THE OFFICIAL REPOSITORY OF
MALAYSIAN JUDGMENTS & RULINGS

[2018] MYCA 233 ENGLISH

Lim Hui Jin v CIMB Bank Berhad and 3 Others
Suit Number: Civil Appeal No. A-01(IM)(NCVC)-179-05/2017  

JUDGMENT

[1] In the court below the appellant by Originating Summons prayed for the following orders against the respondents:

(a) the release of all monies together with all accrued interest in his CIMB Bank Account No. 25164 (“the appellant’s account”) held/ frozen and seized by the respondents;

(b) costs and other reliefs.

[2] At the conclusion of the hearing, the learned High Court Judge dismissed the appellant’s application on the ground that he failed to prove his case on the balance of probabilities, hence the present appeal before us. Having heard arguments by both sides, we reserved judgment to a date to be fixed. We have now reached a unanimous decision and this is our judgment.

[3] First, the salient facts. Pursuant to a freezing order issued by the police under section 44(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (“the AMLATFA”), the appellant’s account was frozen with effect from 24.6.2014. Paragraph 3 of the freezing order expressly states that the order was valid for 90 days, which means it would cease to have effect on 21.9.2014 if the appellant was not charged with an offence under the AMLATFA or a terrorism financing offence, as the case may be. The 90-day period is prescribed by section 44(5) of the AMLATFA.

[4] The AMLATFA is now known as the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“the AMLATEPUA”) vide section 3 of the Anti-Money Laundering and Anti-Terrorism Financing (Amendment) Act 2014 [Act A1467] with effect from 1.9.2014 (see P.U.(B)400/2014). Section 52A of the AMLATEPUA reads as follows:

Expiry of seizure order

52A. A seizure order made under this Act shall cease to have effect after the expiration of twelve months from the date of the seizure order, or where there is a prior freezing order, twelve months from the date of the freezing order, if the person against whom the order was made has not been charged with an offence under this Act.”

[5] This new provision is not found in the AMLATFA. On 11.9.2014, that is ten days after the coming into force of the AMLATEPUA, and before the freezing order issued under section 44(1) of the AMLATFA expired on 21.9.2014, a seizure order was issued by the Public Prosecutor on the appellant’s account pursuant to section 50(1) of the AMLATEPUA.

[6] The basis for the seizure order was that the monies in the appellant’s account are the subject matter of an offence under section 4(1) of the AMLATEPUA allegedly committed by his mother, one Tan Hoo Eng, following Sg. Bernam Police Report No. 2950/14.

[7] Tan Hoo Eng has since been charged with 21 counts of money laundering under section 4(1)(a) of the AMLATEPUA. We were told that the criminal proceeding against Tan Hoo Eng is pending before the Sessions Court at Ipoh, Perak.

[8] There is no ambiguity in section 52A of the AMLATEPUA. What it means is that a seizure order issued under section 50(1) ceases to have effect in the following two situations:

(a) if the person from whom the property was seized has not been charged with an offence under the AMLATEPUA on expiration of the seizure order, which is 12 months from the date of the seizure order; or

(b) if the person from whom the property was seized has not been charged with an offence under the AMLATEPUA after the expiration of a prior freezing order, if any, which is 12 months after the issuance of the freezing order.

[9] In the present case, there was a prior freezing order issued on the appellant’s account before it was seized on 11.9.2014. Therefore, the seizure order ceased to have effect on 23.6.2015. The legislative intent behind section 52A is clear, and that is for the release of the property to the person from whom it was seized if the person has not been charged with an offence under the AMLATEPUA on expiration of the freezing or seizure order, whichever is earlier.

[10] Thus, by virtue of section 52A of the AMLATEPUA, the seizure order issued on the appellant’s account on 11.9.2014 expired on the following dates:

(i) on 23.6.2015, i.e. 12 months after the issuance of the freezing order on 24.6.2014.

(ii) on 10.9.2015, i.e. 12 months after the issuance of the seizure order on 11.9.2014.

[11] When the present Originating Summons was filed on 5.5.2016, the respondents continued to freeze the appellant’s account although the freezing and seizure orders had long ceased to have effect by reason of the fact that the appellant had not been charged with an offence under the AMLATEPUA on expiration of these two orders.

