AntaraRhb Bank Berhad … Plaintif(No. Syarikat : 6171 – M)Dan1. Selenggara Sdn Bhd(No. Syarikat : 018990 – W)2. Raja Alawiah Bte Raja Lop Idris(No. K/P: 540607 – 08- 6398)3. Omar Bin Jaafar4. Kamanudin Bin Che Ahmad… Defendan-Defendan

  

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DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

 

(BAHAGIAN DAGANG)

 

NO. GUAMAN: D3-22-1695-2001

 

ANTARA

 

RHB BANK BERHAD … PLAINTIF

 

(No. Syarikat : 6171 – M)

 

DAN

 

1. SELENGGARA SDN BHD (No. Syarikat : 018990 – W)

 

2. RAJA ALAWIAH BTE RAJA LOP IDRIS (No. K/P: 540607 – 08- 6398)

 

3. OMAR BIN JAAFAR

 

4. KAMANUDIN BIN CHE AHMAD

 

… DEFENDAN-DEFENDAN

 

Grounds of Decision

 

Azizah Nawawi, J:

 

Application

 

[1] Enclosure (55) is the Second Defendant’s application to set aside the Order of this Court dated 15.6.2015, which was granted ex parte, allowing the Plaintiff’s application for leave to execute judgment after six (6) years.

 

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[2] This Court has allowed the Second Defendant’s application with no order as to costs.

 

The Salient Facts

 

[3] The Plaintiff’s claim against the First Defendant is premised on banking facilities granted to the company, whereas the claims against the Second, Third and Fourth Defendants are based on the Letters of Guarantee and Indemnity.

 

[4] Summary judgment was entered against the Second Defendant on 17.6.2003. On appeal, the Court of Appeal has ordered that the judgment sum be reduced by RM316,866.62. The Plaintiff filed an application for leave to appeal to the Federal Court which was allowed on 19.1.2011.

 

[5] After hearing the merits of the appeal, the Federal Court has allowed the Plaintiff’s appeal on 9.8.2011 and reaffirmed the Amended Judgment dated 17.6.2003.

 

[6] On 18.5.2015, the Plaintiff filed an application for leave to execute the Amended Judgment dated 17.6.2003, after a lapse of six (6) years, including bankruptcy proceedings against the Second, Third and Fourth Defendants. The grounds of the application are that all the appeals finally came to a close with the decision of the Federal Court given on 9.8.2011.

 

[7] The application was allowed on 15.6.2015 on an ex parte basis.

 

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[8] The Second Defendant filed this application on 3.11.2015 seeking

 

the following orders:

 

(i) for an extension of time to file this application;

 

(ii) for an order that the Order dated 15.6.2015 granting leave to commence execution proceedings, including bankruptcy proceedings against the Second Defendant, be set aside; and

 

(iii) that all bankruptcy proceedings in 29NCC – 5736 – 06/2015 be stayed until the final disposal of this application.

 

The Findings of the Court

 

[9] The Plaintiff raised three (3) issues against the Second

 

Defendant’s application, namely:

 

(i) whether the Second Defendant has failed to set aside the Order dated 15.6.2015 within 30 days after receipt of the Order under Order 42 rule 13 Rules of Court 2012 (ROC 2012);

 

(ii) whether there is a delay on the part of the Plaintiff to execute the Amended Judgment dated 17.6.2003 against the Second Defendant; and

 

(iii) whether there is a delay in the filing of the Plaintiff’s application for leave to commence execution proceedings,

 

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including bankruptcy proceedings against the Second Defendant.

 

Issue (i) – non compliance with Order 42 rule 13 ROC 2012

 

[10] It is the submission of the Plaintiff that under Order 42 rule 13 ROC 2012, a party intending to set aside or to vary an order or judgment must make his application to Court and serve it on the other party within 30 days after the receipt of the order or judgment.

