JUDGMENT

Shaik Daud Ismail JCA:

This is an appeal by Malaysia Air Charter Co. Sdn. Bhd. (the appellant) against the decision of the High Court given on 6 May 1996 wherein the learned judge ordered the winding-up of the appellant on a petition presented by Petronas Dagangan Sdn. Bhd. (the respondent).

On 18 October 1989, the respondent obtained a judgment in default of appearance against the appellant in the Kuala Lumpur High Court for a sum of RM334,118.79 together with interest thereon at the rate of 8% per annum from 28 October 1988 until date of payment. There was no effort made to apply to have the judgment in default of appearance set aside.

On 16 October 1991, the respondent's solicitors served on the appellant a statutory notice of demand pursuant to s. 218 of the Companies Act 1965. Then on 27 February 1992, the respondent presented a petition for windingup of the appellant, on the ground that the sums demanded in the notice have not been paid by the appellant company. The appellant disputed the validity of the s. 218 notice. On 6 May 1996 the High Court ordered that the appellant be wound up. By consent, the winding-up order was stayed pending appeal to this court.

The issue to be decided is whether s. 218(2)(a) of the Companies Act 1965, is to be interpreted literally and strictly or liberally and widely.

The presumption under s. 218(2)(a) that the Company was unable to pay its debts and hence insolvent arose once it is established that:

(i) a sum exceeding RM500 was due;

(ii) a demand had been made in the manner provided by s. 218(2)(a); and

(iii)the debtor company neglected to pay the amount demanded within three weeks.

It is the submission of learned counsel for the appellant that s. 218(2)(a) ought to be interpreted strictly. He further submits that the statutory demand under s. 218 requires the "sum so due" to be clearly specified and quantified and that no sums whatsoever ought to be left to be calculated and/or ascertained by the recipient of the notice. Failure to do this would result in the statutory notice to be invalid to raise the statutory presumption under s. 218(2)(a) of the company's inability to pay its debts. It is the contention of learned counsel for the appellant that the statutory notice of demand in the instant case contains a sum in excess of what is actually due and that the notice read with the petition and affidavits in support of the petition shows that the sum demanded in the notice is excessive. In the event he contends that the notice is invalid to raise the statutory presumption under s. 218(2)(a).

On the contrary learned counsel for the respondent submits that failure of the respondent to quantify the interest due on the judgment sum, does not render the statutory notice invalid and that the amount mentioned in the notice is sufficient compliance with the requirements of s. 218(2)(a) and not uncertain. In other words the submission on behalf of the respondent is that s. 218(2)(a) ought not to be interpreted strictly but to be interpreted liberally or widely.

There are a number of cases both local and overseas on the interpretation of s. 218(2)(a). In Re Yap Kim Kee & Sons Sdn. Bhd. [1990] 2 MLJ 108, Zakaria Yatim, J (as he then was) following the Australian case of Re Willes Trading [1977-78] ACLC held that s. 218(2)(a) must be interpreted strictly. He emphasised this approach later in Re Perusahaan Jenwatt Sdn. Bhd. [1990] 2 MLJ 178. Learned counsel for the appellant submitted before us that Zakaria Yatim J's decision in both the above cases was endorsed by the Supreme Court in Sri Hartamas Development Sdn. Bhd. v. MBf Finance Bhd. [1992] 1 CLJ 637; [1992] 1 MLJ 313. He also submits that the Supreme Court adopted the strict interpretation of s. 218(2)(a).

On our reading of Sri Hartamas, we find that the facts are on all fours with the facts in the present appeal. On 12 July 1988 the respondents obtained judgment against the appellants for the sum of $5,197,060.82 together with intere