Assignment 2: Insolvency

Semester 1 Session 2022/2023

Instruction:

Each firm has to answer two questions; one is from the Personal insolvency Part and another from the
corporate Insolvency Part.

Each firm has to present the answer for the Personal Insolvency Part only.

Each question for a firm with corresponding order, e.g., firm one (1), answer Q1.

Words: 2.5 – 4 thousand for each answer.

Presentation date: 16 December 2022

Presentation duration: 10 minutes

Submission Deadline: 30 December 2022

Submission: e-mail answers to [email protected] indicated in the title which firm’s and
continued with Assignment 2, UUUK4213.

Answering format: critically evaluate the provision(s) application under the relevant statutes (the
Insolvency Act 1967 & Companies Act 2016) and the case(s) cited. Provide the overall context of the
procedure within which the relevant bankruptcy /winding up/rescue proceedings apply. Also, provide an
evaluation of whether the judgment set a good precedent or (should be or has been) critically
distinguished in later judgment.

Marks Distribution: Presentation – 6%; Personal Insolvency – 7%; Corporate Insolvency – 7%.

Personal Insolvency

1. Describe classes of creditors for bankruptcy by considering the judgment in Perwira Habib Bank
Malaysia Bhd v Samad Pakianathan Jabamanickam [1993] 3 CLJ 349.

2. Discuss the applicability of s 6(3) of the Limitation Act 1953 as enunciated in the Federal Court
case of Perwira Affin Bank Bhd v Lim Ah Hee [2004] 2 CLJ 787.

3. S 100 of the Insolvency Act 1967 requires the creditor’s bankruptcy petition to be filed at the
High Court, where it was presented. Discuss by considering Siti Nur Aishah Ishak v Golden Plus
Holdings Bhd [2017] 8 CLJ 272.

4. Witnessing the creditor’s petition is not a mere formality because it can affect its validity.
Discuss in light of the case law development on the issue.
5. Discuss the application of Rule 108 of the Insolvency Rules 2017 regarding the requirement
relating to the service of the creditor’s petition.

6. By referring to the court’s decisions, to what extent should the company give its authorised
officer authority to present the bankruptcy petition? Should the officer be authorised explicitly
under the seal of the company?

7. Discuss the procedure for a debtor who wishes to set aside the creditor’s petition under the
Insolvency Rules 2017. Support with the decided cases.

8. The decided cases illustrate the possibility that the creditor’s petition may be filed against the
same debtor regarding the same act of bankruptcy under the Insolvency Rules 2017. Discuss

9. Discuss the power of the Director-General of Insolvency in granting leave to a bankrupt to

10. To what extent would the court consider the evidence of a bankrupt as a witness? Refer to the
judgment in Tong Soon Tiong & Ors v FA Securities Sdn Bhd [2013] 2 CLJ 448.

11. Concerning the judgment of Richard Malanjum (as he then was) in Agroco Plantation Sdn Bhd v
Besharapan Sdn Bhd & Ors [1999] 5 CLJ 19, explain the test of what properties can pass to the
Director-General of Insolvency?

12. The court may discharge a bankrupt. Discuss the procedure and consideration concerning the
Court of Appeal’s decision in Lim Tee Keong v HLG Securities Sdn Bhd [2016] 4 CLJ 840

For questions 13 to 17 below, Illustrate the circumstances, and explain the applicable procedure
in which the court may exercise its discretion to annul a bankruptcy order based on the
following cases:

13. Kwong Yik Bannk v Hah Chiew Yib [1985] 2 CLJ 31

For questions 18 & 19 below, explain the applicable procedure for discharging a bankrupt under
a Certificate by the Director-General of Insolvency.

18. Re Benny Ong Swee Siang; Ex P United Overseas Bank (Malaysia) Bhd [2016] 3 CLJ 1001
 19. Maybank Finance Bhd v Lee Kee Sen [2014] 10 CLJ 543

20. Section 104 of the Insolvency Act 1967 provides reciprocal recognition and arrangement relating
to bankruptcy and insolvency. Discuss its application in light of Dato’ Kuah Tian Nam v Tan Wrun
Peng [2009] 1 LNS 702.
21. In Diamex Sdn Bhd v Ivory Indah Sdn Bhd & Ors [2016] 1 LNS 652, explain the court’s approach
to fraudulent settlement cases.
22. Critically evaluate the applicability of s 52(1) of the Bankruptcy Act 1967 in Chin Ah Keow@Chin
Lai Sitt v Soliha Ahmad Nasarudin & Ors [2017] 1 LNS 1337.

