankruptcy Notice was excessive and if there were sufficient grounds to stay bankruptcy proceedings due to pending appeals.
Ratio Decidendi: The court emphasized the lack of evidence provided to support the claim that the Bankruptcy Notice amount was excessive and reaffirmed that claims not included in the original application could not be considered.
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. overview of appeals and applications (Para 1 , 2 , 3 , 4 , 5) |
| 2. key facts of judgment and bankruptcy notice (Para 6 , 7 , 8 , 9 , 10) |
| 3. analysis of jd's grounds for appeal (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 4. criteria for granting a stay under section 97 (Para 24 , 25 , 26) |
| 5. sufficient reasons for stay of bankruptcy proceedings (Para 27 , 28 , 29 , 30 , 31) |
| 6. decision and concluding orders (Para 32 , 33) |
[1]This Grounds of Judgment is on two appeals and one application by the Judgment Debtor (“JD”).
[2]The first appeal is in Enclosure 44 (“Enclosure 44 Appeal”), and is the JD’s appeal against the decision of the Senior Assistant Registrar (“SAR”) given on 24.3.2022 dismissing the JD’s application by affidavit in Enclosure 4 under rule 93 of the Insolvency Rules, 2017 (“Enclosure 4 Application”) to set aside the Bankruptcy Notice dated 15.1.2021 that was issued against him (“BN”).
[3]The second appeal is in Enclosure 45 (“Enclosure 45 Appeal”), and is the JD’s appeal against the decision of the SAR also given on 24.3.2022 dismissing the JD’s application in Enclosure 10 (“Enclosure 10 Application”) to set aside the BN.
[4]The application is in Enclosure 149 (“Enclosure 149 Stay Application”), and is the application by the JD to stay these bankruptcy proceedings pending his appeal to the Court of Appeal in Civil Appeal No. W-03(IM)(NCC)-59-10/2024 (“CA Appeal”). The CA Appeal is against the decision of the High Court Judge given on 26.9.2024 dismissing the JD’s application in Enclosure 124 (“Enclosure 124 Application”) to adduce seven pieces of new evidence (collectively, “New Evidence”) in support of his Enclosure 4 Application and his Enclosure 10 Application, and accordingly, the Enclosure 44 Appeal and the Enclosure 45 Appeal.
[5]I will first deal with the Enclosure 44 Appeal and the Enclosure 45 Appeal together, as they both involve the JD’s applications to set the BN aside. Only if I dismiss the Enclosure 44 Appeal and the Enclosure 45 Appeal will there be any need to decide the Enclosure 149 Stay Application.
Enclosure 44 Appeal and Enclosure 45 AppealSalient facts
[6]On 29.10.2010, the five Judgment Creditors (collectively, “JC”), who were respectively the 3rd, 5th, 6th, 7th and 8th Plaintiffs in Kuala Lumpur High Court Civil Suit No: D5-22-1648-2006 (“High Court Suit”), obtained a Judgment in the High Court Suit against Gula Perak Berhad (“Gula Perak”) and the JD (“Judgment”).
[7]On 8.12.2020, the JC obtained an Order in the High Court Suit for leave to execute the Judgment against the JD.
[8]On 15.1.2021, on the JC’s application, the BN was issued against the JD for the sum of RM12,794,043.52 alleged to be outstanding under the Judgment as at the date of the BN (“BN Amount”).
[9]On 11.3.2021, the JD filed the Enclosure 4 Application, and on 15.7.2021, the JD filed the Enclosure 10 Application, and the SAR dismissed both on 24.3.2022.
[10]On 7.4.2022, the JD filed the Enclosure 44 Appeal and the Enclosure 45 Appeal.
Analysis and decision
[11]It is trite law that an appeal from the Registrar to the Judge involves a re-hearing of the application that resulted in the appeal (see Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Berhad [1996] 1 CLJ 241). Hence, the Enclosure 44 Appeal and the Enclosure 44 Appeal will involve a re-hearing of the Enclosure 4 Application and the Enclosure 10 Application, i.e. the JD’s applications to set the BN aside.
[12]The JD’s sole ground in the Enclosure 4 Application and the Enclosure 10 Application for setting the BN aside is that the BN Amount is excessive due to the following:
(i)By a Settlement Agreement dated 25.6.2002 and a Supplemental Agreement dated 19.12.2003 (collectively, “Settlement Agreements”), the proceeds from the disposal and/or sale of certain properties would be paid to Universal Trustee (Malaysia) Berhad (“UTMB”) as stakeholder to administer certain sums for the benefit of the JC;
(ii)UTMB would administer those proceeds as follows:
(a)70% of
