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2012 MarsdenLR 1942
INDUSTRIAL COURT MALAYSIA KUALA LUMPUR
SOOSAY ANTHONY – Appellant
Versus
CHG PLYWOOD SDN BHD – Respondent
Award No: 1126 Of 2012 [Case No: 15/4-2269/07]
A claimant must seek leave before pursuing claims against a company under winding-up, as required by Section 226(3) of the Companies Act 1965.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Companies Act 1965 - Section 226(3) - Dismissal of employee - Termination challenged by employee after winding-up of employer - Court held that a winding-up order triggers a stay of all proceedings against the company - Claimant must seek leave from the court to proceed with claims against a company under liquidation. (Paras 11-20)
(B) Burden of Proof - In absence of employer's evidence, the Court must consider the employee's claims seriously, ensuring that due process is upheld in adjudicating termination disputes while acknowledging the employer's obligation to substantiate dismissals. (Paras 6, 8)
Facts of the case:
The Claimant, dismissed by the Company on March 13, 2007, continued pursuit of his claim even after the Company’s winding-up petition. Several court hearings were noted with discussions about the legal implications of such liquidation on the proceedings.
Findings of Court:
The Claimant is required to apply for leave under Section 226(3) due to the Company being in liquidation, as proceedings must comply with statutory provisions.
Issues: The court addressed whether the claimant could proceed against a company under winding up without obtaining prior leave, and the implications of the absence of the employer’s representation during the proceedings.
Ratio Decidendi: The court emphasized that the statutory provisions in Section 226(3) necessitate that leave must be sought before proceeding with claims against a company that is subject to a winding-up order; this is integral to managing creditor claims efficiently to preserve company assets.
Result: The Claimant is ordered to apply for requisite leave.
| Table of Content |
|---|
| 1. timeline and context of claim against a company. (Para 1 , 2 , 3 , 4) |
| 2. arguments about legal precedents and their application. (Para 5 , 6 , 7 , 8 , 9) |
| 3. interpretation of the legal requirements of leave under s 226(3). (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
[1] This reference under s 20(3) of the Industrial Relations Act 1967 ("the Act") relates to the dismissal of Soosay a/l Anthony ("the Claimant") by CHG Plywood Sdn. Bhd. (" the Company ") on 13 March 2007.
[2] The case was called up for hearing on 26 May 2009, 27 May 2009 and 24 August 2009. On the adjourned date on 16 August 2010, the Court was informed that a winding-up petition has been filed against the Company. The parties agreed to adjourn the hearing to try to resolve the matter amicably. The parties could not reach a settlement. A new date for continued hearing of the case was fixed. On the last hearing date the Claimant was still under cross-examination by the Counsel for the Company and he informed that he would be calling about 5 witnesses.
[3] The case was called up for mention on 21 January 2010. Cik Siti Fatimah of Messrs Rabinder Budiman & Associates, Counsel for the Company handed to the Court a copy of the winding up order dated 9 December 2010 made against the Company. Mr Varathan of MTUC acting for the Claimant said that the Claimant would want to proceed with his case against the Company. As the Company has been wound up, the Court directed the Claimant to apply for the requisite leave to proceed against the Company under s 226(3) of the Companies Act 1965 The case was called up for mention on 13 April 2011, 30 June 2011, 1 August 2011, 6 September 2011, 30 September 2011, 15 November 2011, 19 December 2011, 8 February 2012 and 12 March 2012. The Claimant had through his representative indicated that he did not want to apply for the leave from the High Court as he was not financially able to do so.
[4] The Claimant then made an application to the Court that he need not apply for leave from the High Court to proceed against the Company which had been wound up. On 18 April 2012, the case was called up for the Claimant and the Insolvency Department to address the Court on the Claimant's said application.
[5] Mr. Varathan, the representative for the Claimant submitted that his reference would be Northern Waste Industries Sdn Bhd v. Zainab Dato' Hj Mohamed Award No. 1755 of 2006 ("the said Award No. 1755"). He said that in that case the Company was 'liquidated' and the Liquidator was present with the Company's lawyers who were holding a watching brief. On application by the Claimant for the case to be heard ex parte, that case was heard and decision made.
[6] Mr. Varathan referred to the paragraph in the said Northern Waste Industries Sdn Bhd v. Zainab Dato' Hj Mohamed Award No. 1755 where reference was made to the case of Goon Kwee Phoy v JP Coats (M) Sdn Bhd, . He read that portion which stated as follows:
".......... that where representations are made and on referred to the Industrial Court for inquiry it is the duty of the Court to determine whether the termination or dismissal is with or without just cause or excuse. - - - Hence the Court is duty bound to hear the evidence of the Claimant and to arrive at a decision."
[7] He said that the case under the Northern Waste Industries Sdn Bhd v. Zainab Dato' Hj Mohamed Award No. 1755 of 2006 was an ex-parte hearing. In the instant case, the Company had closed it's case and what was left was the Claimant's case. The burden of proof lies with the employer on a balance of probabilities. He submitted that "in the absence of the employer, the workman would have to lay down his case and the Court has to decide accordingly."
[8] Mr. Varathan then referred to the paragraph in the said Northern Waste Industries Sdn Bhd v. Zainab Dato' Hj Mohamed Award No. 1755 on the case of Stamford Executive Centre v. Dharsini Ganesan ; [1986] 1 ILR 101 . He submitted that it was stated in that
