Ramly Ali JCA:

[1] This is an appeal by the appellants (the 2nd and the 3rd defendants in the original case) against the decision of the learned High Court judge in dismissing the appellants' appeal against the decision of the Sessions Court allowing the plaintiff's claim for summary judgement under O. 26A of the Subordinate Court Rules 1980.

Factual Background

[2] The 1st defendant, Haleywood Industries Sdn Bhd, was at all material times an employer as defined under s. 2 of the Employees Provident Fund Act 1991 (EPF Act).

[3] The 1st defendant had failed to make payment of EPF contributions in respect of its employees for the periods of June 2000 up to March 2002 and October 2000 up to May 2002 for a total sum of RM180,624.

[4] Both the 2nd and 3rd defendants (the appellants) were at all material times (during the relevant periods stated above) the registered directors of the 1st defendant.

[5] The 1st defendant was wound up on 18 November 2002.

[6] All the above facts are not in dispute.

[7] The plaintiff claimed for the said sum of RM180,624 initially from all the three defendants. However, since the 1st defendant was wound up on 18 November 2002, the plaintiff indicated (in its affidavit in reply - para. 3) its intention to withdraw its claim against the 1st defendant.

[8] The plaintiff proceeded its claim for the said amount against the 2nd and 3rd defendants (the appellants), under s. 46 of the EPF Act. The plaintiff obtained a summary judgement against the 2nd and 3rd defendants at the Sessions Court. The appellants' appeal to the High Court against the said decision was dismissed. Hence, the present appeal to this court.

[9] In the present appeal, the appellants argued that they were not personally liable for the debt of the 1st defendant company under s. 46 of the Employee Provident Fund Act 1991 because the appellants who were directors have lost their status or locus as directors when the 1st defendant company was been wound-up under s. 218 of the Companies Act 1965 and the official receiver has taken over the affairs of the 1st defendant company.

[10] Further it was also contended by the appellants that under s. 292(1) of the Companies Act 1965 in winding up of a company, any payment due under the Provident Fund or Employees Superannuation can be realized by filing the proof of debt with the official receiver.

[11] The appellants contended that s. 46 of the Act is not comprehensive to cover a situation where the company has been liquidated or wound up, and that the position of the directors' liability in such an event is not expressly provided for.

[12] The appellants also argued that the provision of s. 46 of the Employee Provident Fund Act 1991 applies only in respect of the company which is still in operation and the directors have not lost their status or locus as directors.

[13] The appellants also submitted that s. 46 of the EPF Act must be read conjunctively with the provisions of the Companies Act 1965 and that the directors cannot be held personally liable at law in respect of the debt of the company. To support this contention, the appellants relied on the strength of Salomon v. Salomon & Co. Ltd [1897] AC 22 - a judgement of the House of Lords which held that "the incorporation of the company created a separate person ... and the members were not liable in respect of the company's obligations."

[14] Finally, the appellants stressed that the plaintiff's claim under s. 46 of the EPF Act for the said amount against the appellants tantamount to fraudulent preference under the Companies Act 1965 and thus unenforceable in law.

Findings Of Court

[15] It is not in dispute that the 1st defendant, Haleywood Industries, was at all material times an employer as defined under s. 2 of the EPF Act. It is also not in dispute that the 1st defendant had failed to pay contributions to the EPF for the said amount during the relevant periods; and during that periods, both the appellants were directors of the 1st de