Ewe Saw Lee v Dato' Sri Andrew Kam Tai Yeow (WA-29NCC-45-01/2024)

These Grounds concern 2 Notices of Appeal filed vide Encl 86 and Encl 99.

Encl 86 is an appeal by the Judgment Creditor (“JC”) against the decision of the Deputy Registrar on 21.5.2025 in not proceeding with but adjourning the hearing of the Creditor’s Petition (“the CP”). The basis of the decision was that the JD had filed Encl 72 to set aside the CP.

In the end, the Deputy Registrar did eventually dismiss Encl 72 on 3.7.2025. The Judgment’s Debtor (“JD”) appealed the dismissal vide Encl 99.

This saga is a typical example of how judgment debtors will try to game the system in order to delay the CP and the inevitable bankruptcy orders that ensue. I have set out some thoughts on such efforts in the Postscript to these Grounds.

The contents of these Grounds are as set out in the table below: Contents Para No BACKGROUND FACTS 6-7 The Interlocutories 8-12 Adjournment of the CP, Rule 19 & Encl 72 13-15 THE APPEAL IN ENCL 86 - & THE ADJOURNMENT OF THE CP 16 Rule 19 & Encl 72 17-21 The Deliberate Delay & Abuse 22-28 THE APPEAL IN ENCL 99 – THE DISMISSAL OF ENCL 72 29-37 CONCLUSION 38-39 Postscript 40-45

On 21.11.2023, the JC obtained a final judgment (“the Judgment”) against the JD for RM2,167,029.52 in the High S/N Ff7vq5/nh0uyLEQ/ErxFoA Court and/or the Court of Appeal. Based on the Judgment, the CP was filed by the JC on 29.11.2024. Presently, there are no remaining appeals and the Judgment now stands indisputable. In any event, a Bankruptcy Court cannot look behind the Judgment except in very limited instances such as fraud, collusion or a miscarriage of justice, see the Supreme Court (as it then was) in Sovereign General Insurance Sdn Bhd v Koh Tian Bee (Sovereign General) [1988] 1 MLJ 304, at p 305. No such allegations have been made here.

Given the inability of the Bankruptcy Court to look behind the Judgment, any challenge to the CP in bankruptcy proceedings could only be made on procedural or technical grounds. Indeed, the CP did provoke a series of adjournments and tactical interlocutory applications.

On 16.1.2025, the JD filed Encl 49 to stay the bankruptcy proceedings; and on 17.1.2025, the JD filed Encl 51, a notice of intention to oppose the CP.

The first hearing of the CP was fixed for 28.01.2025. However, counsel for the JD requested an adjournment given the proximity of the then pending Chinese New Year holidays. The Deputy Registrar allowed the adjournment. A new hearing date was fixed for 6.2.2025.

However, on 6.2.2025, the CP was again adjourned by reason of the stay application in Encl 49, filed on 16.1.2025. Subsequently, on 28.3.2025, the Deputy Registrar dismissed Encl 49.

The CP was then fixed for hearing on 21.5.2025, a pivotal date in this saga. On 16.5.2025, the Deputy Registrar was informed by the JD that some 2 days earlier (14.5.2025), Encl 72 to set aside the CP, was filed. On 19.5.2025, the sealed copy of Encl 72 was served by email, and physically, on 20.5.2025. These are important events.

By an E-mail to the Deputy Registrar, the JC objected to Encl 72 on the grounds that it was filed late and was designed to delay and frustrate the hearing and disposal of the CP; the JC also pressed for the hearing of the CP to proceed on 21.5.2025, as scheduled. Adjournment of the CP, Rule 19 & Encl 72

The Deputy Registrar did not hear the CP fixed on 21.5.2025. He wanted further written submissions on the effect of Rule 19. Instead, the Deputy Registrar adjourned the CP on the basis of Encl 72 and then fixed the CP for hearing on 4.6.2025.

