Re Yap;

Ex parte FCJ Sdn Bhd

Judgment

Abdul Aziz Mohamad J

1. The creditor's petition is this case was issued on September 11, 1998. It gave November 12, 1998 as the date of hearing. On that date the judgment creditor was absent. The judgment debtor had not been served with the petition and was also absent. Because the judgment creditor was absent, the Senior Assistant Registrar struck out the creditor's petition.

2. On April 6, 1999, on the application of the judgment creditor-the judgment debtor, who was represented by solicitors, not objecting - the creditor's petition was reinstated. What actually happened on that day was that counsel for the judgment creditor appeared also on behalf of the judgment debtor's solicitors and said that the judgment debtor's solicitors did not object to the application.

3. On June 10, 1999 the judgment debtor applied for the striking out of the reinstated creditor's petition. That application was heard together with the creditor's petition. The Senior Assistant Registrar dismissed the judgment debtor's striking-out application and allowed the creditor's petition. The judgment debt or now appeals.

4. The question in this appeal is whether the creditor's petition should have been struck out.

5. The ground for striking out that has been relied on by the judgment debtor is one that depends on Rule 120 of the Bankruptcy Rules 1969. As far as material, that rule says:

   If any creditor neglects to appear on his petition no subsequent petition against the same debtor ... shall be presented by the same creditor in respect of the same act of Bankruptcy without the leave of the Court.

6. Based on that rule, learned counsel for the judgment debtor submitted that after the creditor's petition had been struck out on November 12, 1998 for the non-appearance of the judgment creditor, the only step that the judgment creditor could take to proceed further against the judgment debtor was to present a fresh petition with the leave of the court. Learned counsel for the judgment debtor also submitted that the procedure for reinstatement was not available in bankruptcy proceedings. The entire submission was prompted by the judgment of Faiza Tamby Chik, J in Mariam Sasiman v BBMB Factoring Bhd [1999] 2 AMR 1664, which was delivered on October 5, 1998 but had not yet been published, and therefore was not within the knowledge of the judgment debtor's solicitors when the judgment debtor's solicitors consented to the reinstatement of the creditor's petition in this case.

7. In that case, the creditor's petition was dismissed because on the date of hearing, the judgment creditor was absent. The judgment debtor was present, the petition having been served. The judgment creditor subsequently applied for reinstatement of the petition. The judgment debtor objected to reinstatement, relying on Rule 120. The objection was upheld by the learned Judge on appeal.

8. Relying on that case, learned counsel for the judgment debtor here submitted that the Senior Assistant Registrar had no jurisdiction to allow the reinstatement of the petition and that the judgment debtor's consent was immaterial because consent could not confer jurisdiction where there was none. I have to say that in that case the learned Judge did not use the word "jurisdiction". The word was used only by the reporter. See, in the headnote, paragraph 2 under "Issue(s)" and paragraph 2 under "Held".

9. In my opinion, Rule 120 is specifically directed at the circumstance of a creditor presenting a subsequent petition after having neglected to appear on his original petition and after the original petition was either dismissed or struck out - the rule, strangely, does not state the consequence - as a result of the non-appearance. It does not say that presenting another petition is the only course open to the creditor. It ought not to be inferred that it intends to say so. Its purpose is to bar the presentation of the subsequent petition without the leave of the court. The thinking behind the rule presumably is that, in such a case, the creditor should not be allowed a second chance to proceed against the debtor without the latter being given an opportunity to show that the creditor should not be allowed a second chance.

10. The terms of Rule 120 are such that it is not designed to answer the question, "Can a creditor apply instead for reinstatement of his petition which has been struck out because of his absence?" As I said, the rule does not say that the only course open to the creditor is to present another petition. Apart from the reliance on Rule 120, it has not been argued why the procedure of reinstatement should not be available for a bankruptcy petition. It is important to bear in mind that if reinstatement was allowed, as it was in this case, that would amount to giving leave, and if the judgment debtor had been given a say on the question of reinstatement, the purpose behind Rule 120 would have been served.

11. Because Rule 120 is not designed to answer the question, and the question is not answered elsewhere in the Bankruptcy Rules 1969, there is an absence of a rule on the question of reinstatement of a bankruptcy petition. Because of that - and here I respectfully differ with Faiza Tamby Chik J - Rule 276 of the Bankruptcy Rules 1969 applies to render applicable Order 32 r 5(4) of the Rules of the High Court 1980, which provides for the restoration to the list of an application by summons that has been dismissed without a hearing for the applicant's failure to attend the hearing. The application for reinstatement in this case was therefore in order and, the judgment debtor not objecting the reinstatement is not capable of being questioned.

12. Alternatively the question of reinstatement being a question of mere procedure as to which there is a lacuna in the Bankruptcy Rules 1969, I think parties are at liberty to agree to the procedure of reinstatement. The judgment debtor in this case, by not objecting to the application for reinstatement has agreed to the procedure of reinstatement and to the reinstatement itself. The reinstatement does not violate the principle behind Rule 120. Neither has it caused injustice to the judgment debtor.

13. Look at it this way. Although the decision in Mariam Sasiman was not known to the judgment debtor's solicitors when the reinstatement was consented to, they would have known of the existence of Rule 120 and of its thinking of the presentation of a subsequent petition. If they thought that there was some advantage to be gained by the judgment debtor if the judgment creditor were to attempt to present another petition instead of applying, as they did, for reinstatement, they, the judgment debtor's solicitors, should have resisted the reinstatement and insisted on the judgment creditor applying for leave to present a fresh petition.

14. But after considering the affidavit in support of the application for reinstatement, and the reasons given therein for the absence of the judgment creditor on the hearing of the petition, they must have decided that, now that the actual circumstances were known, the petition did not deserve to be struck out in the first place; and that must have been why they did not object to the reinstatement and give some reason why, if the judgment creditor had instead sought leave to present a fresh petition, leave would not have been granted. It must be assumed that to the solicitors for the judgment debtor, after taking into account the judgment creditor's explanation and the terms of Rule 120, reinstatement was fair and just. The judgment debtor cannot now say that the petition ought to have been and to be struck out because, on jurisdictional grounds, it ought not to have been reinstated in the first place.

15. I dismiss the appeal with costs.

Cases

Mariam Sasiman v BBMB Factoring Bhd [1999] 2 AMR 1664

Legislations

Bankruptcy Rules 1969: R. 120, R. 276

Rules of High Court 1980: Ord. 32 r 5(4)

Representation

N Sivananthan (Messrs Sivananthan) for Judgment Debtor

Daniel Siew and AG Tan (Messrs Shui-Tai) for Judgment Creditor

Notes:-

This decision is also reported at [2000] 1 AMR 573