Re Siti Hamidah;

Exparte K&N Kenaga Bhd

Judgment

Suriyadi Halim Omar, J

1. The judgment creditor had filed a creditor's petition against the judgment debtor, but before it could be heard the judgment debtor had filed a notice to oppose it, pursuant to Rule 117 of the Bankruptcy Rules 1969. At the hearing date the judgment creditor had posed a preliminary objection alleging that the notice, which was as per Form 16, was defective, as it had been signed by the judgment debtor's solicitor, thus breaching a mandatory requirement. The judgment creditor had alleged that that the judgment debtor must sign the notice personally and nobody else.

2. After hearing the preliminary objection the Senior Assistant Registrar had rejected it, and hence the appeal before me. To reiterate, after due concession by the judgment creditor the only matter left for my consideration, was the preliminary objection. At the end of the hearing I had no hesitation in dismissing the appeal with costs. I now supply my reasons for the dismissal.

3. In the course of the hearing, the case of Development & Commercial Bank Bhd v Datuk Ong Kian Seng [1995] 3 AMR 2063 was brought to my attention by the judgment creditor, with particular reference to p 2072, where the Supreme Court remarked:

   ... Rule 117 clearly provides that if a debtor intends to show cause against the petition, he shall file a notice in Form 16. We hasten to add that no breach of a mandatory rule can be described as a formal defect or an irregularity that can be cured.

4. Having scrutinised the above case, it was obvious that the crux of the matter under discussion was whether an affidavit affirmed by the judgment debtor, in opposition of the creditor's petition could substitute as a notice. As it were, no notice in the like of Form 16, provided for in the Bankruptcy Rules 1969 was filed by the judgment debtor there. The Supreme Court without more, after hearing the arguments of the judgment debtor, had pronounced that an affidavit-in-opposition could not qualify as a notice when challenging the validity of the bankruptcy petition. As said above, the court further held that a failure to file a notice supported by an affidavit under Rule 117, was not a mere defect that could be excused.

5. Having perused the case, I saw no reason to quarrel with the legal pronouncements, inter alia, that a notice was a mandatory requirement to be adhered by an aggrieved party, with the affidavit as a poor cousin to a Form 16 notice. I was also satisfied that at no time was the court confronted with the legal poser of whether the format of Form 16 was mandatory in nature i.e. rejecting any variation, and which also had to be signed personally by the judgment debtor, not by the debtor's solicitors.

6. In a gist, the facts in Datuk Ong Kian Seng's case were distinguishable from the current one, in that here a notice in Form 16 was indeed lodged into court, in accordance with the requirements of Rule 117 of the Bankruptcy Rules 1969. That being so, at no time thus was the relevant mandatory rule breached by the judgment debtor. Also, at no time was an affidavit adverted to, in substitution of the prescribed notice of Form 16. Thus the facts here were a far cry from the above case. What attracted the dissatisfaction of the judgment creditor was that, even though a notice of opposition was indeed filed by the judgment debtor, that notice did not conform to the format of Form 16, in that it was signed by the latter's solicitor and not by herself personally. According to the judgment creditor, by virtue of the mandatory format, it was thus encumbent upon the judgment debtor to personally endorse the said notice to oppose. Since she had not adhered stringently to the format, the document thus had become defective, and invariably turning her opposition incompetent.

7. To augment the above Supreme Court case, the judgment creditor industriously cited the case of Chin Sin Lan v Delta Finance Bhd [2002] 1 CLJ 266 in which case the High Court there remarked:

   With regard to the first question, the said Rule 117 clearly stipulates that "where a debtor intends to show cause against a petition he shall file a notice with the Registrar...". From the wording o/the said rule it is clear to me that the Form 16 must be made in the name of the debtor personally and not that of the advocate acting on his behalf. Although the said notice appeared to have been filed substantially in the format of Form 16 but in my view it is still not in conformity with the requirements of the said Rule 117 as it was not issued in the name of the debtors personally. [Emphasis added]

8. Having perused pp 272-274 (the relevant portion of this poser), it was with deep regret that I was unable to identify the premise of the above view, except for the phrase "from the wording of the said rule". As opposed to the brief reason, I was hard-pressed to consider certain incontrovertible factors as discussed below.

9. By analogy, in the event an appeal was anticipated, Parliament had promulgated under Order 56 r 2 of the Rules of the High Court 1980 that Form 114 was to be alluded to. It was crystal clear even from a cursory reading of the provisions, that an appellant must allude to the correct format, due to its elevated position. As compared to this scenario, Rule 117 of the Bankruptcy Rules 1969 miserably failed to prescribe the format of the notice, in the event an aggrieved party desired to oppose the petition. In a rather round about way, it is only in Form 16, even that in an oblique and passing manner that Rule 117 is referred to.

