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The decision in Syarikat Mohd Noor Yusof Sdn Bhd v Polibina Engineering
Enterprise Sdn Bhd 77 should be confined to its facts, namely there was dispute as to
the existence of debts and there had never been any judgment made against the
company in respect of the sum. The appropriate course for the creditor in this matter
would be to exhaust all possible remedies under contract first, before commencing a
winding up procedure.
8.7 Conclusion
The new concept of solvency acts as a preventive measure by which companies are
restricted from acting in certain ways should insolvency ensue from such deed. It
focuses on the future and directors are required to make a prediction based on the
current information available to them. Therefore, it is crucial for them to know how
the courts will interpret these tests. Further, directors themselves may not be well
versed in the information they have on hand, hence clear guidance is essential.
Seeing the difficulties to apply the tests due to the absence of clear definitions, it is
necessary to have clear guidelines on how the tests should be applied. This is to
ensure certainty and uniformity in the area while, at the same time, addressing the
difficulties associated with applying the tests. The courts, rather than Parliament,
remain the appropriate forum to provide these guidelines because courts can respond
promptly to any changes and make decisions based on facts of each case. Therefore,
courts, especially in the UK and Malaysia, must take a proactive role in providing
guidelines on how the tests should be applied.
77 [2006] 1 MLJ 446.
186