Kanawagi S/O Sepurumaniam … PenghutangPenghakimanPenang Port Commission … PemiutangPenghakiman

  

Download PDF Here

~^PDF

 

1 Complete

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

Click Here to upgrade Unlimited Pages and

 

riNGGI MALAYA Dl KUALA LUMPUR HAGIAN DAGANG)

 

DALAM PERKARA KEBANKRAPAN NO: 29-6045-12/2011

 

Berkenaan: Kanawagi s/o Sepurumaniam .. . Penghutang Penghakiman

 

Ex – Parte: Penang Port Commission .. . Pemiutang Penghakiman

 

GROUNDS OF DECISION

 

Azizah Nawawi JC:

 

Application

 

[1] Enclosure (33) is an appeal against the decision of the learned Senior assistant Registrar (SAR) dismissing the application of the Judgment Debtor (the JD) in enclosure (20), to set aside the Bankruptcy Notice and to stay all proceeding in the bankruptcy action.

 

The Background Facts

 

[2] On 5.9.2008, the Court of Appeal in W-02-715-2001 (Penang Port Commission v Kanawagi s/o Seperumaniam [2008] 6 MLJ 686), amongst others, made the following order:

 

i

 

~^PDF

 

1 Complete

 

Click Here to upgrade Unlimited Pages and

 

Your complimentary use period has ended.

 

Thank you for using PDF Complete.

 

(the JD herein) is to refund to the

 

________________foresaid sum of RM2,274,151.42 with

 

interest at 8% per annum with effect from 28 February 1997 to the date of realisation…”

 

[3] The JD was duly served with the court order on 13.11.2008. Despite repeated demands, the JD failed to refund the said sum to the JC.

 

[4] A Bankruptcy Notice (BN) dated 13.12.2011 was issued against the JD and served via substituted service. On 27.4.2012, the JD filed enclosure (20) to set aside the Bankruptcy Notice and to stay all proceeding in the bankruptcy action. Enclosure 20 was dismissed on 20.12.2012 by the learned SAR, hence this appeal against the said decision.

 

The Grounds of Appeal

 

[5] In his written submission, the JD relied on two (2) grounds, that is:

 

(i) the BN is invalid in law as the interest claimed in the BN is time barred under section 6(3) of the Limitation Act 1953; and

 

(ii) that the BN is invalid as it is premised on a judgment of the Court of Appeal which is null and void as it contravene Article 121(1B)(a) of the Federal Constitution.

 

2

 

~^PDF

 

1 Complete

 

Click Here to upgrade Unlimited Pages and

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

Issue (i )that the BN is invalid in law as the interest claimed in the BN is time barred under section 6(3) of the Limitation Act 1953

 

[6] It is the submission of the JD that BN is invalid in law as the interest claimed in the BN is time barred under section 6(3) of the Limitation Act 1953. The BN is premised on judgment of the Court of appeal dated 5.9.2008 which allows interest on the judgment sum at 8% per annum with effect from 28.2.1997 to the date of realisation. The JD submits that from 28.2.1997 to the date of issuance of BN on 13.12.2011, the interest claimed is for a period of 14 years and 9 months. This, according to the JD, is in violation of s. 6(3) of the Limitation Act 1953 and he relied on Federal Court cases, Perwira Affin Bank Ltd v Lim Ah Hee [2004] 2 CLJ 787 and UMBC v Ernest Cheong Yong Yim [2002] 2 CLJ 413.

 

[7] Section 6(3) of the Limitation Act 1953 provides that:

 

“(3) An action upon any judgment shall not be brought after the expiration of twelve years from the date on which the judgment becomes enforceable and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.”

 

[8] In UMBC v Ernest Cheong Yong Yim, the Question posed before the Federal Court is:

 

3

 

roper construction of s. 6(3) of the 53 (hereinafter “the Act”), in respect of that is, ‘No arrears of interest of any judgment debt shall be recovered after the expiration of

 

~^PDF

 

1 Complete

 

Click Here to upgrade to Unlimited Pages and

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

the second limb,

 

six years from the date on which the interest became

 

due’?”

 

[9] In answering this question, Justice Abdul Malek Ahmad FCJ held at page 428/e-f:

 

“To answer the question posed, we would recapitulate by saying that in view of the wording of the second limb of s. 6(3) of the Act, the act of recovery must be made within six years of the judgment date and only up to the date of recovery.”

