Is There More Than One Way To Issue A Notice Of Demand To A Company?
How do you deliver a notice of demand to a company? Is there more than one way to do so? We shall briefly deal with this issue by looking at what the court says in Tee Yam Holdings Sdn Bhd v Shanghai Capital Sdn Bhd; Tenaga Nasional Bhd (Petitioner).
Brief facts of the case
Shanghai Capital owes TNB monies (unpaid electricity bills). TNB sued. In the process of doing so:
- A summary judgment was obtained against Shanghai Capital;
- A statutory notice of demand was issued against Shanghai Capital;
- Shanghai Capital did not respond to the demand;
- A petition of winding up was filed against Shanghai Capital;
- The application was not opposed; and
- Eventually, Shanghai Capital was wound up.
The drama unfolds when, more than one and a half years after Shanghai Capital was wound up, Tee Yam Holdings, a contributory of Shanghai Capital, filed an application to set aside the winding-up order.
What happened?
Tee Yam Holdings (amongst others) claimed that statutory notice was defective, as the statutory notice was made through a registered post and was not handed or left at Shanghai Capital’s registered office personally.
TNB (amongst others) contended otherwise and stated that the service is still good service nonetheless.
What did the court say?
The court disagreed with Tee Yam Holdings’ contention.
The why behind the what
In coming to its decision, the court scrutinized section 466(1) (or formerly section 218(2)(a)) and stated that:
“A company shall be deemed to be unable to pay its debts if a creditor by assignment or otherwise to whom the company is indebted in a sum exceeding five hundred ringgit then due has served on the company by leaving at the registered office a demand under his hand or under the hand of his agent thereunto lawfully authorised requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor.”
Next, (based on the above), the court tackled this question: By ‘leaving it at the registered office’, does it mean that the notice must give personally to the registered office, or can the notice be served via registered post?
The court says, either way, is fine, as:
- Based on the wording of the section, the service could have been performed by any Tom, Dick or Harry- this includes TNB lawyer’s dispatch clerk, or TNB even employee/ agent/ servant, which is why it makes no sense to say that TNB cannot use a postal service worker to deliver the notice?.
- At the end of the day, what is important is that there is adequate proof that the notice has been sent by the creditor to the debtor (In this case, neither Tee Yam Holdings nor Shanghai Capital contended that the postal service had not delivered the notice to them nor did they deny the fact that they had received the notice).
Furthermore, the court also noted that it will not automatically strike out a petition (even if a service was not done properly) unless the Court unless the improper service has prejudiced the debtor one way or another.
Therefore, you can send a notice of demand to a company personally or even via a registered, as long as you can prove you have done so (as mentioned above).
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