PEMIUTANG PENGHAKIMAN PL Yong and Kalitha Shim for the Judgment Creditor / Appellant [Messrs Sreenevasan Young] PENGHUTANG PENGHAKIMAN Tang Kim Choon for the Judgment Debtor / Respondent [Messrs K.C Tang & Co]

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN, MALAYSIA KEBANKRAPAN NO.: WA-29NCC-2209-08/2018 Per: CHAN TSE YUEN & CO …PENGHUTANG (dikenakan prosiding terhadapnya PENGHAKIMAN dengan nama firma Ex-parte: M WEALTH CORRIDOR SDN BHD …PEMIUTANG (sebelum ini dikenali sebagai Fantastic PENGHAKIMAN Megaway Sdn Bhd.) JUDGMENT Introduction 1. This is an appeal by the Judgement Creditor, M Wealth Corridor Sdn Bhd (JC) against the order of the Learned Penolong Kanan Pendaftar (PKP) dated 20.11.2019 allowing the Judgment Debtor’s, Chan Tse Yuen & Co (JD/Firm) application under enclosure 34 (Enclosure 34) to set aside the Creditors Petition dated 14.2.2019 (CP). 2. Enclosure 34 was premised on inter alia on the following:- i. the JC had failed to state the correct amount in the bankruptcy claim for RM668,564.53 which did not take into account the claims made by the JD in Originating Summons No. WA- 24NCVC-874-06/2016 (OS 874) vide the KL High Court’s order dated 28.11.2018 amounting to RM589,387.40 not inclusive of 1 interest at the rate of 8% calculated on a daily basis till full settlement wherein the Court had also in OS 874 ordered that the JC was to pay the sum of RM35,336.24 to the JD on or before 28.12.2018 which till the date of the JD’s application under Enclosure 34 had yet to be paid. ii. the Writ and Statement of Claim (SOC) of WA-22NCVC-810- 12/2016 (810 Action) which forms the basis of the Bankruptcy Proceedings herein had not been served on each of the partners of the JD in the firm of Messrs Chan Tse Yuen & Co (Firm). iii. The bankruptcy proceedings is an abuse of the process of the court as there were 2 bankruptcy proceedings against the partners of the Firm i.e being in WA-29NCC-901-03/2019 (Bankruptcy 901) and WA-29NCC-902-03/2019 (Bankruptcy 902) which amounted to a duplicity of proceedings and wrong in law. JD’s Submissions 3. JD had referred to Rule 220 of the Insolvency Rules 2017 which reads: 220. Bankruptcy Order against partners. No bankruptcy order shall be made against a firm in the firm name but it shall be made against the partners individually. 2 4. The JD alleges that it is a firm and that rule 220 prohibits a bankruptcy order to be made against a firm and that a bankruptcy order should only be made against the partners individually. 5. The JD further submits that it does not know how the sum of RM668,564.53 in the bankruptcy proceedings were obtained as there are incomplete details as to the calculation and how the judgment sum was derived and inserted into the Bankruptcy Notice (BN). JC’s Submission 6. The JC contends amongst others that: a) the issue of the non service of the Writ and Statement of Claim in the 810 Action has been dealt with in the JD’s application to set aside the BN which was dismissed by the PKP and affirmed by the Judge in Chambers and was therefore barred by the doctrine of res judicata; and b) the JC also submits that with regards the issue of duplicity, the JC contends that Bankruptcy 902 was struck off on 17.9.2019 with liberty to file afresh and that in any event the law allows for bankruptcy proceedings to be taken against the JD and its partners separately and as such there is no abuse of process as alleged. Court’s Findings 7. This Court has in coming to its decision herein examined: 3 i. the KL High Court’s Order vide OS 874 obtained by the JD, Chan Tse Yuen & Co against the JC amounting to RM589,387.40 not inclusive of interest at the rate of 8% calculated on a daily basis till full settlementat exhibit JD-4 of the Affidavit In Support at Enclosure 35. ii. the BN dated 2.8.2020 had demanded the sum of RM668,564.53 be paid to the JC pursuant to the 810 Action obtained by the JC against the JD firm. iii. the Request for issuance of the BN (Request) which refers to the Judgment obtained in the 810 Action for inter alia the sum of RM8,445,561.00 against the Firm (Judgment) as well as stating in the said Request that the Firm has 2 partners. The same Writ in the 810 Action, which was also enclosed in the Request, however states that the action filed by the JC who is the Plaintiff therein is against 2 defendants , with the JD herein being the 1st Defendant and one Chan Tse Yuen sued as the 2nd Defendant. 