1. ) MOHD ABDUL KARIM BIN ABDULLAH 2. ) ABDUL KADIER SAHIB 3. ) AWANG DAUD BIN AWANG 4. ) MOHD SHARIFF BIN OMAR v Lembaga Kumpulan Wang Simpanan Pekerja

Case Significance

Confirms that under section 46 of the Employees Provident Fund Act 1991 directors are jointly and severally liable for a company's unpaid contributions and may be sued independently of the company, and refuses leave to appeal for want of ambiguity and public importance.

This Federal Court decision concerns an application for leave to appeal on the joint and several liability of a company's directors for unpaid statutory contributions, and whether such directors may be sued independently of the company. The respondent, the Employees Provident Fund Board, had proceeded to recover outstanding contributions, and the applicants — the registered directors of the company during the material period — sought leave to appeal under section 96(a) of the Courts of Judicature Act 1964 against a Court of Appeal decision, proposing seven questions of law concerning the meaning and application of section 46 of the Employees Provident Fund Act 1991. Section 46 provides that where contributions remain unpaid by a company, the directors shall, together with the company, be jointly and severally liable for them, and operates notwithstanding anything to the contrary in that Act or any other written law. The Court of Appeal had followed its earlier decision in Ong Kim Chuan, holding that section 46 does not bar the Board from naming only the director or directors in its claim, so that the directors may be sued independently of the company. On the leave application the Federal Court examined the proposed questions against the statutory threshold in section 96, guided by the principles in Syed Kechik. It was not persuaded that there was any ambiguity in section 46 requiring clarification, noting that the provision stands by itself and that its earlier decision in Edwin Cassian had already given effect to the joint and several liability, which is enforceable against a single director even without the company. Considering the interlocutory nature of the case, the unlikely prospect of success, and the low degree of general or public importance, the Court held that the application did not meet the section 96(a) threshold and dismissed the application for leave to appeal. The decision confirms that a director may be pursued alone under section 46 for a company's unpaid contributions.