Dscaff Engineering Sdn Bhd v Hashmuddin Bin Yaacob (WA-22NCvC-728-11/2020)

The Defendant in this case applied for summary judgement for his counterclaim against the Plaintiff under Order 14 of the Rules of Court 2012 (“the Rules”).

Order 14 of the Rules states as follows:

Application by plaintiff for summary judgment (O. 14 r. 1)

Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the 24/03/2023 11:38:19 WA-22NCvC-728-11/2020 Kand. 83 S/N koofft16kmQZTSA/LX3sw writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant. Brief facts

The Plaintiff had been appointed by a company called SECB to amongst others to provide manpower for scaffolding works for a project called MDE5.

The Plaintiff in turn had appointed the Defendants as sub-contractors by way of a sub contract to supply manpower for the scaffolding works in pursuance of a service order. Under the sub contract the Defendant would invoice the Plaintiff for payment.

The Plaintiff contended that it was an implied term of the contract and also a market practice that the Defendants will not deal directly with SECB.

Notwithstanding this implicit term of the contract as well as market practise the Plaintiff discovered sometime in June 2019 that the Defendant had dealt directly with SECB on the supply of manpower. In doing so the Defendant had made use of the assets belonging to the Plaintiff and in particular used the scaffolding belonging to the Plaintiff for his own use. S/N koofft16kmQZTSA/LX3sw

Following this discovery, the Plaintiff terminated the sub contract on 14/11/2019 and by this suit is claiming damages from the Defendant for the misuse of the Plaintiff’s asset.

The Defendant denied there were any restrictions of him dealing directly with SECSB on the supply of manpower. The Defendant also averred that the sub contract between him and the Plaintiff was not limited to supplying of manpower but included installation and dismantling of the scaffolding of the Plaintiff.

In short the Defendant denied the Plaintiff’s claim and in turn counter claimed for a sum of money as stated in the invoices sent to the Plaintiff for the works done on behalf of the Plaintiff.

The Defendant is now applying for summary judgement for the sums outstanding and remained unpaid by the Plaintiff as invoiced. The issue

In the Court’s view, the real issue facing the Court in determining the Defendant’s application for summary judgement against the Plaintiff on his counter claim, is can the Defendant, who is an undischarged bankrupt, initiate any action against the Plaintiff without the consent of the Director General of Insolvency? The disability of an undischarged bankrupt

The effect of a bankruptcy order is clear and unambiguous as stated under section 8 (4) of the Insolvency Act 1967 as follows: S/N koofft16kmQZTSA/LX3sw

On such order as aforesaid being made against a debtor the Director General of Insolvency shall forthwith take possession of all books of account and other papers and documents in the possession, custody or control of the debtor relating to his property or affairs, and may take into his possession all or any deeds, books, documents and other property of the debtor.

In other words all affair of the bankrupt after being declared a bankrupt is taken over by the Director General of Insolvency. It also means that the bankrupt cannot initiate without getting the consent of the Director General of Insolvency.

This is made clear under section 38 (1) of the Insolvency Act 1967 which is worded as follows:

Where a bankrupt has not obtained his discharge-

the bankrupt shall be incompetent to maintain any action (other than an action for damages in respect of an injury to his person) without the previous sanction of the Director General of Insolvency;

In the Court’s view the conclusion in this case is clear that neither the Defendant has the ability to apply for the summary nor initiate S/N koofft16kmQZTSA/LX3sw any claim against the Plaintiff without first getting the consent of the Director General of Insolvency.

Base on this conclusion the Court not only dismissed the Defendants’ application for summary judgement but also struck off the Defendant’s claim as being an abuse of the process of court.

The Court has power to do so under its inherent jurisdiction as well as under Order 18 Rule 19 of the Rules. Dated: 23.3.2023 sgd DATO’ HAJI AKHTAR BIN TAHIR Judge High Court of Malaya, Kuala Lumpur S/N koofft16kmQZTSA/LX3sw PARTIES For the Plaintiff: Tetuan Lewis Lim & Min Lee B-9-11, Plaza Mon’t Kiara No. 2 Jalan Kiara Mon’t Kiara 50480 Kuala Lumpur For the Defendant: Tetuan W. Mohd Eirman & Co. No. 52, Jalan 10/27A Seksyen 5 Wangsa Maju 53300 Kuala Lumpur S/N koofft16kmQZTSA/LX3sw