A, who is a Malaysian visited Australia the state of Queensland and incurred gambling debts in one of the casions there.
He issued cheques for the purpose of paying the debts.
The cheques were dishonoured.
The casino now brought the action in Malaysian Court seeking to recover the debts.
The High Court dismissed the casino's action with no order as to costs as the Court also did not want to award the gambler's any benefits for his illegal activities.
The Court cited ss.26(2) and 26(4) of the Civil Law Act 1956 which among others forbids any action for the recovery of gambling debts.
Reading the cases and the grounds put forward by the Judge, the main reason for not allowing the casino's claim is public policy. I agree that if our Court were to become a vehicle for casinos to file claims against our citizens then it will be very a sad scenario.I believe we all agree that gambling is a very injurious activities. Everyday we heard of people running away from Alongs.We also heard of people who break their families as a result of gambling habits.
Wednesday, July 25, 2007
Tuesday, July 24, 2007
A Guarantee that didn't work.
This case happened in Malacca.
A ordered some goods from B.B claimed that had it not because of a verbal promise by C to guarantee payment of the goods he wouldn't have delivered the goods to A.This was so far what was claimed by B,whatever things that you said, it has to be proved in Court.There must be witness or any documents to support your claim.
B denied that he had ever made any such verbal guarantee.
The matter did not just end here. A few days after the delivery of the goods and upon A 's failure to pay for it, B got C.B brought a few people to meet up with C.D, a friend of C,witnessed the meeting from afar.
B brought five people to see C in a restaurant. D waited in the car outside of the restaurant.
When C came back,he told D that he was assaulted by B's people in the restaurant.He was made to sign a guarantee agreement.C immediately went to lodge police report regarding the incident.
In more formal language we would say that C was being coerced into signing the agreement.
Section 15 of the Contract Act 1950 explains 'Coerction'
15.Coercion
Coercion is the committing or threatening to commit any act forbidden by the Penal code....with the intention of causing any person to enter into an agreement.
Obviously B had made use of some people to cause fear into C resulting in the signing the agreement.
These were all facts coming from the mouths of witnesses in the Court.
What was the outcome of the case?
The Court held that it was not convinced by B's claim that C hab made a verbal guarantee.There was insufficient evidence for the claim.
As to the written guarantee which C entered into later,the Court ruled that it was not a document voluntarily signed by C.It was signed under intimidation therefore not a valid document.
A ordered some goods from B.B claimed that had it not because of a verbal promise by C to guarantee payment of the goods he wouldn't have delivered the goods to A.This was so far what was claimed by B,whatever things that you said, it has to be proved in Court.There must be witness or any documents to support your claim.
B denied that he had ever made any such verbal guarantee.
The matter did not just end here. A few days after the delivery of the goods and upon A 's failure to pay for it, B got C.B brought a few people to meet up with C.D, a friend of C,witnessed the meeting from afar.
B brought five people to see C in a restaurant. D waited in the car outside of the restaurant.
When C came back,he told D that he was assaulted by B's people in the restaurant.He was made to sign a guarantee agreement.C immediately went to lodge police report regarding the incident.
In more formal language we would say that C was being coerced into signing the agreement.
Section 15 of the Contract Act 1950 explains 'Coerction'
15.Coercion
Coercion is the committing or threatening to commit any act forbidden by the Penal code....with the intention of causing any person to enter into an agreement.
Obviously B had made use of some people to cause fear into C resulting in the signing the agreement.
These were all facts coming from the mouths of witnesses in the Court.
What was the outcome of the case?
The Court held that it was not convinced by B's claim that C hab made a verbal guarantee.There was insufficient evidence for the claim.
As to the written guarantee which C entered into later,the Court ruled that it was not a document voluntarily signed by C.It was signed under intimidation therefore not a valid document.
Saturday, July 21, 2007
Going After the Director of A Liquidated Company
Very often we heard of Companies wound up and the suppliers or creditors were left with no recourse in the recovery of thier payments owed by the wound up Companies.
At hand is a High Court case where the creditor files a claim against the director of the wound up Company. The Court held that the creditor has the right to do so. There is a provision in the Company Act Section 304(1) which says that if there appears to be fraudulent intent in the minds of the directors of the wound up Company 'any creditor', which means any person or corporate body can still file a suit against the director of the Company for recovery of money due to them. Thus businessmen who thought they can simply escape liability by liquidating their businesses do think twice.