However, the hearing of the CP on 4.6.2025 was also adjourned and re-scheduled for case management (“CM”) on 3.7.2025 S/N Ff7vq5/nh0uyLEQ/ErxFoA due to the JD’s another last-minute filling of a fresh application under Encl 79, this time, for an interim stay of the CP.

It is noted that at the hearing of the CP before the Deputy Registrar on 21.5.2025, the JC submitted that Encl 72 (for stay of the CP) should be ignored as the service of Encl 72 breached Rule 19 of the Insolvency Rules 2017 (“Rule 19”). Rule 19 provided that any application (thus including Encl 72) must be filed 8 clear days before the hearing: “Except where these Rules or the Act otherwise provide, an application and the affidavit in support shall be served on every party affected not less than eight working days before the day appointed for the hearing.” THE APPEAL IN ENCL 86 -

The JC attacked the adjournment on 21.5.2025 (the subject of the appeal in Encl 86) for 2 reasons. First, it was submitted that Encl 72 was filed in breach of Rule 19 and secondly, it was an abuse of process. As such, it is said, the Deputy Registrar should have ignored Encl 72 instead of relying on it to adjourn the CP.

In this respect, I do accept that Rule 19 is mandatory. In Lim Koon Chow v Ambank (M) Bhd [2012] 4 CLJ 624. Lee Swee S/N Ff7vq5/nh0uyLEQ/ErxFoA Seng JC (as he then was) held in relation to Rule 20 of the Bankruptcy Rules 1969 (which is in pari materia to Rule 19), that: “[13] Learned counsel for the JC submitted that encl 18 is vexatious, frivolous and an abuse of the court's process. Enclosure 18 served on the JC five days before the hearing of the CP on 14 September 2011 is for the same reliefs and premised on similar grounds as the previous encl 16 served a day before the hearing of the CP then fixed on 19 April 2011. In the absence of cogent reasons why the same application is filed twice and both with a similar pattern of last-minute service on the JC just before the hearing of the CP, this court would agree with the JC's submission that the second filing was done in bad faith with a view to causing the hearing date of the CP to be postponed and is thus an abuse of the court's process. At any rate there was no express condition that the JD was at liberty to file afresh an application to set aside the substituted order of the CP. The Application In Encl. 18 Is In Breach Of The Bankruptcy Rules 1969 [17] Rule 20 of the Bankruptcy Rules 1969 clearly provides that: ‘Except where these Rules or the Act otherwise provide, an application and the affidavit in support shall be served on every party affected thereby not less than eight clear days before the day appointed for the hearing.’ [18] The JD only served the sealed copy of the application in encl. 18 on the JC's solicitors at 3pm on 9 September 2011, hardly five days before the hearing of the CP fixed on 14 September 2011. S/N Ff7vq5/nh0uyLEQ/ErxFoA I agree with learned counsel for the JC that the JD had some three months from the previous date of 7 June 2011 when a similar application in encl. 16 was withdrawn, to file this application in encl.

Instead he chose to file it only on 26 August 2011 knowing very well that there were the intervening Raya and Merdeka Day holidays. The JD had also failed and/or neglected to serve an unsealed copy of encl. 18 on the JC's solicitors. [19] On that ground alone the application in encl. 18 ought to have been dismissed for non-compliance with r. 20 of the

Lim Koon Chow (supra) dealt with various applications by the JD to defeat the CP, namely, applications to set aside the substituted service of the CP, the BN, and the CP itself. The application in question was the application to set aside the Order for substituted service (Encl 18). It was dismissed on the ground, inter alia, that it was filed and served hardly 5 days before the hearing of the CP in breach of Rule 20 of the Bankruptcy Rules 1969, which is in pari materia with Rule

19.

