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    Tutorial 4 Q3 Slides

    Uploaded by

    Marvin Goshan
    BKB obtained a bankruptcy order against Tom for RM350,000. Tom's uncle Brian later paid BKB RM300,000 to settle the debt. Tom applied to annul the bankruptcy order, which was allowed. BKB wants to appeal. The summary advises that BKB's appeal has no viability because the debt was fully paid per section 105(1)(b), and BKB must get DGI permission before appealing per case law. However, the payment from Brian directly to BKB, without DGI involvement, was improper and the High Court erred in annulling the bankruptcy on this basis.

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    Tutorial 4 Q3 Slides

    Uploaded by

    Marvin Goshan
    41 views6 pages
    BKB obtained a bankruptcy order against Tom for RM350,000. Tom's uncle Brian later paid BKB RM300,000 to settle the debt. Tom applied to annul the bankruptcy order, which was allowed. BKB wants to appeal. The summary advises that BKB's appeal has no viability because the debt was fully paid per section 105(1)(b), and BKB must get DGI permission before appealing per case law. However, the payment from Brian directly to BKB, without DGI involvement, was improper and the High Court erred in annulling the bankruptcy on this basis.

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    BKB obtained a bankruptcy order against Tom for RM350,000. Tom's uncle Brian later paid BKB RM300,000 to settle the debt. Tom applied to annul the bankruptcy order, which was allowed. BKB wants to appeal. The summary advises that BKB's appeal has no viability because the debt was fully paid per section 105(1)(b), and BKB must get DGI permission before appealing per case law. However, the payment from Brian directly to BKB, without DGI involvement, was improper and the High Court erred in annulling the bankruptcy on this basis.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    41 views6 pages

    Tutorial 4 Q3 Slides

    Uploaded by

    Marvin Goshan
    BKB obtained a bankruptcy order against Tom for RM350,000. Tom's uncle Brian later paid BKB RM300,000 to settle the debt. Tom applied to annul the bankruptcy order, which was allowed. BKB wants to appeal. The summary advises that BKB's appeal has no viability because the debt was fully paid per section 105(1)(b), and BKB must get DGI permission before appealing per case law. However, the payment from Brian directly to BKB, without DGI involvement, was improper and the High Court erred in annulling the bankruptcy on this basis.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    • MARVIN RAJA

    Tutorial 4 (1161100438)
    • ABIGAIL JEEVAMANI
    Question 3 (1181100207)
    • DEVARUUBAN A/L A R KRISHNA
    (1181101759)
    • SHAUN YONG JUN XIEN
    Group 4 (1171100370)
    Question 4
    • On 17.2.2019, Bank Kaya Bhd. (BKB) obtained judgment against Tom at the
    Melaka High Court for RM350,000/- together with interest and costs. On
    14.6.2019 the Bankruptcy Order was made against Tom on the Creditor’s
    Petition filed by BKB. • Subsequently, Tom’s uncle Brian approached BKB and
    made a payment of RM300,000/- in full and final settlement of its claim against
    Tom. Tom subsequently filed an application under s.105(1) IA 1967 to have the
    Bankruptcy Order annulled on the grounds that the debt had been fully settled.
    The SAR of the HC allowed the application although it was objected to by BKB.
    • BKB intends to appeal to the judge in Chambers. Advise BKB on the viability of
    the appeal.
    First Issue - Whether Bank Karya Berhad(BKB)
    can suceed on appeal ?
    Law
    • S.105(1)(b) of the Insolvency Act provides that the court may annul a bankruptcy order where all debts
    have been paid in full

    • Bungsar Hills Holdings S/B v Dr. Amir Farid Datuk Ishak, held that on the facts of this case, there is no
    reason for the Court to interfere with the findings of fact of the learned judge that the respondent was
    solvent and was able to pay his debt or with the exercise of his discretion.

    • In the case of Ho Ken Seng v Progressive Insurance Sdn Bhd held that a bankrupt is required to obtain
    the prior sanction of the DGI before he is competent to pursue an appeal against an AO and RO issued
    against him.

    • In Kwong Yik Bank v Haw Chiew Yin, the bankrupt Respondent had failed to satisfy that the proved
    debt had been fully paid
    Application & Conclusion
    • The effect of an annulment is to wipe out the bankruptcy. It would have been
    different if the application were for a discharge. Brian has paid RM300, 000 in
    full against Tom, the requirements under Section 105(1)(b) is satisfied. High
    Court therefore was right in allowing the application to rescind the Receiving
    Order and Adjudication Order as per Bungsar Hills Holdings S/B. Besides
    that, BKB has to firstly acquire the prior sanction of the DGI before he can
    appeal against an AO and RO as per Ho Ken Seng. Since the debt can be
    proved to be fully paid, it is unlike the case of Kwong Yik Bank and therefore
    the SAR was correct in allowing Tom’s application. Thus, BKB may not
    succeed on appeal.
    Second Issue - Whether BKB may appeal against the annulment of
    bankruptcy made by Tom pursuant to Section 115(1) of IA 1967.

    Law

    • Section 115(2) of IA, any creditor who obtains or receives money, property or security as inducement
    for forbearing to oppose, or for consenting to discharge a bankruptcy may be punished with a fine
    which may extend to three times the amount or value of such money, property or security.
    • Section 61(g) of IA, the Director General of Insolvency (DGI) may make such compromise or the
    rearrangement as is thought expedient with creditors or persons claiming to be creditors in respect of
    any debts provable under the bankruptcy.
    • Ting Nyuk Yong v Bank Utama (Malaysia) Bhd, it was held that DGI is the trustee of the estate of the
    bankrupt, and therefore incumbent that all dealings with the estate be made through him
    • Ketua Pengarah Insolvens Bagi Harta Goh Ah Kai, Bankrap v Goh Ah Kai and Parkway Hospital
    Singapore Pte Ltd, it was established that a creditor cannot accept payment from a third party, all
    payments must be made through the DGI.
    Application & Conclusion
    • On the facts of the case, Brian had personally approached BKB and made a
    payment of RM300,000 in full and final settlement of its claim against Tom.
    Tom then subsequently applied for annulment pursuant to Section 115. The
    application was allowed in the High Court and BKB seeks to appeal against
    the order.
    • Once the bankruptcy order was made, the estate vests in the DGI any
    compromise or arrangement must involve the DGI for it to be binding on the
    estate, BKB cannot personally accept payment from a third party as doing so
    would give rise to a penalty under Section 115(2) of IA.
    • In conclusion, the SAR of the High Court had erred in allowing the
    application.

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