Majlis Amanah Rakyat (MARA) v AFEERA BINTI AMRAN (WA-29NCC-194-01/2024)

These Grounds concern two (2) bankruptcy proceedings against Afeera bte Amran (“Afeera”) and Azeera bte Amran (“Azeera”), jointly, (“the JDs”). These are appeals from Encl 32 in Bankruptcy No: WA-29NCC-194- 01/2024 and Encl 31 in Bankruptcy No: WA- 29NCC-195- 01/2024, collectively (“the Appeals”).

The Judgment Creditor (“JC”) obtained summary judgment on 13.9.2023 against four (4) debtors (which include the JDs) for RM236,039.10 together with 4% late payment charges and costs 2 (“the Judgment”). The Judgement was not appealed nor set aside. The JC has not received any payment under the Judgment.

On 31.1.2024, the JC commenced the said bankruptcy proceedings against the JDs:

against Afeera in High Court Kuala Lumpur - Bankruptcy No.: WA 29NCC - 194 - 01/2024.

against Azeera in High Court Kuala Lumpur - Bankruptcy No.: WA 29NCC - 195 - 01/2024; [4] Bankruptcy Notices dated 31.1.2024 (“BNs”) were served on the JDs by substituted service in accordance with the Order dated 13.3.2024. [5] The JDs filed two (2) Summons in Chambers on 4.4.2024 to set aside the BNs. These applications were dismissed by the Registrar on 23.8.2024 and 27.8.2024. On 30.8.2024, the JDs filed Notices of Appeal to the Judge in Chambers against the said dismissals (Encls 31 and 32). [6] The issues in Encls 31 and 32 are similar. I will deal with them in order. Issue 1: Whether leave of Court is required before commencing bankruptcy proceedings against the JDs. [7] The JDs are customers (“pelanggan”) for a business financing facility. [8] This is shown by documents and/or agreements between the JC and the JDs where the JDs were in some agreements, they were stated to be customers (“pelanggan”) in a business financing facility together with another customer, Twins Eera Palm Plantation Sdn Bhd (“Twins Eera”). [9] More importantly, that the JDs are customers, is also admitted by the JDs and Twins Eera in their Defence dated 24.3.2023, filed in response to the JC’s Statement of Claim dated 3.2.2023, both in C/S No: MA-A52M-25-02/2023. [10] The JC’s Statement of Claim dated 3.2.2023 at para 2, provides: “2. Defendan Pertama adalah sebuah syarikat yang didaftarkan di Malaysia, Defendan Kedua dan Ketiga adalah individu pada setiap masa yang material adalah pengarah-pengarah kepada Defendan Pertama dan ketiga-tiganya juga adalah pelanggan Plaintif yang mempunyai alamat penyampaiannya di No. 17 Jalan USJ 16/3E, 47630 Subang Jaya, Selangor.” [11] In the JD’s Defence dated 24.3.2023, it is admitted by the JDs (the Second and Third Defendant) in para 2 that: “2. Perenggan 2 Pernyataan Tuntutan adalah tidak dinafikan kecuali berkenaan alamat penyampain bagi Defendan-defendan adalah dinafikan Dimana alamat penyampaian bagi Defendan Pertama adalah di alamat berdaftar iaitu di Lot 10 Tingkat 1B, Plaza Perangsang, Persiaran Perbandaran 40000 Shah Alam Selangor sebagaimana yang didaftarkan dengan pihak Suruhanjaya Syarikat Malaysia. [12] It is trite that the parties, including the JDs are bound by their pleadings. No authority is needed. [13] As admitted by the JDs (and Twins Eera) in JD’s Defence at para 2, the JDs are customers (“pelanggan”). As such, the JDs are not social guarantors within section 2 when read together with section 5(3) of the Insolvency Act, preventing proceedings against a social guarantor without (it is argued) leave of Court. There is therefore no basis for arguing that leave of Court is required before commencing bankruptcy proceedings against the JDs. Issue 2: Whether the JC’s solicitor may sign and file the Request for the Issue of the BNs [Form 35] on behalf of the JC. [14] The authorities show that the JC's solicitors are authorised to sign Form 35 on behalf of JC as solicitors acting for JC. [15] In Re Lai Hua Kian, Ex P Credit Corp (M) Bhd [1990] 5 MLRH 107 the Court held: “Mr Loa, counsel for the debtor, relied only on one ground to oppose the petition, ie the bankruptcy notice was improperly issued in the context of the bankruptcy legislation as the petitioning creditor, being a corporation, has not specifically authorized any of its officers to issue a bankruptcy notice. He submitted that by virtue of s 133 of the Bankruptcy Act 1967, the petitioning creditor must appoint an officer under seal to act on its behalf to institute all or any actions including the request for issue of a bankruptcy notice .... The request for issue of a bankruptcy notice is prescribed in Form 4 to the appendix to the Rules. Looking at the prescribed Form 4, it is clear, in my view, that the request for issue of a bankruptcy notice can be made by the judgment creditor or solicitor for the judgment creditor. … A creditor includes a corporation (see r 3(b)) and as such any corporation who is for the time being entitled to enforce a final judgment or order has a right to issue a bankruptcy notice. The prescribed Form 4 further allows the solicitor for the judgment creditor to request for the issue of a bankruptcy notice irrespective of whether the judgment creditor is a corporation or a firm or an individual. ....”. [16] In Per: Dato’ Dr Elamaran M Sabapathy; Ex-parte: RHB Bank Berhad [2010] 1 MLRH 488 at para 2, 4.1 dan 4.2, it was held: “2. The JD's contentions were essentially as follows:

