Societe Generale Cawangan Singapura v Chai Seen (J-03(IM)(NCC)-82-07/2018)

1 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO.:J-03(IM)(NCC)-82-07/2018 BETWEEN SOCIETE GENERALE CAWANGAN SINGAPURA … APPELLANT AND CHAI SEEN … RESPONDENT (NO. K/P: 481024-08-5193) [In the matter of the High Court of Malaya at Johor Bahru Bankruptcy No. 29NCC-4295-12/2015] Chai Seen (No. K/P: 481024-08-5193) Judgment Debtor Ex-Parte : Societe Generale Cawangan Judgment Creditor Singapura (An appeal against the decision of YA See Mee Chun High Court Judge, High Court at Johor Bahru on 27 Jun 2018) 2 CORAM: VERNON ONG LAM KIAT, JCA HASNAH MOHAMMED HASHIM, JCA YEW JEN KIE, JCA JUDGMENT OF THE COURT [1] This is an appeal filed by the appellant as the judgment creditor ("the JC") against the decision of the learned High Court Judge in reversing the decision of the learned Senior Assistant Registrar ("the SAR") granting the Receiving Order and Adjudication Order (ROAO) dated 19.2.2018. [2] We had on 7.3.2019, after perusing the Records of Appeal and hearing submissions from learned counsel for the Judgement Creditor as well as the Respondent (“JD”), unanimously dismissed the appeal. We set out below our reasons. [3] For ease of reference, in this judgment, the parties will be referred to as they were in the High Court. Background Facts [4] On 23.4.2005 the JC obtained judgment against the JD in Johor Bahru High Court Suit No. MT4-22-287-2001. More than six (6) years after the judgment was obtained, the JC obtained leave on 8.10.2015 to commence execution proceeding against the JD. The JC filed a Bankruptcy Notice dated 10.12.2015 (‘the BN’) followed by a Creditor’s Petition on 1.2.2016 (‘the CP’). 3 [5] The JD filed an application on 7.1.2016 to set aside the BN. The SAR dismissed the application on 28.4.2016. Subsequently, the appeal of the JD to the High Court and the Court of Appeal were dismissed. The CP was fixed for hearing on 19.2.2018. However, a day before the hearing the JD issued a 3rd party cheque to the JC. The cheque was issued to Soceite Generale Cawangan Singapura and forwarded to the JC’s solicitors by a letter dated 15.2.2018.The JC’s solicitors, however, refused to accept the cheque as it was issued to Soceite Generale Cawangan Singapura and not Soceite Generale Singapore Branch. The solicitors had also requested the JD to issue the cheque in Singapore currency. Proceedings In The High Court [6] The hearing of the CP proceeded on 19.2.2018 and the learned SAR granted the ROAO. Aggrieved, the JD filed an appeal to the judge in chambers against the decision of the SAR. The learned High Court Judge heard the JD’s appeal and allowed the appeal. Dissatisfied with the learned High Court Judge’s decision, the JC appealed to this Court. [7] In the High Court, the main issue for consideration was whether the cheque could be in Singapore currency and addressed in the name of Soceite Generale Cawangan Singapura contrary to the terms of the Judgement obtained in 2005. The learned High Court Judge was of the considered view that the obligation to comply with the Judgment obtained on 23.4.2005. In the said suit the Plaintiff (JC) is Soceite Generale Cawangan Singapura and the judgment sum of RM22,7189,378.64 to be paid in Malaysian currency. At another appeal by the JD against the setting aside of the BN the issue before the Court was whether the Soceite Generale Cawangan Singapura is a valid entity to initiate proceedings in 4 court. In that appeal the Court found that the Soceite Generale Cawangan Singapura is a valid entity. Thus, it follows that the cheque for payment ought to be issued in favour of Soceite Generale Cawangan Singapura. [8] In this appeal before us, the learned High Court Judge was of the view that the argument by the JC that the cheque carries no value being issued in Bahasa Malaysia was without merit as it was issued to the valid entity who had obtained the judgment. The judgement obtained against the JD was in Bahasa Malaysia and the JD had complied with the terms of the said High Court‘s Order dated 23.4.2004 and issued the cheque in the currency as stipulated in the Order. The Appeal [9] Learned counsel for the JC contended that the JD had deliberately caused the 3rd party cheque to be issued despite having full knowledge that could not be encashed by the JC. It was a tactic to delay the CP hearing and stifled the bankruptcy proceedings. It was submitted by learned counsel for the JC that the refusal to provide an undertaking showed that he had neither the intention nor the ability to pay the Judgment Sum. The SAR had therefore, correctly granted the ROAO against the JD. [10] It was further argued by learned counsel for the JC that since this Court’s had confirmed that the Soceite Generale Singapore Branch, a French financial institution with a branch in Singapore, is a valid entity and that Soceite Generale Cawangan Singapura is the Bahasa Malaysia