LR 2013 V1

1
Articles
Intensity of Judicial Review: The Way Forward

Gopal Sri Ram*
It is a fundamental requirement of a democratic state that all forms of State action must be supportable in law either a statute or the common law. Illegal State action is incompatible with a democratic society. This proposition lies at the heart of the rule of law. The elements of a democracy were set out in The State v Abdul Rachid Khoyratty.1 It is a case of first importance. It was an appeal from Mauritius, a country governed by a written constitution modelled along Westminster lines. It is a very important case for several reasons not all of them relevant to the present occasion. Two of them may be mentioned. In a normal case before it, the Board of the Privy Council when it is unanimous delivers only a single judgment in the form of an Advice to the Head of State of the country from which the appeal emanates. However, in Khoyratty, three members of the Judicial Committee delivered separate judgments all concurring in the result. It is necessary to quote from each of them. In his judgment Lord Steyn analysed the elements of a democratic state. He said:
The idea of a democracy involves a number of different concepts. The first is that the people must decide who should govern them. Secondly, there is the principle that fundamental rights should be protected by an impartial and independent judiciary. Thirdly, in order to achieve a reconciliation between the inevitable tensions between these ideas, a separation of powers between the legislature, the executive, and the judiciary is necessary.
In his separate judgment, Lord Rodger of Earlsferry said this when speaking of interpreting the Constitution of Mauritius:
On the other hand, what matters is the content of the concept of a democratic state as that term as used in s 1 and not just generally. That said, the Constitution is not to be interpreted in a vacuum, without any regard to thinking in other countries sharing similar values. Equally, experience in
* Former Federal Court Judge of Malaysia. This is an edited version of the 13th Professor Emeritus Ahmad Ibrahim Memorial Lecture, organised by the Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia (IIUM) and held at IIUM on December 5, 2012. 1 [2007] 1 AC 80.
The Law Review 2013
Mauritius is likely to prove of value to courts elsewhere. Therefore, the decisions cited by Lord Steyn do indeed help to give important colour to the guarantee that Mauritius is to be a democratic state. In particular, it is a hallmark of the modern idea of a democratic state that there should be a separation of powers between the legislature and the executive, on the one hand, and the judiciary, on the other. (Emphasis added.)
Lord Mance added this observation:

34On the one hand, the Attorney General and Minister of Justice made clear that Chapter 2 (ss 3 to 19) of the Constitution was not in the same situation as Chapter 1: ss 1 and 2. This is evident from the confined nature of the entrenchment achieved by s 47(3). So, many amendments of the fundamental rights and freedoms of the individual spelled out in detail in Chapter 2 of the Constitution are possible with a two-thirds majority of the Assembly. On the other hand, the Attorney General and Minister of Justice also made clear that s 1 was not envisaged as an empty general statement, but as a real bastion to protect and perpetuate among other things the rule of law and the existence of an independent judiciary, that is independent of the executive and legislature. 35These are basic principles themselves not expressly spelled out elsewhere in the Constitution, for reasons explained by Lord Diplock in Hinds v The Queen2 (a decision followed in Director of Public Prosecutions of Jamaica v Mollison,3 to which Lord Steyn has referred). Lord Diplock, giving the majority judgment, said that new constitutions on the Westminster model were, particularly in the case of unitary states, evolutionary not revolutionary and, at p 212: Because of this a great deal can be, and in drafting practice often is, left to necessary implication from the adoption in the new constitution of a governmental structure which makes provision for a legislature, an executive and judicature. It is taken for granted that the basic principle of separation of powers will apply to the exercise of their respective functions by these three organs of government. Thus the constitution does not normally contain any express prohibition upon the exercise of legislative powers by the executive or of judicial powers by either the executive or the legislature Nevertheless it is well established as a rule of construction applicable to constitutional instruments under which this governmental structure is adopted that the absence of express words to that effect does not prevent the legislative, the executive and the judicial powers of the new state being exercisable exclusively by the legislature, by the executive and by the judicature respectively. (Emphasis added.)
What is to be gathered from these statements is (i) that the rule of law and the doctrine of separation of powers is an integral part of a democratic constitution
2 [1977] AC 195. 3 [2003] 2 AC 411.
founded on the Westminster model although it may not be expressly provided for, and (ii) decisions interpreting such a constitution of one member of the Commonwealth cast much light on how the constitution of another member should be interpreted. These observations are made to emphasise three important points that underpin the difference between a public law challenge in England and a similar challenge made in Malaysia. First, the challenge in England as will become clear in a moment is founded on rights conferred by the common law, which rights are subordinate to the will of Parliament. However, in Malaysia the Federal Constitution is the supreme law as it declares itself and it is from that document that all organs of Government derive their respective powers. Secondly, as will be seen, the right of judges in England to review administrative action has to be justified upon principles that have evolved over the centuries by which the power to adjudge the legality of administrative action has become vested in the courts. In Malaysia, the power is derived from the supreme law itself. The Constitution has entrenched in it Part II which contains the constitutionally guaranteed rights that are enforceable against all three organs of Government. It is a solemn covenant between the Executive and Legislature on the one hand and the citizens and their heirs of future generations that the former will conduct their business subject to the restrictions imposed upon them by Part II. Third and last, there is no power in an English court to strike down an Act of the UK Parliament. This is because of the settled doctrine of the common law that Parliament is supreme. But in Malaysia, it is the constitution and not Parliament that is supreme. As Suffian LP said in Ah Thian v Government of Malaysia:4
The doctrine of the supremacy of Parliament does not apply in Malaysia. Here we have a written constitution. The power of Parliament and of State legislatures in Malaysia is limited by the Constitution, and they cannot make any law they please.
In administrative law terms, the Executive cannot act or exercise discretion so as to infringe a right that is protected by the constitution save to the extent permitted by the constitution itself. In England judicial review is founded upon the common law principle of ultra vires which itself is one of the facets of the rule of law. Because England has no formal constitutional document English judges have to find justification why a non-elected body, that is to say the courts, should have the right to supervise the actions of an elected Executive that has the mandate of the people to rule them. In his speech in A v Secretary of State for the Home Department5 Lord Bingham provided the justification in these terms:
4 [1976] 2 MLJ 112. 5 [2005] 2 AC 68.
The Law Review 2013
It is of course true that the judges in this country are not elected and are not answerable to Parliament. It is also of course true, as pointed out above, that Parliament, the executive and the courts have different functions. But the function of independent judges charged to interpret and apply the law is universally recognised as a cardinal feature of the modern democratic state, a cornerstone of the rule of law itself.
The basis upon which judicial review is founded has been recently expressed by Floyd J in Virgin Atlantic Airways Ltd v Jet Airways (India) Ltd:6
There is, of course, a longstanding principle of English common law that any individual affected by an act of a public authority should have the opportunity to challenge that act through the courts. The principle is, as Mr Saini recognises, not an absolute one. There is, however, a very strong presumption that an individual affected by the act of a domestic public authority can ask the court, as the ultimate guardian of the rule of law, to enquire into the legality of the public authoritys acts
To sum up, the essential features of the Malaysian parliamentary democracy is the rule of law, a separation of powers between the executive and the legislature on the one hand and an independent judiciary on the other. The function of the judiciary is to ensure that the other two arms of Government act in accordance with written law, the common law and the Federal Constitution. The performance of this function may conveniently be termed as judicial review. The intensity with which the court will examine an impugned decision appears to depend on the nature and quality of the right that is alleged to have been infringed. Generally speaking, when exercising its powers of review over executive action, the court is only concerned with the legality of the decision, act or omission that is challenged. It is not concerned with the correctness of the decision. The administrator is the primary decision-maker. The court merely performs the function of a secondary decision-maker. This is sometimes expressed in the formula judicial review is concerned with the decision-making process and not the merits of the decision. In Chairman, All India Railway Recruitment Board v Shyam Kumar,7 the Supreme Court of India re-stated the formula as follows:
Judicial review conventionally is concerned with the question of jurisdiction and natural justice and the court is not much concerned with the merits of the decision but how the decision was reached.
In the earlier case of Apparel Export Promotion Council v Chopra,8 Anand CJ referred to the well settled principle that:
6 [2012] EWHC 2153. 7 (2010) 5 ALD 1. 8 AIR 1999 SC 625.
even though judicial review of administrative action must remain flexible and its dimension not closed, yet the court in exercise of the power of judicial review is not concerned with the correctness of the findings of fact on the basis of which the orders are made so long as those findings are reasonably supported by evidence and have been arrived at through proceedings which cannot be faulted with for procedural illegalities or irregularities which vitiate the process by which the decision was arrived at. Judicial Review, it must be remembered, is directed not against the decision, but is confined to the examination of the decision-making process.
The formula that judicial review is restricted to the decision making process represents the lowest level of intensity that a court will apply when examining an impugned administrative decision, act or omission. It is referred to as the Wednesbury test. It takes its name from the case where this level of intensity of judicial review first made its appearance, Associated Provincial Picture Houses Ltd v Wednesbury Corporation.9 What had happened was this. The plaintiff applied for a licence from the defendant local authority for a licence for Sunday performances at its theatre. The local authority granted a licence but imposed a condition that no children under 15 years of age should be admitted to such performances with or without an adult. The plaintiff challenged that decision. Lord Greene MR said:
What, then, is the power of the courts? They can only interfere with an act of executive authority if it be shown that the authority has contravened the law. It is for those who assert that the local authority has contravened the law to establish that proposition. On the face of it, a condition of the kind imposed in this case is perfectly lawful. It is not to be assumed prima facie that responsible bodies like the local authority in this case will exceed their powers; but the court, whenever it is alleged that the local authority have contravened the law, must not substitute itself for that authority. It is only concerned with seeing whether or not the proposition is made good. When an executive discretion is entrusted by Parliament to a body such as the local authority in this case, what appears to be an exercise of that discretion can only be challenged in the courts in a strictly limited class of case. As I have said, it must always be remembered that the court is not a court of appeal. When discretion of this kind is granted the law recognizes certain principles upon which that discretion must be exercised, but within the four corners of those principles the discretion, in my opinion, is an absolute one and cannot be questioned in any court of law. What then are those principles? They are well understood. They are principles which the court looks to in considering any question of discretion of this kind. The exercise of such a discretion must be a real exercise of the discretion.
Here then is the clearest statement of the role of the court as a secondary decision maker. Lord Greene MR then explained the very limited circumstances in which a court may review an executive discretion:
9 [1948] 1 KB 223.
The Law Review 2013
It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word unreasonable in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting unreasonably. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington LJ in Short v Poole Corporation10 gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith; and, in fact, all these things run into one another.
Wednesbury unreasonableness is now recognised as a separate and distinct ground for low intensive judicial review. In Council of Civil Service Unions v Minister for the Civil Service,11 Lord Diplock gave it a new label. He called it irrationality. And this is how he explained it:
By irrationality I mean what can by now be succinctly referred to as Wednesbury unreasonableness (Associated Provincial Picture Houses Ltd v Wednesbury Corporation).12 It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it. Whether a decision falls within this category is a question that judges by their training and experience should be well equipped to answer, or else there would be something badly wrong with our judicial system. To justify the courts exercise of this role, resort I think is today no longer needed to Viscount Radcliffes ingenious explanation in Edwards v Bairstow13 of irrationality as a ground for a courts reversal of a decision by ascribing it to an inferred though unidentifiable mistake of law by the decision-maker. Irrationality by now can stand upon its own feet as an accepted ground on which a decision may be attacked by judicial review. (Emphasis added.)
In Anisminic Ltd v Foreign Compensation Commission14 the scope of judicial review was extended using the Wednesbury approach. It is a case that forever changed the face of administrative law. There, the issue was whether the respondent Commission had exceeded its authority or jurisdiction in rejecting
10 11 12 13 14 [1926] Ch 66. [1985] AC 374. [1948] 1 KB 223. [1956] AC 14. [1969] 2 AC 147.
the appellants claim for compensation. The statute in question contained an ouster or privative clause that sought to immunise decisions of the Commission. Browne J at first instance found for Anisminic. The Court of Appeal reversed. On further appeal, the House of Lords restored the judgment at first instance. It was held that the ouster clause in question did not immunise a decision that was made without jurisdiction or authority. Although the speeches of all the Law Lords should be read, it is the statement of principle by Lords Reid and Pearce that is repeatedly referred to. This is what Lord Reid said:
It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity. But in such cases the word jurisdiction has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.
And this is what Lord Pearce said:

Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry. Or the tribunal may at the end make an order that it has no jurisdiction to make. Or in the intervening stage, while engaged on a proper inquiry, the tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its inquiry into something not directed by Parliament and fail to make the inquiry which Parliament did direct. Any of these things would cause its purported decision to be a nullity.
The essence of the decision in Anisminic is that a public law decision may be quashed or declared void because the decision-maker has committed one or more of the errors alluded to by Lord Reid and Lord Pearce. As shorthand, these errors are referred to as Anisminic errors. If an Anisminic error is committed by a decision-maker then an ouster no matter how widely cast will
The Law Review 2013
immunise the decision. In Syarikat Kenderaan Melayu Kelantan Bhd v Transport Workers Union,15 we incrementally extended the principle and held that an inferior tribunal or other decision-making authority, whether exercising a quasi-judicial function or a purely administrative function, has no jurisdiction to commit an error of law, whether the error is jurisdictional or not. But however wide the scope of intervention may be put in Anisminic terms, the function of the court is still limited to one of secondary decision maker. The Wednesbury level of intensity of judicial review has been consistently applied to all cases which have involved the exercise of a power or discretion conferred by statute. By 1987, English courts realised the inadequacy of the Wednesbury low intensive review as a universal standard for all cases irrespective of the right that has been infringed. There was recognition that all rights are not equally weighted and that some rights are more important than others. In Reg v Secretary of State for the Home Department, ex p Bugdaycay,16 Lord Bridge made the following observation:
I approach the question raised by the challenge to the Secretary of States decision on the basis of the law stated earlier in this opinion, viz. that the resolution of any issue of fact and the exercise of any discretion in relation to an application for asylum as a refugee lie exclusively within the jurisdiction of the Secretary of State subject only to the courts power of review. The limitations on the scope of that power are well known and need not be restated here. Within those limitations the court must, I think, be entitled to subject an administrative decision to the more rigorous examination, to ensure that it is in no way flawed, according to the gravity of the issue which the decision determines. The most fundamental of all human rights is the individuals right to life and when an administrative decision under challenge is said to be one which may put the applicants life at risk, the basis of the decision must surely call for the most anxious scrutiny. (Emphasis added.)
In the same case, Lord Templeman said:

In my opinion where the result of a flawed decision may imperil life or liberty a special responsibility lies on the court in the examination of the decision-making process.
Subsequent decisions accepted this shift in the intensity of review. In R v Secretary for the Home Department, ex p Brind17 the judicial House of Lords used different words to express the test set by Lord Bridge in Bugdaycay. Lord Ackner said:
15 [1995] 2 MLJ 317. 16 [1987] AC 514. 17 [1991] 1 AC 696.
In a field which concerns a fundamental human right namely that of free speech close scrutiny must be given to the reasons provided as justification for interference with that right.
In R v Ministry of Defence, ex p Smith18 Simon Brown LJ in the course of his judgment in the Divisional Court said:
even where fundamental human rights are being restricted, the threshold of unreasonableness is not lowered. On the other hand, the minister on judicial review will need to show that there is an important competing public interest which he could reasonably judge sufficient to justify the restriction and he must expect his reasons to be closely scrutinised. Even that approach, therefore, involves a more intensive review process and a greater readiness to intervene than would ordinarily characterise a judicial review challenge.
A common thread runs through all these cases. Where a right classified or recognised by the common law to be a fundamental right is allegedly infringed by administrative action the court will adopt a more rigorous approach when scrutinising the impugned decision. The decision will be subjected to anxious or close or heightened scrutiny. It may be added for good measure that the common law of England classifies the right to free speech, the right to life and liberty as fundamental or basic rights. Access to justice is also classified a basic or fundamental right at common law, as held in Raymond v Honey.19 So, when a public decision makers action violates any of these rights, the court will increase the intensity of its scrutiny. But even this increased level of scrutiny is insufficient when a right guaranteed by the European Convention on Human Rights (what is referred to by English judges as a Convention right) is infringed. That was made clear in R (Daly) v Secretary of State for the Home Department,20 where Lord Steyn in his much celebrated speech after describing the earlier cases as requiring a heightened scrutiny in cases involving fundamental rights went on to say this:
There is a material difference between the Wednesbury and Smith grounds of review and the approach of proportionality applicable in respect of review where Convention rights are at stake. The contours of the principle of proportionality are familiar. In de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing21 the Privy Council adopted a three-stage test. Lord Clyde observed, at p 80, that in determining whether a limitation (by an act, rule or decision) is arbitrary or excessive the court should ask itself:
18 19 20 21 [1996] QB 517. [1983] 1 AC 1. [2001] 2 AC 532. [1999] 1 AC 69.
10
The Law Review 2013
whether: (i) the legislative objective is sufficiently important to justify limiting a fundamental right; (ii) the measures designed to meet the legislative objective are rationally connected to it; and (iii) the means used to impair the right or freedom are no more than is necessary to accomplish the objective. Clearly, these criteria are more precise and more sophisticated than the traditional grounds of review. What is the difference for the disposal of concrete cases? Academic public lawyers have in remarkably similar terms elucidated the difference between the traditional grounds of review and the proportionality approach: see Professor Jeffrey Jowell QC, Beyond the Rule of Law: Towards Constitutional Judicial Review [2000] PL 671; Professor Paul Craig, Administrative Law, 4th edn (1999), pp 561563; Professor David Feldman, Proportionality and the Human Rights Act 1998, essay in The Principle of Proportionality in the Laws of Europe edited by Evelyn Ellis (1999), pp 117, 127 et seq. The starting point is that there is an overlap between the traditional grounds of review and the approach of proportionality. Most cases would be decided in the same way whichever approach is adopted. But the intensity of review is somewhat greater under the proportionality approach. Making due allowance for important structural differences between various convention rights, which I do not propose to discuss, a few generalisations are perhaps permissible. I would mention three concrete differences without suggesting that my statement is exhaustive. First, the doctrine of proportionality may require the reviewing court to assess the balance which the decision maker has struck, not merely whether it is within the range of rational or reasonable decisions. Secondly, the proportionality test may go further than the traditional grounds of review inasmuch as it may require attention to be directed to the relative weight accorded to interests and considerations. Thirdly, even the heightened scrutiny test developed in R v Ministry of Defence, Ex p Smith22 is not necessarily appropriate to the protection of human rights. (Emphasis added.)
We now see that by the common law of England, the Wednesbury intensity of review is inapplicable where there is a breach of a fundamental right guaranteed by written law, namely, the Human Rights Act 1998 which incorporates the European Convention on Human Rights and makes it applicable to the United Kingdom. In such a case, the correct test to apply is that of proportionality. For completeness it must be borne in mind that a Convention right in English constitutional law is the identical equivalent of a right guaranteed by our Federal Constitution. This was made clear by the judgment of Jagannadha Rao J in Om Kumar v Union of India.23 The common law of England requires a higher level of scrutiny not only in cases where there has been a violation of a fundamental right recognised by
22 [1996] QB 517 at 554. 23 AIR 2000 SC 3689.
11
it but also in cases where there is a legitimate expectation to such a right. In R v North and East Devon Health Authority, ex p Coughlan,24 the applicant was a tetraplegic with other disabilities because of an accident. She and other similarly disabled persons were placed by the respondent local authority in a purpose built facility called Mardon House. The local authority made a clear promise to the applicant and the other patients that Mardon House would be their home for life. Later, the local authority decided to close Mardon House. The applicant sought judicial review. She succeeded at first instance. One of the grounds advanced by her was that she had a legitimate expectation of the substantive right to remain and be cared for at Mardon House because of the promise of a home for life. The local authority appealed. It argued, inter alia, that there was an overriding public interest which entitled it to break the home for life promise. The Court of Appeal accepted that the decision to close Mardon House was not irrational and that it therefore passed the Wednesbury standard. Yet it dismissed the appeal on the ground that the breach by the local authority of a home for life was unfair and therefore constituted an abuse of power. In a ground breaking judgment Lord Woolf MR identified three possible outcomes of a challenge where a public authority makes a promise to a person or a class of persons in the matter of the exercise of a statutory discretion and then reverses itself. First, the court may decide that the public authority is only required to bear in mind its previous policy or other representation, giving it the weight it thinks right, but no more, before deciding whether to change course. Here the court is confined to reviewing the decision on Wednesbury grounds The approach here is therefore along traditional lines, that is to say The test will be rationality and whether the public body has given proper weight to the implications of not fulfilling the promise. Second, the promise or the practice of an authority may induce a legitimate expectation in the applicant to be consulted before a particular decision is taken. In such a case, the court itself will require the opportunity for consultation to be given unless there is an overriding reason to resile from it in which case the court will itself judge the adequacy of the reason advanced for the change of policy, taking into account what fairness requires. In other words the court here is concerned with procedural fairness. Third, where a lawful promise or practice of an authority induces a legitimate expectation of a substantive benefit the court will in a proper case decide whether to frustrate the expectation is so unfair that to take a new and different course will amount to an abuse of power. Here, once the legitimacy of the expectation is established, the court will have the task of weighing the requirements of fairness against any overriding interest relied upon for the change of policy. In this third outcome, the court is tasked with determining
24 [2001] QB 213.
12
The Law Review 2013
whether there is a sufficient overriding interest to justify a departure from what has been previously promised. At the time Coughlan was decided the Human Rights Act was yet to come into force. However, the Court of Appeal upheld the ruling of the judge that the authority had acted in breach of article 8 of the Convention (which protects the home and privacy of an individual) which was soon to become part of English law. The court held that:
the health authority would not be justified in law in doing so without providing accommodation which meets her needs. As Sir Thomas Bingham MR said in R v Ministry of Defence, Ex p Smith:25 The more substantial the interference with human rights, the more the court will require by way of justification before it is satisfied that the decision is reasonable or, we would add, in a case such as the present, fair.
By asking whether the exercise of executive power vested by statute has been exercised fairly or reasonably in cases involving substantive legitimate expectation, the court shifts the intensity of review from the mere Wednesbury level to an examination of the merits of the case. This encompasses a review of the reasons put forward by the decision maker including any overriding public interest it took into account when it chose to depart from the promise it made or the assurance it gave. The burden of course lies on the decision maker to justify the departure. This is really asking whether the departure was proportionate to the object it sought to achieve which again is another way of examining the decision on its merits although Lord Steyn in Daly says it is not. Lord Bingham in Huang v Secretary of State for the Home Department26 explained Lord Steyns dictum as follows:
The point which, as we understand, Lord Steyn wished to make was that, although the Convention calls for a more exacting standard of review, it remains the case that the judge is not the primary decision-maker. It is not for him to decide what the recruitment policy for the armed forces should be. In proceedings under the Human Rights Act 1998, of course, the court would have to scrutinise the policy and any justification advanced for it to see whether there was sufficient justification for the discriminatory treatment.
In Shyam Kumars case, the Supreme Court explained what proportionality involves:
Proportionality requires the court to judge whether the action taken was really needed as well as whether it was within the range of courses of action which could reasonably be followed. Proportionality is more concerned with the aims and intention of the decision-maker and whether the decisionmaker has achieved more or less the correct balance or equilibrium. The
25 [1996] QB 517 at 554. 26 [2007] 2 AC 167.
13
court entrusted with the task of judicial review has to examine whether decision taken by the authority is proportionate i.e. well balanced and harmonious, to this extent the court may indulge in a merits review and if the court finds that the decision is proportionate, it seldom interferes with the decision taken and if it finds that the decision is disproportionate i.e. if the court feels that it is not well balanced or harmonious and does not stand to reason it may tend to interfere.
This, then, is the highest level of scrutiny where the court examines the reasonableness of the decision on the totality of the facts and decides whether it was fair in an objective sense. To a large extent it makes the court the primary decision maker (save on issues of pure policy) although judges continue to deny that they are. Thus far we have looked at the different levels of judicial review intensity under the common law of England. It is clear that the same levels of intensity apply in a country with a written constitution containing a chapter on fundamental guarantees. In Om Kumars case, it was held that where a fundamental right was infringed, the test is one of proportionality by virtue of Article 14 of the Indian Constitution. However, where a fundamental right is not infringed then Wednesbury unreasonableness is the test to be applied. So too, in Sivarasa Rasiah v Badan Peguam Malaysia,27 the Federal Court held that the violation of a fundamental right where it occurs in consequence of executive or administrative action must not only be in consequence of a fair procedure but should also in substance be fair, that is to say, it must meet the test of proportionality housed in the second, that is to say, the equal protection limb of art 8(1). What then is the way forward? In England, Lord Woolfs judgment in Coughlan points to a possibly full blown merits review as does the speech of Lord Bingham in Huang. But there are issues of pure policy which are well out of judicial reach. They may range from as simple a question as to whether a road should be built in a particular area to whether Malaysia should enter into a treaty with another country. These are really matters of pure policy which the public authority be it a local council in the first example or the Cabinet in the second should decide as courts are ill-equipped to deal with them. These are matters on which the courts defer to the executive. By doing so there is no abdication of the judicial function. It is a mere consequence of the doctrine of separation of powers. As Lord Hoffmann put it in R v British Broadcasting Corporation, ex p ProLife Alliance:28
My Lords, although the word deference is now very popular in describing the relationship between the judicial and the other branches of government, I do not think that its overtones of servility, or perhaps gracious concession, are appropriate to describe what is happening. In a society based upon the
27 [2010] 2 MLJ 333. 28 [2003] UKHL 23.
14
The Law Review 2013
rule of law and the separation of powers, it is necessary to decide which branch of government has in any particular instance the decision-making power and what the legal limits of that power are. That is a question of law and must therefore be decided by the courts. This means that the courts themselves often have to decide the limits of their own decision-making power. That is inevitable. But it does not mean that their allocation of decision-making power to the other branches of government is a matter of courtesy or deference. The principles upon which decision-making powers are allocated are principles of law. The courts are the independent branch of government and the legislature and executive are, directly and indirectly respectively, the elected branches of government. Independence makes the courts more suited to deciding some kinds of questions and being elected makes the legislature or executive more suited to deciding others. The allocation of these decision-making responsibilities is based upon recognised principles. The principle that the independence of the courts is necessary for a proper decision of disputed legal rights or claims of violation of human rights is a legal principle. It is reflected in article 6 of the Convention. On the other hand, the principle that majority approval is necessary for a proper decision on policy or allocation of resources is also a legal principle. Likewise, when a court decides that a decision is within the proper competence of the legislature or executive, it is not showing deference. It is deciding the law.
But once a prima facie case of an abuse of power is shown, for example that the approval for the construction of a road was given in breach of a statute, be it even a penal law, the court is duty bound to make inquiry and apply the appropriate level of intensity of review to determine whether there has been an abuse of power. The failure of the majority judgments in particular the judgment of Salleh Abas LP in Government of Malaysia v Lim Kit Siang29 to recognise this important principle ranks that case as the lowest ebb in the field of Malaysian public law. The dissents of Seah and Abdoolcader SCJJ really point the way forward. The way forward therefore lies in applying the highest level of scrutiny whenever a fundamental right is infringed and whenever an abuse of power by reason of unfairness is brought home. But there is a proviso to this. Those entrusted with the judicial power of the State must act according to established principles of constitutional and administrative law and not display a propensity that shows them to be to paraphrase Lord Atkin more pro-executive than the executive. When that happens, the rule of law dies as does the Constitution itself.
29 [1988] 2 MLJ 12.
15
LLP @ PLT: New Business Vehicle for Professionals in Malaysia Special Reference to the Legal Profession
Zuhairah Ariff Abd Ghadas*
Abstract Prior to 2012, advocates and solicitors in Malaysia were only allowed to carry on private practice via sole proprietorships or partnerships. Such restriction was derived from the Bar Council Rulings which clearly stated that legal firm refers to a firm of advocates and solicitors whether a partnership or a sole proprietorship. Despite the rigidity of the governing rules, the market acknowledged the importance of the lawyers to carry on private practice and this can be seen in the number of registered legal firms in Malaysia.1 In Singapore, other than the conventional business entities, the legal professions can choose LLP, Law Corporation or limited partnership (LP) as their business vehicles. These business entities allow the legal practitioners to manage risks in business and at the same time maintain a high standard of professionalism. In Malaysia, the Limited Liability Partnerships Act 2012 (Act 743) was enacted in February 2012 but instead of using the universal term of LLP, the Malaysian Act provides that the local LLPs shall be known as Perkongsian Liabiliti Terhad (PLT). This new business entity allows general traders and a few professionals, including advocates and solicitors to set up a business entity which has a body corporate status but is not totally subjected to the Companies Act 1965. This paper highlights general attributes of Malaysia PLT and the requirements imposed for professionals LLP. This paper also highlights the main advantages of carrying out private legal practice in the form of PLT and the effect on third parties protection. Research methodologies adopted for this paper are statutory and doctrinal analysis. Introduction In Malaysia, the business vehicles are merely confined to sole proprietorships, partnerships and companies. However, a new business vehicle known as
* Associate Professor, Department of Private Law, Ahmad Ibrahim Kulliyah of Laws, International Islamic University Malaysia. E-mail: zuhairah@iium.edu.my. 1 According to the Bar Council statistics, at present there are 6,328 legal firms in Malaysia. Retrieved from http://www.malaysianbar.org.my/legal_directory_statistics.html on October 29, 2012.
16
The Law Review 2013
Limited Liability Partnership (LLP) has been introduced in Malaysia, as the LLP Act 2012 which was passed in February 2012 has now come into force on December 26, 2012. LLP is a fascinating business vehicle as it is a hybrid of a company and a partnership. Most interestingly, its legal status could be either a legal entity which is not a body corporate or an entity which is a body corporate. In the United Kingdom, for example, its offshore LLPs, such as in the Isle of Jersey, the LLPs have the status of a legal entity which is not a body corporate whilst in the mainland the UK LLPs have the status of a body corporate. In the US, an LLP is recognised as a legal entity but with the status of a partnership. In the Southeast Asia region, at present LLPs are only available in Singapore and Labuan, i.e. the Malaysian offshore financial centre. Both LLPs have the status of a body corporate. LLPs are seen as alternative business vehicles for professionals in Malaysia who are not allowed to carry out business in the form of companies, such as lawyers and accountants. Such restriction is provided by the professional regulatory bodies such as the Bar Council and the Malaysian Institute of Accountants. This paper will focus on advocates and solicitors as it is perceived that these professionals and the existing legal firms will be one of the takers of LLPs once they are introduced in Malaysia. Business restrictions on lawyers In Malaysia, the main regulation which governs the legal profession is the Legal Profession Act (LPA) 1976. Other than the LPA 1976, the lawyers are also regulated by rulings and by-laws. The Bar Council issues Rules and Rulings pertaining to the practice, conduct and etiquette of advocates and solicitors (collectively Rulings). These Rulings are generally made ad-hoc as a result of specific queries made by advocates and solicitors or members of the public. Although the LPA is silent on the business structure to carry out legal practices, Chapter 1 of the Rulings, clause 1.01(l) clearly provides that all references to a firm or a law firm mean a firm of advocates and solicitors whether a partnership or a sole proprietorship. The exclusion of company structure from references to a firm clearly indicates that the business of legal practices can only be carried out in the form of sole proprietorships or partnerships. According to DP Rajah,2 the restrictions on the types of business structures allowed in the legal profession not only affect a legal firms competitiveness but can also have residual effects on the cost and access to legal services. It
2 Rajah, D P, dissertation, The Malaysian Legal Profession & Globalization, International Graduate School of Management Division of Business and Enterprise, University of South Australia, 2006. Retrieved from http://thecyberlaw.net/DBA_Part1and2.pdf on September 1, 2012.
17
is observed that in Singapore, New South Wales, and Australia and in the UK where the incorporated business models are allowed for lawyers, the practitioners liability to the client and to the profession remains unchanged as the practitioner remains personally liable for any misconduct and for any personal liability in tort or contract. Limited Liability Partnerships (LLP) LLP is a business structure that combines the best features of partnerships and company. It enjoys all the attributes of a body corporate, namely, separate legal entity, limited liability, perpetual succession and legal entity while at the same time retaining the internal flexibility of a partnership. There are three types of LLPs; the first one is LLP with the status of a legal person but not a body corporate, the second one is LLP with the status of a body corporate and the third one is LLP with the status of a partnership. For the purpose of discussion for the first and second types of LLPs, references shall be made to the United Kingdom where both types of LLPs are available. (i)Non-body Corporate LLP One of the types of LLPs is the non-body corporate LLP. A very good example of this LLP is the Isle of Jersey LLP. The Isle of Jersey is one of the UKs offshore islands. The Limited Liability Partnerships (Jersey) Law was enacted in 1997 and revised in 2008. The Jersey LLP is a legal person but it does not have the status of a body corporate.3 As a legal person, the LLP is liable for any contract which it entered under its name4 and any changes in the composition of partners or retirement or death of a partner do not affect the existence, rights or liabilities of the LLP. Jersey LLPs are not required to appoint an auditor or to have their accounts audited.5 However, the LLPs are required to keep 10 years of accounting records which are sufficient to show and explain their transactions and are such as to disclose with reasonable accuracy at any time their financial position.6 Pertaining to limited liability, the Jersey LLP Law 1997 clearly provides that the LLPs shall be liable for any claims of third parties against the LLP and that partners are not liable for other partners default.7 However, the defaulting partner could be liable for any loss which he caused.8 The third party protections are provided in the form of claw back mechanism whereby if a partner made a withdrawal from the LLP at a time when the LLP is unable to pay its debts or the LLP becomes unable to pay its debts as a result of the
3 4 5 6 7 8 Limited Liability Partnership (Jersey) Law 1997 (Revised 2008), s 2(4). Ibid, s 2(4)(a). Ibid, s 9(2). Ibid, s 9(1). Ibid, s 5(1). Ibid, s5(2).
18
The Law Review 2013
withdrawal, the partner shall be liable for any debt or loss of the LLP up to the amount which is equal to the value of the withdrawal.9 The claw back mechanism shall also be applied in the circumstances where a partner made a withdrawal from the LLP within the period of six months preceding the time when the LLP becomes unable to pay its debts.10 As regards the internal regulation, the Act clearly provides that the rights and duties of the partners in the LLPs shall be determined by the partnership agreement.11 The Act also provides that partners have rights to create a charge over the partners partnership interest12 and that a partner may not assign his partnership interest except by way of charge.13 Partners of the LLP are agents of the LLP14 but they are not an agent of the other partners in that partnership.15 (ii)Body Corporate LLP The second type of LLP is the LLP with a body corporate status. Examples of this LLP are the UK and Singapores LLPs. An interesting feature of the second LLP is that although it has the status of a body corporate,16 its internal regulation is via partners agreement,17 which is akin to a partnership agreement. This means partners of an LLP may adopt any forms of internal arrangement which they prefer. One important principle to be highlighted is that despite adopting the internal regulation, which is similar to a partnership, the LLP Acts clearly provides that partnership law is not applicable to the LLP.18 Due to its body corporate status, the LLP generally has similar attributes to a company; namely separate legal entity, limited liability, perpetual succession and ability to take legal action and own property under its own name.19 Nonetheless, different to the Singapore LLP Act 2005 (now Cap 163A, 2006 Rev Edn) which clearly specifies the attributes of the LLP,20 the UK LLP Act 2000 merely states that LLPs have unlimited capacity21 which implies a bigger spectrum of attributes. However, different from a company, the limited liability
9 10 11 12 13 14 15 16 17 18 19 20 21 Ibid, s5(3). Ibid, s5(4). Ibid, s11(1). Ibid, s14(3). Ibid, s14(1). Ibid, s15(2). Ibid, s15(1). Limited Liability Partnerships Act 2000 (UK), s1(2) and Limited Liability Partnerships Act (Cap 163A (2006 Rev Edn)) (Singapore), s4(1). Limited Liability Partnerships Act 2000 (UK), s5(1) and Limited Liability Partnerships Act (Cap 163A, 2006 Rev Edn) (Singapore), s10(1). Limited Liability Partnerships Act 2000 (UK), s1(5) and Limited Liability Partnerships Act (Cap 163A, 2006 Rev Edn) (Singapore), s6. Limited Liability Partnerships Act 2000 (UK), s1(5) and Limited Liability Partnerships Act (Cap 163A, 2006 Rev Edn) (Singapore), s6. Limited Liability Partnerships Act (Cap 163A, 2006 Rev Edn) (Singapore), s5(1). Limited Liability Partnerships Act 2000 (UK), s1(3).
19
protection of the LLP is not applicable to defaulting partners. A partner in the LLP who committed a default shall be jointly liable with the LLP for the effect of the default to the third party.22 (iii)LLPs with a partnership status This type of LLPs is available in the United States of America (US) whereby the LLP has the status as a partnership. However, despite the partnership status, the US LLPs are recognised under the law as a legal entity; distinct from their partners. This means the LLPs incur their own liability and are able to provide limited liability to their partners. Due to the status of a legal entity, partners of LLPs are only agents of the firm and not of one another as applied in English and Malaysian partnerships. As regards the internal regulations, the LLPs are governed by the partnership agreement similar to general partnerships. However, the partnership agreement shall not exclude certain rights which are provided under the Act. Tax status Another interesting feature of the LLP is the tax status. Most LLPs are taxed as a partnership despite the different legal status.23 However, the treatment or approach of the tax scheme on the LLPs as a partnership is different. For example, in Singapore24 and in the UK,25 the LLPs are taxed similarly to partnership firms whereby the partners are taxed based on their income and the business entity is not imposed with any tax. In the US, the LLPs have a partnership status and the Inland Revenue Services treat them as a pass through entity whereby the taxation of the business is passed from the business entity to the partners who are taxed based on their income. In India, s 10(23) of the Income Tax Act provides that firm shall include LLP but differently from the UK, US, Singapore and Malaysia whereby, in a partnership structure, the firm is not subjected to tax, in India, the business profits of a partnership are taxed on the firm and not on the distribution of
22 Limited Liability Partnerships Act 2000 (UK), s1(4) and Limited Liability Partnerships Act (Cap 163A, 2006 Rev Edn) (Singapore), s8(4). 23 Limited Liability Partnerships Act 2000 (UK), s10 and Income Tax Act (Cap 134, 2008 Rev Edn) (Singapore), s36A. 24 Ng, Linda L, Singapore LLP: A Smart, Flexible Hybrid Vehicle, Tax Notes International, February 23, 2009, 697; Income Tax Act (Cap 134 (2008 Rev Edn)) (Singapore), s36A; IRAS circular, Income Tax Treatment of Limited Liability Partnerships (LLPs) first published on July 15, 2004, and revised on July 16, 2004, para5 (IRAS circular on LLPs), available at http://www.iras.gov.sg/irasHome/uploadedFiles/Quick_Links/e-tax_Guides/Individuals_ and_employees/2004it6.pdf; Singapore budget speech 2009, paraE29, available at http:// www.singaporebudget.gov.sg/speech_toc/downloads/index.html. 25 Limited Liability Partnerships Act 2000 (UK), s10(1) and Income and Corporation Taxes Act 1988 (UK), s118ZA.
20
The Law Review 2013
income to the partners.26 A fixed rate is imposed upon the firm27 whilst shares of the profit of the LLP at the hands of the partners are exempted.28 In Labuan, for tax purposes, LLPs are treated as Labuan entities and therefore subjected to similar treatment to other Labuan entities.29 LLPs in Malaysia In Malaysia the initiative to expand the option of business entities was made by the Companies Commission of Malaysia (CCM) under its Corporate Law Reform Programme. To ensure that the reform programme will be conducted effectively and objectively, CCM has established a committee called the Corporate Law Reform Committee (CLRC) pursuant to ss 17 and 19 of the Companies Commission of Malaysia Act 2001. One of the terms of reference of the CLRC is to consider whether the existing legal forms of business vehicles, i.e. the partnership and the corporate forms, are able to provide alternative and adequate choice of establishing legal forms of business entities. This objective was executed by the CLRC by establishing Working Group A. One outcome of the CLRCs efforts is the 2003 consultative document (CD) for an alternative business vehicle for small businesses and venture capital arrangements. The second consultative document was issued in April 2008. The main objective of both consultative documents was to gather responses from the public, business community, financial institutions, academicians and practitioners, as regards the proposed structure of Malaysias own limited liability partnerships. Pursuant to the feedback received from public consultations in 2003 and 2008, CCM published the discussion draft bill on LLP in March 2009. The LLP Act 2012 was passed by the Parliament on February 9, 2012 and gazetted on February 12, 2012. Recently, it was announced that the enforcement date of the LLP Act 2012 is December 26, 2012. Nonetheless, different from other LLPs, the Malaysia LLP Act clearly states that the term which is used for a Malaysian LLP is PLT (Perkongsian Liabiliti Terhad).30 Other than the PLT, LLPs are also available in Labuan, the Malaysian offshore island. The Labuan LLPs law is unique as they are incorporated under the same Act as limited partnerships, i.e. the Labuan Limited Partnership and Limited Liability Partnerships Act (LP and LLPA) 2010.
26 See The Finance (No2) Act 2009 (India). 27 At present, the tax rate imposed on India LLPs is 30% plus Education cess. See http://www. llponline.in/tax_llp.php. Retrieved on September 1, 2012. 28 Income Tax Act (India), s10(2A). 29 Labuan Business Activities Tax Act (LBATA) 1990, Schedule to Section 2B. Section 11 of LBATA 1990: A Labuan entity shall (a) at the time of filing of the statutory declaration and return of its profits for a year of assessment under s 5, make full payment on account of (i) tax to be charged for that year of assessment; or (ii) tax to be charged for that year of assessment after reduction of rebate under s 8A; or (b) at the time of filing of the statutory declaration under s 7 or 8, make full payment of (i) the tax charged for that year of assessment; or (ii) the tax charged for that year of assessment after reduction of rebate under s 8A. 30 See the LLP Act 2012, s13(1).
21
Labuan LLP Under the LP and LLPA 2010, any two or more persons may form a Labuan limited liability partnership for any lawful purpose.31 An individual or a corporation may be a partner in a Labuan limited liability partnership.32 To register a Labuan limited liability partnership, the designated partner shall submit all relevant documents to the Authority, accompanied by the prescribed fee as may be specified by the Authority.33 There must be at least one designated partner in a Labuan LLP.34 A partner may become or cease to be a designated partner by and in accordance with an agreement with the other partners.35 A designated partner shall be responsible for all acts required to be done by him under the Act36 and shall be personally liable to all penalties imposed on the LLP for any contravention of Parts IV and V of the Act unless the court decides that he should not be liable.37 The name of a Labuan limited liability partnership shall end with the words Labuan Limited Liability Partnership in full or the abbreviation (Labuan) L.L.P. or (Labuan) LLP or any other form of abbreviation in romanised characters or words in the national language of a country which connotes a limited liability partnership or any abbreviation thereof as may be approved by the Authority.38 Upon registration, the Labuan limited liability partnership shall be a body corporate and has legal personality separate from that of its partners.39 It also enjoys perpetual succession40 and has all the powers of a natural person.41 Similar to a company, a Labuan LLP is capable of suing and being sued,42 acquiring, owning, holding and developing or disposing of property, both movable and immovable43 and having a common seal44 under its own name. As a legal entity, the Labuan LLP shall be liable for its own debts arising in contract, tort or otherwise.45 The liabilities of the Labuan limited liability partnership shall be met out of the property of the Labuan limited liability
31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 LLP and LLPA 2010, s29(1). LLP and LLPA 2010, s29(2). LLP and LLPA 2010, s30(1). LLP and LLPA 2010, s64(3). LLP and LLPA 2010, s64(2). LLP and LLPA 2010, s65(a). LLP and LLPA 2010, s65(b). LLP and LLPA 2010, s32(1). LLP and LLPA 2010, s55(1). LLP and LLPA 2010, s55(2). LLP and LLPA 2010, s55(3). LLP and LLPA 2010, s55(4)(a). LLP and LLPA 2010, s55(1)(b). LLP and LLPA 2010, s55(1)(c). LLP and LLPA 2010, s56(1).
22
The Law Review 2013
partnership.46A partner is not personally liable, directly or indirectly solely by reason of being a partner of the Labuan LLP.47 However, the protection of limited liability shall not be applicable for personal liability of a partner in tort for his own wrongful act or omission.48 In such a case, the LLP is liable to the same extent as the defaulting partner.49 This means the third party can make a claim against the defaulting partner and the LLP. The mutual rights and duties of the partners inter se and between the LLP with its partners are mainly governed by the partnership agreement.50 It is only in the absence of an agreement that such matters shall be referred to the Labuan LP and LLP Act 2010.51 The LP and LLPA 2010 clearly states that in the case of receivership of a Labuan LLP, the provisions of Part VIII (in so far as they relate to a company limited by shares) of the Companies Act 1965 shall apply52 and in the case of winding-up of a Labuan limited liability partnership, the provisions of Part X (in so far as they relate to a company limited by shares) of the Companies Act 1965 and the Companies (Winding-Up) Rules 1972, or s 68 shall apply.53 Thus, it is apparent that the laws applicable to receivership and winding up of the Labuan LLP are the company law. However, differently from a company, a partner in a Labuan LLP may dissolve the LLP by giving notice of dissolution provided that the LLP has ceased to operate and has discharged all its debts and liabilities.54 This method is akin to a partnership structure. As regards taxation, a Labuan LLP is categorised as a Labuan entity55 and therefore shall be the person assessable and chargeable to tax under the Act.56 In Labuan, tax shall be charged at the rate of three per cent for a year of assessment upon the chargeable profits of a Labuan entity carrying on
46 LLP and LLPA 2010, s56(5). 47 LLP and LLPA 2010, s56(2). 48 LLP and LLPA 2010, s56(3). The other partner shall not be personally liable for the wrongful act or omission of any other partner of the LLP. 49 LLP and LLPA 2010, s56(4). 50 LLP and LLPA 2010, s58(1). 51 LLP and LLPA 2010, s58(2)(a)-(j). 52 LLP and LLPA 2010, s67(1)(a). 53 LLP and LLPA 2010, s67(1)(b). 54 LLP and LLPA 2010, s68(1). 55 Labuan Business Activities Tax Act (LBATA) 1990, Schedule to Section 2B. Under LBATA 1990, s11: A Labuan entity shall (a) at the time of filing of the statutory declaration and return of its profits for a year of assessment under s 5, make full payment on account of (i) tax to be charged for that year of assessment; or (ii) tax to be charged for that year of assessment after reduction of rebate under s 8A; or (b) at the time of filing of the statutory declaration under s 7 or 8, make full payment of (i) the tax charged for that year of assessment; or (ii) the tax charged for that year of assessment after reduction of rebate under s 8A. 56 LBATA 1990, s15.
23
a trading activity for the basis period for that year of assessment57 whilst a Labuan entity carrying on non-trading activity for the basis period for a year of assessment shall not be charged to tax for that year of assessment.58 Perkongsian Liabiliti Terhad (PLT) @ LLP Differently from other countries which adopted LLP as the abbreviation for limited liability partnerships, the Malaysian LLP Act 2012 uses the abbreviation PLT, which refers to Perkongsian Liabiliti Terhad.59 The Malaysian PLT is akin to the incorporated LLP, whereby the LLP shall have a status of body corporate60 and all the powers of a body corporate.61 The Act highlights important features of the proposed LLP: (a) the right to enter into legal proceedings and acquire/ own/ deal with property under its own name;62 (b) limited liability for members of the LLP63 except for the defaulting partners who shall be jointly liable with the LLP for the debts incurred with the third party;64 (c) perpetual succession65 of the LLP whereby changes in membership will not affect the legal entity of the LLP;66 and (d) flexibility in determining the internal arrangements between the members.67 As the LLP has the status of a body corporate, it shall have all the attributes of a company, namely separate legal personality, limited liability, perpetual succession, to sue and be sued and to acquire its own property.68 As regards limited liability, the LLP Act 2012 provides that all partners have limited liability in respect of claims against the LLP.69 However, the protection of limited liability is only available to innocent partners whilst the defaulting partner shall be jointly liable with the LLP for the damage, loss or injury suffered by a third party.70
57 58 59 60 61 62 63 64 65 66 67 68 69 70
LBATA 1990, s4(1). LBATA 1990, s9. LLP Act 2012, s13. LLP Act 2012, s3(1). LLP Act 2012, s3(4)(c). LLP Act 2012, s3(a), (b). LLP Act 2012, s21(1), (2). LLP Act 2012, s21(3). LLP Act 2012, s3(2). LLP Act 2012, s3(3). LLP Act 2012, s9. LLP Act 2012, s3. LLP Act 2012, s21. LLP Act 2012, s21(3), (4).
24
The Law Review 2013
Other than the attributes, it is important to highlight that similarly to a company, registration is required for the LLP.71 However, the formalities are much less than for a company.72 As for the number of members, the minimum number of the LLP is two and there shall be no maximum number.73 It is also stated that in the case that the number of partners falls below two, a grace period of six months and not more than 12 months is given to the sole partner to find another partner.74 Failure to fulfil the minimum requirement after the one year period means that the partner shall be personally, jointly and severally liable with the LLP for the business debts.75 It is also interesting to highlight that membership of the LLP is open to both natural and artificial persons.76 There is also a special provision under the Act for professional77 and foreign LLPs.78 The LLP Act 2012 also highlights the need to have a compliance officer who must be a natural person residing in Malaysia.79 The jobs scope of the designated compliance officer is akin to that of a company secretary.80 As regards internal arrangement, the Malaysian LLP Act 2012 adopted the UKs approach whereby the members should have all the rights to draft the LLPs internal regulation.81 However, default rules as provided in the LLP Act 2012 are applicable in the absence of the partners agreement.82 Pertaining to relations with third parties, partners of the LLP shall only be agents of the LLP and not of one another.83 The LLP shall be responsible for any acts of the partners, which are committed within the partners authority.84 The Act also states that in the absence of any notice that a partner has ceased to be a partner of the LLP, a third party is entitled to assume that such partner is still a partner of the LLP.85
71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
LLP Act 2012, ss1012. LLP Act 2012, s10. LLP Act 2012, s6. LLP Act 2012, s7(1). LLP Act 2012, s7(2). LLP Act 2012, s6. LLP Act 2012, s8. LLP Act 2012, Part IV. LLP Act 2012, s27. See the LLP Act 2012, ss27(7), 17, 19, 20. LLP Act 2012, s9(1)(a). LLP Act 2012, s9(1)(b) and the Second Schedule. LLP Act 2012, s23(1). LLP Act 2012, s23(2). LLP Act 2012, s23(3).
25
Tax status Under the Finance Act 2013, a new provision of s 8(1A) is inserted into the Income Tax Act (ITA) 1967 which recognises LLP as a taxable entity under the ITA 1967. The Finance Act 2013 also clearly states that the word LLP shall be added after the word company in s 21(1A) of the ITA 1967, which provides for the basis period for a company. As such, it is clear that by virtue of the Finance Act 2013, the tax status of the Malaysian PLT is similar to that of a company. Such approach diverges totally from approaches taken in relation to LLPs in other countries, which recognises the LLPs tax status as that of a partnership, albeit has body corporate status. It is opined that by having a company tax status, the PLT shall be entitled to corporate tax advantages which may encourage small companies or medium and large partnerships to convert to PLT but the partnership firms which have had advantages from the income tax regime may be dissuaded from converting to PLT. The Finance Act 2013 also provides that a new provision of s 75B is inserted in ITA 1967,86 which imposes the responsibility for doing all acts and things required to be done by or on behalf of the LLP for the purposes of the ITA, including the payment of tax jointly and severally on the compliance officer and in the case where there is no compliance officer being appointed in the PLT, all partners shall be treated as compliance officers and shall be responsible under the ITA 1967. Professionals PLT Both the LLP Act 2012 and the Labuan LP and LLP Act 2010 allow professionals to adopt LLP. However, under the LLP Act 2012, there are only three professions, namely advocates and solicitors, accountants and company secretaries, which are allowed to be carried out in the form of PLT. These professions are clearly stated under the First Schedule to the Act. However, s 92 provides that the Minister may add to or alter the First Schedule, which indicates that other professionals who are interested to form a PLT may request the Minister to add their respective professions to be included in the First Schedule.
86 Finance Act 2013, s23.
26
The Law Review 2013
FIRST SCHEDULE [Section 2] PROFESSIONAL PRACTICE Professional Practice 1. Chartered Accountant 2. Advocate and Solicitor Governing law Accountants Act 1967 [Act 94] (i) Legal Profession Act 1976 [Act 166] (ii) Advocates Ordinance of Sabah [Sabah Cap. 2] (iii) Advocates Ordinance of Sarawak [Sarawak Cap. 110] Governing body Malaysian Institute of Accountants (i) Legal Profession Act 1976 [Act 166] (ii) Advocates Ordinance of Sabah [Sabah Cap. 2] (iii) Advocates Ordinance of Sarawak [Sarawak Cap. 110] Nil
3. Secretary
Companies Act 1965 [Act 125]
It is observed that the main difference between a professional PLT and other PLT lies in the requirement of membership. In a professional PLT, the members shall only be from the same profession such as all accountants or all lawyers.87 The partners shall regulate their activities by way of contract among themselves88 which should incorporate a requirement of the professionals ethics and regulation. The professional PLTs also need to have professional insurance coverage which cannot be below the compulsory level of insurance which shall be approved by the Registrar upon consultation with the governing body of respective professions.89 Other than the above requirements, the LLP Act 2012 does not differentiate between a professional and a general PLT. Ethical and business issues of incorporation of professionals businesses It is observed that the main issue related to ethics if professionals are allowed to incorporate is the limitation of liability. As incorporation provides limited liability to the members, it is contended that if professionals are protected with limited liability, they would not observe their code of ethics and the standard of duty of care expected of a professional would be compromised.
87 LLP Act 2012, s8(a). 88 LLP Act 2012, s9. 89 LLP Act 2012, s8(b)(i), (ii).
27
Donald H Rivkin, Chairman of the American Bar Associations Trans-national Law Practice Committee, observed that ethical codes and practices of the legal professions throughout the world cover largely the same ground and contain largely the same prescriptions for lawyers conduct.90 In attempting to define what legal professionalism is, the American Bar Associations 1996 Commission on Professionalism noted that the profession is not a business.91 It is distinguished by the requirements of extensive formal training and learning, admission to practice by qualifying licensure, a code of ethics imposing standards qualitatively and extensively beyond those that prevail or are tolerated in the marketplace, a system for discipline of its members for violation of the code of ethics, a duty to subordinate financial reward to social responsibility, and, notably, an obligation on its members, even in non-professional matters, to conduct themselves as members of a learned, disciplined, and honourable occupation. DP Rajah highlighted that a corporate structure cannot be used by practitioners to totally avoid liabilities, as the company only becomes liable for acts where the practitioner is not personally liable.92 The clients interest remains protected as the corporation is covered by heavy and expensive insurance although the heavy insurance premium payment for professional corporate structure/ model is not popular among lawyers.93 From the business perspectives, incorporation of professional firms could bring along with it the benefits associated with a corporation, for example, it would be easier for the business to raise capital for the business infrastructure.94 Furthermore, the professionals could also set up a better management structure that is based on the corporate model. There would also be a continuity of existence as the property of the corporation is vested in the corporation itself and not in the partners. Finally, the corporation can undertake greater risk ventures as such risk is limited to the paid-up capital of the corporation and does not affect the personal assets of the practitioners and the shareholders.95 In Singapore, all the shareholders and the directors of the Law Corporation (LC)96 model must all be lawyers. As such the ethical values of the profession are retained and protected. Conflict of interest issues involving clients are avoided and the right of lawyers to act independently remains protected.
90 91 92 93 94 95 96
See Rajah, DP, supra, n2. Ibid. Ibid. Ibid. Ibid. Ibid. LC is a company in substance and was introduced to the lawyers by virtue of the amendment to the Singapore Legal Profession Act 2000.
28
The Law Review 2013
This model is however not as flexible as in the UK LLP model. The UK LLP allows lawyers to vary the contractual relationship among them. Lawyers in the LLPs can thus take greater risk to venture into different jurisdictions to provide legal services with minimum personal risk to them. According to Cyrus Das, the structure of law firms in Malaysia has remained the same for the last 200 years; i.e. either in the form of sole proprietorship or partnerships.97 With the era of globalisation affecting the global law firm that seeks to practise on a worldwide basis, changes should be made to the Malaysian private practices.98 It is also perceived that the traditional structure of law firms is no longer suitable for the expanding legal work and activities of lawyers.99 In Singapore, when moving the proposal for the Law Corporation via the Legal Profession Bill in Parliament on January 17, 2000, the Minister of State for Law gave a comprehensive reason for permitting the corporatisation of law practices.100 He said the move was not only to protect them against crippling legal claims but also to provide the lawyers flexibility to venture out and compete in the global market.101 In a professional LLP, all partners must be professionals and of the same profession such as all lawyers, and they shall regulate their activities by way of contract among themselves although they cannot limit the liability of the LLP below the compulsory level of insurance that has to be taken to protect clients interests. The LLP model is seen as a flexible model in that while the rights of clients are protected, the model provides the flexibility needed for the members to regulate their activities according to the needs of the situation. Members can also modify their rights and relationship with each other within the LLP by way of contract. The LLP model can then adapt itself to the varying business situations and lawyers can venture into different markets with varying conditions. The risk is taken by the corporation itself while the practitioners liability only remains in tort and in contract. LLPs also allow the professionals to retain benefits of being taxed as a partnership and not as a company despite its body corporate status. This is important particularly to small and medium businesses which benefit most under the income tax scheme rather than on the corporate tax scheme. Conclusion It is observed that one of the means to minimise the business risk is by choosing the correct business vehicle, particularly those which provide limited
97 Das, Cyrus, Should Law Firms Restructure: Is The Trend Towards Incorporation or Limited Liability or MultiDisciplinary Practices?, The Journal of the Malaysian Bar (2002) XXXI No2, 5068. 98 Ibid, at52. 99 Ibid. 100 Ibid, at57. 101 Ibid.
29
liability. At present, the options of business vehicles which are available in Malaysia, are merely confined to the traditional business vehicles, namely, sole proprietorships, partnerships and companies and for certain professions such as lawyers and accountants, corporate structure is excluded as an option. It is perceived that with the introduction of PLT, the Malaysian market will be more attractive to investors and provide more options for conducting business, particularly to professionals. For lawyers who are in private practice, PLT is indeed good news for them as it allows them to carry on their business with less risks compared to the existing partnership/firm structure. The quasi limited liability regime in PLT which is designed to ensure that the professionals are still personally liable for their own default but not for other partners default is observed to be sufficient to protect third parties in particular the clients and the public interest when dealing with the professionals. As highlighted in the above discussion, the introduction of the PLT should not affect or compromise the credibility and ethical quality of the professionals as the personal liability of the professionals is still intact on all partners. The partners still have to be cautious on their duties to client as they shall be personally and jointly liable with the PLT for their default in the business. The flexibility of PLT structure also allows professionals to improve management structure and to expand business for example, as regards ability to raise capital and to create a floating charge which is an advantage is given only to a body corporate structure. In fact, the internal management structure of PLT is seen to be better than a company as it is not rigid and largely depends on the partners rather than on the statute.
30
The Law Review 2013
Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

