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Issue #33/2026
13 August 2026
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CASE SPOTLIGHTS
ACEXIDE TECHNOLOGY SDN BHD & ANOR v. CHANG HENG KEONG & ANOTHER APPEAL [2026] 7 CLJ 687 (i) There is no legal impediment to an individual holding a dual capacity within a company, simultaneously serving as a member of the Board of Directors under the Companies Act 2016 and as an employee or 'workman' under s. 2 of the Industrial Relations Act 1967 ('IRA'). The corporate status and the employment relationship are governed by distinct legal frameworks and independent processes; consequently: (a) the removal of a person from their directorship does not automatically terminate their contract of service or employment; and (b) the termination of an employment contract does not automatically result in the vacation of a directorship; (ii) To determine whether a director qualifies as a 'workman' under the IRA, the following key indicators of an employer-employee relationship must be examined: (a) the consistent remittance of statutory deductions and contributions by the company; (b) the issuance of internal payroll/salary slips denoting regular wages rather than directors' fees, coupled with EA Tax Forms classifying the income under salary instead of business income; and (iii) the formal inclusion of the individual within the company's internal register of employees and its operational reporting hierarchies. CIVIL PROCEDURE: Pleadings - Judicial review - Adequacy of grounds - Industrial law matters - Dismissal - Judicial review against awards handed down by Industrial Court - Whether applicants sufficiently pleaded grounds of judicial review relied on - Whether statement provided fair notice of material facts to opposing party - Whether opposing party taken by surprise - Whether statement legally adequate - Rules of Court 2012, O. 53 COMPANY LAW: Directors - Status - Dual capacity - Company directors holding status as 'workman' - Removal of directors from Board of Directors - Whether company directors can simultaneously be employee or 'workman' - Whether directors prevented from being party to contract of employment - Whether removal of directors automatically terminated contract of employment - Companies Act 2016 - Industrial Relations Act 1967 LABOUR LAW: Employment - Dismissal - Dual capacity - Individuals wearing hats of company directors and workmen - Company made statutory Employment Provident Fund and Social Security Organisation contributions - Payroll records indicating regular monthly salary instead of director's fees - Income tax EA Forms classifying income as salary rather than business income - Name listed in company's internal register of employees - Whether company directors 'workman' - Whether conduct of company sufficient to clothe directors with status of 'workman' - Industrial Relations Act 1967, s. 2 LABOUR LAW: Employment - Dismissal - Remedies - Backwages and compensation in lieu of reinstatement - Deductions for post-dismissal earnings and contributory misconduct - Whether court correct in making award without deductions or scaling down - Industrial Relations Act 1967 JUDICIAL QUOTES“With reference to this issue, the SCIT concluded that the definition of an independent director set by Bursa Malaysia was a mere guideline. The High Court disagreed with the SCIT. We agree with the HCJ as the Bursa Malaysia's listing requirements, including Practice Note 13, are issued pursuant to the Capital Markets and Services Act 2007 and are binding on all listed companies.” “Under para. 1.01 of the listing requirements, an “independent director” is defined as “a director who is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgment or the ability to act in the best interests of an applicant or a listed issuer”. “We are of the view that the very concept of an independent director presupposes that such a director is not an employee. An independent director is appointed to provide independent oversight and advice, not to be subject to the control of management.” - Per Mohd Firuz Jaffril JCA in Ketua Pengarah Hasil Dalam Negeri v. Datuk Oh Chong Peng [2026] 7 CLJ 329 LATEST CASESLegal Network Series
CLJ 2026 Volume 7(Part 4) (i) In a retrenchment exercise premised on financial distress, a subsidiary company cannot rely on the financial difficulties or consolidated accounts of its parent company to prove redundancy. As a parent and subsidiary are distinct legal entities, the employer must produce its own contemporaneous financial evidence to prove that it individually suffering losses at the material time; (ii) While an employer may depart from the 'last in, first out' ('LIFO') principle in favour of a performance-based system, a mere assertion of performance-based selection is insufficient. Any such departure from the LIFO principle must be justified by reliable, cogent, and objectively transparent evidence. LABOUR LAW
LABOUR LAW: Employment - Retrenchment - Redundancy - Financial distress - COVID-19 pandemic - Selection criteria - Departure from 'last in, first out' (LIFO) principle and application of best fit rule in retrenchment exercise - Whether financial distress established - Whether financial difficulties of parent company automatically attributable to subsidiary - Whether distinct legal entities - Whether contemporaneous financial reports produced to establish financial distress - Whether selection criteria reasonable and just - Whether alternative measures genuinely sought and conscientiously considered in good faith - Whether retrenchment carried out bona fide
