Wan Nazma Asyikin binti Wan Yusof for the Respondent/Judgment Creditor v Mugunthan Vadiveloo for the Appellant/Judgment Debtor (DALAM PERKARA KEBANKRAPAN NO. WA-29NCC-3807-12/2019)

In the Notice of Appeal to the Judge in Chambers under Enclosure 101 (Appeal), the Judgment Debtor (JD) has appealed against the decision of the Learned Senior Assistant Registrar (SAR) given on 15.9.2021 dismissing the JD’s Summons In Chambers (Enclosure 95) application to strike out the Bankruptcy Notice dated 11.12.2019 (BN) and the Creditors Petition dated 21.2.2020 (CP) without costs.

Enclosure 95 was grounded on the non-compliance of Sections 5(4) and (6) of the Insolvency Act 1967 and Rule 97 and 282 of the Insolvency Rules 2017 by the Judgement Creditor (JC). 2

The JC had obtained judgement against the JD on 1.11.2018 (Judgment) vide Kuala Lumpur High Court Suit No. WA-22NCC- 258-07/2018 as a result of the JD’s default as a guarantor in settling the debts of one Sinar Mentari Technology Sdn Bhd who was the principal borrower (Borrower) for a banking facility granted by the JC to the said Borrower.

As a result of the JD’s failure to settle the Judgment, the JC had issued a BN on 11.12.2019 which was served personally on the JD on 18.12.2019. As the JD had not filed in any application to oppose the BN, an act of bankruptcy was deemed to have been committed by the JD on 27.12.2019.

The JC had vide its Summons In Chambers dated 23.12.2019 in enclosure 5 applied for leave to commence bankruptcy proceedings against the said JD which was served on the JD and which was uncontested by the JD. Thereafter leave to commence bankruptcy proceedings against the JD was allowed by the Court on 22.1.2020 (22.1.2020 Order).

The JC had submitted that the JD had earlier filed in another Summons in Chambers in enclosure 19 to set aside and/or strike out the BN and the CP (Enclosure 19), which was heard on its merits before the Learned SAR on 6.1.2021 and thereafter dismissed with costs of RM1,000 and that the same was thereafter 3 appealed to the Judge in Chambers via enclosure 40 which was also dismissed on 10.9.2021.

I have had the chance to view Enclosure 19 which was premised on inter alia the following grounds:

there were sufficient and special grounds for the said application to be allowed;

(ii) the BN was invalid and improper as the amount claimed was not allowed and not in accordance with the Judgment;

(iii) as a result of the same the JD was not bound to comply with the BN;

(iv) there was therefore no act of bankruptcy.

Based on Enclosure 95 it is clear that the Summons in Chambers therein had moved the Court to once again dismiss both the BN and the CP herein but this time on the ground of the alleged non-compliance by the JC of Sections 5(4) and (6) of the Insolvency Act 1967 and Rule 97 and 282 of the Insolvency Rules 2017 by the Judgement Creditor(JC).

It is trite that a party cannot commence its case in instalments as per the Court of Appeal in Maril Rionebel (M) Sdn Bhd & Anor v. Perdana Merchant Bankers Bhd & Other Appeals [2001] 3 CLJ 248 where Gopal Sri Ram JCA (as His Lordship then was) stated: 4 “There is a trend - and it is an unhealthy trend - for practitioners to raise several points either on several different applications or by way of preliminary objections on procedural grounds to the same proceeding. As each application or point of objection fails, an appeal is at once lodged and the aid of this court is sought to stay all proceedings in the court below pending the hearing of the appeal against the spurious procedural objection. Let me say at once that such a practice constitutes an abuse of the court's process, leads to injustice and should not be countenanced by judges. A litigant who has a number of procedural and substantive grounds in opposition to any cause or matter must take all of them in one go. He cannot present his case in instalments. He cannot take one procedural point at a time and invite a separate ruling from the presiding judge. This type of advocacy which has been on the rise over the past few years results in serious delays in the various stages of litigation. Judges at first instance and magistrates are therefore advised not to entertain these so-called preliminary objections save and except where they go to the jurisdiction of the particular court.”

In Chemfort Sdn Bhd v Lim Hua [2010] 7 CLJ 491, Lai Kim Loi v Dato Lai Fook Kim [1989] 2 MLJ 290 the Court of Appeal in considering the landmark decision in Asia Commercial Finance (M) Bhd v. Kawal Teliti Sdn Bhd [1995] 3 CLJ 783 SC had inter alia held that: “(vii) The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence might have brought forward at the time: per Wigram VC in Henderson v. Henderson [1843] 3 Hare 100 at p 115; the 'point' should actually include causes of action, or all causes 5 of action which one of the two parties has against the other, based on, or substantially on the same facts or issues, and not just all issues of law or of fact that are in dispute between the parties;”

I would also like to refer to Tenaga Nasional Bhd V Prorak Sdn Bhd [2000] 1 MLJ 479 where the Court of Appeal held: “It was certainly open to the appellant to ground its first application on the basis that the default judgment was irregular for the reasons we have set out earlier in this judgment. It was therefore an issue which properly belonged to the first application. But it chose not to rely upon that ground. Once the first application was dismissed, it was not open to the appellant to make a second application to set aside the judgment on a different ground. It would, as Haidar JCA observed during the course of En Zainur's argument, amount to presenting one's case in instalments. That is something the law does not permit.”

It is thus clear that the High Court has the power to dismiss any matter where the matter is res judicata between the parties and I do so hold after perusing Enclosure 19 and Enclosure 95 respectively, that the issues and reliefs sought in Enclosure 95 was similar and a substantial duplication of the issues raised and reliefs to that filed and sought in Enclosure 19 save that the JD had now in Enclosure 95 raised the non-compliance of Sections 5(4) and (6) of the Insolvency Act 1967 and Rule 97 and 282 of the Insolvency Rules 2017 against the JC.

Accordingly, the principle of res judicata in its wider sense applies to Enclosure 95 and the Respondent is therefore estopped from pursuing Enclosure 95 as the same matter has been adjudicated by 6 this Court in Enclosure 19 and which was heard and dismissed on 6.1.2021. There was therefore no special circumstance for the Respondent not to invoke the said grounds referred to in Enclosure 95 in his earlier application under Enclosure 19.

I have also considered the JD’s counsel’s submission that since the CP was heard on 15.9.2021 and Enclosure 95 was fixed for case management on the same day, the JD was denied the liberty to be heard on Enclosure 95. I have noted that the learned PKP had dismissed the said Enclosure 95 on the grounds that it was similar to Enclosure 19 which had been heard and dismissed on its merits on 6.1.2021. This would indicate that the Learned PKP had addressed the issues raised in the said Enclosure 95 and decided on the same accordingly.

It is also my decision that had the JC failed to comply with Sections 5(4) and (6) of the Insolvency Act 1967, the Court would not have allowed or granted the 22.1.2020 Order for leave to commence the bankruptcy proceedings against the said JD.

Hence, I had on the above grounds above mentioned dismissed the Appeal in enclosure 101 with costs of RM1,500. Dated: 14th day of February 2021 sgd. NADZARIN WOK NORDIN JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT 7 Parties: Mugunthan Vadiveloo for the Appellant/Judgment Debtor [Messrs Mugu & Sufyan] Wan Nazma Asyikin binti Wan Yusof for the Respondent/Judgment Creditor [Messrs Anad & Noraini]