PEMIUTANG PENGHAKIMAN LEMBAGA KUMPULAN WANG SIMPANAN PEKERJA PENGHUTANG PENGHAKIMAN AHMED ISMAIL BIN HAJI AMIN (NO. K/P: 521205-07-5385 / 4366531)

DALAM MAHKAMAH TINGGI PULAU PINANG DALAM NEGERI PULAU PINANG, MALAYSIA DALAM PERKARA KEBANKRAPAN NO: PA-29NCC-809-10/2020 Berkenaan : AHMED ISMAIL BIN HAJI AMIN (NO. K/P: 521205-07-5385 / 4366531) ..._PENGHUTANG KEHAKIMAN Ex-Parte: LEMBAGA KUMPULAN WANG SIMPANAN PEKERJA ...._PEMIUTANG KEHAKIMAN INTRODUCTION [1] This was an appeal ("this Appeal") by the Judgment Debtor ("JD") against the decision of the Senior Assistant Registrar ("SAR") on 25.10.2021 in dismissing the JD's application to set aside the order dated 16.02 2021 in which the SAR had allowed the Judgment Creditor ("JC") to commence bankruptcy proceedings against the JD. [2] Parties are referred as they were addressed before the learned SAR. FINDING AND DECISION OF THE COURT [3] It is trite law that when an appeal against the decision of the learned SAR is brought before the Judge in Chambers, the matter will be heard afresh, as though the matter comes before the Judge for the first time. This principle has been established by the Federal Court in the case (see Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Berhad [1996] 1 CLJ 241. The principle that has been decided in the abovementioned case has been followed by the High Court in the case of Re: Sulaiman Sahari; Ex-Parte: Hafitz Khalid & Anor [2019] 1 LNS 1138 where the court held as follows: 'I10] Firstly, an appeal to the Judge in Chambers from a discretionary order of the SAR is treated as if the matter comes before the Judge for the first time. In Seloga Jaya Sdn. Bhd. v. Pembinaan Keng Ting (Sabah) Sdn Bhd. [1994] 2 CLJ 716, the Supreme Court cited with approval the decision of Lord Atkin in Evans v. Bartlam [1937] AC 473 as follows: - "(1) In an appeal from a discretionary order of the master to a Judge in Chambers, the Judge exercises his own discretion as though the matter comes before him for the first time, unfettered by the previous exercise of the master's discretion; and (2) So far as the master's decision is concerned, the Judge will give it the weight it deserves." BACKGROUND FACTS [4] The JD is a member of Automobile Associates of Malaysia (AAM) since 42002. On 05.10.2018 JC Filed a suit against AAM and all the committee Members of AAM for arrears of EPF contribution for employees of AAM of at KL Session Court. [5] JID was obtained against AAM and two others Committee Members for a sum of RM113,657.00 together with interest’s and costs. JC had initiated a bankruptcy proceeding against all the Defendants including JC who is only a member. The JC proceeded to file an action against the JD but not against AAM. The gist of the JD's contention was that, pursuant to Section 5 of the Insolvency Act, the JC had not exhausted all modes of execution and enforcement to recover the debt owed to it by the AAM. [6] Section 5 of the Insolvency Act reads: Section 5 - Conditions on which creditor may petition (3) A petitioning creditor shall not be entitled to commence any bankruptcy action- (a) against a social guarantor; and (b) against a guarantor other than a social guarantor unless the petitioning creditor has obtained leave from the court. (4) Before granting leave referred to in paragraph (3)(b), the court shall satisfy itself that the petitioning creditor has exhausted all modes of execution and enforcement to recover debts owed to him by the debtor. (6) For the purposes of subsection (4), modes of execution and enforcement include seizure and sale, judgment debtor summon, garnishment and bankruptcy or winding up proceedings against the borrow. [7] JD contented that he is only a social guarantor and JC has to exhaust all the modes of execution and enforcement against AAM. JD also contended that he is protected under AAM Constitution where the lability of the member is limited to subscription and AAM should be the party who should settle the debts. [8] The JC submitted that AAM is an employee and registered with the JC and failed to contribute a monthly payment to his employee. The JC is relying on the Section 45 of the EPF Act 1991 reads: (1) Except where otherwise provided in this Act, the employer shall, in the first instance, be liable to pay both the contributions payable by himself and also, on behalf of and to the exclusion of the employee, the contributions payable by that employee; and for the purposes of this Act contributions paid by an employer on behalf of an employee shall be deemed to be contributions by the employee. (2) Contributions payable by the employer for himself and on behalf of the employee under subsection (1) shall be paid in respect of the first and subsequent months' wages. (3) Notwithstanding section 49, where an employer fails to pay any contributions due within such period as prescribed by the Minister, the employer shall, in addition to such contributions, be