 

[11] However, I agree with learned Counsel for the Second Defendant that this issue was only raised during the submission stage and there is nothing in the affidavit of the Plaintiff or in any notice given by the Plaintiff that they will raise a preliminary objection premised on Order 42 rule 13 ROC 2012. Therefore, this preliminary objection must be dismissed. On this I find support in the case of Public Bank Berhad v. Berjaya Housing Development Sdn Bhd & Ors [1995] 1 CLJ, the Court held that:

 

“ The Defendants by their conduct had waived their right to object to the defects in the Plaintiff’s affidavit. The Defendants, in opposing the O. 14 application have filed two affidavits and none of the affidavits contained the grounds of the preliminary objection raised by the Defendants. Counsel for the Respondents when he raised the preliminary objection herein, did so without any prior notice to his opponent.”

 

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[12]

 

[13]

 

[14]

 

Added to that, Order 42 rule 13 ROC 2012 requires the Plaintiff to serve the Order dated 15.6.2016. The Defendant was served with a copy of the Bankruptcy Notice on 6.8.2015, not the Order dated 15.6.2016. The Court Order was only served on the Second Defendant’s Solicitors on 30.9.2015, and only upon the request made by the Second Defendant.

 

From the date of service of the Order on 30.9.2015, the 30 days period to file this application will lapse on 30.10.2015. This application was filed on 3.11.2015, a delay of 3 days which prompted the Second Defendant to apply for an extension of time as well. I do not find 3 days delay to be inordinate and will allow the application for extension of time. Therefore, there is no issue with regards to non compliance with Order 42 rule 13 ROC 2012.

 

Issue (ii) – whether there is a delay on the part of the Plaintiff to execute the Amended Judgment dated 17.6.2003 against the Second Defendant

 

The Plaintiff takes the position that they did not execute the Amended Judgment dated 17.6.2003 because the appeal in the Court of Appeal is still pending. If the Plaintiff had commenced bankruptcy proceedings against the Second Defendant prior to the disposal of the appeal, the Plaintiff submits that the validity of the bankruptcy proceedings could have been challenged given that the Court of Appeal had reduced the judgment sum. Added to that, on 9.8.2011, the Federal Court had reinstated the original Amended Judgment dated 17.6.2003.

 

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[15] The judgment against the Second Defendant is a monetary claim which the Plaintiff can execute any time as there was no order for stay of execution. On the Plaintiff’s contention that the validity of the bankruptcy proceedings could have been challenged, I agree with the Second Defendant that this issue does not arise as any Bankruptcy Notice will be based on the Judgment of the High Court. Section 3(1)(i) of the Bankruptcy Act 1967 clearly provides that a judgment creditor who has obtained a final judgment/order against a judgment debtor for an amount and execution thereon not having been stayed, is entitled to commence a bankruptcy proceedings against the judgment debtor.

 

[16] In the event that the judgment sum is amended by an Order of the Court of Appeal, the Bankruptcy Notice or the Creditors Petition can be amended to reflect the Order of the Court of Appeal. So long as the judgment sum remains above the statutory threshold, there is no issue of invalidity of the bankruptcy proceedings arising from a change of the judgment sum, as both sums in this case are above the statutory threshold under the Bankruptcy Act 1967.

 

[17] In the premise, I am of the considered opinion that there is delay on the part of the Plaintiff to execute the Amended Judgment dated 17.6.2003 against the Second Defendant. There was a delay of nearly 12 years, from 17.6.2003 to 15.6.2015, bearing in mind that all appeals had finally came to a close with the decision of the Federal Court given on 9.8.2011.

 

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[18]

 

[19]

 

[20]

 

In fact, pursuant to section 6 of the Limitation Act 1953, the Plaintiff can only execute the Amended Judgment dated 17.6.2003 for 12 years, and the last date for execution as calculated by learned Counsel for the Plaintiff himself is 16.6.2015. Therefore the filing of the bankruptcy proceedings on 15.6.2015 was actually done on the eve the statutory limitation period takes effect.