[12] We note that both section 44(5) of the AMLATFA and section 44(5) of the AMLATEPUA limit the lifespan of a freezing order issued under section 44(1) to 90 days only, unless the person against whom the freezing order was made has been charged with an offence under the AMLATFA or the AMLATEPUA or a terrorism financing offence before the order ceases to have effect. We reproduce below section 44(5) for ease of reference:

“(5) An order made under subsection (1) shall cease to have effect after ninety days from the date of the order, if the person against whom the order was made has not been charged with an offence under this Act or a terrorism financing offence, as the case may be.”

[13] On the face of it, there is a contradiction in terms between section 44(5) and section 52A of the AMLATEPUA. Whilst the former prescribes a lifespan of only 90 days for a freezing order, the latter prescribes a longer lifespan of 12 months from the date of a “prior freezing order” for the purposes of computing the lifespan of a seizure order.

[14] Learned counsel for the respondents contended that section 52A of the AMLATEPUA does not apply retrospectively and that therefore the seizure order, which was issued pursuant to the freezing order dated 24.6.2014 (issued under section 44(1) of the AMLATFA) is not subject to the 12-month limitation period prescribed by section 52A.

[15] With due respect, we find no substance to the argument. The seizure order was effected on the appellant’s account on 11.9.2014, well after the coming into force of section 52A on 1.9.2014. The limitation period therefore expired on 23.6.2015, i.e. 12 months after the issuance of the freezing order on 24.6.2014, or latest by 10.9.2015, i.e. 12 months after the issuance of the seizure order on 11.9.2014. Whichever date is to be taken into consideration, the seizure order had ceased to have effect by the time the present Originating Summons was filed by the appellant.

[16] Since the seizure order had expired by operation of section 52A of the AMLATEPUA and the appellant has not been charged with an offence under the Act or a terrorism financing offence, the appellant’s account should have been released on expiration of the seizure order.

[17] In fact, going by section 44(5) of both the AMLATEPUA and the AMLATFA, the appellant’s account should have been released earlier, i.e. on 21.9.2014 (90 days after the issuance of the freezing order on 24.6.2014) and not on 10.9.2015 (12 months after the issuance of the seizure order on 11.9.2014 as prescribed by section 52A).

[18] The 2nd, 3rd and 4th respondents do not in fact dispute that the freezing and seizure orders had expired, but argued that the orders should remain in force, for the following reasons:

(1) the seizure order is valid until otherwise revoked or varied under section 50(1) of the AMLATEPUA;

(2) the appellant’s account is the subject matter of an offence committed by the appellant’s mother Tan Hoo Eng under section 4(1)(a) of the AMLATEPUA;

(3) the freezing and seizure orders relate to a criminal investigation and as such could not be reviewed by the court in a civil proceeding: City Growth Sdn Bhd & Anor v The Government of Malaysia [2005] 7 CLJ 422; Simplex Sdn Bhd v Mohd Samsol bin Muzer & Anor [2015] 9 MLJ 78; R v Sloan [1990] 1 NZLR 474.

[19] As for the 1st respondent (CIMB Bank), its answer to the appellant’s claim was that it had been advised by the 2nd and 3rd respondents to hold on to the freezing and seizure orders as there is a criminal proceeding pending against the appellant’s mother under the AMLATEPUA and as such the two orders should continue to operate against the appellant’s account until after the disposal of the criminal proceeding.

[20] Section 50(1) of the AMLATEPUA, which all four respondents relied on to justify the continued freezing of the appellant’s account, reads:

50. Seizure of moveable property in financial institution

(1) Where the Public Prosecutor is satisfied on information given to him by an investigating officer that any movable property or any accretion to it which is-

(a) the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;

(b) terrorist property;

(c) the proceeds of an unlawful activity; or

(d) the instrumentalities of an offence,

is in the possession, custody or control of a financial institution, he may, notwithstanding any other written law, by order direct that such moveable property or any accretion to it in the financial institution be seized by the investigating officer or by order direct the financial institution not to part with, deal in or otherwise dispose of such movable property or any accretion to it, in whole or in part, until the order is varied or revoked.”

[21] CIMB Bank’s argument was that unless and until the seizure order is varied or revoked by the Public Prosecutor, it is in no position to release the appellant’s account or to allow him to operate it until further notice by the 2nd and 3rd respondents. The bank’s predicament is understandable given the threat of severe penal sanction by section 50(3), which reads:

“(3) Any person who fails to comply with an order of the Public Prosecutor under subsection (1) commits an offence and shall on conviction, be liable to a fine not exceeding five times the amount which was parted with, dealt in or otherwise disposed of in contravention of the Public Prosecutor’s order or five million ringgit, whichever is the higher or to imprisonment for a term not exceeding seven years, or to both, and in the case of a continuing offence, shall in addition be liable to a fine not exceeding five thousand ringgit for each day or part thereof during which the offence continues to be committed.”

