Azizan Md Arshad JC:

GROUNDS OF JUDGMENT

Introduction

[1]This Court has dismissed the Defendant’s application (Enclosure 73) to set aside the Default Judgment (“JID”) and also the assessment of damages obtained by the Plaintiff.

[2]This appeal was filed by the Defendant (Appellant). In this Judgment, the parties are referred to as they were in the High Court.

Issues

[3]Three (3) issues raised for the Court’s consideration, namely:

(i)whether the sanction under section 38Insolvency Act 1967locus standi to file Enclosure 73;

(ii)whether the JID has been regularly obtained by Plaintiff; and

(iii)whether the Defendant has merits in the application to set aside the JID that has been obtained?

Background facts

[4]In this case, the Plaintiff filed this action against the Defendant claiming for the purported losses and damages suffered by the Plaintiff as a result of the Winding-Up Petition. The cause papers were served by way of substituted service. Consequentially, the Plaintiff obtained a Judgment-ln-Default against the Defendant on 16-06-2020 and proceeded with assessment of damages in absence of the Defendant on 18-09-2020 and obtained judgment as follows:

(a)Wang sejumlah RM4,639,946.00 sebagai gantirugi khas;

(b)Wang sejumlah RM 1,750,000.00 sebagai gantirugi am;

(c)Wang sejumlah RM 100,000.00 sebagai gantirugi nominal;

(d)Faedah pada kadar 5% setahun atas jumlah RM4,639,946.00 dan RM1,750,000.00 dari tarikh perintah ini sehingga pembayaran penuh; dan

(e)kos sejumlah RM5,000.00.

[5]Through the application in Enclosure 73, the Defendant wants to set aside the JID that has been obtained on the grounds that it is irregular and defective. The Defendant also argued that he has merit in defending this case.

[6]It is undeniable that Defendant is a bankrupt when this case was filed in Court. The Defendant has also obtained a sanction from the Director General of Insolvency (DIG) under Section 38Insolvency Act 1967

Analysis and findings of the Court(i) Sanction (locus standi)

[7]During the application of Enclosure 73, the Plaintiff raised the issue that the Defendant did not have locus standi to make this application because the sanction obtained was only for setting aside the assessment judgment dated 18.09.2020 and not the JID dated 16.06.2020. The Defendant, in his counter-argument, said that DGI has given sanction for the proceeding as a whole.

[8]The Learned Defendant’s Counsel submitted that in the present case the Letter of Sanction from the DGI has expressly and specifically stated that the sanction shall have retrospective effect from the date the Defendant filed the application and that the Court can approve the retrospective sanction under its discretionary and inherent powers based on the doctrine of ratification. The issue raised in relation to DGI’s authority to grant retrospective sanctions has already been dismissed by the Court before, (refer to Golden Castle City Sdn Bhd v Teoh Soo Beng )

[9]However, this time the issue related to sanctions raised by the Plaintiff is different where the objection is that the sanction letter was only granted for setting aside the JID dated 18.09.2020 and not the JID dated 16.06.2020. The sanction letter reads as follows:

“......................

DALAM MAHKAMAH TINGGI MALAYA Dl PULAU PINANG

Dalam kebankrap No. PA-22NCC-401-04/2019

Berkenaan TEOH SOO PENG

No. Kad pengenalan 661115-07-5319/A05062736

DALAM MAHKAMAH TINGGI MALAYA Dl PULAU PINANG

GUAMAN SIVIL NO PA-22NCvC -255-12/2019

TARIKH PENGURUSAN KES BELUM DITETAPKAN

......................

“1....................

2. Adalah dimaklumkan bahawa Ketua Pengarah Insolvensi telah meluluskan sanksi untuk tuan memulakan dan meneruskan tindakan sivil di Mahkamah tinggi Pulau Pinang bagi Guaman Sivil No. PA-22NCvC-255- 12/2019 ...........

3. Sila ambil maklum perkara-perkara yang berikut

(a) Permohonan dan kelulusan sanksi ini hanya perlu dikeluarkan sekali sahaja sepanjang kes berlangsung dan sanksi yang dikeluarkan ini berkuatkuasa bermula dari permohonan bankrap. Kelulusan sanksi