It is the the usual practice for whoever claiming agianst a wound up Company to to file a proof of debt waiting in the queue to be paid ,usually a futile effort with practically no hope of getting anything back.
In the present cast the liduidated Company(voluntary liquidation) failed to call for a meeting of creditors as required under section 260 of the Company Act 1965. If they have done so in my humble opinion they will still have to face the suit since the Plaintiff (creditor) is filing the suit on the ground of fraud.
This is a High case,in our system the lower Court has to abind by the decision of the higher Courts. The decision is subject to appeal. However it is enough for us to be aware of the fact that even though a Company may go down, the creditors are still able to pursue their claims if fraudulent dealings are proven.
At hand is a High Court case where the creditor files a claim against the director of the wound up Company. The Court held that the creditor has the right to do so. There is a provision in the Company Act Section 304(1) which says that if there appears to be fraudulent intent in the minds of the directors of the wound up Company 'any creditor', which means any person or corporate body can still file a suit against the director of the Company for recovery of money due to them. Thus businessmen who thought they can simply escape liability by liquidating their businesses do think twice.
It is the the usual practice for whoever claiming agianst a wound up Company to to file a proof of debt waiting in the queue to be paid ,usually a futile effort with practically no hope of getting anything back.
In the present cast the liduidated Company(voluntary liquidation) failed to call for a meeting of creditors as required under section 260 of the Company Act 1965. If they have done so in my humble opinion they will still have to face the suit since the Plaintiff (creditor) is filing the suit on the ground of fraud.
This is a High case,in our system the lower Court has to abind by the decision of the higher Courts. The decision is subject to appeal. However it is enough for us to be aware of the fact that even though a Company may go down, the creditors are still able to pursue their claims if fraudulent dealings are proven.
Guarantors and their rights
The law is a complex thing.
I was reading a case on guarantee. It was found by the Court that the two guarantors were liable to repay the debts which they had guaranteed.
When it comes to guarantee the first issue to be resolved is whether the creditor has sent a notice of demand to the guarantor/s and whether they have acknowledged and received it.
There are situations where it is not necessary for notice of demand to be sent to the guarantor/s to invoke liability on them. This is when in the Letter of Guarantee and Indemnity or other loan documents the guarantors accept primary liability and also assume the position of principal debtors to the facilities offerred to the primary debtor which could be a Company.
In this case Danaharta Urus Sdn Bhd v.Chou Kok Hong & Anor the Court found that the guarantors were liable as they had accepted full liability for the loan although they are not the primary debtors.
The reason why guarantors should be made liable only upon the receipt of a notice of demand(which is also known as contigent liability) is because guarantees are known as collateral securities. No matter how serious is the contract between them and the banks they are just guarantors, they are not the main debtors. However if they voluntary agree to assume the position of main debtors then the rules appplicable to guarantors are not applicable to them.
What is meant by notice of demand is not necessary is that if the creditors wish to file a claim on guarantors, they need not have to send a letter to them first demanding the payment, they can straight away file summons against them.
I was reading a case on guarantee. It was found by the Court that the two guarantors were liable to repay the debts which they had guaranteed.
When it comes to guarantee the first issue to be resolved is whether the creditor has sent a notice of demand to the guarantor/s and whether they have acknowledged and received it.
There are situations where it is not necessary for notice of demand to be sent to the guarantor/s to invoke liability on them. This is when in the Letter of Guarantee and Indemnity or other loan documents the guarantors accept primary liability and also assume the position of principal debtors to the facilities offerred to the primary debtor which could be a Company.
In this case Danaharta Urus Sdn Bhd v.Chou Kok Hong & Anor the Court found that the guarantors were liable as they had accepted full liability for the loan although they are not the primary debtors.
The reason why guarantors should be made liable only upon the receipt of a notice of demand(which is also known as contigent liability) is because guarantees are known as collateral securities. No matter how serious is the contract between them and the banks they are just guarantors, they are not the main debtors. However if they voluntary agree to assume the position of main debtors then the rules appplicable to guarantors are not applicable to them.
What is meant by notice of demand is not necessary is that if the creditors wish to file a claim on guarantors, they need not have to send a letter to them first demanding the payment, they can straight away file summons against them.
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