Sridevi Thambapillay*
A.Introduction At the outset, it is to be noted that this paper deals solely with non-Muslim maintenance laws. The Muslims are governed by the Syariah laws, which will not be discussed in this paper due to space constraint. In the past 55 years, Malaysia has progressed tremendously in various fields such as science, technology, infrastructure and education, to name a few. Her citizens have reaped the benefits from the developments that have taken place so far. The lifestyle of our society, especially those who live in the urban areas, now is completely different when compared to the lifestyle before Independence. However, it is disheartening to note that there are certain segments in our society who have been left behind, one of which are the illegitimate children. Illegitimate children are still considered a stigma in society, which has led to the increase in baby dumping cases recently. Although there are laws that confer certain rights on illegitimate children, it is sad to note that these rights are merely illusory. One of the rights conferred by these laws is the right to maintenance, which will be examined in this article. The purpose of this article is to examine the laws that confer the right to maintenance on illegitimate children in Malaysia in order to see if these laws adequately protect the rights and interests of these children. Having looked at the weaknesses that exist in these laws, the writer will attempt to suggest recommendations in order to rectify these weaknesses. B.Meaning of an illegitimate child Before examining the maintenance laws, it is pertinent to first identify who an illegitimate child is. To a lay person, an illegitimate child refers to a child born out of wedlock. However, the legal definition is not necessarily so. The definition of an illegitimate child can be examined from three aspects, i.e. according to common law, the meaning as explained by textbook writers and as defined by the Malaysian law.
* PhD Student/Lecturer, Faculty of Law, University of Malaya. This paper forms part of the PhD thesis currently being written by the writer. This paper was also presented at the International Conference on Public Policy and Social Studies, organised by UiTM, Melaka in December 2012.
31
1.Common law According to common law and Roman Civil Law, the fundamental principle as to legitimacy is Pater est quem nuptiae demonstrantmarriage is the proof of paternity. Hence, a child born out of wedlock is an illegitimate child. This principle is further explained in Blackstones Commentaries on the Laws of England.1 A legitimate child is a child whose parents are married at the time he was conceived or at the time of his birth. Therefore, it does not matter if a child was conceived before the parents married. What matters is that the parents should be married at the time he is born in order to ensure that he is legitimate. In addition thereto, if a child is conceived during the marriage of his parents but is born after the parents have separated or after the father has died, he or she is deemed legitimate. The reason for this common law rule is perhaps that if the child was conceived before marriage and the birth occurred subsequently, by a legal fiction or presumption, the marriage is deemed to have taken place before the child was conceived.2 In short, an illegitimate child, who is considered filius nullius or the son of nobody3 is a child whose parents are not married at the time of his birth. In addition to the general principle above, the legitimacy of a child is also an issue in void and voidable marriages. According to common law, a child from a void marriage is considered illegitimate as the marriage is void ab initio once a decree of nullity is issued to annul the said marriage. On the other hand, in a voidable marriage, the child becomes illegitimate from the date of the decree of nullity. This is because the marriage is deemed valid until the date the decree of nullity becomes absolute. In the case of a voidable marriage, it is submitted that it is unfair to change the status of a legitimate child to an illegitimate child once the decree of nullity becomes absolute, the reason being that at the time of the childs birth, the marriage was indeed valid. The situation in a voidable marriage is different from a void marriage as in the latter, the marriage is considered never to have been valid from the beginning. As such, in a void marriage, the child born from the said marriage could be deemed illegitimate as there was no valid marriage in the first place. However, the position is not the same in a voidable marriage (as explained above). 2.Textbook writers Textbook writers have generally explained that an illegitimate child refers to a child born out of wedlock.4 This general meaning was further elaborated by Tan Yock Lin in Conflicting Issues in Family and Succession Law as follows:5
Blackstone, Commentaries on the Laws of England, 7th edn (1775), pp 434, 442445. Per Lord Brongham in Birthwhistle v Vardill (1835) 2 Cl & F 571 at 591. Blackstone, supra, n1, p447. See for example Pillai, Kamala MG, Family Law in Malaysia (Kuala Lumpur: LexisNexis, 2009), p159. 5 Tan Yock Lin, Conflicting Issues in Family and Succession Law (Singapore: Butterworths, 1993), p421. 1 2 3 4
32
The Law Review 2013
The relation of parent and child arises through the birth of a child in lawful wedlock. The child is said to be legitimate when born in lawful wedlock. Some legal systems which take a less strict view consider a child to be legitimate as long as its parents bona fide and reasonably believed that they had contracted a valid marriage.
3.Malaysian law The meaning of an illegitimate child according to the law in Malaysia can be seen from two aspects, i.e. the presumption of legitimacy under s 112 of the Evidence Act 1950 and children of void and voidable marriages. (a)Presumption of legitimacy under s 112 of the Evidence Act 1950 The meaning of an illegitimate child, unfortunately, is not defined in any statute. Even the Legitimacy Act 1961 is silent on the definition of an illegitimate child. However, the Evidence Act 1950, in s 112, provides for the presumption of legitimacy as follows:
The fact that any person was born during the continuance of a valid marriage between his mother and any man, or within two hundred and eighty days after its dissolution, the mother remaining unmarried shall be conclusive proof that he is the legitimate son of that man, unless it can be shown that the parties to the marriage had no access to each other at any time when he could have been begotten.
Hence, basically a child is presumed to be legitimate if he was born during the valid marriage between his mother and father or within 280 days after the dissolution of his parents marriage, the mother remaining unmarried. However, this presumption could be rebutted if it could be proven that his parents had no access to one another at the time he was begotten. Non-access here refers to no sexual intercourse between the parties to the marriage or if it could be proven that the husband is impotent or incapacitated at the relevant period. An interesting case that arose as to the meaning of the phrase the parties to the marriage had no access to each other is the case of Ah Chuck v Needham.6 The brief facts of the case are as follows: Mr and Mrs Hedges, both Caucasians, married in 1918. In 1928, Mrs Hedges gave birth to a child who had Mongoloid features. The issue as to the legitimacy of the child arose here as Ah Chuck, a gardener, who worked closely, frequently visited the Hedges house when Mr Hedges was away. The court here held that the parties did have access to one another at the time the child was begotten. Even though it was proven that the wife did commit adultery with Ah Chuck, the husband must be deemed to be the father of the child. Hence, the court here gave prominence to the fact that the parties had access to one another during the conception of the child. The fact that the child had Mongoloid features was not sufficient to rebut the presumption.
6 [1931] NZLR 559.
33
When comparing s 112 of the Evidence Act to the presumption under common law, it can be noted that both the presumptions are similar. However, there are differences that can be observed. First, s 112 of the Evidence Act fixes an arbitrary period after the dissolution of the marriage as the limitation regarding the application. There is no such limitation imposed in common law.7 The second difference that is evident is the fact that s 112 expressly states that if the marriage is dissolved, the mother of the child must remain unmarried until the birth of the child. Common law does not impose such a limitation. Therefore, in Malaysia, if a divorced woman gets married and then gives birth within 280 days, prima facie, the child is deemed to be the legitimate child of her second husband. However, if it could be proven that there was no access between the woman and her second husband, the child is then deemed to be the legitimate child of her first husband. On the other hand, the common law position is different. In the case of Re Overbury,8 the child was born to a divorced woman during the nine months gestation period after the dissolution of the marriage and after the woman had remarried. The court held that the child was presumed to be the child of the first marriage. The rationale for this decision is that in the absence of evidence to the contrary, it cannot be presumed that the woman had committed adultery with her second husband during the continuance of her first marriage. The facts of the case also show that there was access between her and her first husband during the time of her conception. (b)Children of void and voidable marriages As mentioned earlier, according to common law, children from void marriages are deemed to be illegitimate. The position is similar in Malaysia as a void marriage is considered never to have taken place. Thus, children born from these marriages are deemed to be illegitimate. The effect of a void marriage was explained by Lord Greene MR in De Reneville v De Reneville:9
A void marriage is one that will be regarded by every court in any case in which the existence of the marriage is in issue as never having taken place and can be so treated by both parties to it without the necessity of any decree annulling it
On the other hand, the status of children from voidable marriages in Malaysia is different from common law. According to common law, the children born from voidable marriages are deemed to be illegitimate from the date of the decree of nullity. However, the position is not the same in Malaysia. Reference can be made to ss 73 and 75(1) of the Law Reform (Marriage and Divorce) Act
7 Khoo, OS, Parent-Child Law in Singapore (Singapore: Butterworths, 1984), p13 8 [1955] Ch D 122. 9 [1949] 1 All ER 56.
34
The Law Review 2013
1976. Section 73 expressly states that effect of a decree of nullity in the case of a voidable marriage. Section 73(2) provides as follows:
A decree of nullity granted after the appointed date on the ground that the marriage is voidable shall operate to annul the marriage only as respects any time after the coming into operation of the decree, and the marriage shall, notwithstanding the decree, be treated as if it had existed up to that time.
Section 75(1) provides for the status of a child of a voidable marriage as follows:
Where a decree of nullity is granted in respect of a voidable marriage, any child who would have been a legitimate child of the parties to the marriage if at the date of the decree it had been dissolved instead of being annulled shall be deemed to be their legitimate child.
The above provision thus clearly states that the status of a child from a voidable marriage is the same as a child from a divorce. The legitimate status remains. This differs from the position under common law where once a decree of nullity is granted in respect of a voidable marriage, the child of that marriage becomes illegitimate.10 Therefore, according to all the sources discussed above as to the meaning of an illegitimate child, a child is basically illegitimate if he or she is not born during a lawful marriage of his or her parents. Before moving on to see if the right to maintenance of illegitimate children in Malaysia, it is first important to see the number of illegitimate children in our country in order to see whether it involves a large number of children. C.Number of illegitimate children in Malaysia According to a New Straits Times report entitled More babies born out of wedlock reported on November 16, 2011, it was reported that the number of illegitimate children is on the rise in Malaysia. According to the statistics from the Women, Family and Community Development Ministry, the number of illegitimate children averaged at some 50,000 a year from 2008 to 2010. As of December 2010, the total number of children born out of wedlock during that period stood at 152,182. Statistics also revealed that Sabah, Selangor and Sarawak had the highest number of children born out of wedlock.11 The above number was further substantiated by a similar report in The Star dated November 19, 2011 entitled Illegitimate babies on the rise. It was reported that Sabah has recorded 41,490 illegitimate children born between 2008 and 2010. Selangor came second highest with 18,983 and Sarawak third
10 See Dredge v Dredge [1947] 1 All ER 29. 11 More babies born out of wedlock, New Straits Times, http://www.nst.com.my/top-news/ more-babies-born-out-of-wedlock-1.6507#ixzz2E4lozPki; accessed on December 4, 2012.
35
with 17,570 from a total of 152,182 children born out of wedlock born during that period.12 It is shocking to note that there are so many illegitimate children in Malaysia. The issue that arises next is regarding the upbringing of these children, bearing in mind that these children are usually raised by a single parent, i.e. their mother. These children have to rely on their mothers for their maintenance. The issue that arises here is whether these mothers are aware of the fact that the law provides that it is the duty of the childs putative father to provide maintenance to his child. Thus, the question of ignorance of the law arises here. The next question that arises is when the mother, aware that her child can claim maintenance from his father applies to the court for a maintenance order, what is the judicial attitude when making the order prayed for? In order to answer these questions, this paper will next look at the laws and the judicial cases concerning the right of an illegitimate child to maintenance in Malaysia. D.Maintenance laws in Malaysia for non-Muslim children 1.Laws The first maintenance laws in Malaysia can be traced back to 1872, during the Straits Settlements era, i.e. the Straits Settlements Criminal Jurisdiction Ordinance 1872. After this Ordinance was passed, there were further developments in this area where subsequent laws were passed. The oldest law concerning maintenance in force at the moment is the Married Women and Children (Maintenance) Act 1950. Apart from this Act, maintenance provisions can also be seen in the Law Reform (Marriage and Divorce) Act 1976 and the Maintenance Ordinance of Sabah 1959. However, before examining the domestic laws on maintenance, it is pertinent to first look at the United Nations Convention on the Rights of the Child (CRC), which was signed and ratified with certain reservations by Malaysia. (a)Convention on the Rights of the Child (CRC) The CRC was ratified by Malaysia in 1995 to uphold its commitment to the protection and welfare of children. The relevant provision in the CRC concerning the upbringing of the child is Article 18. Article 18(1) provides as follows:
(1) State Parties shall use their best efforts to ensure recognition of the principle that both parents have common responsibilities for the upbringing and development of the child. Parents or, as the case may be, legal guardians, have the primary responsibility for the upbringing and development of the child. The best interest of the child will be their basic concern.
12 Illegitimate babies on the rise, The Star , http://thestar.com.my/news/story. asp?file=/2011/11/19/nation/9934872&sec=nation; accessed on December 4, 2012.
36
The Law Review 2013
The above mentioned provision emphasises the duty on the State Parties to ensure that parents execute their duty to maintain their children. Thus, it can be seen that this provision is actually placing the onus on the State Parties as well as the parents to ensure that the children are maintained. Parents have the primary responsibility for the upbringing and development of the child, and the State Parties have the duty to ensure that these parents perform their abovementioned duties. The said provision goes on to state that the underlying principle for the imposition of this duty is the best interest of the children, or in other words, the welfare of the child. In addition to the above duties, one further observation which could be made from the above provision is the fact that Article 18(1) clearly states that parents have the primary duty to maintain a child, thereby placing the duty on both the parents, rather than on the father of the child. Article 18(2) further provides as follows:
For the purpose of guaranteeing and promoting the rights set forth in the present Convention, State Parties shall render appropriate assistance to parents/and legal guardians in the performance of their child-rearing responsibilities and shall ensure the development of institutions, facilities and services for the care of children.
The provision above imposes a duty on the State to provide assistance to parents or guardians in bringing up their children. This is an additional duty imposed on the State which is not provided for under our local laws. Thus, both Articles 18(1) and (2) provide that the duty to maintain a child is the primary responsibility of the parents and the State has an important duty to ensure that this duty is executed by the parents and it (the State) shall provide assistance to the parents in carrying out their responsibilities. Upon perusing Article 18, it is to be noted that the word child is used, thus raising the issue of whether child here includes an illegitimate child. In order to find out, reference would have to be made to Article 1 of the CRC, which defines the word child as:
For the purposes of the present Convention, a child means every human being below the age of eighteen years unless under the law applicable to the child, majority is attained earlier.
The definition above does not mention if a child includes an illegitimate child. It merely states about the age limit. It is however submitted that as the definition above states that a child means every human being (emphasis added), it should also include illegitimate children. Further thereto, the Preamble to the CRC states, inter alia, as follows:
Recognizing that the United Nations has, in the Universal Declaration of Human Rights and in the International Covenants on Human Rights, proclaimed and agreed that everyone is to all the rights and freedoms set forth
37
therein, without distinction of any kind, such as race, colour, sex, language, religion, political or other option, national or social origin, property, birth or other status.
The above preamble expressly states that everyone is entitled to the rights and freedoms mentioned in the Universal Declaration of Human Rights and the International Covenants on Human Rights, without any discrimination based, inter alia, on birth or other status. This would mean that there should not be any discrimination against illegitimate children when it comes to conferring rights and freedoms on children. (b)Married Women and Children (Maintenance) Act 1950 The Married Women and Children (Maintenance) Act 1950 (the 1950 Act) was passed on July 4, 1950 to provide for the maintenance of wives and children. Section 3(1) of the 1950 Act provides that the court may order a person who has neglected or refused to maintain his wife or a legitimate child of his which is unable to maintain itself, to make a monthly allowance for the maintenance of his wife or such child, in proportion to the means of such person, as to the court seems reasonable. Thus, s 3(1) expressly provides for the right of a legitimate child to claim maintenance from his or her father. As for illegitimate children, s 3(2) of the 1950 Act provides as follows:
If any person neglects or refuses to maintain an illegitimate child of his which is unable to maintain itself, a court, upon due proof thereof, may order such person to make such monthly allowance to the court seems reasonable.
Three issues can be discussed pertaining to this Act. First, it is to be noted that s 3(2) was amended by the Law Reform (Marriage and Divorce) Act 1976 (the LRA). Initially, s 3(2) stated that the court may order a monthly allowance of not more than 50 ringgit to an illegitimate child. The amendment by the LRA repealed the words not exceeding fifty ringgit. This is a positive development as it is ridiculous to limit the monthly allowance of an illegitimate child to a mere 50 ringgit, which basically has very little value now, bearing in mind the inflated cost of living nowadays. When this provision was drafted in 1950, the cost of living would definitely have been lower and 50 ringgit was a big amount then.Secondly, the 1950 Act does not define the meaning of child. Hence, reference would have to be made to case law as to how the courts have interpreted child under this Act. The court in the landmark case of Kulasingam v Rasammah13 has defined the meaning of child in the 1950 Act. In this case, the respondent wife had applied for maintenance for herself and her legitimate daughter who was more the 20 years old. The appellant contended that as the daughter was more than 20 years of age, she was no longer entitled to fall within the meaning of child under the 1950 Act. The
13 [1981] 2 MLJ 36.
38
The Law Review 2013
learned judge, Hashim Yeop Sani J (as he then was) stated that the Married Women and Children (Maintenance) Ordinance 1950 is silent on the meaning of child. Thus, in his Lordships view, the Age of Majority Act 1971, which states generally that a child is a person below the age of 18 years, should apply here. His Lordship went on to say that the legislative thinking on this point would seem to be reflected in the legislation that was passed subsequent to the 1950 Ordinance, i.e. the Divorce Ordinance 1952 and the LRA, where child has been expressly defined to mean a person below the age of 18 years. Hence, this, according to the learned judge would fortify the view that the Age of Majority Act 1971 should be applied in determining whether a legitimate child is of such age as would be entitled to a maintenance order under the 1950 Ordinance. The court eventually allowed the appeal against the maintenance order made in favour of the daughter and quashed the maintenance order. Criticisms from academics arose against the judgment above. For example, Mimi Kamariah Majid, in her book, Family Law in Malaysia, states as follows:14
It is submitted that the learned judge should have been guided by the qualifying phrase following the term child, that is, which is unable to maintain itself to rule that a child is anyone who is unable to maintain itself, irrespective of age. He, of course, has to be a child of the person who has been issued the maintenance order. Hence, if the child is aged 30 years and is mentally retarded, and therefore unable to maintain itself, the child should be eligible to be maintained. Similarly, a child who is mentally sound and who is pursuing tertiary education, and therefore unable to maintain itself, should be eligible to be maintained.
Although the case of Kulasingam v Rasammah concerns a legitimate child, the same interpretation of child would apply to an illegitimate child claiming maintenance under s 3(2) of the 1950 Act as well. In addition, the criticism raised by the author as stated above should equally apply to illegitimate children as s 3(2) of the 1950 Act contains the same phrase as in s 3(1) of the 1950 Act, i.e. which is unable to maintain itself. The third issue that arises with regard to s 3(2) is the fact that it provides that If any person neglects or refuses to maintain an illegitimate child of his (emphasis added), thereby raising the issue as to whether the duty imposed by this provision is limited to the father of the illegitimate child or does it extend to the mother as well? Mimi Kamariah Majid in her book, Family Law in Malaysia15 refers to the Interpretation Acts 1947 and 1967 which provides that words and expressions importing the masculine gender includes females.16 Thus, an illegitimate child may also claim maintenance from his mother.
14 Mimi Kamariah Majid, Family Law in Malaysia (Kuala Lumpur: Malayan Law Journal, 1999), p312. 15 Ibid. 16 Section 4(2).
39
(c)Law Reform (Marriage and Divorce) Act 1976 The Law Reform (Marriage and Divorce) Act 1976 (the LRA) came into force on March 1, 1982. Part VIII of the LRA contains provisions concerning the PROTECTION OF CHILDREN. Section 92 of the LRA provides the duty of a parent to maintain his or her child as follows:
it shall be the duty of a parent to maintain or contribute to the maintenance of his or her children, whether they are in his or her custody or the custody of any other person, either by providing them with such accommodation, clothing, food and education as may be reasonable having regard to his or her means and station in life or by paying the cost thereof.
The first issue that arises here is concerning the meaning of child under the LRA. Reading s 92, it merely states children, without qualifying the word by stating whether it merely refers to legitimate children or if it includes illegitimate children as well. Section 92 of the LRA differs from s 3 of the 1950 Act, where in the latter, the legislature has clearly divided the provisions on the duty of a parent to maintain his legitimate child in s 3(1) and the duty to maintain his illegitimate child in s 3(2). The definition of a child is provided for in s 87 of the LRA which provides that a child has the meaning of a child of the marriage is defined in s 2 as follows:
Child of marriage means a child of both parties to the marriage in question or a child of one party to the marriage accepted as one of the family by the other party; and child in this context includes an illegitimate child of, and a child adopted by, either of the parties to the marriage in pursuance of an adoption order made by or under any written law relating to adoption.
The issue that arises at this juncture is in relation to the meaning of a child of marriage as defined in s 2 of the LRA. Does a child of marriage include an illegitimate child? There are two reasons as to why such an issue arises. First, as stated in s 2, the child may be a child of one of the parties to the marriage who is accepted as one of the family by the other party. This refers to illegitimate children whose one parent is married and is accepted by his or her step parent. However, what about illegitimate children whose parent(s) are not married to third parties? Do they qualify to fall within the meaning of child of marriage under s 2? Strictly speaking, they do not. The second issue is pertaining to the phrase that a child includes an illegitimate child of, and a child adopted by, either of the parties to the marriage in pursuance of an adoption order. The question is whether the above phrase should be interpreted by applying a conjunctive view or a disjunctive view. If a conjunctive view is applied, then only illegitimate children who are adopted by either of the parties to the marriage qualify to claim maintenance under the LRA. On the other hand, if a disjunctive view is adopted, then it does not matter if the illegitimate child concerned is not adopted in order to qualify to claim maintenance under the relevant provisions in the LRA from his or
40
The Law Review 2013
her parents. It is submitted that it is in the best interests of the child that a disjunctive view be applied in order to enable illegitimate children to claim under the LRA. The third issue is concerning the phrase his or her children, which goes to show that the LRA imposes the duty to maintain on both parents, when compared to the 1950 Act which imposes such a duty solely on the father. Further thereto, there have been no cases which have decided on the issue as to whether the duty to maintain under the 1950 Act extends to the mother of the child as well. In this respect, it is submitted that it would be better for the illegitimate child to apply for maintenance under the LRA as the maintenance provisions extend the duty to maintain on the mother of the child. (d)Maintenance Ordinance 1959 of Sabah Sabah has its own law as to maintenance, i.e. the Maintenance Ordinance 1959 of Sabah (Maintenance Ordinance). This Ordinance came into force on August 1, 1959. Section 3(2) of this Ordinance, which is similar to s 3(2) of the 1950 Act, provides as follows:
If any person having sufficient means neglects or refuses to maintain or contribute to maintain his illegitimate child unable to maintain itself, a Court upon due proof thereof may order such person to make such monthly allowance not exceeding fifty ringgit on the whole as to the Court seems reasonable.
There is one noticeable difference between s 3(2) of the Maintenance Ordinance and s 3(2) of the 1950 Act. The former still has 50 ringgit as the maximum amount the court would order as the maintenance sum to be paid whereas the latter statute has repealed this ceiling. Thus, it is submitted that it is time for the Sabah Legislative Assembly to revisit this provision and repeal the maximum sum as stated therein so that there is no discrimination between illegitimate and legitimate children in Sabah as far as maintenance is concerned. In addition to the above provision, the Maintenance Ordinance defines child in s 2 to include a legitimate or illegitimate child who is unable to maintain itself. It could be observed that this is the only piece of legislation that has clearly included an illegitimate child without any qualification in its definition of child, thereby making it easier for the judges when it comes to deciding the meaning of a child. (e)Child Act 2001 The Child Act 2001 provides for the punishment in the event the parents or guardian fail to maintain the child. The penalty is provided for in s 31(1)(a) of the Child Act 2001. This section provides that if a person having the care of a child, inter alia, neglects the child in a manner which causes physical or emotional injury to the child, commits an offence and shall on conviction be
41
liable to a fine not exceeding RM20,000 or to imprisonment for a term not exceeding 10 years or both. Section 31(4) explains the phrase neglect a child to include failing to provide adequate food, clothing, medical or dental treatment, lodging or care for the child. In order to see whether the penalty phrase above extends to failing to maintain an illegitimate child, reference should be made to the definition of child in s 2 of the Act. However, s 2 merely defines child as follows:
(a) a person below the age of eighteen years; and (b) in relation to criminal proceedings, a person who has attained the age of criminal responsibility as prescribed in s 82 of the Penal Code.
There is no mention of illegitimate children in the above definition, thereby raising the issue of whether illegitimate children are able to enforce their right to maintenance against their parents under this Act. It is submitted that the legislature should make it clear whether this Act includes illegitimate children as well, as is provided for in the Maintenance Ordinance of Sabah. 2.Government policies Apart from maintenance laws in Malaysia, it is equally important to look at the policies passed by the Government in order to safeguard the interests of children. In this respect, the Government passed two policies in 2009, i.e. the National Child Policy and the Child Protection Policy. (a)National Child Policy The National Child Policy (NCP) is a policy on the rights of survival, protection, development and participation of children in order to enjoy the opportunity and space to achieve a holistic development in a conducive environment. This policy aims to produce healthy, active, knowledgeable, innovative, creative, competitive, progressive children as well as inculcate good values in children. One of the objectives of the NCP is to ensure that every child has the right to live receiving care, love, health services, support and social assistance. In order to achieve this objective, the Government aims to provide basic needs such as identity, shelter, food, drink, clothing, love, security and a conducive environment. The Government also aims to improve quality and expand support services and social assistance according to the needs of children, including disabled children and orphans. At this juncture, it is pertinent to note that the above strategy states disabled children and orphans The issue that arises is whether illegitimate children are included. Reference needs to be made to the definition of child in this Policy. The NCP defines children as a person under the age of 18 years as enshrined in the CRC and the Child Act.
42
The Law Review 2013
Hence, it is submitted that illegitimate children should be included within the meaning of child under the NCP as the objectives stated above provide that every child has a right denoting that all children, no matter whether legitimate or illegitimate, have a right to be protected under the NCP. (b)Child Protection Policy The Child Protection Policy (CPP) is a policy that contains a statement of the principles of child protection in line with the CRC and the Child Act 2001. This policy focuses on advocacy, prevention, support and research development to protect children. In particular, the CPP aims to ensure that every child is protected from neglect, abuse, violence and exploitation. This policy is also a catalyst for awareness and commitment of all parties, including every member of the society in protecting children. Once again, the definition of children under the CPP is the same as the definition in the NCP. Hence, it is submitted that illegitimate children should also be entitled to protection against abuse and neglect under the CPP. E.Judicial decisions To date there are not many cases reported on illegitimate children claiming maintenance from their putative fathers. The cases reported so far have laid down the conditions that need to be satisfied by the petitioner before a maintenance order is made. In the case of T v O,17 the court laid down the conditions that need to be fulfilled before a claim for maintenance could be made under s 3(2) of the 1950 Act. The brief facts of this case are as follows: the plaintiff and defendant married according to the Chinese custom. Their marriage was not in accordance with the LRA. As a result of differences that arose between the husband and wife, the latter left their house with their son. The wife claimed, inter alia, for maintenance for her son for RM350 per month. The High Court judge, referring to s 3(2) of the 1950 Act stated that due proof is required that the person sued is the father, and that his illegitimate child is unable to maintain itself, before the court will order maintenance.18 Thus, two conditions need to be proven before the court will order maintenance to be paid, i.e.: (i) due proof must be shown that the person is the father; and (ii) due proof that his illegitimate child is unable to maintain itself. Unfortunately, the court could did not proceed further in this case as to how the petitioner would be able to fulfil the two abovementioned conditions.
17 [1993] 1 MLJ 168. 18 Ibid, at 172, per Mahadev Shankar J.
43
Pertaining to the first condition, it is submitted that with the development of medical sciences, paternity could be proven through the Deoxyribonucleic Acid test (DNA test). There are two judicial decisions where the issue of proving the paternity of the child by resorting to DNA profiling was discussed. First, in the case of Othman bin Haji Abdul Halim v Hamisah bt Awang,19 the respondent gave birth to an illegitimate child. She claimed that the appellant was the father of the child, which was denied by the appellant. Both parties agreed to a DNA test to prove the paternity of the child. A DNA test was carried out. Unfortunately, the High Court held that the DNA Profiling Analysis Report was inadmissible as it was not unqualified. A proper DNA profiling requires four specified parties to be present and tested, i.e. the child, the purported father, the mother of the child and another family member of the purported father, preferably an uncle on the paternal side. As this requirement was not satisfied, the test was inconclusive and therefore inadmissible. The second case is the case of Ng Chiam Perng (sued by her mother & next friend Wong Nyuet Yoon) v Ng Ho Peng.20 In this case, the appellant gave birth to an illegitimate child. She claimed for maintenance on behalf of the child under s 3(2) of the 1950 Act from the respondent. The respondent denied that he was the father of the child. At the trial, when the appellants counsel requested for a DNA test to prove that the respondent was the father of the child, the respondent refused. The appellants counsel then urged the court to observe and compare the similarity in features between the child and the respondent. The court rejected both the requests and held that the evidence of similarity in features to prove paternity has very little value and is not safe. Having looked at the two cases above, it could be observed that the burden is on the child to prove that the respondent is his father. However, if the father refuses to subject himself to a DNA test, the court cannot order him to do so. This could be seen in the case of Peter James Binsted v Juvencia Autor Partosa,21 where KC Vohrah J stated as follows:22
there is no general power provided by legislation or through common law for any court in Malaysia to order a person to undergo a test to ascertain paternity. In the case of a DNA test, it is common knowledge that either a blood tissue or bone specimen will be taken from the person for testing. If a person refuses to submit himself to such a testing, he is perfectly entitled to do so; a person cannot be subject to s 319 of the Penal Code against his will by submitting himself to such testing. Whoever carries out such testing without the persons consent would violate s 323 of the Penal Code for voluntarily causing hurt to a person and a court cannot in the absence of a specific legislative provision, order such person to submit himself to an unlawful act to be committed on his person.
19 20 21 22 [1994] 3 CLJ 78. [1998] 2 MLJ 656. [2000] 2 MLJ 569. Ibid, at 571.
44
The Law Review 2013
When the case stated above was decided in the year 2000, there was no specific Act on DNA testing. However, in 2009, the Deoxyribonucleic Acid (DNA) Identification Act was passed. This Act was passed to provide for the establishment of a Forensic DNA Databank Malaysia, the taking of DNA samples, forensic DNA analysis, the use of DNA profiles and information in relation thereto and for matters connected therewith.23 Section 4 states that the primary objective of the DNA Databank is to keep and maintain the indices referred to in subsection 3(3) for the purposes of human identification in relation to forensic investigation, in assisting the recovery or of identification of human remains from a disaster or for humanitarian purposes, and the identification of living or deceased persons. Thus, this Act mainly deals with DNA testing for forensic investigations and would not assist in proving the paternity of a child in a maintenance matter. Hence, it would be difficult to compel the respondent to undergo DNA testing if he refuses to do so, thereby, making it impossible to fulfil the need to prove the paternity of an illegitimate child. The second condition that needs to be fulfilled is to prove that the child is unable to maintain himself. As there are no cases that directly deal with this issue, it is submitted that what needs to be proven here is the fact that the child needs to depend on another person (basically the parents) for his or her survival. F.Comparison with maintenance laws in other jurisdictions The maintenance laws in relation to the right of illegitimate children and the weaknesses that exist in these laws were examined above. The writer will next look at the maintenance laws in other jurisdictions for purposes of comparison with the Malaysian laws. A comparison will be made with the laws in Singapore and the United Kingdom as follows. 1.Maintenance laws in Singapore In Singapore, the main statute concerning family law issues is the Womens Charter. Part VIII of the Womens Charter contains provisions on the maintenance of a wife and children. Section 68 of the Charter provides for the duty of a parent to maintain his or her children, which states:
it shall be the duty of a parent to maintain or contribute to the maintenance of his or her children, whether they are in his or her custody or the custody of any other person, and whether they are legitimate or illegitimate, either by providing them with such accommodation, clothing, food and education as may be reasonable having regard to his or her means and station in life or by paying the cost thereof.
23 Refer to the Long Title of the Act.
45
From the above provision, two matters are clear. First, the fact that the provision clearly states his or her children, thereby imposing the duty on both the father and the mother of the child to maintain their child. Secondly, the section also states whether they are legitimate or illegitimate, thereby imposing the duty on the parents to maintain not only their legitimate child, but their illegitimate child as well. At this juncture, a comparison could be made between the above provision and s 3(2) of the 1950 Act and s 92 of the LRA. Section 3(2) states that the court could order a person to maintain his illegitimate child, thereby implying that the duty is upon the putative father of a child, not the mother, to maintain his child. Further, s 92 of the LRA, which imposes the duty to maintain on the parents to maintain their child, does not state anywhere therein about whether the child is legitimate or illegitimate. In this respect, s 68 of the Womens Charter is more comprehensive when compared to the 1950 Act and the LRA. In addition, s 69(2) of the Womens Charter provides:
A Court may, on due proof that a parent has neglected or refused to provide reasonable maintenance for his child who is unable to maintain himself, order that parent to pay a monthly allowance or a lump sum for the maintenance of that child.
This provision is similar to s 3(1) and (2) of the 1950 Act. 2.Maintenance laws in the United Kingdom The English counterpart to maintenance laws is the Child Support Act 1991. Section 1 of this Act states:
1. The duty to maintain (1) For the purposes of this Act, each parent of a qualifying child is responsible for maintaining him. (2) For the purposes of this Act, an absent parent shall be taken to have met his responsibility to maintain any qualifying child of his by making periodical payments of maintenance with respect to the child of such amount, and at such intervals, as may be determined in accordance with the provisions of this Act. (3) When an assessment of maintenance made under this Act requires the making of periodical payments, it shall be the duty of the absent parent with respect to whom the assessment was made to make those payments.
The above provision, similar to the Singapore Womens Charter, imposes a duty to maintain on both the parents of a child, when it states each parent of a qualifying child. The issue as to whether child here includes an illegitimate child, reference needs to be made to the meaning of qualifying child in s 3(1), which states:
46
The Law Review 2013
A child is a qualifying child if (a) one of his parents, in relation to him, an absent parent; or
(b) both of his parents are, in relation to him, absent parents.
The same section goes on to explain who an absent parent is in s 3(2) as follows:
The parent of any child is an absent parent, in relation to him, if (a) that parent is not living in the same household with the child; and
(b) the child has his home with a person who is, in relation to him, a person with care.
Although the English position on the duty to maintain does not expressly mention illegitimate child like the Singapore Womens Charter, it could be implied from the definition of a qualifying child in s 3(1)(a) and (b) that it includes an illegitimate child as well. This is due to the fact that an illegitimate child usually lives with his or her mother and therefore his father is deemed to be an absent parent. In addition to the above provisions, the Child Support Act 1991 has clearly stated that in considering matters concerning child support, the authorities concerned should take into account the welfare of the child concerned. This can be seen in s 2 of the Act, which states as follows:
2. Welfare of children: the general principle Where, in any case which falls to be dealt with under this Act, the Secretary of State or any child support officer is considering the exercise of any discretionary power conferred by this Act, he shall have regard to the welfare of any child likely to be affected by his decision.
The above provision ensures that the welfare of the child concerned should be taken into account before any decision is made concerning the maintenance of the child. This provision is neither found in the Malaysian laws concerning maintenance nor in the Singapore Womens Charter. G.Enforcement of maintenance orders Having discussed at length the maintenance laws that are in force, it is pertinent to next examine the enforcement of maintenance orders laws. Existence of maintenance laws per se is of no use if there are no enforcement laws. Speaking about enforcement of maintenance orders, the statute that is applicable is the Married Women and Children (Enforcement of Maintenance) Act 1968 (the 1968 Act). Maintenance order is defined in this Act to refer to maintenance orders made under the 1950 Act, the LRA, confirmed by the court under the Maintenance Orders (Facilities for Enforcement) Act 1949 and a maintenance
47
order made by a Syariah court. According to s 4 of this Act, a person in whose favour a maintenance order is made or the guardian of such person may apply for an attachment of earnings order. This attachment of earnings order shall require the defendants employer to make out of the earnings falling to be paid to the defendant payments in satisfaction of the order.24 This Act is prima facie, useful, especially to maintenance orders issued in favour of illegitimate children, as these children stand in a weaker position when compared to the legitimate ones in ensuring that their putative fathers pay up their maintenance. The penalty for non-compliance with the attachment of earnings order and for giving a false notice or statement is provided for in s 12, and is either imprisonment for a term not exceeding one year or a fine not exceeding RM1,000 or both. The same section creates a defence for the employer wherein he may state that he took all reasonable steps to comply with the attachment of earnings order. It is disheartening to note that enforcement measures pertaining to a maintenance order are not effective in Malaysia as the penalty is a mere RM1,000 or a one year imprisonment or both. The question that arises is whether there is an alternative measure in ensuring that the defendant complies with a maintenance order. It is indeed disheartening to note that currently there is no alternative method in enforcing a maintenance order. At this juncture, reference could be made to the position in Singapore and the United Kingdom. The Singapore Womens Charter, in addition to the imposing a fine and sentencing the defaulters to imprisonment, also imposes a garnishee order (which is not stated in the 1968 Act). Apart from relying on these traditional penalties, the Singapore legislature amended the Womens Charter in 2011, whereby additional measures were implemented to enhance the enforcement of maintenance orders from June 1, 2011. The new sanctions which can be imposed by the court are as follows: (a) ordering the defaulters to set up a bankers guarantee against future defaulters;25 (b) ordering the defaulters ordering the defaulters to perform community service up to forty hours;26 (c) ordering the defaulters to attend financial counselling;27 (d) directing the Central Provident Fund Board to disclose the employment information of a defaulter for attachment of earnings order.28
24 25 26 27 28
Section 5. Section 71(1)(d). Section 71(1)(f). Section 71(1)(e). Section 85(2).
48
The Law Review 2013
In addition to the above measures, complainants can also report maintenance debts to a credit bureau.29 Provisions would also be introduced to streamline court process to allow for new rules to be made regarding the practice and procedure of maintenance proceedings. In the United Kingdom, there is a specific agency established to look into child maintenance cases and enforcement of maintenance, i.e. the Child Support Agency (CSA). The CSA was established in 1993 by the Child Support Act 1991, and developed further by the Child Support Act 1995 and the Child Support, Pensions and Social Security Act 2000. The CSA is responsible for calculating the childs maintenance (based on current legislation and the rules) and to collect, enforce and transfer the payment from the non-resident parent to the person with care. Basically, the CSA in the United Kingdom falls under the Department for Work and Pensions (Child Maintenance Group) in Great Britain and is responsible for implementing the Child Support Act 1991. Before the CSA was launched, child maintenance issues were handled by the courts. However, there were problems that arose with the court system as: (a) it did not have the power to trace absent parents; and (b) the courts assessment of child maintenance varied between cases and there was an absence of a determined benchmark to assess the maintenance amount. In addition to the problems stated above, the increasing number of single parent families also led to the need for a specific agency, as these single parent families tend to depend on social security for their living. The increase in the number of single parent families increases the financial burden on the Government.30 Apart from the above reasons, the cost of enforcing maintenance orders was also high, when the respondent failed to pay the maintenance amount. As mentioned earlier, the CSA is responsible for collecting and enforcing child support. This is because child support debts are debts due to the government. After the CSA collects the child support amount, it deducts the amount of social security payment from the child support amount collected and pays the balance sum to the custodial parent (having the custody of the child) who is receiving social security.31 In 2010, the Deputy Minister of Women, Family and Community Development said that the Ministry is studying the establishment of a CSA in Malaysia. The functions of this agency are to trace the parents financial resources, to calculate
29 Section 70(2B). 30 Liu, Eva and Yue, S Y, Child Support Agencies in Overseas Countries, Research and Library Services Division, Legislative Council, Secretariat, December 7, 1998; accessed at www.legco.gov.hk/yr 98 on November 12, 2012. 31 Ibid.
49
the reasonable amount based on the childs needs and the parents means and to enforce the payments of child support or maintenance.32 However, the CSA is yet to be set up in Malaysia. This Agency would be beneficial to all children who are neglected by their parents, especially the illegitimate children, who are in a weaker position when compared to the legitimate ones. H.Recommendations Having looked at the various maintenance and enforcement of maintenance orders laws as well as the relevant judicial decisions, it is submitted that an illegitimate childs right to claim maintenance from his or her parents is not satisfactory in Malaysia as there are many weaknesses or defects that exist in these laws. Hence, in order to overcome these problems or weaknesses, the writer would like to suggest the following recommendations. First, the various maintenance laws concerning child maintenance should be combined into one specific Act such as is done in Singapores Womens Charter. The said provision should not discriminate against illegitimate children. It should provide as follows (incorporating the Womens Charter provision):
It shall be the duty of a parent to maintain or contribute to the maintenance of his or her children, whether they are in his or her custody or the custody of any other person, and whether they are legitimate or illegitimate, either by providing them with such accommodation, clothing, food and education as may be reasonable having regard to his or her means and station in life or by paying the cost thereof.
By incorporating the above provision, there will not be any distinction between the right of a legitimate child and an illegitimate child to claim maintenance, thereby safeguarding the welfare of the illegitimate child. Secondly, as mentioned earlier, the Government was studying the establishment of a CSA in Malaysia three years ago. Hence, it is submitted that the Government should expedite its efforts to establish this Agency which would ease the burden on illegitimate children. This Agency would play an important role in calculating the amount of maintenance that needs to be paid based on the childs needs and the parents means and at the same time enforce the payments of child support or maintenance. Thirdly, it is also submitted that enforcement measures should be tightened. Mere existence of maintenance laws is not sufficient if the enforcement laws are not effective. It then becomes a toothless tiger. Our enforcement laws are archaic and the penalty imposed is not enough to deter the respondent from defaulting in paying the maintenance sum as ordered by the court. The writer
32 Child Support Agency must be for all Malaysians, Free Malaysia Today, Wednesday, August 11, 2010; accessed at http://archive-freemalaysiatobe-for-all-malaysians, on September 27, 2012.
50
The Law Review 2013
proposes that we incorporate the measures that have been incorporated in the Singapore Womens Charter such as: (a) ordering the defaulter to set up a bankers guarantee against future defaulters; (b) ordering the defaulter to perform community service; and (c) ordering the defaulter to attend financial counselling. I.Conclusion In conclusion, it is submitted that much needs to be done to revamp the maintenance laws in Malaysia in order to safeguard the right of an illegitimate child to claim maintenance from his parents. The writer submits that the legislature should take positive steps to ensure that these innocent children should not suffer for the sins of their parents. The Government has come up with certain measures such as the setting up of the Baby Hatch to reduce the number of baby dumping cases. However, the question that arises at this juncture is whether the state would take over the role of a parent in maintaining these unfortunate children if the parents do not want to maintain them, bearing in mind that Malaysia is not a welfare state. Looking at the alarming number of illegitimate children in our nation, it is high time that the relevant authorities act fast and implement measures in safeguarding the welfare of these unfortunate illegitimate children.
51
Digital Sampling: How Creator-Friendly is Copyright Law?

