1501 Customs officers -- Action against officers for negligence and fraud

10 [1501] PUBLIC AUTHORITIES Customs officers – Action against officers for negligence and fraud – Whether action time-barred – Application of Public Authorities Protection Act 1948 (Act 198) – Whether act of officers done in pursuance of any written law

Summary :

The plaintiff purchased a car from the second defendant and issued a cheque for the excise duty payable on the car to the first defendant, a motorcar salesman employed by the second defendant. The vehicle was handed over to the plaintiff together with its registration book. The plaintiff had possession and uninterrupted usage of the vehicle for just over three years when officers of the Customs and Excise Department seized the vehicle alleging that excise duty on it had not been paid. The sessions court later ordered forfeiture of the car on the ground that excise duty on the vehicle had not been duly paid. The plaintiff issued a writ against the first and second defendants and against the government of Malaysia as the fourth defendant. The cause of action relied on as against the government was the negligence of its servants in handling the documentation of the vehicle vis--vis the payment of excise duty and the issue of the registration card. The plaintiff also alleged that officers in the customs department fraudulently used funds for its own use when the same was for the express purpose of excise duty. The government applied to have the action against it struck out, contending that the acts complained of were acts carried out by servants of the government pursuant to powers/duties under both the Excise Act 1976 (Act 176) and the Road Traffic Ordinance 1958 (Ord 49/1958) and that accordingly, by s 2(a) of the Public Authorities Protection Act 1948 (Act 198), the action as against the government was time-barred.

Holding :

Held, dismissing the application: (1) in respect of the matters covered by the Public Authorities Protection Act 1948 (Act 198), the provisions of the Limitation Act 1953 (Act 254) have no application. There is nothing express or implied in the 1948 Act that would make for the application of any of the provisions of the 1953 Act; (2) and the Public Authorities Protection Act 1948 (Act 198) is such a written law. Section 2(a) of the Public Authorities Protection Act 1948 (Act 198) does prescribe a period of limitation in respect of the suit, action or proceeding referred to therein; (3) s 3 of the Limitation Act 1953 (Act 254) expressly excludes the application of the Act in respect of actions for which a period of limitation has been prescribed by any other written law;the allegation of fraudulent usage of money paid to the customs authorities cannot be said to be an act done in pursuance or execution or intended execution of any written law, of any public duty or authority or in respect of any alleged neglect or default in the execution thereof and accordingly, protection of the Public Authorities Protection Act 1948 (Act 198) cannot be invoked.

Digest :

Ban Guan Hin Realty Sdn Bhd v Sunny Yap Chiok Sai & Ors [1989] 1 MLJ 131 High Court, Kuala Lumpur (VC George J).

1502 Director of Forestry -- Powers of

10 [1502] PUBLIC AUTHORITIES Director of Forestry – Powers of – Director of Forestry imposing condition in timber licence relating to shipment of logs – Whether condition validly imposed – Forest Enactment 1968 (Sabab), s 42(1)(c)(i) & (iv)

Summary :

D1 had delegated to D2 the power to impose conditions in timber licences issued under the Forest Enactment 1968 relating to the transportation of forest produce. D2 was empowered to stipulate in the timber licence that a licensee shall only export timber through and by any vessel nominated and approved by D1. D3 was subsequently appointed as the agent of D1 to nominate and approve vessels for such purposes. P's application to D3 to have ships of its principal nominated and approved for transporting timber logs for export was rejected by D3 without any reason. P had been carrying on business as shipping agent for vessels carrying timber logs for export. P applied for an injunction to restrain D3 from holding themselves out as the authority to regulate the export or carriage of timber logs from Sabah. As against D1 and D2, P applied for declarations that the appointment of D3 by D1 as the authority to nominate and approve vessels was unlawful, null and void and that D2 had no power to impose the condition in question in any timber licence issued under the Forest Enactment 1968. A preliminary issue relating to the locus standi of P to bring the application was raised at the hearing. It was contended that P was not entitled to bring the application as it did not have sufficient interest in the matter.

Holding :

Held, allowing P's application against D3: (1) in the instant case, P was an aggrieved party as its right to carry on business as shipping agent had been adversely affected by D3's rejection of its application. Further, P had sufficient interest in the matter to support its application. P, accordingly, had the locus standi to bring the application; (2) the condition regarding the shipment of logs was validly imposed under the Forest Enactment 1968. D2 had the power to impose the condition in question in any timber licence issued by him. Accordingly, such a condition is intra vires the Enactment and is valid. P's application for the declarations against D1 and D2 was rejected by the court; (3) however, P's application for an injunction against D3 was not frivolous or vexatious. The appointment of D3 was not lawful under the Forest Enactment 1968. The powers of D3 did not authorize it to deal with matters under the Forest Enactment 1968. Under the Enactment, matters relating to forestry are vested in the Director of Forestry and officers appointed thereunder. In the result, P's application for an injunction against D3 was granted by the court.

Digest :

Syarikat Perkapalan Selatan Sabah Sdn Bhd v State Government of Sabah & Ors [1991] 1 MLJ 370 High Court, Kota Kinabalu (Syed Ahmad Idid JC).

1503 Director of Forests -- Revocation of timber licence

10 [1503] PUBLIC AUTHORITIES Director of Forests – Revocation of timber licence – Controlling shares in licensee company transferred – Whether action for damages against Director of Forests barred by limitation – Whether revocation of licence an act done in execution of public duty – Time from which limitation period begins to run – Sarawak Forest Ordinance (Sarawak Cap 126), ss 2(2) & 55 – Public Authorities Protection Act 1948, s 2(a)

Summary :

The plaintiff was the holder of a forest timber licence which was revoked by the Director of Forests ('the first defendant') on 11ÊMarch 1987. The licence was issued by the first defendant under s 55 of the Sarawak Forest Ordinance (Sarawak Cap 126) ('the Forest Ordinance') on 26 May 1981 and was valid for ten years. In his letter dated 15 May 1987, the first defendant stated that the licence was revoked because the plaintiff had breached s 2(2) of the Forest Ordinance in that it had transferred the controlling shares in the company since the date of issue of the licence and had entered into an agreement with another company, the effect of which was that the benefit of the licence went to the other company. On 9 March 1993, the plaintiff commenced an action against the first defendant for damages. A preliminary issue arose as to whether the plaintiff's suit was barred by the 36-month limitation period as specified in s 2(a) of the Public Authorities Protection Act 1948 ('the PAPA').

Holding :

Held, striking out the plaintiff's suit: (1) the licence was revoked not because there was a breach of the terms of the licence, but because there was a breach of a statutory provision, that is, s 2(2) of the Forest Ordinance. Accordingly, the revocation of the licence was an act done in the execution of a public duty and, under s 2(a) of the PAPA, any claim arising from such an act must be made within 36 months from the date of revocation; (2) based on its pleadings, the plaintiff was injured by a single act of the first defendant, that is, the revocation of its licence on 11 March 1987 and any damage or injury which arose from that singular act. Time began to run from this date and not from the time when the damage or injury ceased. Accordingly, the plaintiff's suit which was filed almost 72 months after the revocation of the licence was barred by limitation by virtue of s 2(a) of the PAPA.

Digest :

Baltim Timber Sdn Bhd v Director of Forests & Ors [1996] 4 MLJ 103 High Court, Kuching (Elizabeth Chapman JC).

1504 Education -- Disciplinary powers of school's head teacher

10 [1504] PUBLIC AUTHORITIES Education – Disciplinary powers of school's head teacher – Whether head teacher could cane and expel student for misconduct – Whether head teacher had exceeded his jurisdiction – Education (School Discipline) Regulations 1959, regs 4 & 8

Summary :

On 16 July 1992 the school's disciplinary committee found one of its students, Mohd Shahrizal ('Shahrizal'), guilty of misconduct and ordered that he should be caned three times and that he should also be expelled from the school ('the first order'). The first respondent who was the school's head teacher, then wrote a letter to the applicants, Shahrizal's parents, to inform them of the first order. Upon an appeal, the school's appellate committee ordered that Shahrizal should be caned twice and that he should be allowed to continue schooling in the school ('the second order'). The applicants applied to the High Court for a certiorari to quash the first and second orders. The applicants also claimed damages from the respondents. The applicants argued, inter alia, that the first respondent had exceeded his jurisdiction and had breached the rule of natural justice.

Holding :

Held, dismissing the claim: (1) the first respondent had not exceeded his jurisdiction in this case. The first respondent had the power to impose punishment as is clear from regs 4 and 8 of the Education (School Discipline) Regulations 1959; (2) concerning the principle of natural justice, it was clear that the court could only review the way the hearings were conducted by the school's disciplinary and appellate committees. The court could not, however, review the punishment imposed by the school's disciplinary and appellate committees. If such a restriction on the court's power was not observed, the court itself would be guilty of usurping power under the guise of preventing the abuse of power; (3) in this case the court was satisfied that there was no breach of the principle of natural justice.

Digest :

Mohd Saad bin Haji Abdul Majid & Anor v Mohd Taib bin Hussin & Anor Originating Motion No 25-19-92 High Court, Seremban (Faiza Tamby Chik J).

1505 Environmental protection -- Whether Environmental Quality Act 1974 applied in Sarawak

10 [1505] PUBLIC AUTHORITIES Environmental protection – Whether Environmental Quality Act 1974 applied in Sarawak – Whether Director General of Environmental Quality may make order in relation to Sarawak – Whether Director General required to supply copies of environmental impact assessment report to public – Whether there was breach of procedural fairness in failure to supply copies

See constitutional law, para IX [60].

Digest :

Ketua Pengarah Jabatan Alam Sekitar & Anor v Kajing Tubek & Ors and other appeals [1997] 3 MLJ 23 Court of Appeal, Kuala Lumpur (Gopal Sri Ram, Ahmad Fairuz and Mokhtar Sidin JJCA).

1506 Estoppel -- Plea of estoppel against public corporation

10 [1506] PUBLIC AUTHORITIES Estoppel – Plea of estoppel against public corporation – Contract to supply electricity to company – Company undercharged by mistake – Whether National Electricity Board estopped from claiming amount – Evidence – Estoppel – Estoppel by negligence – Estoppel by representation – Contract to supply electricity to company – Company undercharged by mistake – Accounts rendered by National Electricity Board utilized by company for costing their products – Whether board estopped from claiming amount – Act constituting board founded on considerations of benefit of public in general – Doctrine of ultra vires – Evidence Act 1950, s 115.

Summary :

The respondent board had contracted to supply electricity to the appellants. By mistake, it had considerably undercharged the appellants and they claimed the amount of RM84,624.01 from the appellants. The High Court gave judgment in favour of the board, the learned trial judge holding that the board was not estopped from claiming the amount although the appellants had utilized the accounts rendered by the board for the purpose of costing their products. The appellants appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) the cases of estoppel by negligence are associated with those cases in which the silence of one under a legal duty to speak or act is regarded as a representation and it is a breach of that duty which is relied upon as creating an estoppel. The doctrine of estoppel by negligence however has no application to the present case because there was an express representation by the servant or agent on behalf of the representator; (2) the plea of estoppel by representation cannot be pleaded against a public corporation on which there is imposed a statutory duty to carry out certain acts in the interest of the public; (3) such public corporation cannot indirectly do, by placing itself under the disability of estoppel, what it could not have directly done by reason of statutory prohibitions; (4) the Electricity Act 1949 (Act 116) constituting the board was founded not so much on consideration of trade as for the benefit of the public in general. The board had a statutory duty to perform to assess the appellants for rates in acccordance with the prescribed tariff for electricity actually supplied and the appellants had a corresponding duty to pay at the scheduled rates for electricity energy consumed. To waive the payment at scheduled rates is prohibited by the doctrine of ultra vires. If the plea of estoppel is allowed, the scheduled rates due in respect of the actual amount of electric energy supplied would be indirectly remitted, which the board could not by any act directly remit. To allow the plea of estoppel would therefore be nullifying the statutory provisions of the Act.

Digest :

Public Textiles Bhd v Lembaga Letrik Negara [1976] 2 MLJ 58 Federal Court, Penang (Gill CJ (Malaya).

Annotation :

[Annotation: See also Re Objection No 1186 of 1962 & Ors [1962] MLJ cxxxviii.]

1507 Housing and Development Board -- Dismissal of employee

10 [1507] PUBLIC AUTHORITIES Housing and Development Board – Dismissal of employee – Necessity to give reasonable notice

Summary :

P was originally employed by the Housing and Development Board (HDB) under a letter of appointment which provided for one month's notice of termination of employment. He was subsequently placed on the permanent establishment of the HDB, subject to their rules and regulations. P was charged with corruption but was granted a discharge amounting to an acquittal. HDB, however, suspended him and he was told to resign. When he refused to do so, they sacked him with one month's pay in lieu of notice. P had been working for HDB for 17 years. He sued for wrongfully dismissal.

Holding :

Held, granting the claim: (1) to be emplaced on the permanent establishment (as distinct from being emplaced on a permanent and pensionable establishment) does not mean that the employee would have security of tenure for life ending on his retirement. His contract may be terminated in accordance with the relevant rules and regulations; (2) in the absence of a provision specifically covering the case in HDB's rules and regulations, it was held that P could be sacked provided that reasonable notice was given to him; (3) under the circumstances, three months' notice was reasonable. The original letter of appointment had been superseded when P was placed on the permanent establishment; (4) however, as this was a contract of service there could not be reinstatement. P was therefore awarded three months' salary by way of damages for wrongful termination of service.

Digest :

Low Pu Tong v Housing and Development Board [1991] 1 MLJ 396 High Court, Singapore (Sinnathuray J).

1508 Limitation of action -- Action time-barred

10 [1508] PUBLIC AUTHORITIES Limitation of action – Action time-barred – Amendment of legislation – Whether statute retroactive in its application – Practice and procedure – Claim for negligence against public authority – Limitation – Expiry of period of limitation – Amendment of legislation – Whether retrospective as to extend expired period – Public Authorities Protection Ordinance 1948, s 2.

Summary :

In this case, the appellant was injured when he fell off a tractor trailer on 19 September 1972. At the time of the accident, the period for instituting the action against the public authority was 12 months, so that the right of action lapsed on 19 September 1973. However, on 13 June 1974, the Public Authorities Protection Ordinance 1948 was amended to extend the period for instituting action to 36 months. The appellant contended that by virtue of the amendment, his action was not time-barred. The claim was dismissed in the High Court see [1979] 2 MLJ 84. The appellant appealed.

Holding :

Held: the amending Act was not truly procedural but affected vested rights and the time for instituting the claim was not enlarged by the amending Act. The amending Act was not retrospective in operation and had no application to a cause of action which was time-barred before the Act was introduced.

Digest :

Goopan s/o Govindasamy v A Subramaniam & Anor [1980] 2 MLJ 64 Federal Court, Kuala Lumpur (Lee Hun Hoe CJ (Borneo).

1509 Limitation of action -- Action time-barred

10 [1509] PUBLIC AUTHORITIES Limitation of action – Action time-barred – Amendment of legislation – Whether statute retroactive in its application – Public Authorities Protection (Amendment) Act 1974 (Act A254) – Practice and procedure – Limitation – Action barred by limitation – Time enlarged by amending statute after action was barred – Whether statute retroactive in its application – Public Authorities Protection Act 1948 (Act 198) – Public Authorities Protection (Amendment) Act 1974 (Act A254).

Summary :

In this case, the respondents in March 1975 brought an action for damages for personal injuries sustained by both of them in a motor accident that took place in April 1972. Section 2(a) of the Public Authorities Protection Act 1948 (Act 198) provided that action shall not lie or be instituted unless it is commenced within 12 months next after the act complained of. With effect from June 1974, this provision was amended to substitute '36 months' for the '12 months'. The question was whether the amending act had retroactive effect so as to enable the respondents to bring their action.

