LIM CHEE TAT XXXX

LIM CHEE TAT XXXX

Failure by the creditor to obtain leave of court under s8(1) before commencing proceedings against an undischarged bankrupt rendered the default judgment irregular and subject to being set aside ex debito justitiae; a subsequent annulment under s105, while retrospective to the bankrupt's status and beneficial to the bankrupt personally, does not validate or cure the creditor's prior statutory non‑compliance and cannot be used by the creditor to ratify an irregular judgment.

Citation
W-03(IM)(MUA)-53-06/2022 (Mahkamah Rayuan)
Parties
Appellant: Lim Chee Tat; Respondent: Maybank Islamic Berhad; 1st Defendant (original Suit): Sunhor Builders Sdn Bhd; 3rd Defendant (original Suit): Teh Lai Hoon
Court
IM
Jurisdiction
Malaysia
Judgment Date
9 November 2022
Case Number
W-03(IM)(MUA)-53-06/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Judgment in Default, Annulment of Bankruptcy (s105), Leave to Commence Action Against Bankrupt (s8(1)), Setting Aside Judgment Ex Debito Justitiae, Delay and Extension of Time
Source Language
Malay/English
Bankruptcy/insolvency Civil Procedure Banking Law Contract/guarantee Judgment in Default Annulment of Bankruptcy (s105) Leave to Commence Action Against Bankrupt (s8(1)) Setting Aside Judgment Ex Debito Justitiae +1 more

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Parties

Lim Chee Tat

Appellant

Maybank Islamic Berhad

Respondent

Sunhor Builders Sdn Bhd

1st Defendant (original Suit)

Teh Lai Hoon

3rd Defendant (original Suit)

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the judgment in default dated 23.11.2016 was irregular because Respondent filed suit against an undischarged bankrupt without leave under section 8(1) of the Bankruptcy Act 1967
  2. 2 Whether an annulment order under section 105 of the Act operates retrospectively to cure or validate a prior irregular judgment obtained without statutory leave
  3. 3 Whether the appellant's delay in applying to set aside the judgment bars relief

Ratio Decidendi

Failure by the creditor to obtain leave of court under s8(1) before commencing proceedings against an undischarged bankrupt rendered the default judgment irregular and subject to being set aside ex debito justitiae; a subsequent annulment under s105, while retrospective to the bankrupt's status and beneficial to the bankrupt personally, does not validate or cure the creditor's prior statutory non‑compliance and cannot be used by the creditor to ratify an irregular judgment.

Court Disposition

Appeal allowed

Orders

  • Costs of RM10,000.00 awarded to the Appellant to be paid by the Respondent
  • Order of the High Court dated 12.05.2022 set aside