 

Issue (iii) – whether there is a delay in the filing of the Plaintiff’s application for leave to commence execution proceedings, including bankruptcy proceedings against the Second Defendant

 

The crux of this case is on issue (iii). Pursuant to the decision of the Federal Court in Dr. Shamsul Bahar Bin Abdul Kadir v. RHB Bank Bhd and another appeal [2015] 4 MLJ 1, leave is required to commence bankruptcy proceedings pursuant to Order 46 rule 2, ROC 2012.

 

Leave application under Order 46 rule 2(1) of the Rules of High Court 1980 (which is pari materia with Order 46 r 2, ROC 2012) was considered by the Court of Appeal in Affin Bank Bhd v. Wan Abdul Rahman Wan Ibrahim [2003] 1 CLJ 826 where Justice Ariffin Zakari, JCA (as His Lordship then was) held as follows:

 

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“It is trite that the grant of leave under O. 46 r. 2 is in the court’s discretion. Order 46 r. 3 states that an application under O. 46 r. 2(1) must be supported by an affidavit stating, when the case falls within r. 2(1)(a), the reasons for the delay in enforcing the judgment or order. Therefore, it is incumbent upon the applicant to furnish the court with sufficient reason in support of such an application.

 

However, the fact that the application was made within the 12 – year period as prescribed by s. 6(3) of the Limitation Act 1953 for the bringing of an action upon judgment is not a sufficient ground for granting of leave as the right to sue on a judgment is distinct from the right to issue execution.”

 

[21] In the present case, the Plaintiff obtained the Amended Judgment on 17.6.2003. All appeals had come to a conclusion with the decision of the Federal Court dated 9.8.2011. Even if we can accept the appeal proceedings to explain the delay in the application for leave to commence bankruptcy proceedings pursuant to Order 46 rule 2, ROC 2012, the issue here is whether the Plaintiff has explained the delay for the period from the decision of the Federal Court on 9.8.2011 to the filing of the leave application on 18.5.2015, a delay of four (4) years.

 

[22] Learned Counsel for the Plaintiff has admitted that no reason was given to explain the 4 years delay from 9.8.2011 to 18.5.2015 in the Plaintiff’s affidavit. Learned Counsel then tried to explain that

 

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based on the case of Perwira Affin Bank Berhad v Lim Ah Hee

 

@ Sim Ah Hee [2004] 3 MLJ 253, leave was not required to commence bankruptcy proceedings, hence the delay in filing the application. But the recent Federal Court decision in Dr. Shamsul Bahar’s case had changed that position and now leave pursuant to Order 46 r. 2 ROC 2012 is required. In paragraph 6.14, learned Counsel for the Plaintiff submitted:

 

“6.14 Given the contrasting judicial opinion, the issue of whether leave is required can only be settled by further cases of the Federal Court. ”

 

[23] However, the change in the law is not an acceptable explanation for the delay of 4 years from 9.8.2011 to 18.5.2015. The case of Dr. Shamsul Bahar (supra) merely requires the Plaintiff to apply for leave, whereas it is the decision of the Court of Appeal in Affin Bank Bhd v. Wan Abdul Rahman Wan Ibrahim (2003) (supra) which requires the Plaintiff to explain the delay when applying for leave. The Plaintiff cannot blame the change in the law for its failure to explain the delay in making the application for leave. If the Plaintiff has attem,pted to do anything, it would have been reflected in the Plaintiff’s affidavit, but as conceded by learned Counsel, no reason was given to explain the delay from 9.8.2011 to 18.5.2015.

 

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[24] In the premise, I find that there is merit in the Second Defendant’s application and the same is allowed with no order as to costs.

 

(AZIZAH BTE HAJI NAWAWI)

 

JUDGE

 

HIGH COURT MALAYA (Commercial Division)

 

KUALA LUMPUR

 

Dated: 13 June 2016

 

For the Plaintiff : Amandev Singh Messrs Lee Hishammuddin Allen & Gledhill Kuala Lumpur.

 

For the Respondent : Davinder Singh Messrs Devinder & Co Kuala Lumpur.

 

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