Azmi Ariffin JCA
An agreement for the sale of movable property, in this case, telecommunication towers and the associated equipment, that constitutes a capital asset rather than trading stock, ie, goods, wares or merchandise, is treated as a 'conveyance on sale' pursuant to s. 21(1) of the Stamp Act 1949 ('Act'). It therefore attracts ad valorem stamp duty under item 32(a) of the First Schedule of the Act, rather than nominal duty under item 4, irrespective of whether the physical transfer or completion date is deferred to a future date. REVENUE LAW | STATUTORY INTERPRETATION | WORDS & PHRASES
REVENUE LAW: Stamp duty - Assessment - Asset purchase agreement - Acquisition of telecommunication towers and associated equipment - Instrument described assets as chattels and movable assets - Whether agreement 'conveyance on sale' - Whether telecommunication towers constituted 'goods, wares or merchandise' - Whether assets formed part of capital assets or trading stock - Whether transaction attracted ad valorem duty or nominal duty - Stamp Act 1949, ss. 2, 21(1), First Schedule, items 4(a) & 32(a) STATUTORY INTERPRETATION: Definition - 'Conveyance on sale' - Stamp Act 1949, ss. 2 & 21(1) and First Schedule, item 32(a) - Instrument executing sale of movable property and capital assets - Whether contract or agreement for sale of movable capital assets falls within statutory definition WORDS & PHRASES: 'Conveyance on sale' - Stamp Act 1949, s. 2 - Instrument executing sale of movable property and capital assets - Whether executing ultimate transfer of title satisfied definition - Whether actual completion date material to interpretation WORDS & PHRASES: 'Goods, wares or merchandise' - Stamp Act 1949, s. 21(1) and First Schedule, item 4(a) - Whether encompassing telecommunication towers and associated equipment - Whether phrase restricted to trading stock or inventory - Whether applicable to movable capital assets Lim Chong Fong JCA
(i) Statutory leave under s. 8(1)(a) of the Insolvency Act 1967 is not required to maintain or proceed with an action against a bankrupt if the relief sought is strictly declaratory or proprietary in nature. As such proceedings seek to determine proprietary rights over property rather than asserting or recovering a 'debt provable in bankruptcy', they fall outside the ambit of s. 8(1)(a); (ii) Section 3(2) of the Powers of Attorney Act 1949 and s. 85 of the Evidence Act 1950 operate in tandem to create a mandatory presumption of regular execution and legal validity for a power of attorney duly authenticated before an authorised officer. This statutory coupling relieves the relying party from proving initial execution and effectively shifts the evidential burden to the challenging party to displace the presumption via cogent evidence of fraud, forgery or flawed authentication. BANKRUPTCY | CIVIL PROCEDURE | LEGAL PROFESSION
BANKRUPTCY: Capacity of bankrupt - Action against bankrupt - Leave of court - Dispute over ownership of lands - Allegations of forgery and fraud - Action seeking declaratory and proprietary reliefs regarding ownership of lands - Whether action for recovery of debt or determination of proprietary rights - Whether action 'in respect of any debt provable in bankruptcy' - Whether leave under s. 8(1)(a) of Insolvency Act 1967 required CIVIL PROCEDURE: Documents - Bundle of documents - Part B - Dispute over ownership of lands - Allegations of forgery and fraud - Dispute as to authenticity of signatures in documents - Whether inclusion of documents in part B automatically rendered them admissible or dispensed with formal proof - Evidence Act 1950, s. 67 CIVIL PROCEDURE: Abuse of process - Re-litigation - Dispute over ownership of lands - Allegations of forgery and fraud - Prior suit challenged validity of will and probate struck out without liberty to file afresh - Identical issues raised as defence in subsequent suit - Whether attempt to circumvent earlier court order - Whether constituted abuse of process LEGAL PROFESSION: Solicitors - Disqualification - Application to disqualify solicitors - Dispute over ownership of lands - Allegations of forgery and fraud - Allegation that solicitors were material witnesses to authenticity of power of attorney - Whether application bereft of merit Azman Abdullah JCA
(i) A solicitor acting as a stakeholder must adhere strictly to the terms of the stakeholding arrangement unless all relevant parties expressly consent to a departure from those terms; (ii) A solicitor's undertakings are not mere courtesies exchanged between solicitors; rather, they are solemn professional assurances upon which courts and practitioners alike are entitled to rely. A solicitor's undertaking carries with it a disciplinary and fiduciary dimension that transcends ordinary contractual obligations. Once given, it must be honoured unless vitiated by circumstances such as forgery, duress or mistake regarding the undertaking. CIVIL PROCEDURE | LEGAL PROFESSION
