Bankruptcy and Insolvency
![handle is hein.journals/commwlb28 and id is 166 raw text is: Bankruptcy and Insolvency
Act of bankruptcy - failure to pay costs - whether appellants had
committed an act of bankruptcy - bankruptcy notice founded on an
allocatur - whether allocatur was a final judgment
Pursuant to a court order (the order) made on 7 September 1991 in respect of
Penang High Court Civil Suit No. 315 of 1983 (the civil suit), the appellants
%%ere ordered to discontinue the cikil suit against the respondent on the terms
that the appellants be debarred from bringing a fresh action against the
respondent and that the appellants pay the respondent costs. The costs were
taxed for RM160,699.97 and an allocatur was issued on 9 February 1994 to that
effect. As no payment based on the allocatur was made, the respondent
commenced bankruptcy proceedings against the appellants and the appellants
were subsequently adjudged bankrupt. The appellants applied to set aside the
bankruptcy proceedings on the ground of nullity and filed a notice of appeal
against the decision of the registrar. In the appeal before the High Court judge,
the appellants argued that they had not committed an act of bankruptcy within
the meaning of s. 3(l)(il of the Bankruptcy Act 1967 (the Act) because the
bankruptcy notice was not founded on a final judgment or order but on an
allocatur. The High Court judge held that the order was a final order and that
the respondent was entitled to commence bankruptcy proceedings against the
appellants based on the allocatur. The appellants appealed to the Court of
Appeal but their appeal was dismissed wvith costs. This was the appellants'
appeal against the decision of the Court of Appeal.
The Federal Court, in dismissing the appeal, held:
1. The central issue in this appeal was whether an allocatur was a final
judgment. Following Re Wheeler [1982] 1 All ER 345, an allocatur was a
final order within the meaning of s. 3(l)(i) of the Act. It followed that a
bankruptcy notice, which was founded on an allocatur, was a valid notice;
Cartwright v Barker [1975] 2 All ER 970 distinguished.
2. The bankruptcy notice was not based on the allocatur only. The request for
the issue of the bankruptcy notice and the bankruptcy notice referred to the
allocatur and the allocatur in turn referred to the order. The order required
costs to be taxed and the allocatur was the result of such taxation.
Accordingly, the allocatur was in accordance with the terms of the order.
Khoo Kay Hoe (trustee to the estate of Oh Kee Lee @ Oh Phaik Sim,
deceased) v Chor Phaik Har and another appeal [2002] 1 MLJ 273 (FC)
judicial decisions
Commonwealth Law Bulletin](ViewImageLocal?handle=hein.journals/commwlb28&div=29&collection=&method=preview&ext=.png&size=3)
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Bankruptcy and Insolvency
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