Sik Cheng Peng*
Introduction Digital technologies in the recent years have not only enabled copyright works originally in analogue format to be converted into digital form but also empowered creators to appropriate pre-existing copyright works in creating transformative derivative works.1 A great deal of transformativeness and ingenuity may be exemplified in the end product resulting from the exploitation of pre-existing copyright works. Digital music sampling is one example of the practices. As explained in Newton v Diamond,2 sampling involves the incorporation of short segments of prior sound recordings into new recordings.3 The copyright concerns in relation to sampling revolve around whether a certain short segment included constitutes a substantial part of the pre-existing sound recording and of the underlying musical work,4 and if so, whether it may be excused as an exception to copyright infringement. This article examines how friendly the copyright law of Malaysia is to digital samplers, being users of pre-existing copyright works as well as creators of potentially new copyright works. The first section considers whether the said act falls within the exclusive rights of copyright owners at all. This is followed by a discussion on the substantiality question in determining copyright infringement in a case of digital sampling. The third section then analyses whether it may be exempted from liability for copyright infringement by virtue of the fair dealing exception. Cross reference is made to the relevant legislation and case law of other jurisdictions on the like issues. Finally, it ends with a conclusion on how the issues should be resolved bearing in mind the need of keeping a right balance of the involved interests.
* LLB (Hons), LLM (Malaya), Consultant, Faculty of Law, University of Malaya, Malaysia. 1 Professors Fitzgerald and OBrien observed that new digital technologies and the Internet have brought great potential for remix such as cutting, pasting, mashing, sampling etc. See Fitzgerald, Brian and OBrien, Damien, Digital Sampling and Culture Jamming in a Remix World: What Does the Law Allow? Media and Arts Law Review, 10(4), 279298, available at http://eprints.qut.edu.au/3687/1/3687.pdf . 2 349 F 3d 591 (9th Cir 2003). 3 This definition was adopted by the US Court of Appeals for the 6th Circuit in Bridgeport Music Inc v Dimension Films Inc 401 F 3d 647 at 655 (6th Cir 2004); 410 F 3d 792 at 798 (6th Cir 2005). 4 There could also be an infringement of the concerned performers rights as well as issues in relation to authors moral rights but the present discussion focuses only on copyright issues in relation to sound recordings and musical works.
52
The Law Review 2013
Whether digital sampling falls within the scope of copyright owners exclusive rights In the practice of digital sampling, fractions of sound recordings, and thus inescapably of the underlying musical works as well, are used to create new recordings. Section 13(1)(a) of the Copyright Act 1987 (hereinafter referred to as the CA) provides that copyright in a work5 shall include the exclusive right to control in Malaysia the reproduction in any material form6 of the whole work or a substantial part thereof, either in its original or derivative form. Reproduction of a work in its derivative form may cover transformative works in which pre-existing works are used.7 It follows therefore it is an act of reproduction if a copyright work is adapted or otherwise transformed; and where it is included as a part of a work. Digital sampling, in which portions of sound recordings or of the underlying musical works are taken, clearly involves an act of reproduction.8 As observed by Professor Sterling, Sampling, re-mastering and colorization may involve adaptation of the records which have been used: such operations will in any event involve reproduction.9 As of date, there has been no Malaysian case law involving digital sampling. A reference may be made to the US case law on this matter. In Bridgeport Music, Inc v Dimension Films,10 in which the main dispute was over the legality of
5 Section 13(1) of the CA makes no distinction between traditional copyright works, i.e. literary, musical and artistic works, and neighbouring rights such as sound recordings. 6 Material form as defined in s3 of the CA includes any form (whether visible or not) of storage from which the work or derivative work, or a substantial part of the work or derivative work can be reproduced. Reproduction refers to the making of one or more copies of a work in any form or version, and in relation to an artistic work includes the making of a copy in three dimensions of a two-dimensional work and the making of a copy in two dimensions of a three-dimensional work. Copy is defined as a reproduction of a work in written form, in the form of a recording or film, or in any other material form. In Rock Records (M) Sdn Bhd v Audio One Entertainment Sdn Bhd [2005] 3 MLJ 552; [2005] 1 CLJ 200, it was held that the plaintiff as the copyright owner enjoyed the rights of exclusive control including the right to control the reproduction of sound recordings in various material forms or media such as cassettes, laser discs (LD), video compact discs (VCD) or digital video compact discs (DVD). 7 Section 8(1)(a) of the CA prescribes translations, adaptations, arrangements and other transformations of works as derivative works which are entitled to be protected as original works. 8 The definition of adaptation in s3 of the CA provides examples of adaptations derived from pre-existing literary, musical and artistic works. Yet, it is silent on what may constitute adaptation or derivative forms of sound recordings and films. Khaw remarked that, there is no reason to suppose that derivative form in relation to a sound recording or film means anything other than adaptation, arrangement or transformation of the sound or visual images fixed in the recording, film or broadcast. As such the reproduction right in respect of a sound recording should include the right to limit the practice of sampling. See Lake Tee Khaw, Copyright Law in Malaysia (3rd edn) (Kuala Lumpur: LexisNexis, 2008), p222. 9 Sterling, John AL, Intellectual Property Rights in Sound Recordings, Film and Video (London: Sweet & Maxwell, 1992), para 4.35. 10 See supra, note 3.
53
sampling, the US Court of Appeals for the Sixth Circuit referred to s 114(b)11 of Title 17 of the United States Code (hereinafter referred to as the 17 USC) and opined that the provision in effect means it is the exclusive right of a copyright owner of a sound recording to sample the sound recording as it falls within the scope of the rights to duplicate and to prepare derivative works exercisable by copyright owners of sound recordings. Could digital sampling be excused as a de minimis use? Since sampling usually involves making use of only a portion, as opposed to the whole, of a musical work or a sound recording the question of whether it could be excused as a de minimis12 use may be raised. In Newton v Diamond13 the US Court of Appeals for the Ninth Circuit affirmed the district courts decision14 that no licence to use the underlying composition was required since the notes taken did not possess sufficient originality to attract copyright protection. Even on the assumption that it was copyrightable such taking by the defendants was de minimis and thus excused. The use of a certain portion of a copyright work is insignificant if the average audience would not recognise the appropriation.15 It should be noted, however, that Newton v Diamond dealt with the de minimis principle in relation to the underlying musical composition in the sound recording, and not the sound recording itself. Thus this case may not be instructive as regards the applicability of the de minimis principle to sound recordings.16 In Bridgeport Music, Inc v Dimension Films17 the dispute was over the use of a sample from the composition and sound recording in a rap song. The segment copied from the sound recording was three notes which were played repeatedly at the opening of the recording and was looped or repeated a few times in the defendants song. The district court found the use de minimis since the sampling in the case did not rise to the level of a legally cognizable appropriation.18 One of the plaintiffs appealed on the ground that the question
11 Section 114(a) of the 17 USC provides that the exclusive rights in sound recordings are the right of reproduction, the right of preparing derivative works; and the right of distribution, as found in ss 106(1)(3). Section 114(b) of the 17 USC imposes further limits on the right to prepare derivative works by stating that such right covers only circumstances where the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality. Nevertheless the practice of sampling does involve arrangement, mixing or alteration of the actual sounds contained in sound recordings. 12 De minimis is derived from the Latin maxim de minimis non curat lex, which literally means the law does not concern itself with trifles. 13 See supra, n2. In this case the defendants secured a licence to sample the sound recording of the plaintiffs performance without a licence to use the underlying composition. 14 204 F Supp 2d 1244 (C D Cal 2002) at 1256. 15 Fisher v Dees 794 F 2d 432 (9th Cir 1986). 16 See Somoano, Leah M, Note: Bridgeport Music, Inc v Dimension Films: Has Unlicensed Digital Sampling of Copyrighted Sound Recordings Come to an End? 21 Berkeley Tech LJ 289. 17 See supra, n3. 18 230 F Supp 2d 830 (M D Tenn 2002) at 841.
54
The Law Review 2013
of substantial similarity or de minimis should not be considered at all when the defendant did not dispute that it digitally sampled a sound recording. The United States Court of Appeals for the Sixth Circuit first held that the analysis used to decide infringement of a musical composition copyright is not to be used to determine infringement of a sound recording. Next the court held that s 114(b) of the 17 USC expressly excludes a sound recordings copyright owner from enjoying rights to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or stimulate those in the copyrighted sound recording. The court found that this means a recording containing any sounds of another recording would constitute infringement and concluded that any unauthorized use of a digital sample taken from anothers copyrighted recording would be an infringement of the copyrighted recording.19 The court continued, In fact, the copyright law specifically provides that the owner of copyright in a sound recording has the exclusive right to prepare a derivative work in which the actual sounds fixed in the sound recording are rearranged, remixed, or otherwise altered in sequence or quality. A recording that embodies samples taken from the sound recording of another is by definition a rearranged, remixed, or otherwise altered in sequence or quality. 20 The effect of the decision in Bridgeport Music, Inc v Dimension Films is that the de minimis principle was wholly precluded from consideration in cases of digital sampling in relation to sound recordings. It follows therefore that a digital sampler is required to get a licence to do so from the concerned copyright owner in all cases regardless of whether the part taken from a sound recording is substantial or insubstantial. As the US court put it, Get a license or do not sample.21 Such approach was criticised as operating against the objective of copyright law, namely the encouragement of artistic creation.22 Besides, the costs of securing a licence for sampling may be too exorbitant in particular in the case of independent artists with limited budget. All in all, sample clearance is time-consuming, expensive, unpredictable, and a legal and administrative hassle.23 As noted by Schietinger, the de minimis
19 20 21 22
See supra, n3. Ibid. Ibid, at 20. Schietinger, John, Bridgeport Music, Inc v Dimension Films: How the Sixth Circuit Missed a Beat on Digital Music Sampling, 55 DePaul L Rev 209 (20052006), 233. Schietinger cited Nate, p 234: The sample is simply used as the starting point for a creative work; although it provides an important foundation for the work, it is not identifiable with the final product and the creativity of the work stands on its own. Nate, Lindell, Are Courts Really Copyright-Competent?, at http://lsolum.typepad.com/copyfutures/2004/10/are_courts_real. html (October 7, 2004). 23 Ibid, at 238, citing Baroni, Michael L, A Pirates Palette: The Dilemmas of Digital Sound Sampling and a Proposed Compulsory License Solution, 11 U Miami Ent & Sports L Rev 65 (1993) 93.
55
principle is neither excluded by the language of s 114(b) of the 17 USC24 nor by its legislative history.25 Unlike the 17 USC which provides for copyright in musical works and sound recordings distinctly, s13(1) of the CA26 provides for the scope of copyright in respect of musical works and sound recordings in the same manner and expressly refers to the controlled acts done of the whole or a substantial part of the relevant work. It is clear that the substantiality requirement is expressly and statutorily prescribed in the copyright statute of Malaysia. Thus the de minimis principle shall be applicable to a defendant engaged in digital sampling of sound recordings. In fact, it is crucial to consider substantiality in determining copyright infringement of both sound recordings and musical works. How may the substantiality issue be addressed in respect of digital sampling under the Malaysian law? The difficulties with respect to digital sampling lie in the fact that a very small and musically unexceptional part of a recording of a popular piece of music may yet be instantly recognizable.27 The Malaysian court in Longman Malaysia Sdn Bhd v Pustaka Delta Pelajaran Sdn Bhd28 considered the three factors listed by Ricketson29 to decide substantiality, i.e. first, the originality of the part at dispute; second, whether the defendant shares the same purpose as the plaintiff in taking or using that particular part; and third, whether such use by the defendant affects the sale of the original work. The first factor concerns the sufficiency of effort involved in producing the part in question.30 Some have proposed the test what is worth copying is worth protecting31 to be applied to sampling.32 Nonetheless, one should not
24 By virtue of the word limited, s 114 means limiting the rights in a sound recording from all other types of derivative activity such as public performances, not as granting a sound recording copyright holder a stronger or additional right. Schietinger, supra, n23, quoting Copyright Law. Sound Recording Act. Sixth Circuit Rejects De Minimis Defense to the Infringement of a Sound Recording. Bridgeport Music, Inc v Dimension Films, 383 F 3d 390 (6th Cir 2004), Harvard Law Review, Vol 118 No4 (February, 2005), 13551362, at 1359. 25 In fact, it is stated in the House of Representatives Report that a right in a sound recording is infringed whenever all or any substantial portion of the actual sounds that go to make up a copyrighted sound recording are reproduced. Ibid, at 1360. 26 Section 13(1) of the CA reads, Copyright in a literary, musical or artistic work, a film, or a sound recording or a derivative work shall be the exclusive right to control in Malaysia [the five controlled acts] of the whole work or a substantial part thereof . 27 Garnett, Kevin, Davies, Gillian and Harbottle, Gwilym, Copinger and Skone James on Copyright (15th edn) (London: Sweet & Maxwell, 2005), para 768. 28 [1987] 2 MLJ 359. 29 Ricketson, Sam, The Law of Intellectual Property (Law Books, 1984), paras 9.109.14. 30 Section 7(3)(a) of the CA states that a literary, musical or artistic work shall not be eligible for copyright unless a sufficient effort has been expended to make the work original in character. 31 University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 610. 32 See supra, n27.
56
The Law Review 2013
ignore that it was actually prescribed as the rough practical test that what is worth copying is prima facie worth protecting.33 Due attention should be given to the qualifications of rough and prima facie for otherwise the proposition obviously proves too much.34 While the factor when applied to musical works would take into account the skill or labour expended by the author in creating the part at dispute, doubts may arise as regards its application to sound recordings. The CA does not impose originality as a pre-requisite for copyright subsistence in sound recordings and thus it does not seem logical to then expect its existence in the sampled part. The originality factor appears to be irrelevant to deciding the substantiality question in relation to sound recordings. It is suggested that in respect of sound recordings, the factors such as the nature of the relevant copyright work and the objective of protecting such work should be considered instead. As Sackville J observed in Nationwide News Pty Ltd & Ors v Copyright Agency Ltd,35 the cases concerned with substantiality in relation to works cannot necessarily be applied uncritically to allegations of infringement of published edition copyright. Sackville J continued, In relation to a published edition, the quality of what is taken must be assessed by reference to the interest protected by the copyright.36 Hence it is crucial to identify the interest being protected in a sound recording. In Network Ten Pty Ltd v TCN Channel Nine Pty Ltd & Ors37 it was held that in deciding substantiality in relation to a television broadcast it is to be considered with regard to the cost and skill in assembling or preparing and transmitting programmes to the public. Section 3 of the CA defines author in relation to sound recordings38 as the person by whom the arrangements for the making of the recording were undertaken. Given the similar nature of television broadcasts and sound recordings being neighbouring rights, and when read together with the definition of author of sound recordings, it is submitted that the interest being protected in sound recording refers to the cost and skill in arranging for the making of the sound recordings.
33 See supra, n31. 34 Laddie, Hugh, The Modern Law of Copyright and Designs (3rd edn) (London: Butterworths, 2000), para 3.131. 35 (1996) 34 IPR 53 at 71. 36 Ibid, at 72. 37 [2005] FCAFC 53. Hely J observed at para 55 that originality is not a touchstone for the assessment of substantiality as originality forms no part of the identification of the interest protected by the copyright. For that reason, the notion that reproduction of non-original matter will not ordinarily involve a reproduction of a substantial part of a copyright work can have no application in the case of Part IV copyright [that is, other than literary, musical and artistic works]. 38 Sound recording is defined in s3 of the CA as any fixation of a sequence of sounds or a representation of sounds capable of being perceived aurally and of being reproduced by any means, but does not include a sound-track associated with a film.
57
It is a question of fact, depending on the circumstances of each case, whether the cost and skill in arranging for the making of a sound recording has been exploited in such a way that it is just to regard the taking substantial. Even though it has always been reiterated that substantiality is a question of quality rather than of quantity,39 the amount of the portion taken is still a material factor to be considered but it is not the only, nor necessarily the principal, criterion.40 In the case of digital sampling the portion used is usually not much in quantity since only short segments are reproduced. It is therefore hard to see how it would be tantamount to a substantial part of the cost and skill in arranging for the making of the sound recordings. The second factor proposed by Ricketson which looks at the objective of a defendant in making use of a plaintiffs work appears to favour digital samplers since the purpose of taking the relevant portion is to mix it with portions derived from other sound recordings with the ultimate aim to create a new recording. The samples created are of a genre different from that of the original recordings or musical works. Whereas the third factor, the impact of the defendants conduct on the sale of the plaintiffs work, may similarly favour digital samplers because the typical recordings resulted from the act of sampling are distinguishable aurally from the original recordings. It is hard to see how they may substitute the original works and thus have adverse effect on the sale of the original works. Apart from the three factors proposed by Ricketson, other factors may also be relevant. In a case of altered copying, as contrary to unaltered copying, it may be pertinent to ask whether a substantial part of the plaintiffs work survives in the defendants so as to appear to be a copy of it.41 A burlesque, in the form of film, made of a novel was held to be non-infringing in Glyn v Weston Feature42 as very little was reproduced from the novel. In Joy Music v Sunday Pictorial43 a parody made of a song lyric in which only a repeated phrase was used was found to be non-infringing too. Referring to both cases, Cornish and Llewelyn pointed out that the common question asked was whether the defendant had bestowed such mental labour on what he had taken and subjected it to such revision and alteration as to produce an original work.44 It is submitted that similar to parody and burlesque instances, digital samplers generally expend sufficient effort and labour in working on the sampled portions and transform them so as to create an original work in itself. Due regard should be given to the creativity and transformativeness
39 Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 293. 40 See supra, n35 at 72. 41 Cornish, W and Llewelyn, D, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (6th edn) (London: Sweet & Maxwell, 2007), para 1209. 42 [1916] 1 Ch 261. 43 [1960] 2 QB 60. 44 See supra, n41, para 1210.
58
The Law Review 2013
in the derivative works ultimately produced by the defendant. All in all, it is argued that digital sampling may not constitute copyright infringement for it is unlikely that the short segments taken may be tantamount to a substantial part of the original works. Could the fair dealing exception come to digital samplers rescue? Assuming the taking made by digital samplers is held to be substantial, it will then be necessary to consider whether or not they could avail themselves of any statutory exception under the CA. The CA implements a closed system of exceptions whereby an act may not constitute copyright infringement only if it falls within any of the situations specifically listed and provided under s13(2). Each exception as prescribed in s13(2) is tied to a particular purpose and certain requirements; for instance, an act done for the purpose of private study must also be conducted in a fair manner and accompanied by a proper acknowledgment.45 This means a conduct which may be considered fair may nevertheless be expelled from the closed system of statutory exceptions if it does not meet any of the prescribed requirements for the relevant exception. The most possible exception to be considered in relation to digital sampling is the fair dealing exception in s13(2)(a) in view of the fact that none of the other specific exceptions in s13(2) appears to be of relevance, except for the exception in s13(2)(b), i.e. the doing of an act by way of parody. It is noted, however, that not all digital samplers are engaged in creating a work of parody. The Copyright (Amendment) Act 201246 has introduced several amendments including those on s13(2)(a). The requirement of a proper acknowledgment47 which was previously compulsory only in cases of a public use is now a must for any use, whether public or private. Prior to the 2012 amendments, the acknowledgment requirement may be dispensed with if the act is done by means of a sound recording, film or broadcast, regardless of the purpose of the act. The exception has now been narrowed down to instances of reporting of news or current events by means of a sound recording, film or broadcast.48 Another two significant changes effected are the insertion of the word including before the prescribed purposes of a fair dealing, i.e. research,49 private study, criticism, review or the reporting of news50 or current events; and the introduction of a new subsection (2A) which is in pari materia with
45 46 47 48 49 The fair dealing exception as provided in s13(2)(a) of the CA. Act A1420, which came into force on March 1, 2012. This means an acknowledgment of the title of the work and its authorship: s13(2)(a). Section 13(2)(a) of the CA. Prior to the Copyright (Amendment) Act 2012, s13(2)(a) recognised fair dealing for purposes of non-profit research. With the removal of the phrase non-profit, s13(2)(a) is now available to anyone who conducts a research, whether for profit or not, subject to all other requisites being fulfilled. 50 News was included as the subject matter of reporting, apart from current events, by the Copyright (Amendment) Act 2012.
59
s 107 of the 17 USC listing the four factors among the matters to be considered in deciding whether or not a dealing is fair. The scope of s13(2)(a) of the CA, as it was prior to the Copyright (Amendment) Act 2012, was considered by the High Court in MediaCorp News Pte Ltd & Ors v MediaBanc (JB) Sdn Bhd & Ors.51 In this case the plaintiffs, a Singaporean broadcasting and media group of companies, sued the defendants on the ground that the latter, in providing the service of news and commercials monitoring to its clients, had supplied clips of news segments and commercials of the plaintiffs. The defendants contended that since they conducted a media monitoring service as opposed to a broadcasting business, they were entitled to a fair dealing as provided in s13(2)(a).52 The defendants referred to the Canadian Supreme Courts decision in CCH Canadian Ltd v Law Society of Upper Canada53 in which research was interpreted liberally and broadly so as not to be confined to only non-commercial entities. Referring to s13(2)(a), Nalini Pahmanathan J observed as follows:
The section is drafted so as to specify with particularity the only circumstances or occasions of use which would qualify for exemption, namely non-profit research, private study, criticism, review or the reporting of current events. The section does not provide for a broad and unspecified category of acts of fair dealing or use, of which the circumstances of non-profit research, private study, criticism, review or the reporting of current events provide some specific examples. This is evident from the fact that the words fair dealing are immediately qualified by the words for the purposes of and followed by the specific events or circumstances in which copyright control is precluded.54
The court found the defendants were engaged in a commercial or profit based enterprise and thus cannot fall within the definition of non-profit research.55 The position of the CA, prior to the 2012 amendment, was similar to that of the fair dealing provisions of the UK Copyright, Designs and Patents Act 1988. As Laddie J stated in Pro Sieben Media AG v Carlton UK Television Ltd,56 the fair dealing provisions are not to be regarded as mere examples of a general wide discretion vested in the courts to refuse to enforce copyright
51 [2010] 6 MLJ 657; [2010] 1 LNS 296; [2010] 4 AMR 1. 52 Ibid, para 230. 53 2004 SCC 13; [2004] 1 SCR 339; 236 DLR (4th) 395. The case involved the question of whether the Law Society of Upper Canada infringed copyright by virtue of its Great Library reproduction services, or whether it was entitled to the fair dealing exception in s29 of the Canadian Copyright Act. It was held that the services facilitated lawyers research and were thus entitled to the fair dealing exception despite the fact that they conducted their law service for profit. 54 See supra, n51, para 202. 55 Ibid, para 230. 56 [1988] FSR 43.
60
The Law Review 2013
where they believe such refusal to be fair and reasonable. The High Court in MediaCorp News Pte Ltd & Ors v MediaBanc (JB) Sdn Bhd & Ors57 noted that s 107 of the 17 USC differs on this point as the various purposes58 are referred to as examples of fair use but do not serve to provide the defining limits for fair dealing, unlike the Act in Malaysia. To that extent the definition of fair dealing in that jurisdiction is considerably wider than in Malaysia under the Act.59 It is submitted that the Copyright (Amendment) Act 201260 has converted s13(2)(a) into a provision akin to that of the 17 USC. The current s13(2)(a), with the presence of the word including before the specified purposes, has eradicated the earlier limit on the types of acts which may constitute fair dealing. Now it provides for a broad and unspecified category of acts of fair dealing or use, in the words of Nalini Pahmanathan J in MediaCorp News Pte Ltd & Ors v MediaBanc (JB) Sdn Bhd & Ors.61 The word including immediately before the enumerated purposes indicates that research, private study, criticism, review or the reporting of news or current events are merely some examples of the acts of fair dealing. This is strengthened by the introduction of the new subsection (2A) listing four factors that shall be considered in determining whether an act constitutes a fair dealing. The amendments have thus opened up the initially closed system of fair dealing under the copyright law of Malaysia. Nonetheless, it remains to be seen as to how open it may be, largely depending on the approach to be adopted by the courts in construing s13(2)(a). Applying the ejusdem generis rule,62 the purpose of a fair dealing that falls within s13(2) (a) should be of the same general nature of kind of the specified purposes. In other words, a fair dealing shall have a purpose similar in nature to research, private study, criticism, review or the reporting of news or current events if a restrictive approach is employed in interpreting s13(2)(a). It should be noted that even if a court elects to apply a restrictive approach in construing s 13(2)(a) the scope of the provision has undoubtedly been broadened by the Copyright (Amendment) Act 2012 since the purpose of a defendant in the doing of a claimed fair dealing is no longer confined to research, private study, criticism, review or the reporting of news or current events.
57 See supra, n51. 58 107 of the 17 USC states, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords, or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright . 59 See supra, n51, para 210. 60 See supra, n46. 61 See supra, n51. 62 The ejusdem generis rule means where of the same general kind or class as those specifically mentioned. See Blacks Law Dictionary Free Online (2nd edn), available at http:// thelawdictionary.org/ejusdem-generis/.
61
If a restrictive approach is used in construing s 13(2)(a), the practice of digital sampling will be fraught with difficulties to qualify for the shelter thereof. Applying the ejusdem generis rule, digital sampling seems to be of a different nature or group as compared to the specified purposes, i.e. research, private study, criticism, review or the reporting of news or current events which apparently tilt in favour of the interests of learning and public access to information and knowledge whereas the main interest served by digital sampling may be said to be the freedom of creativity. Arguably digital sampling does not belong to the same general kind or class as that of the specified purposes in s13(2)(a). It follows therefore digital sampling may not qualify as a fair dealing in the context of s13(2)(a) at all. On the other hand, should a liberal approach be adopted in interpreting s13(2)(a), any act may be entitled to the exception without the need to be of a similar nature to the specified purposes. Arguably an act may be considered as a fair dealing if it is in the public interest to be so regarded, for instance if it encourages freedom of creativity and promotes the production of more works. Digital sampling may thus qualify for the exemption in s 13(2)(a), provided that such act is held to have been conducted in a fair manner. A reference may be made to the Canadian Supreme Courts liberal approach in construing the listed purposes of a fair dealing63 in CCH Canadian Ltd v Law Society of Upper Canada64 in which it was stated that the purposes should not be given restrictive interpretation as to avoid undue restriction on users rights.65 The Canadian Supreme Court was more concerned with the real purpose or motive in using the copyrighted work.66 Assuming a liberal approach is employed in construing s13(2)(a), there is still an obstacle that digital samplers must overcome, i.e. the question of whether or not a particular instance of digital sampling is fair. It will thus require the consideration of the four factors as enumerated under the new subsection (2A), which is similar to the corresponding provision of the 17 USC, i.e. s 107. It should be noted that s13(2A) states that in determining whether a dealing constitutes a fair dealing, the factors to be considered shall include . The word shall indicates the mandatory consideration of the four factors while the word include shows that the list of the factors is not exhaustive. As observed from the case of MediaCorp News Pte Ltd & Ors v MediaBanc (JB) Sdn Bhd & Ors, the court considered other factors, namely on an objective
63 The Canadian Copyright Act implements a closed system of defined exceptions similar to that of the United Kingdoms and Malaysias CA. Its fair dealing provision is contained in s29. 64 See supra, n53. 65 See supra, n53, para 54. It is noted that instead of seeing a fair dealing as an exception or defence to copyright infringement, the Canadian Supreme Court viewed it as a right (para 48). As DAgostino remarked, the approach is nonetheless unclear as to the position of creators. See DAgostino, Giuseppina (2008) 53 McGill L J 309 at 328. 66 Ibid.
62
The Law Review 2013
assessment what is the impression created by the reproduced/copied dealing and what is the motive of the party in its dealing with the work.67 To consider the possibility of digital sampling to qualify as a fair dealing, the purpose and character of the dealing68 shall be taken into account. As held by the US Supreme Court in Campbell v Acuff-Rose Music, Inc, the focus of this factor should be on whether the new work merely supersedes the objects of the original creation, or whether and to what extent it is transformative, altering the original with new expression, meaning, or message.69 Digital sampling, by its nature, does not merely supersede the objects of the original sound recordings or musical works. It is a practice whereby brief segments are sampled from different sound recordings and altered or manipulated so as to produce a remix which is always significantly distinguishable from the original sound recordings or musical works. It does result in the creation of a new sound recording which may sufficiently satisfy the requisite degree of transformativeness. The factor in s13(2A)(a) also calls for the consideration of whether such dealing is of a commercial nature or is for non-profit educational purposes, which may operate against a digital sampler if the sampling is used in commercial settings. Nonetheless the US Supreme Court in Campbell v Acuff-Rose Music, Inc observed, The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a fair use.70 A commercial use of pre-existing copyright works should not in itself foreclose an act from the protection of fair dealings. In the context of digital sampling which demonstrates a high degree of transformativeness it is submitted that commerciality of the use should be of little bearing. The next factor to be considered is the nature of the copyright work in question.71 It is a general rule that copyright law tolerates a use made of factual works more than that made of creative works. This is likely to weigh against digital samplers in view of the fact that the underlying musical works and sound recordings involved are creative works.72 However this is not conclusive as
67 68 69 70 See supra, n51, para 214. Section 13(2A)(a) of the CA. 510 US 569 (1994) at 579. Ibid. As noted by the US Supreme Court, The language of the statute makes clear that the commercial or nonprofit educational purpose of a work is only one element of the first factor enquiry into its purpose and character. Section 107(1) uses the term including to begin the dependent clause referring to commercial use, and the main clause speaks of a broader investigation into purpose and character. If, indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the illustrative uses listed in the preamble paragraph of s 107, including news reporting, comment, criticism, teaching, scholarship, and research, since these activities are generally conducted for profit in this country (at 584). 71 Section 13(2A)(b) of the CA. 72 As decided in Harper & Row Publishers v Nation Enterprises 471 US 539 at 546, the factor may also generally operate against a finding of fair use if the work involved is an unpublished work.
63
shown in Campbell v Acuff-Rose Music, Inc73 where a parody qualified as a fair use despite the fact that the original copyright work involved was a musical work, a creative work. The factor prescribed in s13(2A)(c) of the CA, the amount and substantiality of the portion used, should favour digital samplers as the portion used is usually minimal. As Somoano noted, it would be difficult to ever conclude that such a minimal taking also constituted the heart of the original work.74 It is thought that the factor should only mean that a finding of fair dealing is more likely to be made if a lesser amount of the copyright work has been appropriated. After all it should be noted that this is only one of the factors to be taken into account and is by no means conclusive as regards the applicability of the exception. Section 13(2A)(d) requires the effect of the dealing upon the potential market for or value of the copyright work to be considered. A digital sampler will stand a higher chance if the work he or she produces does not compete or interfere with the sale of the original copyright work. Somoano was of the view that Where the two works are from different genres, this factor should weigh in favour of the defendant, as the new work will probably not impact the market for the original if the audiences for each genre do not overlap.75 The resulting digital samples typically do not and are not intended to replace the original copyright works. An analogy may be drawn to the case of Kelly v Arriba Soft Corp76 in which the US Court of Appeals for the Ninth Circuit found that the lower resolution thumbnail images did not infringe the copyright owners potential to license its images since the original images in high quality format could only be obtained from the copyright owner. The same may be said in respect of digital sampling which will not replace the original copyright works and the latter may be obtained only from the copyright owners. In fact, there have been arguments that sampling might instead boost the potential market for the original sound recordings by renewing interest in older and probably forgotten music.77 Considered as a whole, it is submitted that digital sampling may likely be treated as a fair dealing under s13(2)(a) of the CA. Get the balance right The US Court of Appeals for the Sixth Circuit in Bridgeport Music, Inc v Dimension Films78 ruled out the de minimis principle and substantial similarity analysis from application in relation to sound recordings. It is thought that
73 74 75 76 77 See supra, n69. See supra, n16. Ibid. 336 F 3d 811 (9th Cir 2003). Marcus, Jason H, Dont Stop That Funky Beat: The Essentiality of Digital Sampling to Rap Music, 13 Hastings Comm & Ent L J (1991) 770772, at 784. 78 See supra, n3.
64
The Law Review 2013
such approach has defeated an important mechanism of copyright law which helps maintain a fair balance of interests between copyright owners and subsequent creators.79 The de minimis principle allows subsequent creators to make an insubstantial use of pre-existing copyright works in creating their own works without the need of getting the permission of the copyright owners and thus helps to encourage the production of more works. As discussed earlier, the position in Malaysia on this matter differs from that of the US by virtue of the express provision of substantiality in the CA, which refers to both musical works and sound recordings. As such the question of substantiality is pertinent and may turn out to be conclusive to legality issues of digital sampling in Malaysia. Assuming a court finds a digital sampling involves the use of a substantial part of a plaintiffs work, the defendant may possibly be relieved by the fair dealing exceptions under s13(2)(a). It is noted that the real problem with regard to the applicability of s13(2)(a) may lie in the scope of the purposes as mentioned above, rather than with the consideration of whether such act constitutes a fair dealing within the context of s13(2A). It remains to be seen whether Malaysian judges will employ a restrictive or a more liberal approach in interpreting the scope of the purposes under s13(2)(a) of the CA so as to ensure that the society will progress in the development of its creativity and ideas without undue restriction.80 It is submitted that copyright protection should be viewed as the means to achieve the end, as opposed to the end in itself, and the end of copyright law is to encourage the creation of more works and the benefits they may bring to the public. 81 With that as the objective, copyright law should be more flexible and lenient in respect of derivative works resulting from appropriation of pre-existing works.82 After all, nothing is genuinely new: Culture, like science and technology, grows by accretion, each new creator building on the works of those who came before. Overprotection stifles the very creative forces its
79 Morrison noted that both doctrines take into account the public interest of freedom of expression and impose adequate limits on the interests of the audience and copyright owners. Besides, the doctrines have longstanding precedential guidelines and are able to offer greater certainty for producers and record companies as regards which types of use would require a license. See Morrison, David M, Bridgeport Redux: Digital Sampling and Audience Recoding, 19 Fordham Intell Prop Media & Ent L J 75 (20082009). 80 See supra, n51, para 194. 81 As Lessig observed, intellectual property is an instrument. It sets the groundwork for a richly creative society but remains subservient to the value of creativity. We have become so concerned with protecting the instrument that we are losing sight of the value. See Lessig, Lawrence, Free Culture (London: The Penguin Press, 2004), p19. 82 Ibid. Lessig identified the cause of the confusion as regards intellectual property as an instrument is a distinction that the law no longer takes care to drawthe distinction between republishing someones work on the one hand and building upon or transforming that work on the other. Copyright law at its birth had only publishing as its concern; copyright law today regulates both.
65
supposed to nurture.83 Appropriation, or borrowing, is a common practice in the production of musical works.84 As rightly argued by Professor Fitzgerald and OBrien, a more tolerant doctrine of fair use should be implemented to allow creative innovation. They considered that The expectation that every second or note of recorded music must be paid for and therefore cannot be utilized without permission is too rigid and ignores the fact that the creativity of today builds on that of the past quite often without any compensation being paid.85 It is thought that an open and flexible fair dealing exception is crucial with a view to optimising the great potential offered by digital technologies in respect of the new ways of creating and utilising copyright works. Exempting digital sampling from copyright infringement liability may have the effect of shrinking the scope of the rights enjoyed by the original copyright owners. Nonetheless that is exactly the function of the exceptions provided under the existing copyright laws to strike a balance between public access to creative work and the protection of this work as the property of the copyright owner.86 Such need to maintain a balance of interests has long been acknowledged and endorsed in international treaties.87 Overprotection of copyright usurps the public domain; and absolute protection usurps absolutely.
83 White v Samsung Elecs Am Inc 989 F 2d 1512 (9th Cir 1993) at 1513. 84 Arewa, Olufunmilayo, From JC Bach to Hip Hop: Musical Borrowing, Copyright and Cultural Context, 84 NCL Rev 550551 (2006). 85 See supra, n1. 86 Halbert, Debora, Mass Culture and the Culture of the Masses: A Manifesto for UserGenerated Rights, 11 Vand J Ent & Tech L 921 at 953. 87 See, for instance, the Preamble to the WIPO Copyright Treaty, which recognised the need to maintain a balance between the rights of authors and the larger public interest, particularly education, research and access to information, as reflected in the Berne Convention. A similar provision is likewise noted in the Preamble to the WIPO Performances and Phonograms Treaty.
66
The Law Review 2013
Fifty-Five Years of Independence: Revisiting the Federal Constitution Legal Changes and Impact
Abdul Hamid Mohamad *
The topic covers 55 years of my life. The remaining 15 years is the earlier part. I was born in a kampung in Province Wellesley North surrounded by rice fields during the Japanese occupation. I lived through Malayan Union unknowingly, the Federation of Malaya which I learned about in Malay school, the struggle for Independence when I was able to read Malay newspapers, saw the first General Election, heard the historic shout of Merdeka through the first radio in the kampong with I bought with my saving from my Federal Minor Scholarship, followed the formation of Malaysia, stranded in Kampung Baharu during the May 13 incident 12 days after I reported for duty at the Attorney Generals Chambers. The rest you might know. I think, I have lived during the most important period in the history of the country, tasted the fruits of Independence and played a part, no matter how minor, in its history. I have been asked to revisit the Federal Constitution pointing out the legal changes and impact. I have not written a thesis on it. Instead, I have picked a few topics and will share with you some of my thoughts and experience. To start with, let us remind ourselves of a bit of history. Beginning with the fall of the Sultanate of Melaka in 1511, colonisation (by whatever name you call it) of the Malay Peninsula was a story of colonisation of areas ruled by the Malay Rulers by European powers. The British did it through force, war and persuasion followed by treaties entered with the Malay Rulers. It was a colonisation of the Malay Peninsula ruled by the Malay Rulers. Those unsuccessful rebellions or resistance led by Dol Said, Dato Maharaja Lela, Dato Sagor, Dato Bahaman, Tok Gajah, Mat Kilau or Tok Janggut were all Malay rebellions or resistance against the British. Malayan Union was opposed by the Malays. The struggle for Independence began as a Malay affair. A great majority of Chinese and Indians, at that time, still looked to China and India, respectively, as their motherland, while a group of Chinese had the ambition to seize power and turn the country into a communist state, following the
* Former Chief Justice of Malaysia. E-mail: tunabdulhamid@gmail.com; http://www. tunabdulhamid.my. This article is an edited version of a paper presented at a conference on Transformation of Security and Fundamental Rights Legislation: Rights and Responsibilities: Between Hope and Challenges, January 1416, 2013.
67
success of the Communist Party in China. The Chinese and the Indians joined in later in the negotiation for independence with the British, when independence was imminent, to protect their own interests. During the negotiation for independence, the Pan-Malayan Islamic Party (PMIPnow PAS) proposed that the then Straits Settlements of Penang and Melaka be turned into Malay States with a view to extending Malay privileges to ensure that the special position on the Malays in these two states would be protected.1 In Kelantan, an organisation called Kelantan Malay United Front was formed in late 1955. The organisation campaigned for Kelantan to secede (keluar) from the Federation. They wanted to restore the supremacy of the Islamic religion, Malay language and Malay customs and feared that independence would mean that the Malays were being degraded to accept Chinese and Indians as Ministers.2 In Johore, Sultan Ibrahim opposed the federation proposal arguing instead for the retention of the British Advisor State. He was supported by the Johore Malays National Organisation which wanted Johore to be an independent State under British protection after Johors secession from the Federation.3 The Labour Party, in its memorandum to the Reid Commission, called for the establishment of a unitary government for an independent Malaya, contending that retaining the Sultans and States in a federal government structure would produce a feudal state.4 However, it was basically the Alliance Partys proposals that were finally accepted and written in the Federal Constitution that still survives until today. It should be noted that the original Article 1 of the Federal Constitution as it stood on Merdeka Day read as follows:
1. (1) The Federation shall be known by the name of Persekutuan Tanah Melayu (in English the Federation of Malaya).
In spite of the fact that the Malay Peninsula was colonised from the Malays, Malay leaders tried to oppose it, later the Malays objected to the Malayan Union, struggled for Independence, Malay youths sacrificed their lives to fight Communist insurgency, yet the Malays did not tell the British, You took it from us. You return it to us. Instead, they were prepared to share power with non-Malays after Independence. Indeed, in the first General Election
1 Fong, JC, Constitutional Federalism in Malaysia (Petaling Jaya: Sweet & Maxwell Asia, 2008), p28. 2 Ibid, p27. 3 Ibid. 4 Ibid.
68
The Law Review 2013
in 1955, there were very few seats with non-Malay majority. To give more representation in Parliament to non-Malays, Malay-majority constituencies were given to non-Malay candidates to contest on Alliance Party tickets. Otherwise, there would be no Indians in Parliament. Professor Shad Saleem Farouqi in his book Document of Destiny: The Constitution of the Federation of Malaysia, which I had the honour to write the foreword to and to launch, has this to say at p 710:
As a result of the social contract between the various races, millions of migrants to British Malaya were bestowed with citizenship by the Merdeka Constitution. It is believed that the number of citizens in Malaya doubled at the stroke of midnight on August 31, 1957 due to the constitutional grant.
How many countries that obtained their independence from the British during the same period still have their original Constitutions today? India, Singapore, Malaysia, yes. Any country in Africa? I doubt. In many other countries, the Constitution has been suspended or replaced by as many Generals or Colonels or even by democratically-elected leaders. I attribute that to the spirit and practice of understanding, toleration and compromise between the main races in Malaysia besides the prosperity that we enjoy since independence. Remove those factors, we dont know what will happen. How many countries which have achieved independence about the same time as Malaysia, have developed the way we have, have remained peaceful, maintained law and order with Parliament and the Judiciary functioning? Certainly, we are among the few. So, all said and done, by and large, we must have been doing something quite right since Independence. Our Constitution is ours. It was drafted to suit the circumstances in our country, the historical background, the political reality, the racial compositions, the social, educational and economic situation of the people. We may be different and we have done things our way. For example, what did we do with the nine Rulers after the formation of the Federation? We cannot have nine Kings on the throne at the same time. To pick one and discard the rest forever, would not be fair. We allowed them to choose one at a time among themselves to reign for five years. We are the only country in the world to have such a system and it works. In some countries, when there are general dissatisfactions with the royalty, the royalty would either be deposed or even assassinated. In Malaysia, we amended the Constitution and created a Special Court to try them in accordance with law.5 And, it is a farmers son standing in front of you now who presided at
5 Article 182.
69
the first full trial in that court, where the defendant was a reigning Ruler of a State and former Yang Di-Pertuan Agong. And, what is important is that the judgment, which turned out to be against him, was complied with. Show me one country in this world where such a thing happens. At the Constitutional Court Judges Conference in Manila in 2006, just before the conference closed, I made a comment: I notice that the participants in this conference could be divided into two groups: one from countries with Constitutional Court and one without. I also notice that those with Constitutional Court have the problem of enforcing their judgments while those without Constitutional Court do not have such a problem. Is that the reason why those countries need Constitutional Court? Or, is it in spite of the Constitutional Court? The participants applauded, but the Chairman, a Professor from Germany, did not quite like it and he said curtly: A very good point. Well discuss it next year. (The conference was sponsored by a German NGO and they were propagating the Constitutional Court.) Interestingly, at that conference there was a Chief Justice of the Constitutional Court from one country who had no court at that time because the Constitutional Court in his country had been abolished by the army. On the first day, after I presented my paper, a Constitutional Court judge from Indonesia stood up and said, I salute Malaysia. If I were to pass judgments like you do, there would be riots. Then he went on to say, I envy Malaysia. Not long ago Malaysia was sending students to study medicine in in Indonesia. Now Indonesians are going to Malaysia for medical treatment. I dont know what is wrong with us. Unfortunately, Malaysians always have the imported goods are better mentality. When they hear that other countries have Constitutional Courts, they also want a Constitutional Court here. They dont realise that a Constitutional Court is a by-product of the continental system and is not needed in the common law system. In those countries, Constitutional Courts were established, besides hearing cases involving the interpretation of the Constitution, to hear election petitions and judicial review cases. Our courts are already hearing such cases every day.6 Common law countries, including England, the United States, Australia, Singapore, New Zealand, Canada, India and others do not see the need to establish a separate a Constitutional Court. I say, we dont need it too. Do not waste tax payers money and create more problems. When talking about equality, we should not merely compare the wording of the Malaysian Constitution with that of the Constitution of the United States. For example, we have such provisions as Article 153 which, on the face of it,
6 For a full discussion on this, please see Resolving Constitutional Issues: is the Constitutional Court the Answer? (August 11, 2007). http://www.tunabdulhamid.my.
70
The Law Review 2013
looks discriminatory. But, the Indian Constitution has more such provisions. We should realise that, in the United States, the settlers, being superior in arms, had wiped out the natives and declared to the world that they were equal. In 2005, I spoke at the Maxwell School of Citizenship and Public Affairs, University of Syracuse, USA.7 After my speech a white American Professor stood up and said: After listening to you, I wonder what the United States would be like if the Indians are still the majority. I replied, The United States could be like Malaysia. Talking about freedom and equality, compare the objections that Muslims face to building a mosque in Europe or the US, even before 9/11, with the ease that the followers of other religions enjoy to build temples, churches and gurdwaras here. I believe that to understand the Constitution one has to know the history and the circumstances that had made it what it is. Similarly, in interpreting the Constitution, one should do so in the spirit in which the Constitution was promulgated. We respect the principles of Constitutional interpretation. We respect the universal human values, human rights and obligations. We respect the views of judges from other jurisdictions. But we should not forget our own history and the local circumstances. We should not follow blindly what other judges in other jurisdictions say. We adopt the principle but, in applying it, we should take into account the local circumstances, public policy and public morality of Malaysia, and other relevant factors.8 On the other hand, they might not even look at the judgments of our courts. Take same-sex marriage, for example. Are we going to declare the law that a marriage must be between a man and a woman unconstitutional on the ground that it contravenes the provision regarding equality before the law or because it restricts individual freedom? Are we not going to consider the fact that Islam is the religion of the Federation, that Islam does not recognise such marriage? Are we not going to consider that all religions followed by Malaysians do not recognise such marriage? Are we not going to consider the public morality of Malaysians? On the issue of interpretation of the Constitution, I dont agree with the view of the Indian Supreme Court that some provisions of the Constitution cannot be amended because those provisions form part of the basic structure of the Constitution? That is rewriting the Constitution under the pretext of interpretation. Similarly I dont agree that in the appointment of judges, the requirement for the Prime Minister to consult the Chief Justice means that
7 See Democracy In Practice In Malaysia: Some Observations (April 7, 2005). http://www. tunabdulhamid.my. 8 See Loh Kooi Choon v Government of Malaysia [1977] 2 MLJ 187 at 188189 per Raja Azlan Shah FJ; Public Prosecutor v Kok Wah Kuan [2007] 6 AMR 269; [2008] 1 MLJ 1 at 17 per Abdul Hamid Mohamad PCA. Adegbenro v Akintola [1963] AC 614; [1963] 3 WLR 63, PC, per Viscount Radcliffe.
71
he must obtain the concurrence or consent of the Chief Justice. In other words, the word consult is substituted with the word concurrence or consent. To me, that is an abuse of the power of interpretation. I do not for one moment say that the Constitution must remain static. Indeed, the Constitution is a living document. But, it is not for the court to rewrite the Constitution under the pretext of interpreting it. That is a matter for the Parliament. I had said before: No Judge is a Parliament. I still hold the same view. After all, members of Parliament are law makers elected by the people. If people through their votes indicate that they want changes to the Constitution, Parliament is the proper authority to do it. That is democracy. That is separation of powers. That is rule of law. When the amendments are done in accordance with the provisions of the Constitution, the court should give effect to them. That is why in Pendakwa Raya v Kok Wah Kuan,9 when considering the amendments to Article 121(1), I said:
to say that the amendment has no effect does not make sense. There must be. The only question is to what extent?
Who are we, judges, to say:

