Jla Motorsports Sdn Bhd v Hamidah Binti Ishak (JA-29NCC-799-07/2025)

This appeal before this Court arises from the decision of the learned Senior Assistant Registrar delivered on 26.11.2025 whereby: a) the Judgment Debtor’s application vide Enclosure 6 to set aside the Bankruptcy Notice dated 28.07.2025 was allowed with costs of RM500.00; and b) the Judgment Creditor’s application vide Enclosure 9 seeking leave to amend the Bankruptcy Notice was dismissed without order as to costs.

The Judgment Creditor, being dissatisfied with the aforesaid decision, filed separate Notices of Appeal to the Judge in Chambers pursuant to Order 56 rule 1 of the Rules of Court 2012 vide Enclosures 43 and 44.

The present appeal therefore concerns two interrelated questions, namely:

whether the Bankruptcy Notice dated 28.07.2025 ought properly to be set aside; and

whether the Judgment Creditor ought to have been permitted to amend the said Bankruptcy Notice.

Having considered the cause papers, affidavits, written submissions, authorities cited by parties, the grounds of judgment of the learned Senior Assistant Registrar, and oral submissions advanced before this Court, this Court is satisfied that the learned Senior Assistant Registrar had erred in law and in principle in allowing Enclosure 6 and dismissing Enclosure 9. Accordingly, the appeal is allowed.

The Judgment Creditor obtained judgment against the Judgment Debtor in the sum of RM7,343,804.95.

Pursuant thereto, the Judgment Creditor issued a Bankruptcy Notice dated 28.07.2025 against the Judgment Debtor.

The Judgment Debtor subsequently filed Enclosure 6 seeking to set aside the Bankruptcy Notice on the basis that there existed errors in the computation of interest and dates stated therein.

The alleged error principally concerned the computation period for post-judgment interest, specifically the reference to interest calculated from 01.08.2019 to 15.07.2025 for a period of 2,175 days.

Following the filing of Enclosure 6, the Judgment Creditor filed Enclosure 9 seeking leave to amend the Bankruptcy Notice in order to rectify the alleged errors.

On 26.11.2025, the learned Senior Assistant Registrar allowed Enclosure 6 and dismissed Enclosure 9.

The Judgment Creditor now appeals against the entirety of the said decision.

The issues which fall for determination before this Court are as follows:

Whether the defects complained of in the Bankruptcy Notice constitute substantive defects or merely formal defects;

Whether section 131 of the Insolvency Act 1967 applies to validate the Bankruptcy Notice;

Whether the learned Senior Assistant Registrar erred in refusing leave to amend the Bankruptcy Notice; and

Whether the Bankruptcy Notice ought properly to have been set aside. APPLICABLE LEGAL PRINCIPLES

It is trite that an appeal from the decision of a Registrar to a Judge in Chambers is heard de novo.

Order 56 rule 1 of the Rules of Court 2012 expressly provides that an appeal shall lie to a Judge in Chambers from any judgment, order or decision of the Registrar of the High Court.

The principle governing such appeals has long been settled.

In Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 MLJ 30, the Federal Court affirmed that an appeal to the Judge in Chambers from the decision of a Registrar is effectively a rehearing where the Judge exercises his own discretion afresh.

The same principle was reiterated in Seloga Jaya Sdn Bhd v Pembenaan Keng Ting (Sabah) Sdn Bhd [1994] 2 MLJ 97 where the Supreme Court cited with approval the celebrated dictum in Evans v Bartlam that the Judge exercises his own discretion as though the matter came before him for the first time.

This Court respectfully adopts and applies the aforesaid principles.

Whilst due weight may be accorded to the findings of the learned Senior Assistant Registrar, this Court is nevertheless obliged to independently evaluate the merits of the applications before arriving at its own conclusion. WHETHER THE DEFECTS WERE SUBSTANTIVE OR MERELY

The central issue in the present appeal concerns the true nature of the errors contained in the Bankruptcy Notice.

The Judgment Debtor contends that the errors relating to the computation of interest rendered the Bankruptcy Notice void ab initio and incapable of amendment.

The Judgment Creditor, on the other hand, submits that the errors complained of were merely clerical or typographical in nature and did not occasion any substantial injustice or prejudice to the Judgment Debtor.

This Court agrees with the submissions advanced on behalf of the Judgment Creditor.

The alleged defect concerned the date and computation period for interest.

The Judgment Debtor was at all material times fully aware of:

the existence of the judgment debt;

the date of judgment;

the basis upon which post-judgment interest was claimed; and

the approximate amount claimed.

The impugned error did not create uncertainty as to the existence of the debt itself. Neither did it render the Bankruptcy Notice unintelligible or incapable of understanding.

Most importantly, the alleged defect did not reasonably mislead the Judgment Debtor concerning the nature or basis of the claim.

This distinction is critical.

Section 131 of the Insolvency Act 1967 provides as follows: “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.”

The provision clearly reflects a legislative intention that bankruptcy proceedings ought not be defeated by technical or procedural defects unless substantial injustice is demonstrated.

The jurisprudence concerning section 131 is equally clear.

In Rengasamy Pillai v Comptroller of Income Tax [1970] 1 MLJ 233, the Privy Council explained that the true test is whether the defect complained of is of such nature as could reasonably mislead the debtor upon whom the notice was served.

The Privy Council further held that where the defect could not reasonably mislead the debtor, the defect constitutes a formal defect validated by the statutory provision.

This Court respectfully adopts the reasoning in Rengasamy Pillai (supra).

Applying the aforesaid test to the present appeal, this Court finds that the defect complained of could not reasonably have misled the Judgment Debtor.

