Kuala Excel Sdn Bhd v Chua Liang Hong (WA-29NCC-1201-11/2021)

Enclosure 88: the JD’s appeal against the decision of the Registrar dismissing the JD’s Notice of Intention to oppose a creditor’s petition (“CP”) by the Judgment Creditor (“JC”).

(ii) Enclosure 89: the JD’s appeal against the decision of the Registrar dismissing the JD’s application to oppose and set aside the CP. [2] I will only address the JD’s appeal in Enclosure 89 due to the overlap between the two appeals. BACKGROUND FACTS [3] The JD is an Advocate & Solicitor of the High Court of Malaya who practices under the name of Messrs LH Chua. The Judgement Creditor (“JC”) vide a Kuala Lumpur High Court Suit No.: 22NCVC-411- 08/2014 (“the High Court Suit”) filed a suit against the JD for, inter alia negligence on 29.8.2014. [4] On 30.3.2017, after a full trial, the High Court dismissed the JC’s claim with costs of RM75,000. [5] The JC appealed against the decision of the High Court and on 7.12.2017, the Court of Appeal allowed the JC’s appeal and ordered the JD to pay the JC sum of RM2,500,000 with interest at 5% per annum from 25.5.2010 until full settlement and costs of RM50,000. [6] The JC’s COA Order remains outstanding, and only on 2.10.2018 did the JD’s insurance pay a sum of RM250,000 to the JC. Apart from the insurance payout, it is not in dispute that the JD has not paid any part of the judgment sum to the JC and has not obtained any stay of execution of the judgment. [7] The JC then filed Kuala Lumpur High Court Bankruptcy No: WA- 29NCC-1388-04/2019 (“Bankruptcy 1388”) based on the Judgement, and the JD successfully challenged the validity of the Bankruptcy Notice (“BN”) in Bankruptcy 1388 which resulted in him being awarded costs totalling RM16,640 against the JC. [8] On 17.11.2021, the JC filed a fresh Bankruptcy Notice vide Kuala Lumpur High Court Bankruptcy No: WA-29NCC-1201- 11/2021(“Bankruptcy 1201”), in this bankruptcy proceedings for the Judgement Sum, which did not include the JD’s costs in Bankruptcy 1388. [9] In this current Bankruptcy 1201, the BN was successfully served to the JD on 22.11.2021 and 30.11.2021. The JD applied to set aside the BN. However, on 7.4.2022, the Registrar dismissed the JD’s application with costs of RM2,000 and further held that the date of the JD’s act of bankruptcy was 7.4.2022. [10] The JC has then filed a Creditor’s Petition (“CP”) on 5.10.2022. [11] Dissatisfied with the decision of the Registrar, the JD appealed the decision vide Notice of Appeal to Judge in Chamber dated 11.4.2022, and Justice Azlan Sulaiman dismissed the JD’s appeal with costs of RM3,000 and affirmed the decision given by the Registrar. The JD then appealed against the decision of Justice Azlan Sulaiman to the Court of Appeal vide W-03(IM)(NCC)-74-07/2022, and the appeal was also dismissed on 17.2.2023. [12] The CP then resumed, and the JD filed a Notice of Intention to oppose the CP on 20.3.2023 and Summons in Chamber dated 22.3.2023 to set aside the CP. The Registrar dismissed both applications on 21.7.2023; hence, this appeal to this Court. ISSUES BEFORE THE COURT [13] Upon careful deliberation and consideration of the JD’s appeals, the main issues raised by the JD before the Registrar in the current proceedings are;

whether the CP was valid as the alleged act of bankruptcy fell on the 8th day of service and

(ii) issues regarding the defects or non-compliance of the format of CP filed by the JC. FINDINGS OF THIS COURT [14] On the issue of the validity of the filing of the CP, the JD alleged that the CP was filed on 5.10.2022, which is more than six months from 2.12.2021. This date is allegedly the 8th day after the service of the Bankruptcy Notice on the JD, which is on 22.11.2021. [15] After considering the relevant law and the facts of the case, in particular, Rule 93(2) of the Insolvency Rules 1967, I find that the CP was filed within six months of the act of bankruptcy in compliance with section 5(1) of the Insolvency Act 2016. The act of bankruptcy only occurred on the date of the decision by the Registrar dismissing the JD’s application to set aside the Bankruptcy Notice under enclosure 4. The date of the decision of the Registrar is 07.04.2024. Thus, the date of the act of bankruptcy is 07.04.2022. [16] Rule 93(2) of the Insolvency Rules 1967 (“IR”) states as follows: [2] If the application cannot be heard before the time specified in the notice for compliance with its requirements, the Registrar shall extend the time, and no act of bankruptcy shall be deemed to have been committed under the notice until the application has been heard and determined. Hence, applying to the facts of the case, if the JD’s application to set aside the BN cannot be heard before the time limit to pay the sum stated in the BN (i.e., 7 days from the service of the BN), the Registrar shall extend the time, and no act of bankruptcy shall be deemed committed until the JD’s application to set aside the BN has been heard and determined. [17] The next issue is the purported irregularities in the CP, as the JD alleged that the CP did not follow the form for a private limited company, as it does not contain the details of the authorised officer of the JC. On this issue, I am persuaded by the decision of the Court in the case of Ho Fok v Ann Bee (M) Sdn Bhd [2002] 5 MLJ 331 on page 337 that: “… Where therefore, on the face of it, a petition indicates that it is being presented by an officer of the corporation, a party questioning the legality of its issuance must first show by some credible evidence that he has reason to believe that it has not been issued with the authority of the corporation. It is insufficient merely for him to point to some perceived irregularities in the petition and apply for the petition to be dismissed.” [18] On the facts of the case, the JC’s authorised officer clearly stated his name, address, IC number, and designation in the Affidavit Verifying Petition. It is not enough for the JD to merely declare that he challenges the authority of the JC’s authorised officer. The burden is thus on the JD to show some credible evidence to prove that the JC’s authorised officer is not an authorised person. The JD has not shown any credible evidence. [19] Here, there is no issue with the authority of the JC’s authorised officer, as there was no challenge at all from the beginning. Over the years, the JC’s authorised officer had affirmed various affidavits, and the JD has never challenged his authority. It was only at the final stage of the bankruptcy proceedings did the JD allege without any evidence that the JC’s authorised officer has no authority. Indeed, such an accusation (unsupported by any evidence at all) must fail. Therefore, the JC is not required to produce a resolution for the Board of Directors. [20] For the abovementioned reasons, I dismiss both of the JD’s appeals in enclosures 88 and 89 with costs of RM5,000.00. Dated 29th October 2024 …………t.t…………………. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE JUDGMENT DEBTOR: PAUL CHUA LIANG HONG WITH KINGSTON TAN SOLICITORS FOR THE JUDGEMENT DEBTOR: TETUAN L H CHUA COUNSEL FOR THE JUDGMENT CREDITOR: AUDREY CHONG PEI YING WITH LING HUA KEONG SOLICITORS FOR THE JUDGEMENT CREDITOR: TETUAN LING & MOK Cases Referred to: ➢ Ho Fok v Ann Bee (M) Sdn Bhd [2002] 5 MLJ 331 Legislation Referred to: ➢ Insolvency Act 1967 ➢ Insolvency Rules 1967 Decision date: 17 January 2024