Corporate insolvency

1. Explain the procedure for a court-approved compromise and arrangement under s 366(3) of the
Companies Act 2016 to make it binding on the creditors. Illustrate to what extent the court
would interfere with the decisions of the majority creditors in the creditors meeting, based on
the judgment in Sri Hartamas Development Sdn Bhd v Mbf Finance Bhd [1990] 1 CLJ 827

2. Restraining order provides a degree of protection (a moratorium) while the company works out
the scheme of arrangement from being sued or wound up by the creditors. At the same time,
the moratorium may be subject to abuse. Bearing in mind the statutory amendment on the
issue, explain the procedure and criteria for the court as enunciated in the decided cases (please
pick one) in granting and extending the restraining order.

3. Discuss whether a company in the process of being wound can embark on a scheme of the
arrangement, considering the decision in Francis Augustine Pereira v Dataran Mantin Sdn Bhd &
Ors [2014] 1 CLJ 161.

For questions 4 & 5 below, can any aggrieved party challenge a voluntary corporate
arrangement under the Malaysian Companies Act 2016? Discuss in light of the UK’s position as
illustrated in

4. Prudential Assurance Company Ltd & Ors v PRG Powerhouse Ltd & Ors [2007] EWHC 1002.
[2007] ALL ER (D) 21.
5. Mourant & Co Trustees Ltd & Anor v Sixty UK Ltd (in administration) & Ors [2010] EWXC 1890

6. In Re Genesis Technologies International (Spore) Pte Ltd [1994] 3 SLR 390 at p 8, it was said that:

“The primary purpose of judicial management is the protection of the company from its
creditors. The court should be vigilant to ensure that it is not directly or indirectly used by the
directors and shareholders to the detriment of creditors, particularly the unsecured ones.”
 Considering the above statement, discuss the procedure for the court to grant an order for
judicial management in Malaysia under s 405 of the Companies Act 2016.

7. To what extent may the court oppose the application for judicial management in Malaysia?
Discuss in light of the Singapore case of Hinckley Singapore Trading Pte Ltd v Sogo Department
Stores (s) Pte Ltd [2001] 4 SLR 154.

8. Critically discuss the extent of applicability of judicial management in corporate rescue as

For questions 9 & 10 below, the courts applied a strict approach in interpreting the
requirements under section 405(1) (a),(b)7(c) CA 2016. Discuss

9. Loh Teck Wah v Fintree Capital Sdn Bhd [2021] MLJU 995.
10. Spacious Glory Sdn Bhd v Coconut Three Sdn Bhd [2020] MLJU 1827.

11. Discuss the availability of a moratorium for judicial management in light of the decision in CIMB
Islamic Bank Bhd v Wellcom Communications (NS) Sdn Bhd and Rangkaian Minang (NS) Sdn Bhd;
Dalam Perkara Wellcom Communications (NS) Sdn Bhd [2019] 1 CLJ 393.

12. To what extent may the court interfere in appointing a liquidator in a creditors’ voluntary
winding up? Discuss by considering the judgment in Abdul Rahman Ismail v Pembangunan
Qualicare Sdn Bhd [2018] 1 LNS 785.

13. The court has been instrumental in defining who is a creditor when the existence of the debt is
in dispute. By referring to the case law development, especially in light of the decision in KTS
News Sdn Bhd v See Huat Realty Berhad [2017] 1 LNS, explain the court’s attitude in defining the
term ‘creditor’.

14. Discuss the affidavit in opposition by referring to the decision in Tradelift Indopalm Industries
Sdn Bhd v Waris Selesa Sdn Bhd [2014] 1 LNS 947.

15. When is the leave of the winding-up court required to apply to stay? Discuss by considering
Homewest Sdn Bhd v Vision Returns Sdn Bhd [2016] 5 CLJ 922.

16. Would the court consider granting a stay pending arbitration? Discuss by considering the
judgment in Goh Nguang Chian v Dynapack Eoss Packaging Sdn Bhd [2018] 1 LNS 937.

17. Discuss the court’s power in Malaysia granting Fortuna injunction based on the decision in CIMB
Bank Berhad v Consobiz Ventures Sdn Bhd & 3 Ors [2018] AMEJ 1074.
18. How may the court terminate a winding up? Discuss the judgment in Kathryn Ma Wai Fong v
TMC Importer & Exporter Sdn Bhd [2019] AMEJ 0046.

19. Explain the court’s attitude in considering multiple winding-up petitions against the same
company, especially in Tenaga Gagah Sdn Bhd v Saik Siw Lai & Ors [2016] 7 CLJ 182.

20. Can the court find that a winding-up order is void ab initio? Discuss in light of Malayan Banking
Berhad v Gan Bee San [2019] 1 CLJ 575

21. Do the courts in Malaysia have jurisdiction to grant Erinford injunctions? Discuss the factors
considered by analysing Envipure Sdn bhd v Esstar Vision Sdn Bhd [2018] MLJU 534

22. Judicial attitude towards ailing corporations, especially during the pandemic, is somewhat
relaxed based on Airasia X Bhd v BOC Aviation Ltd & Ors[2021] 10 MLJ 942. Critically discuss the
case.