Holding :

Held: the time for the claim in this case was not enlarged by the amending Act. The Act was not retroactive in operation and had no application to a cause of action which was barred before the Act came into operation.

Digest :

Kenderaan Bas Mara v Yew Bon Tew & Anor [1980] 1 MLJ 311 Federal Court, Kuala Lumpur (Raja Azlan Shah CJ (Malaya).

1510 Limitation of action -- Carriage of goods by sea

10 [1510] PUBLIC AUTHORITIES Limitation of action – Carriage of goods by sea – Effect of statutory provision – Whether binds Crown – Carriage of goods by sea – Period of limitation under Carriage of Goods by Sea Ordinance (Cap 173), art III r 6 – Whether binds Crown – Interpretation and General Clauses Ordinance (Cap 2), s 57.

Summary :

The Crown is not bound by the special period of one year's limitation in art III r 6 of the Carriage of Goods by Sea Ordinance (Cap 173, 1955 Ed) in the absence of an express provision or necessary implication by reason of s 57 of the Interpretation and General Clauses Ordinance (Cap 2, 1955 Ed).

Digest :

British Lighterage Co v Lord High Admiral of the United Kingdom [1961] MLJ 195 Court of Appeal, Singapore (Rose CJ, Tan Ah Tah and Wee Chong Jin JJ).

1511 Limitation of action -- Whether suit out of time

10 [1511] PUBLIC AUTHORITIES Limitation of action – Whether suit out of time – Amendment of legislation – Administrative law – Suit against Government – Whether suit out of time – Public Authorities Protection Ordinance 1948 – Public Authorities Protection (Amendment) Act 1974 (Act A 252).

Summary :

In this case, the respondent had brought a suit for loss of support and dependency and for damages arising out of the death of her son who was killed when travelling in a RMAF helicopter which crashed in Kuantan. The appellant had applied for the proceedings to be set aside for non-compliance with the Public Authorities Protection Ordinance 1948, as the suit was brought over 12 months after the accident. The application had been dismissed in the High Court and the appellant appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) as the pleadings stood, it could not be taken for granted that the act of the government complained of was an act done in pursuance or execution or intended execution of any written law or of any public duty or authority or in respect of any alleged neglect or default in the execution of any such written law, duty or authority, as stipulated by s 2 of the Public Authorities Protection Ordinance 1948; (2) the period of limitation of 12 months had been extended to 36 months by the Public Authorities Protection (Amendment) Act 1974 (Act A252) and it was arguable that this amendment was retrospective, so as to save the suit.

Digest :

Government of Malaysia v Ooi Kheng Kee [1976] 1 MLJ 171 Federal Court, Kota Bharu (Suffian LP, Raja Azlan Shah and Wan Suleiman FJJ).

1512 Local authority -- Discretionary power

10 [1512] PUBLIC AUTHORITIES Local authority – Discretionary power – Improper exercise of – Whether suit time-barred – Local authority – Discretionary power – Improper exercise of – Refusal to pass amended plan – Whether ultra vires the ordinance – Failure to have recourse to remedy specified in ordinance – Municipal Ordinance (SS Cap 133), s 144.

Summary :

The plaintiffs are the registered owners of a piece of land situated within the municipal boundary. They alleged that in December 1960, the then municipal engineer informed their architect that the defendants had approved their application to erect 10 units of buildings shown on plan No 8720, provided that septic tanks were re-sited. They alleged that the plan showed the front of the buildings to be of the ordinary dwelling house type, but the defendants contended that the plan as a whole showed that the buildings to be erected were of the dwelling house type. It was common ground that the plaintiffs completed seven of the ten units shown on the plan, and that they departed from the passed plan when they constructed fronts of the ground floor of the buildings for use as shops closed by shutters and collapsible iron gates. The defendants contended that in departing from the original plan, the plaintiffs had altered entirely the nature of the user of the buildings. In November 1961, the plaintiffs' architect submitted to the defendants plan No 9322 showing departure from passed plan 8720 and in December 1961, the municipal engineer returned plan 9322 to the architect stating that the 'application was refused as the proposed buildings were originally intended for dwelling purposes only, and conversion into shophouses necessitates provision of 20 ft service road which is not possible'. The plaintiffs then made a personal application to the President of the Municipal Council and their architect wrote to the municipal engineer in January 1962. The engineer replied stating that the defendants had already considered the plaintiffs' previous applications and that the waiver of a 20 ft service road was not possible. There followed various protracted correspondence, the engineer replying the matter was still 'under consideration'. Finally on 21 May 1962, the plaintiffs' solicitor wrote pointing out that they were suffering loss by the delay in finalizing the issue. On 27 June 1962, the municipal engineer wrote to the plaintiffs' architect informing him that the 'Councillors have approved the amendment as shown in the plan'. In this action, the plaintiffs claimed, inter alia, 'a declaration that the defendants' disapproval of amended plan No 9322 to pass plan No 8720 was wrongful and ultra vires and by maintaining their wrongful disapproval and wrongfully refusing or neglecting to approve the aforesaid amended plan despite repeated requests until 27 June 1962, had caused loss to the plantiffs, and also claimed general and special damages'. The defendants contended that they acted at all material times reasonably and in bona fide exercise of their duties and powers as Municipal Councillors and they denied liability in damages. The following issues of law were raised: (a) were the defendants acting ultra vires the ordinance in refusing to pass plan No 9322? (b) were the plaintiffs guilty of an offence under s 144 of the Municipal Ordinance (SS Cap 133) when they departed from passed plan No 8720 without the written permission of the Municipal Councillors and, therefore, could they claim damages in respect of and arising out of their illegal acts? (c) would the plaintiffs, who have failed to have recourse to the remedy specifically provided by s 144 of the ordinance be precluded from complaining against the defendants or from claiming any damages which may arise out of their failure to pursue their proper remedy? and (d) was the action barred by limitation under the Public Authorities Protection Ordinance 1948?

Holding :

Held: (1) the defendants, in refusing to pass the amended plan, were acting ultra vires the ordinance; (2) there was no point in pursuing the second issue since it was clear that the plaintiffs' contention was that their cause of action arose out of the refusal to approve the amended plan; (3) the answer to the third issue would also be the answer to the second issue; (4) time would begin to run for the purposes of the Public Authorities Protection Ordinance 1948 from the time when the act was caused, not from the time when the injury or damage ceased, or in the case of a continuing injury or damage, when the act causing the injury or damage ceased. If the refusal to approve the amended plan by the defendants was actionable, there had indeed been a continuation of the act, and therefore the plaintiffs were correct in saying that the act causing damage ceased only from 27 June 1962. It followed that this suit was not time-barred. However in view of the answer to the third issue of law above, the fact that the suit was not time-barred could not affect the action; (5) there was no cause of action and the suit was dismissed with costs. Per curiam: even where the specific remedy provided is for failure to perform, or in this case the improper exercise of a discretionary power, the court would have to seek the intention of the Legislature É the obvious intention is to exclude an action for damages.

Digest :

Mak Koon Yong & Anor v Municipal Councillors, Malacca [1967] 1 MLJ 256 High Court, Malacca (Wan Suleiman J).

1513 Local authority -- Power of

10 [1513] PUBLIC AUTHORITIES Local authority – Power of – Whether empowered to collect monetary contributions from housing developers for landscaping and tree planting in housing schemes – Town and Country Planning Act 1976 (Act 172), ss 21(3)(g) & 22(3)

Summary :

In the instant case, P sought the following declarations against D, a local authority: (a) that the payment by them to D of the sum of RM26,500 for tree planting contribution was ultra vires the Local Government Act 1976 (Act 171) and was null and void; (b) that the car park contribution of RM33,300 paid by them to D was also ultra vires all of the legislations governing the local government authorities; and (c) that P was entitled to the refund of the above sums paid under protest to D. P had earlier applied for and obtained planning permission to build flats and shophouses in a housing scheme. Under the principal layout plan approved by D, P had to carry out landscaping work and tree planting according to D's requirement and had agreed to pay monetary contribution to D at the rate fixed by them. In addition, P was to provide sufficient car parks in accordance with D's standard requirement and supervision. Subsequently, D imposed a condition requiring P to provide additional car parks. P paid the monetary contributions for landscaping and tree planting to D under protest. A further sum was also paid by P to D in lieu of the construction of the additional car parks which P had failed to provide in the housing scheme. The issue before the court was whether D was empowered to impose, demand or collect from P the monetary contributions in question.

Holding :

Held, allowing P's application: (1) s 22(3) of the Town and Country Planning Act 1976 (Act 172) gives power to the local planning authority to impose conditions upon the granting of planning permission. In addition, any direction to a developer for carrying out landscaping and planting of trees in a housing scheme does come within the meaning of 'any other matter' in s 21(3) of the 1976 Act which the local planning authority considers necessary for purposes of planning. However, the local planning authority is not empowered in law to demand from the developer payment of monetary contribution for landscaping and tree planting in lieu of the developer having not physically carried out the work. Accordingly, in the instant case, D was ordered to refund to P the sum of RM26,500 paid by P to D as monetary contribution for landscaping and tree planting. As D had the power to impose conditions for landscaping and tree planting in the said scheme, the court made a further order that P comply with this condition as required by D as soon as possible; (2) having regard to s 70 of the Street, Drainage and Building Act 1974 (Act 133), D had no power to add, amend or go behind the conditions imposed in the layout plan once approval of the said plan was granted. D was, accordingly, bound by their conditions as stated in the approved principal layout plan which was for the construction of reasonable number of car parks by P and had no power to require P to provide additional car parks. The imposition of monetary contribution in lieu of the physical construction of the additional car parks in the scheme was also illegal and ultra vires. D was ordered to refund the sum of RM33,300 to P.

Digest :

Rathina Development Sdn Bhd v Majlis Perbandaran Seberang Perai, Butterworth [1990] 2 MLJ 111 High Court, Penang (Mohamed Dzaiddin J).

1514 Person -- Meaning of

10 [1514] PUBLIC AUTHORITIES Person – Meaning of – Export of Rubber (Restriction) Enactment 1922

Summary :

In a claim against the government of the FMS or a state government the real defendant is the government. The chief secretary, the government of the FMS and the government of a state are each 'persons' within the meaning and protection of s 6 of the Export of Rubber (Restriction) Enactment 1922.

Digest :

Anglo-French Trading Co v Chief Secretary, FMS [1925] 5 FMSLR 166 High Court, Federated Malay States (Sproule Ag CJ).

1515 Person -- Meaning of

10 [1515] PUBLIC AUTHORITIES Person – Meaning of – Land Enactment 1911 – Whether applicable to state

Summary :

The state is not a person within the meaning of s 130 of the Land Enactment 1911.

Digest :

Naested v State of Perak [1925] 5 FMSLR 185 Court of Appeal, Federated Malay States (Woodward CJ, Farrer-Manby and Deane JJ).

1516 Person -- Meaning of

10 [1516] PUBLIC AUTHORITIES Person – Meaning of – Public Authorities Protection Enactment 1929 – Whether applicable to state – The Public Authorities Protection Enactment 1929 s 2 – Meaning of the word 'person' therein.

Summary :

The word 'person' as used in the Public Authorities Protection Enactment 1929, does not apply to the state.

Digest :

Ramasamy v State of Negri Sembilan [1934] MLJ 268; [1933-34] FMSLR 209 High Court, Federated Malay States (Hereford J).

1517 Port authority -- Goods in custody of port authority

10 [1517] PUBLIC AUTHORITIES Port authority – Goods in custody of port authority – Storage at 'cheap rate' godown at request of owners – Loss – Whether port authority liable – Port Authority – Goods in custody of Port of Singapore Authority – Storage at 'cheap rate' godown at request of owners – Whether there was notional delivery or attornment – Loss – Whether port authority liable – Port of Singapore Authority Ordinance 1963, s 88.

Summary :

This was an appeal by the plaintiffs/appellants from the judgment of Tan Ah Tah J dismissing their claim against the defendants/respondents for damages for conversion of 32 cases of textiles valued at S$40,046.63. The appellants' textiles were shipped in the vessel 'Yamaki Maru' and were packed in 50 cases under two bills of lading issued 'to order'. One bill of lading covered 18 cases and the other covered 32 cases. All the 50 cases were completely discharged into the respondents' godown on 19 October 1967. Between that date and 30 October 1967, 48 out of the 50 cases were removed by the respondents to another godown. On 30 October 1967, the appellants wrote to the respondents requesting that they store the 50 cases in 'your cheap rate godown'. This letter and two delivery orders issued by the Singapore agents of the vessel 'Yamaki Maru' were delivered by hand to the respondents' assistant traffic superintendent, storage section. The application was accepted and a 'storage order' was issued, evidencing that the 50 cases were, from 31 October 1967, stored at the respondents' godown. On 9 November 1967, the appellants handed a letter to the respondents' traffic officer as a result of which the appellants obtained delivery of 18 out of the 50 cases stored at the godown. The remaining 32 cases were never delivered to the appellants, it being agreed that they were stolen while they were still in the custody of or under the control of the respondents. The issue at the trial was whether or not there had been a notional delivery of all the goods to the appellants by the respondents' acceptance of the appellants' application to store the goods in their 'cheap rate' godown. The learned trial judge dismissed the action on the ground that there had been no delivery, notional or otherwise, of the 32 cases. He held that it was a case where delivery was postponed because of the lack of storage space on the appellants' premises and that the 32 cases remained in the custody of the respondents for the purpose of delivery even when they were removed to another godown. On appeal,

Holding :

Held, dismissing the appeal: (1) in this case, there was evidence to support the learned trial judge's finding. The learned trial judge was entitled on the evidence not to draw the inference that there had been a notional delivery particularly where such an inference would result in the respondents being found to have agreed to store the goods at a rate for less than the rate applicable before its acceptance of the plaintiffs/appellants' application contained in the letter of 30 October 1967; (2) whether or not there was an attornment is a question of fact. In the present case, it was implicit from the learned trial judge's findings of fact that he was of the opinion that there had been no attornment; (3) therefore, it followed that when the 32 cases were stolen from the godown where they were eventually stored, these goods were in the custody or control of the respondents for the purpose of delivery and the respondents, by virtue of s 88 of the Port of Singapore Authority Ordinance 1963 were absolved from liability for the loss caused to the appellants.

Digest :

Wing Tai Garment Manufactory (Singapore) Ltd v The Port of Singapore Authority [1972] 1 MLJ 198 Court of Appeal, Singapore (Wee Chong Jin CJ, Chua and Choor Singh JJ).

1518 Port authority -- Pollution of port waters

10 [1518] PUBLIC AUTHORITIES Port authority – Pollution of port waters – Charge – Liability of master of ship at anchorage – Singapore Port Regulations 1970 – Port Authority – Pollution – Ship at anchorage – Discharge of waxy residue from damaged side of ship – Liability of – Singapore Port Regulations 1970, regs 101(2) & 111(b).

Summary :

The appellant, the master of motor vessel 'Marimunda', was charged with polluting the port waters, an offence under reg 101(2) of the Singapore Port Regulations 1970 punishable under reg 111(b) of the said regulations. He was convicted and sentenced to pay a fine of S$200, against which he appealed. The issue raised in this appeal was that on the evidence, the master of the vessel did not cause the discharge of the waxy residue from the vessel into the sea, within the meaning of reg 101(2) of the said regulations, and that the learned magistrate was wrong in law in holding that this regulation created an offence of strict liability.

