Kang Hwee Gee J:

This is a petition by the petitioner to wind up the respondent company on the ground that it was unable to pay its debt pursuant to the issuance of the statutory notice under s. 218 of the Companies Act 1965. The notice required the respondent to pay the sum of RM12,099,825.17 and a further sum S$166,439.89 within the stipulated 21 days from the date of the receipt of the notice.

The respondent did not comply with the notice and hence rendered itself liable to the deeming provision under s. 218(2) of the Act that it is unable to pay its debt.

The debt arose from an arbitration award in an arbitration proceeding that the parties had subjected themselves to under the Arbitration Act 1952. The relevant orders of the final award in so far as it concerns this petition are two sums which the arbitrators had adjudged and directed the respondents to pay to the petitioner. They are the award sum of RM12,099,825.17 and the aggregate costs of the award of S$226,439.89.

Leave to enforce the award was obtained by the petitioner against the respondent from High Court videan order dated 14 February 2001 in Kuala Lumpur Civil Suit No. R1-24-64-2000.

The petition is opposed by the respondent solely on account of what the respondent perceived to be an irregularity in that the arbitration award which the petitioner obtained was against two joint respondents. It was not open to the petitioner, so it was argued, to commence winding up proceeding against only one respondent.

There is no direct case law on this point, so I am informed by counsel, with respect to the legality of commencing a winding up petition against only one company based on a judgment obtained jointly against two companies. But there are a number of decisions where bankruptcy petitions were presented against one only of two or more joint judgment debtors.

Counsel for the respondent relied on the judgment of Shaik Daud J (as he then was) in Yeo Ah Wang lwn. United Malayan Banking Corporation Bhd[1991] 1 AMR 38 where a bankruptcy notice was issued from a judgment obtained jointly against three defendants. The judgment creditor issued a judgment notice only against one of the defendants. It was held that a judgment notice was bad in law as it was contrary to the judgment in which all the three defendants were found jointly liable to pay the judgment debt.

However, in the older case of Balasubramaniam; Ex parte Annamalai[1957] 3 MC 128, Sutherland J held that it was perfectly in order for the judgment creditor in that case to issue a judgment notice against a co-defendant who had been adjudged jointly liable to pay the judgment of the judgment creditor.

But Sutherland J spoke with high authority and I am inclined to agree with him. He relied on the English Court of Appeal case of In Re Low, ex p Gibson[1895] QB 734 wherein Lord Esher MR having to rule on a similar point whether a judgment notice under the English Bankruptcy Act 1883 involving a judgment debt entered against joint judgment debtors.

I have no doubt that Sutherland J was correct. The reasoning of Lord Esher MR in Re Low, ex p Gibsoncould not have been clearer. Two convincing arguments were put before the court in that case.

First, it was argued that a writ of execution based on a joint obligation to pay the judgment creditor's debt had always been joint and since a bankruptcy notice depends on the judgment creditors right to execution, the notice should be directed to the debtor and all the other joint debtors, although it need not be served on those against whom it was not intended to proceed.

Secondly, the non-compliance of a judgment notice carried with it a semi-penal consequence which makes it essential for the judgment creditor to follow the forms of the judgment by citing all the judgment debtors jointly and not just one of them as was done in that case. It was not open to the judgment creditor to amend the judgement notice under s. 143 of the Act - for to do so would be to createan act