Siti Norma Yaakob FCJ:

[1] Proceedings were first commenced by the appellant in the Industrial Court, where he claimed that he had been wrongly dismissed by his employer, the respondent, without just cause or excuse.

[2] The appellant had worked for the respondent since early 1977, as a Management Trainee and on 27 October 1987, whilst he held the position as its General Manager, he was suspended from his duties pending a domestic inquiry into allegations of gross negligence and misconduct.

[3] At the domestic inquiry that was conducted on 5 January 1988, the appellant had to answer to two charges of gross negligence and the acts complained of relate to:

(1) your endorsement in a deed of assignment dated 20th December, 1985, and executed by Sa-Mula Jadi Sdn. Bhd. in favour of Arab Malaysian Finance Bhd. in respect of SG-001. In the endorsement you stated that the whole of the purchase price of RM2,722,500.00 payable by Sa-Mula Jadi had been paid in full on that date when in fact this was not the case.

(2) your endorsement in a deed of assignment dated 25th April, 1986, and executed by Sa-Mula Jadi Sdn. Bhd. in favour of Asia Commercial Finance (M) Bhd in relation to Basement 001 and Basement Disco. In the endorsement you stated that the whole of the purchase price of RM3,800,000.00 payable by Sa-Mula Jadi had been paid in full on that date when in fact this was not the case.

[4] The appellant admitted to the acts of negligence but contended that he was merely carrying out the lawful orders of his superior, one Simon Chong ("Chong"), the respondent's Executive Director. However his defence did not get him anywhere as he was found guilty of both charges and on 12 February 1988, the respondent dismissed him from its employment.

[5] The appellant questioned his dismissal in the Industrial Court and in Award No. 179 of 1993, dated 16 June 1993, that court ruled in his favour and held his dismissal to be without just cause or excuse. The appellant was awarded compensation in lieu of reinstatement, back wages and payments in respect of leave due and not taken, to be paid to him within one month of the date of the award. A stay on the award was granted pending further proceedings in the High Court.

[6] Those further proceedings were by way of Originating Motion No. R1-25-87-93 filed by the respondent to have the award quashed and the High Court allowed its motion on 29 December 1997, quashed the award by way of certiorari and also awarded costs to the respondent.

[7] The appellant took the matter further to the Court of Appeal, which confirmed the High Court's findings on 20 November 2003, and the appellant then filed an application for leave to appeal to this court. Leave was granted to him on 18 February 2004, to refer the following two questions of law.

(1) Whether the law on obedience to superior orders in the context of employment law in Malaysia is any way different from that at common law.

(2) Whether the principle of an order being "manifestly wrong" has any part in the doctrine of superior orders.

[8] Before directing our minds to the two questions, it is pertinent that we set out the circumstances surrounding the execution of the documents leading to the allegations and findings of gross negligence on the part of the appellant.

[9] In May 1985, the respondent successfully negotiated the sale of three parcels of business premises in Sungei Wang Plaza, a commercial complex, to a company called Sa-Mula Jadi Sdn. Bhd. ("Sa-Mula"). Two sale and purchase agreements were executed in respect of the three parcels, the first to cover the two basement units, namely Basement 001 and Basement Disco, and the second to cover the ground floor unit, Lot SG-001.

[10] In the first sale and purchase agreement dated 31 May 1985, Sa-Mula agreed to purchase the basement units for RM3.8 million, the 10% deposit of which had been acknowledged by the respondent as having been paid by Sa-Mula with Sa-Mula undertaking to pay the balance of the