Holding :

Held, dismissing the appeal: there was clear evidence to warrant a conviction. The learned magistrate was correct in holding that the master had 'caused to be discharged' the waxy residue within the meaning of reg 101(2) of the Singapore Port Regulations 1970.

Digest :

G Spanolios v Public Prosecutor [1972] 1 MLJ 152 High Court, Singapore (Wee Chong Jin CJ).

1519 Proceedings relating to charities -- Attorney General a necessary party

10 [1519] PUBLIC AUTHORITIES Proceedings relating to charities – Attorney General a necessary party

Summary :

The Attorney General is a necessary party to a suit relating to a charity, although there may be a trustee of the charity capable of enforcing or protecting the right.

Digest :

Kader Mydin v Haji Abdul Kadir [1880] 1 Ky 489 High Court, Straits Settlements (Wood J).

1520 Proceedings relating to charities -- Removal of trustees

10 [1520] PUBLIC AUTHORITIES Proceedings relating to charities – Removal of trustees – Position of Attorney General in suit for – Maladministration

Summary :

A suit concerning the administration of charities in the Colony in which the commission of various breaches of trusts is alleged against trustees of the estate should be commenced in the name of the Attorney General as plaintiff. The true effect of s 59, Ordinance No 22 (Crown Suits) is that in suits regarding charities and public interests the practice and the position of the Attorney General shall be substantially the same as in England and that where he would be plaintiff in England he should be plaintiff in this Colony and where he would be a defendant in England he should be a defendant in this Colony. Where the proceedings are defective by reason of non-joinder of the Attorney General as plaintiff, the defect may by amendment of the writ of summons and statement of claim be cured and the action proceeded with the leave of the Attorney General.

Digest :

Cheah Ewe Chong v Cheah Kee Ee [1934] MLJ 212 High Court, Straits Settlements (Whitley J).

1521 Rateable holdings -- Transfer of

10 [1521] PUBLIC AUTHORITIES Rateable holdings – Transfer of – Notice of transfer not given to local authority – Whether vendors or purchaser liable for rates outstanding in respect of property – Local Government Act 1976 (Act 171), ss 146, 148, 160(4) & (5)

Summary :

D had earlier purchased the land in question from X and Y, the vendors. The transaction was completed on 6 August 1986 and D was registered as the new proprietor of the land on 28 October 1986. Neither D nor the vendors gave P any notice of the transfer in Form I as required under s 160(1) of the Local Government Act 1976 (Act 171). P, by a notice to the vendors dated 15 December 1986, requested them to pay the rates falling due in respect of the land. When the vendors failed to do so, P wrote a letter to D requiring him to satisfy the said amount. Upon the failure of D to pay the stated amount, P, attached the movable property of D under s 148 of the Act. D's application to have his movable property released by P was rejected by the learned magistrate. D's appeal to the High Court was allowed by the learned judge. Dissatisfied with the decision of the High Court, P appealed to the Supreme Court.

Holding :

Held, dismissing the appeal: having regard to s 160(4), it was the vendors who were liable for the rates in question as the rates had already become payable before the notice of the transfer of the land had been given to P under s 160(1) or before the transfer had been recorded in the books of P, the local authority. Accordingly, in the circumstances of the case, P could not resort to s 160(5) as a ground to attach the movable property of D as it was unlikely that the Act requires both the parties to satisfy the amount of the rates outstanding in respect of the land.

Digest :

Dewan Bandaraya Kuala Lumpur v Suppiah [1991] 1 MLJ 149 Supreme Court, Malaysia (Hashim Yeop A Sani CJ (Malaya).

1522 Remedies -- Certiorari

10 [1522] PUBLIC AUTHORITIES Remedies – Certiorari – Allegation of bias – Whether certiorari would lie against Governor

Digest :

Alkaff & Co v The Governor-in-Council & Ors [1937] MLJ 211 Court of Appeal, Straits Settlements (Terrell Ag CJ, Thomas CJ (FMS).

See LOCAL GOVERNMENT, Vol 10, para 6.

1523 Remedies -- Certiorari

10 [1523] PUBLIC AUTHORITIES Remedies – Certiorari – Error of law – Whether court prevented from granting certiorari by Crown Suits Ordinance

Summary :

This was an application for an order of certiorari to remove into the High Court and quash an order made by the Collector of Land Revenue, Penang, under the Crown Lands Encroachments Ordinance (Cap 114). The applicant was the owner of the land in question which in 1925 adjoined the sea. In the course of some years the sea commenced to encroach the land and by about 1933 the whole or at least the major portion of the land was submerged at high water. The sea, however, then began gradually to retreat again and the whole of it became above the high water mark. In 1954 the Collector of Land Revenue in exercise of the powers conferred on him by s 9(1) of the Crown Lands Encroachments Ordinance declared by a notice in the Gazette that if the land was not claimed within six months from the date of the notice it would be declared forfeited to the Crown. The applicant thereupon made a claim to the land. The Collector thereupon held an inquiry and subsequently gave his decision that the claim of the applicant to the land was not valid. He said in his decision, 'In my opinion the claimant had failed to establish a claim to the land which by the imperceptible advance of the high water mark over the period 1893 and 1934 became Crown property and which as far as s 9(1) of Cap 114 is concerned had been abandoned by previous owners for upwards of three years'. The applicant thereupon applied for an order of certiorari.

Holding :

Held: (1) the Collector of Land Revenue in considering and rejecting the claim of the applicant was, for the purpose of certiorari, an inferior tribunal engaged in the exercise of a judicial act; (2) the provisions of the Crown Suits Ordinance did not prevent the court from exercising the remedy by way of certiorari; (3) the owner of land which became gradually and imperceptibly covered by the sea is entitled to regain possession of it, if it subsequently becomes high and dry by gradual recession of the water; (4) there was therefore a clear error of law on the face of the written decision given by the Collector of Land Revenue in this case and therefore there must be an order for certiorari.

Digest :

Re Sithambaram Chettiar [1955] MLJ 213 High Court, Penang (Spenser-Wilkinson J).

1524 Remedies -- Certiorari

10 [1524] PUBLIC AUTHORITIES Remedies – Certiorari – Mandamus – Crown Proceedings Ordinance (Cap 47), s 24A – Certiorari to remove proceedings of probate officer – Grounds for – Powers of probate officer

Summary :

In this case the applicant applied for orders of certiorari and mandamus to remove to the High Court for the purpose of being quashed the decision of the probate officer in refusing to grant letters of administration to the applicant of the estate of Lu Kim Fatt, deceased, and for an order of mandamus requiring him to grant letters of administration of the estate in favour of the applicant alone or jointly with her brother.

Holding :

Held: (1) in a proper case certiorari will lie to remove to the High Court the proceedings of a probate officer for the purpose of being quashed; (2) in this case as there was no excess or want of jurisdiction on the part of the probate officer or any error in law on the face of the record or any breach of the rules of natural justice, the application for certiorari and mandamus must be dismissed and refused.

Digest :

Re Chiew Siew Khim [1964] MLJ 412 High Court, Kuching (McGilligan J).

1525 Remedies -- Damages

10 [1525] PUBLIC AUTHORITIES Remedies – Damages – Extent to which damages can be claimed against public authority for unlawful administrative act – Whether application for damages can be included in application for judicial review – Whether court will allow claim for damages if public body acted ultra vires – Whether ultra vires act was in bad faith, malice or conscious abuse

Digest :

Tropiland Sdn Bhd v Majlis Perbandaran Seberang Perai [1996] 4 MLJ 16 High Court, Penang (Vincent Ng J).

See PUBLIC AUTHORITIES, para 1449.

1526 Remedies -- Declaration

10 [1526] PUBLIC AUTHORITIES Remedies – Declaration – Dismissal of public officer – Application that dismissal null and void – Time-barred – No reasonable cause of action – Administrative law – Dismissal of public officer – Disciplinary proceedings taken after conviction for criminal breach of trust – No appeal brought against conviction – Application for declaration that dismissal null and void – Time-barred – Whether right waived – No reasonable cause of action – Public Authorities Protection Ordinance 1948, s 2(a)

Summary :

The appellant, a public officer, had been convicted in the sessions court for criminal breach of trust. Subsequently, disciplinary proceedings were taken against him and he was dismissed in 1960. He did not pursue an appeal against his conviction. In 1974, he applied for a declaration that his dismissal from the service was null and void and of no effect. A preliminary objection was taken that the action was time-barred under s 2(a) of the Public Authorities Protection Ordinance 1948. The action was dismissed in the High Court and the appellant appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) in this case, the Public Services Commission dismissed the appellant in pursuance or execution of the powers vested in them by the Public Services (Conduct and Discipline) Regulations 1956 and, therefore, s 2(a) of the Public Authorities Protection Ordinance 1948 was applicable and the action was time-barred; (2) (3) in this case, the appellant had not waived his right to have the action dismissed on the ground that it was time-barred either by asking that the originating motion which was originally taken be dismissed on procedural grounds or by applying for the action to be dismissed before the statement of claim was filed; (4) the allegations of fraud raised by the appellant all related to the failure of the prosecution to produce certain evidence at his trial in the sessions court. As such they should have been raised at the trial or at the appeal from his conviction, which the appellant chose not to pursue;although it was not necessary for the learned judge to decide the point in order to dismiss the action, he was right in saying that there could be no reasonable cause of action so long as there remained on the record the appellant's conviction for criminal breach of trust, which was the basis for his dismissal from the service.

Digest :

Kathiravalupillai v Government of Malaysia [1976] 2 MLJ 114 Federal Court, Kuala Lumpur (Gill CJ (Malaya).

1527 Remedies -- Declaration

10 [1527] PUBLIC AUTHORITIES Remedies – Declaration – Injunction – Suit against government – Whether any interim remedy available – Test applicable

Summary :

On 9 July 1963, the governments of the Federation of Malaya, United Kingdom, North Borneo, Sarawak and Singapore signed the Malaysia Agreement whereby Singapore, Sarawak and North Borneo would federate with the existing states of the Federation of Malaya (including Kelantan) and thereafter the Federation would be called 'Malaysia'. The Federal Parliament then passed the Malaysia Act (the bill form of which had been annexed to the Malaysia Agreement) to amend the Federation of Malaya Constitution 1957, art 1(1) and (2) to provide, inter alia, for the admission of the three new states and for the alteration of the name of the Federation to that of 'Malaysia'. The Act received the royal assent on 26 August, and was to come into operation on 16 September. On 10 September, the government of the State of Kelantan commenced proceedings for declarations that the Malaysia Agreement and the Malaysia Act were null and void or alternatively were not binding on the state. It was argued for the State of Kelantan that the Malaysia Act would abolish the 'Federation of Malaya' thereby violating the Federation of Malaya Agreement 1957; that the proposed changes needed the consent of each of the constituent states, including Kelantan, and this had not been obtained; that the ruler of Kelantan should have been a party to the Malaysia Agreement; that constitutional convention called for consultation with rulers of individual states as to substantial changes to be made to the Constitution; and that the Federal Parliament had no power to legislate for Kelantan in respect of any matter regarding which that state had its own legislation. On 11 September, the plaintiff government gave notice of motion that pending the ultimate disposal of their suit, the court should by order restrain the defendants from carrying into effect any of the provisions of the Malaysia Act. The question then for decision was whether on the facts before the court there was a probability that the plaintiff government was entitled to the relief they sought.

Holding :

Held: (1) Parliament in enacting the Malaysia Act so as to amend, inter alia, arts 1(1) and (2) acted within the powers granted to it by art 159 of the Constitution. The Constitution which formed an integral part of the Federation of Malaya Agreement 1957 (to which Kelantan was a party), did not require consultation with any state as a condition to be fulfilled; (2) the Malaysia Agreement was signed for the 'Federation of Malaya' by the Prime Minister, Deputy Prime Minister and four members of the Cabinet. This was in compliance with arts 39 and 80(1) of the Constitution and there is nothing whatsoever in the Constitution requiring consultation with any state government or the ruler of any state. Quaere: whether in proceedings against the government, the court has jurisdiction to make an interim injunction or an interim declaration or any other interim order.

Digest :

Government of the State of Kelantan v Government of the Federation of Malaya & Anor [1963] MLJ 355 High Court, Kuala Lumpur (Thomson CJ).

1528 Remedies -- Declaration

10 [1528] PUBLIC AUTHORITIES Remedies – Declaration – Public Services Tribunal, award of – Whether decision of Tribunal on anomaly in salary scale applicable to any public officer on same scheme of service – Public Services Tribunal Act 1977 (Act 186), s 15(5)

Summary :

D, who were employed as broadcasting assistants in the Department of Broadcasting, claimed that they had been placed on the wrong salary scale. D were so employed by the government by virtue of letters of offer issued by the government to them and accepted by them. The Public Services Tribunal had made an award following a complaint of anomaly in salary scale by broadcasting assistants who were appointed before 1 January 1976. D were not a party to the complaint of anomaly in salary scale which resulted in the above award of the Tribunal. The government subsequently implemented the award of the Tribunal in respect of broadcasting assistants who were appointed before 1 January 1976 but did not implement the second part of the award in respect of D who were appointed after that date. D claimed that the government should have implemented that part of the Tribunal's award that affected them. The High Court (see 1988 BLD [Dec] 2587) found in favour of D and the government appealed to the Supreme Court.

Holding :

Held, allowing the appeal: (1) the second part of the Tribunal's award which affected D should be regarded only as an observation of the Tribunal. Accordingly, the government was not bound to implement that part of the Tribunal's award on D under s 15(1) of the Public Services Tribunal Act 1977 (Act 186). In any event, D were bound by their acceptance of the offers of appointment and any change in their conditions of service or scheme of salary should be negotiated with the government. It was not proper for the court to interfere with the contractual right between D and the government; (2) s 15(5) of the Act was not applicable in the instant case, as it only requires the application of the award to other public officers similarly situated as the complainant which resulted in the award; (3) in the instant case, D were not entitled to the declarations sought. The issuing of declaration is discretionary and in a case of this nature where the claims concerned conditions of service and salary scales in the government service, the court should not usurp the functions of the Tribunal or the government in such matters. The appeal by the government was, accordingly, allowed.

Digest :

Government of Malaysia v Rohaya bte Mohd Majzub & Ors [1989] 1 MLJ 96 Supreme Court, Malaysia (Hashim Yeop A Sani Ag CJ (Malaya).

1529 Remedies -- Mandamus

10 [1529] PUBLIC AUTHORITIES Remedies – Mandamus – Compulsory acquisition of land – 'Suit', meaning of – Whether application barred by Public Authorities Protection Act 1948 – Administrative law – Mandamus – Compulsory acquisition of land – Whether application barred by Public Authorities Protection Act – Undue delay – Public Authorities Protection Act 1948, s 2(a).

Summary :

The appellant was in possession of 700 acres of land in Selangor. The Selangor Government decided to acquire considerable acreage of land in the vicinity. The appellant raised various objections. In the meantime, the government withdrew from acquiring some of the land but took steps to acquire other parts of the land. To resolve the difficulties, a reference was made to the High Court but the High Court declined to act see [1960] MLJ 300. The acquired land was sub-divided into 38 lots and each given a separate title. In 1983, the appellant applied for leave to apply for an order of mandamus directed at the respondent to complete the requisition procedure. Leave was granted and the appellant applied by notice of originating motion for an order of mandamus. The respondent thereupon applied for the originating motion to be struck out. Harun J gave judgment in favour of the respondent on the ground that the institution of the suit was barred by virtue of s 2(a) of the Public Authorities Protection Act 1948 (Act 198) and that there was undue delay. The appellant appealed.

