Chapter 2 - Act of Bankruptcy

Question 1

ACT OF BANKRUPTCY

Overview

Answer 1

1) Definition of act of bankruptcy
2) Date of act of bankruptcy
3) Wrong date of act of bankruptcy
4) Examples of act of bankruptcy

Question 2

ACT OF BANKRUPTCY

Definition

Answer 2

S.3 IA, inter alia:

• makes fraudulent conveyance;
• failure to comply with bankruptcy notice.

Question 3

ACT OF BANKRUPTCY

Date of act of bankruptcy - how many days

Answer 3

S.3(1)(i) IA:

• JD has 7 days to comply with BN after receiving the BN.

Question 4

ACT OF BANKRUPTCY

Date of act of bankruptcy - computation (exclusion)

Answer 4

Re Fadzil Othman, ex parte Malayan Banking Bhd:

• date of service of notice is excluded from the calculation of act of bankruptcy.

Question 5

ACT OF BANKRUPTCY

Date of act of bankruptcy - computation (inclusion)

Answer 5

Re Dato’ Loh Fook Yen:

• 7 days include weekly or public holiday.

Question 6

WRONG DATE OF BANKRUPTCY

Curing provision

Answer 6

S.131 IA

• Formal defects not to invalidate proceedings.

Question 7

WRONG DATE OF BANKRUPTCY

Test

Answer 7

General:

• whether the misstatement has caused substantial injustice;
• if it is not, it is curable under S.131 IA.

S.6(3):

• If the court for other sufficient cause is satisfied that no order ought to be made, the court may dismiss the petition.

Question 8

WRONG DATE OF BANKRUPTCY

Curable cases

Answer 8

1) Re Ariff Sionggong Ex Parte Arab Malaysian Finance Bhd:

• HC held that misstatement was merely a formal defect or irregularity;
• it is curable under S.131.

2) Re Liow Foong Mooi:

• As no substantial injustice was caused, it was held that the misstatement is not fatal.
• otf, there was also a formal application to amend the date of an bankruptcy.

Question 9

WRONG DATE OF BANKRUPTCY

Non-curable cases

Answer 9

Re Fadzil bin Othman ex p Malayan Banking Bhd:

• HC held that wrong date stated is fatal.

Question 10

WRONG DATE OF BANKRUPTCY

Recent case

CA, 2009

Answer 10

Stephen Wong Leong Kiong v HSBC Malaysia Bank Bhd:

• bankruptcy proceedings are of a quasi-penal in nature so all procedural requirements must be complied;
• when there is non-compliance, petition ought to be dismissed & S.6(3) ought to be given effect.