10. Diluting further the supposed "mandatory" format of Form 16, Rule 4 of the Bankruptcy Rules 1969 in succinct terms provides:

    The forms in the Appendix, where applicable, and where they are not applicable, forms of the like character, with such variations as circumstances may require shall be used. Where such forms are applicable any costs occasioned by the use of any other or more prolix forms shall be borne by or disallowed to the party using the same unless the Court shall otherwise direct.

11. As regards the proforma of forms, Abdul Hamid FJ in Kamaruddin Mohamed v United Motor Works (M) Sdn Bhd [1982] 1 MLJ 126 at p 128 in fact had occasion to opine:

    It needs no emphasis that they are recognised but it should be observed that proforma of forms to be used in bankruptcy proceedings is given in the appendix to the Bankruptcy Rules 1969 and be that as it may these forms are intended to be used with modifications as may be necessary.

12. Rule 4 surely, without requiring an in-depth discourse of it, in all its clarity provides that whenever the forms in the Appendix are adverted to, variations as circumstances may require, may be permitted. Nothing is built into the said Rule 4, which states that in the event a modified version is adverted to, that varied form may be construed as being defective or the intention of the notice be declared incompetent. Viewing the matter from a different angle, it is fair to say that even though all laws are mandatory in the sense that they impose the duty of obedience on those who come within their purview, it does not follow that every slight departure therefrom shall taint the whole proceeding with a fatal blemish.

13. In matters of procedure, it is generally accepted that a statutory requirement may be interpreted as mandatory if it confers upon a litigant a substantial right, the violation of which will injure him or prejudice his case. At the other end, a statutory provision regulating a matter of practice or procedure will generally be read as directory, when the disregard of it, or the failure to follow it exactly will not materially prejudice a litigant's case or deprive him of a substantial right (Bhindra's Interpretation of Statutes, 7th Edn).

14. Applying the above universal view vis-à-vis the notice at hand as mandated by Rule 117, it cannot be denied that it is the prescribed manner of alerting the petitioner of the judgment debtor's desire to oppose the creditor's petition in court, restricted to issues supplied in the relevant documentations. Does it matter who signs the notice, so long as the judgment creditor has been alerted? With no deprivation of substantial rights or injury can result from ignoring the rigid words of Form 16, and the purpose of the legislature can still be accomplished i.e. the petitioner satisfactorily alerted, without adhering meticulously to the prescribed format and substantially obtaining the same results, then the format of Form 16 must be read as directory and not mandatory. In the circumstances of the case, no petitioner would care to assert that his interest would be prejudiced, just because the notice was signed by an advocate and not by the judgment debtor personally.

15. I had to bear in mind too that under the Bankruptcy Act 1967, when a person is adjudged a bankrupt, his estate would vest in the Official Assignee. Thereafter any statutorily imposed dealings that are connected to the bankrupt person would require the prior official approval of the Official Assignee. In the current case, as the judgment debtor was yet to be declared a bankrupt and thus status-wise no different to the next person, I found no legal impediment in existence that could justify the prevention of the judgment debtor permitting counsel to sign the impugned form. Members of the Honourable Society will rue the day when their signatures will be construed as not good enough to carry the day, when fulfilling their representative duty on behalf of their clients in like circumstances.

16. Additional to that, in the event the judgment debtor were to be prevented from giving notice of her intention to oppose the creditor's petition, the repercussion to her would be quite catastrophic, due to the quasi-criminal effect of a bankruptcy order. To deprive her of the rights to contest the creditor's petition, merely on technical grounds, surely would rebel against common sense and the administration of civil justice (United Malayan Banking Corp Bhd v Ernest Cheong Yong Yin [2001] 1 AMR 1073). To wind up the matter, in a situation like this, without involving any new canon of construction the format must be strictly construed in favour of the person most aggrieved by the outcome.

17. At the end of the hearing I had no compunction in rejecting the preliminary objection of the judgment creditor with costs.

Chin Sin Lan v Delta Finance Bhd [2002] 1 CLJ 266; Development & Commercial Bank Bhd v Datuk Ong Kian Seng [1995] 3 AMR 2063; Kamaruddin Mohamed v United Motor Works (M) Sdn Bhd [1982] 1 MLJ 126; United Malayan Banking Corp Bhd v Ernest Cheong Yong Yin [2001] 1 AMR 1073

Bankruptcy Act 1967

Bankruptcy Rules 1969: R. 4, R. 117, Form 16

Rules of the High Court 1980: Ord. 56 r 2, Form 114

Authors and other references

Bhindra's Interpretation of Statutes, 7th Edn

Thaiyub Khan & Inderjit Singh (B Inderjit Singh) for Judgment Creditor/Appellant

M Kalaichelvan & Ashok K Raman (Abu Talib Shahrom & Zahari) for Judgement Debtor/Respondent

Notes:-

This decision is also reported at [2002] 3 AMR 2530