Therefore, it must follow that the requirement under Rule 19 for service not less than 8 working days before the day appointed for the ‘hearing’ applies to the hearing of the CP itself. Justice Lee, at para 18, calculated the time for the filing and service of the JD’s applications with reference the hearing date of the CP. I accept this approach, but if I am wrong, I am firmly of the view that the adjournment was procured by an abuse of process as set out in paras 22 to 26 below.

As stated above at para 11, Encl 72 was served on 19.5.2025 via email, and physically on 20.5.2025. Since the CP was scheduled to be heard on 21.05.2025, Encl 72 was served (in breach of Rule 19) less than 2 working days before the hearing of the CP.

Encl 72 was therefore served in contravention of Rule 19. On this ground, the adjournment of the CP on 21.5.2025 because of Encl 72 was flawed. The Appeal in Encl 86 should be allowed.

Additionally, in Lim Koon Chow (supra), Encl 18 therein was served only 5 days before the hearing of the CP. Justice Lee (at para 19) held that such late filing and service was calculated to delay the hearing of the CP and was independently, an abuse of process. On this ground alone, Encl 18 was dismissed.

Here, it was also submitted that the late filing and service of Encl 72 was designed to delay the hearing of the CP and was similarly, an abuse. Otherwise, any party could file a last-minute application which would frustrate and delay the hearing of a CP.

I also accept that the JD had ample time to file Encl 72 to set aside the CP. In this context, I am reminded that Encl 49 was dismissed on 28.3.2025. At that hearing, Counsel for the JD indicated that he still intended to file an application to set aside S/N Ff7vq5/nh0uyLEQ/ErxFoA the CP in the event the stay was not granted. Despite having 55 days from 28.3.2025 to 21.5.2025 (the hearing date of the CP) to file for the stay in Encl 79, the JD instead waited until the eve of the said hearing to file and serve Encl 72 on 19/20.5.2025. The inevitable inference is, and I accept, that the late filing of Encl 72 was a deliberate manoeuvre designed to ‘scuttle’ the hearing date of the CP.

Accordingly, for this second reason, the Deputy Registrar was wrong to have adjourned the CP but instead, should have proceeded to hear it as scheduled.

In my mind, the JD’s conduct, viewed cumulatively, was designed to delay and frustrate the disposal of the CP by deliberately timed interlocutory applications and adjournments. It seems plain that the Deputy Registrar fell for this tactical abuse to grant the adjournment of the CP; although perhaps only initially (see para 29 below).

In summary, the Deputy Registrar erred in various aspects. He failed to give effect to the mandatory Rule 19 and failed to dismiss Encl 72. And he failed to hear the CP scheduled for hearing on 21.5.2025, but instead, adjourned the CP.

As such, I allowed the appeal in Encl 86. THE APPEAL IN ENCL 99 –

It was during the CM on 3.7.2025 that the Deputy Registrar eventually dismissed Encl 72. His decision was premised on the objections raised by the JC and the matters as outlined at paras 16 to 28 above.

By Encl 99, the JD appealed the dismissal.

In my view the Deputy Registrar was correct to dismiss Encl 72, particularly having regard to Rule 19 and the abuse by the deliberate delay in filing Encl 72, see paras 16 to 28 above.

It is important to note that Lim Koon Chow (supra) also dealt with various applications to set aside by the JD, namely, those to set aside the substituted service of the CP (Encl 18), the BN, and the CP itself. The Court dismissed Encl 18, inter alia, on the ground that it was filed and served in breach of Rule 20 of the Bankruptcy Rules 1969, which is in pari materia with Rule 19.

More importantly the said Encl 18 was served only 5 days before the hearing of the CP, and the Court held that such late filing and service was calculated to cause a delay of the hearing of the CP, which amounted to an abuse of process. The said application was accordingly dismissed on this ground as well.

Similarly, in the present case, Encl 72 was served less than 2 working days before the hearing of the CP which was scheduled on 21.05.2025, thereby contravening the mandatory 8 clear S/N Ff7vq5/nh0uyLEQ/ErxFoA days stipulated under Rule 19. Also, the eleventh hour filing and service was calculated to delay the hearing of the CP and should have been ignored. Otherwise, any party to a proceeding could file last minute applications to frustrate and delay hearing of the CP.

