JUDGMENT

AP Rajah J:

This is an appeal arising out of an order made by Choor Singh J in the above winding-up petition.

The abovenamed first appellant is a company incorporated in Singapore in 1969 under the Companies Act and has its registered office at Room 1506, 15th Floor High Street Centre, North Bridge Road, Singapore. The nominal capital of the company is $1m divided into 1m ordinary shares of $1 each. The amount of the capital paid up or credited as paid up is $2. The shareholders of the company are two in number, one being the second appellant and the other being one Low Seow Nam. The main object of the company was to act as attorneys, nominees, agents, receivers, managers and trustees.

On 14 April 1976 the Supreme Court of Hong Kong ordered that Mosbert Acceptance Ltd., a company incorporated in Hong Kong, be wound up and appointed the Official Receiver and Liquidator in Hong Kong the liquidator thereof, the respondent herein. A first examination of the books of the company showed that the first appellant was indebted to the Hong Kong company in the sum of HK$529,054.97 in respect of loans and advances made by it to the first appellant.

On 24 May 1976 the respondent purported to serve the first appellant with a notice of demand requiring it to pay the said sum.

On 26 July 1976 the respondent, acting through his Singapore solicitors, served at the registered office of the first appellant a second notice of demand bearing the same date under s. 218 of the Companies Act in the following terms:

TAKE NOTICE that we, Messrs Lee & Lee of 18th Floor, UIC Building, Shenton Way, Singapore, Solicitors for the Official Receiver and Liquidator of Mosbert Acceptance Ltd. (a company incorporated in Hong Kong which was ordered to be wound up by the Supreme Court of Hong Kong on 14 of April 1976) whose address is: Official Receiver's Office, Registrar-General's Dept Mosbert Group Liquidation Unit, United Chinese Bank Building, 31-37 Des Voeux Road Central, 6th Floor Hong Kong, hereby require you to pay to our client or to us the sum of HK$529,054.97 being the total amount of loans and advances owing to Mosbert Acceptance Ltd.

AND FURTHER TAKE NOTICE that in the event of your failure and/or refusal to make payment of the full amount now due by you to our client or to us within three (3) weeks from the date of receipt hereof, we shall on behalf of our client petition for you to be wound up by the Court upon the ground provided for in s. 218(1)(e) read with s. 218(2)(a) of the Singapore Companies Act, Cap. 185 namely that you are unable to pay your debts.

The first appellant by its solicitors' letter dated 12 August 1976 to the respondent's solicitors admitted the said debt and requested for two months to finalize arrangements to pay the said debt. The letter reads as follows:

Your letter date 26 July 1976 has been referred to us with instructions to reply to it.

We are instructed that our clients are trying to make arrangements to pay your clients the sum due to them and, in these circumstances, we have been further instructed to inquest you to let our clients have two months within which to finalize those arrangements.

However, on 14 August 1976 the first appellant's solicitors wrote a 'without prejudice' letter to the respondent's solicitors as follows:

Further to our letter date 12 August 1976, we have been further instructed to request from you particulars showing how the sum of HK$529,054.97 became allegedly due and owing to your clients, how were they paid, to whom and who acknowledged receipt thereof?

By a reply date 16 August 1976 the respondent through his solicitors refused to grant the first appellant the two months' extension asked for to finalize arrangements to pay the said debt. At the end of the three weeks referred to in the said second letter of demand of 26 July 1976, the first appellant had not paid or satisfied the said sum or any part thereof nor had it made any offer to the respondent to secure or comp