 

[10] Two years later, the Federal Court in Perwira Affin Bank Ltd v Lim Ah Hee (supra) agreed with the decision in UMBC v Ernest Cheong Yong Yim (supra), where Justice Abdul Hamid Mohamad FCJ held as page 803/f-g:

 

“In the circumstances I would answer the first question posed to this court in the affirmative ie, s. 6(3) applies to bankruptcy proceedings and while a bankruptcy proceeding may be brought within twelve years of the date of judgment, arrears of interest may only be claimed for a period of six years from the date of the judgment.” (emphasis added)

 

4

 

~^PDF

 

1 Complete

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

Click Here to upgrade Unlimited Pages and

 

sn is whether the arrears of interest in the

 

_________________________he 6 years limitation imposed by s. 6(3) of

 

the Limitation Act 1953. The JD submits that the calculation

 

starts from 28.2.1997 (the date specified by the Court of Appeal) to the date of issuance of BN on 13.12.2011, a period spanning over 14 years and 9 months, which is clearly beyond the 6 years limitation period.

 

[12] However, if we read the judgments of both the Federal Courts in Perwira Affin Bank Ltd v Lim Ah Hee (supra) and UMBC v Ernest Cheong Yong Yim, both Courts have held that any prejudgment interests or any other interest merged into the judgment debt, and therefore the date the interest becomes due is the date of the judgment, not any earlier date. In UMBC v Ernest Cheong Yong Yim, the Court said at page 428/d:

 

“The Court of Appeal had decided that ‘the date on which the interest became due’ was the date of the breach which would be before the judgment date. We are of the considered view that this finding is erroneous as the arrears of the interest are in respect of a judgment debt, which as we have stated earlier is the principal sum and the prejudgment interest, and so the date on which the interest on the judgment debt became due must surely mean the judgment debt. ” (emphasis added)

 

[13] Subsequently in Perwira Affin Bank Ltd v Lim Ah Hee (supra), Justice Abdul Hamid Mohamad FCJ held as page 804:

 

5

 

– *PDF

 

„Complete

 

use period has ended. Thank you for using

 

Your complimentary

 

PDF Compiete.

 

nterest claimed?

 

… A few things need to be said about this part of the judgment. First, the learned Judge took the date from which the interest was calculated (1December 1985) and not the date of the judgment (23 October 1987) as the date of interest became due. In view of the judgment of this court in Ernest Cheong (supra) which was followed by this court in Moscow Narodny Bank Ltd (supra), with respect, that is not correct. (Those cases held, and I agree, that regarding interest before judgment, the date the interest became due is the date of judgment. The interest merged with the judgment sum).

 

Secondly, the learned judge calculated the period of limitation from the date the interest was calculated in the judgment (1 December 1985) to the date of the judgment (23 October 1987). In view of the two judgments of this court just mentioned, with respect, that too is not correct.

 

(As decided in Ernest Cheong (supra), the period is to be calculated from the date of judgment to the date of filing the bankruptcy notice (eight years and five months after date of judgment).

 

The date of judgment is 23 October 1987. Interest may only be claimed for a period of six years from the date of judgment, ie, until and including 22 October

 

6

 

~^PDF

 

1 Complete

 

Click Here to upgrade Unlimited Pages and

 

Your complimentary use period has ended.

 

Thank you for using PDF Complete.

 

um was made until 28 March 1996 (the otcy notice was filed) which is clearly more than six years. So the arrears of interest claimed contain arrears of interest outside the period of six years

 

allowed ie, two years and five months more than allowed. Thus, following Ernest Cheong (supra) renders the

 

bankruptcy notice invalid

 

[14] The BN in the present case reads:

 

“Jumlah Perintah RM2, 274,151.42

 

Tambah faedah pada kadar 8% setahun ke atas RM2,274,151.42 dari 28/02/1997

 

sehingga 13/12/2011 RM2,692,595.28

 

Jumlah yang masih terhutang pada 13/12/2011 RM4, 966,746.70

 

[15] Following the reasoning of the Federal Courts in the cases above, the interest of RM2,692,595.28 calculated from 28/2/1997 to 13/12/2011 merged into the judgment sum and the date the interest became due is the date of judgment, which is 5.9.2008. The six years limitation period runs from 5.9.2008 and expires on 4.9.2014. Since the BN was issued on 13.12.2011, the interest claimed is still within the six year limitation period. Therefore the BN dated 13.12.2011 is not invalid.

 

Issue (ii) whether the BN is invalid as it is premised on a judgment of the Court of Appeal which is null and void as it contravene Article 121(1B)(a) of the Federal Constitution.

 

7

 

– *PDF

 

„Complete

 

use period has ended. Thank you for using

 

Your complimentary

 

PDF Compiete.

