Andrea Tan Soon Li for the Judgment Creditor [Messrs Peters Chambers] v Muhammad Zahir Sanjay Bin Abdullah for the Judgment Debtor [Messrs Muhammad Zahir] (WA-29NCC-2160-12/2020)

There are 2 Notices of Appeals to the Judge in Chambers both dated 24.1.2022 before this Court in enclosure 119 (Enclosure 119) and enclosure 120 (Enclosure 120) respectively with the former being an appeal against the decision of the Learned Deputy Registrar given on 12.1.2022 dismissing the Judgment Debtor’s (JD) objection in enclosure 46 and dismissing enclosure 50 (Enclosure 50), and Enclosure 120 being an appeal against the decision of the Learned Registrar given on 12.1.2022 ordering that the Judgment Creditor’s (JC) Amended Creditors Petition dated 4.2.2021 (Amended CP) and Affidavit of Truth of Statements in Petition in 2 enclosure 66 (Enclosure 66) had been properly served on the JD personally on 23.7.2021 and 22.9.2021.

Enclosure 50 is the JD’s Application to set aside the Amended CP on the grounds that:-

on 23.7.2021 the JC had served the same without enclosing the Affidavit of Truth of Statements In Petition

(ii) on 30.7.2021 the JC had served the Amended CP and the said Affidavit of Truth of Statements In Petition but the JD had refused to accept the same

Enclosure 66 on the other hand is the JC’s application to serve the Amended CP by way of substituted service on the ground that the JD had attempted to evade personal service of the Amended CP and the said Affidavit of Truth of Statements In Petition when the JD was at the address in question at the material time.

The JC commenced a writ action in the Sessions Court [Suit No.: WA-B52-79-10/2018] whereby the Learned Sessions Court Judge decided, amongst other as follows:

4.1 Allowing the JC’s application to enter summary judgment against the JD on 24.4.2019 (“the said Judgment”).

Vide an Order dated 6.3.2020, the High Court had dismissed the JD’s Appeal in which the JD had subsequently filed an appeal to the Court of Appeal. 3

5.1 On 28.6.2021, the Court of Appeal had dismissed the JD’s Appeal with costs.

On or about December 2020, the JC had filed and caused to be issued the said BN (which was founded upon the said Judgment) together with the said Request for issuance of BN upon the JD.

The said BN and the said Request for issuance of BN were personally served on the JD on 16.12.2020 at 4 pm.

As a result of the JD’s failure to comply with the said BN, the said CP was then filed on 4/2/2021, stating that the JD had committed and act of bankruptcy on 24.12.2020.

Upon filing the said CP, this Honourable Court had directed for an Amendment Application to be filed.

On 24/6/2021, the Deputy Registrar allowed the Amendment Application with parties to bear their own costs.

10.1 Upon Appeal to Judgment in Chambers, this Honourable Court dismissed the JD’s Appeal with costs on 25.10.2021.

Subsequently, the JC filed the Amended CP.

After reading and perusing the respective affidavits, exhibits and written submissions as well as after hearing the oral submissions by 4 counsels for the respective parties, my grounds for the decision in respect of the said Appeals will be as follows.

With regards the preliminary objection (PO) raised by the JD that the JC’s Written Submissions was filed on 11.3.2022 without obtaining an extension of time to do so, I am dismissing the said PO as the late filing is not prejudicial to any party herein and I am hereby exercising my discretion to allow the said JC’s Written Submissions to be admitted.

I now turn to the JC’s PO that the Appeals are defective and incompetent in the sense that the Appeals in Enclosure 119 and Enclosure 120 do not specify the order sought to be obtained before the Judge.

After reading both the Appeals in Enclosure 119 and Enclosure 120 I agree with the JC that the Appeals were framed broadly and does not specify the order sought to be obtained before the Judge. This Court therefore holds that there has been non compliance with order 56 rule 1 of the Rules of Court 2012 and Form 114 thereto in which the latter specifically requires that the JD does state:

the full order appealed against and

(ii) the order sought to be obtained from the Judge

Authority for the same can be found in the case of Genisys Intergrated Engineers Pte Ltd v UEM Genisys Sdn Bhd & Ors 5 (No.2) [2001] 5 CLJ 556 where Ramly Ali J (as His Lordship then was) held: “Based on the above authorities, I am of the opinion that an appellant must comply with the two mandatory requirements under Form 114 RHC:- i) to state in full the order appealed against; and ii) to state the order sought to be obtained.”

The lack of the order sought to be obtained before the Judge is therefore fundamental and is in my view a serious non compliance with the rules as aforesaid and prejudicial to the JC. On this basis alone, the Appeals should be dismissed and I uphold the JC’s PO on the same.

As to the JC’s objections in respect of the Appeals being served late i.e 2 days after the date in the said respective Notice of Appeals instead of the 5 days period before the day specified in the Notice of Appeal as required under the Rules of Court 2012. I find no prejudice caused on the JC as a result of the same and will disregard this head of objection.

Should I be wrong on my decision as regards the said PO’s raised, I will never the less hereinafter go into the main or substantive issues of the said Appeals. 6

On the first main issue of whether the JC had served the Amended CP and the said Affidavit of Truth of Statements In Petition to the JD, Section 6 of the Insolvency Act 1967 provides:

A creditor's petition shall be verified by affidavit of the creditor or of some person on his behalf having knowledge of the facts, and shall be served personally to a debtor.