I am unable to accede to the proposition that with the amendment of Article 121(1) of the Federal Constitution (the amendment) the Courts in Malaysia can only function in accordance with what have been assigned to them by federal laws.
Richard Malanjum CJ (Sabah and Sarawak) in the same case. The doctrine of separation of powers applies equally to the three branches of the government. I have been asked to touch on Article 121(1A). Modesty aside for a moment, I think, among the judges, I have written the most on it, both in my judgments, lectures, papers, speeches and articles.10 I will make two points here. First, do not think that with the amendment all problems regarding conflict of jurisdiction have been solved. That is the mistake made by most people, especially Shariah lawyers and scholars as well as academicians. What about cases in which one party is a Muslim and the other is not? Connected with it, is Majlis Agama Islam or Bank Islam a person professing the religion of Islam? What about cases in which there are
9 [2007] 6 AMR 269. 10 See Conflict of Civil and Shariah Law: Issues and Practical Solutions in Malaysia (September 21, 2006); Sistem Kehakiman di Malaysia: Satu Wawasan (April 2, 2001); Civil and Shariah Courts in Malaysia: Conflict of Jurisdiction (October 24, 2000). http:// www.tunabdulhamid.my.
72
The Law Review 2013
Shariah as well as common law issues and issues arising from written laws under the jurisdiction of the civil court, e.g. Contracts Act, National Land Code and others? What if, in a Shariah court case, a constitutional issue arises? Secondly, the amendment is not a licence to expand the jurisdiction of Shariah Courts and to oust the jurisdiction of the civil courts. Take sodomy for example. A similar offence had been in the Penal Code since long before the establishment of the Shariah courts. Is an offence under the Penal Code not part of criminal law? The Federal Constitution provides that criminal law is a Federal matter within the jurisdiction of the civil court. A similar offence is later created in the Syariah Criminal Offences Enactments of the States. Arguments are then put forward that the offence is within the jurisdiction of the Shariah Court and not the civil court anymore, by virtue of the amendment. Unfortunately, when the issue came up before the Court of Appeal in the case of Sukma Darmawan Sasmitaat Madja v Ketua Pengarah Penjara Malaysia & Anor,11 the court failed to address the issue of constitutionality of the s 25 of the Syariah Criminal Offences (Federal Territories) Act 1997 (Act 559). To me, that section is unconstitutional and void. I ran through the amendments made to Part II (Fundamental Liberties) of the Constitution over the last 55 years. There are consequential amendments like changing the words a High Court for the words the Supreme Court (Act 26/1963) or adding provisos to Article 5(4) for the purpose of clarification. Article 8 was amended in 2001 to add the word gender making discrimination on the ground of gender or sex unconstitutional to emphasise the equal status of women. (Act A1130). Perhaps the most controversial amendment to the Constitution on the subject is the Constitution (Amendment) Act 1971 (Act 30). A new clause (4) was added to Article 10:
In imposing restrictions in the interest of the security of the Federation or any part thereof or public order under Clause (2)(a), Parliament may pass law prohibiting the questioning of any matter, right, status, position, privilege, sovereignty or prerogative established or protected by the provisions of Part III, Article 152,153 or 181 otherwise than in relation to the implementation thereof as may be specified in such law.
Parliament then amended the Sedition Act 1948 accordingly. The new restrictions also applied to Members of Parliament. Article 159, which governs Constitutional amendments, was amended to the effect that amendments to those provisions would also require the consent of the Conference of Rulers. These amendments were made as a result of the May 13 incident.
11 [1999] 1 AMR 281.
73
Tun Mohamed Suffian LP, delivering the judgment of the Federal Court in the case of Mark Koding v Public Prosecutor,12 said, inter alia:
Before departing from this case, we would make two observations. First, Malaysians take pride in the fact that our country is a parliamentary democracy and we have since independence held free general elections every five years as enjoined in the Constitution. Malaysians with short memories and people living in mature and homogeneous democracies may wonder why in a democracy discussion of any issue and in Parliament of all places, should be suppressed. Surely it might be said that it is better that grievances and problems about language, etc. should be openly debated, rather than that they be swept under the carpet and allowed to fester. But Malaysians who remember what happened during May 13, 1969, and subsequent days are sadly aware that racial feelings are only too easily stirred up by constant harping on sensitive issues like language; and it is to minimize racial explosions that the amendments were made.
I would like to stress a few points here. First, Part III referred to in the amendment is on citizenship. Secondly, Article 152 not only protects the National Language but also the use, teaching and learning of other languages. Thirdly, Article 153 does not only talk about the special position of the Malays and the natives of Sabah and Sarawak but also about the legitimate interests of other communities. So, do not think that the restriction is only in respect of the National Language, the special position of the Malays and the natives of Sabah and Sarawak and the Rulers. It also applies to citizenship, the use, teaching and learning of other languages as well as the legitimate interests of other communities. The restriction applies across the board, not one-sided as it is often made out to be. Speaking for myself, as I have said at the beginning of this paper, I was caught in Kampung Baharu during the May 13 incident 12 days after I reported for work. I saw it, I experienced it and I say, it is better to shut the mouth of a few people or even to lock them up for a while than to risk people killing each other simply because they are of different race. Anyway, I understand that the Sedition Act 1948 is one of the Acts that would be amended. That is welcomed but I hope the new found freedom will not be abused. Remember that right and responsibility are inseparable. We should not compare the kind of freedom that we practise in Malaysia with that in the United States or some Western countries. It is not our religion, culture or upbringing to slander the prophets, not only Muhammad (s.a.w.) but also Isa (a.s.) or anybody for that matter in the name of freedom of speech; peeping on people in their privacy, taking their photographs secretly and publishing them in the name of freedom of the press. Neither do I subscribe
12 [1982] 1 LNS 15.
74
The Law Review 2013
to uncontrolled owning of guns in the name of individual freedom, human rights or whatever. On the day I was writing this line, newspapers reported another senseless murder of 26 people including 20 young children at an elementary school in Newtown, Connecticut, US by a gunman.13 If you talk about individual right to own guns, dont those innocent children have a right to live? We have to balance individual liberty against public safety and interest. To me, public safety and interest must supersede individual liberty. There is no such thing as absolute freedom. There is no right without responsibility. Human beings do not live individually. Even wild animals follow the rules of the herd. Even ants, when in a group, walk in a line, stop and kiss one another as they pass, perhaps a kind of greetings. A few words about preventive detention laws. Now that they have been repealed, they are not an issue anymore. However, let us look back to when we had them. When I was a judge, to me, as they were valid laws, I gave effect to them. Whether they were desirable or not was a matter of policy for the Government to decide. The courts in Malaysia accepted them as valid laws. However, the courts had been very strict in applying those laws. Courts had issued writs of habeas corpus on the slightest non-compliance with the provisions of the law or regulations thereof, e.g. where only one copy of the form for the detainee to make representation was given to the detainee when the regulation says that two copies should be given, even though he had made the representation and his appeal to the Advisory Board had been heard and disposed of.14 At the Constitutional Court Judges Conference mentioned earlier, I posed this question: Which is better, to have detailed provisions of the law and regulations governing such detentions or not to have any law at all but such detentions are done all the same? I am referring to Guantanamo. In the first model (Malaysian model), there is a right to make representations to an independent tribunal which makes recommendations to the appropriate authority whether the detention should be extended or not. From the day a person is arrested, he may, through his counsel, challenge his arrest and subsequent detention in court and ask for a writ of habeas corpus to be issued. And, as I have mentioned, the courts have always been very strict in ensuring that every provision of the law or regulation has been complied with. Such applications are argued in open court, written judgments are handed down and there is a right of appeal right up to the highest court in the country. In the second model (US model), there is no bad law, so to speak. But, people are arrested in other countries and detained in yet another country without trial.
13 New Straits Times December 16, 2012, p1. 14 Aw Ngoh Leang v Inspector General of Police & 2 Ors [1993] 1 AMR 201.
75
What legal remedies do they have? To whom do they make representations? How are they going to argue that their arrests and detentions have not been in compliance with the law or regulation thereof when there is no law or regulation governing their arrests and detentions, in the first place? Which is better? Now those laws have been repealed. We welcome it. At the same time, no group should take it as a sign of weakness and take advantage of the new situation. Otherwise they are only justifying the reintroduction of those laws, which can still be done, if necessary. For the love of Malaysia, let us not do anything that makes it necessary for or justify the reintroduction of those laws. It has been proved in the last 55 years that Malaysia has enough to offer to everybody. What is needed is to improve the governance and accountability and eradicate corruption and poverty. But, everyone has to work hard and not merely expect handouts and subsidies. No group should be greedy and think only of its own interest. They should remember the tolerance and compromise that had been practised in the past. And, politicians should think beyond five years! Looking back, I am reminded of one Chapter in the Quran in which out of the total of 78 verses in it, one verse was repeated 31 times. I am referring to Chapter 55 (Surah Al-Rahman) and the verse is:
So which of the favours of your Lord would you deny? Sahih International.
Why does Allah repeat it so many times? Perhaps it shows how ungrateful human beings are and they have to be repeatedly reminded. Wallahu alam. Thank you.
76
The Law Review 2013
An Analysis of Incorrect Return Penalty and the Inland Revenues Power in Tax Audit
Choong Kwai Fatt*
Introduction Since the inception of self-assessment for companies in year of assessment (YA) 2001, incorrect return penalty seems to be the shadow of tax audit. Upon completion of an audit on taxpayers premises, the Inland Revenue Board (IRB) will impose a penalty ranging from 45% to 100% in addition to the tax undercharged when an additional assessment (Form JA) is issued in relation to that YA. The IRB contended that the taxpayer has submitted an incorrect return resulting in income being understated. Thus s113(2) of the Income Tax Act 1967 (the Act) was invoked to impose such a penalty. The taxpayer on many occasions has challenged the validity of such imposition of penalty through tax appeal to the Special Commissioners, the High Court and the Court of Appeal. This article critically analyses the legislation and the recent Special Commissioners, High Court and Court of Appeal case precedents on incorrect return to explore the validity of such penalty and IRBs power in relation to tax audit. The legislation The Act requires taxpayers to file a correct return for an accurate tax to be paid as their obligation to the country. Section 113 of the Act is on incorrect return. It sets up the scope of incorrect return being: (a) omitting or understating any income in the tax return; or (b) giving any incorrect information in relation to his own chargeability to tax. Failure to submit a correct return would attract a penalty, a fine in addition to the tax undercharged or tax omitted.
* Advocate and Solicitor, High Court of Malaya; Professor of Law, Segi University; B Acc (Hons) (Malaya), LLB (Hons) (London), CLP, Master of Comparative Laws (IIUM), PhD (taxation law) (IIUM), Certified Public Accountants (MICPA), CA(M), Fellow member of Chartered Certified Accountants (ACCA,UK), Chartered Accountants (Aust), CPA (Aust), ACA (ICAEW), CGA (Canada), FCCS. See www.kwaifatt.com.
77
Section 113(1) provides:

Any person who (a) makes an incorrect return by omitting or understating any income of which he is required by this Act to make a return or on behalf of himself or another person; or
(b) gives any incorrect information in relation to any matter affecting his own chargeability to tax or the chargeability to tax of any other person, shall, unless he satisfies the court that the incorrect return or incorrect information was made or given in good faith, be guilty of an offence and shall, on conviction, be liable to a fine of not less than one thousand ringgit and not more than ten thousand ringgit and shall pay a special penalty of double the amount of tax which has been undercharged in consequence of the incorrect return or incorrect information or which would have been undercharged if the return or information had been accepted as correct.
Section 113(1) imposes two times the tax undercharged as a penalty if a taxpayer is charged in court and found guilty of this offence. A defence of good faith is provided under s113(1). Section 113(2) provides:
Where a person (a) makes an incorrect return by omitting or understating any income of which he is required by this Act to make a return on behalf of himself or another person; or
(b) gives any incorrect information in relation to any matter affecting his own chargeability to tax or the chargeability to tax of any other person, then, if no prosecution under sub-s (1) has been instituted in respect of the incorrect return or incorrect information, the Director General may require that person to pay a penalty equal to the amount of tax which has been undercharged in consequence of the incorrect return or incorrect information or which would have been undercharged if the return or information had been accepted as correct; and, if that person pays that penalty (or, where the penalty is abated or remitted under sub-s 124(3), so much, if any, of the penalty as has not been abated or remitted), he shall not be liable to be charged on the same facts with an offence under sub-s (1).
Section 113(2) would operate where there is no prosecution made under s113(1). A close examination of s113(1) and 113(2) reveals that both subsections are identical on the offence of omitting, understating income or giving incorrect information in relation to tax return submitted. The imposition of penalty in s113(1) deals with court while s113(2) empowers the Director General (IRB) to impose such a penalty. The IRB has the discretion to impose or not
78
The Law Review 2013
to impose such penalty as s113(2) uses the phrase the Director General may require . The maximum penalty is one time the tax undercharged. Section 113 offences cover negligence in computing the tax, unintentionally omitting or understating income, misinforming, misunderstanding of the obligation on chargeability resulting from incorrect information provided in the tax return, which has resulted in a much lower amount of income tax being paid to IRB. These are lesser degrees of offences as compared to s114 (wilful evasion). Section 113 attracts a penalty and fine but not imprisonment. To expedite the collection and mitigate tax litigation in court, s113(2) empowers the IRB to exercise its discretion to impose a penalty in addition to the tax undercharged arising from the incorrect return submitted. Section 113 has two limbs. The first limb, s113(1), covers prosecution in court and empowers the court to impose a fine and special penalty of double the undercharged tax consequential on the incorrect returns or information. Section 113(2) on the other hand empowers the Director General to exercise discretion to impose a penalty up to the amount of the tax undercharged if the case is not being prosecuted in court under s113(1). In both cases of s113(1) or (2), the taxpayer is required to pay additional tax on any tax undercharged arising from the incorrect return submitted. Section 113(1) clearly states that in the event that the taxpayer can satisfy the court that such incorrect return or incorrect information was made or given in good faith, then no penalty would be imposed. However, such wording of good faith has been missed out in s113(2) and the complete silence of such a wording would raise suspicions whether such a defence of good faith is indeed available or otherwise in s113(2). The Inland Revenue Counsel are of the opinion that the legislation being what it is, one should employ literal interpretation. Since s113(1) employs the words good faith and they are omitted in s113(2), then one cannot import such good faith defence into reading of s113(2). This literal interpretation has gained support in the recent High Court decision of Ketua Pengarah Hasil Dalam Negeri v NV Alliance Sdn Bhd1 where Dato Aziah Ali J held at 363:
I agree with the Appellant (IRB) that good faith is not a defence under s113(2) of the Act. Therefore the penalty imposed by the Director General in the exercise of the discretion conferred by s113(2) is correct.
With greatest respect, the author begs to differ with this view. Section 113(1) and (2) must never be read in isolation. It has to be read in a whole with a
1 [2011] 10 CLJ 345.
79
totality approach. The taxpayer who submits its tax return in the self-assessment regime to the IRB bears onerous responsibility on the tax return given the frequent changes in the Act, case law, public rulings and IRB practice. The court in many instances acknowledges that tax is a creature of statute, a legislation which it is never easy to understand. The taxpayer must be presumed to have submitted its return in good faith, in full compliance with the Act unless proven otherwise. Therefore where a taxpayer is exposed to an offence of making an incorrect return, good faith must be given to determine the innocent mind of the taxpayer, the justification to impose a penalty, bearing in mind that the imposition of a penalty is for an offence. The taxpayer must be given an opportunity to mitigate such an offence if being charged with an offence of incorrect return. The IRBs practice and its power Upon completion of tax audit, the IRB would impose a penalty of 45% to 100% on the tax undercharged under s113(2) should the tax audit personnel be of the opinion that an incorrect return has been filed. Section 113(2) confers discretion on the IRB whether to impose a penalty after considering all relevant facts. Additional assessments (Form JA) would be issued to recoup the tax undercharged and the penalty. The IRB has the control whether to prosecute or not on the taxpayer relying on s113(1). It is never a decision of the taxpayer to be prosecuted or not. If only on prosecution, the taxpayer can rely on good faith as a defence, it would be unjust to the taxpayer since he cannot exercise such option when he is liable for an offence under s113(2). In any situations, whether in court or with the IRB, the taxpayer would naturally adduce evidence to persuade the IRB or the court that the tax return is submitted in good faith, i.e. the taxpayer has no intention to defraud the government and honestly believes that the return submitted does comply with the Act in order to appeal for the waiver or reduction of penalty. In a non-prosecution case, where the taxpayer is able as of right to appeal to the Special Commissioners (then to the High Court and the Court of Appeal) on the additional tax and additional penalty, surely the Special Commissioners or the court would adjudicate on whether such an act of the taxpayer is tantamount to an incorrect return, and if does, it would go further to decide whether the factual matrix of the case justifid the imposition of a penalty. The benchmark to determine the imposition of a penalty has to be good faith, as the imposition of a penalty is criminal in nature, and the mens rea must be determined critically, i.e. whether the taxpayer has intentionally defrauded the government or honestly believed such act is permitted. This yardstick using good faith on its own would point to one and only one conclusion, good faith must be inherent in s113(2) and be used to determine whether an incorrect return has been committed by the taxpayer.
80
The Law Review 2013
If the contention that good faith is only available in s113(1) through prosecution is accepted, this would encourage more litigation through the courts and not through negotiation with IRB which is never the intention of any legislation, more so with the Income Tax Act. The Parliament enacted s113(2) is to encourage settlement without litigation in court. Since s113(2) permits the IRB to impose a penalty in lieu of prosecution in s113(1), it would then naturally allow the defence of good faith in s113(1) to be applied mutatis mutandis in s113(2). In the Supreme Court case of Ketua Pengarah Hasil Dalam Negeri v Kim Thye & Co,2 the court held that this provision of s113(2) vested the discretion in the IRB, a discretion that cannot be exercised at whim and fancy. The IRB has to consider the merits of each case, taking into facts and circumstances of each case before imposing such penalty. The Supreme Court also firmly rejected the IRB contention that in s113(2), good faith is not a defence for the taxpayer. In Office Park Development Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,3 the High Court held that the construction of s113(2) is redundant if it is made without reference to s113(1). Section 113(2) operates as an alternative provision to s113(1). Therefore, Alizatul Khair Osman Khairuddin J concluded that IRB has the discretion to impose a penalty and a penalty under s113(2) should not be imposed where the taxpayer has acted in good faith and made full disclosure of information. The IRBs contention that s113(2) did not provide the defence of good faith is without basis. Ambiguity in the Act The rule of interpretation of a provision in tax legislation is to produce a harmonious result as intended by the Parliament. If one interprets s113(1) and 113(2) in isolation, one cannot help thinking that such interpretation in s113(2) creates injustice, being a criminal offence without allowing the pleading of defence of good faith. It produces an absurd result. It is a settled principle that when construing a taxing statue where there is ambiguity, the sole function of the court is to discover the true intention of the Parliament. This is in line with the provisions in s17A of the Interpretation Act 1948 and 1967. Section 17A provides:
In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.
2 [1992] 2 MLJ 708. 3 [2011] AMTC 253.
81
The court is duty bound to adopt an interpretation that promotes the purpose or the object of the statue which does not cause injustice to the taxpayer or absurdity. In summary, s113(2) thus must be available with good faith as a defence, as found in s113(1). As the Income Tax Act imposes liability on the taxpayer, the canon of interpretation which applies to ambiguity of the legislation is that the ambiguity must be resolved in favour of the taxpayer. Lord President Hope held in Glenrothes Development Corp v IRC4 at 80:
But if there is an ambiguity, because the phrase in question is capable of two or more alternative meanings, the ambiguity will be resolved in favour of the taxpayer without regard to the question whether it was appropriate for a tax to be imposed.
Section 113(2) has the ambiguity whether good faith is available as a defence. The court when construing legislation which is ambiguous, must then construe it according to the intention in the Act itself. The Parliament always discourages prosecution, a process which causes precious judicial time to be used up, and cost to IRB and taxpayer. Thus s113(2) allows the Director General to accelerate the administration of the Act. Therefore, giving effect to the will of Parliament as expressed in the enactments, good faith as a defence in s113(2) produces harmony in interpretation and is also consistent with the legislative intention. The imposition of penalty The imposition of a penalty aims to deter non-compliance and to ensure all taxpayers pays their legally due tax to the government. It discourages the submission of incorrect returns. Since the object of the tax audit is to encourage voluntary compliance and educate taxpayers, the IRB should invoke s113 where there is clear evidence an incorrect return being submitted. Likewise when the act of taxpayer involves an interpretation of the law, s113 is inapplicable, more so in the event the taxpayers act is based on good faith. The Income Tax Act is never an easy piece of legislation to understand even to lawyers. It involves an appreciation of accounting principles, evolves into various concepts of income starting from gross income, adjusted income, statutory income, aggregate income, defined aggregate income, total income to chargeable income. The courts in many instances have differed in opinion when asked to pronounce an opinion or give effect to a particular section. In Ketua Pengarah Hasil Dalam Negeri v NV Alliance Sdn Bhd,5 the Special Commissioners held that expenses/incentive paid to non-employees are
4 [1994] STC 74. 5 [2009] AMTC 1242.
82
The Law Review 2013
promotional expenses and deductible under s33(1) of the Act. The High Court however overturned the decision and concurred with the IRB that such an expense is entertainment thus prohibited by s39(1)(l) of the Act. This case is an example which illustrates the difficulty on the interpretation whether cash incentives paid to non-employees are indeed promotional expenses (tax deductible) or entertainment expenses (not tax deductible). The Special Commissioners and the court based on the same facts have arrived at different decisions. Therefore, to penalise the taxpayer for filing an incorrect return on these facts is in breach of natural justice, more so when the taxpayer has acted in good faith. The computation of tax in any YA involves the facts and the application of the Act on the facts, namely questions of fact and questions of law. If the taxpayer has interpreted the sections of the Act in good faith which is later not accepted by the IRB during the tax audit, the adjudication is determined by Special Commissioners and the court. Such an issue should not be classified as incorrect return. Section 113 has no application. This is to encourage the development of law in this country and also not unduly penalise taxpayers when undertaking bona fide business decisions. The common notable examples on questions of law would be the scope of bad debts in s34(2), promotion expenses, entertainment expenses in s39(1)(l), sponsorship expenses, royalty expense and the issue of whether disposing of land is a capital gain or business income. Upon completion of tax audit at the taxpayers premises, the IRB would evaluate the evidence and conclude that taxpayer may have: (a) understated income; or (b) excessively claimed expenses, i.e. the taxpayer is deducting expenses which were not supposed to be deducted; or (c) wrongly claimed double deduction of expenses. A penalty of 45% to 100% on the additional tax under s113(2) for incorrect return is imposed. The taxpayer on the other hand may argue otherwise, contending by evidence that: (a) the profit is not income but instead capital gain; (b) expenses are deductible under s33(1) and not prohibited by s39 of the Act; (c) double deduction of expenses indeed comply with the gazette orders PU(A) issued by the Ministry of Finance. The taxpayer would further argue that since the crux of an appeal is on a question of law, an interpretation should be given that conforms to the Act
83
and thus the return being submitted in good faith. No penalty should be imposed. An appeal would be filed to Special Commissioners via Form Q. The tax courts includeing Special Commissioners are there to adjudicate the matter based on the interpretation of the Act. Special Commissioners decision The Special Commissioners have consistently in their decisions, read s113 as a whole and allowed good faith as a defence when deciding whether the penalty is appropriate in interpreting s113(2). It is an academic point that s113 has no application, i.e. no penalty to be imposed when the taxpayer succeed in the appeal. Additional tax earlier imposed in the Form JA would be discharged accordingly. In ELMSB v Ketua Pengarah Hasil Dalam Negeri,6 the Special Commissioners held that conference (congress) expenses paid to medical doctor with the objective of promoting the taxpayers pharmaceutical products were revenue expense and tax deductible. Penalty on incorrect return is thus a non issue. Admad Zaki b Husin (Chairman of the Special Commissioners) opined, at 1,241:
Finally, we agree with the appellant that this is only academic. If the issue on congress expenses is allowable, there was no incorrect return filed and no penalty should be imposed.
The two stages test In the case when an appeal is dismissed at first instance, IRB is confirmed in its opinion to collect the additional tax, being tax undercharged as stated in the Form JA. The Special Commissioners would then consider, based on the factual matrix, whether IRB correctly imposed a penalty under s113(2). The Special Commissioners laid down the two stages test, namely s113 is inapplicable if an appeal of a taxpayer is allowed (taxpayer won the appeal). In a case when an appeal is dismissed, the Special Commissioners would assess whether the crux of the issue involved the determination of a question of law, interpretation of technical terms and whether good faith has been displaced. If it does then no penalty on incorrect return is imposed. In ELMSB v Ketua Pengarah Hasil Dalam Negeri,7 the taxpayer, which traded in pharmaceutical products, claimed congress expenses, sponsorship for doctors attending conference as revenue expense under s33(1) which was however contended by IRB personnel as submitting an incorrect return in deducting expenses which were not supposed to be deducted. Thus it imposed a 60% penalty on the additional tax payable under s113(2). In rebutting the allegation of incorrect return, the taxpayer submitted that:
6 [2009] AMTC 1224. 7 [2009] AMTC 1224.
84
The Law Review 2013
(a) the IRB had in prior years allowed the expenses leading the taxpayer to continue claim the expenses in following YAs; (b) the IRB was in possession of the facts and circumstances of the payment of congress expenses; (c) information has been provided correctly to the IRB. Therefore in such circumstances, the return cannot be described as an incorrect return. Good faith has been established. A penalty should not be imposed even if the expenses are not deductible as contended by IRB being entertainment expenses. The Special Commissioners agreed in total with the submission of the taxpayer that based on the facts and circumstances of the above agreement, the penalty should not be imposed against the appellant, even if the appeal is dismissed. The taxpayer is liable to tax undercharged but excluding the incorrect return penalty. Admad Zaki b Husin (Chairman of the Special Commissioners) held at 1,240:
On the penalty of 60% imposed under s113 of the Act, which was on the incorrect return, the Appellant submitted that the congress expenses was claimed as a deduction, with a line by line analysis, since such expenses were first incurred, which were always allowed and admitted and confirmed by AW1. The Appellant maintained that the correct information was given to the Respondent. Therefore, the Respondent had allowed such congress expense in prior years, this lead the Appellant to claim the expenses. The respondent submitted that the penalty was imposed on the ground that the Appellant made incorrect returns in deducting certain expenses which were not supposed to be deducted. The Appellant however submitted that the Respondent had in prior years allowed the expenses and furthermore, the Respondent was in possession of the facts and circumstances of the payment of the congress expenses, in such circumstances, the return cannot be described as an incorrect return. We are of the view that based on the facts and circumstances of the case, the penalty should not be imposed against the Appellant.
In relation to the penalty on incorrect return, the Special Commissioners in NV Alliance Sdn Bhd held that since the cash incentives were promotional expenses wholly and exclusively incurred in the production of income and not prohibited by s39(1)(l), the taxpayer thus submitted its return correctly. Section 113(2) is inapplicable. Penalty is not an issue. The Special Commissioners however went on to conclude that even though these cash incentive expenses were not allowable, the taxpayer nonetheless exercised its interpretation in good faith, thus penalty under s113(2) should not be imposed. The Special Commissioners relied on the defence of good
85
faith in s113(1) to be read in s113(2) as the Special Commissioners interpreted s113 as a whole. Ahmad Zaki b Husin (Chairman of the Special Commissioners) opined at 1,255:
Regarding the penalty under s113(2) of the Act imposed on the Appellant in this case, we are of the opinion that the imposition of that penalty is wrong in law as even assuming that the expenses claimed are not allowable. Based on the facts of this case the claimed was made base on the Appellants interpretation in good faith. Therefore the penalty shall not be imposed [sic].
In SPM Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,8 the Special Commissioners held that franchise fees based on sales were revenue expenditure and not capital expenditure as contended by IRB. In relation to penalty on incorrect return, the Special Commissioners held that penalty should not be imposed under s113(2) as: (a) there is no evidence to show that the taxpayer had the intention to evade tax; (b) the taxpayer had not concealed the deduction of franchise fees; (c) the taxpayer was fully co-operative during the tax audit. Admad Zaki b Husin (Chairman of the Special Commissioners) held at 1,198:
In regard to the question of penalty imposed by the Respondent, in case our above finding is wrong, there is no evidence to show that the Appellant had the intention to evade tax. The tax computation prepared by the Appellant shows that the Appellant has taken deductions for the franchise fee and there is nothing to suggest that the Appellant has attempted to conceal the deductions. The Appellant was fully cooperative during the tax audit by the Respondent which resulted in the Notice of Assessment in question. Therefore we found that there is no justification to impose the penalty.
With greatest due respect, the reading of s113(2) together with s113(1) merely requires the taxpayer to demonstrate good faith to abate the penalty. Good faith is determined by positive act of honest belief, acting bona fide. What is required is to adduce evidence that it honestly believed the deduction was available based on its best interpretation of the Act. It never requires the taxpayer to adduce evidence that it has no intention to evade tax. If the taxpayer has attempted to evade tax, it would be charged under s114 wilful evasion. It is therefore respectfully submitted that the fact that there is no evidence to show that the taxpayer had the intention to evade tax would not be tantamount to a ground to demonstrate good faith.
8 [20082009] AMTC 1188.
86
The Law Review 2013
The mitigation factor Upon completion of a tax audit, IRB is empowered to impose a penalty of 45% to 100% of tax undercharged under s113(2) if it is of the opinion that an incorrect return has been submitted by the taxpayer. Since para 13 Sch 5 to the Act states that the onus of proving that an assessment against which an appeal is made is excessive or erroneous shall be on the appellant, which is the taxpayer, then the taxpayer has to adhere to one or more of the following to discharge the burden of proving it had not submitted an incorrect return: (a) the income tax return was filed in time; (b) the income tax return was submitted in good faith, in compliance with the Act; (c) professional tax advice was taken from either a tax consultant, tax lawyer or tax agent on contentious issues before a decision was made; (d) full disclosure of the facts in the audited accounts, tax computations and accounts. The facts and circumstances must be looked into to see to what extent the evidence was declared in the tax computations. The expenses incurred were clearly and correctly described in the tax return and submitted to IRB. (e) the taxpayer has no intention to mislead the IRB; (f) the taxpayer was fully co-operative during the tax audit. Technical adjustment as mitigation factor The IRB has acknowledged the contentious issue in interpretation and application of the Act. It has a practice that technical adjustment would not subject a taxpayer to incorrect return penalty. This position has also been conceded by the IRB lawyer in numerous appeals before Special Commissioners. It was acknowledged and accepted by IRB in MAA Bhd v Ketua Pengarah Hasil Dalam Negeri9 that no penalty should be imposed if it was technical adjustment. This case is concerned with whether advertisement cost, training cost and also dinner and award cost incurred by an insurance company is tax deductible. The crux of the issue is that what constitutes technical adjustment is subjective and judgemental between persons. It is not easy in a real scenario to take positions and it must be considered with care, depending on the merits and circumstances of the case. In general, technical adjustment involves differing interpretation of a particular section of the Act. Seeking opinion from a tax specialist is a must in a self-assessment regime as this adds probative value
9 [2010] AMTC 1137.
87
that it is a technical issue and a good ground to mitigate incorrect return penalty. Ignorance of the law is of no excuse. In Syarikat Pukin Ladang Kelapa Sawit Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,10 the taxpayer made advanced rental and claimed it as a deduction under s33(1)(b) of the Act. Upon tax audit, IRB imposed an incorrect return penalty for the taxpayer understating its income by claiming excessive rental expense which is never permitted by s33(1)(b). Section 33(1)(b) clearly states that the deductible rental refers to rent payable in that period, which limits to annual rental. The Special Commissioners allowed the imposition of penalty as, on the facts and merits, the taxpayer had submitted an incorrect return. The High Court concurred with the Special Commissioners and affirmed the Special Commissioners decision. The penalty imposed on the taxpayer was correct. The court held that the clear terms of s33(1)(b) using the phrase rent payable for that period mean any annual rental is deducted. Advance rental is not deductible and there exist no technical difficulties or differing interpretation in s 33(1)(b). In short, the High Court does not allow taxpayer to rely on technical term as mitigation factor. Rohana Yusuf J held, at 425:
The evidence in this case shows that the Revenue Board became aware of the RM18,000,000 claimed as deduction only upon auditing. Not for the auditing the respondent would not be aware that the deductible rental should be lesser instead. The appellant therefore would be paying less tax. The contention by the appellant that it was made in good faith due to the differing interpretation of the law cannot hold because ignorance of law cannot be a defence.
In this case, the learned judge also opined that the necessary consultation from a tax consultant on a contentious issue is required to ensure that a correct return is submitted. Rohana Yusuf J opined, at 425:
This country is now adopting a self-assessment regime. Thus in line with the present policy where submission of returns are based on self-assessment by taxpayer, a taxpayer must be mindful of his responsibility to submit correct returns and must necessarily do so upon necessary consultation to ensure correct returns are submitted.
In Office Park Development Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,11 the High Court acknowledged in obiter the use of professional tax agents to
10 [2012] 6 MLJ 411. 11 [2011] AMTC 253.
88
The Law Review 2013
prepare and submit a tax return as a mitigation factor to avoid an incorrect return being submitted. Professional tax agents being tax specialists would interpret the provisions of the Act and would be able to give opinions on technical and contentious issues. Imposition of penalty Section 113(2) empowers the IRB to impose a penalty where the return is submitted incorrectly resulting in loss of revenue to the government. The IRB being the statutory authority must exercise its discretionary power in accordance with the Act and also the rules of natural justice. All relevant facts and circumstances must be considered with its merits. The IRB must establish that the taxpayer has omitted or understated the income, evidenced by the facts admitted, before imposing the penalty under s113(2). In SSU Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,12 the Special Commissioners found that the taxpayer had: (a) discrepancies in rebates and discounts and evidence showed that rebates were not given to the customers; (b) claimed provision of discount as tax deductible expenses. This case justified the imposition of penalty on incorrect return as there was evidence of concealment of income, over claiming expenses or negligently not paying the rebates to the customers even after deduction had been obtained. The Special Commissioners thus found that the penalty of 80% on tax undercharged was justifiable and the IRB indeed had basis to exercise the discretion under s113(2). Ahmad Zaki b Husin held, at 1,077:
In respect of penalty imposed, we have to view whether the Respondent has the right to impose or otherwise. Under s113(2) of the Act, the Respondent is empower [sic] to impose up to 100% penalty (a penalty equal to the amount of tax). This is the discretion of the Respondent. Whether it is viewed as harsh or not, or whether it need [sic] to differentiate between the technical adjustment or on the difference in the opinion is not material. Therefore, we found the Respondent has sufficient basis to impose the penalty at 80% and no reason for us to interfere.
In BTN Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri13 the Special Commissioners held that the taxpayer had understated the income by not reporting bad debts recovered. The taxpayer failed to declare the correct income in the tax computations. Thus the penalty was appropriate. However the Special
12 [2008] AMTC 1067. 13 [2008] AMTC 1079.
89
Commissioners revised the penalty rate to 50% of tax undercharged as they found that IRB has failed to apply its mind to the facts and circumstances of the case. Admad Zaki b Husin (Chairman of the Special Commissioners) held, at 1,086:
Regarding the penalty under s 113(2) of the Act, we agreed with the Respondent that the penalty was properly imposed because the amount of RM 593,598 written off claimed as bad debt was recovered after the Respondent conducted a field audit on the Appellant on the 10th and 11th January 2005. It means the Appellant failed to declare the correct income in their tax computation submitted to the Respondent for the Year of Assessment 1999. Since RW1 (the assessor) admitted that he just follow the guideline of the Director General of Inland Revenue on penalty, it means RW 1 did not apply his mind to the facts and circumstances of the case before imposing the 60% penalty. Therefore we are of the opinion that the Respondent failed to use their discretion properly when they imposed the penalty concern. We are of the view that 50% penalty is justified on the facts and circumstances of the case. We therefore allowed the appeal and the penalty shall be reduced to 50% of the tax payable for the Year of Assessment 1999.
Statutory interpretation Where a provision of the Act is stated in clear terms and there is no ambiguity in the words of the section, the court would hold that the penalty imposed by the IRB on s113(2) for incorrect return was justified. The taxpayer has to adduce evidence to demonstrate otherwise or provide reasons for the misinterpretation of the Act to convince the court that such penalty should not be imposed. In KV Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,14 the Special Commissioners held that on the interpretation of s14 of the Income Tax (Amendment) Act 1999 (A1055), the word disposal must refer to both disposer and acquirer. The taxpayer contented that it should cover the disposer only. Section 14 of the Amendment Act 1999 (A1055) provides:
Disposal of stock in trade between companies in the same group shall be treated at cost unless it can be proven to the satisfaction of the Director General that the disposal was made in the ordinary course of its trade.
The Special Commissioners held that s14 is clear and unambiguous, therefore the principle of strict interpretation applies. Admad Zaki b Husin (Chairman of the Special Commissioners) held, at 1,134:
14 [2010] AMTC 1126.
90
The Law Review 2013
Therefore, we are of the view that the disposal of stock in trade between companies in the same group refers to both the disposer as well as the acquirer in the transaction. The words between companies clearly refer to both companies ie the company as the disposer and the other company as acquirer.
His lordship went on to conclude that since there is no ambiguity in the words of s14, and the taxpayer failed to provide reason as to the misinterpretation, the IRB was right to impose a penalty under s 113(2) for incorrect return submission. The penalties were justified. The taxpayer appealed to the High Court as to the correctness of the Special Commissioners in interpretation of s14 of the Amendment Act. In Kenny Vale Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,15 the High Court was asked to determine whether the word disposal in s14 of Amendment Act A1099 should include both disposer company and acquirer company. Mohd Zawawi Salleh J held that in the circumstances of the case, there was no reason for the taxpayer to misinterpret s14 of the Act A1055, thus the penalties imposed were reasonable and within the scope of s113(2). The DG had acted within his jurisdiction. The taxpayer being dissatisfied sought the final redress in the Court of Appeal. In Kenny Vale Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri,16 Abdul Wahab Patail JCA delivering the Court of Appeal judgment held that it is clear from the language of s14 that it is not confined to a remedy against the disposer only. It does cover the acquirer as well. In relation to the penalty under s113(2), the Court of Appeal however held that since this is the first case involving interpretation and application of s 14, a penalty should not be imposed. This case demonstrates that the Court of Appeal does not classify failure in interpretation of the law as tantamount to the submission of an incorrect return, which is very beneficial to the development of law in Malaysias self assessment system. Conclusion The object of s113 is to address incorrect returns. The IRB when carrying out the tax audit may impose a penalty ranging from 45% to 100% on the tax undercharged under s113(2) should there be found clear evidence that the act of the taxpayer is intentionally or negligently understating its income. However, the IRB must exercise its discretion taking into account the facts and merits of each case. However, s113 is inapplicable, i.e. no penalty should be imposed, when the act of the taxpayer is on interpretation of the law or application of the law to the
15 [2011] AMTC 312. 16 (W-01-521-2010).
91
facts, as seen in Ketua Pengarah Hasil Dalam Negeri v NV Alliance Sdn Bhd17 bearing in mind that even the court differs in its opinion in interpreting a question of law based on the same facts. To impose a penalty on interpretation of law is an incorrect result never intended by the Parliament and the demarcation whether such an act of a taxpayer is an incorrect return must be on good faith, which is discharged on the balance of probability.
17 [2010] AMTC 96.
92
The Law Review 2013
Isu Pemerdagangan dan Penyeludupan Manusia di Malaysia: Suatu Tinjauan Tentang Mekanisme Perundangan di Malaysia
Ramalinggam Rajamanickam* dan Ganesh Magenthiran**
Pengenalan Masalah pemerdagangan dan penyeludupan manusia telah mendapat perhatian global sebagai jenayah rentas sempadan yang serius sama seperti jenayah penyeludupan senjata nukleur dan dadah. Malaysia menjadi negara destinasi dan sedikit sebanyak menjadi negara sumber dan negara transit bagi lelaki, wanita dan kanak-kanak yang terdedah kepada keadaan buruh paksa, dan juga kepada aktiviti perdagangan seks bagi wanita dan kanak-kanak. Sebahagian besar mangsa pemerdagangan manusia terdiri dalam kalangan 2 juta pekerja asing sah dan 1.9 pekerja asing tanpa izin di Malaysia. Mereka berhijrah secara sukarela ke Malaysia dari negara-negara termasuk Indonesia, Nepal, India, Thailand, China, Filipina, Burma, Kemboja, Bangladesh, Pakistan, dan Vietnam untuk mencari peluang ekonomi yang lebih besar.1 Malaysia kekal di tahap dua (dalam pemerhatian) dalam Laporan Pemerdagangan Manusia (TIP) 2011 yang dikeluarkan Jabatan Negara Amerika Syarikat (AS). TIP menunjukkan Malaysia berada di tahap dua (dalam pemerhatian) pada 2011 sama seperti tahun sebelumnya berbanding tahap tiga pada tahun 2009.2 TIP adalah senarai kedudukan negara-negara dunia berdasarkan tahap pematuhan standard minimum dalam memerangi pemerdagangan orang dan penilaian dilaksanakan setiap tahun oleh Jabatan Negara AS. Kedudukan isu pemerdagangan dan penyeludupan manusia di peringkat antarabangsa Masalah pemerdagangan orang telah mendapat perhatian global sebagai jenayah rentas sempadan yang serius sama seperti jenayah penyeludupan senjata dan dadah. Menurut laporan,3 penyeludupan manusia telah
Pensyarah Fakulti Undang-undang, Universiti Kebangsaan Malaysia, Bangi. Peguambela dan peguamcara, Hakem Arabi & Associates, Kuala Lumpur. Laporan Pemerdagangan Manusia 2011. Malaysia kekal Tahap Dua Dalam Laporan Pemerdagangan Manusia, Berita Harian: Ogos 26, 2011. 3 United Nations Office on Drugs and Crime, Trafficking in Persons: Global Patterns (Vienna, 2006).
* ** 1 2
93
memberikan kesan kepada 161 negara sama ada sebagai negara sumber,4 negara transit5 ataupun negara destinasi.6 Dianggarkan bahawa keuntungan daripada jenayah pemerdagangan orang adalah berjumlah USD38 bilion setahun. Susulan daripada keuntungan yang besar hasil daripada kegiatan tidak bermoral ini, sebilangan besar mangsa jenayah ini terutamanya wanita dan kanak-kanak telah dirampas maruah, kebebasan dan hak asasi manusia mereka.7 Isu pemerdangangan dan penyeludupan manusia adalah merupakan salah satu isu yang hangat diperkatakkan oleh kebanyakan pihak di persada antarabangsa. Jenayah Pemerdangan dan penyeludupan manusia bukan merupakan satu isu yang baru wujud di dunia ini malahan masalah ini telah lama wujud dalam kalangan manusia sejak lama lagi dalam bentuk buruh paksa dan perhambaan.8 Setiap tahun, ramai manusia yang diseludup daripada seluruh pelosok dunia. Hal ini dapat dilihat melalui statistik yang dikeluarkan oleh Pertubuhan Buruh Antrabangsa (International labour Organization) di mana berdasarkan kepada statistik tersebut adalah didapati bahawa 2.5 juta orang adalah terdedah kepada aktiviti penyeludupan manusia.9 Jadual di bawah yang dikeluarkan oleh Pertubuhan Buruh Antarabangsa dapat mempaparkan maklumat mengenai bilangan manusia yang menjadi mangsa penyeludupan di seluruh dunia sehingga tahun 2007. Jadual 1: Jumlah manusia yang menjadi buruh paksa (termasuk eksploitasi seks) akibat daripada penyeludupan Jenis Kawasan Asia dan Pasifik Amerika Latin dan Caribbean Timur Tengah dan Afrika Tengah Negara-negara sub-Sahara Negara-negara Perindustrian Negara-negara Peralihan Bilangan orang 1.4 juta 250,000 230,000 130,000 270,000 200,000 Peratusan 56% 10% 9.2% 5.2% 10.8% 8%
4 Maksudnya negara di mana orang yang didagangkan itu berasal. Ia menjadi tumpuan sindiket untuk mencari individu atau kumpulan manusia yang akan menjadi mangsa mereka. 5 Maksudnya negara yang digunakan sebagai laluan oleh sindiket untuk membawa mangsa mereka sebelum tiba ke negara destinasi. Ia sama ada menggunakan jalan darat, laut mahupun udara. 6 Maksudnya negara penerima atau negara yang dituju oleh sindiket untuk membawa mangsa mereka. 7 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 1. 8 Lihat Diana Wong. Border Controls, Illegal Migration and the Sovereignty of the NationState. IKMAS Paper Work Series, No 10 (UKM: IKMAS, July 2004). 9 International Labour Organization, Forced Labour Statistics Factsheet (2007).
94
The Law Review 2013
Kedudukan isu pemerdagangan dan penyeludupan manusia di Malaysia Aktiviti pemerdagangan orang merupakan landskap jenayah yang masih dianggap baru kerana pemahaman terhadapnya masih belum meluas di negara ini.10 Datuk Dr Rahman Ismail, Pengerusi Gabungan Badan Bukan Kerajaan (Gabungan) Gombak ketika berucap pada penutupan Seminar Keselamatan dan Sekuriti Masyarakat Tempatan: Hentikan Pemerdagangan Orang, Tanggungjawab Bersama yang dijalankan di Kelab Taman Melawati, Gombak menyatakan bahawa isu jenayah pemerdagangan orang yang semakin serius di negara ini harus dibanteras secara bersungguh-sungguh, bukan sekadar melepaskan batuk di tangga sahaja.11 Selain itu, Muzakarah Jawatankuasa Majlis Fatwa Kebangsaan memutuskan bahawa sebarang bentuk memperdagang dan mengeksploitasi manusia adalah menyalahi hukum syarak dan haram. Setiausahanya yang juga Ketua Pengarah Jabatan Kemajuan Islam Malaysia (Jakim), Othman Mustapha menegaskan, kegiatan itu sangat ditegah dalam Islam kerana manusia ialah makhluk yang amat dimuliakan oleh Allah s.w.t di mana Allah s.w.t. tidak menciptakan setiap hamba-Nya untuk menjadi hamba kepada manusia yang lain kecuali hamba kepada-Nya sahaja. Dalam Islam tiada konsep jual-beli manusia kerana ia tidak dibenarkan, bahkan sejak kedatangan Nabi Muhammad s.a.w. kegiatan perhambaan ketika itu juga telah dihapuskan. Justeru, sebarang bentuk pemerdagangan manusia yang melibatkan pelbagai eksploitasi seperti pelacuran dan perhambaan adalah bercanggah dengan kemuliaan dan konsep khalifah yang disyariatkan oleh Islam.12 Justeru, setiap negara di dunia ini perlu mempunyai satu undangundang khusus yang dapat membendung jenayah pemerdagangan dan penyeludupan manusia. Di Malaysia, undang-undang yang terpakai ialah Akta Antipemerdagangan Orang dan Antipenyeludupan Migran 2007.13 Akta ini merupakan akta yang telah dipinda daripada Akta Pemerdagangan Orang 2007. Pindaan akta ini telah melalui beberapa proses. Pada Jun 18, 2010, Mesyuarat Jemaah Menteri yang bersidang telah meluluskan cadangan Kementerian Dalam Negeri untuk meminda Akta Antipemerdagangan Orang 2007 bagi memperkukuhkan rangka kawal selia untuk menangani isu pemerdagangan orang dan penyeludupan migran dengan lebih berkesan. Pembentangan Rang Undang-Undang Antipemerdagangan Orang (Pindaan) 2010 telahpun dibuat pada sesi Mesyuarat Kedua, Penggal Ketiga, Parlimen Ke-12. Bacaan Kali Pertama di Dewan Rakyat telah berlangsung pada Julai
10 Isu Jenayah: Pemerdagangan orang landskap jenayah baru, http: //www.mstar.com.my/, Disember 21, 2011. 11 Sinar Harian, November 15, 2011, hlm 20. 12 Pemerdagangan Orang Haram, Utusan Malaysia: September 11, 2011. 13 Akta 670.
95
5, 2010 dan dibentangkan untuk Bacaan Kali Kedua dan Bacaan Kali Ketiga oleh YB Menteri Dalam Negeri pada Julai 13, 2010 dan diluluskan oleh Dewan Rakyat pada Julai 15, 2010. Seterusnya, Rang Undang-Undang ini telas dibahaskan di Dewan Negara pada Ogos 3, 2010 dan telah diluluskan sebulat suara.Pindaan Akta ini telah mendapat perkenan daripada Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong pada September 8, 2010 dan telah diwartakan pada September 30, 2010. Kini Akta terpinda tersebut dikenali sebagai Akta Antipemerdagangan Orang dan Antipenyeludupan Migran 2007 dan mula berkuatkuasa pada November 15, 2010. Maka, dapatlah dikatakan bahawa Akta ini adalah undang-undang induk yang mengawal selia jenayah pemerdagangan dan penyeludupan manusia di Malaysia. Selain akta ini, lain-lain perundangan domestik yang menyokongnya ialah Akta Imigresen 1959/63,14 Akta Agensi Penguatkuasa Maritim Malaysia 2004,15 Akta Kastam 1967,16 Akta Keterangan 1950,17 Akta Mahkamah Kehakiman 1964,18 Akta Kanak-Kanak 2001,19 Kanun Keseksaan,20 Akta Kediaman Terhad 193321 dan Ordinan Darurat 5/69.22 Hubungkait antara jenayah pemerdagangan orang dengan jenyah penyeludupan migran Sebelum meneliti tentang hubungkait antara jenayah pemerdagangan orang dan jenayah penyeludupan migran, kedua-dua perbuatan ini perlulah diberi takrifan terlebih dahulu. Seksyen 2 Akta Antipemerdangangan Orang dan Antipenyeludupan Migran 2007 telah mendefinisikan pemerdangangan orang sebagai segala perbuatan yang melibatkan pemerolehan atau pengekalan tenaga kerja atau perkhidmatan seseorang melalui paksaan, dan termasuklah perbuatan merekrut, mengangkut, memindahkan, melindungi, menyediakan atau menerima seseorang. Manakala seksyen yang sama telah memberikan takrifan penyeludupan migran sebagai mengatur, memudahkan atau merancang, secara langsung atau tidak langsung, kemasukan seseorang secara tidak sah ke dalam atau melalui, atau pengeluaran seseorang secara tidak sah dari mana-mana Negara yang orang itu bukan warganegara atau pemastautin tetap sama ada dengan mengetahui atau mempunyai sebab untuk mempercayai bahawa kemasukan atau pengeluaran orang itu adalah tidak sah dan merekrut, mengangkut, memindahkan, menyembunyikan, melindungi
14 15 16 17 18 19 20 21 22 Akta 155. Akta 633. Akta 235. Akta 56. Akta 91. Akta 611. Akta 574. Akta 377. Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 1-2.
96
The Law Review 2013
atau menyediakan apa-apa bantuan atau perkhidmatan bagi tujuan melaksanakan perbuatan yang disebut di atas. Dalam Akta Antipemerdangangan Orang dan Antipenyeludupan Migran 2007, terdapat peruntukan-peruntukan yang berkaitan dengan kesalahan kesalahan pemerdagangan orang seperti yang tertera di dalam Jadual 2 di bawah. Jadual 2: Kesalahan-kesalahan pemerdagangan orang23 Seksyen 12 Kesalahan Memperdagangkan orang yang bukan merupakan seorang kanak-kanak, bagi maksud eksploitasi Memperdagangkan orang yang bukan merupakan seorang kanak-kanak, bagi maksud eksploitasi dengan satu atau lebih cara berikut: (a) Ancaman; (b) Penggunaan kekerasan atau bentuk paksaan yang lain; (c) Pemelarian; (d) Fraud; (e) Perdayaan; (f) Penyalahgunaan kuasa; (g) Penyalahgunaan kedudukan orang yang mudah terdedah kepada perbuatan pemerdagangan orang; atau (h) Pemberian atau penerimaan bayaran atau faedah untuk memperoleh kerelaan seseorang yang mempunyai kawalan ke atas orang yang diperdagangkan
23 Informasi Antipemerdagangan Orang Dan Antipenyeludupan Migran oleh Sekretariat Majlis Antipemerdagangan Orang Dan Antipenyeludupan Migran, hlm 8.
Penalti Apabila disabitkan, hukuman penjara tidak lebih lima belas (15) tahun dan boleh dikenakan denda Apabila disabitkan, hukuman penjara tidak kurang tiga (3) tahun tetapi tidak melebihi dua puluh (20) tahun dan boleh dikenakan denda
13
97
Seksyen 14
Kesalahan Memperdagangkan orang yang merupakan seorang kanak-kanak, bagi maksud eksploitasi Kesalahan mendapatkan keuntungan daripada pengeksploitasian orang yang diperdagangkan
Penalti Apabila disabitkan, hukuman penjara tidak kurang tiga (3) tahun tetapi tidak melebihi dua puluh (20) tahun dan boleh dikenakan denda Apabila disabitkan, hukuman penjara tidak lebih lima belas (15) tahun dan boleh dikenakan denda lima ratus ribu ringgit tetapi tidak melebihi satu juta ringgit dan boleh juga dilucuthakkan keuntungan daripada kesalahan itu Apabila disabitkan, hukuman penjara tidak lebih tujuh (7) tahun dan boleh dikenakan denda
15
15A
Kesalahan membawa dalam tansit orang yang diperdagangkan melalui Malaysia (darat, laut dan udara) atau mengatur atau memudahkan perbuatan itu dilakukan
Bukan itu sahaja, malah Akta Antipemerdangangan Orang dan Antipenyeludupan Migran 2007 juga mengandungi peruntukan-peruntukan mengenai kesalahan-kesalahan penyeludupan migran seperti yang terkandung di dalam Jadual 3 di bawah. Jadual 3: Kesalahan-kesalahan penyeludupan migran24 Seksyen 26A Kesalahan Kesalahan menjalankan penyeludupan migran Penalti Apabila disabitkan, hukuman penjara tidak lebih lima belas (15) tahun dan boleh dikenakan denda atau keduaduanya.
98
The Law Review 2013
Seksyen 26B
Kesalahan Kesalahan penyeludupan migran yang lebih berat melibatkan: (a) Berniat untuk mengeksploitasi migran yang diseludup itu selepas kemasukannya ke dalam negara penerima atau negara transit sama ada oleh orang itu sendiri atau oleh orang lain; (b) Memperlakukan migran yang diseludup itu dengan layanan yang kejam, tidak berperikemanusiaan atau menjatuhkan maruah; atau (c) Kelakuan orang itu menimbulkan risiko kematian atau kemudaratan yang serius terhadap migran yang diseludup itu.
Penalti Apabila disabitkan, hukuman penjara tidak kurang tiga (3) tahun tetapi tidak lebih dua puluh (20) tahun dan boleh dikenakan denda atau keduaduanya.
26C
Kesalahan membawa dalam transit seorang migran yang diseludup menerusi Malaysia melalui darat, laut, atau udara atau selainnya mengaturkan atau memudahkan perbuatan itu. Kesalahan mendapatkan keuntungan daripada kesalahan penyeludupan migran
Apabila disabitkan, hukuman penjara tidak kurang tujuh (7) tahun dan boleh dikenakan denda atau keduaduanya.
26D
Apabila disabitkan, hukuman penjara tidak kurang tujuh (7) tahun dan tidak lebih lima belas (15) tahun dan boleh dikenakan denda tidak kurang daripada lima ratus ribu ringgit tetapi tidak melebihi satu juta ringgit atau kedua-duanya dan boleh dilucuthakkan keuntungan daripada kesalahan itu.
99
Walaupun terdapat beberapa peruntukan-peruntukan yang berbeza antara jenayah pemerdagangan orang dengan jenayah penyeludupan migran, namun dari segi realitinya, kedua-dua aktiviti ini sukar dipisahkan apabila ia melibatkan warga asing yang diseludup masuk dan diperdagangkan di Malaysia. Sebagi contoh, ramai pekerja asing di ladang, tapak pembinaan, kilang tekstil, dan mereka yang bekerja sebagai pembantu rumah di Malaysia menghadapi amalan-amalan berupa pemerdagangan manusia seperti sekatan ke atas pergerakan, penipuan dan fraud dalam pembayaran gaji, perampasan pasport, atau ikatan hutang oleh ejen atau majikan mereka.25 Berdasarkan kajian, terdapat persamaan beberapa elemen seperti merekrut, mengangkut, memindahkan, melindungi, menyediakan terdapat dalam definisi aktiviti pemerdangangan orang dan juga dalam aktiviti penyeludupan migran di bawah Akta Antipemerdagangan dan Antipenyeludupan Migran 2007. Persamaan elemen ini adalah secara langsung dapat memberi satu gambaran bahawa kedua-dua aktivi ini adalah saling berkaitan dan berhubung antara satu sama lain. Di samping itu, persamaan elemen ini juga adalah dapat memberi satu gambaran bahawa individu yang terlibat dalam jenayah penyeludupan migran adalah juga mempunyai potensi yang tinggi untuk terlibat dalam aktiviti pemerdangangan orang. Hal ini bermakna mangsa-mangsa yang diseludup masuk ke dalam negara Malaysia secara sukarela adalah juga mempunyai potensi yang tinggi untuk terdedah kepada aktiviti pemerdangangan orang di mana kemasukan migran dengan tidak sah adalah dapat membuka satu jalan yang luas kepada agenagen dan/atau majikan-majikan di Malaysia untuk menggunakan dan/atau memaksa individu-individu ini untuk tujuan pemerdangangan orang. Hal ini disebabkan individu-individu yang memasuki negara Malaysia secara tidak sah melalui aktiviti penyeludupan manusia yang tidak dapat menuntut keselamatan dan/atau perlindungan daripada pihak berkuasa adalah mudah terdedah kepada aktiviti pemerdangangan orang dan mudah dieksploitasi oleh penjenayah aktiviti pemerdangangan orang. Menurut Kementerian Keselamatan Dalam Negeri menerusi laman web rasminya telah menyatakan bahawa kesalahan-kesalahan yang diperuntukan dalam s 26B Akta Antipemerdangangan dan Antipenyeludupan Migran 2007 adalah antara kesalahan yang kerap dilaporkan di Malaysia. Satu pemahaman mengenai s 26B ini dapat memberikan satu penjelasan bahawa aktiviti penyeludupan migran adalah saling berhubungkait dengan aktiviti pemerdangangan orang di mana migran yang diseludup masuk diperdagangkan di Malaysia. Disamping itu, fakta bahawa kesalahan di bawah seksyen tersebut yang kerap dilaporkan adalah juga dapat membuktikan bahawa mangsa penyeludupan migran sentiasa berpotensi untuk terdedah kepada jenayah pemerdangangan orang.26
25 Laporan Pemerdagangan Manusia 2011. 26 http://www.moha.gov.my.
100
The Law Review 2013
Umumnya, terdapat dua perbezaan yang ketara antara aktiviti pemerdangangan dan penyeludupan manusia di mana yang pertama adalah aktiviti pemerdangangan manusia yang membabitkan kesalahan berunsur eksploitasi dan ia boleh berlaku dalam sesebuah negara tanpa melibatkan aspek rentas sempadan manakala aktiviti penyeludupan manusia pula yang melibatkan unsur rentas sempadan. Keduanya, aktiviti pemerdangangan manusia yang melibatkan elemen-elemen eksploitasi, manipulasi, ancaman yang berterusan dan berulang terhadap mangsa yang terlibat manakala, aktiviti penyeludupan manusia adalah yang melibatkan kerelaan orang yang diseludup. perbezaan antara jenayah pemerdagangan orang dengan jenayah penyeludupan migran dapat dilihat secara jelas daripada Jadual 4 di bawah. Jadual 4: Perbezaan antara pemerdagangan orang dengan penyeludupan migran27 Bil. 1 Pemerdagangan Orang Instrumen/ undang-undang antarabangsa yang terlibat adalah Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children di bawah UN Convention on Transnational Organised Crime. Elemen utama bagi membuktikan sebarang kesalahan berhubung dengan pemerdagangan orang adalah unsur eksploitasi dan ia boleh berlaku dalam sesebuah negara tanpa melibatkan aspek rentas sempadan. Ia boleh juga boleh berlaku di peringkat domestik Melibatkan elemen eksploitasi, manipulasi dan ancaman terhadap mangsa yang terlibat. Eksploitasi adalah berterusan dan berulang. Penyeludupan Migran Instrument/ undang-undang antarabangsa yang terlibat adalah Protocol Against The Smuggling Of Migrants By Land, Air And Sea di bawah UN Convention on Transnational Organised Crime. Elemen penting dalam penyeludupan migran adalah ia mesti melibatkan unsur rentas sempadan.
Melibatkan kerelaan orang yang diseludupkan dan keuntungan terhadap sindiket penyeludupan manusia. Kegiatan penyeludupan tamat apabila tiba di destinasi.
101
Faktor-faktor yang menyumbang kepada peningkatan masalah pemerdagangan dan penyeludupan manusia di Malaysia Terdapat pelbagai faktor yang mendorong kepada peningkatan kes-kes jenayah pemerdagangan dan penyeludupan manusia di Malaysia. Antaranya ialah kemiskinan, buta huruf, krisis ekonomi, konflik domestik dan serantau, ketidakstabilan politik dan terpinggir (displacement).28 Selain faktor-faktor di atas, niat untuk mendapatkan keuntungan yang tinggi merupakan salah satu penyumbang kepada peningkatan aktivitiaktiviti pemerdagangan dan penyeludupan manusia. Menerusi aktiviti pemerdagangan dan penyeludupan manusia ini, peluang untuk mengaut laba (keuntungan) adalah sangat tinggi. Hal ini disebabkan oleh aktiviti pemerdagangan manusia melibatkan pelbagai tujuan seperti eksploitasi seks atau pelacur, perhambaan, pengabdian, pemindahan organ dan kerja atau perkhidmatan paksa. Maka, pihak yang terlibat dalam aktiviti pemerdagangan orang mempunyai banyak pilihan dan peluang untuk memperdagangkan orang. Hal ini jelas terbukti apabila kerajaan Malaysia melaporkan bahawa terdapat kira-kira 300,000 wanita pembantu rumah yang bekerja di negara ini dan kebanyakan mereka mungkin menjadi mangsa pemerdagangan manusia. Tambahan pula, sebilangan kecil rakyat Malaysia telah dilaporkan diperdagangkan dalam dan luar negara ke Singapura, China dan Jepun dan mereka dieksploitasi sebagai pekerja seks komersial.29 Menurut Pelan Tindakan Nasional Antipemerdagangan Orang, dianggarkan bahawa keuntungan daripada jenayah pemerdagangan orang adalah berjumlah USD 38 bilion setahun. Susulan daripada keuntungan yang besar hasil daripada kegiatan tidak bermoral ini, sebilangan besar mangsa jenayah ini terutamanya wanita dan kanak-kanak telah dirampas maruah, kebebasan dan hak asasi manusia mereka.30 Manakala, berdasarkan kepada laporan yang dikeluarkan oleh Patrick Besler, adalah didapati bahawa keuntungan kewangan tahunan yang dicatatkan daripada eksploitasi buruh paksa yang diseludup pada tahun 2005 adalah sebanyak US$ 31.6 bilion.31 Data ini dapat diperincikan di Jadual 5 di bawah:
28 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 1. 29 Laporan pemerdagangan Manusia 2011. 30 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 1. 31 Forced Labour and Human Traffiking: Estimating The Profits , (working paper) (Geneva, International Labour Office, 2005).
102
The Law Review 2013
Jadual 5: Hasil keuntungan tahunan yang diperoleh menerusi eksploitasi buruh paksa yang diseludup Jenis Kawasan Asia dan Pasifik Amerika Latin dan Caribbean Timur Tengah dan Afrika Utara Afrika sub-Sahara Negara-negara Perindustrian Jumlah Keuntungan (US$) 9.7 bilion 1.3 bilion 1.5 bilion 1.6 bilion 15.5 bilion Peratusan 30.6% 4.1% 4.7% 5% 49%
Selain itu, masalah ekonomi global turut menjadi pendorong kepada berlakunya peningkatan kes pemerdagangan dan penyeludupan di Malaysia. Mengikut laporan antara April 2008 hingga Mac 2009, krisis kewangan global telah menambah kemungkinan peningkatan perdagangan manusia di seluruh dunia. Akibat daripada krisis ini, dua trend serentak iaitu penyusutan permintaan dunia bagi buruh dan peningkatan bekalan pekerja yang sanggup mengambil risiko lebih besar bagi peluang ekonomi menjadi resepi bagi peningkatan kes buruh paksa bagi pekerja asing dan wanita dalam pelacuran. Salah satu faktor yang menyumbang kepada peningkatan kes pemerdagangan dan penyeludupan di Malaysia adalah ketiadaan koordinasi antara agensiagensi yang terlibat dalam membendung isu ini. Sebanyak lima agensi yang menjalankan tindakan penguatkuasaan iaitu Polis Diraja Malaysia (PDRM), Jabatan Imigresen, Jabatan Kastam Diraja Malaysia (KDRM), Agensi Penguatkuasa Maritim Malaysia (APMM) dan terbaru, Jabatan Tenaga Kerja. Datuk Dr Rahman Ismail, Pengerusi Gabungan Badan Bukan Kerajaan (Gabungan) Gombak telah menyatakan bahawa walaupun terdapat lima agensi kerajaan diberi mandat melaksanakan penguatkuasaan, namun disebabkan tiada koordinasi antara satu sama lain, kebanyakan tindakan agensi berdepan dengan masalah pertindihan.32 Selain itu, tawaran pekerjaan dan pendapatan yang lumayan merupakan salah satu faktor penyumbang kepada masalah pemerdagangan dan penyeludupan manusia di Malaysia. Kebanyakan mangsa yang terlibat dalam isu ini merupakan golongan yang terpengaruh dengan tawaran pekerjaan yang diberikan oleh pihak yang tidak bertanggungjawab sama ada secara langsung mahupun tidak langsung. Menurut salah seorang mangsa iaitu Bella yang ditempatkan di Rumah Pelindungan Wanita Bukit Ledang, Kuala Lumpur menyatakan bahawa dia telah ditipu oleh abang angkat yang
32 Isu Jenayah: Pemerdagangan orang landskap jenayah baru, http: //www.mstar.com.my/, Disember 21, 2011.
103
kononnya hendak menawarkannya kerja sebagai tukang urut di Johor Bahru. Sebaliknya, dia dibawa ke kedai urut di Kuala Lumpur dan dipaksa bekerja sebagai pelacur.33 Hal ini membuktikan bahawa desakan hidup dan tawaran pekerjaan merupakan salah satu faktor yang mendorong individu terus terlibat dalam aktiviti pemerdagangan orang dan penyeludupan migran. Faktor sempadan luas dan kemakmuran ekonomi menjadi salah satu faktor peningkatan kes pemerdangangan orang di Malaysia. Pegawai Cawangan Maksiat Dan Perjudian, Jabatan Siasatan Jenayah Negeri Sabah dalam satu temubual kepada Utusan Borneo pada haribulan 28, April 2010 telah memaklumkan bahawa permasalahan logistik dan sumber manusia dalam mengawasi sempadan yang luas di Sabah serta kemakmuran ekonomi adalah menjadi dua punca utama kepada kedatangan mangsa serta peningkatan aktiviti pemerdagangan orang di negara Malaysia. Menurut statistik, antara Februari 2008 hingga Oktober 2010, sebanyak 118 kes pemerdagangan kanakkanak dilaporkan di Malaysia berbanding sebanyak 1,843 kes dilaporkan dalam tempoh yang sama di sekitar negara Asia. Malaysia kini bukan sahaja dijadikan sebagai negara transit malahan sebagai negara destinasi untuk aktiviti pemerdagangan.34 Adalah juga telah dilaporkan bahawa seorang kanak-kanak yang bernama Lina (nama samaran) yang baru berusia lima tahun berasal dari sebuah kawasan di Selangor telah dijadikan sebagai mangsa aktiviti pemerdagangan orang di mana dia dipaksa bekerja dengan memberi perkhidmatan seks kepada lelaki yang boleh dipanggil abang, bapa atau datuk kepadanya. Dia, yang dikawal oleh lelaki yang dipanggil uncle, tidak mengerti tentang apa yang sedang dilaluinya.35 Sementara itu, masalah kekurangan bukti turut menjadi salah satu sebab kepada kegagalan atau kesukaran dalam mendakwa penjenayah kes pemerdangangan secara efektif di Malaysia. Memandangkan jenayah ini melibatkan banyak pihak, maka pihak berkuasa mengalami kesukaran untuk mengumpul bukti. Hal ini ditambah pula oleh situasi di mana kebanyakan mangsa pemerdangangan orang juga enggan dan abai untuk menjadi saksi untuk tujuan mendakwa dan mensabitkan penjenayah aktiviti pemerdagangan orang.36 Usaha-usaha dalam menangani jenayah pemerdagangan dan penyeludupan manusia di Malaysia Kerajaan Malaysia telah mengambil pelbagai usaha untuk menyiasat dan mendakwa kes-kes pemerdagangan orang di mana undang-undang Malaysia adalah secara langsung mengharamkan semua jenis aktiviti pemerdangangan dan penyeludupan manusia melalui pembentukan dan penggubalan Akta
33 34 35 36 Portal berita Kementerian Dalam Negeri. Utusan Malaysia: Mei 26, 2011. Utusan Malaysia: Mei 26, 2011. Berita Harian: Ogos 26, 2011.
104
The Law Review 2013
Antipemerdagangan Orang dan Penyeludupan Migran 2007. Undang-undang ini juga telah menetapkan hukuman yang ketat bagi kesalahan jenayah pemerdagangan orang dan penyeludupan migran dan setara dengan hukuman yang dikenakan untuk kesalahan berat yang lain seperti rogol. Pada tahun 2010, 206 wanita asing, 172 lelaki asing dan lima kanak-kanak asing telah disahkan sebagai mangsa pemerdagangan dan ditahan di fasiliti kerajaan. Kerajaan juga telah mengenal pasti tujuh mangsa pemerdagangan yang terdiri daripada rakyat Malaysia. Menurut laporan, kerajaan telah mensabitkan 11 pesalah pemerdagangan seks dan tiga individu yang terlibat dalam pemerdagangan buruh dan menjatuhkan hukuman penjara tiga hingga lapan tahun kepada mereka berbanding kepada tujuh pesalah pemerdagangan yang disabitkan sepanjang tempoh laporan tahun sebelumnya.37 Namun begitu, kerajaan Malaysia perlu meningkatkan tindakan penguatkuasaan undang-undang di bawah undang-undang antipemerdagangan dan antipenyeludupan terutamanya kes pemerdagangan buruh di samping mempercepatkan proses pendakwaan dan perbicaraan kes. Hal ini disebabkan Kerajaan melaporkan bahawa 141 kes pemerdagangan masih belum selesai di mahkamah Malaysia.38 Selain itu, menurut Datuk Dr Rahman Ismail, Pengerusi Gabungan Badan Bukan Kerajaan (Gabungan) Gombak, tumpuan akan dilakukan terhadap pendakwaan dan penyelesaian kes perburuhan serta memantapkan Pelan Tindakan Kebangsaan berkaitan pemerdagangan orang. Dengan kerjasama badan antarabangsa, pertubuhan bukan kerajaan (NGO) dan rakyat, kes-kes berkenaan dapat diselesaikan dengan segera dan mudah. MAPO menjalankan kerjasama dengan pihak luar seperti Pertubuhan Migrasi Antarabangsa (IOM) dan Pesuruhjaya Tinggi Pertubuhan Bangsa-bangsa Bersatu untuk Pelarian (UNHCR). Kerjasama dengan NGO pula melibatkan Majlis Kanak-kanak Malaysia (MKKM) dan Majlis Pertubuhan Wanita Kebangsaan (NCWO). Hal ini termasuk menjalinkan kerjasama dengan kedutaan negara luar seperti Amerika Syarikat, United Kingdom, Australia dan Kanada.39 Bukan itu sahaja, malah kerjaan Malaysia telah mengambil inisiatif untuk membanteras aktiviti pemerdagangan buruh. Pada masa kini, dianggarkan bahawa jumlah pekerja warga asing di negara ini adalah seramai 1.9 juta orang. Kebanjiran pekerja-pekerja warga asing di negara ini adalah salah satu faktor penyumbang kepada berlakunya jenayah pemerdagangan orang. Dengan adanya Akta Anti Pemerdagangan Orang 2007 serta disokong oleh Akta Kerja 195540 dan perundangan buruh yang lain, ia akan dapat membantu untuk menangani isu eksploitasi buruh. Sebagai langkah untuk mengawal
37 Laporan Pemerdagangan Manusia 2011. 38 Laporan Pemerdagangan Manusia 2011. 39 Isu Jenayah: Pemerdagangan orang landskap jenayah baru, http: //www.mstar.com.my/, Disember 21, 2011 40 Akta 265.
105
selia pengambilan tenaga kerja asing, Kerajaan Malaysia telah menandatangani Memorandum Persefahaman (MoU) dengan sekurang-kurangnya 7 negara sumber termasuk satu MoU spesifik mengenai pengambilan dan penempatan pembantu rumah. Kesemua MoU ini adalah bertujuan untuk kebaikan majikan dan pekerja. Di samping itu, Jawatankuasa Khas mengenai Pemerdagangan Buruh di bawah Majlis bagi Antipemerdagangan Orang yang bertanggungjawab secara spesifik untuk menangani isu pemerdagangan orang turut diwujudkan.41 Kerajaan Malaysia turut mengambil usaha membanteras jenayah ini menerusi Majlis Antipemerdagangan Orang (MAPO). MAPO adalah suatu badan yang ditubuhkan di bawah peruntukan Akta Antipemerdagangan Orang 2007 yang dikuatkuasakan pada Februari 28, 2008. Berikutan kuatkuasa pindaan Akta Antipemerdagangan Orang 2007, maka MAPO kini dikenali sebagai Majlis Antipemerdagangan Orang dan Antipenyeludupan Migran. Majlis Antipemerdagangan Orang dan Antipenyeludupan Migran dibantu pula oleh Sekretariat Majlis Antipemerdagangan Orang dan Antipenyeludupan Migran dalam menangani isu pemerdagangan orang dan penyeludupan migran di Malaysia.42 MAPO telah memperkenalkan suatu pelan yang dikenali sebagai Pelan Tindakan Kebangsaan (2010-2015) sebagai instrumen bagi menangani jenayah ini terutamanya yang menyentuh mengenai bidang pencegahan, pemulihan dan perlindungan mangsa pemerdagangan orang termasuk pendakwaan. Di samping itu, kerajaan Malaysia perlu membina rangkaian kerjasama antara semua pihak memandangkan isu pemerdagangan dan penyeludupan manusia merupakan masalah antarabanagsa. Kerjasama dua hala dan pelbagai hala di peringkat serantau dan antarabangsa antara kerajaan Malaysia dengan negara-negara lain termasuk pertubuhan-pertubuhan antarabangsa perlu dipertingkatkan dalam menangani masalah pemerdagangan orang.43 Kesedaran masyarakat atau orang awam juga perlu dalam menangani jenayah pemerdagangan dan penyeludupan manusia ini. Program-program kesedaran awam perlu dilancarkan dan maklumat tentang bahaya jenayah ini dan implikasinya kepada keselamatan negara dan hak asasi manusia perlu disebarkan seluas mungkin melalui pelbagai bentuk komunikasi. Program kesedaran tersebut juga penting untuk dikoordinasi serta mengambil pendekatan pelbagai sektor yang melibatkan agensi-agensi kerajaan, badanbadan bukan Kerajaan (NGO), pertubuhan-pertubuhan antarabangsa dan
41 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 12. 42 http://www.moha.gov.my. 43 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 13.
106
The Law Review 2013
kumpulan-kumpulan komuniti supaya tindak balas secara kolektif dan positif dapat diperolehi.44 Kesimpulan Memang tidak dapat disangkal lagi bahawa aspek migrasi sangat berkait rapat dengan jenayah pemerdagangan orang. Sehubungan itu, aspek ini perlu diberikan perhatian kerana jumlah migrasi kian meningkat dan dianggarkan jumlah migrasi di peringkat global berjumlah 240 juta orang. Migrasi menjurus kepada isu pemerdagangan buruh kerana dieksploitasi oleh individu dan sindiket tidak bertanggungjawab.45 Walaupun jenayah pemerdagangan orang dan penyeludupan migran merupakan suatu isu yang sering menjadi topik perbincangan sama ada di peringkat tempatan mahupun antarabangsa, namun Malaysia telah mula mengorak langkah yang sistematik dan konsisten dalam membendung gejala ini. Hal ini terbukti dengan peningkatan kedudukan Malaysia dalam TIP daripada tahap tiga ke tahap dua berlaku hasil beberapa penambahbaikan dalam sistem pemantauan dan penguatkuasaan selain mendidik masyarakat mengenai pemerdagangan orang. Tahap dua bermakna Malaysia berusaha memenuhi syarat Akta Pemerdagangan Perlindungan Mangsa (TVPA) Amerika Syarikat. Manakala tahap tiga bermakna langsung tidak melakukan apa-apa usaha dan mengaplikasi sepenuhnya TVPA.46 Sesungguhnya, aktiviti pemerdagangan manusia mendatangkan kemudaratan dan kesan buruk yang banyak kepada agama, masyarakat dan negara.47 Justeru, semua pihak harus berganding bahu dalam menangani isu global ini daripada memusnahkan keselamatan, kesejahteraan dan keharmonian masyarakat secara holistik.
44 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 7. 45 Pelan Tindakan Kebangsaan Anti Pemerdagangan Orang (2010-2015) oleh Majlis AntiPemerdagangan Orang Malaysia, Kuala Lumpur, Percetakan Nasional Malaysia Berhad, 2010, hlm 1. 46 Malaysia di tahap dua Laporan Pemerdagangan Orang AS, Utusan Malaysia: Julai 12, 2011. 47 Pemerdagangan Orang Haram, Utusan Malaysia: September 11, 2011.
107
Case Digests
Arbitration
LW Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and Another Appeal [2012] SGCA 57; [2013] 1 SLR 125 Court of Appeal, Singapore Chan Sek Keong CJ, Andrew Phang Boon Leong, Sundaresh Menon JJA October 18, 2012 Arbitration Award Setting aside Additional award Whether arbitrator entitled to make additional award Arbitrator rendering additional award without response from other party Whether additional award null and void Whether additional award to be set aside for breach of natural justice Arbitration Award Setting aside Jurisdiction of courts Extent to which courts retain supervisory powers over arbitration Whether courts have powers beyond those expressly provided in the relevant legislation There were two appeals arising out of the judgment of the High Court judge (the judge). Another appeal (CA 26/2012) was filed by Lim Chin San Contractors Pte Ltd (the plaintiff) while this appeal (CA 17/2012) was filed by LW Infrastructure Pte Ltd (the defendant). These appeals raised the issue of what do the rules of natural justice require of an arbitrator; to what extent do these rules apply even to ancillary applications; and what was the threshold a party must cross if it is to obtain any relief even assuming it can show that an arbitrator has failed to observe the rules of natural justice? The Court of Appeal also had to consider the extent to which the court retains any supervisory powers over arbitration beyond the expressly provided avenues for recourse that are spelt out in the relevant legislation. The plaintiff was the defendants subcontractor for a building project. The plaintiff failed to complete certain works by the agreed completion date, and the defendant subsequently terminated the subcontract. This gave rise to a dispute between them which was referred to arbitration before an arbitrator pursuant to a notice of arbitration served on June 22, 2004 by the defendant on the plaintiff. In the arbitral proceedings, the defendant was the claimant while the plaintiff was the respondent. The Arbitration Act (Cap 10, 2002 Rev Ed) (the Act) governed the proceedings. The arbitrator rendered his final award (the final award) on June 29, 2010. The plaintiff was awarded the sum
108
The Law Review 2013
of $341,391.10 with simple interest at the rate of 5.33% per annum from the date of the award. Both parties were dissatisfied with the arbitrators decision and appealed against it on questions of law arising out of the final award. The High Court dismissed the plaintiffs appeal and substantially allowed the defendants appeal and the final award was remitted to the arbitrator for his reconsideration and final disposal. Following this, the arbitrator rendered his Supplementary Award No 2 (Remitted Issues) on September 21, 2011 (the second supplementary award), under which the defendant was awarded the sum of $945,000 by way of liquidated damages. In satisfaction of this sum, the plaintiff was ordered to pay the defendant the sum of $603,608.90, after setting off the sum of $341,391.10 that had earlier been found to be due to the plaintiff under the final award. The arbitrator expressly dealt with interest in the second supplementary award, and as he had done in the final award, he awarded the successful party (i.e., the defendant) interest at the rate of 5.33% per annum on the sum of $603,608.90 from the date of the second supplementary award. On both occasions, only post-award interest was awarded. On October 17, 2011, almost four weeks after the issuance of the second supplementary award, the defendants solicitors wrote a letter to the arbitrator (copied to the plaintiffs solicitors) requesting an additional award for preaward interest. The arbitrator responded three days later making an additional award (the additional award) for a further sum of $274,114.61 payable to the defendant as pre-award interest calculated on the sum of $603,608.90 from January 13, 2003 to the date of the second supplementary award. The arbitrator stated that January 13, 2003 was selected as the date from which pre-award interest would be payable because liquidated damages accrued then. At the time he issued the additional award, the arbitrator had not heard submissions on issues such as (a) the principal amount that should carry interest, (b) the rate of interest, (c) the time from which interest should be awarded, or (d) why the situation in favour of the defendant should differ from that which applied when he made his final award in favour of the plaintiff and confined interest to post-award interest. The plaintiffs solicitors protested on the same day, taking issue with the additional award having been made prior to the plaintiff having the opportunity to present its position and/or arguments on the issue of pre-award interest. It appeared on the one hand that the Arbitrator proceeded to make the additional award because he inferred from the plaintiffs three-day silence that there was no objection to this. But on the other hand, the arbitrator appeared also to be saying that he had already formed the intention to award pre-award interest in the manner he eventually did in the additional award but had simply overlooked reflecting this in the second supplementary award. The plaintiff thus applied to the High Court for the additional award be declared a nullity
Case Digests Arbitration
109
in that it was not an award made under or for the purposes of s 43(4) of the Act; or in the alternative, for an order that the additional award be set aside under s 48(1)(a)(vii) of the Act on the ground that it had been made in breach of natural justice. The High Court judge set aside the additional award under s 48(1)(a)(vii) of the Act in favour of the plaintiff, but decided against declaring the award a nullity. Hence this appeal which raised the following issues: (i) did the judge err in refusing to declare the additional award a nullity?; and (ii) did the judge err in setting aside the additional award under s 48(1) (a)(vii) of the Act for breach of natural justice? The Court of appeal held that in situations expressly regulated by the Act, the courts should only intervene where so provided in the Act. The plaintiff sought a declaratory order that the additional award be deemed a nullity on the basis that s 43(4) of the Act did not apply and so there was no basis for the arbitrator to have made it. Their Lordships however were of the view that this was precisely a grievance which has been expressly regulated under s 48(1)(a)(v) of the Act. The powers (or the lack thereof) of the arbitrator are circumscribed by the Act aside from anything else that might have been specifically agreed between the parties. If the arbitrator was wrong to render the additional award because s 43(4) of the Act did not in fact empower him to do so, the arbitral procedure leading to the issuance of the additional award would be contrary both to the agreement of the parties and also the provisions of this Act. It followed from the fact that the Act does make provision for seeking relief in such circumstances, that there was simply no basis for finding that there was any residual or concurrent jurisdiction for the court to make a declaration as to the validity of the additional award. Thus, the Court of Appeal upheld the judges decision not to declare the additional award a nullity and the plaintiffs appeal in CA 26/2012 was dismissed. The judge nonetheless held in favour of the plaintiff and set aside the additional award under s 48(1)(a)(vii) of the Act on the basis that the plaintiff had not been given a reasonable opportunity to be heard and was in fact prejudiced. The CA 17/2012 was the defendants appeal against the judges decision to set aside the additional award. The Court of Appeal held that the arbitrator should have given the plaintiff the right to be heard on the applicability of s 43(4) of the Act prior to coming to his decision, notwithstanding the absence of the express words giving the parties a reasonable opportunity to be heard in s 43(4) of the Act. The arbitrator rendered the additional award just three days after the defendant had submitted its request, even before the plaintiff had responded on the applicability of s 43(4) of the Act. The short time given for the plaintiff to respond was unreasonable. If he wanted to render the additional award after just three days, the arbitrator should have contacted the plaintiff to ascertain whether it intended to object to the making of the additional award. Their Lordships thus agreed with the judge that the additional award was made without affording the plaintiff the opportunity
110
The Law Review 2013
to be heard on the applicability of s 43(4) of the Act. A breach of the plaintiffs right to be heard on the jurisdictional question had therefore occurred. The breach of natural justice in relation to the jurisdictional question was sufficient to set aside the additional award under s 48(1)(a)(vii) of the Act. Their Lordships opined that the plaintiff suffered actual or real prejudice in being deprived of its right to be heard on each of these issues in relation to the substantive question. This was because the arguments the plaintiff may have made on some or perhaps even all of these points could reasonably have affected the outcome of the arbitrators decision. As such, the decision of the judge in setting aside the additional award was upheld and the second appeal was dismissed.
Bankruptcy
Cheo Sharon Andriesz v Official Assignee of the Estate of Andriesz Paul Matthew, a bankrupt [2013] SGCA 8; [2012] 4 SLR 89 Court of Appeal, Singapore Sundaresh Menon CJ, Andrew Phang Boon Leong, VK Rajah JJA January 18, 2013 Bankruptcy Disposition of property Disposition between date of bankruptcy application and date of bankruptcy order Bankrupt husband disposing property to wife pursuant to consent judgment in divorce suit Whether disposition void Whether court should ratify disposition Divorce court not informed regarding bankruptcy proceedings Whether disposition void Bankruptcy Act, s 77(1) This was an appeal against the decision of the High Court judge (the judge) holding that the disposition of the interest of the appellants ex-husband (the bankrupt) in two properties to the appellant (the disposition) pursuant to an interim consent judgment in a divorce suit (the ICJ) made between the date of the bankruptcy application against the bankrupt and the date of the bankruptcy order was void by virtue of s 77(1) of the Bankruptcy Act (Cap 20, 2009 Rev Ed) (the Act). The judge also declined to ratify the disposition. The properties in question (collectively, the properties) consist of a matrimonial home in Singapore (the matrimonial property) and a condominium in Penang (the Penang property). Section 77(1) of the Act (s 77(1)) provides that where a person is adjudged bankrupt, any disposition of property made by him during the period beginning
Case Digests Civil Procedure
111
with the day of the making of the bankruptcy application and ending with the making of the bankruptcy order (i.e. the relevant period) shall be void except to the extent that such disposition has been made with the consent of, or been subsequently ratified by, the court. Section 77(3)(a) of the Act (s 77(3)(a)) provides that nothing in s 77 shall give a remedy against any person in respect of any property or payment which he received from the bankrupt before the commencement of the bankruptcy in good faith, for value and without notice that the bankruptcy application had been made. The issues on appeal were as follows: (a) whether s 77(1) applies to a disposition of property pursuant to a court order; (b) whether the appellant fell within s 77(3)(a); and (c) whether the court should ratify the disposition. The Court of Appeal held that s 77(1) applied to a disposition of property pursuant to a court order. The appellant had not proved that she fell within s 77(3)(a). Further, it was not disputed that the court which granted the ICJ requiring the disposition was not informed that the bankruptcy application had been made. Given this, the Court of Appeal was not prepared to ratify the disposition. According to their Lordships, the ICJ may have been the means by which the disposition was made, but the disposition was nonetheless made, by the bankrupt. Their Lordships also held that this appeal should serve as a reminder that it is prudent for parties to a litigation to conduct the relevant bankruptcy searches before the commencement of proceedings and that this applies equally to divorce cases. In the circumstances of the case, the appeal was dismissed.
Civil Procedure
Foo Jong Peng & Ors v Phua Kiah Mai & Anor [2012] SGCA 55; [2012] 4 SLR 1267 Court of Appeal, Singapore Andrew Phang Boon Leong, VK Rajah JJA, Woo Bih Li J October 8, 2012 Civil procedure Appeal Academic appeals Whether appellate court should decline to hear purely academic appeals Appeal against decision holding that removal of office bearers of association was illegal Whether no longer any live issue to be decided since term of office of office bearers had lapsed Whether appeal may be heard purely due to issue of costs
112
The Law Review 2013
Contract Terms Implied terms Principles governing implying of terms Dispute pertaining to removal of office bearers of association Rules of association not containing provisions for removal of office bearers Whether term conferring power on management committee to remove office bearers should be implied Unincorporated associations Meetings Calling of Whether member of management committee may call for management committee meeting in absence of any provision in rules of association This was an appeal against a decision of the High Court judge (the judge) granting declarations, inter alia, that the management committee (MC) of the Singapore Hainan Hwee Kuan (the association) did not have the power to remove office bearers from their positions on the executive committee (Executive Committee). The parties to this appeal were members of the Management Committee of the association. The first respondent, Phua Kiah Mai, was the president of the association and the second respondent, Hun Chin Guan, was the honorary secretary general. The first appellant, Foo Jong Peng, was president for two consecutive terms from January 2006 to January 2010 and was presently the first vice president. The second appellant, Lee Teck Hai, was the head of the public relations division and had proposed the motions for the removal of Phua Kiah Mai and Foo Jong Peng from their positions. The third appellant, Han Tan Juan, was head of the cultural & education division and had proposed the motion for the removal of Hun Chin Guan from his position. The fourth appellant, Foo Shick Thai, and the fifth appellant, Pang Fui Nam, were elected as the new president and honorary secretary general respectively after resolutions to remove Phua Kiah Mai and Hun Chin Guan were passed at the October 20, 2011 Meeting. Under r 8 of the Rules of the Singapore Hainan Hwee Kuan (the Rules), Management Committee members will be elected by a vote of the general body of members at the annual general meeting (AGM). Rule 7 provided that the elected MC members shall hold office for a term of two years. The elected MC members then elected from amongst themselves the office bearers (office bearers) of the association. The parties were all voted in as members of the MC by the general body of members at the AGM held in January 2010. Sometime in March 2011, a dispute arose between Foo Jong Peng and Phua Kiah Mai and Foo Jong Peng expressed the view that he was no longer able to work with Phua Kiah Mai. On October 12, 2011, Foo Jong Peng issued a notice in his capacity as first vice-president convening a meeting on October 20, 2011 (the October 20, 2011 meeting). The October 20, 2011 meeting was attended by a sufficient quorum of 27 MC members. Phua Kiah Mai and Hun Chin Guan were both absent from the meeting. The members approved the associations accounts for the financial year 2010 and resolutions were
113
passed removing Phua Kiah Mai and Hun Chin Guan from their positions. The motion to remove Foo Jong Peng as first vice-president was defeated, and Foo Shick Thai and Pang Fui Nam were elected as the new president and honorary secretary general, respectively, following a vote by the members present at the meeting. Phua Kiah Mai and Hun Chin Guan thus filed a suit the High Court seeking declarations that Foo Jong Peng had no power to convene the October 20, 2011 Meeting; that the meeting was invalid; that the MC had no power to remove their President, First Vice President and Honorary Secretary General and elect a new President, First Vice President and Honorary Secretary General; and that the resolutions passed by the MC on October 20, 2011 to replace the President and Honorary Secretary General were invalid and thus null and void. The judge held that the Rules did not expressly provide for the removal of a member of the Executive Committee, i.e., an office bearer, and declined to imply a term permitting the MC to remove members of the committee apart from general expulsion from the association for misconduct. As the MC members were appointed for a fixed two-year term, the judge considered that a more reasonable interpretation of the Rules was that the members of the association did not intend to have the membership of the committee rotated before the term had expired. In the absence of an express provision in the Rules, the MC could not remove MC members before the expiry of their terms. The appellants appealed against the entirety of the judgment, raising two main issues: (a) whether there was an implied term in the Rules giving the MC the power to remove an office bearer in the Executive Committee; and (b) whether the October 20, 2011 meeting was properly convened. A preliminary point was raised that the Court of Appeal should decline to hear this appeal on the merits as there was no longer a live issue to be decided. The respondents relied on the Court of Appeals decision in AG v Joo Yee Construction Pte Ltd [1992] 2 SLR(R) 165 (Joo Yee) for the proposition that the Court of Appeal should exercise its inherent jurisdiction to decline to decide an issue which the appellants retain no interest in, even if the decision would set a useful precedent for future cases. Counsel for the respondents informed the court that a new MC had been elected at the AGM held on May 20, 2012 and that new office bearers had also been elected by the MC; accordingly, even if the appellants were to succeed in the present appeal, it would not affect their interests as the respondents terms of office had lapsed. The Court of Appeal however, did not agree with the respondents that the instant appeal was one where there was no live issue to be decided and considered that the principles laid down in Joo Yee were not directly applicable to the facts of this case. While it was true that the election of new office bearers of the Executive Committee meant that the respondents previous terms of office had lapsed and the issue of whether the respondents still legally held their offices despite
114
The Law Review 2013
the purported removal was therefore rendered moot, the parties to this appeal were, quite unfortunately, unable to come to an agreement on costs. If the appellants were successful, the respondents would have been liable for costs here and below, and the positions of the parties may therefore have been affected. Considering the potential costs ramifications in the present appeal, it meant that the appellants retained a real interest in the outcome of this dispute. Their Lordships thus rejected the preliminary objection. Their Lordships observed that in relation to the law relating to implied terms in fact, the two traditional tests are the business efficacy test and the officious bystander test. The relationship between the two tests is complementary, rather than alternative or cumulative: the officious bystander test is the practical mode by which the business efficacy test is implemented. Where there is already an express term covering the situation at hand, the court will not imply a term which contradicts that particular express term. Another principle is the criterion of necessity. The very nature of this criterion means that the court will imply terms in fact sparingly. In order to arrive at its decision whether or not to imply a term in fact, it will utilise the two tests (viz., the business efficacy and officious bystander tests) which, by their very nature, are directly related to ascertaining how the contracting parties would (or would not) have filled the gap which ought not to have existed had it been covered by an express term in the first place. The court does not imply terms based on its idea of what it thinks ought to be the contractual relationship between the contracting parties. The court is concerned only with the presumed intention of the contracting parties because it can ascertain the subjective intention of the contracting parties only through the objective evidence which is available before it in the case concerned. Their Lordships then turned to consider whether (applying both the business efficacy as well as officious bystander tests), a term conferring a power on the MC to remove office bearers may be implied in the Rules. The purpose of the Rules was to set out the rights and obligations of the members inter se and to create an effective governance structure that would enable the association to achieve its objectives of promoting the welfare of the Hainanese community and fostering interaction and a sense of identity amongst the community. The Rules were silent on the removal of office bearers. The Court of Appeal thus held that both the business efficacy and officious bystander tests were not satisfied, and that this implied power of removal could not therefore have been part of the presumed intentions of the members. It was not necessary for the effective management of the associations affairs for the MC to be given the power to remove particular office bearers. The Court of Appeal disagreed with the respondents that the effect of r 17 was to confer exclusive power on the president to convene a MC meeting. Rule 17(1) was simply an enabling provision that gave the president authority to act on behalf of the association on all matters, subject to a monetary limit for
115
the authorisation of expenditure, and we could not construe this provision so broadly so as to give exclusive power to the president to decide on residual matters relating to the affairs of the MC or the association that are not explicitly provided for in the Rules. There were no discernable procedural limitations in the Rules mandating that MC meetings could only be convened by the president. Their Lordships held that any member of the MC could convene a meeting upon reasonable notice, and, accordingly, the October 20, 2011 meeting was validly convened by Foo Jong Peng. The Court of Appeal therefore dismissed the appeal substantially as the appellants had not succeeded on their key contention, i.e., that the MC had the power to remove an office bearer of the Executive Committee.
Centillion Environment & Recycling Ltd (f.k.a. Citiraya Industries Ltd) v Public Prosecutor & Ors and Another Appeal [2012] SGCA 65; [2013] 1 SLR 444 Court of Appeal, Singapore Chan Sek Keong CJ, Andrew Phang Boon Leong, VK Rajah JJA November 2, 2012 Civil procedure Costs Quasi criminal proceedings Public Prosecutor instituting proceedings under Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act Whether Public Prosecutor should be liable to pay costs if third party succeeded in asserting his interest over confiscated property Criminal procedure Forfeiture Confiscation order for proceeds of crime under Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act Third parties asserting claim over forfeited properties Whether judgment creditor could execute judgment against forfeited properties Whether properties gifted by accused could be forfeited Whether third parties have rights to claims The appellant in this appeal (CA 114/2011) was Centillion Environment & Recycling Ltd (Centillion), formerly known as Citiraya Industries Ltd (Citiraya), a company whose shares were publicly listed on the Singapore Stock Exchange. The respondents in this case (CA 114/2011) were the Public Prosecutor (PP), one Ung Yoke Hooi (UYH) and one Ng Teck Lee (NTL). The appellant in another appeal (CA 115/2011) was the PP and the respondents were Centillion and UYH. These parties were rival claimants to the properties set out in the PPs list of realisable assets at Appendix A to the judgment (PPs list of realisable assets), although NTL did not appear in the proceedings to present his claims. NTL was Citirayas Chief Executive Officer and President. Citiraya, which was engaged in the business of recovering
116
The Law Review 2013
precious metals from sub-standard computer chips (electronic scrap), entered into agreements with a number of chip manufacturers which required Citiraya to return to them the precious metals extracted from the electronic scrap consigned to it by the chip manufacturers. Instead of carrying out the terms of the agreements, NTL misappropriated and sent the electronic scrap to syndicates in Taiwan and Hong Kong for repackaging and sale as standard products. NTL was assisted in this scam by one Gan Chin Chin (Gan), the Chief Financial Officer of Citiraya and NTLs personal financial advisor. The electronic scrap was sold under the names of a number of business entities, i.e., Neat World Trading, Pan Asset International (Pan Asset), Multi Comm Parts & Trading, Compunet Trading, DCP Corporation Singapore Pte Ltd, Poly Create Limited and Rich Nature Limited (Rich Nature). Pan Asset was a British Virgin Islands company whose sole shareholder was Gan as NTLs nominee. Between April 2003 and November 2004, NTL diverted 62 shipments of electronic scrap which he sold to overseas syndicates for a total sum of US$51,196,938.52 (the illegal proceeds). Under NTLs instructions, Gan credited the illegal proceeds to three bank accounts: US$24,897,394.43 into Pan Assets Credit Suisse Hong Kong account, US$20,349,608.09 into Pan Assets UBS Hong Kong account (collectively, the Pan Assets Accounts) and US$5,949,936.00 into NTLs personal or Rich Natures Credit Suisse Hong Kong account. NTLs misdeeds were uncovered at the end of 2004 when the Corrupt Practices Investigation Bureau (CPIB) commenced investigations against him for, inter alia, criminal breach of trust as a servant under s 408 of the Penal Code (Cap 224, 2008 Rev Ed), which came within the definition of a serious offence under the Second Schedule to the CDSA. NTL was not charged or prosecuted for any serious offence as he had left Singapore on January 19, 2005 and his whereabouts remained unknown. Following NTLs departure from Singapore, various efforts were made to locate him, including: (a) an immigration stop-list, (b) a police gazette, (c) a Singapore warrant of arrest, and (d) an international warrant of arrest issued through Interpol; but despite these measures, his whereabouts (and the whereabouts of his wife, Thor Chwee Hwa (TCH)) remained unknown. In the circumstances, NTL was deemed under s 26(3) of the CDSA to have absconded in connection with two counts under s 408 of the Penal Code (i.e., each being a serious offence), and he was therefore also deemed under s 26(1) to be convicted of a serious offence. The PP commenced proceedings on June 10, 2008 in Originating Summons No 785 of 2008 (OS 785/2008) for: (a) a confiscation order against NTL under s 5 of the CDSA for US$51,196,938.52 being the value of benefits known to be derived by him from criminal conduct (the Confiscation Order); (b) a certificate under s 10(2) of the CDSA that the amount to be recovered under the confiscation order be assessed at S$28,832,725.14 and US$1,008.66; (c) an
117
order that NTL pay S$28,832,725.14 and US$1,008.66 to the State; (d) an order that properties identified as realisable properties be realised and applied on NTLs behalf towards the satisfaction of the confiscation order; and (e) an order that the PP be at liberty to apply for supplementary confiscation and realisation orders. On July 11, 2008, Centillion filed Suit No 484 of 2008 against NTL for breach of fiduciary duties to the company as a director and sought an account of profits and equitable compensation or damages for losses occasioned to the company. Centillion subsequently obtained a default judgment against NTL (the 2008 judgment) for payment of S$51,196,938.52, being the value of the electronic scrap misappropriated by NTL. Centillion also intervened in OS 785/2008 to assert its interests in certain properties contained in the PPs list of realisable assets. UYH and Thor Beng Huat (TBH), the brother of TCH, also intervened to assert their respective interests in other properties listed in the PPs list of realisable assets. Both NTL and TCH did not appear, and were not represented, in the proceedings. The judge made a provisional Confiscation Order under s 5 of the CDSA against NTL for the value of the illegal proceeds on May 4, 2009 without prejudice to the claims of Centillion, UYH and TBH to the properties listed in the PPs list of realisable assets. Centillion then applied for discovery against the PP for evidence on the movement of funds from Hong Kong to Singapore and sought an order of court that the PP produce all the documents that could enable Centillion to establish the links between the Pan Assets Accounts in Hong Kong and the Singapore properties (contained in the PPs list of realisable assets). The PP objected to the discovery application on the ground that it was too extensive and that CPIBs policy was only to allow a party access to documents that had been seized from that party in the course of investigations. Centillion and the PP subsequently reached a compromise whereby the PP would produce the evidence in the form of an affidavit to be filed by a CPIB officer listing the properties in the PPs list of realisable assets that were directly traceable to the illegal proceeds (the traceable properties). The judge held that the PP, in order to claim the 28 classes/items of properties listed in the PPs list of realisable assets, had to show that they were in law or in fact realisable properties as defined in s 2(1) of the CDSA, i.e., they were (a) properties held by NTL; or (b) properties held by a person to whom NTL had made a gift caught by the CDSA. Properties in category (a) would include (i) properties held in NTLs name, and (ii) properties that were held on trust for NTL. On this basis, the judge held that only the properties listed in Appendix B to the Judgment were realisable properties as defined in s 2(1) of the CDSA (the ordered list of realisable Assets). The traceable properties listed in the PPs List of realisable assets were also excluded from the ordered list of realisable assets. The judge further excluded properties held in the name
118
The Law Review 2013
of TCH either solely or jointly with NTL or other third parties - from the ordered list of realisable assets as the judge found that the PP had failed to produce sufficient evidence to show that the properties were either acquired with gifts made by NTL within the period of six years prior to June 10, 2008 (i.e., the date of the PPs application for the Confiscation Order) or that they were derived from the illegal proceeds, under s 12(8) of the CDSA. The judge also excluded various properties held by a company called Ventures Trust Pte Ltd (Ventures Trust) from the ordered list of realisable assets on the ground that the evidence adduced by the PP to establish that the Ventures Trust properties were held on trust for NTL was hearsay evidence. UYH had five bank accounts in his name. The judge found on the evidence that the monies in these accounts were the balance of S$2m received by UYH as part payment for sale to NTL of UYHs 40% shareholdings in Citiraya Teknologi Sdn Bhd (CTSB), of which Citiraya was a 60% shareholder. Accordingly, he held that the sums totalling S$671,832.66 were not realisable properties and that UYH was entitled to retain them. Centillions application was based on two grounds: (a) it was a judgment creditor under the 2008 judgment and was therefore entitled to execute on all residual properties which belonged to NTL and were not traceable to the illegal proceeds (the executable properties); and (b) it was a beneficiary under constructive trusts in relation to properties traceable to the illegal proceeds (ground (b)). It was argued that Centillion accordingly held an interest in these properties under s 13 of the CDSA. On ground (a), the judge held that an unexecuted judgment was not an interest in relation to property as defined under s 2 of the CDSA. On ground (b), the judge held that Centillion could recover the properties listed in Appendix C to the judgment (the constructive trust properties) on the ground that it was entitled to assert a constructive trust over these assets. One of the realisable properties listed in the PPs list of realisable assets was TCHs 60% share of a property at 95A Paya Lebar Crescent. Although TBH claimed that TCH held the 60% share on a resulting trust for him, he admitted in his oral evidence that he had intended TCH to have full beneficial ownership of the said property. The judge accordingly dismissed TBHs application. The judge awarded costs against the PP with respect to UYHs successful application and Centillions partially successful application on the ground that O 59 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (ROC) was applicable to the proceedings, and that the general rule under O 59 r 3(2) was that costs follow the event. Even though the PP was performing a public function in the proceedings, the judge considered that the exception to the general rule did not apply as the PP had not acted reasonably in the manner in which he had dealt with the applications taken out by UYH and Centillion.
119