8. I have noted enclosure 5 which is the JD’s application to set aside the BN based on the grounds of inter alia that non service of the Writ and SoC in the 810 Action has been dealt with in the JD’s application to set aside the BN which was dismissed by the PKP and affirmed by the Judge in Chambers and I hold thereto that the said issue is barred by the doctrine of res judicata on this point. 9. As to whether the bankruptcy proceedings is an abuse of the process of the court as there were 2 other bankruptcy proceedings 4 against the partners of the Firm i.e being in WA-29NCC-901- 03/2019 (Bankruptcy 901) and WA-29NCC-902-03/2019 (Bankruptcy 902) respectively which the JD submits amounted to a duplicity, this Court holds the view that the JC is at liberty to commence the bankruptcy proceedings against any or all of the individual partners of the Firm whether jointly or severally and that the same is not an abuse of court process as it is the right of a JC to initiate whatever execution proceedings including separate bankruptcy proceedings against the partners of a firm wherein judgment has been obtained against the firm. In this respect I need only quote Sec 11 of the Partnership Act 1974 which reads: Every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner; and after his death his estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied but subject to the prior payment of his separate debts. 10. It is thus self evident that in partnership law, the partners are jointly and severally liable and thus the JC in a bankruptcy proceedings is entitled to pursue against all or any of the partners as it thinks fit. 11. This court further holds that a reading of the Insolvency Act and the Insolvency Rules as a whole, in particular Rules 216 to 220 therein shows that in a judgment obtained against the Firm, the JC may choose to commence bankruptcy proceedings against either the Firm and/or its partners and in this respect I agree with the JC’s counsel on this. I therefore hold that in this respect, the Bankruptcy 5 proceedings against the Firm is proper and in accordance with the law and that rule 220 which reads: No bankruptcy order shall be made against a firm in the firm name but it shall be made against the partners individually. only prohibits a bankruptcy order to be made against a firm but does not prevent bankruptcy proceedings being commenced against the name of the Firm. This is clear by the fact that sec 103 states; (1) Upon the filing of a petition by or against a debtor's firm in the firm's name, the petitioner shall file a statement of the names and addresses of the partners as they appear in the register under the Registration of Businesses Act 1956 [Act 197] as at date of the presentation of the petition. (2) Where a petition is filed by or against an individual debtor carrying on business in a name other than his own, sub rule (1) of this rule shall apply with the necessary modifications. 12. I now turn to whether the BN had not quantified the sum owing and that there are incomplete details as to the calculation as to how the sum of RM668,564.53 was derived, I note that the JD had not complied with sec 3(1)(i) IA 1967 in that they had failed within seven days after service of the notice, which was done on 7.8.2018 as per the Affidavit of Service at enclosure 4, satisfied the court that they have a counterclaim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid and which they could not set up in the action in which the judgment 6 was obtained or in the proceedings in which the order was obtained. The said section reads; “i) if a creditor has obtained a final judgment or final order against him for any amount and execution thereon not having been stayed has served on him in Malaysia, or by leave of the court elsewhere, a bankruptcy notice under this act requiring him to pay the judgment debt or sum ordered to be paid in accordance with the terms of the judgment or order with interest quantified up to the date of issue of the bankruptcy notice, or to secure or compound for it to the satisfaction of the creditor or the court; and he does not within seven days after service of the notice in case the service is effected in Malaysia, and in case the service is effected elsewhere then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice or satisfy the court that he has a counterclaim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid and which he could not set up in the action in which the judgment was obtained or in the proceedings in which the order was obtained:” 13. It is also incumbent upon the JD to dispute the validity of the bankruptcy notice within the time prescribed in the bankruptcy notice being 7 days after service of the said BN on the JD. This is consonant with the requirement under Sec 3(2)(ii) IA 1967 which reads: “Provided that a bankruptcy notice- (i) …. 