CIVIL PROCEDURE: Summary judgment - Triable issues - Claim for refund of monies paid by purchaser under sale and purchase agreement to vendor's solicitors as stakeholder - Solicitors released funds to vendor in breach of clear written terms of undertaking - Allegation of sham and fraudulent transaction - Whether purchaser consented to release of fund to vendor - Whether invocation of fraud automatically convert dispute into triable issue - Whether presence of fraud may justify refusal of summary judgment - Whether bona fide triable issues raised - Rules of Court 2012, O. 14 LEGAL PROFESSION: Solicitors - Stakeholders - Obligations under sale and purchase agreement - Claim for refund of monies paid by purchaser under sale and purchase agreement to vendor's solicitors as stakeholder - Solicitors released funds to vendor in breach of clear written terms of undertaking - Whether purchaser consented to release of fund to vendor - Whether solicitors assumed position of trustee once funds received as stakeholder - Whether funds could be released upon unilateral instruction of one party - Whether funds released in breach of trust and professional undertaking LEGAL PROFESSION: Duty to client - Breach - Solicitors - Breach of undertaking - Claim for refund of monies paid by purchaser under sale and purchase agreement to vendor's solicitors as stakeholder - Unconditional written undertaking by solicitor to refund funds - Solicitors released funds to vendor - Whether purchaser consented to release of fund to vendor - Whether failure to honour undertaking amounted to breach of professional undertaking
Moh Kok Wai JC
Regulatory non-compliance, such as driving underage or without a valid licence, carries penal consequences but does not automatically ground a finding of civil liability or contributory negligence. For regulatory non-compliance to impact civil liability, there must be clear evidence of a direct causal connection between the lack of a licence/experience and the occurrence of the accident. Speculative reasoning, that a more experienced driver might have avoided the collision, is legally insufficient to sustain a finding of contributory negligence. TORT | DAMAGES
TORT: Negligence - Contributory negligence - Liability - Road accident - Appeal against decision of Sessions Court - Collision between motorcycle and motorcar - Motorcar suddenly exited junction and encroached into motorcycle's lawful lane - Sessions Court found motorcycle rider contributorily negligent for being underage and riding without valid licence - Whether regulatory non-compliance automatically equated to civil liability or contributory negligence - Whether failure to hold driving licence had causal connection to accident - Whether motorcycle rider contributorily negligent for being underage and not possessing valid driver's licence TORT: Negligence - Road accident - Collision between motorcycle and motorcar - Motorcar suddenly exited junction and encroached into motorcycle's lawful lane - Doctrine of 'moment of agony' - Whether motorcycle rider expected to exercise perfect judgment when confronted with imminent danger DAMAGES: Quantum - Negligence - Road accident - Collision between motorcycle and motorcar - Motorcycle rider sustained multiple injuries - Appeal against general and special damages awarded by Sessions Court - Competing expert medical opinions on cost and necessity of prosthesis - Evaluation of expert evidence by trial judge - Whether awards fair, reasonable and within permissible range
Abdul Wahab Mohamed J
An ex parte interim injunction cannot be sustained and must be set aside if a substantial, unresolved challenge to the court's jurisdiction to grant injunctive relief is raised promptly. Where such central jurisdictional questions are raised substantively and cannot be conclusively resolved on the initial ex parte materials, the proper course is to set aside the ex parte order and defer the matter to a full inter partes hearing on a complete record. CIVIL PROCEDURE
CIVIL PROCEDURE: Injunction - Interim injunction - Application to set aside ex parte interim injunction - Dispute on management agreement - Ad interim order granted pending inter partes disposal - Substantial and unresolved challenge to court's jurisdiction raised promptly - Whether holding measure or final decree of specific performance - Whether ex parte order sustainable on contested jurisdictional foundation - Specific Relief Act 1950, s. 54(d) - Government Proceedings Act 1956, s. 29
Noradura Hamzah JC
Where a valid, autonomous arbitration clause exists and the applicant has not waived it by taking a 'step in the proceedings,' the court ought to grant a mandatory stay under s. 10(1) of the Arbitration Act 2005. The court's role is strictly confined to verifying the prima facie existence of the clause and ensuring it is not null, void, inoperative, or incapable of being performed. The court cannot delve into the substantive merits, performance disputes, or allegations of a sham transaction, which fall exclusively within the province of the arbitral tribunal. Furthermore, under the doctrine of separability, the arbitration clause survives independently even if the parent contract is impugned; a plaintiff cannot approbate and reprobate by suing on an agreement while disowning its arbitration clause. Because administrative case management requests or forced extensions of time do not constitute a voluntary submission to the court's jurisdiction, the court must adopt a non-interventionist posture to honour the parties' private bargain and uphold the statutory pro-arbitration policy. ARBITRATION | CIVIL PROCEDURE