The Judgment Debtor was already aware of:

the judgment sum;

the existence of post-judgment interest;

the relevant judgment date; and

the fact that the Bankruptcy Notice arose directly from the judgment debt previously obtained.

The Judgment Debtor has also failed to demonstrate any actual prejudice suffered.

Indeed, as correctly submitted by the Judgment Creditor, the alleged error would have resulted in a lower rather than higher computation of interest.

In the circumstances, this Court is unable to conclude that any substantial injustice had arisen.

The learned Senior Assistant Registrar concluded that the defect was substantive in nature and incapable of cure under section 131.

With respect, this Court is unable to agree. The learned Senior Assistant Registrar appears to have treated the error as automatically fatal merely because it involved computation of interest.

However, the authorities establish that not every error in a Bankruptcy Notice renders the notice void ab initio. The proper inquiry remains whether the defect reasonably misled the debtor or caused substantial injustice.

This Court finds that the learned Senior Assistant Registrar had insufficiently considered this aspect.

The Judgment Creditor relies on Re Azizul Nizam bin Bidin; Ex Parte Solsis (M) Sdn Bhd [2017] 11 MLJ 459 for the proposition that errors involving interest computation may, depending on the circumstances, constitute curable defects rather than fatal defects.

This Court respectfully agrees.

In Re Azizul Nizam (supra), the Court recognised that understatements or computational inaccuracies which do not prejudice the debtor may be cured under section 131.

The factual matrix in the present appeal bears closer resemblance to Re Azizul Nizam (supra) than to the authorities relied upon by the Judgment Debtor.

The Judgment Creditor further relies on Per Ng Mei Yoong; Ex Parte Cheng Yong Pin [2024] MLJU 1013 where the Court recognised that not every computational error necessarily invalidates a Bankruptcy Notice.

This Court similarly adopts that approach.

The modern judicial trend is toward substantial justice rather than rigid technical invalidation of insolvency proceedings for non-prejudicial defects.

The Judgment Creditor also correctly relies on the principle that amendments ought generally to be permitted where no irremediable prejudice is caused.

In the present case, permitting amendment would have enabled the real dispute between parties to be determined on the merits rather than upon technical objections.

This Court finds that the learned Senior Assistant Registrar ought properly to have exercised the discretion in favour of allowing the amendment sought in Enclosure 9.

The Judgment Debtor relies heavily on Fawzia bte Osman v Bank Bumiputra Malaysia Bhd [1991] 1 MLJ 426. However, this Court finds the said authority distinguishable.

In Fawzia bte Osman (supra), the Bankruptcy Notice demanded interest “to date of actual realization”, thereby rendering the amount uncertain, indeterminate and incapable of precise ascertainment.

The Supreme Court therefore held that the notice was fundamentally defective because the debtor could not determine the actual amount payable.

In contrast, the present appeal concerns a discrete computational or date-related error within an otherwise ascertainable and known judgment debt.

The amount claimed remained identifiable and capable of verification.

The defect did not create indeterminate liability akin to the situation in Fawzia bte Osman (supra).

The Judgment Debtor also relies on Low Mun v Chung Khiaw Bank Ltd [1988] 1 MLJ 263 and Ghazali bin Mat Noor v Southern Bank Bhd [1989] 2 MLJ 142 for the proposition that a Bankruptcy Notice must state the debt with certainty.

This Court does not disagree with the general proposition.

However, those authorities must be read contextually. They do not establish that every computational imperfection automatically nullifies a Bankruptcy Notice irrespective of prejudice or materiality.

In the present case, the alleged error did not deprive the Judgment Debtor of knowledge concerning the debt or the basis of the claim.

The Judgment Debtor was not materially misled.

The authorities relied upon by the Judgment Debtor are therefore distinguishable on the facts.

This Court further finds that the learned Senior Assistant Registrar erred in refusing leave to amend the Bankruptcy Notice.

The Bankruptcy Court possesses broad powers to permit amendment in order to achieve substantial justice. The amendment sought by the Judgment Creditor merely sought to rectify the date and interest computation.

The proposed amendment did not alter:

the identity of parties;

the existence of the judgment debt;

the basis of liability; or

the underlying judgment itself.

No irremediable prejudice would have been occasioned to the Judgment Debtor.

On the contrary, refusal to permit amendment elevated technicality over substantive justice.

This Court is therefore satisfied that Enclosure 9 ought properly to have been allowed.

For all the reasons stated above, this Court finds that:

the defects complained of in the Bankruptcy Notice were merely formal defects and not substantive defects;

section 131 of the Insolvency Act 1967 applies to validate the

the Judgment Debtor failed to establish substantial injustice;

the learned Senior Assistant Registrar erred in allowing

the learned Senior Assistant Registrar further erred in dismissing Enclosure 9.

Accordingly:

the appeal against the decision allowing Enclosure 6 is hereby allowed;

the order setting aside the Bankruptcy Notice dated 28.07.2025 is hereby set aside;

the appeal against the dismissal of Enclosure 9 is likewise allowed; and

the Judgment Creditor is granted leave to amend the Bankruptcy Notice in terms of the proposed amended Bankruptcy Notice exhibited in Enclosure 9.

Costs of RM5,000.00 are awarded to the Appellant/Judgment Creditor, subject to allocatur. Dated: 26th May 2026 -sgd- …………………………………………. (BUDIMAN LUTFI BIN MOHAMED) JUDICIAL COMMISSIONER HIGH COURT, JOHOR BAHRU Solicitors for the : Previesha a/p Narindra Mohan Kumar Judgment Debtor : Messrs Chor Pee Anwarul & Co. : Johor Bahru, Johor Solicitors for the : Syahmi Nawawi Judgment Creditor : Messrs Azwad Ihsan & Co. : Johor Bahru, Johor