[22] In acceding to the respondents’ argument that it is lawful for the respondents to continue freezing the appellant’s account despite the expiration of the freezing and seizure orders, the learned judge reasoned as follows:

“[21] I hold further that although the period of twelve (12) months has lapsed and there is no prosecution preferred as yet against the plaintiff, his right to access the funds in the said frozen and seized account immediate and/or absolute, it is subject always to the order being varied and/or revoked as the case may be (see Section 50(1) of the AMLATFA, supra). However, such is not the case here. The court must be slow to interfere with the enforcement matter so as not to interfere in the relevant authorities’ investigation and subsequent prosecution of the wrong doer. The power of investigation is the responsibility of the enforcement agency while the Attorney General, has the power to prosecute. The court must not be used as an instrument to derail and/or hamper these two institutions from carrying out their responsibilities in rooting out criminal wrong doings.”

[23] With due respect to the learned judge, the reasoning is seriously flawed. Section 50(1) of the AMLATEPUA must not be read in isolation. It must be read together with section 52A. Had the learned judge done so, she would have realized that the Public Prosecutor’s power to vary or revoke the seizure order could only be exercised before the expiration of the order, and not after.

[24] Clearly, once the seizure order had expired by effluxion of time, there is nothing for the Public Prosecutor to vary or revoke. To hold otherwise would be to violate Article 13(1) of the Federal Constitution, which provides that no person shall be deprived of property save in accordance with law.

[25] Courts are not allowed to usurp the function of the legislature by reading words into the statute. This is familiar law. Suffice it if we cite the case of Government of Malaysia v Mohamed Amin bin Hassan [1985] 1 LNS 79; [1986] 1 MLJ 224 where the Supreme Court made the following observations:

"In the matter of construction it is well to remember that in Magor & St Mellons Rural District Council v Newport Corporation [1952] AC 189 191 the House of Lords has laid down clearly that in construing a statute the duty of the court is limited to interpreting the words used by the legislature and it has no power to fill in any gaps disclosed. To do so would be to usurp the function of the legislature. In that case Lord Simonds made this important observation:

‘The duty of the court is to interpret the words that the legislature has used; those words may be ambiguous, but, even if they are, the power and duty of the court to travel outside them on a voyage of discovery are strictly limited.’ ”

[26] We were referred to section 54(3) of the AMLATEPUA by the respondents for the proposition that since the freezing and seizure orders relate to a criminal investigation, they cannot be reviewed by the court in a civil proceeding. Section 54(3) provides as follows:

“(3) For so long as a seizure of any property under this Act remains in force, no action, suit or other proceedings of a civil nature shall be instituted, or if it is pending immediately before such seizure, be maintained or continued in any court or before any other authority in respect of the property which has been so seized, and no attachment, execution or other similar process shall be commenced, or if any such process is pending immediately before such seizure, be maintained or continued, in respect of such property on account of any claim, judgment or decree, regardless whether such claim was made, or such judgment or decree was given, before or after such seizure was effected, except at the instance of the Federal Government or the Government of a State, or at the instance of the local authority or other statutory authority, or except with the prior consent in writing of the Public Prosecutor.”

[27] The provision clearly does not apply. The operative words are “For so long as a seizure of any property under this Act remains in force”. In the present case, the seizure order on the appellant’s account is no longer in force as it had expired, the first time on 23.6.2015 (12 months after the issuance of the freezing order on 24.6.2014) and the second time on 10.9.2015 (12 months after the issuance of the seizure order itself on 11.9.2014).

[28] As we indicated earlier, by virtue of section 44(5) of both the AMLATFA and the AMLATEPUA, the freezing order (pursuant to which the seizure order was made on 11.9.2014) had in fact ceased to have effect on 21.9.2014 (90 days after it was issued on 24.6.2014).

[29] It is important to bear in mind that the proceeding in the High Court was not a proceeding to forfeit the monies in the appellant’s account. The sole purpose of the proceeding was to determine whether the appellant’s account should be released, given the fact that he has not been charged with an offence under the AMLATEPUA after the expiration of the freezing and seizure orders.