Holding :

Held: (1) the appellant had a right to appeal against the decision of the High Court in refusing to hear the reference and, therefore, had failed to avail itself of the alternative remedy. It has accordingly no specific legal right to apply for mandamus in this case; (2) there was undue delay in this case and this would disentitle the appellant to the remedy; (3) there is no good reason in giving the word 'suit' in the Public Authorities Protection Act 1948 a restricted meaning so as to make the limitation prescribed by it not applicable to the prerogative writ of mandamus; (4) in the circumstances, mandamus could not be issued and the appeal must be dismissed with costs.

Digest :

Semantan Estate (1952) Sdn Bhd v Collector of Land Revenue Wilayah Persekutuan [1987] 2 MLJ 346 Supreme Court, Kuala Lumpur (Lee Hun Hoe CJ, Hashim Yeop A Sani and Syed Agil Barakbah SCJJ).

1530 Remedies -- Mandamus

10 [1530] PUBLIC AUTHORITIES Remedies – Mandamus – When it lies against Crown servant – No specific legal remedy – Delay amounting to repeal – Land Acquisition Ordinance (Cap 248)

Summary :

On 9 July 1963, the governments of the Federation of Malaya, United Kingdom, North Borneo, Sarawak and Singapore signed the Malaysia Agreement whereby Singapore, Sarawak and North Borneo would federate with the existing states of the Federation of Malaya (including Kelantan) and thereafter the Federation would be called 'Malaysia'. The Federal Parliament then passed the Malaysia Act (the bill form of which had been annexed to the Malaysia Agreement) to amend the Federation of Malaya Constitution 1957, art 1(1) and (2) to provide, inter alia, for the admission of the three new states and for the alteration of the name of the Federation to that of 'Malaysia'. The Act received the royal assent on 26 August, and was to come into operation on 16 September. On 10 September, the government of the State of Kelantan commenced proceedings for declarations that the Malaysia Agreement and the Malaysia Act were null and void or alternatively were not binding on the state. It was argued for the State of Kelantan that the Malaysia Act would abolish the 'Federation of Malaya' thereby violating the Federation of Malaya Agreement 1957; that the proposed changes needed the consent of each of the constituent states, including Kelantan, and this had not been obtained; that the ruler of Kelantan should have been a party to the Malaysia Agreement; that constitutional convention called for consultation with rulers of individual states as to substantial changes to be made to the Constitution; and that the Federal Parliament had no power to legislate for Kelantan in respect of any matter regarding which that state had its own legislation. On 11 September, the plaintiff government gave notice of motion that pending the ultimate disposal of their suit, the court should by order restrain the defendants from carrying into effect any of the provisions of the Malaysia Act. The question then for decision was whether on the facts before the court there was a probability that the plaintiff government was entitled to the relief they sought.

Holding :

Held: (1) Parliament in enacting the Malaysia Act so as to amend, inter alia, arts 1(1) and (2) acted within the powers granted to it by art 159 of the Constitution. The Constitution which formed an integral part of the Federation of Malaya Agreement 1957 (to which Kelantan was a party), did not require consultation with any state as a condition to be fulfilled; (2) the Malaysia Agreement was signed for the 'Federation of Malaya' by the Prime Minister, Deputy Prime Minister and four members of the Cabinet. This was in compliance with arts 39 and 80(1) of the Constitution and there is nothing whatsoever in the Constitution requiring consultation with any state government or the ruler of any state. Quaere: whether in proceedings against the government, the court has jurisdiction to make an interim injunction or an interim declaration or any other interim order.

Digest :

Re Bukit Sembawang Rubber Co Ltd & Sembawang Estates Ltd [1961] MLJ 269 High Court, Singapore (Chua J).

1531 Remedies -- Mandamus

10 [1531] PUBLIC AUTHORITIES Remedies – Mandamus – Whether subject to Public Authorities Protection Ordinance

Summary :

An action for a mandamus (as distinguished from the prerogative writ of mandamus) comes within the word 'action' in s 2(1) of Ordinance No 132 (Public Authorities Protection) and is subject to the restrictions imposed in respect of such actions by that ordinance. Semble: applications for the prerogative writs and actions founded in contract are not 'actions prosecutions or proceedings' within the language of s 2(1) of Ordinance 132 and are excluded from the scope of that ordinance.

Digest :

Lim Yew Hock v Municipal Commissioners of the Town and Fort of Malacca [1936] MLJ 55 High Court, Straits Settlements (Burton Ag CJ).

1532 Statutory body -- Building contract

10 [1532] PUBLIC AUTHORITIES Statutory body – Building contract – Statutory body entered into agreement for construction and sale of dwelling house – Agreement drafted and entered into by officer of statutory body – Authority delegated to officer – Whether officer's action ultra vires – Rules of the High Court 1980, O 16 r 16 & O 53 r 1

Summary :

The appellant is a statutory body established under the provisions of the Penang Development Corporation Enactment 1971 (No 10 of 1971) ('the Enactment') with powers to, inter alia, enter into contracts. Further, in line with the practice of all other statutory bodies, the appellant may set up a committee to look after any specific project of the appellant and for this purpose, the appellant may delegate under s 10 by resolution to the various committees its power and authority to carry out on their behalf such duties, powers or functions as the appellant may determine. A housing committee was likewise appointed. All matters relating to the sale of houses under the sale project were to be decided by the committee without the necessity to refer the matter further to the appellant. On 12 December 1979, a sale and purchase agreement was entered into whereby the appellant agreed to sell a link dwelling house to the respondents at the total price of RM82,364, to be paid by instalments in accordance with the rate and time prescribed in the third schedule to the agreement. Two of the clauses in the agreement were impugned by the appellant as being ultra vires and unenforceable against the appellant. The respondents paid the purchase price in full but at the time of making the final payment, the link house was not ready to be delivered up to the respondents and they were only given possession of the same after a delay of 427 days. The respondents therefore commenced an action claiming liquidated damages. It was the appellant's case that the officer who had entered into the agreement had acted without any authority, thus rendering his action ultra vires.

Holding :

Held, dismissing the appeal: (1) in cases where ultra vires is raised as an issue the court is faced with problems of statutory interpretation; (2) the normal practice is for an aggrieved party affected by the ultra vires act to challenge its validity by judicial review under O 53 r 1 by way of certiorari or by a declaration under O 16 r 16 of the Rules of the High Court 1980, ie by direct attack; (3) as a general rule the court will allow the issue of invalidity to be raised in any proceedings where it is relevant. Where some act or order is invalid or void, the consequences are followed out logically; (4) if the order was bad on its face the court would treat it as invalid. But if the jurisdictional defect was not visible on the face, as is in the case at hand, the court would require the order to be quashed in separate proceedings before the action for damages could be examined. Collateral attack was thus allowed in the first case but not in the second case; (5) the term 'ultra vires' is apt to suggest the paradigm of a public authority stepping outside a clearly defined sphere of competence; (6) the notion of ultra vires now encompasses a situation where the public authority commits an error of law albeit that the authorities' action is undeniably of a kind falling within the field of activity allocated to it by the law; (7) the word 'authority' could mean administrative authority given by a superior to a junior officer, in the instant case the General Manager to the Director of Administration, or it could mean statutory authority or, to use the conventional term, 'jurisdiction'; (8) the maxim omnia praesumuntur rite et solemniter esse acta is applicable to establish the presumed validity of the officer's acts here while performing his duties of the appellant. The schedule of duties gave the officer blanket administrative authority to act in his sphere of responsibility and we do not expect an officer of such seniority in the appellant to need specific instruction every time he carried out his duties or exercised his initiative; (9) on the evidence and on the law the officer had not acted without authority, either administrative or statutory, of the appellant.

Digest :

Penang Development Corp v Teoh Eng Huat & Anor [1993] 2 MLJ 97 Supreme Court, Malaysia (Jemuri Serjan CJ (Borneo).

1533 Statutory body -- Powers of

10 [1533] PUBLIC AUTHORITIES Statutory body – Powers of – Statutory body appointed to deal with matters under Forest Enactment – Whether appointment unlawful – Whether acting ultra vires its powers in dealing with matters under Forest Enactment – Yayasan Sabah Enactment 1966, s 10

Digest :

Syarikat Perkapalan Selatan Sabah Sdn Bhd v State Government of Sabah & Ors [1991] 1 MLJ 370 High Court, Kota Kinabalu (Syed Ahmad Idid JC).

See PUBLIC AUTHORITIES, Vol 10, para 1476.

1534 Statutory body -- Whether retrospective legislation has effect of impairing existing obligation of statutory body as guarantor in the absence of clear and precise words

10 [1534] PUBLIC AUTHORITIES Statutory body – Whether retrospective legislation has effect of impairing existing obligation of statutory body as guarantor in the absence of clear and precise words – Retrospective legislation effective as regards matters of procedure only unless clearly provided otherwise – Incorporation (State Legislature Competency) Act 1962 (Act 380), ss 2 & 4(a)

Summary :

P applied for summary judgments against D for sums of money owing by two companies. D, the Negeri Sembilan Development Corporation, had acted as the guarantors of these two companies in respect of loans given by P to the latter. D relied on the Incorporation (State Legislatures Competency) Act 1962 (Act 380) which was subsequently amended and its retrospective effect to get away from their obligations under the guarantees. P's applications were refused by the senior assistant registrar who took the view that difficult points of law were involved. D were given leave to defend the action. P appealed to the High Court against the decisions of the senior assistant registrar. The issue before the court was whether the bringing into retrospective effect of certain provisions of the 1962 Act could have effect on D's existing rights or obligations. One of the amendments to the Act provided that no corporation shall without the prior consent in writing of the Minister of Finance enter into any guarantee involving financial liability.

Holding :

Held, allowing P's appeal: (1) a retrospective operation is not to be given to a statute so as to impair an existing right or obligation otherwise than as regards matters of procedure unless the language is very clear and is capable of only one meaning in that it is retrospective; (2) in the instant case, there was no clear provision in the amendment Act making it retrospective the taking away of an existing right or abolishing an existing obligation. The legislature would have clearly so stated in the amendment itself if it had intended to take away an existing right or obligation; (3) in the instant case, there was no dispute on the facts and arguments on points of law can be made without going to trial proper. Accordingly, summary judgment should have been granted on the application of P. In the circumstances, P's appeal was allowed.

Digest :

United Asian Bank Bhd v Negeri Sembilan Development Corporation [1989] 1 MLJ 230 High Court, Seremban (Mustapha Hussain J).

1535 Telecommunications Authority of Singapore -- Dismissal from service

10 [1535] PUBLIC AUTHORITIES Telecommunications Authority of Singapore – Dismissal from service – Functions of inquiry committee – Staff committee not obliged to follow recommendation of inquiry committee

Summary :

A was an employee of TAS, a statutory board. He was accused of stealing from a jackpot machine in the board's recreation club. The police declined to prosecute. However, A was informed that disciplinary proceedings under reg 4 of the Telecommunications Authority of Singapore (Disciplinary Proceedings) Regulations 1983 had been instituted. Two charges were preferred against him and he submitted a written statement in his defence. A committee of inquiry was appointed to inquire into the matter and report to the staff committee of TAS. The inquiry committee reported that the evidence against A was not conclusive and recommended that he be given the benefit of the doubt. However, the staff committee decided to dismiss A. A applied for an order of certiorari to quash the staff committee's decision and an order of mandamus to compel TAS to reinstate him.

Holding :

Held, dismissing the application: (1) the committee of inquiry and the staff committee had different functions. The committee of inquiry's function was to investigate and report to the staff committee. They were not a judicial or quasi-judicial body. The staff committee's function was to decide whether the officer should be punished; (2) the staff committee was not bound to follow the recommendation of the committee of inquiry. There was evidence which supported their decision and it was not a decision so unreasonable that no reasonable committee would have reached it; (3) alleged insufficiency of evidence is not a ground on which a court exercising supervisory jurisdiction will interfere with the decision of an inferior tribunal.

Digest :

Re Yap George [1992] 1 SLR 488 High Court, Singapore (Thean J).

1536 Tort -- Breach of statutory duty

10 [1536] PUBLIC AUTHORITIES Tort – Breach of statutory duty – Vessels not provided with proper crew – Exemption by Colonial Government in breach of ordinance – Bill of Rights – Whether damages recoverable – Petition of Right – Ordinance No 125 (Merchant Shipping) – Neglect by shipowner of statutory duty – Exemption by Colonial Government in breach of ordinance – Illegality of exercise of dispensing power.

Summary :

Section 14 of Ordinance 125 (Merchant Shipping) requires vessels to be properly provided with officers duly certificated. In 1927, the government of the Colony purported to exempt from the provisions of this section six small motor vessels plying between Burmese ports and Penang and they also instructed the Port Officer not to prosecute the offending owners or masters of those vessels. The petitioners were a steamship company owning vessels which traded between Penang and Burmese ports and which were manned in accordance with s 14 of Ordinance 125. They alleged that the six motor vessels by reason of such exemption were run at a very low cost and competed unfairly with their own ships and that they had thereby suffered damage. They further claimed that in purporting to exempt the six small vessels from compliance with s 14 of Ordinance 125, the government were illegally exercising a dispensing power contrary to the Bill of Rights.

Holding :

Held: (1) in granting exemption to the six small motor vessels, the government committed a breach of their statutory duty but the statute, namely, Ordinance 125 (Merchant Shipping), was aimed at the regulation of merchant shipping and not at the protection of individuals from damage in their trade and, therefore, the damage arising from the breach of the statutory duty was not of a kind which the statute was intended to prevent; (2) the purported exemption of the six small motor vessels was illegal under the Bill of Rights, the Crown having no such dispensing power but the Bill of Rights is generic whereas Ordinance 125 is specific and in this case there being no remedy for breach of the specific statute it was not open to a person injured to claim a remedy under the wider prohibition.

Digest :

Straits Steamship Co Ltd v The Attorney General [1933] MLJ 170 Court of Appeal, Straits Settlements (Murison CJ, Burton and Whitley JJ).

1537 Tort -- Compensation for requisition of ships

10 [1537] PUBLIC AUTHORITIES Tort – Compensation for requisition of ships – Prerogative of Crown – Power to requisition ships – Rejection of petition of right – Proceedings by ordinary action – Crown suits – Prerogative of Crown – Power to requisition ships – Compensation – Tort – Imperial Orders in Council dated 26 October 1896 and 21 March 1916 – Practice – Rejection of Petition of Right – Proceedings by ordinary action.

Summary :

The plaintiffs, the owners of certain ships which were expropriated by the government of the Straits Settlements on 5 October 1918, claimed compensation from the Crown for the use of their ships and for loss and damage occasioned by such requisition. They also claimed a declaration that they were entitled to have such compensation assessed under the direction of the court. These vessels were seized in pursuance of a notice signed by the Colonial Secretary in purported exercise of the powers vested in the Governor of the Colony by virtue of cl 6 of the Order in Council of 1896. By cl 4 of Order in Council of 1916, the Governor can delegate the power of requisition in favour of the Naval or Military authorities compensation as aforesaid but the Governor refused to grant his fiat. During the pendency of this action, the government in March 1920, appointed a board to inquire into the matter and assess compensation. The plaintiffs, however, objected to the constitution of this board.

Holding :

Held: (1) the Crown having consistently refused until the institution of the present proceedings to recognize any duty of perfect obligation towards them, the plaintiffs were justified in bringing the action; (2) the plaintiffs' ships never were expropriated in exercise of any powers conferred, upon the Governor; (3) the notice given by the Colonial Secretary was not a notice contemplated by the Orders in Council. It was incumbent upon the Governor to pursue strictly the authority given to him; (4) the Crown having deliberately elected to waive any possible title traceable to the Orders in Council, could not ignore that election so as to force the plaintiffs before a board to the constitution of which they objected.

