View/Open - Research Commons - The University of Waikato

prescribed time. 65 The decision in Bank of Australasia v Hall 66 illustrated that the
debtor‟s ability to pay was not limited to its cash but include any moneys from sale
or pledge of assets. 67 The courts, however, acknowledge not all assets can be
included and realized, for it may result in the closure of business or breach of
contract. 68 Hence, whether assets should be accounted for or not depends upon the
nature of business and the nature of the assets. 69 In Sri Jeluda Bhd v Pentalink Sdn
Bhd, 70 the Malaysian Court of Appeal decided that the company failed in rebutting
the presumption when the money it asserted to be in its account in fact belonged to a
third party. 71 As such, the company would not be able to pay its debts when they
were due.
In Syarikat Mohd Noor Yusof Sdn Bhd v Polibina Engineering Enterprise Sdn Bhd, 72
the respondent sent a notice under section 218(2)(a) claiming a sum of RM896,
378.18. The respondent, however, did not obtain any judgment for such sums and the
appellant disputed the debts. The court decided that the presumption of being unable
to pay its debts did not arise in this case since the appellant was clearly a solvent
company. 73
65 Ibid.
66 Bank of Australasia v Hall (1907) 4 C.L.R 1514 at 1528.
67 See also the decision in Sandell v Porter (1966) 115 CLR 666; New Zealand unreported case Re:
Northbridge Properties Ltd High Court Auckland, M46-49/75 and M77/75, 13 December 1977, as
noted in “Insolvency and Companies” [1983] NZLJ 44; for Malaysia, see decision in Lian Keow
Sdn Bhd (In Liquidation) & Anor v Overseas Credit Finance (M) Sdn Bhd & Ors [1988] 2 MLJ 449
at 454; PT Anekapangan Dwitama v Far East Food Industries Sdn Bhd [1995] 1 MLJ 21 at 29; Sri
Hartamas Development Sdn Bhd v MBF Finance Bhd [1992] 1 MLJ 313 at 320.
68 Re Timbatec Pty Ltd (1974) 24 FLR 30 at 36-37; Bank of Australasia v Hall above n 55.
69 Keay above n62 at 324.
70 [2008] 3 MLJ 692.
71 [2008] 3 MLJ 692 at 711.
72 [2006] 1 MLJ 446.
73 [2006] 1 MLJ 446 at 455.
184