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2025 MarsdenLR 4095
HIGH COURT (KUALA LUMPUR)
AZLAN SULAIMAN, J
Re Lim Sue Beng – Plaintiff
Versus
Ambank (M) Bhd (Formerly known as Amfinance Bhd which had received all the assets rights and liabilities and business of Ambank Bhd pursuant to the court order dated 18 May 2005) & 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.
A Judgment Debtor must present valid evidence to substantiate claims regarding excessive bankruptcy amounts and may not introduce post-filing agreements as grounds for appeal.
Headnote:(A) Insolvency Rules, 2017 - Rule 93 - Bankruptcy Notice - Appeals against dismissal of applications to set aside Bankruptcy Notice and stay bankruptcy proceedings - Burden on judgment debtor to prove excessive claim and valid grounds for setting aside notice - Evidence of settlement and new documents not material for deciding the appeals. (Paras [1]-[10], [12]-[20])
(B) Principles governing stay of bankruptcy proceedings - Sufficient reason test applied, as opposed to special circumstances, recognized by courts to ensure protection for debtors - Necessity for concrete factors justifying a stay outlined. (Paras [23]-[30])
Facts of the case:
Judgment Debtor appealed against decisions dismissing his applications to set aside a Bankruptcy Notice and to stay proceedings, alleging the amounts due were excessive due to prior agreements and settlements. Dismissed for lack of evidence.
Findings of Court:
Decisions of the Senior Assistant Registrar affirmed, costs awarded.
Issues: Whether the Bankruptcy Notice was excessive, and if the JD had valid grounds to set it aside or stay proceedings.
Ratio Decidendi: The JD failed to provide evidence for excessive amounts and could not base appeals on subsequent claims or settlements not included in original applications.
Result: Appeals and applications dismissed.
| Table of Content |
|---|
| 1. introduction of appeals and procedures. (Para 1 , 2 , 3 , 4 , 5) |
| 2. background and issuance of bankruptcy notice. (Para 6 , 7 , 8 , 9 , 10) |
| 3. appeal involves re-hearing applications. (Para 11) |
| 4. claims of excessive bankruptcy notice amount. (Para 12) |
| 5. rejection of jd's grounds for setting aside. (Para 13 , 15 , 18 , 19) |
| 6. additional grounds for setting aside bn. (Para 14 , 16 , 17) |
| 7. filing for supplementary affidavit. (Para 21 , 22) |
| 8. legal standards for staying bankruptcy proceedings. (Para 23 , 24 , 26 , 29) |
| 9. substantive reasons for a stay. (Para 25 , 28 , 30 , 31) |
| 10. orders on appeals and application. (Para 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 pr
