PEMIUTANG PENGHAKIMAN ZAVARCO PLC PENGHUTANG PENGHAKIMAN RANJEET SINGH SIDHU

Case Significance

Illustrates the requirement that a bankruptcy notice conform to the terms of the underlying judgment and not improperly combine separate judgments, and the courts' reluctance to allow set-aside applications to be deployed merely to delay a creditor's bankruptcy proceedings.

This High Court decision at Kuala Lumpur, sitting in bankruptcy, concerns an appeal against a Senior Assistant Registrar's refusal to set aside a bankruptcy notice. The judgment creditor, Zavarco PLC (formerly known as Vasseti (UK) PLC), had issued a bankruptcy notice dated 22 April 2024 against the judgment debtor founded on an earlier High Court judgment. The judgment debtor applied to set aside the bankruptcy notice on the grounds, among others, that it was defective and not in accordance with the terms specified in the judgment, and that it had improperly combined two or more judgments. The Senior Assistant Registrar dismissed that application, and the judgment debtor appealed to the judge in chambers. Hearing the appeal and considering the oral and written submissions of both sides, the court examined whether the bankruptcy notice truly departed from the terms of the underlying judgment or wrongly aggregated distinct judgment debts so as to mislead the debtor, applying the principle that a bankruptcy notice must correspond to the judgment on which it is based. The court found no such defect made out on the affidavit evidence properly before it, and it was influenced by the fact that the judgment debtor had, in separate proceedings, made clear that he had no intention of satisfying the judgment debt, which indicated that the application to set aside and the appeal had been filed to delay the creditor from advancing the bankruptcy proceedings. Concluding that there was no merit in the challenge, the court dismissed the appeal with costs of RM5,000. The judgment is a useful illustration of the requirement that a bankruptcy notice conform to the underlying judgment, and of the courts' unwillingness to allow set-aside applications to be used as delaying tactics. The court emphasised that the bankruptcy jurisdiction is not to be obstructed by technical objections that do not go to the substance of the debtor's liability, and that a debtor who admits he has no intention of paying cannot be permitted to string out the process by successive challenges to the regularity of the notice. It is the correspondence between the notice and the judgment, not the debtor's dissatisfaction with the judgment, that governs a set-aside application.