As such in the present case, the Deputy Registrar was correct to apply Rule 19 and Lim Koon Chow (supra). The conduct of the JD similarly demonstrated a deliberate pattern of delay and last-minute applications aimed at frustrating the hearing of the CP. Encl 72 was rightly dismissed. It was an abuse.

In any event, following the dismissal of the JD’s appeal to the Court of Appeal against the Judgment on 3.7.2025, the JD discontinued both Encl 71 and Encl 79, which proved unnecessary.

Additionally, at the CM held on 3.7.2025 when the Deputy Registrar informed the parties that Encl 72 had been dismissed, the JD’s solicitors informed the Court that the JD wished to settle the Judgment. The JD requested 6 weeks to make payment. Full settlement did not happen; instead, the JD filed the appeal in Encl 99. Such conduct casts doubt over the JD’s bona fides.

It appears that this drawn-out saga was a result of multiple applications and tactical adjournments to stifle the disposal of the CP.

In summary, I decided that: a. the adjournment of the CP on 21.5.2025 for the filing of Encl 72 was wrongful. I allowed Encl 86 with costs of RM1,500.00; b. it follows that the Deputy Registrar’s decision to dismiss Encl 72 was correct and accordingly, Encl 99 (the appeal against the dismissal of Encl 72) be dismissed with costs of RM5,000.00. Order accordingly.

As stated above, there has been an unhealthy practice in the bankruptcy courts whereby interlocutory applications are filed to stave off the making of bankruptcy orders on the hearing of the creditors petition.

This is particularly so when the underlying debt is a judgment debt and all appeals in the civil courts have been exhausted; and the bankruptcy court is unable to look behind the judgment. All that is available to the JD are therefore procedural and S/N Ff7vq5/nh0uyLEQ/ErxFoA technical objections to the bankruptcy proceedings. And such objections are taken in each step of the proceedings prior to the hearing of the CP leading to endless applications and delays. Typically, these include: a. a challenge to the request to issue the Bankruptcy Notice; b. an application to set aside the Bankruptcy Notice (if issued); c. an application to set aside the service of the CP (and to set aside the order for substituted service, if obtained); d. an application to set aside the CP; e. each application will be accompanied by a corresponding application for stay of the bankruptcy proceedings pending the disposal of each of these applications; f. if unsuccessful, there will be an appeal to the Judge (and perhaps to the higher appellate Courts) with accompanying applications for stay.

In Lim Koon Chow (supra) there were indeed, various applications to set aside by the JD, namely, to set aside the substituted service of the CP, the BN, and the CP itself. Such delaying tactics were commented on by Vernon Ong J (as he then was) in Re Tunku Maryam bt Tunku Zainal Abidin; Ex-S/N Ff7vq5/nh0uyLEQ/ErxFoA Parte Arab Malaysian Finance Berhad [2007] 8 MLJ 714, who referred to Maril-Rionebel (supra) and held that: “[23] With the proliferation of credit-card issuance and debts and easy availability of car loans and defaults, I would anticipate an increasing and substantial workload of bankruptcy cases in the near future, especially in the commercial courts and the Court of Appeal. The courts would be overwhelmed with a deluge of such work. In Malaysia, this observation could also apply to winding-up cases in court, due to the tendency of lawyers to adopt the short-cut statutory (rather than the common law) method of debt recovery, at times, even for recovery of their professional fees. In his tour of duty, having served a substantial period in the Commercial Division, I think we should take heed of the words of Hamid Mohamed JCA (as he then was), when, in Maril-Rionebel (M) Sdn Bhd & Anor v Perdana Merchant Bankers Bhd and other appeals [2001] 4 MLJ 203 (a winding-up matter), he observed that: ‘As pointed out by my learned brother Gopal Sri Ram JCA, the unhealthy trend is, upon being served with a petition, instead of defending the petition proper at the hearing of the petition, the respondent makes all kinds of interlocutory applications that would invariably stall the hearing of the petition proper. If the application is dismissed, the respondent would appeal to the Court of Appeal, or may even try to go further, further delaying the hearing of the petition. I have come across cases when even an order made by the senior assistant registrar under r 32 of the Companies (Winding-up) Rules 1972 ('the Rules') was appealed against, and when the appeal was dismissed, the respondent further appeal to the Supreme Court (see Asia Commercial Finance (M) Bhd v Lum Choon