liable to pay dividend on such contributions at the rate and in accordance with any manner and calculation determined by the Board. [9] JC contended that its action against JD is maintainable under the law. Until the debts is paid or realised, the JC has a right to proceed or act against JD or any number of AAM members to secure the judgment debt. This action was filed pursuant to s. 46 of the Employees Provident Fund Act 1991 (“the EPF Act”) which provides as follows: Section 46 Joint and several liability of directors, etc (1) Where any contributions remaining unpaid by a company, a firm or an association of persons, then, notwithstanding anything to the contrary in this Act or any other written law, the directors of such company including any persons who were directors of such company during such period in which contributions were liable to be paid, or the partners of such firm, including any persons who were partners of such firm during such period in which contributions were liable to be paid, or the office bearers of such association of persons, including any persons who were office-bearers of such association during such period in which contributions were liable to be paid, as the case may be, shall together with the company, firm or association of persons liable to pay the said contributions, be jointly and severally liable for the contributions due and payable to the Fund. (see case of Ong Kim Chuan Anor v Lembaga Kumpulan Wang Simpanan Perkerja [2009] 6 CLJ 586; Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan [2021] 7 CLJ 823) [10] The JD also argued that AAM is able to pay the debts by way of auctioning or disposing of its assets. In the mean time, the JD and others member are planning to take actions against JC to compel them by way of Mandamus Order to sales AAM’s properties to realise all the debts due before acting against the JD who is only a social guarantor. [11] At this point of time, this Bankruptcy Court cannot go behind the orders pronounced. Therefore, the JC has a right to enforce the judgment. (see Sovereign General Insurance Sdn Bhd v. Koh Tian Bee [1988] 1 CLJ Rep 277.) The federal Court in the case of Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian Nagappan decide that: [38] Finally, s. 44 of the EPF Act is also relevant by virtue of our discussion above. It is manifestly clear that the liability of the judgment debtors in the present appeal is both joint and several by operation of law. [12] The JD submitted as there is an intended Writ of Mandamus to be taken out by other Committee Members against JC, the action by the JC is amount to abuse process of court. [13] JD alleged that if each of JD settle the judgment sum, JD will be getting more and this is an oppressive manner. JD is relying on the case of Sumathy a/p Subramaniam a/l Gunasegaran [2017 6 MLJ 753 [COA]. On this issue, in fact, has be commented by the Federal Court in the case of Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian Nagappan where the Federal Court stated that: “_.. Invoking the presumption that joint liability means liability for only half the debt and not the full amount. As mentioned earlier, joint and several liability gives rise to one joint obligation and to as many several obligations as there are joint and several promises. The promisee, ie, the Board, is therefore entitled to proceed against one promisor, or the other, or both, in order to procure full performance as is evident from s. 44 of the EPF Act’. The Federal court further stated in paragraphs: [31] As stated earlier, the courts below regarded themselves bound by the earlier Court of Appeal decision in Sumathy. In Sumathy, the creditor sued the principal borrower and the guarantor for monies outstanding under a friendly loan. Summary judgment was entered against both defendants, on the same terms, but the judgment did not state whether the liability of the parties was joint or several. Subsequently, two separate bankruptcy notices were filed at the same time against the principal borrower and the guarantor, both specifying the judgment debt of RM291,800. [32] The Court of Appeal held at para. 19 of the judgment that a plaintiff who becomes a judgment creditor where the liability is joint, is only entitled to seek recovery in equal proportions against each of the defendants. This premise is, with respect, flawed because it pre-supposes that liability is proportionate to the number of promisors, from the perspective of the creditor. In Sumathy, the position of the creditor was conflated with the position of the debtors or promisors inter se, as we have explained above. 