Digest :

Eastern Shipping Co Ltd v Attorney General [1934] MLJ 99 High Court, Straits Settlements (Barrett-Lennard J).

1538 Tort -- False imprisonment

10 [1538] PUBLIC AUTHORITIES Tort – False imprisonment – Action for damages against police officer – Arrest by police constables on a traffic charge – Absence of malice – False imprisonment – Arrest by police constables on a traffic charge – Negligence of police officer – Absence of malice – Public Authorities Protection Enactment (Cap 30), s 2 sub-s (ii).

Summary :

In a suit against an officer of the police for damages for false imprisonment in that the plaintiff was arrested by two police constables at the entrance of the court on a charge of driving a lorry with inefficient brakes, the magistrate found that the arrest was effected through the negligence of the defendant and without reasonable or probable cause and awarded the plaintiff damages and costs.

Holding :

Held, on appeal: the tort of false imprisonment cannot be committed negligently, that all policemen and officers are not responsible for one another's wrongful acts unless such acts are done by subordinates on the orders or instructions of their seniors and in the absence of proof of malice, the defendant was entitled to the protection of the Public Authortities Protection Enactment, s 2.

Digest :

Elphinstone v Lee Leng San [1938] MLJ 135 High Court, Federated Malay States (Aitken J).

1539 Tort -- False imprisonment

10 [1539] PUBLIC AUTHORITIES Tort – False imprisonment – Liability of government as principal – Proof of liability of government servant – The Government Suit Enactment 1928, s 11(ii)(a) – False imprisonment – Action for damages – The Public Authorities Protection Enactment 1929, s 2(ii).

Summary :

By s 11 of the Government Suits Enactment 1928, the subject can only sue the government if it is shown that the public officer concerned would have been liable in his personal capacity. Therefore in an action against the government claiming damages for false imprisonment, the plaintiff must prove malice or negligence and absence of reasonable or probable cause on the part of the public officer concerned.

Digest :

Cheah Cheong Pheng v Government of the Federated Malay States [1935] MLJ 146 High Court, Federated Malay States (Howes J).

1540 Tort -- False imprisonment

10 [1540] PUBLIC AUTHORITIES Tort – False imprisonment – Wrongful arrest – Arrest without warrant – Extent of police officer's authority

Summary :

The petitioners in this case claimed damages from the Crown for false imprisonment, alleging that they were wrongfully arrested and detained by an Assistant Superintendent of Police on 22 March 1954. The facts were briefly as follows: On the night of 22 March 1954, the petitioners, husband and wife, retired to bed at about 10 pm but shortly before midnight, they were woken up and arrested. The first petitioner was able to put on a few day clothes, but his wife, who was five months pregnant, was not and she went to the police station wearing her night pyjamas. They were kept at the police station from midnight until 5 am before being released on police bail. Later that morning, they appeared before the magistrate and were charged under s 347 of the Penal Code with having wrongfully confined one Ng Yok Jick at their house on 17 March with intent to extort property from him. After that, they were once again released on bail but were re-arrested outside the court room and taken to the Criminal Investigation Department to be finger-printed before being allowed to go home. They came before the magistrate again on 30 March and were remanded on bail until 13 April but when the case came up on that date, the prosecution offered no evidence and they were released.

Holding :

Held: (1) a police officer is entitled to arrest a person without warrant if he has received a reasonable complaint that such person has been concerned in an offence under s 347 of the Penal Code. In this case, no reasonable complaint was made against the petitoners within the meaning of s 31 of the Criminal Procedure Code and, therefore, their arrest without warrant and their subsequent detention was unlawful; (2) their action, in effect, amounted to a second false imprisonment; (3) as the petitioners had been released by the magistrate on bail, the police had no authority to take them into custody again in order to convey them to the Criminal Investigation Department for fingerprinting;a false imprisonment does not merely affect a man's liberty, it also affects his reputation. Where a person had been wrongfully arrested and detained, it is in the public interest that sufficient damages should be awarded in order to give reality to the protection afforded by law to personal freedom. Damages of S$1,000 to each petitioner allowed with costs. The word 'complaint' in s 31 of the Criminal Procedure Code means a complaint to a police officer.

Digest :

Tan Kay Teck & Anor v The Attorney General [1957] MLJ 237 High Court, Singapore (Whyatt CJ).

1541 Tort -- False imprisonment

10 [1541] PUBLIC AUTHORITIES Tort – False imprisonment – Wrongful arrest – Liability of government – Remedy by petition of right

Summary :

Where a police constable, having been handed a warrant of arrest with instructions to ask the complainant in the case to point out the accused named therein, brought the complainant in handcuffs to the police station, in an action against the government for damages for wrongful arrest,

Holding :

Held: the government was liable inasmuch as the act of bringing the complainant in itself though authorized was done in an unauthorized manner.

Digest :

Vairavan Chettiar v Attorney General [1933] MLJ 13 High Court, Straits Settlements (Terrell J).

1542 Tort -- Liability of Crown for torts of its servant

10 [1542] PUBLIC AUTHORITIES Tort – Liability of Crown for torts of its servant – Sale of land for arrears of land revenue – Non-compliance with ordinance – Petition of right – Sale of land for arrears of land revenue – Non-compliance with ordinance – Liability of Crown for torts of its servants – Petition of right – Ordinance No 22 (Crown Suits), s 20 – Ordinance No 35 (Land Revenue Collection), s 4 – Ordinance No 132 (Public Authorities Protection).

Summary :

Under Ordinance No 22 (Crown Suits), a petition of right can be maintained to recover damages arising from a Collector of Land Revenue selling land under Ordinance No 35 (Land Revenue Collection) for arrears of revenues without first serving a written notice of demand as required by s 4 of Ordinance No 35 (Land Revenue Collection). The Collector in selling is an agent of the Crown although he acts under statutory authority, and the fact that he has carried out his duties in an unauthorized manner does not prevent the Crown from being liable. No action lies against any person acting in execution of statutory duties or other public duties, unless the party complaining can allege malice and want of reasonable and probable cause. Principles on which the Court of Appeal will allow points of law not taken in the court of first instance to be raised on appeal discussed by Reay J.

Digest :

Attorney General v Pang Ah Yew [1934] MLJ 184 Court of Appeal, Straits Settlements (Shaw CJ, Brown and Reay JJ).

1543 Tort -- Liability of government as principal

10 [1543] PUBLIC AUTHORITIES Tort – Liability of government as principal – Allegation of malicious falsehood against head of department – Whether claim comes within the Public Authorities Protection Ordinance 1948 – Administrative law – Action of tort against Government – Allegation of malicious falsehood against head of department – Whether claim comes within the Public Authorities Protection Ordinance 1948.

Summary :

In this case, the plaintiff had been employed as senior technical assistant in the Public Works Department. In 1969, his head of department, the second defendant, purported to transfer him to the Kuching Water Board, stating falsely in a memorandum that the plaintiff had agreed to the transfer. When the plaintiff requested for a copy of the option alleged to be exercised by him, the second defendant purportedly terminated the plaintiff's services with the board. In an action in the High Court, the plaintiff obtained a consent order declaring that he was and had been at all material times a servant of the government of Sarawak. Following that suit, the plaintiff instituted this action claiming, inter alia, damages for malicious falsehood. The defendants thereupon applied by motion to strike out the writ of summons and set aside all subsequent proceedings on the ground that the statement of claim disclosed no reasonable cause of action, it was frivolous and vexatious and that the proceedings were an abuse of the process of the court. It was contended that the claim was statute-barred by the Public Authorities Protection Ordinance 1948 as it was not instituted within 12 months of the alleged act, neglect or default.

Holding :

Held: (1) in this case, there was no suggestion that the second defendant had acted in the exercise of his public duty or authority when he wrote the memorandum concerned. The second defendant had not in the circumstances acted in exercise of his public duty or authority so as to entitle him to the protection of the Public Authorities Protection Ordinance 1948; (2) the statement of claim in this case raised triable issues and it could not therefore be said that the writ was frivolous of vexatious.

Digest :

Joseph v Government of Sarawak & Anor [1975] 2 MLJ 38 High Court, Kuching (Yusoff J).

1544 Tort -- Liability of government as principal

10 [1544] PUBLIC AUTHORITIES Tort – Liability of government as principal – Government servant not made a party – Whether action would lie – Government suit – Writ not issued till after expiry of 12 months – Whether action would lie against government as principal when servant of government was not made a party – Government Proceedings Ordinance 1956, ss 5 & 6.

Summary :

The plaintiff brought an action to recover damages arising out of a traffic accident. The accident took place on 2 April 1963. The writ was submitted to the registry on 1 April 1964, with instructions that it was not to be issued until further instructions were received from the solicitors for the plaintiff and it was not finally sealed and issued till 18 January 1965. The driver of the government vehicle was not made a party to the action.

Holding :

Held: as the action was not commenced within 12 months after the neglect, or default complained of and as the servant of the government was not also made a defendant to the action, the action could not proceed and must be dismissed.

Digest :

Haji Abdul Rahman v Government of Malaysia & Anor [1966] 2 MLJ 174 High Court, Kota Bharu (Abdul Aziz J).

1545 Tort -- Liability of government as principal

10 [1545] PUBLIC AUTHORITIES Tort – Liability of government as principal – Principles of master and servant apply

Summary :

The government is responsible for the torts of its officers and the principles of the law of master and servant apply.

Digest :

Chief Secretary to Government v Soo Choon Wee [1923] 3 FMSLR 126 Court of Appeal, Federated Malay States (Woodward CJC and Reay JC).

1546 Tort -- Liability of government as principal

10 [1546] PUBLIC AUTHORITIES Tort – Liability of government as principal – Principles of master and servant apply

Summary :

An action will lie against a state for torts committed by a government officer in its employment. The relationship between a government and its officer is analogous to that of master and servant and the same principles apply.

Digest :

State of Negri Sembilan v St George [1923] 4 FMSLR 93 Court of Appeal, Federated Malay States (Woodward CJC, Farrer-Manby and Watson JJC).

1547 Tort -- Liability of government as principal

10 [1547] PUBLIC AUTHORITIES Tort – Liability of government as principal – Principles of master and servant apply

Summary :

The principles of the law of master and servant apply to the relationship between the government and its officers and the government may therefore be sued for a tort committed by a public servant.

Digest :

Naested v State of Perak [1925] 5 FMSLR 185 Court of Appeal, Federated Malay States (Woodward CJ, Farrer-Manby and Deane JJ).

1548 Tort -- Negligence

10 [1548] PUBLIC AUTHORITIES Tort – Negligence – Action for damages from collision – Whether act done in execution of public duty or authority – Public Authorities Protection Ordinance (Cap 14), s 2 – Action of negligence – Execution of act, duty or authority – Limitation of time.

Summary :

The defendants, who were under a statutory duty to construct, repair and maintain the streets, used a lorry of their own for the purpose of transporting sand and asphalt from the depot at Tanjong Pagar to Collyer Quay where maintenance work was in progress. The daily routine was for the driver of the lorry to pick up some labourers at Albert Street and then to proceed to Havelock Road for a general muster of labourers. At the Havelock Centre, he collected the labourers and brought them to Collyer Quay. After the final journey from Tanjong Pagar depot to Collyer Quay the driver was ordered to take the labourers to their quarters in Maude Road. On completion of that work, he was free to return to the depot at Mackenzie Road. During the journey from Maude Road to Mackenzie Road on 10 August 1936, the defendants' lorry collided with the plaintiff's motor cycle and injured the plaintiff. On 11 January 1937, the plaintiff issued a writ claiming damages for negligence arising out of the collision.

Holding :

Held: the defendants in transporting the labour force to their quarters in the town from the place of work or vice versa were performing an act which they were clearly not bound to do by an ordinance and, therefore, the action was not protected by s 2(1) of the Public Authorities Protection Ordinance.

Digest :

Wee Hong Heng v Municipal Commissioners, Singapore [1937] MLJ 207 High Court, Straits Settlements (Horne J).

1549 Tort -- Negligence

10 [1549] PUBLIC AUTHORITIES Tort – Negligence – Injury to trespasser on state land – Injury caused by Federal government servant – Liability – Negligence – Injury to trespasse on village road – State land – Whether trespasser entitled to damages – Trespass – Trespasser on state land – Injury caused by servant of Federal Government – Damages.

Summary :

While the respondent, a housewife, was engaged in depasturing her chicken on a macadamized village road in a squatting position, behind a bush, a caterpillar motor grader which was being used to level and clear land near the village road was partly driven off the vacant land on to the village road and came in contact with her leg as a result of which the respondent suffered severe injuries to her leg. The grader was driven at the material time by one P, an employee of the appellant government and he was assisted by one N who was supposed to warn people who might be in the grader's path. The respondent sued P and the appellant government. On the pleadings, it was admitted that the village road and the neighbouring land was state land of which the appellant government had no right, title or interest nor was occupier thereof. The trial judge held that there was negligence on the part of P, that the respondent was a trespasser and that nevertheless P and his employers were still liable, but that as the respondent was guilty of contributory negligence (which was assessed at 50%) general and special damages should be fixed at RM10,000 and RM500 respectively and awarded the respondent RM5,250. On appeal, it was argued that the trial judge having found that the respondent was a trespasser, proceeded to examine the appellants' liability in the light of the test of foreseeability as adopted by the English Court of Appeal in Videan v British Transport Commission [1963] 2 QB 650 instead of that adopted by the Privy Council in Commissioner for Railways v Quinlan [1964] AC 1054.

Holding :

Held: (1) although [bu]Quinlan's case is binding on the court if applicable, it was not applicable in this case because this case differed from the Privy Council case in two material particulars namely, first, the respondent was not a trespasser vis-a-vis the appellant government as the village road was state land and secondly, the respondent's trespass on the land arose not by reason of having introduced her physical person on the land but by reason of what she was doing on the land with her physical person; (2) on a highway, the possibility of the physical presence of pedestrians and other persons must always be assumed and every user of a highway owes a duty of care to all other users and he violates that duty if he does an act without reasonable care which injures any other user. In this case, P had a duty to foresee the possibility of the physical presence of a person behind a bush and the question of whether that person was doing something lawful or unlawful was irrelevant to that duty; (3) although the degree of contributory negligence on the part of the respondent was much greater than that imputed to be by the trial judge, that part of the decision had not been appealed against the appeal should be dismissed with costs.

Digest :

Government of Malaysia & Anor v Kong Ee Kim [1965] 1 MLJ 81 Federal Court, Ipoh (Thomson LP, Barakbah CJ (Malaya).

1550 Tort -- Negligence

10 [1550] PUBLIC AUTHORITIES Tort – Negligence – Liability of government as principal – Proof of liability of government servant – Res ipsa loquitur – Pleadings – The Civil Procedure Code (Cap 7), s 42 – Action against government – The Government Suits Enactment (Cap 17), s 10 – The Public Authorities Protection Enactment (Cap 30), s 2 – Doctrine of 'res ipsa loquitur'.

Summary :

The plaintiff-appellant, the managing proprietor of the Prince's and Coliseum Theatres, Kuala Lumpur, claimed damages against the defendants-respondents for the destruction by fire of certain reels of films whilst they were being examined by an Assistant Commissioner of Police at the Central Police Station, Kuala Lumpur. The plaintiff-appellant contended that he was in the position of a bailor invitee. He relied on the doctrine of res ipsa loquitur and submitted that it was unnecessary for him to plead negligence. The defendants-respondents contended that the plaint disclosed no cause of action because by the general law of pleadings in a case in which negligence is relied on it must be pleaded and secondly that as this was an action against government, the provisions of the Public Authorities Protection Enactment (Cap 30) applied by virtue of s 10 of the Government Suits Enactment (Cap 17).