The PP raised four issues in CA 115/2011 as follows: (a) whether properties in TCHs name were realisable properties; (b) whether the monies held in UYHs bank accounts were realisable properties; and (c) whether the PP should be held liable to pay the costs of Centillion and UYH in these proceedings. Centillion raised two issues in CA 114/2011 as follows: (a) whether its right to execute the unexecuted 2008 judgment gave it an interest in the executable properties under s 13 of the CDSA; and (b) whether certain properties held under the names of Ventures Trust, Gan and UYH were held on a constructive trust for Centillion as they are traceable to the illegal proceeds. The Court of Appeal held that a confiscation order under the CDSA is directed at the offender, not innocent third parties. The intended purpose of s 13 of the CDSA is to balance the efficacy of the enforcement of the confiscation order and the interests of third parties. It is only when a third party fails to satisfy the court of his interest in the property that the property may be realised by the State and the proceeds directed towards payment of the confiscation order. Since NTL was not prosecuted for any serious offence caught by the CDSA, and only an application for a Confiscation Order was made against him by the PP under s 5 on June 10, 2008, the six-year period under s 12(8) stretched back to June 10, 2002. Since NTLs misappropriation of Citirayas electronic scrap started only in April 2003, a reasonable inference was that all the assets acquired by NTL before April 2003 would have been acquired from his lawful gains from employment, investment or other sources, and most of the assets acquired by him after the ill-gotten gains were paid into the Pan Assets Accounts would have been acquired from his unlawful activities, having regard to the fact that NTLs benefits from criminal conduct were assessed at US$51,196,938.52 and the total value of the realisable assets in the PPs list of realisable assets amounted only to S$28,832,725.14 and US$1,008.66. Their Lordships affirmed the judges decision that Centillions unsatisfied judgment debt did not give Centillion an interest for the purposes of s 13 of the CDSA in the executable properties. All the properties held in the name of TCH were held to be realisable properties. However, the value of the properties held by TCH exceeded the value of the gifts made to her by NTL (which totalled about S$4m). Under s 21(3) of the CDSA, the Public Trustee shall exercise the powers to realise the properties with a view to realising no more than the value of the gift. While any property held by the donee may potentially be realised, no more than the value of the gift can go towards the satisfaction of the confiscation order. The total value of the properties held in TCHs name exceeded S$5.5m. Hence, the Public Trustee should not realise more than was sufficient to meet the claim of the PP. Centillions claim to the monies in UYHs two SCB Accounts also failed for the same reason as Centillion could not demonstrate that UYH was not a bona fide purchaser of the property derived from the illegal proceeds. Centillion was held to have a
120
The Law Review 2013
constructive trust over the chose in action in the form of the right to recover the loan of S$3,496,678.37 and all the monies in Gans POSB account save for the S$500 deposit paid by Gan and the interest accruing on the S$500. The Ventures Trust properties were held to be realisable on the basis that these properties were attributable to or purchased using money provided by NTL and were held on trust for NTL. The China Enersave Ltd shares purchased using the S$4,500,000 provided by NTL remained in Ventures Trusts CDP account and could be traceable to these sums. The Ventures Trust properties were also traceable to the illegal proceeds and these properties were held to be held on a constructive trust for Centillion. In relation to costs, their Lordships held that, although confiscation proceedings under the CDSA are civil proceedings and therefore the determination of costs in such proceedings prima facie falls under O 59 of the ROC, it should be remembered that the rule that costs follow the event was an established rule even before O 59 came into existence. Confiscation proceedings under the CDSA are different from ordinary civil proceedings because they are initiated by the PP under the CDSA for a public purpose and in the public interest to prevent defendants and their associates from enjoying the fruits of their crime. Before confiscation proceedings can be initiated, the State would have incurred considerable resources in order to investigate, collect or seize the assets of the defendant. The PPs list of realisable properties would give an indication of the amount of time and effort expended in collecting and seizing these assets. For these reasons, their Lordships did not agree with the judge that the starting point in determining the issue of costs in confiscation proceedings is that costs follow the event and that the PPs role in such proceedings is only a factor to be taken into account in determining whether he should be made to pay the costs of a successful claimant. The proper rule to apply is that given the nature of confiscation proceedings where claimants of an interest in realisable properties have the right to intervene in the confiscation proceedings to prove their entitlement to such properties, and given the interest of the State in realising such properties, the rule on costs should either be that the costs of all claimants and the PP should come out of the pool of realisable properties, or alternatively, that each party should pay his own costs.
121
Re L and B (Children) [2013] UKSC 8; [2013] 1 WLR 634 Supreme Court, UK Lord Neuberger, President, Lady Hale, Lord Kerr, Lord Wilson, Lord Sumption February 20, 2013 Civil procedure Judgments and orders Finality of judgment Whether judge who has announced her decision may change her mind First judgment given orally and not yet perfected by seal at the time revised judgment was given Power of court to vary its own previous order Whether second judgment was valid The issue in this case was whether and in what circumstances a judge who has announced her decision is entitled to change her mind. The issue arose in the context of fact-finding hearings in care proceedings in a family court. Section 1(2) of the Children Act 1989 requires that any court hearing a case in which a question about the upbringing of a child arises is to have regard to the general principle that delay in determining it is likely to prejudice the welfare of the child. The proceedings concerned two children, Susan (born on July 8, 2010) and her elder half brother Terry (born on January 30, 2006). On September 21, 2010, Susan was taken to hospital by her mother and found to have suffered a number of fractures to her ribs, clavicle and long bones, as well as some bruising to her face and head. Care proceedings were brought in respect of both children. Susan was placed in foster care, where she remained ever since. Terry was initially removed from his home with his maternal grandparents, but was returned to them after a few days, and remained with them ever since. Judge Penna directed that the case be listed for a fact-finding hearing to determine the nature and extent of Susans injuries, their causation whether accidental or non-accidental, and if non-accidental, the identity of the perpetrator or perpetrators. The mother suffered from a serious mental illness and the judge concluded that the mother lacked the capacity to take part in the proceedings and invited the Official Solicitor to act as her litigation friend. The father then gave evidence over two days. Thus the father was cross-examined but the mother was not. The judge also heard oral evidence from various family members and from the paediatric sister at the time of Susans admission to hospital, the health visitor, and the mothers community psychiatric nurse. By that stage it was common ground that these were nonaccidentally caused and that the only possible perpetrators were the mother and the father. The judge gave her first judgment orally on December 15, 2011. It did not deal at all with the specifics of the injuries to the child, their nature, or their
122
The Law Review 2013
timing. It concentrated on the stresses upon the family caused by financial problems, the mothers mental illness, and caring for a young baby who cried often and was not easy to feed. It concluded that the pressures upon the father, who took the lions share of the responsibility for looking after Susan, became intolerable and he snapped. So the finding was that the father was the perpetrator. The following day, counsel for the father asked the judge to address a number of matters in an addendum to her judgment: the context in which both mother and father had given their evidence; the mothers opportunity to have perpetrated the injuries; the inconsistencies in the mothers account; the mothers lack of parenting skills and what she did when the baby cried and the father was not there. The local authoritys care plan was for Susan to be placed with the maternal grandparents where her half brother Terry was already living. However, on February 15, the judge delivered a bombshell in the shape of a written perfected judgment. This expanded upon the earlier judgment in some respects: it gave an account of the injuries, concluded that they were non-accidental, that one of the parents must have been the perpetrator, that the same parent was likely to have inflicted all the injuries, that Susan had been injured during the course of the day before she was taken to hospital or the two or three days beforehand, and that she had been injured on (at least) one occasion before that. However, it reached a different conclusion from the conclusion reached in December: Given the uncertain nature of the evidence after the passage of so much time I am unable to find to the requisite standard which of the parents it was who succumbed to the stress to which the family was subject. It could have been either of them who injured [Susan] and that is my finding. The mother, the Official Solicitor still acting as her litigation friend, was granted permission to appeal against the February 15 judgment. The Grounds of Appeal complained, firstly, that the second judgment was flawed and/or unjust. No adequate reasons have been provided to account for the change of decision and to place the mother back into the pool of possible perpetrators, and secondly, that no opportunity to make further representations was afforded to the mother beforehand. The Court of Appeal, by a majority, not only allowed the mothers appeal but ordered that the findings of December 15, 2011 stood as the findings of fact as to the perpetration of the injuries. The judgment of December 15, 2012 was quashed. Hence, the father now appealed. The order pertaining to the December 15 judgment had not in fact been sealed until February 28. The Supreme Court held that it has long been the law that a judge is entitled to reverse his decision at any time before his order is drawn up and perfected. Under the CPR (rule 40.2(2)(b)), an order is perfected by being sealed by the court. There is no jurisdiction to change ones mind thereafter unless the court has an express power to vary its own previous order. The proper route of challenge is by appeal. In relation to the power of the judge
Case Digests Company Law
123
to change her mind, their Lordships opined that a relevant factor must be whether any party had acted upon the decision to his detriment, especially in a case where it is expected that they may do so before the order is formally drawn up. A carefully considered change of mind can be sufficient. Every case would depend upon its particular circumstances. However their Lordships held that, on any view, in the particular circumstances of this case, the judge did have power to change her mind. The question here however was whether the judge should have exercised the power to change her mind. Their Lordships observed that it could not be in the interests of the child to require a judge to shut his eyes to the reality of the case and embrace a fiction. According to their Lordships, the Court of Appeal erred in applying an exceptionality test. It was doubtful whether anyone had irretrievably changed their position as a result. The care plan may have been developed but the childs placement had yet to be decided and she had remained where she was for the time being. The final decision had yet to be taken. No judge should be required to decide the future placement of a child upon what he or she believes to be a false basis. The discretion must be exercised judicially and not capriciously. This may entail offering the parties the opportunity of addressing the judge on whether she should or should not change her decision. The longer the interval between the two decisions the more likely it is that it would not be fair to do otherwise. The Supreme Court therefore allowed the fathers appeal against the decision of the Court of Appeal.
Company Law
Yong Kheng Leong & Anor v Panweld Trading Pte Ltd & Anor [2012] SGCA 59; [2013] 1 SLR 173 Court of Appeal, Singapore Chan Sek Keong CJ, Andrew Phang Boon Leong, Sundaresh Menon JJA October 22, 2012 Company law Directors Duties Breach Director placing wife on payroll of company Whether breach of fiduciary duties Whether director liable as constructive trustee Equity Restitution Knowing receipt Action by company to recover misappropriated monies Company director misappropriating funds Director making unauthorised payments to his wife Liability for knowing receipt and dishonest assistance Whether wife liable to make restitution to company on basis of knowing receipt or dishonest assistance
124
The Law Review 2013
Limitation Action Breach of trust Company director misappropriating funds Director making unauthorised payments to his wife Breach of fiduciary duties and fraud established What is the applicable limitation period Trusts and trustees Constructive trust Whether established Company director misappropriating funds Director making unauthorised payments to his wife Breach of fiduciary duties and fraud established Whether constructive trust arose over misappropriated amounts The first respondent, Panweld Trading Pte Ltd (Panweld), was a private company. A claim was brought by Panweld against one of its directors, the first appellant, Mr Yong alleging that Mr Yong had mismanaged the company and misappropriated some of its funds by making unauthorised payments to his wife, Mdm Lim who was the second appellant. Mr Yong held 20% of Panwelds shares. The only other director was Mr Loh, the second respondent. Mr Loh was also Panwelds only other shareholder at the material time and owned the remaining 80% of its shares. Mr Yong had been the director in charge of the day-to-day business of running Panweld since its incorporation. In March 2009, Mr Yong informed Mr Loh that Panweld needed a bank loan to secure a performance bond for a potential project as it lacked the funds to do so on its own. This surprised Mr Loh who had been under the impression that Panweld was financially healthy. He therefore engaged the firm of certified public accountants, BDO LLP (BDO), to undertake a forensic examination of Panwelds accounts. These investigations revealed several alleged financial misdeeds by Mr Yong, including that his wife, Mdm Lim, had been on Panwelds payroll and received a salary from Panweld. This had evidently been going on for 17 years from 1992 to 2009 even though, as far as Mr Loh was concerned, she was not and had never been an employee of Panweld. It was thus alleged that Mr Yong had breached his fiduciary duties he owed to Panweld as a director and had abused his position throughout the period in question. On this basis, Panweld contended that Mr Yong was liable to it as a constructive trustee of the sums that had been misappropriated. As regards Mdm Lim, Panweld claimed that she should be held liable on the basis of her knowing receipt of these tainted funds and/or the dishonest assistance she rendered to her husband in carrying out his scheme. Because of the long duration over which the alleged breaches had occurred, the question of limitation arose and on this, Panweld took the position that its claim against Mr Yong for breach of his fiduciary duties fell within the ambit of s 22(1) of the Limitation Act (Cap 163, 1996 Rev Ed) and hence was not time-barred. The same argument was made in relation to the claim against Mdm Lim. Mr Yong however claimed that it was Mr Loh who had first placed his wife (Mrs Loh) and his mistress (Sook Min) on the payroll in March 1995,
Case Digests Company Law
125
even though neither of them had ever been employees of Panweld in any meaningful sense. According to Mr Yong, he expressed concern over this and in response, Mr Loh suggested that Mdm Lim, as well, could be placed on Panwelds payroll. Panweld denied the alleged agreement between Mr Yong and Mr Loh. The defence was then amended to state that Mdm Lim was genuinely employed as a marketing executive on a part-time basis from 1992 to 1994 and thereafter, from 1995 on a full-time basis. Later, the defence was revised again alleging that Mrs Loh and Sook Min had been employed to reduce the taxes payable by Panweld; and that Mdm Lims salary from 1992 to 1994, when she was allegedly genuinely employed by Panweld albeit on a part-time basis, had been paid out of Mr Yongs bonuses and unused annual leave pay. The judge below found in Panwelds favour. The judge found as a fact that Mdm Lim was never a genuine employee of Panweld. The judge further found that there was no express agreement between Mr Yong and Mr Loh for Mdm Lim to be put on Panwelds payroll. Accordingly, Mr Yong was found to be in breach of his fiduciary duty to Panweld. As for Mdm Lim, the judge found that she knew the funds in question had been paid to her in breach of Mr Yongs fiduciary duty to Panweld and was therefore liable for the dishonest assistance she gave to Mr Yong, as well as her knowing receipt of the proceeds of his unlawful actions. On the question of limitation, the judge accepted that Panwelds claim against Mr Yong fell within s 22(1) of the Limitation Act and therefore that the claim was not subject to any limitation period. The judge accordingly held that Mr Yong was a constructive trustee of the full amount of the monies that had been misapplied. As for Mdm Lims liability, the judge found that the six-year limitation defence under s 6(7) of the Limitation Act applied. Thus, the amount recoverable against her was confined to the funds wrongfully paid out in the six years immediately preceding the commencement of the action. Mr Yong and Mdm Lim brought this appeal against the said decision. The Court of Appeal found that there was no such agreement as contended by Mr Yong. As such, their Lordships upheld the judges decision that the payments authorised by Mr Yong in favour of Mdm Lim were made in breach of Mr Yongs fiduciary duties as a director of Panweld. The Court of Appeal referred to the cases of Paragon Finance plc v DB Thakerar & Co (a firm) [1999] 1 All ER 400 (Paragon Finance) and Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555, where two distinct types of constructive trusts were identified. The first category (Class 1 constructive trusts) may potentially be denied any limitation defence, whereas those in the second category (Class 2 constructive trusts) generally may avail themselves of any defence of limitation. The judge had concluded that the line between Class 1 and Class 2 constructive trustees is to be drawn according to whether the trust or trustlike relationship existed even before the wrongful transaction in question,
126
The Law Review 2013
in which case, it would be a Class 1 constructive trust. If it did not and if the constructive trust only came into existence as a result of the wrongful conduct and was in fact a remedy designed to address the consequences of that conduct, then it would be a Class 2 constructive trust. He found that Mr Yong was a Class 1 constructive trustee since he was a director of Panweld and had stood in a trustee-like position vis-a-vis Panwelds assets even before the misappropriation took place. The Court of Appeal held that a director who in breach of his fiduciary duties causes a loss to the company, but does not himself receive any of the companys property, would nonetheless be liable for equitable compensation. There would be no question of any proprietary remedy being imposed in such a case because it is simply a matter of compensating the company for the loss it has suffered as a result of the breach of his duties. Where, however, a director has misappropriated the companys property, there is no basis in principle for finding that the companys only remedy is one for equitable compensation. Hence, their Lordships agreed with the judge that Mr Yong ought to be characterised as a Class 1 constructive trustee and not as a Class 2 constructive trustee. According to their Lordships, if an express trustee takes trust money and fraudulently misappropriates it, he will be liable for breach of trust even if he has lost it all and there is no property left that the trust can latch on to. It may be that because the trust money is no longer available, a proprietary remedy is no longer available and the only remedy in fact available is equitable compensation, but that does not change the fact that the cause of action would be for breach of trust and the relevant limitation period would be based on that. It was undisputed here that the misappropriated funds constituted trust property in that it was the property of Panweld over which Mr Yong had the power of disposal. A director who disposes of company property in breach of his fiduciary duties is treated as having acted in breach of trust. Because of this, a director who obtains property of the company for himself is treated as a Class 1 constructive trustee. The relevant property that the trust latches on to is the companys property, over which the director has the power of disposal If a person holds property in the position of a trustee and deals with that property in breach of that trust, he will be a Class 1 constructive trustee; whereas a wrongdoer who fraudulently acquires property over which he had never previously been impressed with any trust obligations, may, by virtue of his fraudulent conduct, be held liable in equity to account as if he were a constructive trustee. But the latter is not a case of someone who had ever in reality been a trustee of that property; and it is only by virtue of equitys reach that such a person is regarded as a Class 2 constructive trustee. Their Lordships observed that Mr Yong could not be said to have acted honestly in authorising the wrongful payments to his wife. Mr Yong could
Case Digests Consumer Law
127
not possibly have believed that he was acting in the interests of the company by making these payments to his wife; he either knew it was contrary to the interests of the company and his co-shareholder for that matter, or was indifferent to those interests. Fraud was thus quite clearly made out on the facts and s 22(1)(a) was satisfied. The Court of Appeal further held that the test for liability for knowing receipt is whether the recipient possessed the state of knowledge ... such as to make it unconscionable for him to retain the benefit of the receipt. This can either be actual knowledge or the wilful avoidance of knowledge. In a similar vein, for liability for dishonest assistance to attach, the assistor does not need to know exactly what is going on so long as he suspects that something dishonest might be going on. Mdm Lim knew that she was not a genuine employee of Panweld and she therefore either knew, or wilfully avoided knowing, that the only reason the payments were made into her bank account was because her husband was channelling funds from Panweld to her in breach of his fiduciary duty. This was not a one-off transaction such that it might be said Mdm Lim had just been careless or was misled as to the reason she was paid. On the contrary, she received substantial salary payments, filed returns, and paid income tax on the same, for an extended period of 17 years, knowing all the while that she was not a genuine employee of Panweld. Significantly, she stood to gain, and did in fact gain, substantial benefits from the arrangement. Accordingly, the Court of Appeal upheld the judges findings of liability on the part of Mdm Lim and affirmed the judges finding that Mdm Lim was liable for the sum of $338,410, being the sum that the parties agreed was paid out in the last six years immediately preceding the commencement of this action. For these reasons, the appeal was dismissed.
Consumer Law
Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 High Court, Australia French CJ, Hayne, Heydon, Crennan, Kiefel JJ February 6, 2013 Consumer law Consumer protection Trade practices Misleading or deceptive representations Search results displayed by Google search engine conveying misleading and deceptive representations Whether Google in contravention of Trade Practices Act 1974 by publishing or displaying the search results Sponsored links -Google not author of the sponsored links Google merely publishing or
128
The Law Review 2013
displaying the links without adoption or endorsement Whether misleading or deceptive conduct by Google The appellant, Google Inc (Google), operates the well-known internet search engine Google (the Google search engine). The respondent, the Australian Competition and Consumer Commission (the ACCC), claims that particular search results displayed by the Google search engine between 2005 and 2008 conveyed misleading and deceptive representations, and that, by publishing or displaying those search results, Google engaged in conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (the Act). In July 2007, the ACCC initiated proceedings under Pt VI of the Act, seeking declarations and injunctive relief against Google and another party. At first instance in the Federal Court of Australia, the primary judge (Nicholas J) dismissed the ACCCs application to the extent that it related to Google on the basis that Google had not made the misleading and deceptive representations relied upon by the ACCC. The Full Court of the Federal Court allowed the ACCCs appeal, and made declarations to the effect that Google had contravened s 52 of the Act by publishing the search results. By special leave, Google now appealed to the High Court. The search results which were the subject of these proceedings were sponsored links a form of advertisement created by, or at the direction of, advertisers willing to pay Google for advertising text which directs users to a web site of the advertisers choosing. It was in contention that the sponsored links which were the subject of this appeal conveyed misleading and deceptive representations. What this appeal concerned was whether, in all the circumstances, Google (as distinct from the advertisers to whom the sponsored links belonged) engaged in misleading and deceptive conduct by publishing or displaying the sponsored links. The High Court held that Google did not contravene s 52 of the Act. Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers. The High Court held that taken together, the facts and circumstances of the case showed that Google did not itself engage in misleading or deceptive conduct, or endorse or adopt the representations which it displayed on behalf of advertisers. The appeal was allowed.
Case Digests Contract
129
Contract
Societe Generale, London Branch v Geys [2012] UKSC 63; [2013] 2 WLR 50; [2013] 1 All ER 1061 Supreme Court, UK Lord Hope, Lady Hale, Lord Wilson, Lord Sumption, Lord Carnwath December 19, 2012 Contract Employment contract Dismissal Entitlement for termination payment Contract requiring employee to enter into a termination agreement in the event his employment being terminated Contract excluding a claim for damages Whether employee prevented from claiming damages Contract Termination Repudiation Whether a repudiatory breach will by itself terminate the contract even if the repudiation is not accepted Whether right to terminate was validly exercised Contract Terms Construction of Conflicting provisions in contract Duty of court to reconcile terms if can conscientiously and fairly be done Contract Terms Exclusion clause Clause exempting one party from any liability in damages for breach of contract Ambiguously worded Whether doubt in wording to be construed in favour of party it is being invoked against Contract Terms Waiver Provision requiring one party to waive all claims against the other Ambiguously worded Whether doubt in wording to be construed in favour of party it is being invoked against Labour law Employment Dismissal Compensation Entitlement for termination payment Contract requiring employee to enter into a termination agreement in the event his employment being terminated Contract excluding a claim for damages Whether employee prevented from claiming damages The appellant, Raphael Geys, was in dispute with his former employer, Socit Gnrale, London Branch (the Bank), about the amount due to him following his summary dismissal from his employment. His case was that he was dismissed and that he was entitled to a sum contractually due to him in the form of a termination payment amounting to more than Euro 12.5m and to damages for breach of contract. The Banks case was that the appellant was entitled to a termination payment of no more than Euro 7m. The Bank also maintained that, based on the terms of his employment contract, it is not open to the appellant to claim damages. On February 9, 2005 the appellant commenced employment with the Bank as the managing director of its European Fixed Income Sales, Financial
130
The Law Review 2013
Institutions Division. He was provided with a written contract of employment. It was offered to him by a letter dated January 28, 2005 with which there were enclosed, among other things, two copies of a contract of employment (the Contract) and a copy of the Staff Handbook of the SGUK Group (the Handbook). He had accepted the offer of employment. On November 29, 2007 the appellant was called to a meeting at which he was handed a termination letter. The Bank subsequently sent the appellant a severance agreement but the appellant declined to agree with the terms contained therein. On December 18, 2007 the Bank paid 31,899.29 into the appellants bank account. This was the equivalent of his basic salary and flexible benefits allowance for three months. This payment satisfied the monetary requirements of paragraph 8.3 of the employment handbook as it was the amount which the appellant would have received had he been given three months notice. The first instance judge gave judgment for the appellant in a sum of Euro 11m. The Bank appealed against that decision on various grounds. The first two related to the date of the appellants dismissal. The first ground raised the question as to whether, in the context of employment law, a repudiatory dismissal of an employee will by itself terminate the contract even if its repudiation is not accepted. The second ground raised the question as to when, having regard to the relevant provision in the contract, the right to terminate was validly exercised. The third ground related to the construction of a paragraph in the Contract which obliged the Bank to ensure that any bonus award made to the appellant was made in as tax efficient a manner as was possible. The fourth and fifth grounds related to the construction of provisions in the Contract for the entering into by the appellant of a termination agreement in the event of his employment with the Bank being terminated. The Bank claimed that the Contract provided for a clean break when the employment was terminated and excluded the possibility of claiming damages. The Court of Appeal dismissed the Banks appeal on the first and fifth grounds, but allowed its appeal on the second, third and fourth grounds and found that the appellant was dismissed on December 18, 2007. Hence the present appeal by the appellant on the issues raised by the second and third grounds. The Bank cross-appealed against the dismissal of its appeal on the first ground. The following issues arose in this appeal: (1) Does a repudiation of a contract of employment by the employer which takes the form of an express and immediate dismissal automatically terminate the contract or does the normal contractual rule that the repudiation must be accepted by the other party apply equally to that case? (the repudiation issue); (2) When, in the events that happened and having regard to the terms of paragraph 8.3 of the Handbook, was the Contract terminated? (the termination issue); (3) Was there any conflict, within the meaning of paragraph 17 of the Contract, between the provision for termination on three months notice in paragraph 13 of the Contract and the provision in paragraph 8.3 of the Handbook which gave the Bank the right to terminate the employment at
Case Digests Contract
131
any time with immediate effect by making a payment in lieu of notice? (the conflict issue); and (4) On a proper construction of paragraph 5.16 of and Schedules 1 and 2 to the Contract, was the employee entitled to maintain a claim for damages for wrongful dismissal and an alleged breach of the tax efficiency provision in paragraph 5.5 or was he to be taken to have waived those claims? (the paragraph 5.16 issue). Lord Hope held that a partys repudiation terminates a contract of employment only if and when the other party elects to accept the repudiation. According to his Lordship, it was not until January 6, 2008, when the appellant was deemed to have received the Banks letter of January 4, 2008, that the contractual right to terminate under paragraph 8.3 of the Handbook by payment in lieu of notice (PILON) method was validly exercised and his employment with the Bank was terminated. Lord Hope observed that paragraph 13 of the Contract set out one way of terminating the Contract, but it did not say that it was the only way. It used the word can, which suggested that it was a course of action that the Bank might take if it wanted to. But the Bank reserved the right, as paragraph 8.3 of the Handbook put it, to use the PILON method. The provision in the Handbook could be read as qualifying the provision which was set out in the Contract. In any event the courts duty, when confronted with two provisions in a contract that seem to be inconsistent with each other, is plain. It must do its best to reconcile them if that can conscientiously and fairly be done. His Lordship therefore held that this case must be approached on the basis that it was open to the Bank to use the PILON method which it had reserved to itself by paragraph 8.3 of the Handbook, and that this was what it was seeking to do when the appellant was called to the meeting on November 29, 2007 at which he was handed a letter which had been written on the Banks behalf. On the issue of whether it was open to the appellant to maintain a claim for damages against the Bank in view of the provisions of paragraph 5.16 of and schedules 1 and 2 to the Contract by which, in consideration of the termination payment provided for by paragraph 5.15, the employee was to waive all contractual and statutory claims against the Bank, Lord Hope was of the view that paragraph 5.16 was to be interpreted as imposing a mutual obligation on the parties to enter into a termination agreement. The Bank was under an obligation to make the termination payment referred to in paragraphs 5.14 and 5.15. The appellant, for his part, was under an obligation to enter into the termination agreement. There was no provision on which he could rely which would entitle him to waive that obligation. The provisions under which the appellant was required to waive all contractual and statutory claims against it, and thus to exempt the Bank from any liability in damages for breach of contract, were at first sight all embracing. However, the wording that was chosen was ambiguous. In this situation the ordinary principle must be applied. Any doubt that the wording gives rise to must be construed in
132
The Law Review 2013
favour of the appellant and against the Bank. The Supreme Court therefore held that on a proper construction of paragraph 5.16 of and schedules 1 and 2 to the Contract, the appellant was entitled to maintain against the Bank a claim for damages for wrongful dismissal and a claim for an alleged breach of the tax efficiency provision in paragraph 5.5 and that, if he were to do so, he would not be in breach of the terms on which he was entitled to payment of the termination payment specified in paragraph 5.15.
Criminal Law
R v Ryan 2013 SCC 3; (2013) 353 DLR (4th) 387 Supreme Court, Canada McLachlinCJ, LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver, KarakatsanisJJ January 18, 2013 Criminal law Defences Duress Abused wife hiring hit man to murder husband Whether wife could plead duress as a defence Wifes fear of husband arising from his threats of death and serious bodily harm to herself and their daughter Whether defence of duress available where threats are made against the accused not for the purpose of compelling the commission of an offence Criminal law Offence of counselling the commission of an offence Abused wife hiring hit man to murder husband Whether wife could plead duress as a defence This appeal raised a novel question: may a wife, whose life is threatened by her abusive husband, rely on the defence of duress when she tries to have him murdered? The defence of duress is available when a person commits an offence while under compulsion of a threat made for the purpose of compelling him or her to commit it. That was not the respondents situation in this case. She wanted her husband dead because he was threatening to kill her and her daughter, not because she was being threatened for the purpose of compelling her to have him killed. The respondent, Nicole Ryan, had been the victim of a violent, abusive and controlling husband. She believed that he would cause her and their daughter serious bodily harm or death as he had threatened to do many times. In September of 2007, she began to think about having her husband murdered. Over the course of the next seven months, she spoke to at least three men whom she hoped would kill him. In December 2007 or January 2008, she paid one man $25,000 to carry out the killing, but the man then refused, demanding
Case Digests Criminal Law
133
more compensation. She approached another person and was contacted by a third, an undercover RCMP officer, posing as a hit man. On March 27, 2008, she met with this individual and agreed to pay him to kill her husband. The agreed upon price was $25,000, with $2,000 paid in cash that day. The killing was to take place the coming weekend. Later that same night, she provided an address and a picture of her husband to the hit man. Shortly after, she was arrested and charged with counselling the commission of an offence not committed contrary to s 464(a) of the Criminal Code, R.S.C. 1985, c C-46. The trial judge found that the requisite elements of the offence of counselling the commission of an offence had been established. The only issue at trial was whether the respondents otherwise criminal acts were excused because of duress. The accused contended that the common law defence of duress applied. The Crown argued that on the facts of this case, the components of duress were not present. But it did not argue at trial, as it did later on appeal, that the defence of duress was not available in law to the respondent. The trial judge accepted the respondents evidence that the relationship and the events she had described relating to that relationship were true. For example, Mr Ryans violent and threatening behaviour included outbursts at least once a week, where he would throw things at the respondents head, physically assault her and threaten to kill her. The respondent testified that MrRyan often told her that he would kill her and their daughter if she ever tried to leave him and that he would burn the fucking house down while she and her daughter were inside. The judge found that the respondents sole reason for her actions was her fear of her husband which arose from his threats of death and serious bodily harm to herself and their daughter. He also was satisfied that the respondent had led evidence to the requisite standard that she reasonably believed that Mr Ryan would cause her and her daughter serious bodily injury and that there was no safe avenue of escape other than having him killed. The trial judge therefore found that the common law defence of duress applied, and acquitted the accused. On appeal by the Crown, the Court of Appeal unanimously upheld the trial judges verdict of acquittal. Hence the present appeal by the Crown. This appeal raised the following issues: (i) whether duress is available in law as a defence where the threats made against the accused are not made for the purpose of compelling the commission of an offence?; (ii) if not, and the appeal must therefore be allowed, what order should be made and, in particular, in the unusual circumstances of this case, should a stay of proceedings be entered?; and (iii) can the law of duress be clarified and how? The Supreme Court in allowing the appeal held that the defence of duress is only available when a person commits an offence while under compulsion of a threat made for the purpose of compelling him or her to commit the offence. This was not the respondents situation. Hence, the defence of duress was not available to her. Their Lordships were of the view that if an accused
134
The Law Review 2013
is threatened without compulsion, his or her only defence is selfdefence. Although the defences of duress and selfdefence are both based on the idea of normative involuntariness and both apply where the accused acts in response to an external threat, significant differences between these defences justify maintaining a meaningful juridical difference between them. According to their Lordships, duress, like the defence of necessity, is an excuse. The act, usually committed against an innocent third party, remains wrong but the law excuses those who commit the act in a morally involuntary manner, where there was realistically no choice but to commit the act. However, selfdefence, in contrast, is a justification based on the principle that it is lawful in defined circumstances to resist force or a threat of force with force. The victim, also the attacker, is the author of his or her own misfortune. Their Lordships opined that generally, the justification of selfdefence ought to be more readily available than the excuse of duress. Duress, which is an amalgam of statutory and common law elements, cannot be extended to apply where the accused meets force with force in situations where self-defence is not available. Duress is an applicable defence only in situations where the accused has been compelled to commit a specific offence under threats of death or bodily harm. The defence of duress, in its statutory and common law forms, is largely the same and both forms share the following common elements: there must be an explicit or implicit threat of present or future death or bodily harm this threat can be directed at the accused or a third party; the accused must reasonably believe that the threat will be carried out; there must be no safe avenue of escape, evaluated on a modified objective standard; there must be a close temporal connection between the threat and the harm threatened; there must be proportionality between the harm threatened and the harm inflicted by the accused, also evaluated on a modified objective standard; and the accused cannot be a party to a conspiracy or association whereby he or she is subject to compulsion and actually knew that threats and coercion to commit an offence were a possible result of this criminal activity, conspiracy or association. Nonetheless, the Supreme Court held that the circumstances of this case was exceptional and warranted a stay of proceedings. Although the appeal should be allowed, their Lordships were of the view that it would not be fair to subject the respondent to another trial. Furthermore, the Crown had changed its position about the applicable law between the trial and appeal process, raising a serious risk that the consequences of decisions made during the conduct of the respondents defence cannot be undone in the context of a new trial. The Supreme Court therefore allowed the appeal and entered a stay of proceedings.
Case Digests Criminal Procedure
135
Criminal Procedure
Mohammad Faizal bin Sabtu & Anor v Public Prosecutor and Another Matter [2013] SGCA 1 Court of Appeal, Singapore Chao Hick Tin, Andrew Phang Boon Leong, V K Rajah JJA January 11, 2013 Criminal procedure Referral on question of law Application for leave to refer question of law to Court of Appeal Questions relating to constitutionality of certain provisions in Misuse of Drugs Act High Court yet to pass final judgment or sentence on applicants Whether application an abuse of process Whether leave should be refused These two Criminal Motions arose out of an answer given by the High Court on two separate questions of law stated for the High Courts determination pursuant to s 395 of the Criminal Procedure Code (Act 15 of 2012) (the CPC 2010) relating to the constitutionality of certain provisions in s 33A of the Misuse of Drugs Act (Cap 185, 2008 Rev Ed) (the MDA). In Mohammad Faizal bin Sabtu v Public Prosecutor [2012] 4 SLR 947 (special case no 1), Mr Mohammad Faizal bin Sabtu (the 1st applicant) had challenged the constitutionality of s 33A(1)(a), (d), and (e) of the MDA. In brief, the said subsections provide for enhanced punishment for persons who had previously been admitted to an approved Drug Rehabilitation Centre (DRC), previously convicted of consumption of a specified drug, or previously convicted for an offence of failure to provide a urine specimen. The stated question in Special Case No 1 was: Does s 33A(1)(a), (d), and/or (e) of the MDA violate the separation of powers embodied in the Constitution of the Republic of Singapore in requiring the court to impose a mandatory minimum sentence as prescribed thereunder, with specific reference to admission as defined in s 33A(5)(c) of the MDA? The first applicant was charged with a number of offences under the MDA, including one charge of consumption of morphine under s 8(b)(ii) of the MDA (the consumption charge). As he had two previous DRC admissions, he would have had to suffer an enhanced punishment of a minimum of five years imprisonment and three strokes of the cane pursuant to s 33A(1)(a)(i) and (ii) of the MDA. In Amazi bin Hawasi v Public Prosecutor [2012] 4 SLR 981 (Special Case No 2), Mr Amazi bin Hawasi (the 2nd applicant) challenged the constitutionality of s 33A(5)(a) of the MDA. Section 33A(5)(a) of the MDA deems a previous conviction for consumption of a controlled drug as a conviction for consumption of a specified drug under s 8(b) of the MDA, for the purposes of bringing recalcitrant abusers of controlled drugs into the enhanced
136
The Law Review 2013
punishment regime under s 33A of the MDA. The stated question in Special Case No 2 was: Does s 33A(5)(a) of the MDA violate the separation of powers embodied in the Constitution of the Republic of Singapore in deeming a previous conviction for consumption of a controlled drug as a conviction for consumption of a specified drug, and thereby requiring the court to impose a mandatory minimum sentence as prescribed in s 33A(1) of the MDA? The second applicant pleaded guilty to a charge of consumption of morphine (among other charges) and because of his previous convictions for drug consumption offences, he would have had to suffer a similar enhanced punishment under s 33A(1)(b)(i) and (ii), read with the deeming provision in s 33A(5)(a) of the MDA. The High Court answered the stated questions in the special cases in the negative, ruling that the impugned provisions of the MDA did not violate the principle of separation of powers embodied in the Constitution of the Republic of Singapore (1985 Rev Ed, 1999 Reprint) (the Singapore Constitution). In light of this decision, the applicants applied pursuant to s 397 of CPC 2010, for leave to refer the questions to the Court of Appeal. The Court of Appeal dismissed both the criminal motions for leave. Their Lordships in the Court of Appeal held that since the answers given by the High Court had yet to affect the outcome of the charges which were preferred against the applicants, no decision had been made by the trial court in relation to the said charges. The High Court in the special cases had not passed any judgment or sentence on the applicants. All it did was to give its opinion on the two questions. Neither had the District Court passed any judgment or sentence on the applicants. But for the instant criminal motions, the cases would have gone back to the District Court to continue where they left off before the Special Cases were filed. For a reference to be made under s 397, a ruling must already have been made, or a sentence passed, by the High Court. In the present case, no such ruling or sentence has yet been passed on either applicant. To allow the criminal motions to go on any further, when final judgment or sentence has yet to be passed on both applicants, would lead to an unnecessary and unacceptable disruption to the final disposal of both matters. Their Lordships further held that they were compelled to dismiss the present criminal motions because the steps taken by the applicants here veered close to being an abuse of process. The criminal motions here were thinly disguised attempts at appealing against the High Courts decisions in the special cases, which ran totally contrary to the purpose of s 397 of the CPC 2010. Both criminal motions were utterly without merit and were therefore dismissed.
Case Digests Criminal Procedure
137
R v Named Person B 2013 SCC 9 Supreme Court, Canada McLachlinCJ, LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver, KarakatsanisJJ February 22, 2013 Criminal procedure Witness Informer Police informer privilege Whether informer entitled to confidentiality of his identity Individual with informer privilege with one police force providing information to second police force Whether informer privilege also applied to the second police force Whether implied promise of confidentiality by second police force existed due to nexus between the two police forces Motivated by fear for his safety and a desire for vengeance, B met with two officers of the first police force in order to give them information. Bs information implicated a number of people who were involved in violent criminal activity and in which he admitted to having been involved as well. B was promised confidentiality and given an informant code in that police forces system. The police force then released B, but because the criminal activity was outside its authority, the force transmitted the information it got from B to the Sret du Qubec (SQ). Two days later, B was transferred to the SQ and two SQ officers arrested him for his crimes. B continued to want to cooperate and to give information both about his crimes and his prior criminal activities. In the next several days, B made a number of statements to the SQ relating to them. B was given an informant code in the SQs system and, for five years, continued to cooperate with the SQ. Most of Bs declarations to the SQ were preceded by a statement promising him that the information he provided would not be used against him in a proceeding, except for perjury, but that charges could be brought against him if they were supported by independent evidence. During the course of those five years, B pleaded guilty to one of his violent crimes and was sentenced for it. At the end of the five years, the Crown ordered the SQ to redact Bs name and any information that could identify him from all documents and to put those documents under seal. A few months later, two SQ officers went to the penitentiary to have B sign a document entitled Waiver of Informer Privilege a waiver of his right to invoke police informer privilege. He did not sign. Thereafter, Bs name does not appear in any new documents, and was replaced with the word source. The Crown brought an application to clarify Bs status and determine if he benefitted from a police informer privilege that assured the confidentiality of his identity. The hearing took place in closed session, with documents under seal. At the hearing, B testified that he was told by the SQ on several occasions that he was an informer. He relied on the fact that he was attributed an informant
138
The Law Review 2013
code by the SQ, that he was asked to sign a Waiver of Informer Privilege, and that he was identified as a source in any documents created after the Crown requested the general redaction. For its part, the Crown argued that the SQ expected B to become a cooperating witness; that B was told on many occasions that his statements could be used against him; that Bs identity was not concealed by the SQ in documents and statements prior to the sealing of the documents; and that the police had made limited disclosure of one of Bs statements on one occasion. The Crown suggested that this was inconsistent with Bs testimony that he had been promised that his identity would remain protected. The application judge found that the first police forces officers had promised to keep Bs identity confidential in exchange for the information he provided. All of Bs statements to that police force, therefore, were protected by informer privilege. This was not contested by any of the parties. The application judge concluded, however, that the evidence required that Bs situation be viewed differently depending on whether information was being disclosed to the first police force or to investigators from the SQ. As to Bs status with the SQ, the application judge rejected Bs evidence that the SQ had expressly told him that he was a confidential informer, and accepted the SQs denial that any such promise was made. He concluded that B had never been promised police informer status by the SQ in exchange for his statements. The application judge held that Bs status as a confidential informant with one police force did not automatically make him a confidential informant for the other. Hence this appeal. The Supreme Court in allowing the appeal held that the application judge had failed to analyse whether an implicit promise could have been inferred. The application judge failed to make any findings about whether Bs transfer from the first police force to the SQ, the relationship between the two police forces, and the similarities in Bs relationships with both, could have led someone in Bs position to believe, on reasonable grounds, that the status he had with the first police force would continue with the second. The possibility of an implied promise of confidentiality emerged based on the nexus between the first police force and the SQ and the SQs failure to clarify to B what his status was. No one ever told B that he ceased to be a confidential informant when he was transferred to the SQ. Based on Bs information, the two police forces had worked together and dealt with B interchangeably. B had insistently asked what his status was and never received a clear answer. This may well have led someone in Bs position to reasonably believe that his identity would be protected. B was promised confidentiality by the first police force because his cooperation put his life at risk. The risk did not change when he was transferred to the SQ two days later and there was no doubt that the SQ knew of Bs protected status with the first police force. The fact that one police force has granted informer status to an individual is not, on its own, a sufficient basis for a claim of informer privilege with another police force. However, given the nexus between the forces in handling B, and
Case Digests Evidence
139
given the essential continuity of Bs relationship with both, B may well have had reasonable grounds to believe that the protection promised by the first police force would continue with the ongoing flow of information that he was providing to the SQ. The Supreme Court therefore allowed the appeal and remitted the matter for reconsideration.
Evidence
R v Nedelcu 2012 SCC 59; (2012) 353 DLR (4th) 199 Supreme Court, Canada McLachlinCJ, LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver, KarakatsanisJJ November 7, 2012 Evidence Privilege Privilege against self-incrimination Accused involved in motor vehicle accident where victim sustained serious injuries Accused facing criminal charges and civil suit by victim Accuseds testimony in criminal action inconsistent with discovery testimony in the civil action Whether accused at criminal trial may be crossexamined regarding the prior inconsistent statements made in the civil suit Whether accused protected by right against selfincrimination This appeal dealt with the issue of the right against self-incrimination. A specific form of protection against self-incrimination is the right against testimonial self-incrimination provided for in s 13 of the Canadian Charter of Rights and Freedoms (the Charter). Section 13 of the Charter protects a witness who gives evidence in any proceeding from having that evidence used against him or her in a subsequent proceeding. This appeal arose out of a guilty verdict for dangerous driving causing bodily harm. At his criminal trial, the respondent was cross-examined on inconsistent statements he had previously made during discovery in a tort action brought against him in relation to the same incident. After his cross-examination, it became clear to all the parties, including the respondents own counsel and the trial judge, that the respondents entire testimony was unreliable and had to be disregarded. He was found guilty on one count of dangerous driving. The issue was whether, at his criminal trial, the Crown could cross-examine the respondent on statements he had made during discovery in a civil action without infringing his right against self-incrimination. The respondent and the victim worked together. After work one evening, at around 6:30 p.m., the respondent took the victim for a ride on his motorcycle on their employers property. The motorcycle crashed into a curb, and both
140
The Law Review 2013
the victim and the respondent were thrown from it. The victim was not wearing a helmet, and the accident caused him permanent brain damage. The respondent sustained minor injuries and was hospitalised overnight. The respondent was charged with dangerous driving causing bodily harm and impaired driving causing bodily harm. The respondent was also sued in a civil action by the victim and his family. He was examined for discovery as part of the civil proceedings. During his examination for discovery, he testified that he had no memory of the events from 5:00 p.m. on the day of the accident to the following day at 11:00 a.m., when he woke up in the hospital. Fourteen months later, at his criminal trial, however, he gave a detailed account of the accident and the events leading up to it. The Crown sought leave to cross-examine the respondent on his discovery evidence. After a voir dire, the trial judge ruled that the discovery evidence could be put to the respondent in cross-examination for the purpose of impeaching his credibility. The respondent was ultimately found guilty of dangerous driving causing bodily harm. Upon appeal, the Court of Appeal found that the respondent had not given his discovery evidence to further his own private interest in a civil action against him, as the trial judge had characterised it. The respondent was a defendant in a civil suit against him and, as such, he was compelled to testify on the examination for discovery solely for the benefit of the plaintiffs. The Court of Appeal allowed the appeal, set aside the respondents conviction and ordered a new trial. Hence this appeal by the Crown. The Supreme Court allowed the appeal and restored the guilty verdict on the charge of dangerous driving causing bodily harm. Their Lordships held that although the respondent was statutorily compellable and therefore compelled for the purpose of s13 of the Charter to testify at his examination for discovery in the civil action, the use of his nonincriminating discovery evidence for impeachment purposes did not trigger the application of s13. Section 13 is not directed to any evidence the witness may have been compelled to give at the prior proceeding, but to incriminating evidence. According to their Lordships, incriminating evidence is evidence given by the witness at the prior proceeding that the Crown could use at the subsequent proceeding, if it were permitted to do so, to prove guilt, i.e. to prove or assist in proving one or more of the essential elements of the offence for which the witness is being tried. Where the evidence given by the witness at the prior proceeding could not be used by the Crown at the subsequent proceeding to prove the witnesss guilt on the charge for which he or she is being tried, the prior evidence is not incriminating evidence. In the present case, the use of the respondents discovery evidence to test his credibility, and nothing else, could not convert his discovery evidence into incriminating evidence. On its own, the respondents discovery testimony could not have been used by the Crown to prove or assist in proving one or more of the essential elements of
Case Digests Family Law
141
the criminal charges he was facing. Their Lordships opined that while his inconsistent discovery evidence might lead the triers of fact to reject his trial testimony, rejection of an accuseds testimony does not create evidence for the Crown.
Family Law
AYQ v AYR and Another Matter [2012] SGCA 66; [2013] 1 SLR 476 Court of Appeal, Singapore Chao Hick Tin, Andrew Phang Boon Leong, Sundaresh Menon JJA November 5, 2012 Family law Divorce Maintenance Children Appeal by wife against insufficiency of maintenance for her and the children New evidence presented by wife on appeal relating to her recently diagnosed illness Whether wife should have instead applied to vary the maintenance order in court below Family law Divorce Matrimonial property Division Methodology for division of matrimonial property Whether use of classification methodology proper Whether wifes indirect contributions not accorded sufficient weight in division of matrimonial property Whether indirect contributions must be accorded same weight in relation to each class of matrimonial property Whether indirect contributions can only be assessed at the end of the marriage relating back to the entire period of marriage The appellant (wife) in these divorce proceedings was 51 years old whilst the respondent (husband) was 53 years old. The parties were married in 1986. The appellant sought a divorce citing, inter alia, unreasonable behaviour on the part of the respondent. The marriage ended after 23 years. There were two children of the marriage a daughter, aged 20 years and pursuing a university education in England and a son, aged 16 years, pursuing his studies at an international school in Singapore. The appellant was an aesthetics doctor with Singapore citizenship whilst the respondent was an eye surgeon with Australian citizenship. They were both presently in private practice and ran their own clinics. The trial judge had made the following orders: (A) Custody of children: That parties be granted joint custody over the children and that the wife be granted sole care and control with reasonable access to the husband; (B) Division of matrimonial assets: (i) That the wife would obtain the following: (a) 20% of $1,323,655.19 which was the parties combined matrimonial assets excluding
142
The Law Review 2013
matrimonial home sale proceeds and Australian house sale proceeds (other matrimonial assets), (b) 39% of $886,887 which was the net sale proceeds of the matrimonial home, and (c) 5% of $533,122.52 being the husbands share of the Australian house sale proceeds; (ii) That the husband would obtain the balance. The sums to be paid by the husband from the division may be set off against his share of the matrimonial home sale proceeds; (C) Maintenance: (i) That the husband pays the wife $1 per month from January 1, 2010 for her own maintenance; (ii) That the husband pays 60% of the childrens maintenance of $2,000 per month, i.e., $1,200 per month, from January 1, 2010; (iii) That the wife reimburses the husband for 40% of the childrens school fees from January 1, 2009 and 40% of the daughters overseas accommodation and living expenses. The appellant appealed against the judges orders relating to the division of the pool of matrimonial assets and maintenance for herself and the children. The appellant also filed an application to adduce additional evidence before the Court of Appeal (the new evidence), comprising the following (in relation to her recent diagnosis of and treatment for breast cancer): the appellants histopathology report, the medical certification of her treatment, her medical report, copies of her medical receipts as well as her clinics sales summary from March 2012 to September 2012. The new evidence might, if admitted, have impacted the issue of maintenance (both with regard to herself as well as her (percentage) contribution to the maintenance of the children). Counsel for the husband had no objection to the adducing of the new evidence. The Court of Appeal dismissed the appeal with regard to the issue of maintenance, albeit with liberty to the appellant and with the appropriate evidence to apply to the court below for a variation of the maintenance order(s). In so far as the issue relating to the division of the pool of matrimonial assets was concerned, the Court of Appeal confirmed the classification method adopted by the judge. However, their Lordships varied the percentage of indirect contributions by the appellant which was allotted a 30% weightage in each of the three asset classes. In the circumstances, the appellant was awarded 49% (instead of 39%) of the net sales proceeds of the matrimonial home, 30% (instead of 5%) of the respondents share of the Australian house sale proceeds, and 40% (instead of 20%) of the other matrimonial assets. In relation to the division of the pool of matrimonial assets, the focal difference appeared to centre around, first, whether the global assessment methodology or the classification methodology ought to be applied and, secondly, assuming (as the judge did) that the latter methodology applied, whether or not indirect contributions ought to be accorded the same weight in relation to each class of assets. The Court of Appeal held that the trial judge was justified in adopting the classification methodology as the various matrimonial assets did lend themselves to classification under the three headings adopted in the court below, viz., the sale proceeds of the Singapore
Case Digests Intellectual Property
143
matrimonial home, the sale proceeds from the respondents share of the Australian house and the matrimonial assets (not arising from the sale of real property). However, the judge appeared to accord different weights to the appellants indirect contributions with regard to each class of assets. The Court of Appeal however held that indirect contributions must be factored into and its weightage must remain constant in relation to each class of assets. This is because indirect contributions can only be assessed and applied at the end of the marriage and, by their very nature, relate back and impact the entire marriage to date. The courts assessment of a spouses indirect contribution should thus be performed with retrospective lenses, looking back and fully appreciating the entire context and circumstances of the marriage. It should not be done in a time-specific manner, i.e. assessing the extent of indirect contributions of a spouse as at that specific point in time when a particular matrimonial asset was acquired. In relation to whether the appellants percentage contribution to the childrens maintenance ought to be decreased, their Lordships were of the view that given the new evidence presented by the appellant on appeal, it suggested that there might in principle perhaps be scope for some adjustment of the percentage contribution ordered by the judge in the court below. However, the more appropriate route would be by way of an application for variation of the maintenance order in the court below.
Intellectual Property
Sarika Connoisseur Cafe Pte Ltd v Ferrero SpA [2012] SGCA 56; [2013] 1 SLR 531 Court of Appeal, Singapore Chao Hick Tin, Andrew Phang Boon Leong, VK Rajah JJA October 16, 2012 Intellectual property Trade marks Passing off Damage Elements of passing off Goodwill, misrepresentation and damage to be established Whether restriction of respondents expansion into Singapore drinks business was sufficient damage Intellectual property Trade marks Registered trademarks Infringement Criteria required to establish infringement Requirement of similarity Visual, aural and conceptual aspects of similarity Test for determining similarity Likelihood of confusion Test for determining likelihood of confusion Inherent distinctiveness of mark Use of Nutello mark for gourmet hot coffee beverage Whether constituted infringement of Nutella trade mark used for cocoa-based hazelnut spread Trade Marks Act (Cap 332, 2005 Rev Ed), s 27(2)(b)
144
The Law Review 2013
Intellectual property Trade marks Registered trademarks Infringement Dilution by blurring Well-known trade mark Criteria required to establish dilution by blurring Trade Marks Act (Cap 332, 2005 Rev Ed), s 55(3)(b)(i) Intellectual property Trade marks Registered trademarks Infringement Infringement by damaging connection of well-known trade mark Criteria required to establish damaging connection Trade Marks Act (Cap 332, 2005 Rev Ed), s 55(3)(a) This was an appeal against the decision of a High Court judge (the judge) given in a suit instituted by Ferrero SpA (the respondent) against Sarika Connoisseur Cafe Pte Ltd (the appellant) for trade mark infringement and passing off. The appellant, a company incorporated in Singapore, was a retailer in the food and beverage business and a wholesaler of coffee, cocoa and tea. It owned and operated a chain of cafe outlets (cafes) known as tcc - the connoisseur concerto (TCC). In its cafes, it offered customers, amongst others, a variety of gourmet coffee beverages and coffee concoctions. The respondent was a company incorporated in Italy. It manufactured and retailed confectionery, including a cocoa-based hazelnut spread (Nutella spread) marketed under the brand name Nutella, which was the product concerned in the present case. The spread was sold at various retail outlets in Singapore, including supermarkets. The respondent was the registered proprietor of the marks in Class 30 of the International Classification of Goods and Services in Singapore (ICGS). On August 1, 2007, the appellant introduced a new gourmet hot coffee beverage served in a shot glass under the Nutello sign in its cafes. The term Nutello was more appropriately described as a sign under the definition in s 2(1) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (the TMA). The ingredients in the Nutello drink (Nutello beverage) comprised espresso, milk foam, cocoa powder and Nutella spread, amongst others. This drink was listed under the Espresso Specialties section of the TCC Drinks Gallery Menu (the menu). The menu describes the Nutello beverage as: Espresso with lashings of nutella perfect for cocoa lovers! (menu description). To effect sale of the Nutello beverage, the appellant had used the term Nutello in various forms in its promotional material such as the menu, booklet and website. The respondent objected to the appellants use of the Nutello sign and the menu description of the Nutello beverage and instituted the suit in the High Court. In July 2010, sales of the Nutello beverage were discontinued by the appellants, ostensibly due to an annual menu overhaul. The High Court judge held that: (a) the appellant had infringed the respondents Nutella word mark under s 27(2)(b) of the TMA given that there was a similarity of marks and goods resulting in a likelihood of confusion by the relevant public; (b) the respondents Nutella marks were well-known trade marks both to the relevant sector of the public as well as to the public at large
145
in Singapore. The appellant had infringed the respondents Nutella marks under s 55(2) and s 55(3)(a) of the TMA, and had diluted the respondents marks under s 55(3)(b)(i) of the TMA. However, he found that the appellant had not taken unfair advantage of the distinctive character of the respondents Nutella marks under s 55(3)(b)(ii) of the TMA; and (c) the appellant had committed the tort of passing off vis--vis the respondents Nutella product when the former promoted and offered for sale its Nutello drink. Consequently, the judge granted injunctions to restrain the appellant from infringing the respondents Nutella trade marks and from passing off its Nutello products as products of, or connected to, the respondent. He also ordered that damages be assessed. The appellant raised the following issues in this appeal: (a) Whether there was trade mark infringement under s 27(2)(b) of the TMA? (the first issue): (i) whether the Nutello sign was similar to the Nutella word mark; (ii) whether the Nutello sign was used in goods similar to those which the Nutella word mark is registered for; (iii) whether there is a likelihood of confusion by the public?; (b) Whether there was trade mark infringement under s 55(2) of the TMA? (the second issue); (c) Whether there was infringement by damaging connection of well-known trade mark under s 55(3)(a) of the TMA? (the third issue); (d) Whether there was dilution by blurring under s 55(3)(b)(i) of the TMA? (the fourth issue): (i) whether it is conceptually incongruous to find both infringement and dilution; (ii) what is required to show dilution in an unfair manner; (iii) whether dilution by blurring is made out on the facts?; (e) Whether the damage element needed to establish the tort of passing off was made out? (the fifth issue): (i) whether actual damage has to be shown to establish the said damage element; (ii) whether the respondents expansion into the Singapore drinks industry would be restricted? In relation to the first issue, the Court of Appeal held that under s 27(2)(b) of the TMA, three conditions need to be satisfied in turn for infringement to be established. First, the alleged offending sign, Nutello, must be shown to be similar to the registered mark, Nutella. Second, both the sign and the mark must be used in relation to identical or similar goods or services. Third, because of the presence of the first two conditions, there must exist a likelihood of confusion on the part of the public. The court will consider three aspects of similarity, viz., visual, aural and conceptual similarity. However, it is not a prerequisite that all three aspects of similarity must be made out before there can be a finding of similarity between the sign and the mark. The relative importance of each aspect of similarity varies with the circumstances, in particular, with the goods and types of marks. Simply put, a trade-off between the three aspects of similarity can be made, and each case ought to be viewed in its own context. Whether there is similarity between the sign and the mark is a question of fact and degree for the court to determine.
146
The Law Review 2013
The comparison to be made is one of mark for mark. Each mark must be considered as a whole without any external matter being taken into account. The relevant perception is that of an average consumer who is reasonably well-informed and reasonably observant and circumspect. To determine similarity, the sign and the mark ought not to be examined side by side in close proximity as the imperfect recollection of the consumer must be taken into account, given that comparisons are usually made from memory, removed in time and space from the actual sign and mark in question. Their Lordships found that the Nutella word mark was inherently distinctive and that it was visually and aurally, but not conceptually, similar to the Nutello sign. Their Lordships were of the view that the visual and aural aspects of similarity were relatively more important than conceptual similarity. This was because the Nutella mark and Nutello sign were word-only and effectively could only be engaged visually or verbally. In light of the significance of visual and aural similarity of the mark and sign and the inherent distinctiveness of the former, their Lordships found that similarity was established as between them. The first element of s 27(2)(b) of the TMA was thus made out. Section 27(2)(b) of the TMA contemplates that with regard to goods, identity or similarity must be shown. According to their Lordships, to determine similarity of goods in the present case, one must not only compare the goods of the offending party with the actual product of the owner but also with the specification of the mark. Their Lordships found that the Nutella and Nutello products were similar. In relation to the third element to establish infringement: likelihood of confusion, the judge found a likelihood of confusion because of the great similarity of the marks and the goods respectively, the distinctive nature of the Nutella word mark and the evidence showing that approximately 30% of the relevant public surveyed had indicated that they were confused. The Court of Appeal held that the test to be adopted in determining likelihood of confusion is whether a substantial portion of the relevant public will be confused. Confusion will not be presumed simply because the marks and the goods are similar. The question of likelihood of confusion has to be assessed globally, taking into account all the circumstances such as the closeness of the goods, the impression given by the marks, the possibility of imperfect recollection and the risk that it may be believed that the goods came from the same source or economically-linked sources. Mere association by the relevant public between two signs based on their similar use is insufficient to establish confusion if the public is not misapprehended about the goods origins. Survey evidence is relevant in assessing whether there is a likelihood of confusion on the part of the relevant public. However, survey evidence should not be conclusive. Rather, it is only one factor in the global confusion analysis. Their Lordships were of the view that there existed a real likelihood that a substantial portion of the general public and/or the target consumers
147
of these goods would be confused in the sense that they would think that the parties are related or have business links between them. As a result, the s 27(2)(b) of the TMA claim was made out. In relation to the second issue of whether there was well-known trade mark infringement under s 55(2) of the TMA, the Court of Appeal observed that s 55 of the TMA is concerned with well-known trade marks under which the trade mark proprietor would be entitled to obtain relief by injunction to restrain the use by anyone else of an identical or similar mark, or the essential part of which mark is identical or similar to the well-known mark. The appellant did not dispute that Nutella was a well-known trade mark. The Court of Appeal affirmed the finding of the judge that infringement under s 55(2) TMA had been made out. In relation to the third issue of whether there was infringement by damaging connection of well-known trade mark under s 55(3)(a) of the TMA, the Court of Appeal held that to establish a case under this provision, the proprietor of a well-known trade mark must show the following: first, that the defendants mark, or an essential part of it, is identical with or similar to the proprietors mark; second, that the use by the defendant of its mark would indicate a connection between the goods or services of the defendant with the proprietor; and third, that because of the connection the interests of the proprietor are likely to be damaged. Unlike the position under s 27(2), the well-known trade mark proprietor need not show that the goods or services of the defendant are similar to those of the proprietor. Their Lordships agreed with the High Court judge that a case under s 55(3)(a) of the TMA had been made out. With regard to the fourth issue of whether there was dilution by blurring under s 55(3)(b)(i) of the TMA, the Court of Appeal held that to establish such a case, the following must be shown. First, that a defendant has used a trade mark on its goods or services (of whatever nature), and that trade mark, or the essential part of which, is identical or similar to a well-known trade mark of the plaintiff. Second, that such use of the trade mark on the goods or services of the defendant has been without the consent of the well-known trade mark proprietor. Third, that the well-known trade mark is well known to the public at large in Singapore. Fourth, that such use of the trade mark by the defendant would cause dilution in an unfair manner of the distinctive character of the well-known trade mark. Their Lordships found that the dilution by blurring claim under s 55(3)(b)(i) of the TMA was made out. In relation to the fifth issue of whether the damage element under the action for passing off was made out, the Court of Appeal held that it is trite law that for the respondent to succeed in an action for passing off, the classical trinity requirements of goodwill, misrepresentation and damage must be established. Their Lordships agreed with the judges finding that, in view of the appellants use of the Nutello sign, there would be a likelihood of
148
The Law Review 2013
restriction on the respondents expansion of its product line into the Singapore beverage business. Accordingly, the claim in passing off was made out. The appeal was thus dismissed.
Revenue Law
AQP v Comptroller of Income Tax [2013] SGCA 3 Court of Appeal, Singapore Chao Hick Tin, Andrew Phang Boon Leong, VK Rajah JJA January 16, 2013 Revenue law Income tax Deduction Whether loss suffered by taxpayer due to misappropriation of funds qualifies as a deduction under s 14(1) of the Income Tax Act (Singapore) Companys monies misappropriated by ex-Managing Director The overriding power or control test Whether defalcating employee was in a position of overriding power or control Whether taxpayer had put in place sufficient set of checks and balances to prevent defalcations of its funds by such employees This was an appeal against the decision of a High Court judge (the judge), holding that the loss suffered by the taxpayer (the appellant) due to misappropriation of its funds by its ex-Managing Director (the Ex-MD) does not qualify as a deduction under s 14(1) of the Income Tax Act (Cap 134, 2008 Rev Ed) (the Act). The Ex-MD was the Managing Director of the appellant when he was dismissed for misappropriating the appellants funds. In 2001, the Ex-MD was convicted of criminal breach of trust after the District Judge (the DJ) found that he had, on various occasions between September 1997 and August 1998, falsely claimed to have paid money to the appellants suppliers and customers, either as deposits for goods or as loans, and then reimbursed himself from the appellants funds. As a result of these misappropriations, the appellant lost $12,272,917 (the loss). The appellant made a provision for doubtful debts including the loss in its statutory accounts for the year ended December 31, 1999 but did not claim a deduction for the loss in its income tax return for the Year of Assessment 2000. Although the appellant obtained judgment against the Ex-MD in 2003 for the money misappropriated, it could not recover anything and the Ex-MD was subsequently declared a bankrupt. On December 15, 2005, the appellant applied to the respondent for relief under s 93A of the Act (s 93A) on the basis that it had made an error or mistake
Case Digests Revenue Law
149
within the meaning of that section by not claiming a deduction for the loss under s 14(1) of the Act in its income tax return for the Year of Assessment 2000. The respondent made a determination that no relief would be granted as no error or mistake had been made. On the appellants appeal to the Income Tax Board of Review (the Board), the Board upheld the respondents determination. On the appellants appeal to the High Court, the judge held that the correct understanding of the test in Curtis (H M Inspector of Taxes) v J & G Oldfield, Limited (1925) 9 TC 319 (Curtis) was applied by the Board. The correct understanding of the Curtis test, was held to be as follows: Did the defalcator possess an overriding power or control in the company (i.e., in a position to do exactly what he likes) and was the defalcation committed in the exercise of such power or control? If so, the losses which result from such defalcations are not deductible for income tax purposes. The judge was of the view that the Board had correctly relied on the findings of fact of the DJ. Applying the overriding power or control test to the DJs findings, the judge held that the Ex-MD possessed an overriding power or control in the Appellant and that the defalcations were committed in the exercise of such power or control. The appeal against the Boards decision was therefore dismissed. The appellant thus brought the present appeal on the grounds that the judge had erred in holding that the loss did not qualify for deduction under s 14(1) of the Act. The Court of Appeal held that a plain reading of s 14(1) of the Act would suggest that the loss (by its very nature) would not fall within its ambit and that this appeal must consequently fail. This is because defalcations by an employee would not usually be considered an outgoing or an expense which is wholly and exclusively incurred ... in the production of income within the meaning of s 14(1) of the Act. However, their Lordships observed that this is not the approach adopted by the courts of the various jurisdictions. According to their Lordships, the reason why the courts generally allow deductions in so far as defalcations by employees who do not have overriding power or control in their respective organisations are concerned is the fact that such defalcations are an inevitable fact of commercial life in general and the conducting of the business concerned in particular. Put simply, the granting of such deductions is premised on commercial reality. As importantly, such a reality is in turn premised on the fact that it is practically impossible to have the appropriate checks and balances which would prevent such defalcations from taking place. This is particularly the case in so far as large organisations are concerned. If the taxpayer concerned does not put in place a sufficient set of checks and balances with the result that overriding power or control is abused by the employee concerned, then it is logical, fair as well as commonsensical for the respondent to refuse the taxpayer concerned a deduction for such defalcations pursuant to s 14 of the Act. Indeed, if the taxpayer, who, ex hypothesi, could have prevented (or at least made a proper
150
The Law Review 2013
attempt to prevent) the defalcation concerned by putting a sufficient set of checks and balances in place but chose not to do so, that omission would, in our view, break the nexus to the production of income that is an inherent requirement in s 14 of the Act itself. Looked at in this light, the overriding power or control test is not only desirable but is also logical, principled as well as consistent with commercial reality and practice. This particular test was, in fact, wholly consistent with the general law relating to deductions as embodied within s 14 of the Act itself in particular, the requirement of a nexus. The Court of Appeal held that the onus of demonstrating to the relevant tax authorities (here, the respondent) that the employee concerned was not placed in a position of overriding power or control or that, if he or she had been so placed, that a sufficient system of checks and balances had indeed been instituted, notwithstanding the fact defalcations had still been effected by the employee concerned, lies on the taxpayer concerned bearing in mind, of course, the respective parties evidential burdens as well as the legal burden of proof, the latter of which lies throughout with the taxpayer. Hence, their Lordships found that it would be just and fair for the proceedings to be remitted to the Board in order for the necessary evidence to be adduced with regard to (a) whether the Ex-MD was in a position of overriding power or control for the purposes of the present (civil) proceedings and, if so, (b) whether a sufficient system of checks and balances had been put in place by the Appellant on the facts of this particular case. The Board should then proceed to render a decision thereon in accordance with the overriding power or control test, the application of which (when applied in the context of the facts of the present case) entails an inquiry as to whether or not the taxpayers employee had an overriding power or control in the organisation and, if so, whether the taxpayer had instituted a sufficient set of checks and balances intended to prevent defalcations of its funds by such employees.
Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 293 ALR 257; (2012) 87 ALJR 98 High Court, Australia French CJ, Hayne, Crennan, Bell, Gageler JJ December 5, 2012 Revenue law Income tax Assessment Share buy-back Off-market purchase Characterisation of consideration received for shares sold in an off-market buy-back Whether a profit or capital gain This appeal concerned the characterisation for income tax purposes of consideration received by the respondent, then Publishing and Broadcasting
Case Digests Revenue Law
151
Ltd (PBL), for shares sold to Crown Melbourne Ltd, then Crown Ltd (Crown), in an off-market buy-back in the year of income ended June 30, 2002. The legislative setting for off-market buy-back comprises the Corporations Act 2001 (Cth) (the Corporations Act) as well as the Income Tax Assessment Act 1936 (Cth) (the ITAA1936) and the Income Tax Assessment Act 1997 (Cth) (the ITAA1997). For the whole of the year ended June 30, 2002, PBL owned all of the nearly three billion issued and paid-up ordinary shares in Crown. On June 28, 2002, PBL and Crown entered into a share buy-back agreement which provided for the sale by PBL to Crown of just over 840 million of those shares for a purchase price of $1 billion (the share buy-back agreement). The share buy-back agreement provided for completion on August 1, 2002 or such other date as might be agreed between the parties. The share buy-back agreement was completed on August 6, 2002. On that date, amongst other things, PBL transferred to Crown the shares the subject of the share buy-back agreement for a consideration of $1 billion and Crown cancelled those shares. The Commissioner of Taxation (the Commissioner) took the view that s 159GZZZP(2) of the ITAA 1936 applied to the $1 billion PBL was entitled to receive under the share buy-back agreement as at June 30, 2002 and went on to assess PBL to have made a capital gain in respect of the buy-back. PBL objected to the assessment on the ground that it was s 159GZZZP(1) that applied, with the result that the $1 billion was taken to be a dividend to be included in its assessable income and entitling it to a rebate of income tax. The Commissioner disallowed the objection. The Federal Court allowed an appeal from that dismissal and allowed the objection. Hence, the present appeal. The issue in the appeal was whether the $1 billion PBL was entitled to receive under the share buy-back agreement was, as at June 30, 2002, debited against amounts standing to the credit of [Crowns] share capital account within the meaning of s 159GZZZP(1) of the ITAA 1936. The High Court held that Crowns Share Buy-Back Reserve Account in which the only entry as at June 302002 was a $1 billion debit, was a record of the transaction by which Crown had on June 28, 2002 entered into an executory contract to reduce its share capital by that amount. The financial position of Crown in relation to its share capital as at June 30, 2002 could only be understood by subtracting the $1 billion debit balance in its Share BuyBack Reserve Account from the credit balance of just over $2.4 billion in its Shareholders Equity Account. On either basis, the Share Buy-Back Reserve Account answered the description of an account which Crown kept of its share capital within s 6D(1)(a) of the ITAA 1936. The Share Buy-Back Reserve Account was therefore a share capital account. As Crowns Share Buy-Back Reserve Account, along with its Shareholders Equity Account, was, as at June 30, 2002, a share capital account, the Share Buy-Back Reserve Account and the
152
The Law Review 2013
Shareholders Equity Account were, by the operation of s 6D(2), to be taken for the purposes of s 159GZZZP(1) of the ITAA 1936 to be Crowns single combined share capital account. Taken as a single account, Crowns combined share capital account had an amount of just over $2.4 billion standing to its credit and a debit of $1 billion to the same combined share capital account. The $1 billion PBL was entitled to receive under the share buy-back agreement was, as at June 30, 2002, therefore the purchase price in respect of the buyback of the shares which was debited against amounts standing to the credit of Crowns share capital account within the meaning of s 159GZZZP(1) of the ITAA 1936. It was not to the point that the share buy-back agreement remained to be completed and the shares had not been cancelled. Hence, the appeal was allowed.
Securities
Mansfield v The Queen and Another Appeal [2012] HCA 49; (2012) 293 ALR 1 High Court, Australia Hayne, Heydon, Crennan, Kiefel, Bell JJ November 14, 2012 Securities Insider trading Appellants accused of trading in shares of public listed company using inside information Information shown to be false False information regarding companys expected turnover and profit Whether the appellant possessed information that was not generally available Whether person trading using false inside information contravenes insider trading laws The Corporations Act 2001 (Cth) prohibits trading in securities by persons who possess information that is not generally available and know, or ought reasonably to know, that, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of the securities. It was alleged that, in January 2002, MrMalcolmDay, the managing director of a listed public company (AdultShop.com Limited AdultShop) told one of the appellants (Mr Mansfield) that AdultShops expected profit for the then current year had risen from $3million to $11 million and that its expected turnover had risen from between $30million and $50million to about $111 million. It was alleged that MrMansfield then told the other appellant (MrKizon) what MrDay had said. It was alleged that MrDay and MrMansfield
Case Digests Securities
153
later had other conversations in which MrDay gave optimistic assessments of AdultShops financial performance and that MrMansfield told MrKizon what MrDay said in those conversations. In another conversation alleged to have taken place in June2002 between MrDay and MrKizon, it was alleged that MrDay told MrKizon that Packer (a well-known businessman) had bought 4.9% of AdultShop and that the projected revenue for AdultShop for the following month would exceed what had been forecast. It was alleged that MrKizon told MrMansfield what MrDay had said in this conversation. It was contended that knowing the matters revealed in the conversations, MrMansfield and MrKizon bought or procured the purchase of AdultShop shares, and thus contravened the Corporations Act. What MrDay said to MrMansfield and to MrKizon was false. AdultShops expected profit and turnover for the period of which MrDay spoke in his conversation with MrMansfield had not risen, and neither MrPacker nor any company associated with MrPacker had bought 4.9 per cent of the issued capital of AdultShop. Interests associated with MrPacker had for two days held a little under 1.5% of the capital of AdultShop but, at the time of the alleged conversation between MrDay and MrKizon which was described above, all of those shares had been sold. The central question in these appeals was: did the appellants possess information that was not generally available? The appellants argued that, to establish contravention of the relevant provisions of the Corporations Act, the prosecution must prove that the information which the appellants possessed was a factual reality. They alleged that MrDay had told them lies about AdultShop and that a lie cannot constitute information. The High Court held that the appellants arguments should be rejected and each appeal dismissed. Their Lordships held that if the alleged conversations had taken place, each appellant possessed information about AdultShop that was information not generally available. MrDay communicated knowledge about a subject (the expected profit and turnover of the company or a particular shareholding in the company) and what Mr Day communicated was not generally available. That the knowledge communicated was not true did not deny that it was information. It thus had to be decided at a new trial whether the information was material, in the sense that, had it been generally available, a reasonable person would have expected it to have a material effect on the price or value of AdultShops shares.
154
The Law Review 2013
Tort
Papaconstuntinos v Holmes Court [2012] HCA 53; (2012) 293 ALR 215 High Court, Australia French CJ, Heydon, Crennan, Kiefel, Bell JJ December 5, 2012 Tort Defamation Defences Qualified privilege Appellant a board member of a football club Appellant opposing respondents proposal to invest funds in football club by sending letter to appellants employer conveying imputations defamatory of appellant Whether defence of qualified privilege applicable Criteria for invoking qualified privilege Reciprocity of interest Whether maker and recipient of defamatory statement had an interest in what was conveyed Whether a pressing need to protect interests must be shown Whether self-interest negates qualified privilege In August 2005, South Sydney District Rugby League Football Club (the football club) was experiencing some financial difficulty. The respondent, Mr Holmes Court, and Mr Russell Crowe put forward a proposal by which they would contribute $3million to the football club in exchange for a controlling interest in its management. Their proposal required the approval of its members at a general meeting. The appellant, Mr Tony Papaconstuntinos, was at the relevant time a director of the South Sydney Leagues Club, a licensed club associated with the football club. He was also employed by the Construction, Forestry, Mining and Energy Union (the CFMEU). He was firmly opposed to the proposal regarding the football club. An Extraordinary General Meeting of the members of the football club was called for March 19, 2006 for the purpose of voting on the proposal. Two days prior to that meeting, the respondent sent a letter addressed to Mr Andrew Ferguson, the State Secretary of the CFMEU. The letter was expressed to be a formal complaint about the appellant, who was referred to as an official of the CFMEU. The evident concern of the respondent was that the appellant had recently contacted members of the football club to repeat misleading information about the proposal which is being put to members. The respondent related a series of facts involving the appellant and his son, Mr Jamie Papaconstuntinos. An inference to be drawn from the respondents doing so was that he considered that those facts provided the reason for the appellants opposition to the proposal: the proposal would involve a change in the management of the football club and the prospect of disclosure of dealings concerning the appellants son. The focus of the respondents allegations was the former employment by the football club of Mr Jamie Papaconstuntinos as an assistant coach. The respondent claimed that Mr Jamie Papaconstuntinos was paid a salary well in excess of the salary normally paid for a person of his experience and for the position in question. The respondent raised questions as to whether the
Case Digests Tort
155
payments were made to Mr Jamie Papaconstuntinos at a premium as a reward for other activities, or a method of channelling funds to the CFMEU, or indeed to Mr Tony Papa. The respondent said that he was seeking Mr Fergusons assistance in checking the facts that he had presented and asked that Mr Ferguson contact him that day. The respondent had also been told by the Chief Executive Officer of the football club that the salary paid to Mr Jamie Papaconstuntinos was to be met by sponsors of the club. The sponsors were construction companies. The trial judge observed that these companies may have had a motive for keeping the CFMEU happy and found that the facts were inherently suspicious. The trial judge found that the letter contained three defamatory imputations, namely, that the appellant, a board member of the South Sydney Leagues Club: (a) repeated information he knew to be misleading about the respondents proposal to take a controlling interest in the football club; (b) was reasonably suspected by the respondent of corruptly arranging for funds meant for the football Club to be channelled to himself; and (c) was reasonably suspected by the respondent of corruptly channelling overpayments by the football Club to the CFMEU. The respondent did not plead the statutory defence of qualified privilege which contains a requirement of reasonableness. He relied upon the defence at common law. The defence of qualified privilege at common law has been held to require that both the maker and the recipient of a defamatory statement have an interest in what is conveyed. This is often referred to as a reciprocity of interest, although community of interest has been considered a more accurate term because it does not suggest as necessary a perfect correspondence of interest. The interest spoken of may also be founded in a duty to speak and to listen to what is conveyed. The trial judge found that Mr Ferguson and Mr Brian Parker, who was the immediate supervisor of the appellant at the CFMEU and became aware of the contents of the letter, had an interest in receiving the information concerning the conduct of the appellant as an officer and employee of the CFMEU. However, the judge did not consider that such interest as existed was sufficient to give rise to the defence of qualified privilege. The judge clearly considered that the respondent was required to further justify his conduct in making the statements. The judge said that she found it difficult to accept that the respondent had an interest that justified his publishing information on that subject to Mr Ferguson at the time that he did. The judge said that she did not accept that the publication of the defamatory statements was warranted in furtherance or protection of the respondents interests. The Court of Appeal identified the respondents interest as lying in the proposal respecting the football club succeeding and not being thwarted by a person who was possibly motivated by a desire to prevent exposure of his misconduct.
156
The Law Review 2013
The appellant argued that it was in the application of the test of reasonable necessity that a pressing need may be seen to be required in cases concerning the protection of self-interest, in order to justify a defamatory statement which is volunteered. The High Court however held that the requirement of justification did not arise where an interest or duty existed such as to found the privilege. Statements may be fairly warranted if they are relevant to the duty sought to be discharged or the interest sought to be protected. The modern emphasis in the formulation of the defence of qualified privilege is upon duties and interests rather than the state of mind of the defendant, the latter of which would include the defendants motive. According to their Lordships, if the defendant has a legitimate interest which the defendant seeks to protect in making the defamatory statement, the occasion for the privilege arises. There is no case which holds that self-interest operates as a disqualification or requires something more, such as some compelling need or urgency, to justify a statement. The appeal was thus dismissed.
157
Legislation Update
Digest of Acts passed between January 1, 2013 and March 31, 2013 (correct as at March 31, 2013)
Finance Act 2013 Act 755

