To make a person a bankrupt, firstly there must be a purported act of bankruptcy, i.e. the unpaid judgment sum. If there is 1 debtor in that particular judgment, then it would be straightforward, i.e. Judgment Creditor (“JC”) only has to file in a Bankruptcy Notice (“BN”) against that particular Judgment Debtor (“JD”), for the full sum as his judgment debts. However, issue arises if there are more than 1 JD, sharing 1 judgment, for 1 single sum, what is the correct amount that a JC should place in each of the JDs’ BN?
For example, if the judgment sum is RM200,000.00. Should we place RM200,000.00 in the BN for each of the JDs? Or RM100,000.00 for each of them? The answer is vested in the Court of Appeal’s decision of Sumathy a/p Subramaniam v Subramaniam a/l Gunasegaran and another appeal [2017] 6 MLJ 753, which is HALF for each of them.
While JC may be entitled to enter judgment for the same single sum, but the liability of each of them is necessarily joint. This is because the judgment that was entered has not specified that both JDs are jointly and severally liable for that single sum. Where the judgment is silent or has not specified that liability is joint and several, the liability is necessarily joint. Where liability is joint, each of the appellant as defendant, shares that liability equally. And so, when it comes to enforcing the judgment, JC has a right to enforce only half the judgment sum against each JD. JC is not entitled to enforce the full sum against both of them, certainly not at the same time. See also:- Varghese George JC (as he then was) in Re Dato Elamaran M Sabapathy; Ex P RHB Bank Bhd [2011] 10 CLJ 262.
If both JDs were to pay up the full amount in the Judgment as they are required to do under the bankruptcy notices, JC would effectively be very much overpaid.
It is essential to note that the adjudication of any person as a bankrupt is a serious and sombre act; it has far reached effects, affecting not just the person’s daily affairs, doing of business or occupation but also his movements, especially egress and ingress of the country. The basis for petitioning a person to be adjudged a bankrupt must be done responsibly based on sound legal grounds. Since the act of bankruptcy here is the non-payment of a judgment debt, that debt must be clear and unequivocal.
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