...

The 'Request for Issue of Bankruptcy Notice' was defective as it was signed by Solicitors for the JC without identifying the signatory. This defect was not merely a formal defect but one which went to the substance of that document. Consequently, the Bankruptcy Notice issued pursuant to that request was ineffective.

4.1. I accepted Counsel for JC's submission that a firm of Solicitors could apply for issue of Bankruptcy Notice on behalf of their clients. Form 4 to the Appendix to the Bankruptcy Rules clearly provides for this and the decision in Re Lai Hua Kian Ex-Parte Credit Corp. (M) Bhd [1990] 5 MLRH 107; [1990] 2 MLJ 487 supported this position. The Form 4, provided as guidance, clearly sets out that the 'Request For Issue Of Bankruptcy Notice' could be signed by 'Judgment creditor or solicitor for the judgment creditor'.” [17] In Re: Tan Chin Hong; Ex-Parte: Bank Kerjasama Rakyat Malaysia Berhad [2018] MLRHU 8 at paras 7 and 8, it was held: “[7] The next complaint on the Bankruptcy Notice was that the Request for Issuance of Bankruptcy Notice was signed by the legal firm and not the JC. [8] It is to be noted from Form No 4 (Rule 92) under the Bankruptcy Rules 1969 that the Judgment Creditor or solicitor for the judgment creditor may sign. (see Re: Lai Hua Kian ex-parte Credit Corp (M) Bhd [1990] 5 MLRH 107; [1990] 2 MLJ 487, which was followed in Re Dato' Dr Elamaran M Sabapathy Ex-parte RHB Bank Berhad [2010] 11 MLRH 488; [2011] 10 CLJ 262) in which it was held: - "I accepted counsel for JC's submission that a firm of solicitors could apply for issue of bankruptcy notice on behalf of their clients. Form 4 to the appendix to the bankruptcy rr clearly provides for this and the decision in Re Lai Hua Kian, Ex P Credit Corp (M) Bhd [1990] 5 MLRH 107; [1990] 2 MLJ 487 supported this position. The Form 4, provided as guidance, clearly sets out that the 'request for issue of bankruptcy notice' could be signed by 'judgment creditor or solicitor for the judgment creditor'." [18] By parity of reasoning, I find that the JC’s solicitors may sign the Requests For Issue of Bankruptcy Notice (Form 35). The prescribed Form 35 itself provides that the solicitors for the JC may sign the Requests for Issue of Bankruptcy Notice whether the judgment creditor is a corporation or an individual. Issue 3: Whether Requests for Issue of Bankruptcy Notice should be served on the JDs. [19] In Re: Chua Liang Hong; Ex-parte: Kuala Excel Sdn Bhd [2020] MLRHU 419 at paras 37 and 38 it was held that: “[37] To my mind, r 90(1)(b) was not a requirement for the benefit of the Judgment Debtor but rather a requirement for the purposes of the Court in connection with the issue of the Bankruptcy Notice. Therefore, the noncompliance with r 90(1)(b) could not be said to be prejudicial to the Judgment Debtor, to have misled him or to have caused any injustice. A similar rationale was given in Mat Ripen Mat Elah v. Perwira Affin Bank Berhad [2005] 6 MLRH 55 and Per: Summugam Ramasamy lwn. Ex Parte Kwang Keh Chong [2018] MLRHU 1788, although in respect of non-compliance with s 6 of the Bankruptcy Act 1967.” [20] As such, I find that when applying to the Registrar for the issue for a BN, the application or the Requests for the Issue of Bankruptcy Notices need not be served on the JDs. There are no requirements for such service under the Insolvency Act 1967 nor the Insolvency Rules 2017, in particular, Rule 90(1). Requests for the Issue of Bankruptcy Notice under Rule 90(1) are not for the benefit of the JDs, but rather a requirement for the purposes of the Court in connection with the issue of Bankruptcy Notices. Issue 4: There is a Double claim when bankruptcy proceedings were brought against both JDs on the single Judgement [21] The JC is entitled to bring and file bankruptcy actions against JDs and any other debtors for the Judgment debt simultaneously and separately against both JDs. So long as a Judgment debt remains unrealised, the JC is entitled to proceed against one or more JDs for the amount in the Judgement. [22] This issue was decided by the Federal court in Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian Nagappan @ Marie [2021] 5 MLRA 178 (“Edwin Cassian”). The Federal Court held that: “[24] In this jurisdiction in any event, the common law is inapplicable, as we are governed by the Contracts Act 1950. Section 44 of the Contracts Act 1950 (Act 136) (‘the Contracts Act’) is the relevant provision relating to joint liability. It states: ‘(1) When two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any one or more of the joint promisors to perform the whole of the promise.’ “[27] Accordingly, so long as a judgment debt remains unrealised, the judgment creditor is entitled to proceed against one or any number of judgment debtors to secure the performance of an obligation in its entirety. … Conclusion [30] In summary, even in the United Kingdom where there is a judgment premised on a joint liability, the creditor is at liberty to go against one, or the other or both. In respect of the present appeal, the position is even clearer in this jurisdiction because we are governed by s 44 of the Contracts Act 1950 which statutorily provides that the creditor may proceed against one or both of the joint promisors. … [38] Finally, s 44 of the Act is also relevant by virtue of our discussion above. It is manifestly clear that the liability of the judgment debtors in the present appeal is both joint and several by operation of law. [41] One final point remains to be made. The Court of Appeal in Sumathy was concerned that the judgment creditor would be “very much overpaid” if both defendants were to be liable for the amounts in the bankruptcy notices. To address this, guidance can be gleaned from Tang Min Sit v. Capacious Investments Ltd [1996] AC 514, where Lord Nicholls of Birkenhead delivering the Privy Council judgment at p 522 said that: ‘... a plaintiff cannot recover in the aggregate from one or more defendants an amount in excess of his loss. Part satisfaction of a judgment against one person does not operate as a bar to the plaintiff thereafter bringing an action against another who is also liable, but it does operate to reduce the amount recoverable in the second action. However, once a plaintiff has fully recouped his loss, of necessity he cannot thereafter pursue any other remedy he might have and which he might have pursued earlier. Having recouped the whole of his loss, any further proceedings would lack a subject matter. This principle of full satisfaction prevents double recovery.” [23] In Chong Hin Seong; Ex-parte Standard Chartered Bank Malaysia Berhad [2024] MLRHU 1307 at page 158, the court held that: “… when a judgment sum is entered against more than one debtor, it is only when the successful plaintiff (the judgment creditor) fully recovers the judgment sum from any or more of the judgment debtors, will the judgment creditor then be prohibited from recovering more than what is due to him under the judgment. This principle is settled by the Federal Court in Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian Nagappan @ Marie [2021] 5 MLRA 178; [2021] 5 MLJ 253; [2021] 7 CLJ 823”. [24] Therefore, the JC's bankruptcy proceedings commenced simultaneously against both the JDs on the same Judgement is not an abuse; there is no multiplicity. [25] So long as the Judgment debt remains unrealised, the JC is entitled to proceed against one or more of JDs for the Judgement debt. [26] The JDs are jointly and several liable to honour the entire Judgment debt in accordance with Edwin Cassian. [27] For these reasons, I dismissed both Appeals. Dated 18th April 2025 ...................t.t........................... YA Tuan Saheran Suhendran Judicial Commissioner, High Court of Malaya, Kuala Lumpur. Suhaidi Zakaria [Riza, Yusoff & Partners (ayer keroh)] for Judgment Debtor Mahaiyuddin bin Musa [Mahaiyuddin, Azlifa & Co (Melaka)] for Judgment Creditor Cases Referred to: • Re Lai Hua Kian, Ex P Credit Corp (M) Bhd [1990] 5 MLRH 107 • Per: Dato’ Dr Elamaran M Sabapathy; Ex-parte: RHB Bank Berhad [2010] 1 MLRH 488 • Re: Tan Chin Hong; Ex-Parte: Bank Kerjasama Rakyat Malaysia Berhad [2018] MLRHU 8 • Re: Chua Liang Hong; Ex-parte: Kuala Excel Sdn Bhd [2020] MLRHU 419 • Lembaga Kumpulan Wang Simpanan Pekerja v. Edwin Cassian Nagappan @ Marie [2021] 5 MLRA 178 (“Edwin Cassian”) • Chong Hin Seong; Ex-parte Standard Chartered Bank Malaysia Berhad [2024] MLRHU 1307 Legislation referred to: • Insolvency Act 1967 • Insolvency Rules 2017 Decision date: 6th February 2025