NUR ZULAIKHA BINTI DZULZAILI (menyaman melalui bapa dan wakil litigasinya, Dzulzaili Bin Muhammad Nor) v MEDI-CIRCLE SDN.BHD. PIHAK YANG DIGARNIS 1. ) PUSAT RAWATAN ISLAM AZ-ZAHRAH SDN BHD 2. ) HOSPITAL AZZAHRAH BANGI SDN BHD 3. ) AZ-ZAHRAH WELLNESS CENTRE SDN BHD 4. ) DEFINITE INTEGRATION SDN BHD 5. ) ENERGY BUILDER NETWORK SDN BHD 6. ) INDUSTRI AZ-ZAHRAH SDN BHD 7. ) POLIKLINIK AZ-ZAHRAH BBB SDN BHD 8. ) POLIKLINIK AZ-ZAHRAH BTHO SDN BHD 9. ) UMATY INDUSTRIES SDN BHD 10. ) POLIKLINIK AZ-ZAH...

Case Significance

Confirms that a garnishee order under Order 49 of the Rules of Court 2012 requires accurate identification of the final judgment and the amount unpaid, and that garnishee debts must be properly proven and open to challenge — an order based on a misidentified judgment and unproven debts will be set aside.

This High Court decision at Kuala Lumpur concerns an appeal by garnishees against a garnishee order, and it turns on defects in identifying the judgment and the outstanding sum, and on the unproven nature of the debts to be attached. The judgment creditor, a minor suing through her father, had obtained judgment against the judgment debtor company and, in enforcing it, entered into a settlement agreement and filed a judgment debtor summons. In the course of that summons it emerged, from the judgment debtor's management accounts, statement of account and financial and annual returns, that a number of companies — the garnishees — owed money to the judgment debtor. The judgment creditor applied under Order 49 rules 1 and 2 of the Rules of Court 2012 for a garnishee order attaching those debts, and the Senior Assistant Registrar granted it. On the garnishees' appeal, the court held the application was materially flawed. Order 49 requires the application to identify the judgment to be enforced and to state the amount remaining unpaid; here the application identified the judgments of the High Court, the Court of Appeal and the Federal Court together, whereas the creditor had to rely only on the final judgment, that of the Court of Appeal, which had reduced the judgment sum, so the outstanding amount was wrongly stated. These discrepancies in identifying the judgment and the amount owing were a material flaw the Senior Assistant Registrar should have considered before making the order. As a further ground, the amounts said to be owed by the garnishees to the judgment debtor had not been fully ventilated because the judgment debtor summons proceedings were not yet complete, so taking those amounts from unproven documents at this stage, which the garnishees had no opportunity to challenge, was unacceptable and contrary to law. The court allowed the garnishees' appeal and set aside the garnishee order, with costs of RM3,000 against the first garnishee and no order as to costs against the others.