Holding :

Held: (1) the doctrine of res ipsa loquitur is a rule of evidence and not a rule of pleading and that under s 42 of the Civil Procedure Code (Cap 7), a plaintiff alleging a contract of bailment and negligence must plead such a contract and must also plead negligence; (2) sub-ss (i) and (ii) of s 2 of the Public Authorities Protection Enactment (Cap 30) apply to suits in tort against government by virtue of s 10 of the Government Suits Enactment (Cap 17) and, therefore, in any suit against the government founded on the tortious act of one of its officers, malice or negligence and absence of reasonable and probable cause must be expressly alleged in the plaint.

Digest :

Ong Ee Lim v Government of the Federated Malay States [1937] MLJ 40 Court of Appeal, Federated Malay States (Terrell Ag CJ, Whitley and Aitken JJ).

1551 Tort -- Negligence

10 [1551] PUBLIC AUTHORITIES Tort – Negligence – Vicarious liability – Stevedoring gang in employment of port authority hired to shipowners – Liability of port authority – Tort – Negligence – Vicarious liability – Liability of general employer – Whether shifted to hirer – Stevedoring gang in employment of port authority hired to shipowners – Liability of port authority – Ports Byelaws, Byelaw 26.

Summary :

In this case, a member of a stevedoring gang in the regular employment of the respondent had been killed in an accident when loading a cargo of planks from the wharfside at the Port of Singapore into the holds of a ship. The members of the stevedoring gang were engaged by the respondent who paid them, prescribed the jobs which they should undertake and also had the power of dismissing them. The stevedoring gang was hired out to shipowners to work on the ship and the shipowners paid the respondent for the stevedoring services. It was admitted at the trial that the accident had been caused by the negligence of the winchman and/or the signalman, who were also members of the stevedoring gang, and contributed to by the negligence of the deceased. The question that arose was who was vicariously responsible for the negligence of the signalman and the winchman. The respondent relied on byelaw 26 of the Port Rules which provided: 'The servants and labourers employed in discharging and loading vessels shall be under the superintendence of the ship's officers; the board undertake no responsibility as stevedores.' The learned trial judge held that the respondent was protected by byelaw 26 and this decision was confirmed on appeal by the Court of Appeal. The appellant appealed to the Privy Council.

Holding :

Held, allowing the appeal: (1) byelaw 26 fell short of putting the servants of the respondent under the entire and absolute control of the ship and did not exclude the liability of the respondent at common law nor transfer any part of it on to the shoulders of the shipowners; (2) the respondent was therefore vicariously liable for the negligence of its servants if such negligence caused personal injury to a fellow servant or to a member of the public. Alishakkar v Port of Singapore Authority (Civil Appeal No 25 of 1972, unreported) overruled.

Digest :

Karuppan Bhoomidas v Port of Singapore Authority [1978] 1 MLJ 49 Privy Council Appeal from Singapore (Lord Simon of Glaisdale, Lord Salmon, Lord Keith of Kinkel, Sir Garfield Barwick and Sir Richard Wild).

1552 Tort -- Negligence in collapse of public jetty

10 [1552] PUBLIC AUTHORITIES Tort – Negligence in collapse of public jetty – Limitation of liability – Applicability of Penang Port Commission Act 1955 (Act 140), s 77

Summary :

Several suits had been filed against the Penang Port Commission for damages as a result of the collapse of Pangkalan Sultan Abdul Halim Butterworth. Upon an ex parte application by the Commission under s 77 of the Penang Port Commission Act 1955, the High Court granted orders with respect to the proceedings for claims for damages. The applicant applied to set aside these orders on the ground that the court has no power to make them.

Holding :

Held, allowing the application: s 77 of the Act must be read with the preceding sections, ie ss 72, 73, 74, 75 and 76. The words 'any liability is alleged to have been incurred by the Commission' must refer to liability under ss 73 and 74. But the claims now being brought are for damages in connection with the collapse alleged to have been caused by the negligence of the commission. They are not claims under ss 73 and 74 of the Act. Section 77 therefore does not apply in this case. Its application is limited to liability alleged to have been incurred under ss 73 and 74 of the Act.

Digest :

Sequerah Stephen Patrick (Mrs) v Penang Port Commission [1990] 2 MLJ 232 High Court, Penang (Wan Adnan J).

1553 Tort -- Obstruction

10 [1553] PUBLIC AUTHORITIES Tort – Obstruction – Construction of rail by local authority – No proof of pecuniary damage – Tort – Obstruction – Construction of a rail by local authority – Interference with access to premises – No proof of pecuniary damage – Statutory authority – Kuching Municipal Ordinance (Cap 116), s 84.

Summary :

The plaintiff sought a declaration that the defendants, a local authority, were not entitled to keep a rail in front of his clinic between it and the street and he asked for an order that the defendants pull down the rail and an injunction to restrain the defendants from obstructing his patients and himself and his staff from getting into the clinic. The plaintiff did not prove that he had in fact suffered any pecuniary loss or that his practice as a dentist was affected. The defendants denied that the plaintiff's enjoyment of his premises had been adversely affected or interfered with and claimed that the rail was properly constructed as part of the authorized powers given to the defendants.

Holding :

Held: (1) on the facts of the case, the plaintiff's access to his clinic had not been substantially interfered with; (2) the defendants had not exceeded their authority in constructing the rail which was intended to channel pedestrians along a path of safety; and (3) as the plaintiff had not suffered any pecuniary damage, the plaintiff's claim must be dismissed.

Digest :

Chong Sin Onn v Kuching Municipal Council [1967] 1 MLJ 21 High Court, Kuching (Harley Ag CJ (Borneo).

1554 Tort -- Suit by government against private person

10 [1554] PUBLIC AUTHORITIES Tort – Suit by government against private person – Principles to be applied

Summary :

The same principle applies to a suit by the government against a landowner for damage by causing a road to be flooded as if the plaintiffs were private owners of adjoining property.

Digest :

Government of Perak v Adams [1914] 2 FMSLR 144 High Court, Federated Malay States (Woodward JC).

1555 Tort -- Trespass to goods

10 [1555] PUBLIC AUTHORITIES Tort – Trespass to goods – Issuing of notice requiring payment of arrears of assessment due – No payment received – Issuing of warrant of attachment – Seizure of plaintiff occupier's goods – Payment subsequently made by owner of premises – Whether plaintiff liable to pay arrears due – Whether seizure of plaintiff's goods amounted to trespass – Local Government Act 1976, s 148

Summary :

On 26 April 1989, Majlis Perbandaran Kuantan ('the respondent') issued a notice in Form E pursuant to s 148 of the Local Government Act 1976 ('the Act') to one Chua Ong Kiat ('Chua'), who was the owner on record of premises No 57, Lorong Lengkok Kiri 3, Taman Putih Baru, Kuantan ('the premises'), requiring him to pay up arrears of assessment due within 15 days. Since no payment was received within the stipulated time, the respondent issued a warrant of attachment in Form F to be executed by its officials pursuant to the power under s 148 of the Act. On 26 May 1989, the respondent's officials went to the premises. They met the occupier of the premises ('the appellant') who claimed that he had bought the premises from Chua. The appellant's solicitors later confirmed with the respondent's officials that the premises were in fact sold to the plaintiff on 14 November 1988, although Form I had not yet been lodged with the respondent. As the appellant refused to discuss the matter further with the respondent, the respondent's officials proceeded with the attachment. A cassette recorder and a television set belonging to the appellant were removed. On 29 May 1989, Chua paid to the respondent the arrears due. On 2 June 1989, the goods were brought back to the premises. The plaintiff contended that the seizure of the goods amounted to trespass, as he was not liable to pay the arrears. The sessions court judge allowed the appellant's claim on the appellant's application under O 26A of the Subordinate Court Rules 1980. However, the judge at the High Court, on an appeal by the respondent, set aside the sessions judge's order. The appellant appealed.

Holding :

Held, dismissing the appeal: (1) since the appellant's claim was based on trespass, the issue was whether the respondent had the power to seize the appellant's goods; (2) it is clear from s 148 of the Act that any moveable property found in the premises in respect of which arrears of assessment are due is liable to seizure; (3) in this case, as there was compliance with the provisions of s 148 of the Act by the defendant, the seizure was not unlawful. It follows that there could not have been any trespass.

Digest :

Haji Awalludin bin Anidin v Majlis Perbandaran Kuantan [1996] 1 MLJ 57 Supreme Court, Kuantan (Anuar CJ (Malaya).

1556 Town and country planning -- Developing land without authority

10 [1556] PUBLIC AUTHORITIES Town and country planning – Developing land without authority – Making material change in use of land – Using part of dwelling as store – Change made before 1 February 1960 – Continued use as store – Whether an offence – Planning Act (Cap 232, 1990 Ed), ss 10(1) & 12

Summary :

The appellants were charged with developing premises at 37A Tyrwhitt Road (37A TR) without the written permission of the competent authority, in contravention of s 10(1) of the Planning Act (Cap 232, 1990 Ed) (the Act), by failing to comply with the directions of an enforcement notice issued under s 16(1) of the Act, which is an offence under s 16(8) of the Act. The prosecution evidence was that approval was given in December 1951 for the erection of six shophouses, including 37A TR, the premises of the appellants, in a location zoned for local shopping. According to the prosecution witness, the second storey of 37A was approved only for residential purposes. The appellants were found to be using the second storey of 37A TR as a store for machinery. On 2 May 1995, an enforcement notice issued under s 16(1) of the Act was served on the appellants, directing, inter alia, that they ceased to use the second storey of 37A TR as a store. The appellants did not comply with the notice and the prosecution was brought. During the trial, it was contended by the appellants, and accepted by the magistrate, that the second storey of 37A TR had been used as a store since before 1 February 1960, the date the Act came into effect. Nevertheless, the magistrate convicted the appellants. The appellants appealed.

Holding :

Held, allowing the appeal: (1) and for failing to comply with the directions in the enforcement notice, contrary to s 16(8) of the Act; (2) the defect in the charge could be cured even though there had been confusion caused by the charge. Even if the charge had been correctly framed, the only relevant issue of fact was that the second storey of 37A TR had been used as a store since before 1 February 1960. That claim was accepted by the magistrate. The confusion related solely to the ingredients of an offence under s 16 of the Act. That was purely a question of law, and can easily be cured by an appellate court; (3) the prosecution was able to produce no evidence, and had no basis for alleging that there had been any material change in use of 37A TR (or the second storey thereof) since 1 February 1960. The appellants obviously could not breach s 10(1) before 1 February 1960 as that provision only came into effect on that day. There was therefore no ground for alleging that the appellants contravened s 10(1) of the Act by developing 37A TR; (4) the concession by the prosecution that it had to prove development of the land was rightly made. The natural interpretation of s 16(1) was that the opinion of the authority related to whether the development of land was in contravention of s 10 or any conditions thereunder. It did not relate to whether there was or was not a development of land. 'Development' in s 16(1) referred to development of land occurring on or after 1 February 1960; (5) there was no need for the prosecution to show that there had been an infringement. However, it was necessary for the prosecution to show that the relevant authority had directed its mind to the question of whether there was a contravention of s 10(1); (6) it was unlikely that the legislative intent was that just because there was some approval given sometime in the past for a building or part of a building to be used for some purpose, and that it appeared that the building or part of the building had been used in contravention of what was now very dead legislation, the competent authority was entitled to issue an enforcement notice under s 16 of the Act. Section 16 spoke of development in contravention of s 10 of the Act, it did not refer to contravention of any earlier legislation; (7) the officers obviously did not apply their minds to the question whether there was development in contravention of s 10. They did not know whether any change of use, much less material change of use, had been made since the Act came into effect and they made no effort to find out; (8) the charge was duplicitous as it accused the appellants of developing the premises without written permission, contrary to s 10(1) of the Act;the enforcement notice issued by the competent authority was invalid and of no legal effect. In any event, it had not been shown that there had been a development within the meaning of s 16 of the Act. Two essential ingredients for an offence under s 16(8) were missing.

Digest :

Chuan Hoe Engineering Pte Ltd v Public Prosecutor [1996] 3 SLR 544 High Court, Singapore (Yong Pung How CJ).

1557 Town and country planning -- Enforcement notice

10 [1557] PUBLIC AUTHORITIES Town and country planning – Enforcement notice – Material change in use of land made before 1 February 1960 – Whether competent authority addressed its mind to relevant issue – Whether competent authority could come to opinion that development of land was in contravention of s 10(1) of Planning Act (Cap 232, 1990 Ed) – Whether enforcement notice valid – Planning Act (Cap 232, 1990 Ed), ss 10 & 16(1)

Digest :

Chuan Hoe Engineering Pte Ltd v Public Prosecutor [1996] 3 SLR 544 High Court, Singapore (Yong Pung How CJ).

See PUBLIC AUTHORITIES, para 1453.

1558 Town and country planning -- Enforcement notice

10 [1558] PUBLIC AUTHORITIES Town and country planning – Enforcement notice – Service of enforcement notice to rectify contraventions of s 10 of Planning Act (Cap 232) – Whether service on just one member of specified class constituted valid service – Whether s 16(8) imposes liability on persons who had not been served with notice – Planning Act (Cap 232), ss 10, 16(2) & (8)

Summary :

The respondent and six others were tenants-in-common of premises which were being used in contravention of s 10 of the Planning Act (Cap 232) ('the Act'). The respondent was charged in the subordinate court under s 16(8) of the Act for having failed to comply with directions to rectify certain infringements of the Act as required in an enforcement notice which had been served on him. He successfully argued at trial that the enforcement notice had not been validly served according to the provisions of s 16(2)(a) of the Act as it had been served on him alone and not on his six other co-tenants. Section 16(2) provides that the notice should be served on 'one or more of the following persons': (a) the owner of the land, (b) the occupier of the land, and (c) any person responsible for the infringement. The magistrate had regard to the English position under the Town and Country Planning Act 1962 ('the TCPA') and held that the competent authority was entitled to serve the notice on any one of the three classes of person described in (a) to (c), but was obliged to serve it on all the members of the class chosen. Therefore, if there was more than one owner of the land, the term 'the owner of the land' must refer to all the owners of the land. The service on the respondent was therefore invalid as it had not been served on all the co-owners of the land as required by s 16(2)(a). The respondent was acquitted without his defence being called. The prosecution appealed.

