Chapter 1 - Introduction to Bankruptcy Flashcards
INTRODUCTION TO BANKRUPTCY
Overview
1) Debtor & creditor
2) Who can & cannot be a bankrupt
DEBTOR & CREDITOR
Debtor - overview
1) Definition of debtor
2) Burden of proof
DEBTOR
Definition of debtor
S.3(3) IA:
- personally present in MY;
- ordinarily resided or has place of residence in MY;
- carrying on business in Malaysia;
- member of firm / partnership in Malaysia.
DEBTOR
Burden of proof
Algemene Bank Nederland v Loo Choon Yow:
- creditor / petitioner has the burden to prove that one is a debtor within S.3.
CREDITOR
Overview
1) Definitions
2) Secured & unsecured creditor
3) Property held by secured creditor
4) Rights of secured creditor
CREDITOR
Definitions
S.2 - meaning of secured creditor:
- a person holding a mortgage, charge or lien on the property of the debtor.
CREDITOR
Secured & unsecured creditor
1) SECURED CREDITOR
- a person whom money is owed by way of a secured loan.
- e.g. housing loan from a bank; the bank will be a secured creditor.
- e.g. financier owner for hire purchase (M Hashimi v Asia Commercial Finance (M) Bhd)
2) UNSECURED CREDITOR
- a person whom money is owed by way of an unsecured loan.
- e.g. normal trade creditors, judgment creditors, etc.
CREDITOR
Property held by secured creditor
Goh Kein Hooi v OCBC Bank (MY) Bhd:
- property held by the secured creditor must be of the judgment debtor himself, not 3rd party.
CREDITOR
Right of a secured creditor
Re Ng Say Tee:
- Secured creditor is entitled to proceed outside IA;
- In the event a person is made a bankrupt, his secured creditors will get priority over unsecured creditors.
Malayan Banking Bhd v Boau Yoon Futt (CA, 2014):
- a secured creditor has three “elections” under bankruptcy law:
(1) It can stand outside the bankruptcy, and realise its security; or
(2) It can value its security and prove for the difference between this value and the amount of its debt; or
(3) It can surrender its security to the DGI for the general benefit of the creditors.
WHO CAN & CANNOT BE A BANKRUPT
Overview
1) Foreigner
2) Married woman
3) Infant
4) Social guarantor
5) Other guarantor
WHO CAN & CANNOT BE A BANKRUPT
Foreigner
Re Leong Nyuk Weng, ex parte Public Bank:
(1) S.3(3):
- personally present / has a place of residence in MY at the time act of bankruptcy is COMMITTED.
(2) S.5(1)(d):
- bankruptcy petition can be presented against a debtor domiciled in MY within 1 year before the petition is presented.
WHO CAN & CANNOT BE A BANKRUPT
Foreigner
1) Re Leong Nyuk Weng, ex parte Public Bank:
- personally present / has a place of residence in MY at the time act of bankruptcy is COMMITTED.
2) Re Alfred Lam Choong Choy:
- it does not matter if a person is no longer in MY;
- what matters is he was in MY when act of bankruptcy is committed.
WHO CAN & CANNOT BE A BANKRUPT
Married woman - the law
S.120 IA:
- shall be subjected to IA as if she is a feme-sole, i.e. woman w/o husband.
WHO CAN & CANNOT BE A BANKRUPT
Married woman - the case
Re Mahmooda bte Ismail:
- a married woman cannot be bankrupt if she has no separate property or she is depending on her husband’s income.
WHO CAN & CANNOT BE A BANKRUPT
Infant
Re Davenport:
- action for bankruptcy against an infant may be commenced through a guardian.