7 (ii) shall not be invalidated by reason only that the sum specified in the notice as the amount due exceeds the amount actually due unless the debtor within the time allowed for payment gives notice to the creditor that he disputes the validity of the notice on the ground of such mistake; but if the debtor does not give such notice he shall be deemed to have complied with the bankruptcy notice, if within the time allowed he takes such steps as would have constituted compliance with the notice had the actual amount due been correctly specified therein.” 14. Failure to challenge the said amounts in the BN within the time prescribed is fatal to the JD’s case as held in Re Woo Yoke San, ex p OCBC Bank (M) Bhd [2006] 2 CLJ 589 at pages 595-596, his Lordship Ramly J. (as he then was) opined: "...Strict compliance with s. 3(2)(ii) of the Bankruptcy Act 1967 is mandatory. Failure of the JD to comply with the said requirements cannot be regarded as a mere procedural irregularity. There are a number of authorities on this point. In Development & Commercial Bank Bhd v. Datuk Ong Kian Seng [1995] 3 CLJ 307; the Federal Court held, inter alia that: the Respondent cannot be allowed to dispute the validity of the bankruptcy notice on the ground on which he now relies because the notice of dispute by way of his affidavit affirmed on 18 February 1992 has not complied with proviso (ii) to section 3(2) of the Act, it having been served on the appellant about seven months after the service of the bankruptcy notice on him (the Respondent). The bankruptcy notice cannot therefore be challenged as to the interest specified therein.” 8 15. Similarly in J. Raju M. Kerpaya v. Commerce International Merchant Banker Bhd [2000] 3 CLJ 104, the Court of Appeal held: “A debtor who seeks to challenge a bankruptcy notice on the ground that the amount specified therein exceeds the amount actually due, must act in accordance with proviso (ii) to section 3(2) of the Act. Hence, he must, within the time prescribed in the bankruptcy notice give in writing to the creditor that he disputes the validity of the notice on the ground that it mistakenly claims an amount larger than that lawfully due.” 16. Thus, based on the abovesaid high authorities, the JD cannot now complain to this Court that the BN does not specify the correct figure or has failed to detail how the calculation was arrived at or for that matter that the JD has a set off by virtue of the order in OS 874, as submitted by the JD. 17. For the purpose of completeness, this court was also referred to the English case of Re a debtor (No 26 of 1983) and Re a debtor (No 72 of 1982) [1984] 2 All ER 257 where the Chancery Division had held that there was no need for leave to issue execution against the firm as there was no stay of judgment as the bankruptcy notice was issued against the firm and not against any individual partner. The said case in deciding as such at page 266 para c had referred to section 119 of the 1914 Bankruptcy Act of England. I have had the opportunity to read the said cited case as well as peruse section 119 of the English Bankruptcy Act 1914 which is almost identical to our sec 103 IA 1967 save that our sec 103 IA has divided the said 9 words into 2 sub sections under the said section but which effect is in my view, the same as that in sec 119 of the English Act. 18. Accordingly I am of the view and do so hold that a BN can be issued against a firm as per the said Re a debtor (No 26 of 1983) and Re a debtor (No 72 of 1982) (supra). 19. I thus hereby allow the appeal by the JC and hereby overturn the decision of the PKP made on 20.11.2019 with costs of RM1000. I also allow prayer 3 in the said enc 48 to be heard before a different PKP. Dated: 6th October 2020 sgd. NADZARIN BIN WOK NORDIN JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT Parties PL Yong and Kalitha Shim for the Judgment Creditor / Appellant [Messrs Sreenevasan Young] Tang Kim Choon for the Judgment Debtor / Respondent [Messrs K.C Tang & Co] 10