Holding :

Held, allowing the appeal: (1) s 16(8) of the Act fixes liability on a person who, having received a validly served enforcement notice, does not comply with the directions contained in it, and thus necessitates knowledge, at least, of the notice's provisions. This can be contrasted with the position under English law where s 47(5) of the TCPA provides that once an enforcement notice makes a land use unauthorized, any person who continues to so use the land or permits it to be so used would be liable, whether served with that notice or not; (2) there is therefore no reason to adopt the English position that service requirements in the TCPA must be interpreted widely, so as to ensure that all persons who might be prejudiced by the enforcement notice under s 47(5) of the TCPA would have been notified of it. Accordingly, the trial magistrate erred in applying English authorities in the case before her; (3) the proper interpretation of s 16(2) is that it entitles the URA as the competent authority appointed under the Act to effect valid service by serving a notice on any member of the three classes or more, requiring him to comply with the directions stated in the notice. If that member did not so comply, he would be liable under s 16(8). If the other remaining members of the three classes were not served with a notice, they would not be obliged to rectify and would not be liable under s 16(8). If the infringements remained unrectified by the person served, then the URA would be entitled under s 16(9) to enter upon the land and rectify the infringement themselves as against these other members as well; (4) all the prosecution has to show to make out a prima facie case under s 16(8) against the respondent is, first, that there was an infringement of the Act; secondly, that the respondent was a person who fell within one of the three classes in s 16(2); thirdly, that they had sent an enforcement notice to the respondent; and fourthly, that the respondent had failed to comply with the notice within 28 days. In this case, all this has been done by the prosecution. Per curiam: the natural reading of s 16(2) does seem to indicate that the URA is entitled to pick any person by virtue of his being in class (a), (b) or (c), and serve a notice on him obliging him to comply with the directions contained in it. In a sense, allowing the URA this seemingly arbitrary power is actually reasonable, since the Act has already made infringing its planning provisions an offence (see, eg ss 10 and 13), and fixed the infringer with liability, whereas s 16(8) creates a new offence of failure to comply with a notice requiring the infringements to be rectified. The s 16 provisions are thus not aimed at punishing the guilty party who was responsible for the infringements; they are aimed at having the infringements rectified, and the persons in the best position to do so fall into classes (a)(c). It is reasonable for the URA to require only one of the owners or one of the contraveners to rectify the infringements since their primary concern is with rectification itself: they could thus choose the most accessible or convenient person, or the person with the most money, to suit their purposes. That person could then apply under s 16(4) to the Minister for relief if dissatisfied with having been picked by the URA, and argue that his co-tenants also be obliged to rectify the infringement, possibly by a service of an enforcement notice on them.

Digest :

Public Prosecutor v Abdul Razak Valibhoy [1993] 3 SLR 902 High Court, Singapore (Yong Pung How CJ).

1559 Town and country planning -- Imposition of daily fine for not complying with order to demolish building

10 [1559] PUBLIC AUTHORITIES Town and country planning – Imposition of daily fine for not complying with order to demolish building – Whether owner of building had used all due diligence to carry out order – Street, Drainage and Building Act 1974 (Act 133), s 70(13)

Digest :

Tan Lai San v Public Prosecutor Criminal Appeal No 51-233-87 High Court, Shah Alam (Shankar J).

See PUBLIC AUTHORITIES, Vol 10, para 1530.

1560 Town and country planning -- Mandatory order

10 [1560] PUBLIC AUTHORITIES Town and country planning – Mandatory order – Owner of shophouse carried out illegal structural alterations – Local authority obtained mandatory order to demolish alterations – Whether mandatory order was valid – Whether owner should first be convicted before mandatory order could be made – Street, Drainage and Building Act 1974 (Act 133), ss 70(13)(b), (15) & 91(1)

Digest :

Eu Lian Hang v President, Municipal Council Petaling Jaya [1992] 1 MLJ 691 High Court, Shah Alam (Shankar J).

See PUBLIC AUTHORITIES, Vol 10, para 1529.

1561 Town and country planning -- Mandatory order

10 [1561] PUBLIC AUTHORITIES Town and country planning – Mandatory order – Owner of shophouse carried out structural alterations which deviated from approved plans – Local authority applied ex parte for mandatory order to demolish alterations – Whether mandatory order was valid – Whether owner was given opportunity to be heard before mandatory order was made – Street, Drainage and Building Act 1974 (Act 133), s 91(1)

Summary :

A, the owner of a shop-house, submitted plans for structural alterations of the shop-house. The municipal council, D, approved A's plans and A proceeded with the work. Subsequently D discovered that A had carried out works which deviated from the approved plans. D then served a notice under s 72(1)(b) of the Street, Drainage and Building Act 1974 (Act 133) requiring A to demolish the offending structure ('the notice'). A did not comply with 'the notice' and instead submitted amended plans to D and applied for ex post facto approval for the deviations. D rejected A's application and applied ex parte for a 'mandatory order' for the demolition of A's offending structure under s 91(1) of the 1974 Act. The 'mandatory order' was served on A on 7 December 1988. A did not comply with the 'mandatory order' and he appealed, inter alia, against the 'mandatory order'. A's notice of appeal was dated 4 January 1989. D argued that time to appeal against the 'mandatory order' would have run out ten days from the date of service of the 'mandatory order'. A accordingly applied to the High Court for extension of time to file an appeal against the 'mandatory order' and for a stay of the 'mandatory order'. A argued that there were merits in his appeal because firstly he was not given an opportunity of being heard before the 'mandatory order' was made. A also argued that before the 'mandatory order' could be made, he must be convicted under s 70(13)(b) of the 1974 Act for carrying out unauthorized activity in deviating from the approved plans.

Holding :

Held, dismissing A's applications: (1) A's structural alterations were illegal because they did not comply with the approved plans. If what A did was legal he could have challenged 'the notice'. 'The notice' was therefore an opportunity for A to be heard. A's application for approval of the amended plans was also rejected by D. D was thus entitled to remove A's offending structure; (2) a conviction under s 70(13)(b) of the 1974 Act is not a pre-condition to D's application for a 'mandatory order' under s 91(1) of the 1974 Act. Section 91(1) of the 1974 Act gives the local authority an option to apply for a summary order while s 70(13)(b) of the 1974 Act makes unauthorized deviation from approved plans an offence by itself. Section 70(13)(b) read with s 70(15) of the 1974 Act constitutes an independent and separate provision from s 91 of the 1974 Act; (3) there were accordingly no grounds for extending time to appeal. Nor were there any merits in A's appeal.

Digest :

Eu Lian Hang v President, Municipal Council Petaling Jaya [1992] 1 MLJ 691 High Court, Shah Alam (Shankar J).

1562 Town and country planning -- Mandatory order

10 [1562] PUBLIC AUTHORITIES Town and country planning – Mandatory order – Whether demolition order was valid – Whether officer was authorized to apply for demolition order – Whether owner of building to be demolished had reasonable opportunity to show cause – Street, Drainage and Building Act 1974 (Act 133), s 70(1) & (13)

Summary :

The appellant pleaded guilty to the offence of erecting a building without prior written approval of the 'Majlis Perbandaran' ('Majlis') which is an offence under s 70(1) of the Street, Drainage and Building Act 1974 (Act 133) and is punishable under s 70(13)(c) of the 1974 Act. The magistrate fined the appellant RM2,500 and ordered his building to be demolished upon an application by the prosecuting officer of the Majlis ('the demolition order'). The appellant did not comply with the demolition order but instead completed the building after his conviction. The unauthorized building was also inhabited. The appellant appealed to the High Court against the demolition order. The appellant firstly argued that the appeal record did not show that the prosecuting officer was a public officer authorized to apply for the demolition order on behalf of the Majlis. The appellant also contended that he had no reasonable opportunity to show cause why the demolition order should not be made against him.

Holding :

Held, dismissing the appeal: (1) the court was satisfied that at all material times, the prosecuting officer was an officer of the Majlis holding a laminated authority card in writing stating that he was a legal officer of the Majlis and that he had been vested with all the powers and responsibilities conferred by the 1984 Act and the regulations made thereunder; (2) the appellant was present when the application for the demolition order was made and he did not contest it; (3) if the appellant had not used all due diligence to carry out the demolition order, the court could impose a daily fine under s 70(13) of the 1984 Act. The proper time to impose the daily penalty is upon conviction and it is for the magistrate to impose this additional sentence if the circumstances so warrant; (4) having considered all the circumstances of the case, no daily penalty should be imposed because firstly the appellant had pleaded guilty and if he had demolished his building, his appeal against the demolition order would have been wholly nugatory. Moreover the Majlis had the option to demolish the appellant's building under s 91(3)(b) of the 1984 Act but this was not done. Where the Majlis had failed to act, it would not be appropriate to impose a retrospective penalty going back to the conviction. It was also for the magistrate in the first instance to impose the daily fine on the appellant if the circumstances so warranted.

Digest :

Tan Lai San v Public Prosecutor Criminal Appeal No 51-233-87 High Court, Shah Alam (Shankar J).

1563 Town and country planning -- Non-compliance with enforcement notice

10 [1563] PUBLIC AUTHORITIES Town and country planning – Non-compliance with enforcement notice – Whether prosecution had to prove that there was development of the land on or after 1 February 1960 – Planning Act (Cap 232, 1990 Ed), s 16(1) & (8)

Digest :

Chuan Hoe Engineering Pte Ltd v Public Prosecutor [1996] 3 SLR 544 High Court, Singapore (Yong Pung How CJ).

See PUBLIC AUTHORITIES, para 1453.

1564 Town and country planning -- Right of appeal against development order

10 [1564] PUBLIC AUTHORITIES Town and country planning – Right of appeal against development order – Whether adjoining landowner could appeal against development order – Planning (Development) Rules 1970, r 11 – Federal Territory (Planning) Act 1982 (Act 267), ss 23(1) & 65(2) – Interpretation Acts 1948 and 1967 (Act 388), ss 23 & 87

Digest :

Datin Azizah bte Abdul Ghani v Dewan Bandaraya Kuala Lumpur & Ors; Datuk Haji Suhaimi bin Dato Haji Kamaruddin & Ors v Dato Bandar Kuala Lumpur & Anor [1992] 2 MLJ 393 Supreme Court, Malaysia (Abdul Hamid Omar LP, Gunn Chit Tuan and Eusoff Chin SCJJ).

See PUBLIC AUTHORITIES, Vol 10, para 1535.

1565 Town and country planning -- Right to be heard

10 [1565] PUBLIC AUTHORITIES Town and country planning – Right to be heard – Whether adjoining land owner had right to be heard before planning permission was given – Federal Territory (Planning) Act 1982 (Act 267), s 65 – Planning (Development) Rules 1970, rr 5, 6 & 11

Summary :

D2, the city mayor, gave planning permission for the building of apartments on a lot adjacent to A's land. Prior to D2's decision letters informing A of her right to object to the application for planning permission were not received by her. A applied to the High Court for a certiorari to quash D2's planning permission. A firstly argued that D2 was obliged to give her notice of the application for planning permission before deciding to give planning permission under rr 5 and 6 of the Planning (Development) Rules 1970. A further claimed that rr 5 and 6 of the 1970 Rules were still applicable by virtue of s 65 of the Federal Territory (Planning) Act 1982 (Act 267). A accordingly contended that D2's failure to comply with rr 5 and 6 of the 1970 Rules infringed the rule of natural justice because she had not been given the right of being heard before D2 decided to give the planning permission. A also argued that r 11 of the 1970 Rules was still effective to give her a right of appeal to the Appeal Board.

Holding :

Held, dismissing the application: (1) A was not a person aggrieved by D2's decision. A had not shown that any legal right or interest belonging to her would be affected by the planning permission. Accordingly, A had no locus standi in this case; (2) the 1970 Rules are saved by s 65 of the 1982 Act provided that the 1970 Rules are not inconsistent with the 1982 Act. Rules 5, 6 and 11 of the 1970 Rules are inconsistent with the 1982 Act because there is no longer any machinery for giving notice to adjoining landowners in the 1982 Act. Accordingly rr 5, 6 and 11 of the 1970 Rules are no longer available to A to assist her in being heard as an adjoining owner when the planning permission was passed by D2; (3) A's allegation of breach of natural justice must therefore fall to the ground because her right to be heard had been abrogated by the 1982 Act.

Digest :

Datin Azizah bte Abdul Ghani v Dewan Bandaraya Kuala Lumpur & Ors Originating Motion No R1-25-28-1991 High Court, Kuala Lumpur (Abu Mansor J).

1566 Town and country planning -- Service of enforcement notice

10 [1566] PUBLIC AUTHORITIES Town and country planning – Service of enforcement notice – Directions to rectify infringements – Failure to comply with notice – Need to serve notice on each and every co-owner of premises affected – Planning Act (Cap 232), ss 10, 16(2) & (8)

Summary :

The respondent was acquitted in the subordinate courts of a charge under s 16(8) of the Planning Act (Cap 232) ('the Act'), that is, of failing to comply, within the requisite 28-day time period, with directions to rectify certain infringements of the Act which was required by an enforcement notice served on him. The respondent successfully argued at the trial that the enforcement notice had not been validly served according to the provisions of s 16(2) of the Act. The premises in question were being used to house Thai workers in contravention of s 10 of the Act. There were seven co-owners of the premises and the notice was served on the respondent only. The trial magistrate had regard to the English position under the Town and Country Planning Act 1962 ('the TCPA') and acquitted the respondent because the notice had not been served on all the co-owners. The prosecution appealed. Held, allowing the appeal: (1) s 16(8) of the Act fixes liability on a person who, having received a validly served enforcement notice, does not comply with the directions contained in it, and thus necessitates knowledge, at least, of the notice's provisions. This can be contrasted with the position under English law where s 47(5) of the TCPA provides that once an enforcement notice makes a land use unauthorized, any person who continues to so use the land or permits it to be so used would be liable, whether served with that notice or not; (2) there is therefore no reason to adopt the English position that service requirements in the TCPA must be interpreted widely, so as to ensure that all persons who might be prejudiced by the enforcement notice under s 47(5) of the TCPA would have been notified of it. Accordingly, the trial magistrate erred in applying English authorities in the case before her; (3) the proper interpretation of s 16(2) is that it entitles the URA as the competent authority appointed under the Act to effect valid service by serving a notice on any member of the three classes or more, requiring him to comply with the directions stated in the notice. If that member did not so comply, he would be liable under s 16(8). If the other remaining members of the three classes were not served with a notice, they would not be obliged to rectify and would not be liable under s 16(8). If the infringements remained unrectified by the person served, then the URA would be entitled under s 16(9) to enter upon the land and rectify the infringement themselves as against these other members as well; (4) all the prosecution has to show to make out a prima facie case under s 16(8) against the respondent is, first, that there was an infringement of the Act; secondly, that the respondent was a person who fell within one of the three classes in s 16(2); thirdly, that they had sent an enforcement notice to the respondent; and fourthly, that the respondent had failed to comply with the notice within 28 days. In this case, all this has been done by the prosecution; (5) (per curiam) the natural reading of s 16(2) of the Act did not seem to indicate that the Chief Planner of the Urban Renewal Authority ('URA') was entitled to pick any person and serve a notice on him obliging him to comply with the directions contained in it. In a sense, allowing the URA this seemingly arbitrary power was actually reasonable, since the Act had already made infringing its planning provisions an offence, and fixed the infringer with liability, whereas s 16(8) created a new offence of failure to comply with a notice requiring the infringements to be rectified. The s 16 provisions are thus not aimed at punishing the guilty party who was responsible for the infringements; they are aimed at having the infringements rectified, and the persons in the best position to do so fall into classes (a)--(c). It is reasonable for the URA to require only one of the owners or one of the contraveners to rectify the infringements since their primary concern is with rectification itself; they could thus choose the most accessible or convenient person, or the person with the most money, to suit their purpose. That person could then apply under s 16(4) to the Minister for relief if dissatisfied with having been picked by the URA, and argue that his co-tenants also be obliged to rectify the infringement, possibly by a service of an enforcement notice on them.

Digest :

Public Prosecutor v Abdul Razak Valibhoy [1993] 3 SLR 902 High Court, Singapore (Yong Pung How CJ).

1567 Town and country planning -- Service of notice informing adjoining landowner of application for planning permission

10 [1567] PUBLIC AUTHORITIES Town and country planning – Service of notice informing adjoining landowner of application for planning permission – Notice could not be served because of mistake in address – Whether notice could be presumed to be duly served because it was sent by registered post – Federal Territory (Planning) Act 1982 (Act 267), s 53(1)(c)(ii)

Digest :

Datin Azizah bte Abdul Ghani v Dewan Bandaraya Kuala Lumpur & Ors; Datuk Haji Suhaimi bin Dato Haji Kamaruddin & Ors v Dato Bandar Kuala Lumpur & Anor [1992] 2 MLJ 393 Supreme Court, Malaysia (Abdul Hamid Omar LP, Gunn Chit Tuan and Eusoff Chin SCJJ).