10 [41] One final point remains to be made. The Court of Appeal in Sumathy was concerned that the judgment creditor would be “very much overpaid” if both defendants were to be liable for the amounts in the bankruptcy notices. To address this, guidance can be gleaned from Tang Min Sit v. Capacious Investments Ltd [1996] AC 514, where Lord Nicholls of Birkenhead delivering the Privy Council judgment at p. 522 said that: “ . a plaintiff cannot recover in the aggregate from one or more defendants an amount in excess of his loss. Part satisfaction of a judgment against one person does not operate as a bar to the plaintiff thereafter bringing an action against another who is also liable, but it does operate to reduce the amount recoverable in the second action. However, once a plaintiff has fully recouped his loss, of necessity he cannot thereafter pursue any other remedy he might have and which he might have pursued earlier. Having recouped 11 the whole of his loss, any further proceedings would lack a subject matter. This principle of full satisfaction prevents double recovery”. This argument on this issue is without merits, therefore | cannot agree with the submission by the Learned Counsel for the JD. Stays Proceeding [14] Whether there is special circumstance, must be shown by the JD for this court to exercise its power. Section 97 of the Bankruptcy Act 1967 states: “The court may at any time, for sufficient reason, make an order staying the proceedings under a bankruptcy petition, either altogether or for a limited time, on such terms and subject to conditions as the court thinks just”. 12 [15] The learned Counsel for the JD is referring to the case of Chen Ying v. Export-Import Bank of Malaysia Bhd [2016] 7 CLJ 475. But with respect, the fact in that case must be distinguished. In that case the Respondent has embarked on a course of action against the Principal Borrower before the Higher People’s Court in Liaoning Province in China. That China suit is pending. In our case there no pending action against the judgment which the bankruptcy is based. This principle has been adopted in the case of Re Rosli Abdul Kadir; Ex p Bank Kerjasama Rakyat Malaysia Bhd [2008] 5 CLJ 691 at paragraph: [27] These grounds of application on the issue of irregularity, to set aside the judgment in default obtained irregularly, are grounds of merit. And if the bona fide or merit or the chances of success of an application to set aside a judgment is an issue to constitute sufficient reason to postpone the hearing of the bankruptcy petition, pending the disposal of the application to set aside the judgment in default that was obtain irregularly, which is the foundation of this bankruptcy petition, then the court is of the view that the 13 judgment debtor has shown ‘sufficient reason’ to warrant stay of bankruptcy proceedings in this case. [16] The case of Bungsar Hill Holdings Sdn Bhd v. Dr Amir Farid Datuk Isahak [2005] 2 CLJ 809 at page 824 (paragraph g): “The learned judge gave another ground why he allowed the application based on the same fact that the respondent was solvent. The ground is that there was sufficient cause why no order ought to have been made, which is another ground in subsection (3) of s. 6. This is actually an additional ground based on the same facts, as the debtor's ability to pay his debt is already specifically provided for. | do not disagree with him and | do not think | need to say more as it also falls under the clause " ought not to have been adjudged bankrupt "in s. 105(1)”. Based on those cases, the stay under Section 6 and 97 Bankruptcy Act are allowed pending disposal of bankruptcy proceeding. No such facts to support our case for this court to consider it as “sufficient reason” to stay. The reason that the writ of mandamus to be filed (and yet to be filed) is not a good reason for stay of proceeding. 14 Conclusion [17] Based on the above reasons, this appeal and the application for stay of further proceedings are also dismissed with costs of RM3000.00 to be paid by JC subject to allocator. AZIZAN MD./ARSHAD Judicial Commissioner High Court of Malaya at Pulau Pinang Dated: 31th. March 2022 Counsel for the Judgement Creditor : Adilah Abdul Wahid NASHILI & CO. (AMPANG) 25C, Jalan Wawasan 2/10, Bandar Baru Ampang, 68000 Ampang, Selangor Counsel for the Judgement Debtor : S. Annie Santha S. ANNIE & ASSOC. (PENANG) Suite 01, Penthouse, Bangunan Tabung Haji, No. 45, Green Hall 10200 Penang Pulau Pinang 15 Cases referred to : 1. 10. 11. Tuan Haji Ahmed Abdul Rahman v. Arab-Malaysian Finance Berhad [1996] 1 CLJ 24 Hafitz Khalid & Anor [2019] 1 LNS 1138 Seloga Jaya Sdn. Bhd. v. Pembinaan Keng Ting (Sabah) Sdn Bhd. [1994] 2 CLJ 716 Evans v. Bartlam [1937] AC 473 Ong Kim Chuan Anor v Lembaga Kumpulan Wang Simpanan Perkerja [2009] 6 CLJ 586 Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian Nagappan [2021] 7 CLJ 823 Sumathy a/p Subramaniam a/l Gunasegaran [2017 6 MLJ 753 [COA] Tang Min Sit v. Capacious Investments Ltd [1996] AC 514 Chen Ying v. Export-Import Bank of Malaysia Bhd [2016] 7 CLJ 475 Re Rosli Abdul Kadir; Ex p Bank Kerjasama Rakyat Malaysia Bhd [2008] 5 CLJ 691 Bungsar Hill Holdings Sdn Bhd v. Dr Amir Farid Datuk Isahak [2005] 2 CLJ 809 16