Pursuant to Rule 108 of the Insolvency Rules 2017 [P.U.(A) 305/2017], a Creditor’s Petition is required to be served personally on the Judgment Debtor. Similarly, a Bankruptcy Notice is also required to be served personally on the Judgment Debtor pursuant to Rule 95 of the Insolvency Rules 2017.
However, a practical issue may arise where, prior to the effective service of the Bankruptcy Notice or Creditor’s Petition, the Judgment Debtor has appointed solicitors and the said solicitors have entered appearance or are acting on behalf of the Judgment Debtor in the bankruptcy proceedings. We have encountered numerous instances of this nature in practice.
In such circumstances, it should not be assumed that the mere appointment of solicitors, or the fact that they are acting on behalf of the Judgment Debtor, dispenses with the requirement for personal service of the Creditor’s Petition and/or Bankruptcy Notice, nor does it automatically confer authority on the solicitors to accept personal service of the said documents on behalf of the Judgment Debtor.
There must be a clear indication or evidence that the solicitors have been specifically authorised to accept service on behalf of the Judgment Debtor. This position was affirmed by the Court of Appeal in Lim Boon Kiak v Affin Bank Bhd (formerly known as BSN Commercial Bank (M) Bhd) [2014] 1 MLJ 439, where the Court held:
“Rule 109 makes it mandatory for the creditor’s petition to be served personally (kediri) on the judgment debtor. The sealed copy of the petition must be delivered personally to the debtor. In the event that prompt personal service cannot be effected, after attempts have been made, the only avenue left is to apply for substituted service as provided for under r 110. Substituted service can only be effected with leave of the court. With the clear provisions of the above rules, it is our view that the creditor’s petition against a judgment debtor cannot be served by any other means. It cannot be served on a firm of solicitors, unless there is a clear indication (in writing) that the said firm of solicitors has the authority to accept service of the documents on behalf of the judgment debtor.”
The above decision establishes an important distinction between being appointed to act in proceedings and being authorised to accept personal service of bankruptcy cause papers. The former does not, by itself, necessarily establish the latter.
Accordingly, where the Judgment Debtor is represented by solicitors, it would be prudent for the Judgment Creditor or its solicitors to expressly enquire whether the solicitors are authorised to accept service of the Bankruptcy Notice and/or Creditor’s Petition on behalf of the Judgment Debtor.
If the solicitors confirm that they have such authority, it is advisable to request a copy of the written authorisation or instruction from the Judgment Debtor confirming that the solicitors are authorised to accept service on his/her behalf. This will provide documentary evidence of the solicitors’ authority and minimise the risk of any subsequent challenge to the validity of service.
For further protection, the said written authorisation should be retained on file and, where appropriate, referred to and exhibited in the Affidavit of Service. The Affidavit of Service should clearly set out the circumstances under which service was effected, including the basis upon which the solicitors accepted service and the authority relied upon.
If the solicitors are unable to provide evidence that they have been authorised to accept service, the safer course would be to proceed with personal service on the Judgment Debtor. Where personal service cannot be effected despite reasonable attempts, the Judgment Creditor may consider applying to the Court for substituted service, where permissible under the applicable provisions of the Insolvency Rules 2017.
CONCLUSION
In conclusion, the mere fact that a Judgment Debtor has appointed solicitors, or that the solicitors have entered appearance or are acting in the bankruptcy proceedings, does not, without more, mean that the solicitors are authorised to accept personal service of the Bankruptcy Notice or Creditor’s Petition on behalf of the Judgment Debtor.
There should be clear evidence of such authority, preferably in writing, before service is effected on the solicitors. Failure to comply with the prescribed mode of service may render the service invalid and should not be treated merely as a procedural irregularity capable of being cured.
For practical purposes, where there is any doubt as to the solicitors’ authority to accept service, the safer approach is to obtain express written confirmation and the underlying written authority from the Judgment Debtor before relying on service upon the solicitors.
