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for under the Act. 348 The action pursued under this proceeding is merely procedural
and not a new cause of action but a right which a company has against the director
prior to the winding-up. 349 Hence, the applicant would have to establish the wrongful
act on the part of the director independent of the misfeasance action. 350 There must
actual loss to the company in respect of claim for misfeasance or breach of trust. 351
Misfeasance covers a broad range of directors‘ duties which have existed under
common law and companies‘ legislation, and thus, in the UK, the proceeds of these
remedy are not specifically available to unsecured creditors. 352 The law in the UK
and Malaysia in respect of the proceedings for misfeasance is generally the same.
The section can be enforced against any officer, liquidator, administrative receiver or
anyone who has taken part in the management of the company as well as any person
who has taken part in the formation or promotion of the company. 353 In Malaysia,
misfeasance proceedings are seldom used by liquidators to enforce a company‘s right
against the director, but have been utilized against the liquidator for breach of
duty. 354
348 See section 212 of the UK Insolvency Act 1986 and section 305 (1) of the Malaysian Companies
Act 1965.For New Zealand see section 301 of the Companies Act 1993.
349 Nigel Furey ―The Protection of Creditors‘ Interests n Company Law‖ in David Feldman and Frank
Meisel (Eds) Corporate and Commercial Law: Modern Development (Lloyd‘s of London Press,
London, 1996)173 at 190; see also Re Canadian Land Reclaiming and Colonising Co.; Coventry
and Dixon’s Case (1880) 14 Ch. D 660.
350 Keay ―Company Directors Responsibility‖ above n208 at 271 citing Fidelis Oditah ‗Misfeasance
proceedings against the company directors‘ [1992] LMCLQ 207 at 208.
351 Re Peace Insurance Co Ltd [1965] 1 MLJ 208.
352 Contrast from section 213 and section 214.
353 Note the slight difference in the application of the section, in Malaysia the section can be invoked
against any person who has taken part in the formation or promotion of the company, while in the
UK it applies to officer receiver and anyone who has taken part in the management of the company.
354 Sarawak Timber Industry Development Corporation v Borneo Pulp Plantation Sdn Bhd [2005] 2
MLJ 74.
395