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2011 MarsdenLR 930
COURT OF APPEAL PUTRAJAYA
MOHAMED TAWFIK TUN DR ISMAIL – Appellant
Versus
HLG CREDIT SDN BHD & ANOR – Respondent
[Civil Appeal No: J-03(IM)-183-2010]
An absolute assignment of a judgment debt allows the assignee to substitute the assignor as the judgment creditor in bankruptcy proceedings, validating the jurisdiction of the bankruptcy court to consider such applications.
Headnote:(A) Civil Law Act 1956 - Section 4(3) - Bankruptcy Act 1967 - Jurisdiction - Assignment of judgment debt - The 2nd respondent validly substituted as judgment creditor in bankruptcy proceedings after an absolute assignment of judgment debt from 1st respondent. The High Court has jurisdiction to decide on such assignments in bankruptcy context. (Paras 24, 30, 38)
(B) Jurisdiction - The powers of the High Court under bankruptcy jurisdiction are confined to provisions of Bankruptcy Act 1967, but valid assignments allow for substitution of the assignee as judgment creditor. (Paras 11, 25, 36)
(C) Absolute Assignment - Compliance with notice requirements for assignment under s 4(3) validates the assignment, making the assignee entitled to pursue judgment recovery. (Paras 12, 18, 35) )
Facts of the case:
The appellant contests the substitution of the 2nd respondent as judgment creditor in a bankruptcy proceeding initiated based on a prior judgment against him, following an assignment of that judgment debt from the 1st to the 2nd respondent. (Paras 1-7)
Findings of Court:
The Court finds the assignment valid and fully effective in allowing the 2nd respondent to substitute the 1st respondent as the judgment creditor in the bankruptcy proceedings involving the appellant. (Paras 35-36)
Issues: The Court addressed whether substitution of the assignee as judgment creditor in bankruptcy proceedings is lawful, and if the bankruptcy court possessed the jurisdiction to consider the validity of the assignment. (Paras 8-9)
Ratio Decidendi: The court ruled that the High Court has jurisdiction in bankruptcy matters related to valid assignments without needing prior leave, affirming that the 2nd respondent can enforce the absolute assignment of debt in question. (Paras 23-38)
Result: Appeal dismissed with costs.
| Table of Content |
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| 1. background of bankruptcy proceedings and assignment (Para 1 , 2 , 3 , 4 , 5) |
[1] The present appeal is against the decision of the learned Judicial Commissioner dated 5 August 2010 dismissing the appellant's 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 respondent's application (vide encl 16) to substitute the 2nd respondent (HLG Capital Market Sdn Bhd) as the judgment creditor in place of the 1 respondent (HLG Credit Sdn Bhd) in the pending bankruptcy proceeding.
Brief Facts
[2] On 26 February 1999, the 1 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 1 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 1 respondent filed a creditor's petition (CP).
[3] In the meantime, while the CP was still pending in Court, all rights of the 1 respondent in respect of the appellant's 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 1 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 1 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 1 respondent's application dated 1 December 2005 (Encl 16) be reheard inter partes.
