JUDGMENT

Raus Sharif JCA:

Facts

[1] The facts of this case are these. The judgment creditor (Kesvaran) was employed by RNC as Senior General Manager starting from 24 September 1996. On 23 January 1998 he was promoted to the post of Chief Executive Officer and Executive Director. He was tasked on to restructure the RNC group of companies to put it in a stronger financial position.

[2] Under his stewardship, RNC on 17 August 1998 obtained a court order under s. 176 of the Companies Act 1965 . This entitled RNC to a nine months protection period from its creditors. In March 1999, the restraining order was further extended for a period of nine months.

[3] With the restraining orders, Kesvaran proceeded to embark on a restructuring exercise involving the companies within the group. Despite his effort, RNC and its groups of companies began facing dire financial difficulties. RNC put into effect a wide cost cutting programme. On 2 February 1999, the staff were informed that a monthly pay cut will be implemented to all employees earning more than RM3,500. As the result, Kesvaran salary was reduced from RM13,000 to RM8,450. He protested. On 19 February 1999, he considered himself constructively dismissed by RNC.

[4] In the meantime, on 27 July 1999, RNC was placed under special administration by Pengurusan Danaharta Nasional Berhad ("Danaharta") pursuant to a scheme ("Danaharta Scheme") set out under Pengurusan Danaharta Nasional Act 1998 and the Pengurusan Danaharta Nasional Amendment Act 2000 ("Danaharta Act") . On 20 March 2000, the secured and the unsecured creditors of RNC approved the Danaharta Scheme.

[5] While this was going on, Kesvaran's complaint of constructive dismissal was referred to the Industrial court. The Industrial court, on 1 September 2004 held that Kesvaran had been constructively dismissed without just cause or excuse. Kesvaran was awarded the sum of RM342,333 ("award") comprising of the following amounts:

(a) Backwages RM312,000; and

(b) Compensation in lieu of reinstatement RM30,333;

[6] About eight months after the award, RNC was wound up pursuant to creditor's voluntarily winding up. It happened on 20 May 2005. Dato' Abu Hanifah bin Noordin and Vincent Chew Cheong Eu were appointed to act jointly and severally as the liquidators of RNC.

[7] Kesvaran on his part then initiated proceedings under s. 56 of the Industrial Relations Act 1967 for non-compliance of the Industrial court Award by RNC. On 5 August 2005, the Industrial court handed down an enforcement award requiring RNC to pay Kesvaran within thirty days. RNC failed to comply. This resulted in Kesvaran, on 5 January 2006 filing a Garnishment Application in the High court to garnish RM342,333 in RNC's Bumiputra Commerce Bank Berhad's ("BCB") account.

[8] On 16 February 2006, the registrar of the High court on an ex parte basis, granted:

(a) leave pursuant to s. 263(2) of the Companies Act 1965 for Kesvaran to proceed and/or commence legal action against RNC;

(b) an order pursuant to O. 49 of Rules of the High requiring RNC and/or Bumiputra-Commerce Bank Berhad ("BCB") to show cause why Kesvaran should not be allowed to garnish RNC's monies held with BCB.

[9] On 20 March 2006, RNC filed a summons in chambers to set aside the ex parte orders. On 19 June 2006, RNC's application was dismissed by the registrar and at the same time ordered the Garnishee Order to be made absolute.

[10] Aggrieved with the said decisions, RNC filed two notices of appeal to the judge in chambers. On 24 January 2008, the learned High court Judge dismissed both appeals. Hence this appeal.

Decision Of The High court

[11] The High court in dismissing RNC's appeals basically held:

(i) The creditors voluntary liquidation that RNC was placed in was void because there was non-compliance with ss. 254 and 260 of the Companies Act 1965 as there was no meeting of the creditors of RNC whether secured or unsecured.

(ii) At the proceedings before the Industrial court for the non-compliance of the Award date