translation then the cheque can be issued to Soceite Generale Singapore Branch. Furthermore, the JC had agreed to postpone the hearing of the CP subject to the following undertaking by the JD: 5 [11] The failure of the JD in taking the steps as per the terms of the undertaking showed that he neither the intention nor the ability to pay such amount. Therefore, learned counsel for the JC contended that the SAR had correctly proceeded with the hearing of the CP and granted the ROAO. The learned High Court Judge erred when she held that the JD is entitled to issue the cheque to Soceite Generale Cawangan Singapura in the sum of RM22,718,378.64 and that by issuing the cheque the JD is solvent. [12] Learned counsel for the JD further argued that the JD presented the cheque for payment in compliance with the Judgment Order dated 23.4.2005, the BN dated 10.12.2015 and the CP dated 1.2.2016. [13] In determining an issue under the Bankruptcy Act 1967 (‘the Act’) it is incumbent for the Court to strictly apply the provisions under the said Act. Gopal Sri Ram JCA (as he then was) in J Raju M Kerpaya v. Commerce International Merchant Bankers Bhd [2000] 3 CLJ 104 said: When determining an issue under the Act, it is incumbent upon the court to accord its provisions a strict construction. The consequence of such an approach to construction is that a bankruptcy notice that requires a debtor to pay a judgment debt otherwise than in accordance with the terms of the judgment founded is null and void ab initio. Hence, a debtor does not commit 6

an act of bankruptcy if he makes default upon such a notice. A challenge on the ground that a bankruptcy notice requires a debtor to pay a judgment debt otherwise than in accordance with the terms of the judgment may be taken at any time after service of the notice. A debtor who seeks to set aside a bankruptcy notice on the ground that it requires him to pay a judgment debt otherwise than in accordance with the terms of the judgment, must make an application in that behalf in accordance with r. 18 of the Rules. [14] The BN reads as follows: AMBIL PERHATIAN bahawa dalam tempoh tujuh (7) hari selepas penyampaian notis ini ke atas kamu tidak termasuk hari penyampaian tersebut,kamu hendaklah membayar kepada Soceite Generale Cawangan Singapura yang beralamat di Marina Boulevard #07-01, Marina Bay, Fianancial Centre Tower 1, Singapore 018981, wang sejumlah RM22,718,378.64…. * emphasis added [15] The JD must comply with the terms of the BN. Similarly, the JC, must comply with the terms of the BN. We agreed with the learned High Court Jude that the fact the cause papers were filed in Bahasa Malaysia in compliance with Order 92 R 1 of the Rules of the High Court is not a basis to alter the terms as set out in the BN. Section 3(2)(ii) of the Act provides that a BN shall not be invalidated by reason only that the sum specified in the said BN as the amount due exceeds the amount actually due unless the JD gave notice to the JC that he disputes the validity of the said BN on the ground of such a mistake, which is not the case in the present appeal before us. [16] In the case of Sovereign General Insurance Sdn. Bhd. v. Koh Tian Bee [1988] 1 CLJ (Rep) 277 Lee Hun Hoe, CJ (Borneo) had this to say: 7 In the exercise of his jurisdiction in bankruptcy proceedings, the learned judge cannot go behind the judgment. Thus on an application to set aside a bankruptcy notice, it was laid down as early as 1893 that the court could not go behind the judgment. See In re Easton [1893] 10 Mor. 111; 9 TLR 409. Even if there has been an irregularity in the service of the notice of sale, it is not open to the respondent in this case to challenge the execution proceedings.” [17] Steve Shim J (as he then was) in Re: Tioh Ngee Heng; ex p Yap Kiu Lian @ Norhashimah Yap (Administratrix of the estate of Mohamad Shariff bin Haji Hussain) [2000] 1 LNS 197; [2000] 6 MLJ 155, said at p. 158 of the report: It is trite law that an order, even if irregular, is valid and enforceable until set aside. This principle is particularly relevant in bankruptcy proceedings where the court generally will not look behind the judgments or order save in very limited circumstances of fraud or illegality, etc. Conclusion [18] In our view, the JD had issued the cheque in accordance to the terms of the BN. We agreed with the reasons given by the learned High Court Judge. We find no appealable error to warrant our intervention. The appeal is therefore dismissed with no order as to costs. Sgd HASNAH DATO’ MOHAMMED HASHIM Judge Court of Appeal, Malaysia Putrajaya Date: 21.10.2019 8 Counsel for the Appellant Ong Chee Kwan HK Niak Messrs Christopher & Lee Ong Quill 7 KL Sentral, Level 22, No. 9, Jalan Stesen Sentral 5, Wilayah Persekutuan, 50470 Kuala Lumpur Counsel for the Respondent T Gunaseelan R Karnan Messrs Gengeys & Co 2A Off Lama, 20, Jalan 3/109c, Taman Abadi Indah, Wilayah Persekutuan 58100 Kuala Lumpur