Chapter 3 - Bankruptcy Notice Flashcards Preview

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Flashcards in Chapter 3 - Bankruptcy Notice Deck (32)
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1
Q

BANKRUPTCY NOTICE

Overview

A

1) Contents of BN
2) Conditions for issuance of BN
3) Procedures for issuance of BN
4) Service of BN

2
Q

CONTENTS OF BN

Overview

A

1) Particulars
2) Endorsement
3) Liquidated sum
4) Interest

3
Q

CONTENTS OF BN

Particulars

A

Bankruptcy notice:

  • Form 34, page 238

Goh Wee Peng v Standard Chartered:

  • BN should contained particulars of the sum claimed;
  • The sum is referred to the statements of accounts attached.
4
Q

CONTENTS OF BN

Endorsement

A

S.92 IR

5
Q

CONTENTS OF BN

Liquidated sum

A

Re Ismail bin Daud & Hajah Qameriah:

  • Sum must be liquidated sum;
  • Interest must be properly quantified;
  • Any ambiguity will invalidate BN.
6
Q

CONTENTS OF BN

Interest - time for calculation

A

Moscow Narodny Bank Ltd v Ngan Ching Wen:

  • amount of interest must be only for 6 years;
  • 6 years is calculated from the date of the judgment.
7
Q

CONTENTS OF BN

Interest - failure to quantify

CA, 2018

A

P Mukundan PK Kunchu Kurup v Daniel Anthony:

  • the judgment did not quantify the interest & the costs, which in fact cannot be quantified at all;
  • but at the date BN was issued, the interest was capable of quantification & JC did in fact quantify it;
  • the amount demanded from the judgment in the BN was thus correctly quantified, capable of execution & in accordance with the judgment.
8
Q

CONDITIONS FOR ISSUANCE OF BN

Overview

A

1) Founded upon final judgment
2) Cannot be founded on two judgment
3) Jointly liable debtor
4) Leave for judgment over 6 years
5) Order for JD summons

9
Q

CONDITIONS FOR ISSUANCE OF BN

Founded upon final judgment - meaning of final judgment

A

1) Trite - Re Udos Al Rigging v Seabanc Kredit Sdn Bhd:
- Debtor has exhausted all his remedies permitted in law.
2) Recent - P Mukundan PK Kunchu Kurup v Daniel Anthony (CA, 2018)

  • Judgment is final when it has stated the interest rate & the time it starts to run and end.
  • The judgment has also disposed all the rights of JC & JD.
10
Q

CONDITIONS FOR ISSUANCE OF BN

Founded upon final judgment - judgment pending appeal

A

Jacob Robindranath M Krishnan v GP Autobat Sdn Bhd:

  • JC is entitled to issue BN although the judgment is pending appeal;
  • This is so when the application of stay has been refused in all courts.
  • i.e. judgment pending appeal is a final judgment.
11
Q

CONDITIONS FOR ISSUANCE OF BN

Founded upon final judgment - order for specific performance

A

Re Eng Poh Hong, Ex P MBF Leasing Sdn Bhd:

  • Order for SP is not a final judgment, as it is not an order to pay a judgment debt.
12
Q

CONDITIONS FOR ISSUANCE OF BN

Founded upon final judgment - consent judgment

A

Datuk Mohd Sari v Norwich Wintherthur Insurance:

  • Consent judgment is not a final judgment.
13
Q

CONDITIONS FOR ISSUANCE OF BN

Founded upon final judgment - allocatur

A

Khoo Kau Hoe v Chor Phaik Har:

  • What is an allocatur: certificate of taxing master as to costs allowed.
  • Whether it is a final judgment: allocatur is a final judgment, thus BN issued upon it is valid.
14
Q

CONDITIONS FOR ISSUANCE OF BN

Cannot be founded on two judgments

A

r. 89(2):
- creditor is not entitled to apply for BN by combining two judgment.

Re Chen Chong Fatt Willy, Ex P Hitachi Lease:

  • BN cannot be founded on two judgment;
  • two judgments cannot be combined to meet the minimum statutory amount.
15
Q

CONDITIONS FOR ISSUANCE OF BN

Jointly liable judgment debtor

A

1) The law - r.89(3):

  • creditor is not entitled to apply for the issue of a BN against joint debtors unless they had carried on a business jointly.
  • separate bankruptcy notice must be issued against each debtor in the final judgments.