[30] Under the AMLATEPUA, there are two situations where seized property ‘shall’ be forfeited. The first situation is where there is a prosecution for an offence under section 4(1) or a terrorism financing offence. The second situation is where there is no such prosecution. The first situation is regulated by section 55, which reads:

55. Forfeiture of property upon prosecution for an offence

(1) Subject to section 61, in any prosecution for an offence under subsection 4(1) or a terrorism financing offence, the court shall make an order for the forfeiture of any property which is proved to be-

(a) the subject-matter or evidence relating to the commission of such offence;

(b) terrorist property;

(c) the proceeds of an unlawful activity; or

(d) the instrumentalities of an offence,

where-

(aa) the offence is proved against the accused; or

(bb) the offence is not proved against the accused but the court is satisfied that-

(i) the accused is not the true and lawful owner of such property; and

(ii) no other person is entitled to the property as a purchaser in good faith for valuable consideration.

(2) Where the offence is proved against the accused but the property referred to in subsection (1) has been disposed of, diminished in value or cannot be traced, the court shall order the accused to pay as a penalty a sum which is equivalent to, in the opinion of the court, the value of the property, and any such penalty shall be recoverable as a civil debt due to the Government of Malaysia and shall not be subject to any period of limitation prescribed by any written law.

(3) In determining whether the property is-

(a) the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;

(b) terrorist property;

(c) the proceeds of an unlawful activity; or

(d) the instrumentalities of an offence,

the court shall apply the standard of proof required in civil proceedings.”

[31] There is no mention of seized or frozen property in this section but it provides for mandatory forfeiture of ‘any property’ if it is proved to be property falling under paragraphs (a) to (d) of subsection (1). The prerequisite is that there must be a prosecution under section 4(1) or a terrorism financing offence before the court could make a forfeiture order. Section 55(1) expressly provides that a forfeiture order can only be made if the court is satisfied that the requirements of paragraphs (aa) or (bb) are fulfilled.

[32] The second situation is regulated by section 56, which provides as follows:

"56. Forfeiture of property where there is no prosecution.

(1) Subject to section 61, where in respect of any property seized under this Act there is no prosecution or conviction for an offence under subsection 4(1) or a terrorism financing offence, the Public Prosecutor may, before the expiration of twelve months from the date of the seizure, or where there is a freezing order, twelve months from the date of the freezing, apply to a judge of the High Court for an order of forfeiture of that property if he is satisfied that such property is-

(a) the subject-matter or evidence relating to the commission of such offence;

(b) terrorist property;

(c) the proceeds of an unlawful activity; or

(d) the instrumentalities of an offence.

(2) The judge to whom an application is made under subsection (1) shall make an order for the forfeiture of the property if he is satisfied-

(a) that the property is-

(i) the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;

(ii) terrorist property;

(iii) the proceeds of an unlawful activity; or

(iv) the instrumentalities of an offence; and

(b) that there is no purchaser in good faith for valuable consideration in respect of the property.

(3) Any property that has been seized and in respect of which no application is made under subsection (1) shall, at the expiration of twelve months from the date of its seizure, be released to the person from whom it was seized.

(4) In determining whether the property is-

(e) the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;

(f) terrorist property;

(g) the proceeds of an unlawful activity; or

(h) the instrumentalities of an offence,

the court shall apply the standard of proof required in civil proceedings.”

(emphasis added)

[33] Section 56 speaks of forfeiture of “any property seized under this Act” where there is no prosecution or conviction for an offence under section 4(1) or a terrorism financing offence. The appellant’s account falls under this class of properties. However, before the provision is activated, there must first be an application by the Public Prosecutor for forfeiture of the seized property and the application must be made within 12 months from the date of seizure, failing which subsection (3) mandates that the property must be returned to the person from whom it was seized. There was no such application by the Public Prosecutor in the present case.

[34] At first blush, there appears to be a conflict between section 55(1) and sections 52A and 56(3) of the AMLATEPUA. Whilst both section 52A and section 56(3) envisage the release of the seized property if no criminal prosecution is instituted within 12 months from the date of the freezing or seizure order, section 55(1) on the other hand stipulates that where there is a prosecution for an offence under section 4(1) or a terrorism financing offence, the seized property must be forfeited if the requirements are met, that is, if the property is proved to be-

“(a) the subject-matter or evidence relating to the commission of such offence;

(b) terrorist property;

(c) the proceeds of an unlawful activity;

(d) the instrumentalities of an offence,

where-

(aa) the offence is proved against the accused; or

(bb) the offence is not proved against the accused but the court is satisfied that-

(i) the accused is not the true and lawful owner of such property; and

(ii) no other person is entitled to the property as a purchaser in good faith for valuable consideration.”

