HIGH COURT PENANG
WONG TECK MENG JC
[Civil Appeal No: 12A-42-05/2013]
16 JANUARY 2014

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DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG
DALAM NEGERI PULAU PINANG MALAYSIA
[RAYUAN SIVIL NO: 12A-42-05/2013]

ANTARA

KHATHERESEN DORAISAMY
… PERAYU

AND

1. LEE HOCK KIM
[Berniaga di bawah nama dan gaya KIM LIAN SOON AUTO TRADING]
… RESPONDEN PERTAMA

2. R NADARAJAN RAMIAH
[Berniaga di bawah nama dan gaya R. NADARAJAN TRADING (PG.0035065-W)]
… RESPONDEN KEDUA

GROUNDS OF DECISION

Introduction

1. This is an appeal against the decision of the Sessions Court Judge in dismissing an interpleader’s summons that was issued in pursuant to Oder 17, rule 1(b), Rules of Court 2012.

2. The Plaintiff Judgment Creditor had obtained in judgment for RM37,794.00 together with interest against the Defendant and had on 19.07.2012 attached the business premise of the Defendant at Lot 340, No. 2802, Jalan Mengkuang, 12200, Butterworth, Penang by a writ of seizure and sale.

3. The items seized on the said premises were listed in the bailiff’s inventory and they are as follow:-

(1) 1 Lot besi buruk terdiri daripada tong drum, gandar lori dan lain-lain.

(2) 1 Lot besi buruk terdiri daripada enjin dan lain-lain.

(3) Lori Kecil WHD 8549

(4) Sebuah Forklift

(5) 1 Lot besi buruk bawah bumbung terdiri daripada kepala lori dan lain-lain.

(6) Sebuah mesin pemampat angin.

As required under Order. 46, rule 16(1), Rules of Court 2012, the bailiff gave a notice of seizure and inventory to the Defendant execution debtor.

4. The claimant Khatheresen a/l Doraisamy gave a notice of claim dated 03.07.2012 to the goods taken in execution to the Sheriff claiming for all the items listed in the inventory. As the execution creditor disputes the claims or the claimant after being notified by the Sheriff, the Sheriff there after applied to the Session Court for relief by way of an interpleader’s summons on 15.08.2012. The interpleader’s summons was issued on the same dated.

5. The hearing of the interpleader’s summons was conducted by affidavit evidence and on 30.04.2013, the court dismissed the claimant’s claim with costs.5 OF 19

Facts of the case

6. The notice of the claim of the claimant states that he had bought over the business and the goods found at Lot No. 340, No. 2802, Jalan Mengkuang 12200, Butterworth from the Defendant on 05.05.2009 through a Deed of Sale dated 05.03.2009 for RM45,000.00. The consideration for the Deed of Sale was the same amount of debt that the Defendant had in the course of business between themselves owing to the claimant. It was on a contra of debt that the Deed of Sale was entered into for the benefit of the claimant. The claimant by an affidavit affirmed on 18.10.2012 to support his contention exhibited the said Deed of Sale (KD-2) and a copy of registration of business of D.K. Trading and Transport7 OF 19 (KD-3) whose business branches include at the premise No. 2802, Jalan Mengkuang, 12200, Butterworth, Pulau Pinang.

7. The Plaintiff Judgment Creditor filed an affidavit dated 11.09.2012 objecting to the notice to claim dated 03.07.2012. This affidavit sets out the following relevant averments:-

1. That the Defendants who is a sole proprietor was operating and carrying on its business at his business address at No. 2802, Lot 340, Jalan Mengkuang, 1220, Butterworth, Penang. A copy of an official search with the Companies Commison of Malaysia of Malaysia of the business was exhibited as LHK-1;

2. That the goods found in the said premise belonged of the Defendant and the Deed of Sale was an afterthought and not bona fide; and

3. The lorry WHD 8549 is still registered in the Defendants name. A search with the Road Transport Department exhibited as LHK-4 confirmed the status of the Defendant as its owner.

8. In another affidavit affirmed by the Judgment Creditor dated 02.11.2012, to oppose the claimant’s affidavit dated 18.10.2012, the Judgment Creditor alleged that the Deed of Sale was not stamped by a proper authority ie, that Inland Revenue Department and that the registration of business of D.K. Trading and Transport was only done on 31.07.2012 which was after the date of attachment 19.07.2012.

9. At all material time, the Defendant was carrying on its business at the said address and that the notice of the claim together with the Deed of Sale was an afterthought and was clothed with suspicion.

10. That the date of attachment on 19.07.2012, there was an Indian lady present at the premise but she was unable to show any proof that the business of the Defendant was already sold to someone-else or for the matter to claimant.

