Re Peh Kong Wan, exparte United Malayan Banking

Corp Bhd [1992] 2 MLJ 292Annulment- Section 105 BA

Ground: Court’s opinion that the bankrupt ought not to have been adjudged a bankrupt.

21st September 1976Petitioner Bank obtained

judgements against Peh and his co-defendents – 1.5

million with interest and cost

8th March 1988 (12 years later)Bank obtained leave to enforce judgement

and attempt to serve BA on Peh.Effected by substitute service; advertising

and posting to the last known address.Served notwithstanding that the court process server was informed that the

applicant was no longer staying at that address.

14th September 1988Petition was called for disposal.

Respondent absent and accordingly petition was treated as an unopposed

petitionROAO was made

4th December 1991Applicant took out a motion to set aside

ROAO.Claiming that he had left Malaysia with the

whole family.Obtained a permanent resident in

Singapore.Worked in Singapore, Hong Kong and

Indonesia.Came back to Malaysia just to renew

passport.

WHAT THE COURT HAD TO SAY• Court is satisfied that Peh ceased to ordinarily reside in Malaysia and since

then has not had a dwelling house or place of business. • All probability did not know about bankruptcy proceedings and it explains

the lapse of time in filing this application.

SECTION 5(1)(d) BA

• Court took into account the stringent immigration laws most countries have. An application for permanent resident satisfy the host country that it is the application’s wish that the host county become his domicile of choice

DOMICILE

• The applicant has establish both the animus to change his domicile from Malaysia to Singapore and the factum of having effected the change.

• It followed that under section 5(1)(d)- the applicant ought not to have been adjudged a bankrupt.

CONCLUSION

Re Keet [1905] 2 K.B 666

Annulment- Section 105 BAGround: Debts settled in full

English Court of Appeal

Discussed the meaning of “Where it is proved to the satisfaction of the court that the debts of the bankrupt are paid

in full”

It is common ground that our Bankruptcy Act 1967 is modelled along the English Bankruptcy

Act 1914 and the phrase in the second limb of

section 105(1) of our Act is in identical terms with the words in the second limb of section 29(1) of

the Act 1914

The language of this Act, interpreted according to

its natural meaning.Thus, to him the

payment must be required in full and

nothing less than that

“DEBT”At least all debts

actually and properly proved in the bankruptcy.

“PAID IN FULL”Fully paid in cashBeing satisfied by

unconditional release given to the bankrupt by

the creditors does not count.

Therefore, where debts properly proved were

subsequently released, because the creditors had decided to try to

help the debtor start in business again, the

bankruptcy could not be annulled on the grounds

of payment in full.

WHAT THE COURT HAD TO SAY

Kwong Yik Bank Bhd. V Hah Chiew Yin Yin

[1985] CLJ 178Annulment- Section 105 BAGround: Debts settled in full

September 10, 1976

Appellant had obtained judgment

against the respondent- $30K.

1979 A sum of $15,000.00 was paid

towards reduction of the judgment-debt. 1981

The balance still due and owing plus accumulated interest was $30,000.00

or thereabout.

October 1981The appellant caused a Bankruptcy Notice to be

issued against the bankrupt and this was followed by the

Creditor's Petition

July 5, 1982 Both Receiving and Adjudication Orders were made against the

bankrupt.Bankrupt's husband approached the

appellant with a view to effect a settlement in order to enable the bankrupt to apply to the Court to

have the adjudication order annulled

August 28, 1982Bankrput ‘s bro-in-law gave

$6KNovember 2, 1982Paid $10K (with the

receipt, the Appelent wrote to the official asignee)

Respondent filled a motion to have the

ROAO annulled on the ground that debt has

been paid in full.

TRIAL COURT

• Learned trial judge found on the documentary evidence that the appellant had agreed to accept and had accepted$16,000-00 in full settlement and there was no merit in the objection of the appellant who opposed the motion.

COA

• Held, in this case, the respondent (bankrupt) had failed to satisfy that the proved debt lawfully due to the appellant had been paid in full in cash and therefore the order of the learned Judge in annulling the adjudication order must be set aside.

FC

• The learned Judge erred in law and in fact in holding that the bankrupt had satisfied the second limb of section 105(1) of the Bankruptcy Act 1967 "where it is proved to the satisfaction of the court that the debts of the bankrupt are paid in full ... the court may annul the adjudication"..

