Judgement day for estate workers after 23-year wait for compensation

From Malaysiakini, Thursday, April 4, 2019.

Hakem Arabi & Associates

Today will be a day of destiny for 120 former workers of the Padang Meha Hup Seng Estate, who have waited 23 years for their termination, layoff, ex-gratia and housing benefits.

The Court of Appeal is set to rule on a 1995 settlement agreement between East Asiatic Company (M) Sdn Bhd and MBF Holdings Bhd, and decide if these workers are liable for compensation.

The agreement was signed following MBF taking the East Asiatic Company to court for failing to deliver vacant possession of the Padang Meha Hup Seng Estate, which was sold at a purchase price of RM115.9 million under a 1994 sale and purchase agreement.

On March 8, 1995, MBF transferred the estate land to its subsidiary Alamanda Development Sdn Bhd (formerly MBF Country Homes & Resort Sdn Bhd) to develop a township project.

Being unable to evict the workers on the estate, MBF sued the East Asiatic Company, with both parties subsequently arriving at an RM7 million settlement, which includes compensation for the workers.

In 1997, Alamanda Development agreed to pay the workers compensation for termination of employment and ex-gratia payments, along with a commitment to build 240 low-cost houses valued at RM25,000 each.

According to the estate workers, however, the agreement failed to materialise.

They filed suit against Alamanda Development in 2003, and obtained a judgement in their favour a year later.

In August 2005, Alamanda Development Sdn Bhd placed itself under creditors and appointed liquidators.

The Alor Setar High Court assessed the damages six years later, and awarded the layoff, ex-gratia and housing compensation to the workers.

Although the workers were deemed priority creditors, no compensation was forthcoming.

They proceeded to file another suit in the Kuala Lumpur High Court in 2016 against the two appointed liquidators and MBF, along with its subsidiaries Alamanda Development Sdn Bhd (in liquidation), MBF Equities Sdn Bhd and Vintage Developer's Sdn Bhd.

Through a consent order dated April 10, 2018, the liquidators agreed to pay a partial ex-gratia payment of RM1.03 million.

However, they were unable to fulfil the full obligations of the previous court-assessed damages in 2011, claiming that never received the settlement monies that the East Asiatic Company paid to MBF.

The trial in the High Court then proceeded against MBF on the plaintiff’s remaining claims, as per the 1995 settlement agreement.