11. The claimant the filled in an additional affidavit dated 30.01.2012 exhibiting the same Deed of Sale which was tamped on 29.01.2012 by the Inland Revenue Department after paying a penalty for late stamping.

Decision

12. There are two issued to be tried and decided upon. First is whether the judgment creditor had attached the goods of the judgment debtor and the second is whether the claimant had proven by its Deed of Sale8 OF 19 that the said good attached were their property as against the execution creditor at the time of the execution.

13. On the first issued, it was correctly submitted by the Appellant that the mandate or authority given under the writ of seizure and sale is for the bailiff to seize goods or properties belonging to the judgment debtor. The case of Neuman v. Bakeaway Ltd and another (Ghotli, claimant) [1983] 2 All ER 935 states the law on this point. It was held at page 936-(l):

“The terms of the writ of fieri facias did not direct the Sheriff to seize all or any business goods on the premises whether or not they belonged to the judgment debtor, and therefor under the term of the writ the Sheriff was protected in regard to the seizure of goods belonging to the judgment debtor. It followed that the Sheriff was liable to an action for conversion by the claimant in respect of the seizure and sale of his equipment.”

14. Used as a format for a writ of seizure and sale (movable property (Oder 45, rule 12) Rule of Court 2012, from 84A commands that the Sheriff to seize property under a writ of seizure and sale which shall be identified by or on behalf on the judgment creditor as belonging to the judgment debtor. It is there for incumbent upon the9 OF 19 Sheriff to identify and seize the good of judgment debtor. Anything short of this requirement may render the Sheriff to be an action for conversion by the claimant whose property was wrongly attached and sold auction.

15. The case of Development & Commercial Bank Bhd v. Lam Chuan Company & Anor [1989] 1 CLJ Rep 489; [1989] 1 CLJ 192; [1989] 1 MLJ 318 also reaffirms the legal position that it is for the judgment creditor to prove that the judgment debtor was the actual owner of the goods attached.

16. In the present case the Session Court Judge utilized Order 17, rule 5 (2), Rules of Court 2012, where by the consent of the judgment creditor and the claimant that the question in issue between the claimants is a question of law and facts are not in dispute to summarily determine the question at issue between the claimant and made an order accordingly on such terms as may be just.

17. The facts that were established by the Judgment Creditor that the goods that were attached by the Sheriff were that belonging to the judgment debtor are as follows:-

1) The attachment was effected on the premises at the address No. 2802, Lot 340, Jalan Mengkuang, 12200 Butterworth, Penang on 19.07.2012, which is registered business address of the Judgment Debtor. This is evidence by exhibit LKH-1 – in the affidavit opposing the claim of the Judgment Creditor dated 11.09.2012. LKH-1 is a copy search made with the Companies Commission of Malaysia verifying the business address as that at the premises where the attachment was done.

2) At all material time, in the pleadings in the Civil Suit, the judgment debtor had acknowledged that his business address was that stated above.

3) On the day of attachment ie, 19.07.2012, the premises at the said address was unoccupied. However there was an Indian lady who was found selling food in front of the premises. She claimed the premises belonged to her husband but was unable to show any proof.11 OF 19

4) The goods attached at the premises were similar to some of the used automation parts that the Judgment Creditor sold and delivered to the Judgment Debtor which is the subject matter of the claim in this case.

5) The small lorry WHD 8549 – is still registered in the Judgment Debtor’s name.

18. It is may considered view that the above facts established that the goods attached at the said premises must have belonged to the Judgment Debtor. Hence, they were in the possession of the Judgment Debtor. The execution of the writ of seizure and sale was correctly carried out on the goods of the Judgment Debtor by the Sheriff. The finding of the Sessions Court on this issue is therefore correct based on the above undisputed facts.

19. Having established that the seized goods were in the Judgment Debtor’s possession, the Sessions Court Judge made the claimant as the Plaintiff and the Judgment Creditor as Defendant. He relied on the case of Tan Kim Kuan v. Tan Kee Kiat (M) Sdn Bhd [1998] 1 CLJ SUPP 147; [1998] 1 MLJ 697 which is the most comprehensive judgment.12 OF 19 stating the procedures and legal principle involved in an interpleader’s hearing. The relevant portion of the said judgment at page 703 is reproduced as follows:-

“Where the applicant for relief is the bailiff who, as is usually the case, has seized goods in the possession of the judgment debtor under a writ of execution the claimant generally made plaintiff, and the execution creditor defendant, is the issue (see Chase v. Goble [1841] 2 M & G 930; Yorke v. Smith [p1851] 21 LJQB 53 and Bentley v. Hook [1834] 2 Dowl 339) if, however, the claimant was in possession of the goods at the time of seizure, and not the judgment debtor, the execution creditor will generally be made plaintiff (see Gerhand v. Montagu & Co (Low & Co, Claimants)[1889] 61 Lt 564; De La Rue v. Hernu Peron & Stockwell Ltd; Lucking v. Highway Motel (Carnarvon) Pty Ltd [1975] 133 CLR 164). The burden of proof will be on the person who has been appointed as plaintiff. The onus of proof rest upon him to show that he has a title to the goods, which justifies his intervention, and such onus can only be satisfied by proof of actual title in himself (see Cababe on Interpleader (3rd Ed) at p. 78).”