ARBITRATION: Stay of proceedings - Application for - Application for stay of court proceeding pending reference to arbitration - Dispute arising from escrow agreement - Whether escrow agreement contained arbitration clause - Whether defendants took 'step in the proceedings' before filing application for stay - Whether there was valid and operative arbitration agreement - Whether there was oral agreement that displaced escrow agreement and its arbitration clause - Whether dispute fell within scope of arbitration clause - Whether arbitrating dispute would prejudice plaintiff - Whether stay mandatory - Arbitration Act 2005, s. 10(1) ARBITRATION: Arbitration clause - Validity and enforceability - Dispute arising from escrow agreement - Whether plaintiff pleaded breach of escrow agreement as cause of action while simultaneously disowning its arbitration clause to resist stay application - Principle of approbate and reprobate - Whether party could invoke agreement to advance claim but reject it to avoid arbitration - Whether arbitration clause survived as separate and autonomous agreement when parent contract impugned - Whether there was failure to independently demonstrate arbitration clause null, void, or inoperative - Whether valid and binding arbitration agreement existed - Arbitration Act 2005, s. 10(1) CIVIL PROCEDURE: Stay of proceedings - Application for - Application for stay of court proceeding pending reference to arbitration - Dispute arising from escrow agreement - Whether escrow agreement contained arbitration clause - Whether defendants took 'step in the proceedings' before filing application for stay - Whether there was valid and operative arbitration agreement - Whether there was oral agreement that displaced escrow agreement and its arbitration clause - Whether dispute fell within scope of arbitration clause - Whether arbitrating dispute would prejudice plaintiff - Whether stay mandatory - Arbitration Act 2005, s. 10(1)
Kenneth St James J
(i) Statutory authority to 'apprehend and convey' a person for evaluation does not inherently grant the power to perform invasive medical procedures. Under Malaysian law, an adult of sound mind possesses absolute autonomy over their medical treatment. Parental or next-of-kin consent is legally irrelevant unless the individual has been formally determined to lack capacity. Performing invasive procedures without valid consent or an explicitly triggered statutory order constitutes battery; (ii) Section 105 of the Criminal Procedure Code ('CPC') authorises the prevention of seizable offences and arrest, but it does not grant a blanket right to enter or force entry into private premises. A search or 'rescue operation', as in this case, within private property requires a search warrant under s. 58 of the CPC. TORT | CONSTITUTIONAL LAW | WORDS & PHRASES
TORT: Battery - Medical procedures - Claim for damages - Adult patient of sound mind - Allegation that patient mentally disordered person - Forced invasive procedures under physical restraint - Whether power to apprehend and convey included power to conduct invasive tests - Whether battery established TORT: Trespass - Trespass to property - Forced entry into private residence - Claim for damages - Police entry without warrant - Purported rescue operation of competent adult - Scope of preventative powers - Whether included automatic power to enter private premises without search warrant - Whether less intrusive alternatives explored - Whether trespass established TORT: False imprisonment - Arrest of advocate and solicitor - Claim for damages - Purported obstruction of public servant - Whether there was criminal force or show of force - Whether legal practitioner questioning lawfulness of detention constituted criminal obstruction - Whether false imprisonment established TORT: Misfeasance in public office - Elements - Claim for damages arising from tortious acts of public officers - Public officers proceeding without adequate legal foundation - Continuous pattern of public authorities disregarding limits of statutory powers - Whether there were malice and illegality - Whether liability established on reckless indifference - Whether personal liability of police officers and public hospital staff established TORT: Liability - Vicarious liability - Claim for damages arising from tortious acts of public officers - Torts of battery, trespass to land, false imprisonment and misfeasance in public office - Whether personal liability of public officers established - Whether individual officers named as parties - Whether Government vicariously liable for acts of public officers - Government Proceedings Act 1956, s. 7 CONSTITUTIONAL LAW: Fundamental liberties - Personal liberty - Deprivation - Unlawful apprehension under Mental Health Act 2001 and unlawful arrest under Penal Code - Whether there was deprivation of personal liberty - Federal Constitution, art. 5(1) WORDS & PHRASES: 'reason to believe' - Mental Health Act 2001, s. 11 - Meaning and construction - Difference between mere suspicion and reasonable belief - Cumulative requirements of mental disorder and danger to self or others - Time-sensitive nature of mental health assessments - Whether reliance on remote historical distress sufficient to justify current arrest WORDS & PHRASES: 'obstruction' - Penal Code, s. 186 - Statutory interpretation - Requirement of criminal force or show of criminal force - Whether verbal disagreement, non-physical interference or questioning of lawfulness of executive action by advocate and solicitor amounted to criminal obstruction Arziah Mohamed Apandi J
ARTICLESLNS Article(s)
LEGISLATION HIGHLIGHTSPrincipal Acts
Amending Acts
PU(A)
PU(B)
Legislation Alert Updated
Revoked
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