2) Trite - Yeo Ah Wang v UMBC:
- BN must be issued separately for each & every liable judgment debtor.
3) Recent - Sumathy Subramaniam v Subramaniam Gunasegaran (CA, 2018):

  • When BN is issued against a few liable JD & the judgment did not specify whether they are jointly or severely liable, the liability is necessarily joint.
  • The JC has the right to enforce only half of the judgment sum against each JD.
16
Q

CONDITIONS FOR ISSUANCE OF BN

Leave of court for judgment over 6 years

A

Dr. Shamsul Bahar v RHB Bank Bhd:

  • leave is required for judgment over 6 years.
17
Q

CONDITIONS FOR ISSUANCE OF BN

Order for JD summons

A

Mohd Kamal Omar v UoB (Malaysia) Bhd:

  • Order for JD summons will bar the presentation of a BN founded on the same judgment.
  • Execution under Debtors Act did not extend to bankruptcy proceedings.
18
Q

PROCEDURES FOR ISSUANCE OF BN

Overview

A

1) What court to issue

2) Application for issuance of BN

19
Q

PROCEDURES FOR ISSUANCE OF BN

What court to issue

A

r. 89:

- BN shall be issued by the court in which a bankruptcy petition may subsequently be heard.

20
Q

PROCEDURES FOR ISSUANCE OF BN

Application for issuance

A

r.90:

  • creditor shall produce & file as specified in the rules.
  • failure to comply with the requirements of the rule will move the court to reject the application, per r.90(2)
21
Q

PROCEDURES FOR ISSUANCE OF BN

Effect of non-compliance with the rules for issuance

HC, 2020

A

RE CHUA LIANG HONG; EX P: KUALA EXCEL SDN BHD

  • If the non-compliance cannot mislead, prejudice or cause any injustice to the judgment debtor, the bankruptcy notice cannot be invalidated on the ground of such error per se.
22
Q

SERVICE OF BN

Overview

A

1) When to serve

2) To whom to serve

23
Q

SERVICE OF BN

When to serve - time limited to serve

A

r. 94:

- BN must be served within 3 months

24
Q

SERVICE OF BN

When to serve - extension of time

A

S.93(4) IA:

  • court may extend time as it sees fit.
25
Q

SERVICE OF BN

When to serve - discretionary power to grant extension of time

A

Aris bin Massod, ex p UOL Factoring Sdn Bhd:

  • creditor may apply for extension of time to serve the BN;
  • court has the power to extend by virtue of S.93(4).
26
Q

SERVICE OF BN

When to serve - test for extension of time

A

Rohani Hamidah bt Nor v Service Leasing Sdn Bhd:

  • special circumstances;
  • for a good cause.
27
Q

SERVICE OF BN

When to serve - how long time can be extended

A

Yap Heng Cheong v CitiBank Bhd:

  • not only 3 months, but 9 months.
28
Q

SERVICE OF BN

To whom to serve - general rule

A

r. 95:
- service is to be effected according to service of CP.
r. 108:
- personal service, to the judgment debtor.

29
Q

SERVICE OF BN

To whom to serve - exception - to the solicitor

A

Dato’ Hj Yusuf Kamari v CIMB Bank Bhd:

  • service on solicitor representing the JD is valid.

Lim Boon Kiak v Affin Bank Bhd:

  • CP (or BN) cannot be served on a firm of solicitors, unless there is a clear indication (in writing) that the said firm of solicitors has the authority to accept service of the documents on behalf of the judgment debtor.
30
Q

SERVICE OF BN

To whom to serve - exception - substituted service

A

1) r.109:
- order of SS can be made by ways stated therein.
2) Leow Boke Chooi v Asia Motor Co.:
- 2 calls must be made prior.
3) Re S Nirmala:

  • SS can only be granted if JD is evading service;
  • PD has no application if D’s whereabouts is not known.
31
Q

SERVICE OF BN

To whom to serve - exception - example of SS order

A

Kamalasan a/l Tangarajoo v Ambank (M) Bhd (HC, 2017):

JC has correctly followed the order for SS by:

  • newspaper advertisement;
  • notice put up at Shah Alam High Court;
  • service to JD’s last known address.
32
Q

SERVICE OF BN

Effect of irregular service

A

Re Subramaniam a/l Palani v Ex P Tharenpalam A/L Subramaniam:

  • Irregular service of CP or BN warrants the court to deny the petition or dismiss the notice.