Of course, having filed the notice of appeal, the respondent then filed a notice of motion to stay all proceedings pending the disposal of the appeal by the then Supreme Court. When the notice of motion was dismissed, another appeal was filed. The effect is that the hearing and disposal of the petition is delayed.’ [24] Regrettably, even in Bankruptcy cases, I have observed the common ploy of JDs to grossly delay court proceedings, by making all sorts of applications for striking out etc at the BN stage, as well later, at the CP stage of the proceedings and then to appeal to the judge in chambers, the Court of Appeal and even to the Federal Courts coupled with an application for stay of the petition. In the result, it sometimes takes a JC eight to fifteen years to recover the judgment debt or to secure a truly final adjudication and receiving order. Just take this case as an example. The JC first obtained judgment on 1st June 1995 before the SAR, which was confirmed by the judge in chambers and the Court of Appeal without further appeal by the JD. Until now, about 11 years later, the JC has yet to recover the fruits of litigation.”

The observations of Vernon Ong J are apt.

I do believe that the approach of the winding-up Courts as to multiple interlocutory challenges to the winding-up petitions, should be applied in bankruptcy. For completeness, the practice as referred to in Re Tunku Maryam (supra) is as stated in Maril-Rionebel (M) Sdn Bhd & Anor v Perdana Merchant Bankers Bhd and other appeals [2001] 4 MLJ 203 per Abdul Hamid Mohamad JCA (as he then was) in the Court of Appeal.

As such, all interlocutory challenges to bankruptcy proceedings prior to the creditor’s petition, should (except in special circumstances) be taken at the hearing of the creditor’s petition itself. As an example, I gladly refer to the Federal Court’s decision in Dato’ Sri Teong Teck Leng v Jupiter Securities Sdn Bhd [2003] 4 CLJ 34, where the Court held that there should be no separate hearing of the notice of intention to oppose the creditor’s petition; it is to be considered at the hearing of a creditor’s petition. I believe this approach to interlocutory applications in bankruptcy to be correct. Dated the 18th day of December 2025 ...........................tt............................ YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISSIONER OF THE HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) OF KUALA LUMPUR IN THE TERRITORY, MALAYSIA Counsel for the Judgment Debtor: Solicitors: Ooi Xi Fang Messrs. Sathya, Lee & Co. (Kuala Lumpur) S/N Ff7vq5/nh0uyLEQ/ErxFoA Case References: • Dato’ Sri Teong Teck Leng v Jupiter Securities Sdn Bhd [2003] 4 CLJ 34 • Lim Koon Chow v Ambank (M) Bhd [2012] 4 CLJ 624 • Maril-Rionebel (M) Sdn Bhd & Anor v Perdana Merchant Bankers Bhd and other appeals [2001] 4 MLJ 203 • Re Tunku Maryam bt Tunku Zainal Abidin; Ex-Parte Arab Malaysian Finance Berhad [2007] 8 MLJ 714 • Sovereign General Insurance Sdn Bhd v Koh Tian Bee (Sovereign General) [1988] 1 MLJ 304 Legislation References: • Rule 19 of the Insolvency Rules 2017 (“Rule 19”) • Rule 20 of the Bankruptcy Rules 1969 Decision Date: 13th October 2025 Counsel for the