Re: Lim Sue Beng(No. K/P: 641119-10-6073) … Judgment DebtorEx Parte:1. Rhb Bank Berhad & 7 Others2. Ambank (M) Berhad[Dahulunya Dikenali Sebagai Amfinance Berhad,Yang Menerima Segala Aset, Hak Dan LiabilitySerta Perniagaan Ambank Berhad MenurutPerintah Mahkamah Bertarikh 18.5.2005]3. Dbs Bank Ltd, Cawangan Labuan[Dahulunya Dikenali Sebagai The DevelopmentBank Of Singapore Limited (Cawangan Labuan)]4. Alliance Merchant Bank Berhad5. Malayan Ba

  

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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION)

 

BANKRUPTCY NO: 29-750-2011

 

Re: LIM SUE BENG

 

(No. K/P: 641119-10-6073) … Judgment Debtor

 

Ex parte:

 

1. RHB BANK BERHAD & 7 OTHERS

 

2. AMBANK (M) BERHAD

 

[dahulunya dikenali sebagai AmFinance Berhad, yang menerima segala aset, hak dan liability serta perniagaan AmBank Berhad menurut Perintah Mahkamah bertarikh 18.5.2005]

 

3. DBS BANK LTD, Cawangan Labuan [dahulunya dikenali sebagai The Development Bank of Singapore Limited (Cawangan Labuan)]

 

4. ALLIANCE MERCHANT BANK BERHAD

 

5. MALAYAN BANKING BERHAD

 

[yang menerima pindahmilik keseluruhan aset dan liabiliti Mayban Finance Berhad yang telah diletakhak menurut Perintah Mahkamah bertarikh 17.8.2004 dan Maybank Investment Bank Berhad (dahulunya dikenali sebagai Aseambankers Malaysia Berhad mengikut Perintah Letakhak Bertarikh 21.5.2007)]

 

6. MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BERHAD

 

7. CIMB BANK BERHAD

 

[dahulunya dikenali sebagai Bumiputra-Commerce Bank Berhad yang telah mengambil alih kesemua Perniagaan, aset dan liability Southern Bank Berhad]

 

8.

 

AFFIN BANK BERHAD

 

Judgment Creditors

 

Grounds of Decision

 

Azizah Nawawi, J:

 

Application

 

[1] Enclosure (46) is the Judgment Creditors (JC) application for an order, inter alia, that leave be granted to one of the Judgment Creditors, RHB Bank Berhad to cease to be a party to the proceedings herein and that further leave be granted to amend the Bankruptcy Notice (BN) dated 24.2.2011 and the Creditor’s Petition (CP) dated 25.11.2011 accordingly.

 

[2] The Judgment Debtor (JD) did not file any affidavit in reply. Pursuant to the case of Ng Hee Thoong & Anor v. Public Bank Bhd [1995] 1 MLJ 281, the JC’s narration of facts are deemed to be admitted by the JD.

 

The Salient Facts

 

[3] Both the BN and the CP were issued pursuant to the Judgment dated 29.10.2010 in Suit MTKL D5 – 22 – 1648 – 2005. The Judgment is based on a syndicated loan from 8 lenders including RHB Bank Berhad.

 

[4] In a letter dated 15.12.2015, RHB Bank wrote to the Solicitors for the JC to inform the following facts:

 

“ Please be informed that the judgment debt owing by Lim Sue Beng and Gula Perak Sdn Bhd to RHB Bank Berhad has been satisfied.

 

We will therefore not continue as a party in the above matters.

 

Please be instructed to withdraw RHB Bank Berhad as a party in the bankruptcy petition against Lim Sue Beng with liberty to file afresh and with no order as to cost. ”

 

[5] Based on the above letter, this application was filed.

 

Findings of the Court

 

[6] The JD contends that it is a term of the settlement with RHB Bank that the bankruptcy proceedings would be withdrawn against him. The JD submits that since the JD had fully paid the settlement sum to RHB Bank, RHB Bank must abide by its agreement to withdraw the bankruptcy proceedings.