Long Title: An Act to amend the Income Tax Act 1967, the Stamp Act 1949, the Petroleum (Income Tax) Act 1967 and the Real Property Gains Tax Act 1976. Date of Royal Assent: December 27, 2012 Date of Publication in the Gazette: January 10, 2013 Date of operation: Separate commencement dates have been provided in the Act for the various sections of the Act Summary: This Act amends the Income Tax Act 1967 (Act 53), the Stamp Act 1949 (Act 378), the Petroleum (Income Tax) Act 1967 (Act 543) and the Real Property Gains Tax Act 1976 (Act 169) in the manner specified in Chapters II, III, IV and V respectively.
Traditional and Complementary Medicine Act 2013 Act 756

Long Title: An Act to provide for the establishment of the Traditional and Complementary Medicine Council to regulate the traditional and complementary medicine services in Malaysia and to provide for matters connected therewith. Date of Royal Assent: February 5, 2013 Date of Publication in the Gazette: February 8, 2013 Date of operation: In force on a date to be appointed by the Minister in the Gazette
158
The Law Review 2013
Summary: This Act provides for matters relating to the establishment of the Traditional and Complementary Medicine Council, regulates traditional and complementary medicine services in Malaysia and provides for matters connected therewith. The key provisions of the Act are as follows: Section 2 of the Act provides for the non-application of the Private Healthcare Facilities and Services Act 1998 (Act 586) to the practice of traditional and complementary medicine. Part II (ss 417) deals with specific provisions on the Traditional and Complementary Medicine Council (the Council). These include provisions, inter alia, on the establishment of the Council (s 4), the functions and powers of the Council (s 5), the appointment of the members of the Council (s 6), the power of the Council to regulate its own procedure (s 12), the appointment of advisors (s 14), the designation of the Secretary of the Council who is to assist the Council in carrying out its functions (s 16) and the power of the Council to delegate its functions, with the approval of the Minister, to any designated practitioner or any person as the Council deems fit (s 17). Part III (ss 18 and 19) deals with the provisions on general administration, i.e. the appointment of the Secretary to the Council as the Registrar (s 18) and the maintenance of physical and electronic forms of any register as may be required under the law by the Registrar (s 19). Part IV (ss 2028) deals with the registration of traditional and complementary medicine practitioners, and these include the provisions on, inter alia, the recognition of the practice areas by the Council (s 20), the requirement to practise only in recognised practice area (s 21), the requirement that any person intending to practise is to apply to the Council to be provisionally registered as a practitioner and to comply with any qualifications as may be specified by the Council for that recognised practice area (s 22), the requirement for a provisionally registered practitioner intending to practise traditional and complementary medicine in any recognised practice area to apply to the Council to be registered with the Council after completing his period of residency under s 22 (s 23), the prohibition of any individual who is not registered in a recognised practice area to directly or indirectlypractise in such area, the contravention of the provision being an offence under the Act (s 25), the prohibition of a registered practitioner to practise in a recognised practice area without holding a valid and subsisting practising certificate (s 26), the revocation of registration of a registered practitioner (s 27) and the re-registration of deregistered practitioners (s 28). Part V (ss 2935) deals with the provisions on the obligations and duties of registered practitioners, which include, the duty to refer
Legislation Update
159
the patient to a medical or dental practitioner, as the case may be, in certain circumstances, unless the patient or individual consents in writing not to be referred (s 30), the duty to report any epidemic or other localised outbreaks of diseases to the Registrar (s 31), the prohibition of the making of any spurious claim or false or misleading representation in advertisements or promotions (s 33), the permission to incorporate the practice into a company with limited liability, practise as a company or enter into a partnership in order to provide traditional and complementary medicine services and the requirement to notify the Registrar of the legal status of the practice (s 34) and also the duty to comply with mandatory practice standards and registered governance and practice codes (s 35). Part VI (ss 3639) deals with the disciplinary proceedings for all practitioners registered under the Act. Part VII (ss 40 and 41) sets out the patients rights, which include the imposition of obligations in respect thereof on registered practitioners and on non-practitioners who engage or employ practitioners (s 40) and the dispute resolution service (s 41), which further provides that the Council may, on its own or through a person appointed to provide dispute resolution services, resolve any dispute relating to s 40. Part VIII (ss 4247) deals with the traditional and complementary medicine practitioner bodies, with provisions on the designation and revocation of the designation of practitioner bodies, on the recommendation of the Council, by the Minister (s 42), the duties of the designated practitioner body (s 43), the conditions for self-regulation of the designated practitioner body (s 44), the supervision of the designated practitioner body by the Council (s 45), the effect of revocation of the designation of the practitioner body (s 46) and the preparation of governance and practice codes according to the mandatory practice standards as prescribed by the Council (s 47). Part IX (ss 4859) provides for the enforcement provisions, which include the power of the Minister to authorise any medical officer of health, health inspector of the Ministry of Health and of any local authority, any public officer and any suitably qualified person to perform enforcement under the Act (s 48), the issuance of an authority card signed by the Chairman of the Council to each authorised officer (s 49), the power of investigation (s 50), the power to issue stop orders and to enter into any premises, building or facility to discharge and enforce the stop order (s 51), the power of the Director General to issue closure orders in respect of any premises, building or facility used for providing traditional and complementary medicine services due to public health and safety issues, or persistent use of unsafe or unhygienic practices (s 52), the power of authorised officers to enter any premises, building or facility to search
160
The Law Review 2013
the premises and seize documents or material with warrant (s 53), the power to take samples (s 55), the power to access computerised data when required (s 56) and the institution of prosecution for an offence under the Act only to be made with the consent in writing of the Public Prosecutor (s 57). Part X (ss 6062) of the Act deals with general provisions, i.e. the power of the Minister to make regulations (s 60), the penalties for offences committed against any subsidiary legislation made under the Act (s 61) and the offences by body corporate (s 62). Part XI of the Act contains s 63 which deals with transitional matters.
Strata Management Act 2013 Act 757

