1. ) WONG CHAM MEW sebagai Likuidator bagi Bukit Pedoman Sdn Bhd 2. ) ONG KONG LAI sebagai Likuidator bagi Bukit Pedoman Sdn Bhd v 1. ) TAN ENG PUN 2. ) KETUA PENGARAH JABATAN INSOLVENSI MALAYSIA PENCELAH KETUA PENGARAH JABATAN INSOLVENSI MALAYSIA

Case Significance

Illustrates the operation of res judicata, estoppel and the abuse-of-process doctrine to strike out a re-litigated claim under Order 18 rule 19 of the Rules of Court 2012, and confirms that claims affecting a bankrupt's property must proceed through the Director General of Insolvency under the Insolvency Act 1967.

This High Court decision concerns an application to strike out a writ under Order 18 rule 19 of the Rules of Court 2012 as an abuse of process barred by res judicata, in the context of a claim by the liquidators of an insolvent developer against a bankrupt sub-contractor. The developer company had, in 1998, agreed to sell forty light-industrial buildings from an industrial-park project to the sub-contractor for RM12 million, the titles being transferred to him as consideration for his sub-contract work. The project stalled and was abandoned. The developer was wound up in 2001 and the liquidators were appointed, while the sub-contractor was adjudged bankrupt in 2004. The liquidators claimed that a balance of RM5,022,473.87, equivalent to sixteen of the buildings, remained owing, and around 2004 had commenced an earlier action to that effect, which had proceeded through the courts with the Director General of Insolvency representing the bankrupt. The first defendant applied to strike out the fresh writ. The court held that the claim could not be maintained. It was barred by res judicata and estoppel because the same subject matter had already been litigated, and amounted to an abuse of the court's process. The court further reasoned that, as a bankrupt, the first defendant no longer had absolute ownership of the sixteen units, which now vested in and were administered by the Director General of Insolvency under the Insolvency Act 1967, so that suing the bankrupt directly was an attempt to bypass that Act. It allowed the striking-out application and ordered costs of RM8,000.00 to be paid to the first defendant through the Director General of Insolvency, reflecting his status as a bankrupt. The judgment is a useful illustration of the operation of res judicata and the abuse-of-process doctrine, and of the way the Insolvency Act 1967 channels claims affecting a bankrupt's property.