 

[7] Added to that, since the JD has altered his position by raising and paying the sum of RM3,851,200.00 to RHB Bank, then RHB Bank should be estopped from applying to amend the BN. The JD also claimed to be prejudiced by this application as the JD will not have the right to receive a fresh BN from the other judgment creditors to allow him the right to pay within the time allowed in law.

 

[8] However, I am of the considered opinion that since the JD did not file any affidavit in opposition, the letter dated 15.12.2015 does not indicate any withdrawal of the whole bankruptcy proceedings, but only for the withdrawal of RHB Bank as a party. Further, the JC averment in the affidavit (paragraph 9 of Enclosure 45) that the application does not prejudice the JD must be taken to be admitted by him. Thus, the JD cannot simply raise any issue from the Bar without any affirmed evidence. This is supported by the case of Chua Liong Hai & Ors v Lian Soon Industries Sdn Bhd [2004] 8 CLJ 117 which held that:

 

“Therefore, the defendants; solicitor’s submission on the issue of irregularity is inadmissible as the same is not based on evidence from the affidavit in support filed by the defendants. It is also trite law that submission on evidence from a solicitor (evidence from the Bar) is inadmissible in a court of law, without the support of any affidavit evidence in an application based on affidavit evidence. It is also trite law that parties are bound by affidavit evidence made by it. The defendants’ solicitors action in raising issues not deposed in affidavit prejudiced the plaintiff.”

 

[9] The JD further submits that this application is misconceived as the BN and CP is based on a single judgment for all 8 creditors. Thus a single BN was issued and a single CP was mounted. In such a situation, the JD submits that the BN must be withdrawn and fresh proceedings to commence. This is because there is no such provision under Bankruptcy Act 1967 (BA 1967) which

 

allows a JC to withdraw, and under section 95 of the BA 1967, the Court may only allow substitution of petitioner and change the carriage of proceedings where the petitioner does not proceed with due diligence. Section 95 reads:

 

“95. Power to change carriage of proceedings

 

Where the petitioner does not proceed with due diligence on his petition, the court may substitute as petitioner any other creditor to whom the debtor is indebted in the amount required by this Act in the case of a petitioning creditor, or may give the carriage of the proceedings to the Director General of Insolvency, and thereafter the proceedings shall, unless the court otherwise orders, be continued as though no change had been made in the conduct of the proceedings.”

 

[10] The JD further submits that the English position, as reflected in para 173 and 174 of Halsbury Laws of England, which allows wider ground for substitution of petitioner and change of carriage of petition, is not found in our provisions.

 

[11] However, I am of the considered opinion that since this application is not for the substitution of a JC or a change of carriage of petition, the issue of section 95 of the BA 1967 and paras 173 and 174 of Halsbury Laws of England, are not relevant. In cases involving substitution and change of carriage of petition, they are only relevant where the JC does not proceed with the petition with due diligence or has no intention to prosecute the

 

petition, and other JC wants to continue with the proceedings. In this case, there is no issue of the intention of the other 7 JC wanting to continue with the petition. Therefore, there is no statutory limitation in the BA 1967 with regards to an application by a JC to withdraw from the bankruptcy proceedings.

 

[12] Added to that, I agree with the learned Counsel for the JC that section 93(3) of the BA 1967, read with rule 276 of the Bankruptcy Rules 1969 meant that the ROC 2012 is applicable where the provisions on amendment and parties is silent in the BA 1967 and Rules 1969. The relevant provisions read:

 

(i) Section 93(3) of the BA 1967:

 

“93. Discretionary powers of the Court (1)

 

(2) …

 

(3) The court may at any time amend any written process or proceeding upon such terms, if any, as it thinks fit to impose…”

 

(ii) Rule 276 of the Bankruptcy Rules 1969:

 

“In the absence of any rule regulating any proceeding under the Act or these Rules, the Rules of the High Court shall apply, mutatis mutandis.”