Long Title: An Act to provide for the proper maintenance and management of buildings and common property, and for related matters. Date of Royal Assent: February 5, 2013 Date of Publication in the Gazette: February 8, 2013 Date of operation: In force on a date to be appointed by the Minister in the Gazette Summary: This Act provides for the proper maintenance and management of buildings and common property, and for related matters. The Act, divided into 11 parts, comprises the following: Part I (ss 13) deals with preliminary matters, with s 1 providing for the application of this Act only to Peninsular Malaysia and the Federal Territory of Labuan. Part II, which contains s 4, deals with the administration of the Act, with the section providing for the appointment of the Commissioner, Deputy Commissioners and other officers by the State Authority. Part III (ss 5 and 6) contains the provisions relating to dealings in buildings or lands intended for subdivision into parcels and common property, which include a provision on the application of Part III of the Act to any sale of a parcel by a developer on or after the commencement of the Act (s 5) and another provision on the requirement for the developer to file a schedule of parcels with the Commissioner showing the proposed share units of each parcel and the total share units of all the parcels before it can sell any parcel (s 6).
Legislation Update
161
Part IV (ss 745), subdivided into five chapters, deals with the maintenance and management of buildings and common property before the establishment of a management corporation. Chapter 1 vide its s 7 provides that subject to Part V, Part IV shall apply to a development area, where vacant possession of a parcel in a building or land intended for subdivision into parcels has been delivered by the developer to a purchaser and the management corporation has yet to come into existence, prior to or after the commencement of the Act. Chapter 2 generally provides for management by the developer before the joint management body is established. Chapter 3 makes provisions on management by joint management body, while Chapter 4 provides for miscellaneous provisions applicable to Part IV. Chapter 5 provides for the transitional and savings provisions due to the repeal of the Building and Common Property (Maintenance and Management) Act 2007 (Act 663). Part V (ss 4685), subdivided into six chapters, deals with the maintenance and management of buildings and common property after the existence of a management corporation, with some provisions providing for the application of the Schedules to this Act. Chapter 1 provides for the application of this Part (s 46), Chapter 2 provides for the management by the developer before the first annual general meeting of the management corporation, Chapter 3 provides for the management after the first annual general meeting of the management corporation, Chapter 4 provides for the subsidiary management corporation and limited common property, Chapter 5 provides for the miscellaneous provision applicable to this Part and Chapter 6, vide its ss 8185, provides for the transitional and saving provisions due to consequential amendments made to the Strata Titles Act 1985 (Act 318). Part VI (ss 8691) contains the provisions relating to the managing agent, which include, among others, s 86 which provides for the appointment of a managing agent by the Commissioner to maintain and manage the building or land intended for subdivision into parcels or the subdivided building or land and the common property, and s 89 which sets out the powers and duties of a managing agent. Despite the appointment of the managing agent to carry out maintenance works and the property management, the duty to carry out repairs during the defects liability period is not relieved from the developer, as provided under s 90 of this Act. Part VII vide its s 92 deals with deposits to rectify defects, where the provision requires the developer to pay deposit to rectify defects in the common property of the development area after the completion of the common property.
162
The Law Review 2013
Part VIII (ss 93100) contains the provisions on insurances, which include, inter alia, s 93 which requires any person or body who is responsible under the Act to maintain and manage any building to insure such building under a damage policy with a licensed insurer, ss 95 and 96 which respectively provide for the duties of the management corporation and the subsidiary management corporation to insure a building in situations where the limited common property cannot be separated (s 95) or cannot be separated (s 96) from the main premises of the building, whilst s 97 provides for the non-application of Part VIII to land parcels, where each parcel owner or proprietor shall be responsible to insure his building on the land parcel. Part IX (ss 101124), subdivided into six chapters, deals with the establishment of the Strata Management Tribunal (the Tribunal). The provisions include Chapter 1 which gives the general interpretation, Chapter 2 which provides for the establishment and the organisation of the Tribunal, Chapter 3 which sets out the jurisdiction of the Tribunal, Chapter 4 which governs the conduct of proceedings by the Tribunal, Chapter 5 which makes provisions on the awards by the Tribunal, and Chapter 6 which makes some miscellaneous provisions applicable to this Part, which include criminal penalty for failure to comply with the Tribunals awards (s 123) and the power of the Minister, after consultation with the National Council for Local Government, to make regulations in respect of the Tribunal (s 124). Part X (ss 125141) contains the enforcement provisions. The provisions include s 125 which empowers the Commissioner to investigate any offence under the Act and to authorise any officer of the local authority or public officer to exercise the power of enforcement under the Act, ss 126 and 127 which deal the power of search and seizure with warrant and search and seizure without warrant, s 135 which provides for the compounding of offences under the Act, s 137 which provides for the jurisdiction of the Magistrates Court to try summarily any offence under the Act, and s 141 which provides for the recovery of daily penalty in respect of a continuing offence. Part XI (ss 142153) contains miscellaneous provisions, among others, s 142 which deals with evidential provisions in relation to any proceedings in a court or of the Tribunal with respect to any defect in a parcel, common property or limited common property under the Act, s 143 which provides for the representation in any proceedings by or against the joint management body, management corporation or subsidiary management corporation, s 144 which sets out the manner of service of notice or order on any person under the Act, s 146 which provides for the application of the Public Authorities Protection Act 1948 (Act 198) to any action, suit, proceedings or prosecution against
Legislation Update
163
the Commissioner and other officers, s 148 which deals with the nonapplication of other written laws, contracts and deeds relating to the maintenance and management of buildings and common property in a local authority area once the Act came into operation, s 149 which prohibits the contracting out of the provisions of this Act, s 151 which empowers the Minister, after consultation with the National Council for the Local Government, to exempt any person or building or lands or classes of persons or types of buildings or lands, from all or any of the provisions of this Act, s 152 which gives power to the Minister, after consultation with the National Council for Local Government, to amend any of the Schedules, and s 153 which provides for the repeal of the Building and Common Property (Maintenance and Management) Act 2007 (Act 663).
Financial Services Act 2013 Act 758

Long Title: An Act to provide for the regulation and supervision of financial institutions, payment systems and other relevant entities and the oversight of the money market and foreign exchange market to promote financial stability and for related, consequential or incidental matters. Date of Royal Assent: March 18, 2013 Date of Publication in the Gazette: March 22, 2013 Date of operation: In force on a date to be appointed by the Minister in the Gazette Summary: This Act consolidates the Banking and Financial Institutions Act 1989 (Act 372), the Insurance Act 1996 (Act 553), the Payment Systems Act 2003 (Act 627) and the Exchange Control Act 1953 (Act 17) and provides for matters incidental thereto and connected therewith. The provisions of this Act may be summarised as follows: Part I (ss 15) contains some preliminary matters. Section 3 empowers the Minister, on the recommendation of the Bank (i.e. the Central Bank of Malaysia, as defined in s 2(1) of the Central Bank of Malaysia Act 2009 (Act 701)), to prescribe any business, service or activity as an addition to the definition of certain businesses or activities, whilst s 4 empowers the Bank, with the concurrence of the Minister, to prescribe any agreement in respect of a financial transaction in the financial markets as a qualified financial agreement, any dealing or transaction as a credit facility or any other person as a market participant.
164
The Law Review 2013
Section 5 provides for the classification of insurance business into life business and general business. This provision also describes what would constitute the carrying on of insurance business as well as empowers the Minister, on the recommendation of the Bank, to prescribe a business or activity as insurance business and that the businesses set out in Schedule 4 are not to be treated as insurance business for the purposes of this Act. Part II (ss 6 and 7) contains provisions relating to the regulatory objectives of the Act. Section 6 states the principal regulatory objective of the Act, i.e. to promote financial stability. Additionally, the Bank has to strive to protect the rights and interests of consumers of financial services and products. By virtue of s 7, the Bank shall exercise its powers and perform its functions in a way which it considers most appropriate and the Governor shall exercise such powers and perform such functions of the Bank on its behalf. The Bank to may authorise a Deputy Governor, an officer of the Bank or any other person to exercise its powers or perform its functions under the Act. Additionally, the Bank shall keep the Minister informed on matters relating to the exercise of its powers and performance of its functions under the Act. Part III (ss 829), divided into six divisions, contains provisions relating to the authorisation of licensed and approved businesses and the registration of registered businesses. Part IV (ss 3045), divided into three divisions, contains provisions relating to payment systems. Part V (ss 4685), divided into seven divisions, contains provisions relating to prudential requirements, transparency requirements, appointment of auditors and actuaries, insurance funds and establishment of subsidiaries. Part VI (ss 86107), divided into four divisions, comprises provisions on ownership, control and transfer of business. Part VII (ss 108120) contains provisions on the regulation and supervision to oversee financial groups of the licensed person to preserve the safety and soundness of the financial affairs of the targeted group. Part VIII (ss 121139), divided into five divisions, outlines the requirements and prohibitions in relation to business conduct and consumer protection. Part IX (ss 140142) deals with the requirements and prohibited conduct in the money market and foreign exchange market, where s 142 gives power to the Bank to coordinate the regulation of financial instruments in the money market with the relevant supervisory authorities.
Legislation Update
165
Part X (ss 143145) briefly provides the requirement to submit documents or information to the Bank. Part XI (ss 146153) comprises provisions, among others, on the examination, without giving any prior notice, of authorised persons, registered persons, operators of a designated payment system and others, including any director, officer or controller of such persons (s 146). Part XII (ss 154159) makes provisions with regard to the Banks power to issue directions of compliance. Part XIII (ss 160210), divided into four divisions, sets out the intervention and remedial actions that may be taken by the Bank. Section 160 gives clarification of the circumstances where Part XIII shall apply in respect of an institution that is a member institution under the Malaysia Deposit Insurance Corporation Act 2011 (Act 720). Part XIV (ss 211217), divided into three divisions, sets out some other powers of the Bank, which include the power of the Minister to prescribe financial institutions and the power to regulate and safeguard international and domestic transactions including the imposition of levies (s 215) and the issuance of directions (s 216). Section 214 empowers the Bank to safeguard the balance of payments position and the value of the currency of Malaysia. Part XV (ss 218258), divided into five divisions, makes provisions in relation to enforcement actions and penalties to be imposed by the Bank, which include the protection in relation to disclosure of information to the Bank (s 256) and the power of the Bank to publish information (s 258). Part XVI (ss 259270) deals with general provisions, which include provisions relating to approvals, consents, standards, codes, specifications, notices, requirements, directions or measures (s 261), the power of the Bank to issue guidance (s 266), the application of the Companies Act 1965 (Act 125) (s 268) and the application of certain provisions of this Act to Labuan entities (s 269). Part XVII (ss 271281) deals with provisions relating to repeal, savings and transitional provisions. Section 271 repeals the Banking and Financial Institutions Act 1989 (Act 372), the Insurance Act 1996 (Act 553), the Payment Systems Act 2003 (Act 627) and the Exchange Control Act 1953 (Act 17), whilst the remaining sections mainly contain savings and transitional provisions. Schedule 1 sets out the list of approved and registered businesses. Schedule 2 provides a list of circumstances or persons which are excluded from the definition of deposit.
166
The Law Review 2013
Schedule 3 provides for the definition of interest in shares and the computation of effective interest in shares. Schedule 4 sets out businesses which are not insurance business. Schedule 5 sets out factors to be considered by the Bank in assessing an application for a licence or approval under s 11. Schedule 6 sets out the factors to be considered by the Bank in assessing shareholder suitability. Schedule 7 provides a list of prohibited business conduct. Schedule 8 sets out certain provisions relating to policies such as those dealing with misstatement of age of the life insured, the 15-day cooling-off period for the return of a life policy by a policy owner, the payment of life policy moneys by a licensed insurer without any deductions made unless consent has been obtained, and the payment of surrender value under a life policy. This Schedule also provides for a person effecting insurance on the life of another to have an insurable interest in that life at the time the insurance is effected, failing which the insurance will be void. On the capacity of minors, this Schedule makes provision for a minor aged ten years but less than sixteen years with consent of a parent or guardian to effect a life policy on his own life or upon another life in which he has an insurable interest, or to assign a life policy on his own life or take an assignment of a life policy. A minor aged sixteen years and above may do the same without consent of a parent or guardian except when he assigns a life policy on his own life. The Schedule further sets out certain requirements on disclosure, group policies and refund of premium. Schedule 9 sets out a new duty of disclosure and representations for a consumer to observe before a contract of insurance is entered into, varied or renewed with an insurer. This Schedule also sets out proportionate remedies which an insurer may rely on in the case of a misrepresentation made by a consumer during the pre-contractual stage depending on the type of misrepresentation made. This Schedule also continues to provide that all contracts of life insurance, whether consumer insurance contracts or not, are non-contestable in relation to any inaccurate, false or misleading statement leading to the issue of the life policy, if these contracts have been in force for more than two years from the date on which they were effected during the lifetime of the insured, where such contracts are only contestable if an insurer can show that a statement made was on a material matter or a material fact was suppressed and such statement was fraudulently made or omitted, as well as provisions relating to the duty of disclosure and representations for group policies and variations, insurers duty of disclosure, prohibition on warranties in respect of any pre-contractual representations made by consumers, prohibition on contracting out and the application of the Schedule.
Legislation Update
167
Schedule 10 provides for the payment of policy moneys upon the death of a policy owner under a life policy or personal accident policy which has been effected by the policy owner upon his own life, in order to expedite the payment of policy moneys. This Schedule also provides for the claim of an assignee and pledgee to have priority over the claim of any nominee, whether a trust nominee or otherwise. In the case of no nomination having been made, the moneys are to be paid to the lawful executor or administrator of the estate of the policy owner, and where there are no such persons, then to the policy owners spouse, child or parent according to the Distribution Act 1958 (Act 300). Where there is no spouse, child or parent, the Schedule also provides for certain other persons to be able to receive the policy moneys. Schedule 11 sets out the permitted disclosures where the duty to preserve secrecy imposed under s 133 does not apply. Schedule 12 provides a list of persons excluded from the restrictions on the use of certain words. Schedule 13 modifies provisions in the Third Schedule to the Central Bank of Malaysia Act 2009 (Act 701) for the purposes of a vesting order made by the Bank in respect of the vesting of businesses, assets or liabilities under s 176. Schedule 14 sets out the list of transactions prohibited under s 214(2). Schedule 15 provides a list of provisions in respect of which the Bank may impose an administrative monetary penalty. Schedule 16 sets out the list of subsidiary legislation which is to be revoked.
Islamic Financial Services Act 2013 Act 759

Long Title: An Act to provide for the regulation and supervision of Islamic financial institutions, payment systems and other relevant entities and the oversight of the Islamic money market and Islamic foreign exchange market to promote financial stability and compliance with Shariah and for related, consequential or incidental matters. Date of Royal Assent: March 18, 2013 Date of Publication in the Gazette: March 22, 2013 Date of operation: In force on a date to be appointed by the Minister in the Gazette
168
The Law Review 2013
Summary: This Act consolidates the Islamic Banking Act 1983 (Act 276) and the Takaful Act 1984 (Act 312) and provides for matters incidental thereto and connected therewith. The summary of the Act, which is divided into 18 parts, is as follows: Part I (ss 15) contains preliminary matters, which include the power to prescribe additional business or activity by the Minister (s 3), the power to prescribe additional agreement, dealing, transaction or person by the Bank (s 4) and the classification of takaful business and construction of references to the takaful business (s 5). Part II (ss 6 and 7) contains provisions relating to the regulatory objectives of the Act. It is stated in s 6 of the Act that the principal regulatory objectives of the Act are to promote financial stability and compliance with Shariah, and in order to achieve the objectives, the Bank (i.e. the Central Bank of Malaysia, as defined in s 2(1) of the Central Bank of Malaysia Act 2009 (Act 701)) is required to foster the safety and soundness of Islamic financial institutions, the integrity and orderly functioning of the Islamic money market and Islamic foreign exchange market, safe, efficient and reliable payment systems and Islamic payment instruments and fair, responsible and professional business conduct of Islamic financial institutions, as well as to protect the rights and interests of consumers of Islamic financial services and products. Section 7 specifically provides that the Bank shall exercise its powers and perform its functions in a way which it considers most appropriate, and further provides the power for the Bank to authorise a Deputy Governor or an officer of the Bank to exercise its powers or perform its functions under the Act, as well as to keep the Minister informed on matters relating to the exercise of its powers and performance of its functions under the Act. Part III (ss 826), divided into five divisions, contains provisions relating to the authorisation of licensed and approved businesses. Division 1 provisions are primarily on the authorised business, and the provisions include the requirement on minimal capital funds or surplus of assets over liabilities (s 12), additional conditions of license or approval (s 13) and persons approved under the Financial Services Act 2013 (Act 758) to carry out Islamic financial business. Division 2 contains provisions on restriction on dealings of authorised person, Division 3 on representative office, Division 4 on revocation, surrender or cessation of business or operations, and Division 5 on general matters, which include form of establishment (s 21), prescription of fees (s 23), and publication of names of authorised persons (s 24).
Legislation Update
169
Part IV (ss 2738), divided into three divisions, contains provisions relating to requirements on compliance with Shariah, among others, Division 1 on Shariah compliance which include the duty of an institution to ensure compliance with Shariah (s 28) and the power of the Bank to specify standards on Shariah matters (s 29), Division 2 on Shariah governance which include the establishment of Shariah committee (s 30) and duties of Shariah committee and its members (s 32), and Division 3 on audit on Shariah compliance which include the appointment of auditor by the institution (s 37) and the appointment of auditor by the Bank (s 38) to conduct audit on Shariah compliance. Part V (ss 3955), divided into three divisions, mainly contains provisions relating to payment systems, with Division 1 on the designation of payment systems and Islamic payment instruments, Division 2 on the requirements for operation of payment systems and issuance of designated Islamic payment instruments, and Division 3 on finality of payment and netting arrangement. Part VI (ss 5697), divided into seven divisions, contains provisions relating to prudential requirements, appointment of auditors and actuaries and establishment of subsidiaries. Division 1 deals with standards on prudential matters, Division 2 deals with corporate governance, Division 3 covers the requirements of transparency, Division 4 provides for the appointment and the duties of auditors, Division 5 deals with the appointment and the duties of actuaries, Division 6 covers the establishment and maintenance of takaful funds and shareholders fund, and Division 7 deals with matters relating to subsidiaries. Part VII (ss 98119), divided into four divisions, deals with ownership, control and business transfer scheme of a licensed person and certain approved persons. While s 98 provides for the application and nonapplication of some of the provisions under this part, Division 1 deals with interests in shares of licensed persons, Division 2 deals with action which can be taken by the Bank against any breach of certain provisions of the Act, Division 3 deals with interests in shares of approved persons, and Division 4 deals with transfer of business, reconstruction or amalgamation of licensed persons. Part VIII (ss 120132) deals mainly with the regulation and supervision of financial groups, and the provisions include, among others, the nonapplication of ss 122 and 123 to licensed persons under this Act, and licensed persons and financial holding companies under the Financial Services Act 2013 (s 121), application to be a financial holding company (s 122), business of a financial holding company (s 126), power of the Bank to issue directions (s 128) and consequences for failing to comply with the Banks directions (s 130).
170
The Law Review 2013
Part IX (ss 133151), divided into five divisions, deals with requirements and prohibitions in relation to business conduct and consumer protection, which include Division 1 on interpretation, Division 2 on business conduct, complaints and disputes matters, Division 3 on takaful issues, Division 4 on information and secrecy matters and Division 5 on the restrictions relating to consumer protection. Part X (ss 152154) deals with the requirements and prohibited conducts in the Islamic money market and Islamic foreign exchange market, and the provisions are on matters such as the power of the Bank to specify standards or issue codes for maintaining orderly conditions or the integrity of the Islamic money market and Islamic foreign exchange market (s 152), the prohibition on engaging in prohibited conduct such as false trading, market rigging and insider dealing in the Islamic money market and Islamic foreign exchange market (s 153) and the power of the Bank to enter into arrangements with relevant supervisory authorities to coordinate regulation of financial instruments in the Islamic money market (s 154). Part XI (ss 155157) makes provisions on the submission of document or information to the Bank, and the provisions include the imposition of an obligation on any person, including those listed in the section, who is required under the law to submit to the Bank any document or information, to submit such document or information to the Bank (s 155) and the power of the Bank to require any person to submit to it any document or information to collate statistical or other information on financial intermediation or financial inclusion in Malaysia or for other purposes related to the regulatory objectives of the Act (s 156), and certain exceptions to the secrecy requirements (s 157). Part XII (ss 158165) contains provisions with regard to the examination of authorised persons, operators of a designated payment system etc., and these provisions cover the power the Bank to examine, without giving prior notice, the business and affairs of an authorised person, operator of a designated payment system and others as well as to examine any director, officer or controller of such persons (s 158), the imposition of an obligation on a person who is being examined under s 158 to give the Bank access to that persons documents, cash, premises, apparatus, equipment or machinery, and to produce to the Bank all such documents or cash as well as to take in possession such documents or cash (s 159), and the power of the Bank to provide to a relevant supervisory authority outside Malaysia documents or information relating to the affairs of an authorised person or operator of a designated payment system or financial holding company, which is a subsidiary or associate of a foreign institution (s 165).
Legislation Update
171
Part XIII (ss 166171) makes provisions with regard to the Banks power to issue directions of compliance, which include the provisions on the circumstances whereby the Bank may exercise its powers to issue directions of compliance to an institution (s 167), the power of the Bank to issue directions of compliance to an institution, its director, chief executive officer or senior officer, to cease or refrain from committing an act or pursuing a course of conduct or to do any act, in relation to its business, affairs or property (s 168), general provisions relating to the directions of compliance (s 169), imposition of penalty against an institution, its director, chief executive officer or senior officer who fails to comply with a direction (s 170) and some additional provisions flowing from s 168(2)(b) which set out the procedures in relation to a direction issued to a licensed person to increase its capital (s 171). Part XIV (ss 172221), divided into four divisions, sets out the intervention and remedial action that may be taken by the Bank, which include a provision that expressly clarifies the circumstances where Part XIV shall be applicable to an institution that is a member institution under the Malaysia Deposit Insurance Corporation Act 2011 (Act 720) (s 172). Part XV (ss 222228), divided into three divisions, contains provisions relating to other powers of the Bank, which include, inter alia, s 225 which empowers the Bank to safeguard the balance of payments position and the value of the currency of Malaysia, as well as prohibits any person from undertaking or engaging in any transaction set out in Schedule 14 except with the written approval of the Bank. Part XVI (ss 229269), divided into five divisions, makes provisions in relation to enforcement actions by the Bank, the Banks investigation powers, the Banks powers to take administrative and civil actions, criminal offences and general matters, which include, among others, s 229 which empowers the Bank to invoke its investigations powers in order to investigate into offences or breaches under the Act if the Bank is satisfied or has reason to believe that any person has committed an offence or breach under the Act. Section 240 provides for the manner in which orders or notices shall be served. Part XVII (ss 270281) deals with general provisions, inter alia, s 270 which empowers the Minister or the Bank to accept a written undertaking given by a person in connection with a matter to which the Minister or the Bank, as the case may be, has a power or function under the Act, where in the case of a person who has breached the undertaking, the Bank may apply, or recommend to the Minister to apply, as the case may be, to the High Court for an order to be made in respect of such breach, s 272 which deals with approvals, consents, specifications, notices, requirements, directions, standards, codes or measures made or issued under the Act, and s 274 which empowers the Minister, on
172
The Law Review 2013
the recommendation of the Bank, to exempt any particular person or any class, category or description of persons by an order published in the Gazette, from all or any of the provisions of the Act, provided that it is consistent with the objects and functions of the Bank under the Central Bank of Malaysia Act 2009 (Act 701) or the regulatory objectives of the Act. Part XVIII (ss 282291) comprises repeal, savings and transitional provisions. Section 282 repeals the Islamic Banking Act 1983 (Act 276) and the Takaful Act 1984 (Act 312) (the repealed Acts), and s 283 sets out the savings and transitional provisions relating to all subsidiary legislation except for the subsidiary legislation set out in Schedule 16, all executive act or all pending applications made or granted under the repealed Acts or acts done or transactions entered into under the repealed Acts. Section 291 sets out savings and transitional provisions relating to Islamic deposits accepted by a co-operative society from a person who is not a member of the co-operative society before the appointed date and provides for such co-operative society to obtain approval from the Bank within the specified time after the appointed date for it to continue to accept Islamic deposits from non-members. Schedule 1 sets out the list of approved businesses. Schedule 2 provides a list of circumstances which are excluded from the definition of Islamic deposit. Schedule 3 provides for the definition of interest in shares and the computation of effective interests in shares. Schedule 4 sets out businesses which are not takaful business. Schedule 5 sets out factors to be considered by the Bank in assessing an application for a licence or approval. Schedule 6 sets out the factors to be considered by the Bank in assessing shareholder suitability. Schedule 7 provides a list of prohibited business conduct. Schedule 8 sets out certain provisions relating to takaful certificates and variations. Schedule 9 sets out a new duty of disclosure and representations for a consumer to observe before a contract of takaful is entered into, varied or renewed with a takaful operator, as well as provisions relating to the duty of disclosure and representations for group takaful certificates and variations. It also covers the takaful operators duty of disclosure, and prohibition on warranties in respect of any pre-contractual representations made by consumers.
Legislation Update
173
Schedule 10 provides for the payment of takaful benefits under family takaful certificate or personal accident takaful certificate which has been entered into by the takaful participant on his life. Schedule 11 sets out the permitted disclosures where the duty to preserve secrecy imposed under s 145 does not apply. Schedule 12 provides a list of persons excluded from the restrictions on the use of certain words. Schedule 13 modifies provisions in the Third Schedule to the Central Bank of Malaysia Act 2009 for the purposes of a vesting order made by the Bank in respect of the vesting of businesses, assets or liabilities under s 188. Schedule 14 sets out the list of transactions prohibited under s 225(2) of the Act. Schedule 15 provides a list of provisions of the Act under which the Bank may impose an administrative monetary penalty. Schedule 16 sets out the list of subsidiary legislation which is to be revoked.
Pensions Adjustment (Amendment) Act 2013 Act A1447

Long Title: An Act to amend the Pensions Adjustment Act 1980. Date of Royal Assent: December 27, 2012 Date of Publication in the Gazette: January 10, 2013 Date of operation: January 1, 2013 Summary: This Act amends the Pensions Adjustment Act 1980 (Act 238). The amendments include: Section 2 amends s 2 of Act 238 to delete the definition of corresponding last drawn salary. Section 3 substitutes a new s 3 of Act 238 to provide that pensions and other benefits granted to officers and their dependants under any written law shall be adjusted annually by an increment of two percent and shall be paid or be payable with effect from January of each year and to provide safeguards for officers appointed before the commencement of the Act.
174
The Law Review 2013
Section 4 introduces new ss 3A and 3B into Act 238. Section 3A deals with the adjustment of pensions, disability pensions, retiring allowances and injury allowances, whilst s 3B deals with the adjustment of lowest pensions and other benefits as determined under s 8 of Act 238. Sections 5 and 6 amend ss 4 and 5 of Act 238 respectively. These amendments clarify the procedure for the adjustment of derivative pensions and derivative retiring allowances under the respective schemes. Sections 7 and 9 delete s 6 and s 9 of Act 238 respectively. Section 10 substitutes a new s 10 of Act 238. The amendment clarifies the procedure for the adjustment of dependants pensions. Section 11 introduces a new s 10A into Act 238 to deal with adjustments of pensions or other benefits under s 3 of Act 238 where the maximum reckonable service under any written law changes. Section 13 deletes the First and Second Schedules to Act 238. Section 14 provides saving and transitional provisions.
Central Bank of Malaysia (Amendment) Act 2013 Act A1448

Long Title: An Act to amend the Central Bank of Malaysia Act 2009. Date of Royal Assent: January 18, 2013 Date of Publication in the Gazette: January 22, 2013 Date of operation: February 8, 2013 (PU(B) 44/2013) Summary: This Act amends the Central Bank of Malaysia Act 2009 (Act 701). The amendments include: Section 2 amends s 2 of Act 701 by inserting definitions for several new terms. Section 3 amends s 15(6) of Act 701 by substituting for the words such written law the words any written law. The amendment clarifies that the Governor shall manage the Bank and may exercise powers under any written law. Section 4 substitutes a new s 31 of Act 701, and this provides power for the Bank to specify measures to a class, category or description of persons engaging in financial intermediation which would contribute to the resilience of the financial system or limit the accumulation of
Legislation Update
175
risks to financial stability and also provides the Bank with enforcement powers for compliance of this section. Section 5 amends s 32 of Act 701 by inserting subsection (1A) for purposes of clarifying that the vesting order under s 32(1)(c)(iii) shall not affect any netting arrangement of the parties. Section 6 substitutes a new s 37(4) of Act 701 to provide that the Secretary General to the Treasury shall be invited to all the meetings of the Financial Stability Executive Committee. Section 7 amends s 38(1)(a)(i) of Act 701 to provide for the Financial Stability Executive Committee to consider proposals under s 31(1) to specify measures or issue orders. Section 8 amends s 48 of Act 701 by inserting a paragraph to enable the Bank to establish or acquire a body corporate for purposes of carrying out the functions of a bridge institution under any written law enforced by the Bank. Section 9 substitutes a new s 77(1) of Act 701 for purposes of clarifying that any direction given or requirement imposed under this section does not affect any netting arrangement of the parties. Section 11 amends paragraph 2 of the Third Schedule to Act 701 by inserting four new subparagraphs to ensure that a vesting order shall not affect any netting arrangement of the parties whereby a transferee is to assume all rights and obligations under any qualified financial agreement of the transferor and to ensure that all or none of the qualified financial transactions are transferred out.
Industrial Designs (Amendment) Act 2013 Act A1449

Long Title: An Act to amend the Industrial Designs Act 1996. Date of Royal Assent: January 18, 2013 Date of Publication in the Gazette: January 22, 2013 Date of operation: July 1, 2013 (PU(B) 86/2013) Summary: This Act amends the Industrial Designs Act 1996 (Act 552). The amendments include: Section 2 amends s 3(1) of Act 552 to introduce a new definition of Official Journal consequent to the introduction of the new s 46A into Act 552.
176
The Law Review 2013
Section 3 amends s 12(2)(a) of Act 552 and the amendment provides for consideration of public disclosure elsewhere than in Malaysia in determining the novelty of an industrial design. Sections 4, 5 and 6 amend ss 22(2), 25(4) and 26 of Act 552 respectively consequent to the introduction of the new s 46A into Act 552. Section 5 also amends s 25(2) of Act 552 to provide for the extension of the period of registration of an industrial design from two further consecutive terms to four further consecutive terms of five years each, which will result in a maximum duration of protection of 25 years for a registered industrial design. Section 8 substitutes new ss 29 and 30 of Act 552. The new s 29 clarifies the attributes of a registered industrial design as personal property and also provides for the collateralisation of registered industrial designs, whilst the new s 30 clarifies the obligation to record any title or interest acquired by way of assignment or transmission or by operation of law or by a security interest transaction in the Register of Industrial Designs (the Register). Section 9 amends s 35 of Act 552 to introduce a new s 35(4) to provide that a person who becomes entitled to a registered industrial design by way of assignment or transmission or by operation of law or by a security interest transaction shall not be awarded costs in respect of an infringement unless an application to record his title or interest in the Register has been duly made within the specified period. Section 10 introduces a new s 46A into Act 552 to provide for the publication of an Intellectual Property Official Journal. Section 11 amends s 47(2) of Act 552 to give power for the Minister to make regulations on the procedure for the recording of the matters required under s 30 and to prescribe the matters or information to be published in the Intellectual Property Official Journal. Section 12 provides saving and transitional provisions.
Strata Titles (Amendment) Act 2013 Act A1450

Long Title: An Act to amend the Strata Titles Act 1985. Date of Royal Assent: January 28, 2013 Date of Publication in the Gazette: February 7, 2013 Date of operation: In force on a date to be appointed by the Minister in the Gazette
Legislation Update
177
Summary: This Act amends the Strata Titles Act 1985 (Act 318) including the insertion of a new Sixth Schedule to enable the implementation of the Electronic Land Administration System for Strata Titles in Peninsular Malaysia. The Act also harmonises the provisions of Act 318 and its relationship with the provisions of the National Land Code 1965 (the Code) as Act 318 is construed as part of the Code. This Act also removes the provisions pertaining to the management of subdivided building which is to be governed by the Strata Management Act 2013 (Act 757). Consequently, this Act harmonises the provisions of Act 318 with the provisions of the Strata Management Act 2013. Some of the key amendments are: Section 2 amends the preamble of Act 318 to reflect the extension of the scope of Act 318 to the Federal Territory of Labuan. Section 3 amends s 2 of Act 318 to extend the application of Act 318 to the Federal Territory of Labuan. Section 4 amends s 4 of Act 318 to introduce new definitions as well as to amend existing definitions used Act 318. Section 5 introduces a new s 4B into Act 318 to provide for the Electronic Land Administration System of Strata Titles and the application of a new Sixth Schedule upon the coming into operation of the system. Section 6 substitutes a new s 7 of Act 318. This amendment states that the original proprietor of alienated land may apply for subdivision of a building or land. Section 7 substitutes a new s 8 of Act 318 to strengthen the circumstances in which the original proprietor is compelled to apply for subdivision of building or land. Previously, an application of subdivision is compulsory only upon sale or agreement to sell any parcel in a completed building that is capable of being subdivided. However, this amendment provides that an application for subdivision is compulsory even for a building the construction of which is still in progress, where sale or agreement to sell any parcel in such building has taken place and document to certify the super structure stage has been issued. This amendment further provides the relevant time period for such application to be made. Section 8 introduces a new s 8A into Act 318 to provide for the application for certificate of proposed strata plan. The certificate of proposed strata plan is required to be submitted in the application for subdivision of building, etc. under s 9 of Act 318. Section 9 substitutes a new s 9 of Act 318 to reduce the duration of time for obtaining approval for subdivision of building, etc. The new amendment imposes self-management on the land proprietor to obtain the certificate of proposed strata plan from the Director of Survey
178
The Law Review 2013
prior to making application for subdivision of land. As a result, when the application for subdivision of building, etc. is made by the land proprietor, the Land Administrator can transmit the application to the Director with his recommendations without having to postpone the process in order to get the necessary certification from the Land Surveyor. Section 10 inserts new ss 9A and 9B to streamline the process of application for subdivision of building, etc. in respect of provisional blocks in the case of phased development, and in respect of subdivision of building, etc. for low-cost buildings, respectively. Section 11 substitutes a new s 10 of Act 318 in consequence of the introduction of the new s 8A and the amendment to s 9 of Act 318. Section 12 deletes s 10A of Act 318 pursuant to the insertion of the new s 9A. Section 13 deletes s 10B of Act 318 pursuant to the introduction of the new s 9B. Section 17 deletes s 14A of Act 318 as fee collection is dealt with under s 9. Section 20 substitutes a new s 17 of Act 318 in relation to the effect of the opening of the book of strata register in respect of a subdivided building or land, and to further provide for the establishment of a management corporation as a body corporate under Act 318. Section 21 inserts a new s 17A into Act 318, which allows a management corporation to designate limited common property and create one or more subsidiary management corporation to enhance the management of the strata scheme. Section 22 inserts a new s 19A into Act 318 to cover the transfer of ownership of strata titles. Section 24 substitutes a new s 20 of Act 318 to stipulate the circumstances that obligate the proprietor of provisional strata title to apply for issuance of strata titles, and further provide the relevant time period for such application to be made. Section 25 introduces new ss 20A and 20B into Act 318 as a consequence of the amendments in s 20 and to streamline the process of application for subdivision of building or land in respect of provisional strata title. The period of time for such application to be considered is also reduced as a result of the introduction of the new process of application. Section 26 substitutes a new s 21 into Act 318 to provide for the power of the Director of Lands and Mines to approve any application for subdivision of building under s 20B.
Legislation Update
179
Section 28 deletes s 22A of Act 318 regarding the failure to apply for subdivision of building or land within stipulated time as this is dealt with under s 20. Section 29 deletes s 22B of Act 318. Section 30 amends s 25 of Act 318 to impose requirement of consent from the relevant authorities for the purpose of subdivision or amalgamation of parcels. Section 38 deletes Part VII of Act 318 as the aspect of maintenance and management of subdivided building or land and its common property is being dealt with under Act 757. Section 39 amends s 57 of Act 318 to provide clarity on profit distribution arising from the management corporations proprietorship of the lot which was held in trust for the former proprietors, upon termination of a subdivided building. Section 40 deletes Part IXA of Act 318 in respect of the Strata Titles Board. Section 41 deletes ss 76,77 and 78 of Act 318. Section 42 amends s 81 of Act 318 by substituting subsection (1) to provide the State Authority with power to make rules regarding the classification of low-cost buildings and special buildings, the formula of the proposed share units, and any matter which by Act 318 is required or permitted to be prescribed or necessary or convenient to be prescribed. Section 43 contains savings and transitional provisions. Section 44 deletes the Second and Third Schedules to Act 318 as both Schedules along with Part VII of Act 318 are now provided in Act 757. Section 45 amends the Fifth Schedule to Act 318 to streamline the automation procedures for strata titles conversion to a computerised system upon the implementation of the Computerisation System of Strata Titles in the land Registry. Section 46 introduces a new Sixth Schedule to Act 318 which contains provisions relating to the implementation of electronic strata titles as a consequence of the coming into operation of the Electronic Land Administration System upon the commencement of the Sixteenth Schedule to the Code.
180
The Law Review 2013
Perbadanan Kemajuan Filem Nasional Malaysia (Amendment) Act 2013 Act A1451
Long Title: An Act to amend the the Perbadanan Kemajuan Filem Nasional Malaysia Act 1981. Date of Royal Assent: January 28, 2013 Date of Publication in the Gazette: February 7, 2013 Date of operation: April 1, 2013 (PU(B) 89/2013) Summary: This Act amends the Perbadanan Kemajuan Filem Nasional Malaysia Act 1981 (Act 244). The amendment has been enacted arising from the merging of the Perbadanan Kemajuan Filem Nasional Malaysia (Perbadanan) with the National Film Department (NFD). The amendments include: Section 2 amends s 6 of Act 244, which introduces new functions and powers of the Perbadanan arising from the merging of the Perbadanan with NFD. Section 3 introduces new ss 11A and 11B into Act 244. Under the new s 11A, the Government is required on the appointed date, to give option to every person who immediately before that date was in its employment or service in NFD, and the Perbadanan is required to accept into its employment all such persons who have exercised an option to serve as its employee, whilst the new s 11B gives protection of the pension rights of the employees who were previously in the employment of the Government in NFD.
Animals (Amendment) Act 2013 Act A1452

Long Title: An Act to amend the Animals Act 1953. Date of Royal Assent: March 18, 2013 Date of Publication in the Gazette: March 20, 2013 Date of operation: In force on a date to be appointed by the Minister in the Gazette Summary: This Act amends the Animals Act 1953 (Act 647) in relation to the quantum of penalties, the powers of enforcement and to facilitate a more effective implementation and enforcement of the Act to ensure the prevention,
Legislation Update
181
control and eradication of diseases from animals or birds as well as the prevention of cruelty to animals. The amendments to the Act are also as a consequence to the introduction of the Malaysian Quarantine and Inspection Services Act 2011 (Act 728) (the MAQIS Act). The amendments include: Section 2 amends s 2 of Act 647 to introduce the definitions of some terms and words of the Act. Section 3 amends s 5 of Act 647 to increase the penalty under the section. Section 4 amends s 6 of Act 647 to confer the power of issuance of licence to import any animal or bird to enforcement officers in line with the MAQIS Act. Section 5 introduces s 6A into Act 647 to provide for the prohibition on importation of carcass, product of animals or birds, etc., without a permit. Section 6 amends s 7 of Act 647 to empower an enforcement officer to examine animals or birds imported at the entry points, quarantine stations and quarantine premises. Section 7 amends s 8 of Act 647 to require the arrival of animals to be reported through the MAQIS office, and the amendment further increases the penalty provided under s 8 of Act 647. Section 8 amends s 9 of Act 647 to empower an enforcement officer either to refuse to permit the landing or removing of diseased animals or birds, to destroy, or to detain in quarantine, the diseased animal or bird or carcass. Section 9 amends s 10 of Act 647 to empower the enforcement officer to authorise the landing of any dog or cat imported by sea, and also amends s 10(2) to require the death or loss of dog or cat to be notified to the veterinary authority through the MAQIS office. The amendment to s 10(3) meanwhile increases the penalty provided under the section. Section 10 amends s 11 of Act 647 to empower an enforcement officer to destroy an animal or bird which is found to be suffering from injury which cannot be relieved and to dispose of the carcass. Section 11 amends s 12 of Act 647 to provide that the written permission to land from any ship or to remove from any aircraft, train or vehicle, the carcass of any animal or bird shall be obtained from an enforcement officer who shall give directions as to the manner of its disposal. The amendment also increases the penalty provided under s 12(2) of Act 647. Section 12 amends s 13 of Act 647 to enable an enforcement officer to seize and detain any bedding, litter, fodder, dung, semen, personal
182
The Law Review 2013
belongings or other substance or material imported which may convey or spread disease. Section 13 amends s 14 of Act 647 to confer the power of issuance of licence to export any animal, bird or carcass to an enforcement officer in accordance with the MAQIS Act. Section 14 inserts a new s 14A into Act 647 which provides for the prohibition on exportation of carcass, product of animals or birds, etc., without a permit. Section 15 deletes s 15 of Act 647. Section 16 amends s 16 of Act 647 to include birds and other parts or products of birds or animals as requiring to go for examination prior to exportation. Section 17 substitutes s 17 of Act 647 with a new s 17, which provides that the veterinary authority may refuse permit to allow other parts or products of birds or animals infected with any disease to be exported. Sections 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30 and 31 amend ss 18, 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 33, 34 and 35 of Act 647 respectively to increase the penalties provided under these sections of the Act. Section 32 amends ss 36(4) and 36(5) of Act 647 to provide for the better management of animals and birds seized, by having it dealt with according to s 68 of Act 647, and the amending section also increases the penalty provided under the two provisions of the Act. Sections 33, 34, 35, 36 and 37 amend ss 38, 39, 40, 41 and 42 of Act 647 respectively to increase the penalties provided under the provisions of the Act. Section 38 amends s 44(1) of Act 647, which increases the penalty to be imposed for offences under the said section. With this amendment, the maximum fine is increased to RM50,000 and the maximum term of imprisonment to one year. Section 39 amends s 45 of Act 647 for better management of animals seized by the authority, by having it dealt under s 68 of the Act. Sections 40, 41, 42, 43, 44, 45 and 46 amend ss 47, 50A, 51, 55, 58, 60 and 61 of Act 647 respectively to increase the penalties provided under the said sections of the Act. Section 47 amends Act 647 by substituting for Part VII a new Part VII. This Part contains provisions on powers relating to enforcement, comprising new ss 67, 67A, 68, 68A, 68B, 69, 69A, 69B, 69C, 69D and 69E. Sections 48, 49 and 50 amend ss 70, 71 and 72 of Act 647 respectively to increase the penalties under the said sections of the Act.
Legislation Update
183
Section 51 introduces a new s 73A into Act 647 which deals with offences committed by a body corporate and its agents and servants. It also introduces a new s 73B which provides for the compounding of offences, and the amending section also introduces a new s 73C to give the jusrisdiction to the Magistrate Court to try any offence under the Act. Section 52 substitutes s 74 of Act 647 with a new section to provide a comprehensive provision on forfeiture of animals or birds, or the carcasses, etc., or any product of animals or birds, etc.. Section 53 introduces a new s 74A into Act 647 to deal with the carcass, etc., or any product of animals or birds, etc., in respect of which there is no prosecution. Section 54 amends s 76 of Act 647 on the conduct of prosecution under the Act. Section 55 substitutes a new s 79 of Act 647 which requires any person who has charge of any animals or birds to apply brands or other marks of identification on those animals and birds, failure to comply with the requirement is an offence. Section 56 amends s 84 of Act 647 to increase the penalty provided under the said section, and also introduces a new s 84(1A) to require a person who has received a written permission from the Director General of Veterinary Services to apply for a permit to import in accordance with the MAQIS Act. It also amends s 84(2) of Act 647 to provide that the contravention of s 84 shall be dealt with in accordance with the MAQIS Act. Section 58 amends s 86 of Act 647 on the power of the Minister to make rules by adding new matters in paragraph (2)(ka) which will extend the Ministers power to regulate the licensing, control, supervision and inspection of places in which animals or birds are or may be kept in captivity for sale, export or exhibition, recreation or sports, research or scientific experiments. The amending section also deletes ss 86(2)(c) and 86(2)(e) of the Act on the power of the Minister to make rules on matters specified in the paragraphs, as well as provides for higher penalties for the contravention of any of the rules made by the Minister in the new s 86(3). Section 59 provides for the transitional and saving provision.
184
The Law Review 2013
Note on Commencement of Acts

Name of Act Food Analysts Act 2011 (Act 727) International Transfer of Prisoners Act 2012 (Act 754) Postal Services Act 2012 (Act 741) Subordinate Courts (Amendment) Act 2010 (Act A1382) Digested at [2011] LR 376 [2012] LR 668 Date of operation March 15, 2014 February 21, 2013 Source PU(B) 75/2013 PU(B) 59/2012
[2012] LR 145 [2010] LR 519
April 1, 2013 March 1, 2013
PU(B) 94/2013 PU(B) 45/2013

LR 2013 V1

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

LR 2013 V1

Загружено:

Авторское право:

Доступные форматы

1

Intensity of Judicial Review: The Way Forward

The Law Review 2013

Lord Mance added this observation:

2 [1977] AC 195. 3 [2003] 2 AC 411.

Intensity of Judicial Review: The Way Forward

4 [1976] 2 MLJ 112. 5 [2005] 2 AC 68.

The Law Review 2013

Intensity of Judicial Review: The Way Forward

The Law Review 2013

Intensity of Judicial Review: The Way Forward

And this is what Lord Pearce said:

The Law Review 2013

In the same case, Lord Templeman said:

15 [1995] 2 MLJ 317. 16 [1987] AC 514. 17 [1991] 1 AC 696.

Intensity of Judicial Review: The Way Forward

The Law Review 2013

Intensity of Judicial Review: The Way Forward

The Law Review 2013

Intensity of Judicial Review: The Way Forward

The Law Review 2013

29 [1988] 2 MLJ 12.

The Law Review 2013

The Law Review 2013

The Law Review 2013

The Law Review 2013

The Law Review 2013

86 Finance Act 2013, s23.

The Law Review 2013

Companies Act 1965 [Act 125]

The Law Review 2013

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

(b) both of his parents are, in relation to him, absent parents.

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

Section 5. Section 71(1)(d). Section 71(1)(f). Section 71(1)(e). Section 85(2).

The Law Review 2013

Right of Illegitimate Children to Claim Maintenance in Malaysia: A Right or a Privilege?

The Law Review 2013

Digital Sampling: How Creator-Friendly is Copyright Law?

The Law Review 2013

Digital Sampling: How Creator-Friendly is Copyright Law?

The Law Review 2013

Digital Sampling: How Creator-Friendly is Copyright Law?

The Law Review 2013

Digital Sampling: How Creator-Friendly is Copyright Law?