TANAVANUS SDN BHD v SIMON JINGKING PINGGUAN

Fact
By an agreement made between the plaintiffs and the defendant ('the agreement'), the
defendant agreed to grant the plaintiffs authority to remove stones from his land for
quarrying purposes, in consideration for a sum of payment. However, the plaintiff alleged
that the defendant later breached the agreement by fencing up the land which in effect
stopped the plaintiffs' quarry operations. The plaintiffs filed a writ of summons against the
defendant praying for, inter alia, an order to restrain the defendant from obstructing the
plaintiffs from carrying out their quarry operations, and loss and damages to be assessed by
the court. The defendant then filed a summons-in-chambers for an order to set aside the
writ, on the ground that the plaintiffs' cause of action was irregular ab initio and premature in
that: (i) the plaintiffs had failed to obtain leave from the High Court before commencing the
action contrary to the requirement of s 8(1) of the Bankruptcy Act 1967 ('the Act'), as a
receiving order had been made against the defendant; and (ii) the commencement of action
without leave was an abuse of the court process. The plaintiffs, on the other hand, argued
that their claim was not a debt provable in bankruptcy within the meaning of s 40(1) of the
Act, and thus not caught by s 8.

Held, setting aside the plaintiffs' writ:

1)

By virtue of s 8 of the Act, after the making of a receiving order against the
defendant, the creditor to whom the defendant was indebted in respect of any
debt provable in bankruptcy could not commence any legal proceeding against
the defendant in respect of such debt, unless leave of the court have been first
obtained.

1)

The meaning of a 'debt provable in bankruptcy' could be found in s 40(1) of the

Act, which, in effect provides, inter alia, that a demand in the nature of
unliquidated damages arising by reason of a contract and not otherwise, would
constitute a 'debt provable in bankruptcy'.

1)

In this case, the claim of the plaintiff for the restraining order arose out of the
agreement and not otherwise. Also, the loss and damages claimed were within
the meaning of 'unliquidated damages' under s 40(1). Hence, the present claim
came within the ambit of s 40(1) as a debt provable in bankruptcy and leave of
the court was required under s 8(1) before commencement of the action.