FirozJulian

On the court record

The firm's record illustrates the scope and exceptions of the sanction requirement under section 38(1)(a) of the Insolvency Act 1967, which restricts an undischarged bankrupt's capacity to litigate in order to protect the creditors' collective interest.

FirozJulian appears in the corpus as counsel in insolvency litigation, argued in the High Court (Mahkamah Tinggi), with a focus on the statutory sanction that governs suits by an undischarged bankrupt.

The firm's reported work centres on a connected group of originating summonses brought by an undischarged bankrupt against various defendants, including the Government, the Director General of Insolvency and a bank. Acting for the defendants, the firm appeared where the central and recurring question was whether the bankrupt could institute the proceedings without first obtaining the sanction of the Director General of Insolvency, as required by section 38(1)(a) of the Insolvency Act 1967, and whether the absence of that sanction barred the action. The provision restricts the capacity of an undischarged bankrupt to litigate, vesting the bankrupt's property and the conduct of legal proceedings in the Director General for the benefit of the creditors.

The proceedings raised several refinements of that rule. One was whether, by naming the Director General of Insolvency as a party, the requirement of obtaining his sanction was thereby dispensed with. Another was whether sanction was required in an action in which the Director General was himself sued for an alleged failure in the discharge of his duties while acting as Official Assignee. A third was whether the bankrupt's action, founded on causes of action such as defamation and harassment personal to the bankrupt rather than concerning his property, fell within a recognised exception to the sanction requirement, and whether the point was in any event caught by res judicata, the same issue having been raised and decided in earlier proceedings.

The firm's record is a focused insolvency-litigation practice, concentrated on the scope and exceptions of the section 38(1)(a) sanction requirement and its role in protecting the collective interests of creditors. The connected proceedings illustrate a recurring feature of bankruptcy litigation, in which an undischarged bankrupt seeks to pursue grievances against creditors, officials and the state, and the courts must hold the line between preserving the bankrupt's genuine personal rights and preventing a proliferation of unsanctioned suits that would undermine the orderly administration of the estate for the benefit of all creditors.