JUDGMENT

Ramly Ali JCA:

(1) The present appeal is against the decision of the learned Judicial Commissioner dated 5 August 2010 dismissing the appellants appeal against the decision of the learned Senior Assistant Registrar given on 28 January 2010, dismissing the preliminary objection of the appellant and allowing the respondents application (vide encl. 16) to substitute the 2nd respondent (HLG Capital Market Sdn Bhd) as the judgment creditor in place of the 1st respondent (HLG Credit Sdn Bhd) in the pending bankruptcy proceeding.

Brief Facts

(2) On 26 February 1999, the 1st respondent obtained a judgment against the appellant at the Kuala Lumpur High Court vide Civil Suit No: D2-22-476-1998. On 11 October 2004, the 1st respondent filed a bankruptcy notice (BN) against the appellant at the Johor Bahru High Court vide Bankruptcy Suit No: 29-3033-2004 based on the above judgment. On 17 March 2005, the 1st respondent filed a creditors petition (CP).

(3) In the meantime, while the CP was still pending in court, all rights of the 1st respondent in respect of the appellants indebtedness under the judgment were assigned to the 2nd respondent; vide a deed of assignment dated 24 September 2005. Notices of the assignment dated 23 September 2005 and 11 October 2005 were given to the appellant.

(4) On 1 December 2005, the 1st respondent filed an ex parte application (encl. 16) seeking an order to substitute the 2nd respondent as the judgment creditor in the said bankruptcy proceedings. The said ex parte application was allowed on 26 July 2006.

(5) The appellant then filed an application to set aside the ex parte order dated 26 July 2006. The said application was allowed by the learned SAR on 16 May 2007. On 24 May 2007, the 1st respondent filed an appeal to the judge in chambers against the SAR order dated 16 May 2007. The learned judge allowed the said appeal that the said order dated 16 May 2007 made by the learned SAR was set aside and directed the 1st respondents application dated 1 December 2005 (encl. 16) be reheard inter partes.

(6) Upon rehearing encl. 16, the learned SAR had, on 28 January 2010, allowed the application with costs and further ordered that the 2nd respondent be substituted as the judgment creditor in the pending bankruptcy proceedings. The appellants appeal to the judge in chambers against the decision of the learned SAR dated 28 January 2010 was dismissed with costs on 5 August 2010. Hence the present appeal before this court.

(7) The application in encl. 16 was a straightforward application by the 1st respondent on the ground that as the judgment debt, which is the basis of the bankruptcy proceedings, had been absolutely assigned by the 1st respondent to the 2nd respondent, therefore the 2nd respondent should be cited as the judgment creditor in the said proceedings.

The Issue

(8) The main issue before the court is whether upon absolute assignment of the judgment debt which forms the basis of the bankruptcy proceedings, the 2nd respondent (the assignee) can be substituted for the 1st respondent (the assignor) as the judgment creditor in the pending bankruptcy proceedings.

(9) The appellant strongly contended that such substitution cannot be done in the present proceedings on the following main grounds:

(a) the High Court in purporting to exercise bankruptcy jurisdiction lacked jurisdiction to hear or to make any decision which touched on the validity of an assignment of the debt owing under a judgment dated 26 February 1999 entered by the 1st respondent against the appellant at the Kuala Lumpur High Court; and

(b) the 2nd respondent lacked the locus to execute the judgment or to otherwise continue the bankruptcy proceedings initially commenced by the 1st respondent at the High Court, by reason of their failure to obtain leave from the court which ordered the judgment (Kuala Lumpur High Court) to execute the judgment pursuant to the provisions of O. 46 r. 2(1)(b) of the Rules of the High Court 1980