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LW/JUN 2012/LAW534

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE

INSOLVENCY I

COURSE CODE

LAW534

EXAMINATION

JUNE 2012

TIME

3 HOURS

INSTRUCTIONS TO CANDIDATES
PART A (5 Questions)
PART B (2 Questions)
PART C (1 Question)

1.

This question paper consists of three (3) parts

2.

Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3.

Candidates are allowed to bring in the following materials (unannotated):

i)
ii)
iii)
iv)

Bankruptcy
Bankruptcy
Bankruptcy
Bankruptcy

Act 1967
Rules 1969
(Fees) Rules 1969
(Cost) Rules 1969

4.

Do not bring any material into the examination room unless permission is given by the
invigilator.

5.

Please check to make sure that this examination pack consists of:
i)
ii)

the Question Paper

an Answer Booklet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages
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LW/JUN 2012/LAW534

PART A

QUESTION 1
A petitioning creditor shall not be entitled to commence any bankruptcy action against a
social guarantor unless he proves to the satisfaction of the court that he has exhausted all
avenues to recover debts owed to him by the debtor.
Discuss the above statement.
(6 marks)

QUESTION 2
Zatil was declared bankrupt on 1 July 2011. The Director General of Insolvency disclaimed
Zatil's tenancy of a shop.
Discuss the legality of the action of the Director General of Insolvency.
(6 marks)
QUESTION 3
A creditor shall not be entitled to present a bankruptcy petition against the debtor unless
certain conditions have been complied with. With reference to the Bankruptcy Act 1967,
explain these conditions.
(6 marks)

QUESTION 4
Discuss any THREE (3) situations which would constitute an act of bankruptcy under section
3(1) of the Bankruptcy Act 1967.
(6 marks)

QUESTION 5
What needs to be proven by a party who seeks to avoid the consequences of section 52 of
the Bankruptcy Act 1967?
(6 marks)

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LW/JUN2012/LAW534

PARTB

QUESTION 1
On 1 August 2010 Danial obtained a judgment in default against Anisah in the Sessions
Court for a sum of RM200,000.00 with interest at 8% per annum from date of judgment to
date of realization and costs of RM3,500.00.
On 1 October 2010, Danial demanded from Anisah, payment of the full sum under the said
judgment. Anisah paid a sum of RM20,000.00 towards the judgment sum. Danial accepted
the sum of RM20,000.00 as part payment of the judgment sum.
On 30 October 2010, Danial served a bankruptcy notice on Anisah. The bankruptcy notice
stated that Anisah must pay Danial RM200,000.00 with interest at 8% per annum from date
of judgement to date of realization and costs of RM3,500.00 within five days after service of
the bankruptcy notice on Anisah.
Anisah ignored the bankruptcy notice.
On 24 July 2011, Danial served on Anisah a Creditor's Petition together with a supporting
affidavit. Danial's creditor's petition was dated 23 July 2011. Danial's affidavit in support of
the Creditor's Petition was dated 22 July 2011. The creditor's petition is fixed for hearing on
18 July 2012.
Anisah seeks your advice whether she has any grounds to oppose the creditor's petition.
Advise Anisah.
(20 marks)

QUESTION 2
Kuwaita Bank obtained judgment against Ivan Wong in Kuala Lumpur Sessions Court on 1
February 2010 for a sum of RM150,000.00 together with interests and costs. On 3
December 2011, Receiving Orders and Adjudication Order were made against Ivan Wong
on the Creditor's Petition filed by Kuwaita Bank. Subsequently, Ivan Wong's brother
approached Kuwaita Bank to effect a settlement in order to enable Ivan Wong to apply to the
court to have the Receiving Order and Adjudication Orders rescinded and annulled. Kuwaita
Bank agreed to accept the sum of RM120,000.00 in full settlement of its claim against Ivan
Wong. Ivan Wong intends to apply for an application under section 105 (1) of the Bankruptcy
Act 1967 to have the Receiving and Adjudication Orders rescinded and annulled on the
ground that the debt has been paid in full. Kuwaita Bank intends to oppose Ivan Wong's
application.
Advise Ivan Wong.
(20 marks)

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LW/JUN 2012/LAW534

PARTC

QUESTION 1

On 2 January 2010 Sofini Baida obtained judgment in default against Robin Lim in the High
Court of Kuala Lumpur for the sum of RM350,000 with interest at 8% per annum from date of
judgment to date of realization and cost of RM 10,000.
On 4 March 2011, Sofini Baida served a bankruptcy notice on Robin Lim. The bankruptcy
notice demanded RM370,000.00 with excessive interest at 14% per annum from date of
judgment and costs RM10,750.00. Robin Lim ignored the bankruptcy notice which was
personally served on him.
On 9 December 2011 Sofini Baida filed and served a Creditor's Petition together with an
affidavit of truth of petition on Robin Lim. Sofini Baida's creditor's petition was dated
9.5.2009. The affidavit of truth of petition was affirmed on 7.5.2009. Robin Lim on receiving
the creditor's petition, paid Sofini Baida the judgment sum in instalments, leaving a balance
sum of RM127,000.00. The Creditor's Petition is fixed for hearing next month on 25 July
2012.
Robin Lim intends to file an affidavit to oppose the creditors' petition.
Advise Robin Lim on the following:
a)

Whether Robin Lim has committed an act of bankruptcy?

(5 marks)

b)

Whether Robin Lim can challenge the excessive amount in the bankruptcy notice at
this stage?
(5 marks)

c)

Whether Robin Lim has any other grounds to oppose the Bankruptcy Notice and
Creditors' Petition?
(15 marks)

d)

Procedures to oppose Bankruptcy Notice and Creditor's Petition.

(5 marks)

END OF QUESTION PAPER

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