PEMIUTANG PENGHAKIMAN Lua Ai Siew and Soong Ru Hui (chambering student) for the Judgment Creditors/Respondent [Messrs Soo Thien Ming & Nashrah] PENGHUTANG PENGHAKIMAN Datuk Wong Rhen Yen, Emily Wong and Jasneeta Bhullar for the Judgment Deb

PEMIUTANG PENGHAKIMAN Lua Ai Siew and Soong Ru Hui (chambering student) for the Judgment Creditors/Respondent [Messrs Soo Thien Ming & Nashrah] PENGHUTANG PENGHAKIMAN Datuk Wong Rhen Yen, Emily Wong and Jasneeta Bhullar for the Judgment Deb

Section 5(3) of the Insolvency Act 1967 plainly requires a petitioning creditor to obtain leave from the court before issuing a Bankruptcy Notice against a guarantor; because a Bankruptcy Notice invokes bankruptcy proceedings, leave granted only after issuance is retrospective, prejudicial and cannot cure the defect; therefore the BN in this case was prematurely issued and the Judge allowed the appeal concerning leave (Enclosure 46).

Citation
KEBANKRAPAN NO. WA-29NCC-40-01/2021 (Mahkamah Tinggi)
Parties
Judgment Debtor: LIM SUE BENG; Judgment Creditor: AmBank (M) Berhad; Judgment Creditor: Alliance Investment Bank Berhad; Judgment Creditor: Malayan Banking Berhad; Judgment Creditor: Malaysian Industrial Development Finance Berhad; Judgment Creditor: CIMB Bank Berhad
Court
High Court
Jurisdiction
Malaysia
Judgment Date
23 September 2022
Case Number
KEBANKRAPAN NO. WA-29NCC-40-01/2021 (Mahkamah Tinggi)
Procedural Posture
Bankruptcy / Insolvency / Appeal to High Court (judge in Chambers) Against Deputy Registrar Decisions on Bankruptcy Notice and Leave to Commence Bankruptcy Proceedings
Outcome
Appeal allowed (Enclosure 46); other appeals (Enclosures 44, 45 and 66) dismissed as academic
Legal Topics
Leave to Commence Bankruptcy, Bankruptcy Notice, Section 5(3) Insolvency Act 1967, Winding Up Vs Dissolution, Exhaustion of Modes of Execution
Source Language
Malay/English
Insolvency Law Bankruptcy Civil Procedure Company Law Leave to Commence Bankruptcy Bankruptcy Notice Section 5(3) Insolvency Act 1967 Winding Up Vs Dissolution +1 more

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Parties

LIM SUE BENG

Judgment Debtor

AmBank (M) Berhad

Judgment Creditor

Alliance Investment Bank Berhad

Judgment Creditor

Malayan Banking Berhad

Judgment Creditor

Malaysian Industrial Development Finance Berhad

Judgment Creditor

CIMB Bank Berhad

Judgment Creditor

Procedural Posture

Bankruptcy / Insolvency / Appeal to High Court (judge in Chambers) Against Deputy Registrar Decisions on Bankruptcy Notice and Leave to Commence Bankruptcy Proceedings

Legal Issues

  1. 1 Whether a petitioning creditor must obtain leave from the court before issuing a Bankruptcy Notice against a guarantor under s5(3) Insolvency Act 1967
  2. 2 Whether the Bankruptcy Notice issued was premature and therefore invalid
  3. 3 Whether leave granted retrospectively after issuance of the Bankruptcy Notice can cure the defect

Ratio Decidendi

Section 5(3) of the Insolvency Act 1967 plainly requires a petitioning creditor to obtain leave from the court before issuing a Bankruptcy Notice against a guarantor; because a Bankruptcy Notice invokes bankruptcy proceedings, leave granted only after issuance is retrospective, prejudicial and cannot cure the defect; therefore the BN in this case was prematurely issued and the Judge allowed the appeal concerning leave (Enclosure 46).

Court Disposition

Appeal allowed (Enclosure 46); other appeals (Enclosures 44, 45 and 66) dismissed as academic

Orders

  • Allow Enclosure 46 with costs
  • Dismiss Enclosures 44, 45 and 66 with no order as to costs