 

[13] In the absence of any rules, Order 15 r 6 of the ROC 2012 with regards to parties and Order 20 r 8 of the ROC 2012 with regards to amendment are therefore applicable.

 

[14] In Re Kasiah Kasbah, ex p Sime Bank Bhd [2003] 5 CLJ 468, the Court held that in an application to amend the bankruptcy notice and the creditors petition, the Court will apply the principles in Yamaha Motor Co Ltd v Yamaha Malaysia Sdn Bhd [1983] 1 MLJ 213 in respect of amendment of pleadings under O. 20 r 5(1) RHC 1980, that is:

 

“The general principle is that the court will allow such amendments as will cause no injustice to the other parties. Three basic questions should be considered to determine whether injustice would or would not result, (a) whether the application was bona fide (b) whether the prejudice caused to the other side can be compensated by costs and (c) whether the amendments would not in effect turn the bankruptcy proceeding from one character into an inconsistent proceeding of another and inconsistent character.”

 

[14] On the issue of bona fide, the JD submits that this application is not bona fide as RHB Bank had agreed to withdraw the bankruptcy proceedings. As I have said earlier, there is no affidavit to support this contention, whilst the letter from RHB Bank clearly shows that they wanted to cease from being a party from these proceedings, which resulted in the filing of this application.

 

[15] Added to that, I agree with the contention of the JC that this application is made bona fide as one of the creditors of the Judgment dated 29.10.2010, RHB Bank wanted to withdraw itself from these proceedings as it has settled its portion of the Judgment sum with the JD. From the Judgment sum of RM28,651,503.00 (as at 7.11.2012) payable to the JCs, RHB Bank portion is RM9,268,336.25, leaving a balance sum owing at RM19,058,321.15 as at 24.2.2011. Therefore, the JCs rights are not prejudiced by the acceptance of payment made by the JD to RHB Bank, as it does not result in the BN and CP to become defective or irregular. The debt owing under the Judgment is not reduced to below the statutory amount of RM30,000.00. In Soveriegn General Insurance v Koh Tian Bee [1988] 1 CLJ 155, the Supreme Court held that:

 

“Where a bankruptcy notice has been served and not complied with, in respect of a judgment debt which has subsequently been reduced on appeal, that reduction does not retrospectively per se cause the notice to become defective or irregular..”

 

[16] This position is reaffirmed by the Federal Court in Moscow Narodny Bank Ltd v Ngan Cin Wen [2004] 2 CLJ 241 where the Court held that the jurisdiction of the bankruptcy Court is not ousted when the balance debt is still above the statutory minimum sum. At page 260, Hamid Mohamad FCJ held that:

 

“Malaysian courts have, on many occasions, followed Re Patel and took similar view, ie where after the filing of the creditor’s petition the amount owing by the debtor is reduced, the petition is not bad as long as the amount remaining owing at the date of hearing of the petition is more than the statutory limit…”

 

[17] Therefore, I am of the considered opinion that since RHB bank no longer wants to be involved in these proceedings, the application pursuant to Order 15 r 6 ROC 2012 should be allowed. This necessitates the consequential amendments to the sum owing and therefore the amendments to the BN and the CP should also be allowed accordingly.

 

[18] Premised on the reasons enumerated above, the application is allowed with cost.

 

(AZIZAH BTE HAJI NAWAWI) JUDGE

 

HIGH COURT MALAYA (Commercial Division) KUALA LUMPUR

 

Dated: 12 May 2016

 

For the Judgment Creditor : Lua Ai Siew and Ely Azura Messrs Soo Thien Ming & Nashrah Kuala Lumpur.

 

For the Judgment Debtor : Datuk Malik Imtiaz Messrs Woon & Co. Seremban, Negeri Sembilan.

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