• The bankrupt was not applying for an order of discharge but was applying for an order annulling her adjudication.• The effect of this is to wipe out the bankruptcy altogether and put the bankrupt in the same position as if there

had been no adjudication order.

It appears to us that the case of In re Keet ( supra) had not been cited to the Court below and if the attention of the learned Judge had been drawn to this authority he might not have exercised the discretion and made an Order as prayed. On the affidavit evidence adduced before the learned Judge, in our opinion, the bankrupt had failed to satisfy that the proved debt lawfully due to the appellant had been paid in full in cash. For these reasons we allow the appeal of the appellant and set aside the order of the learned Judge in annulling the adjudication order. The appellant is clearly entitled to its costs here and in the Court below. The deposit to be refunded to the appellant.

Re Peter Wong, Ex Parte the Debtor [1958] MLJ 116

Annulment- Section 105 BAGround: Debts settled in full

COURT TAKES INTO CONSIDERATION OF THE BANKRUPT’S CONDUCT.

11th February 1957ROAO made against

Peter Wong.He admitted himself the

correctness of the sheriff’s return after

the creditor’s petition was filed.

Filed and affidavit contradicting the

admission and stated that he possessed

goods worth of more than $30K.

Court: this does not displace the

conclusion drawn by the Sheriff.

7th August 1957Filed an affidavit;

Cotton, rubber and a car Austin A40(which he bought in 1956)

13th August 1957Official assignee became

interested and took in possession of the said

goods. The car registration book

confirms the debtor’s story that it has been in

his ownership since 1956

Annulment of ROAO on the ground; the

act of bankruptcy

relied upon is invalid.

WHAT THE COURT HAD TO SAYWhether the court sitting in bankruptcy has the

power to inquire into the correctness of the sheriff’s nulla bona return.

• This particular provision of Singapore bankruptcy law has no counterpart with English law.• Bankruptcy: everything is open to

enquiry & long been establish that court may go behind a judgement even If that judgement had been affirmed by the COA. Thus, court has the power to inquire into the correctness.

Whether the court must necessarily annul the adjudication/ whether the court had discretion in

that matter• On the ROAO hearing date, Peter admitted

himself the correctness of the sheriff’s return but later filled an affidavit contradicting the admission- trying to play a double game; trying to delay bankruptcy proceedings by saying he had no assets and when bankruptcy proceeding became unavoidable, he started disclosing assets

• Section 104 of the Bankruptcy Ordinance- "Where in the opinion of the Court a debtor ought not to have been adjudged bankrupt ... the Court may annul the

• adjudication.“ Thus, appeal dismissed.

Re Seow Yin Fong Ex Parte United Orient Leasing Company

Bhd [1994] 2 CLJ 845Annulment- Section 105 BAGround: Debts settled in full

COURT TAKES INTO CONSIDERATION OF THE CREDITOR’S INTEREST.

11th ay 1987ROAO were

made against debtor. 11th October 1993 (6

years later)Section 105(1) BA

-Amount stated in the respective bankruptcy

notices were not quantified up to the date

of the bankruptcy notices

-Bankruptcy notices also included a sum which

was not due and owing as at the date of the

notices, namely interest until date of full and final

settlement

Applicants contended that the bankruptcy notices were invalid and therefore the whole bankruptcy

proceedings were a nullity and ROAO ought not to have been made

in the frist place.

Judgement creditor and other creditors:

who had proved their debts opposed the applications on the

grounds: - applicants had admitted in full the proof of debts filed against

them at the first creditors' meeting

-affirmed their liabilities to the respective creditors at the Public

Examination.

HELD

The application to annul was made 6 years from ROAO.

Prejudice the creditors as whatever owed to them will be statue barred even

though the delay of filing isn’t their fault as the applicants were bankrupt at that

point of time.

Section 105(1) BA is discretionary.

Must still be exercised with proper principles.

Must consider the interest of the affected parties.

In this case, the applicants did not reason out to the court for the delay of this application

Even if the law allows to annul the ROAO for being void ab initio, this will cause serious prejudice to the

creditors.By allowing so, this will lead to flood gates of other application

under the same basis.

All in all, justice will not be served by

annulling the ROAO as it deadly affects the position of the

creditors.