[35] Having given the matter careful consideration, we do not think that the effect of section 55(1) is to override sections 52A and 56(3) of the AMLATEPUA. The three provisions cater to two different situations. Section 52A and section 56(3) provide for the release or return of the seized property where there is no prosecution against the person from whom the property was seized, whereas section 55(1) provides for forfeiture where there is a prosecution under section 4(1) or a terrorism financing offence.

[36] The prosecuted person under section 55(1) must necessarily refer to the person from whom the property was seized pursuant to section 50(1) of the AMLATEPUA, who in the present case is the appellant. But the fact is, the appellant has not been prosecuted for an offence under section 4(1) or a terrorism financing offence.

[37] In a situation where the seized property is required to be released to the person from whom it was seized after the expiration of the freezing or seizure order as envisaged by section 52A and upon expiration of the period prescribed by section 56(3), it stands to reason that the property cannot be forfeited by way of a proceeding under section 55(1), that is, by way of a criminal prosecution against some other person for an offence under section 4(1) or a terrorism financing offence.

[38] To allow the Public Prosecutor to do so will be to allow him to ignore and circumvent the limitation period prescribed by both section 52A and section 56(3) of the AMLATEPUA. That will defeat the object behind the two provisions rather than to put their object into effect, which is for the release or return of the property to the person from whom the property is seized if there is no prosecution against that person for an offence under the AMLATEPUA after the expiration of the seizure order.

[39] Such construction will also render section 52A and section 56(3) otiose, which could not have been the intention of the legislature when enacting the two provisions. It is axiomatic that Parliament does not legislate in vain. In any event, it is trite principle that where there is a conflict between two or more provisions in a statute of this nature, the court must give a construction that is most favourable to the subject.

[40] It bears repeating that in the present case, the appellant was not charged with an offence under section 4(1) or a terrorism financing offence after the expiration of the freezing and seizure orders. It was his mother who was charged with that offence. Nor did the Public Prosecutor apply for forfeiture of the monies in the appellant’s account under section 56(1). Thus, by virtue of section 52A of the AMLATEPUA, the freezing and seizure orders have ceased to have effect. It must follow that the appellant’s account must be released on expiration of the orders.

[41] The fact that the appellant’s account is the subject matter of a criminal proceeding against the appellant’s mother under section 4(1)(a) of the AMLATEPUA is of no consequence as the freezing and seizure orders relate to the appellant’s account and not his mother’s account, and both orders have ceased to have effect.

[42] Since there is no dispute that the freezing and seizure orders have ceased to have effect, the only issue before the court was whether the appellant’s account should be released on expiration of the freezing and seizure orders. Having regard to the provisions of section 44(5) and section 52A of the AMLATEPUA, the answer to the question has to be in the affirmative.

[43] For all the reasons aforesaid, we allow the appellant’s appeal with costs, to be borne by the 2nd, 3rd and 4th respondents and payable to the appellant. We set aside the order of the High Court dated 23.5.2017 and we allow prayer (1) of the appellant’s Originating Summons. The deposit is to be refunded to the appellant.

Signed

ABDUL RAHMAN SEBLI
Judge
Court of Appeal Malaysia

Dated: 31 July 2018

COUNSEL

For the Appellant: Rabinder Singh, Amir Faliq, Syahidah Ismail, Ng Jun Wei of Messrs AmirFaliq & Syahidah

For the 1st Respondent: Datin Jeyanthi Kannaperan, Marina Nasution of Shearn Delamore & Co

For the 2nd, 3rd and 4th Respondents: Muzila binti Mohamed Arsad, Senior Federal Counsel of the Attorney General’s Chambers

Legislation referred to:

Anti-Money Laundering and Anti-Terrorism Financing (Amendment) Act 2014, Section 3

Anti-Money Laundering and Anti-Terrorism Financing Act 2001, Sections 44(1), 44(5)

Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, Sections 4, 44, 50, 52A, 54, 55

Federal Constitution, Article 13(1)

Judgments referred to:

City Growth Sdn Bhd & Anor v The Government of Malaysia [2005] 7 CLJ 422

Government of Malaysia v Mohamed Amin bin Hassan [1985] 1 LNS 79; [1986] 1 MLJ 224

R v Sloan [1990] 1 NZLR 474

Simplex Sdn Bhd v Mohd Samsol bin Muzer & Anor [2015] 9 MLJ 78

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