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2025 MarsdenLR 559
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.
The Judgment Debtor must produce sufficient evidence to substantiate claims against a Bankruptcy Notice; mere assertions of excessive amounts are insufficient for setting aside such notices.
Headnote:(A) Insolvency Act, 1967 - Section 97 - Appeals against Bankruptcy Notice - Judgment Debtor's appeals dismissed due to failure to establish excessive amount owed and inadequate grounds for setting aside the Bankruptcy Notice - Court emphasized the importance of presenting sufficient evidence to substantiate claims against Bankruptcy Notice. (Paras 11, 10, 13 to 19, 30, 32)
(B) Re-hearing of application - An appeal from the Registrar involves a re-hearing of the application, and the onus is on the Judgment Debtor to provide substantive evidence for the appeal. (Paras 11, 10)
Facts of the case:
Judgment Debtor faced a Bankruptcy Notice for RM12,794,043.52 and filed two applications to contest its validity based on allegations of excessive amount due and settlements not considered. Both applications were dismissed by the Senior Assistant Registrar, prompting appeals.
Findings of Court:
Judgment Debtor failed to provide any valid evidence of being owed a lesser amount; thus, the Bankruptcy Notice was affirmed as valid and due.
Issues: Whether the amount stated in the Bankruptcy Notice was excessive and whether the additional grounds presented were valid for setting the Notice aside.
Ratio Decidendi: The court ruled it was the responsibility of the Judgment Debtor to substantiate claims with adequate evidence to set aside the Bankruptcy Notice, emphasizing that appeals must not be purely speculative.
Result: Appeals dismissed with costs.
| Table of Content |
|---|
| 1. overview of jd's appeals and application (Para 1 , 2 , 3 , 4 , 5) |
| 2. facts related to the bankruptcy notice issuance (Para 6 , 7 , 8 , 9 , 10) |
| 3. judicial process for appeals involving a re-hearing (Para 11 , 12 , 13) |
| 4. analysis of jd's grounds for setting bn aside (Para 14 , 15 , 16 , 17 , 18 , 19) |
| 5. legal tests for a stay of bankruptcy proceedings (Para 21 , 22 , 23 , 24 , 25 , 26) |
| 6. requirements for sufficient reasons for a stay (Para 27 , 28 , 29 , 30 , 31) |
| 7. final orders on appeals and applications (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 properties would be paid to Universal Trustee (Malaysia) Berhad (“UTMB”) as stakeholder to administer certain