 

I by the JD is that the BN is invalid as it is ent of the Court of Appeal which is null and

 

void as it contravene Article 121(1B)(a) of the Federal Constitution. The JD submits that he won a case for wrongful termination in the High Court, and damages was assessed at RM2,274,151.42, which was duly paid by the JC. When the JC did not reinstate the JD to his former post, the JD filed an Originating Summons to compel the reinstatement, which was granted by the High Court. On appeal, the decision was reversed by the Court of Appeal, hence the judgment dated 5.9.2011, which forms the basis of the BN. The JD says that the judgment dated 5.9.2011 is null and void as the court cannot ordered the JD to pay back the judgment sum awarded in the earlier suit.

 

[17] However, having read the judgment of the Court of Appeal as reported in Penang Port Commission v Kanawagi s/o Seperumaniam [2008] 6 MLJ 686, the factual matrix involving the JD and the JC is not as simplistic as the JD tried to make it. From the report, the JD obtained summary judgment in S6-22-208 of 1987 for a declaration that the JD’s termination of employment on 7.5.1987 was null and void and for damages. An appeal was filed against the summary judgment (W-02-252 of 1994 – summary judgment appeal) Damages was assessed at RM2, 274,151.42. An appeal filed against the assessment was not heard. The JD initiate garnishment proceedings against the JC and The JC paid the sum RM2,274,151.42. The JC also filed an appeal in W-03-16 of 1994 (the damages appeal).

 

8

 

~^PDF

 

1 Complete

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

Click Here to upgrade Unlimited Pages and

 

Court of Appeal (Coram 1) allowed the

 

______________________ippeal’, set aside the declaratory order and

 

set the case for early trial. On 27.2.1997, the Court of Appeal (Coram 1) also allowed the JC’s damages appeal, and the assessment of damages was set aside.

 

[19] On 1.8.2001, the JD managed to get the Court of Appeal (Coram 2) to vary the orders granted by Coram 1. The JC obtained leave from the Federal Court to decide on the issue of whether Coram 2 has any jurisdiction to set aside an order made earlier by Coram 1. The Federal Court held that Coram 2 has no jurisdiction to set aside the orders made by Coram 1. Hence Coram 1 decision that the suit S6-22-208 of 1987 proceed for trial was affirmed.

 

[20] But before S6-22-208 of 1987 went for hearing, the JD filed another Originating Summons, R2-24-5 of 2000 (the OS). On 16.1.2001, the JD obtained an order on the same issues as had been earlier ordered to proceed with trial. The Court had also dismissed the JC’s application to strike out the OS. Against both decisions, the JC filed the appeals.

 

[21] On 5.9.2008, the Court of Appeal allowed the appeals by the JC, and had also made an order directing the JD “to refund to the defendant the aforesaid sum of RM2,274,151.42 with interest at 8% per annum with effect from 28 February 1997 to the date of realisation..”

 

[22] Against this decision dated 5.9.2008, the JD had filed an application for leave to appeal to the Federal Court. On

 

9

 

~^PDF

 

1 Complete

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

Click Here to upgrade Unlimited Pages and

 

ition for leave was dismissed by the Federal iment dated 5.9.2008 is final, legally binding

 

and enforceable against the JD.

 

[23] Despite losing the leave application in the Federal Court, the JD went on to file a Motion in the Court of Appeal to remove part of the Order dated 5.9.2008 directing him to return the sum of RM2,274,151.42 with interest to the JC. The JD’s application was dismissed by the Court of Appeal on 14.1.2010.

 

[24] So, what I have before me is an order of the Court of Appeal dated 5.9.2010. By the principle of stare decisis, I am bound by the judgment of the Court of Appeal dated 5.9.2010. I do not have the jurisdiction to ascertain whether a judgment of a superior court is null and void. It is clearly misconceived for the JD to attack the judgment of the Court of Appeal in order to avoid the repercussions arising from the BN. He could have avoided these bankruptcy proceedings if he had just paid back the taxpayers’ money.

 

[25] For the reasons enumerated above, the JD’s appeal in enclosure (33) is dismissed with costs.

 

(AZIZAH BINTI HAJI NAWAWI) JUDICIAL COMMISSIONER HIGH COURT MALAYA (Commercial Division) KUALA LUMPUR

 

Dated: 30th May 2013

 

10

 

~^PDF

 

1 Complete

 

Click Here to upgrade Unlimited Pages and

 

Your complimentary use period has ended. Thank you for using PDF Complete.

 

Nicholas Tan

 

Tetuan Lim Huck Aik & Co.

 

Judgment Debtor in Person

 

11

PDF Source: http://kl.kehakiman.gov.my