Notwithstanding subsection (2), the court may make an order for substituted service of a creditor's petition as prescribed if the creditor can prove to the satisfaction of the court that the debtor, with intent to defeat, delay or evade personal service:

departs out of Malaysia or being out of Malaysia remains out of Malaysia; or

departs from his dwelling house or otherwise absents himself, or secludes himself in his house or closes his place of business.

In this respect Rule 108 of the Insolvency Rules 2017 also provides: A creditor's petition shall be personally served and the service shall be effected by an officer of the court or by the creditor or his solicitor or a person in their employment by delivering a sealed copy of the petition to the debtor.

It is to be noted from and Rule 108 of the Insolvency Rules 2017 that the requirement of the Affidavit Verifying the Petition to. be served with the Creditors Petition is not mentioned. 7

From the facts before me, the service of the Amended CP was served on the JD on 23.7.2021 at the JD’s address and the said JD had acknowledge receipt of the same as can be seen in exhibit MM- 1 of the JC’s Solicitors Affidavit of Service at enclosure 68 but the said Amended CP was not accompanied with the Affidavit Verifying the Petition, which fact has also been admitted by the JD, and where the JC’s Solicitors then attempted to serve the said Affidavit Verifying the Petition on 30.7.2021 which service was unsuccessful as the JD had refused to accept service of the same.

I agree with the Learned Deputy Registrar that based on the above facts, the Amended CP was properly served on the JD. I say this as I hold that despite the words in section 6 of the Insolvency Act 1967 stating that the CP should be personally served on the JD and shall be accompanied with the Affidavit Verifying the Petition, the absence of the Affidavit Verifying the Petition when the Amended CP was served on the JD does not in anyway cause any substantial injustice to the JD and that the JD has failed to show evidence of such injustice occurring despite averring to the same. Accordingly, I hold Section 131 of the Insolvency Act 1967 is applicable and which reads: No proceeding in bankruptcy shall be invalidated by any formal defect or by any irregularity, unless the court before which an objection is made to the proceeding is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by any order of that court. 8

My decision is further fortified by Rule 282 of the Insolvency Rules 2017 which states: Non-compliance to any of these rules or with any of practice for the time being in force shall not render any proceeding void unless the court shall direct but such proceedings may be set aside either wholly or in part as irregular or amended or otherwise dealt with in such manner and upon such terms as the court may think fit.

I further wish to refer to and adopt what was stated by the High Court in Mat Ripen Bin Mat Elah v Periwra Affin Bank Berhad [2005] MLJU 121: “A cursory perusal of the Bankruptcy Rules will show that the purpose of the verifying affidavit is for the consumption of the Registrar only, to demonstrate to him that the contents of the CP are accurate and true (rule 108). From this affidavit, he will also be able to decide whether the contents are more than sufficient to assist him to arrive at a decision, or a need still arises for him to summon witnesses to prove the statements in the petition. In other words it is an administrative relevancy, to act as a conduit or source of evidence for his investigation, before sealing and returning the petition for service. (emphasis mine)”

Although the above case was decided pre the current Insolvency Act 1967, I am never the less of the opinion that purpose of the Affidavit Verifying the Petition remains the same i.e for the Registrar to determine that the contents of the Creditors Petition are true. 9

I have also in coming to my decision herein, considered the JD’s submissions that Parliament had intended by way of act the Insolvency Act 1967 act A1534/2017, which came into effect in 2017, that the Amended CP accompanied with the Affidavit Verifying the Petition was to be served personally on the JD. I hold that even if this was the case, Parliament had in its wisdom kept section 131 of the Insolvency act 1967 which is headed “Formal defect not to invalidate proceedings” which would mean that Parliament had at the end of the day left the validity of such formal defects to be decided by the Courts subject to no substantial injustice being caused by the defect or irregularity and that the injustice can be remedied by any order of that court.

The record before this Court at exhibit MZ 2 of enclosure 52 further shows that the JC had then attempted to serve once again the Amended CP accompanied together with the Affidavit Verifying the Petition by way of email on the JD on 26.7.2021. This second attempt at service is in my view not regular or proper as there was already service of the Amended CP personally on the JD on 23.7.2021, and the JC’s counsel reason for the same that they were doing the same as a matter of abundance of caution is misconceived.

There was thereafter an application filed by the JC in Enclosure 66 for the Amended CP accompanied together with the Affidavit Verifying the Petition to be served by way of substituted service (Substituted Service Application) on the JD which was dismissed by the Deputy Registrar on 12.1.2022 on the grounds that the 10 Amended CP accompanied together with the Affidavit Verifying the Petition were served on the JD on 23.7.2021 and 22.9.2021 respectively of which the JD is appealing against via Enclosure 120. I fail to see how the JD can appeal against a decision given against the JC and thus I hold the Appeal by the JD in Enclosure 120 is completely devoid of any merit.

Be that as it may, I hold that neither the second attempt at personal service of the Amended CP accompanied together with the Affidavit Verifying the Petition via email or the Substituted Service Application in Enclosure 66, does not distract from the fact that the personal service of the Amended CP on the JD on 23.7.2021 has been done and is valid and regular.

In the circumstances this Court is:

dismissing the Appeal in Enclosure 119 as being of no merit and I hereby affirm the decision of the Learned Deputy Registrar given on 12.1.2022 dismissing the Judgment Debtor’s objection in enclosure 46 and dismissing enclosure 50

(ii) dismissing Enclosure 120 as being of no merit

(iii) making no order as to costs. Dated: 13th day of June 2022 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT 11 Parties: Muhammad Zahir Sanjay Bin Abdullah for the Judgment Debtor [Messrs Muhammad Zahir] Andrea Tan Soon Li for the Judgment Creditor [Messrs Peters Chambers]