Professional Documents
Culture Documents
1. Mr Feed owns a fitness centre in Petaling Jaya. He bought exercise equipment from
Body Builder Sdn Bhd, a supplier of exercise equipment, for the sum of RM250,000.
Due to some financial difficulties, Mr Feed was not able to pay Body Builder Sdn
Bhd the sum of RM250,000. A civil suit was initiated against Mr Feed by Body
Builder Sdn Bhd. A judgment in default was entered against Mr Feed as he did not
enter appearance or file in a defence. The judgment is for Mr Feed to pay Body
Builder Sdn Bhd the sum of RM250,000 with interest of 5% per annum from the date
of judgment until full and final realization.
Mr Feed failed to pay the judgment sum and Body Builder Sdn Bhd served a
bankruptcy notice against Mr Feed demanding payment of “RM250,000 with interest
of 5% per annum from the date of judgment until full and final realization”.
Prior to the serving of the bankruptcy notice, Mr Feed had filed an application to set
aside the judgment in default. When the bankruptcy notice was served on him, the
application has not been heard by court. His application to set aside the judgment in
default was later dismissed by the court. Mr Feed did not proceed to appeal on the
dismissal of his application.
Advice Mr Feed regarding the bankruptcy notice that was served on him.
Mr. Boros was not able to pay for the balance of the loan from Coldplay Bank Berhad
amounting to RM200,000. Coldplay Bank Berhad proceeded to initiate a civil suit
against Mr. Boros for the amount of RM200,000. On 1.3.2013 a summary judgment
was obtained against Mr Boros to pay Coldplay Bank Berhad the sum of RM200,000
with interest of 5% per annum from the date of judgment until full and final
realization. There was no application to set aside the summary judgment by Mr.
Boros. After several failed attempts to persuade Mr Boros to pay the judgment sum,
on 4.3.2023 Coldplay Bank Berhad came to see you seeking advice on whether the
bank can issue a bankruptcy notice against Mr. Boros in respect of the judgment
obtained on 1.3.2013.
(i) Advice Coldplay Bank Berhad whether a bankruptcy notice can be issued
against Mr Boros.
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(ii) How do you apply for the issuance of a Bankruptcy Notice? If the application
does not comply with the requirements of the IR can Mr Boros challenge the
Bankruptcy Notice?
(iii) How will the interest be calculated for the purposes of the Bankruptcy Notice?
Based on S.6(3) of the Limitation Act, when BN is to be issued 6 years after the
judgment was obtained, arrears of interest may only be claimed for a period of six
years from the date of the judgment. In Perwira Affin Bank v Lim Ah Hee,
bankruptcy proceedings may be brought within 12 years of the date of judgment;
however, arrears of interest may only be claimed for a period of 6 years from the date
of judgment.
In this case, the judgment was obtained on 1.3.2013 and Coldplay Bank Berhad only
wished to file the BN on 4.3.2020, that is 7 years after the judgement. Therefore, the
arrears of interest that may be claimed is only up until 28.2.2019, that is within 6
years after the judgment was obtained. Hence, total of RM60k of interest may be
claimed + the principal sum of RM200k and hence, the total amount that can be
claimed is RM260k as at 4.3.2020.
3. On 1.6.2019 Coldplay Bank Bhd obtained a judgment against Ms Debt arising from
default in payment by Ms Debt on a personal loan Coldplay Bank Bhd granted to Ms
Debt upon her request. The judgment was for Ms Debt to pay Coldplay Bank Bhd the
sum of RM170,000 as at date of judgment with interest at the rate of 5% per annum
from date of judgment until full and final realization. Ms Debt did not make payment
of the judgment sum to Coldplay Bank Bhd.
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In this case, the judgment sum was obtained on 1.6.2019 and hence, the interest will
be calculated from 1.6.2019 until 1.1.2020, which is the date he BN was issued. Since
it was less than a year, the calculation of interest shall be divided by the number of
days.
RM RM
Interest due from 1/6/2019 to 31/12/2019
170,000 x 214/365 x 5% 4983.56
Firstly, 5% per annum of RM170,000 is RM8500, that is the interest Coldplay Bank Bhd can
get in a year. Then we shall calculate the interest due in 2019. We divide by 365 days, so it is
RM23.29, that is the interest Coldplay Bank Bhd can get in a day. Then times 214 days (from
1.6.2019 until 1.1.2020) and hence Coldplay Bank should get RM5006.78 for the interest in
2019. For the year of 2020, the total number of days is 366. BN was issued on 1.1.2020. So,
we divide by 366 and times 1 day. Then, the interest due as at 1.1.2020 is RM23.22. In total it
is RM170,000 plus RM5006.78, that is RM175,006.78.