The above paragraph serves as an important statement of law on the order of the proceeding and burden of proof in an interpleader’s hearing. On the second issue whether the goods were the property of the claimant,13 OF 19 the claimant based his claim on the Deed of Sale which evidence that all the goods including the lorry in the Judgment Debtor’s premises were sold to him. And by a copy of business registration KD-2, to show that as at 13.07.2013 the business of the claimant D.K Trading and Transport including the premises at 2802, Jalan Mengkuang, 12200, Butterworth as its third branch office.

20. The Judgment Creditor claimed that the Deed of Sale was not a bona fide transaction and the claimant was not the lawful owner of the property at the time of attachment.

21. In this respect, I wish to refer to the case of Sigma Air Conditioning Sdn Bhd v. Word Wide Agencies (M) Sdn Bhd [1979] 1 LNS 94; [1980] 1 MLJ 179 where at page 181 where it was stated that:-

“Where property of a judgment debtor has been attached by a judgment creditor, an objection in objection proceeding must show that he is the lawful owner of the property at time of attachment. If such ownership has been obtained by purchase on otherwise, the court14 OF 19 must be satisfied that the transaction is bona fide. In determining whether the transaction is bona fide, it should be decided on the facts of each particular case. In the present case, the objection has failed to show that the purchase was bona fide. As such the objection has been correctly dismissed.”

22. Now, looking at the Deed of Sale dated 05.03.2009 very closely especially the dated stamped on it on the first page, the stamping was done by the Commissioner of Oath who witnessed the signatories to the agreement purportedly entered into on 05.03.2009. It has to be noted that a Commissioner of Oath is not the proper authority to stamp on a revenue stamp as the authority should be the Inland Revenue Department. The stamping of the revenue stamp was beyond the powers given to Commissioner for Oath. I now refer to rule 12 of the Commissioners of Oath Rules 1993 where a Commissioner of Oath may do all or any of the following:-

(a) Administer oaths and

(b) Take or receive statutory declarations15 OF 19

The Commissioner of Oath therefore had no legal authority to stamp the revenue stamp on the Deed of Sale.

23. The only inference or conclusion that one can draw from the stamping on the Deed of Sale is that in all probability the Deed of Sale was entered into by the parties sometime after the attachment was done on 19.07.2012. If it was indeed entered into on 05.03.2009, the stamping could be done at the Inland Revenue Department anytime on the same date or on any other date prior to 19.07.2012. If indeed the contents of the Deed are true, then by 19.07.2012, the lorry WHD 8549 would have been transferred from the Judgment Debtor into the claimant’s name bearing in mind the properties in the premises were sold to the claimant allegedly on 05.03.2009.

24. On the registration of business of the claimant on 31.07.2012 to that judgment debtor’s business premises is now under the claimant’s overall business the registration was done after 19.07.2012, the date of the attachment. The other pertinent point to consider is that the business address mentioned in registration is 2802, Jalan Mengkuang, 12200 Butterworth which is16 OF 19 different from that of the judgment debtor where there is a lot number No. 340. Hence, the question is whether the registration of business of the claimant refers to the same premises of the judgment debtor. This omission was never clarified by the claimant.

25. The next factual situation that is damaging to the claimant’s claim is that when the Sheriff attached the said premises, there was no signboard of the claimant there to show the public at large that was D.K. Trading and Transport. There was only one Indian lady there when the attachment took place but she did not even mention or show proof that the business premises belonged to the claimant at the material time.

26. The existence of the Deed of Sale has never been supported by any affidavit affirmed by the Judgment Debtor who could have easily corroborated the claimant’s claim. That would be the best evidence available but unfortunately it was not presented perhaps, due to reasons best known to the claimant.

27. Hence, after having carefully considered the facts and circumstances as stated above, the finding of the Sessions Judge that the Deed of Sale and the claim of17 OF 19 the claimant was not bone fide and an afterthought is not unfounded. I have also arrived at the same conclusion basing on the above observation. As such, the claim of the claimant that the said property belonged to them was not proven on a balance of probabilities. The decision of the Session court of dismissing the claimant’s claim was correct in law and in fact.

As such I accordingly dismissed the appeal with costs.

Dated: 16 JANUARY 2014

(WONG TECK MENG)
Judicial Commissioner
High Court of Malaya at Penang