Padang Meha estate workers win RM3.3m settlement from MBF

The Court of Appeal in Putrajaya today awarded 120 former workers of the Padang Meha Hup Seng Estate the sum of RM3.3 million based on a settlement agreement dating back to 1995.

It ruled that based on a 1995 settlement agreement between East Asiatic Company (M) Sdn Bhd and MBF Holdings Bhd, the workers are entitled to termination, layoff, ex-gratia and housing benefits.

The appellate court ordered that RM3.3 million be paid to the appellants’ solicitors Hakem Arabi & Associates as stakeholders within one month of the order.

Part of this payment was a sum of RM2,102,700.32 as termination and lay-off benefits and there was a further sum of RM1,253,138.

The said sum is to be released to the former workers within three months thereafter.

The initial 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 located near Kulim, Kedah, 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 a suit against Alamanda Development in 2003 and obtained a judgment in their favour a year later.

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

The Alor Setar High Court assessed the damages six years later and awarded 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 (in liquidation), MBF Equities Sdn Bhd and Vintage Developers 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 they 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.

The High Court ruled on the same day that MBF, as the new owner, was not liable for the sum owed to the workers by the East Asiatic Company. It also judged that the appellants were not parties to the agreement.

Some of the appellants were employed in Padang Meha estate as far back as 1968.

Initially, 428 workers were listed in the annexe to the settlement agreement, but many have since moved away or passed on. - Mkini