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LW/JAN 201 21LAW534

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE

INSOLVENCY I

COURSE CODE

EXAMINATION

TIME

LAW534
JANUARY 2012
3 HOURS

INSTRUCTIONS TO CANDIDATES
1. This question paper consists of three (3) parts: PART A (5 Questions)
PART B (2 Questions)
PART C (1 Question)

Answer ALL questions in the Answer Booklet. Start each answer on a new page.
2

Candidates are allowed to bring in the following materials (unannotated):
3
I)
ii)
iii)
iv)
4.
5

Bankruptcy Act 1967

Bankruptcy Rules 1969
Bankruptcy (Fees) Rules 1969
Bankruptcy (Cost) Rules 1969

Do not bring any material into the examination room unless permission is given by the
invigilator.
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/JAN 201 21LAW534

PART A
QUESTION I
Explain the doctrine of relation back and its importance to the act of bankruptcy.
(6 marks)
QUESTION 2
Maria borrowed a sum of RM40,000 from Cekap Bank to support her studies at Best
University. Sabri stands as her guarantor. Later, she defaulted in her loan payment. Cekap
Bank sued both of them and Judgment was entered against them.
Can Cekap Bank proceed with bankruptcy proceedings against Sabri?
Discuss.
(6 marks)

QUESTION 3
There are certain irregularities that would justify setting aside of a Bankruptcy Notice. Identify
any THREE (3) of them.
(6 marks)

QUESTION 4
Explain the various implications and effects of a Receiving Order and Adjudication Order.
(6 marks)

QUESTION 5
A creditor shall not be entitled to present a Bankruptcy Notice against the debtor unless
certain conditions have been complied with. With reference to the Bankruptcy Act 1967,
explain these conditions.
(6 marks)

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LW/JAN 2012/LAW534

PART B
QUESTION I
On 20.2.2009, Ah Long Bank obtained Judgment In Default against Zara in Kuala Lumpur
Sessions Court for a sum of RM60,000 with interest thereon at 8% per annum from the date
of judgment until full and final settlement and costs to be taxed.
Ah Long Bank issued a Bankruptcy Notice dated 22.2.2009 against Zara which stated
inter a/ia:
"You are required to pay within seven days the amount of RM 70,000 with interest thereon at
the rate of 8% from the date of judgment until full and final settlement and costs of RM900."

The said Bankruptcy Notice was personally served on Zara's solicitor, Mr William at his
office on 2.7.2009. Zara informs you that she has a counter claim of RM10,000 againstAh
Long Bank.
Advise Zara on the grounds to set aside the bankruptcy notice and the relevant procedures
applicable.
(20 marks)
QUESTION 2
Harry was adjudged a bankrupt on 13.8.2011. The Director General of Insolvency while
investigating properties owned by Harry, discovered that he had transferred shares worth
RM200,000 to his sister, Diana. Diana paid RM50,000 for those shares. The transfer of
shares were completed on 2.2.2011. At the time of transfer, Harry was facing severe
financial difficulties and 4 months later, a bankruptcy petition was presented against him.
Advise the Director General of Insolvency whether he can recover the shares from Diana.
(20 marks)

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LW/JAN 201 21LAW534

PART C
QUESTION I
On 18.4.2009, Alex obtained a judgment in default against Ben amounting to RM85,000 with
interest at 8% per annum from the date of judgment to the date of realization and costs of
RM1 0,000.
Pursuant to the judgment in default, Alex issued a Bankruptcy Notice against Ben on
15.10.2009 for the amount of RM85,000 with interest at 16% per annum from the date of
judgment to the date of realization and cost of RM10,000 payable within 6 days from the
date of service of Bankruptcy Notice.
The Bankruptcy Notice was served by personal service on Jazmin, Ben's fiance, on
25.2.2010. Ben ignored the bankruptcy notice for the reason that he has a counterclaim
against Alex amounting to RM75,000.
On 20.3.2010, Alex filed a creditors petition together with an affidavit verifying the petition
against Ben. The creditors petition was personally served on Ben. However due to some
miscommunication, the affidavit verifying the petition was not served on him.
Advise Ben on the following:a)

Whether he has committed an act of bankruptcy.

State your reasons.

(5 marks)

b)

Whether he has any grounds to set aside the Bankruptcy notice and Creditors'
petition.
(15 marks)

C)

The procedures to set aside Bankrupcty Notice and to oppose the Creditors' petition.
(10 marks)

END OF QUESTION PAPER

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