See PUBLIC AUTHORITIES, Vol 10, para 1535.

1568 Town and country planning -- Validity of development orders

10 [1568] PUBLIC AUTHORITIES Town and country planning – Validity of development orders – Whether City Mayor should consider views of adjoining landowners before making development orders – Whether adjoining landowners should be informed of application for planning permission before development orders were made – Planning (Development) Rules 1970, rr 5 & 6 – Federal Territory (Planning) Act 1982 (Act 267), ss 22(4) & 65(2)

Summary :

In the first appeal, the first respondent, the City Hall, sent by registered post a letter to the appellant informing her that an application for planning permission to construct apartments on a lot adjacent to her land had been made ('the letter'). The letter also asked whether the appellant had any objection to the application. The letter however did not reach the appellant because there was a mistake in her address due to the negligence of the first respondent's officer. In the second appeal the appellant was not given any notice by the first respondent as to his right to object to the application for planning permission to build condominiums on his adjoining land. In both appeals the second respondent, the City Mayor, made development orders allowing the construction on the appellants adjoining land ('the orders'). The appellants applied for certiorari to quash the orders. The High Court dismissed the application and the appellants appealed to the Supreme Court. The High Court held that rr 5, 6 and 11 of the Planning (Development) Rules 1970 which were made under the Emergency (Essential Powers) Ordinance 1970, were inconsistent with the Federal Territory (Planning) Act 1982 (Act 267) because the 1982 Act is silent as to the need to inform the adjoining landowners of the application for planning permission. Rules 5 and 6 of the 1970 Rules provide for the adjoining landowners to be informed of any application for planning permission while r 11 of the 1970 Rules states that any adjoining landowner who has objected to an application for planning permission may appeal against a development order to the Appeal Board. The second respondent argued that under s 53(1)(c)(ii) of the 1982 Act, any document required to be served under the 1982 Act, is deemed to have been duly served if it is sent by registered post.

Holding :

Held, allowing the appeals: (1) under ss 23 and 87 of the Interpretation Acts 1948 and 1967 (Act 388), any rule made under an Act of Parliament which is inconsistent with the Act, is void to the extent of the inconsistency; (2) s 22(4) of the 1982 Act requires the second respondent when dealing with an application for planning permission, 'to take into consideration such matters as are in his discretion expedient or necessary for the purposes of proper planning' and 'he shall have regard to any other material consideration'. Rules 5 and 6 of the 1970 Rules are not inconsistent with s 22(4) of the 1982 Act because they merely spell out one of the material and necessary matters which the second respondent is required to consider and they lay down the procedures on how the second respondent is to execute his statutory duties in considering such matters before coming to a decision to make or refuse to make a development order. Accordingly rr 5 and 6 of the 1970 Rules are saved by s 65(2) of the 1982 Act; (3) r 11 of the 1970 Rules is however inconsistent with s 23(1) of the 1982 Act which only gives a right of appeal to an applicant for planning permission and not to adjoining land owners. Rule 11 of the 1970 Rules is therefore valid only to the extent that it makes provision for an applicant for planning permission to file his appeal in Form 12 of the First Schedule to the 1970 Rules within three months after his receipt of Form 5 of the First Schedule to the 1970 Rules; (4) for the presumption under s 53(1)(c)(ii) of the 1982 Act to apply, the letter must firstly be correctly addressed to the appellant in the first appeal; (5) in both appeals, the second respondent failed to comply with rr 5 and 6 of the 1970 Rules when he made the orders. The orders were accordingly quashed and the second respondent shall reconsider the applications for planning permission in accordance with the law.

Digest :

Datin Azizah bte Abdul Ghani v Dewan Bandaraya Kuala Lumpur & Ors; Datuk Haji Suhaimi bin Dato Haji Kamaruddin & Ors v Dato Bandar Kuala Lumpur & Anor [1992] 2 MLJ 393 Supreme Court, Malaysia (Abdul Hamid Omar LP, Gunn Chit Tuan and Eusoff Chin SCJJ).

1569 Use of unlicensed public service vehicle -- Accused pleaded guilty to offence charged

10 [1569] PUBLIC AUTHORITIES Use of unlicensed public service vehicle – Accused pleaded guilty to offence charged – Whether seizure of vehicle properly effected – Appeal against order of forfeiture – Commercial Vehicle Licensing Board Act 1987 (Act 334), ss 33, 51(1), (3) & 52(1)

Summary :

P was charged in the magistrate's court with being the registered owner and driver of a van which was used as a public service vehicle without a valid licence granted under s 33 of the Commercial Vehicle Licensing Board Act 1987 (Act 334). P pleaded guilty to the charge and was convicted and fined RM700 in default one month's imprisonment. The van was ordered to be forfeited. P appealed to the High Court against the conviction and the order of forfeiture. P contended that the charge was defective on the grounds that he was not the registered owner of the van and that there was no mention of the commission of any offence in the charge. Accordingly, a miscarriage of justice had resulted with the consequence that the conviction must be set aside. P also contended that the van had not been properly seized and should not have been forfeited.

Holding :

Held, dismissing the appeal against conviction: (1) in the instant case, P had pleaded and maintained the plea of guilty to the offence charged after having understood the charge and the consequences of the plea. As such, there can be no appeal against conviction; (2) as regards the charge, the registered ownership is not an element of the offence under s 33 of the Commercial Vehicle Licensing Board Act 1987 (Act 334). But its inclusion in the charge in the instant case, though unnecessary, had not misled P nor occasioned a failure of justice; (3) the charge contained all the necessary ingredients of the offence alleged and the facts of the case advanced by the prosecution and admitted by P clearly showed that the offence had been committed. The omission to mention in the charge the commission of the offence in the circumstances was immaterial. For the above reasons, the appeal against conviction was dismissed; (4) in the instant case, the facts given by the prosecution did not disclose that the van had been seized by officers authorized under s 51(1) of the Act. Moreover, the seizure was effected pursuant to s 52 of the Act which does not provide for the power of seizure. Since the van had not been properly seized, the order of forfeiture was bad and was set aside by the court.

Digest :

Ngerantar ak Ripai v Public Prosecutor [1990] 2 MLJ 273 High Court, Sibu (Chong Siew Fai J).

Public Entertainment

1570 'Juke box' -- Whether constitutes a 'public amusement'

10 [1570] PUBLIC ENTERTAINMENT 'Juke box' – Whether constitutes a 'public amusement' – Whether public amusement was 'carried on' on premises – Theatres and Places of Public Amusement Enactment 1936, ss 3 & 10 – Theatres and Places of Public Amusement Enactment 1936, ss 3 & 10 – 'Juke Box' – Whether constitutes a 'public amusement' – Whether public amusement was 'carried on' on premises.

Summary :

The appellant was the owner of premises at No 163 Brewster Road, Ipoh, which he conducted as coffee shop and bar. He held a liquor licence in respect of the bar but the premises were not licensed as a place of public amusement. In the premises, besides the usual coffee shop furniture, there was also a 'juke box'. The appellant was charged with keeping open 'a place of public amusement, to wit, a bar where entertainment in the form of music from a juke box is carried on without a licence issued in that behalf', an offence under s 3 punishable under s 10 of the Theatres and Places of Public Amusement Enactment 1936. He was convicted and fined RM25. On appeal, two questions arose: (a) whether the operation of the 'juke box' constituted a public amusement; (b) whether public amusement was 'carried on' on the premises.

Holding :

Held: (1) the operation of a 'juke box' constituted a public amusement within the meaning of the Theatres and Places of Public Amusement Enactment 1936; (2) in the circumstances of the case, at the material date, public amusement was carried on on the premises so as to bring those premises within the description of a 'place of public amusement'.

Digest :

Lim Eng Liew v Public Prosecutor [1957] MLJ 99 High Court, Ipoh (Thomson CJ).

1571 Board of Film Censors -- Application to quash decision

10 [1571] PUBLIC ENTERTAINMENT Board of Film Censors – Application to quash decision – Order of certiorari – Ex parte application – Locus standi – Films (Censorship) Act 1952 (Act 35), ss 12A & 19C – Administrative law – Order of certiorari – Leave to apply for – Ex parte application – Whether applicant has locus standi to apply for leave – Whether Senior Federal Counsel has locus standi to oppose – Principles applicable – Requirements for application for leave – RHC 1980, O 53, r 1(2) – Films (Censorship) Act 1952 (Act 35), ss 12A & 19C.

Summary :

The applicant has made an ex parte application for leave to apply for an order of certiorari to quash the decision of the second respondent, Board of Film Censors, in approving the film publicity material bearing the title 'Happy Bigamist' and a certain statement in the advertisement of the film which conveyed the message 'two wives in one house policy feasible' and which was published, displayed and advertised by the first respondent to promote their showing of the film. The applicant also prayed for an injunction to restrain the first respondent, their servants or agents from publishing, displaying or in any way utilizing the said film publicity material. The third respondent was added as a party pursuant to certain rules under the Films (Censorship) Act 1952 (Act 35). At the hearing, the learned Senior Federal Counsel challenged the locus standi of the applicant in the present proceedings. Likewise, the applicant also challenged the 'standing' of the learned Senior Federal Counsel.

Holding :

Held, dismissing the objections: (1) in order to have the locus standi to invoke the jurisdiction of judicial review, the applicant should claim, if not a legal or equitable right, at least a sufficient interest in respect of the matter to be litigated. The extent of sufficient interest depends on diverse variable factors such as the content and intent of the statute of which contravention is alleged, the nature of the breaches of statutory power, the specific circumstances of the case, the nature and extent of the applicant's interest or grievance and the nature and extent of the prejudice or injury suffered by him; (2) this court was satisfied that: (i) the applicant is a rate-payer, (ii) he had contracted a monogamous marriage, and (iii) he strongly adheres to the sanctity of a monogamous marriage which has the backing of an Act of Parliament, namely, the Law Reform (Marriage and Divorce) Act 1976 (Act 164). The applicant therefore has a standing to challenge the decision of the second respondent and the endorsement of the said decision by the third respondent at least at this threshold stage of his application for leave; (3) the opposition to the locus standi of the learned Senior Federal Counsel has no merit; (4) in addition the applicant has also sufficiently made up a case (at least at the threshold stage) which shows that in approving the film publicity materials, the second and third respondents had failed to take into consideration that the said materials bearing the title 'Happy Bigamist' and the advertising message of 'two wives in one house policy feasible' would have the effect of depraving the sanctity of a monogamous marriage; indeed the said material has the tendency to promote bigamy which in law is offensive. Per curiam: on principle and authority, the court is of the view that at this stage of the proceedings the court is required only to inquire whether the matter to be decided by the court is not in fact frivolous and vexatious in the sense that it is a trivial complaint of an administrative error by a busybody with a misguided sentiment and misconception of the law. Another requirement at this stage of the proceeding which a court has to consider is that the applicant must produce sufficient evidence to sustain a prima facie case that a public officer or authority that made the decision had acted unlawfully or that he or it had, in its exercise of the administrative discretion, acted ultra vires the power given to him or it under the relevant statute. If the court is satisfied that the applicant has complied with these two requirements, leave would usually be granted irrespective of whether the applicant has suffered no greater injury than thousands of the King's subjects.

Digest :

George John v Goh Eng Wah Bros Filem Sdn Bhd & Ors [1988] 1 MLJ 319 High Court, Alor Setar (Lim Beng Choon J).

1572 Censorship certificate -- Non-compliance with Films (Censorship) Act 1952 (Act 35)

10 [1572] PUBLIC ENTERTAINMENT Censorship certificate – Non-compliance with Films (Censorship) Act 1952 (Act 35) – Whether affects acquisition of copyright – Claim against videopirates – Anton Piller order sought – Censorship – Censorship certificate – Offence to exhibit, sell, hire or distribute film without certificate – Films (Censorship) Act 1952 (Act 35), ss 9(2), 9A(2), 15(1)(a) & 25(1)(d).

Summary :

The first two plaintiffs, TVB and RTV were producers of the television series and programmes which were shown on Hong Kong television. TVB and RTV were owners of the copyright in those television films or soap operas. The third plaintiff, Golden Star, had the exclusive right from them to reproduce those films on video cassettes for distribution to their dealers or outlets for hiring out to the public. From investigations conducted by Golden Star, the defendants had been hiring out pirated copies of their television series on the black market. They had not given permission to the defendants to make copies of or put on video cassettes their films. The plaintiffs therefore sought for an ex parte order, the Anton Piller order, before the writ was even served on the defendants. The plaintiffs wanted to take the defendants by surprise so that they could not get rid of incriminating evidence and their stock of infringing video cassettes. The plaintiffs therefore feared that unless they obtained an Anton Piller order the defendants would easily remove, destroy or erase incriminating documents and articles. The said order was granted by the present court. The defendants objected on the following grounds: (a) the defendants claimed privilege against self-incrimination; (b) as the plaintiffs had allegedly committed offences contrary to s 15(1) of the Films (Censorship) Act 1952 (Act 35), they had lost their copyright to the films; (c) the films were not made available in sufficient quantities to satisfy the reasonable requirement of the public under s 2(2)(a) of the Copyright Act 1969 (Act 10).

Holding :

Held: (1) there was a strong prima facie case against the defendants that the plaintiffs had been dealing in illicit films and that the plaintiffs had satisfied the requirements for the making of an Anton Piller order; (2) the usefulness of the Anton Piller order is on the element of surprise. This is so essential in cases of piracy. If the pirates have been forewarned then vital documents and articles would be lost, hidden or destroyed; (3) the defendants in this case were dealing with pirated video cassettes which infringed the plaintiffs' rights; (4) in this country, the privilege against self-incrimination has been withdrawn: s 132 of the Evidence Act 1950 (Act 56). In view of s 132(3), the Anton Piller order had to be modified to carry a statement in terms of s 132(2). The defendants must be informed that the answers given by them in response to the order will not subject them to the risk of arrest or prosecution and that their evidence will not be used in any criminal proceedings, except a prosecution for giving false evidence by their answers; (5) s 15(1)(a) of the Films (Censorship) Act 1952 makes it an offence to exhibit, sell, hire or distribute any film without a certificate. The court, however, ought to be very slow to hold that the Films (Censorship) Act 1952 intends to interfere with the rights and remedies given by the ordinary law of copyright; (6) if Golden Star had infringed the Films (Censorship) Act 1952 then they could be prosecuted and they would have to pay the penalty. However, their rights under the Copyright Act 1969 remains and could be enforced; (7) for copyright to subsist, the films must be published in Malaysia within 30 days of their being first shown in any country, in this case, Hong Kong; (8) for the films to be published within the meaning of s 2(2)(a) of the Copyright Act 1969, it is enough if they were on offer and sufficient copies were available to meet the anticipated public demand. In this case, the video cassettes were with the dealers who, being businessmen, were prepared to supply on demand. The plaintiffs need not prove any positive acts of offer; (9) TVB and RTV as makers of the film could, by virtue of s 2(1) of the Copyright Act 1969, sue. Golden Star as the exclusive licensee could also sue. Should Golden Star merely have a licence and be not an exclusive licensee, they were proper parties so long as they had joined TVB and RTV as co-plaintiffs.

Digest :

Television Broadcasts Ltd & Ors v Mandarin Video Holdings Sdn Bhd [1983] 2 MLJ 346 High Court, Kuala Lumpur (Chan J).

Annotation :

[Annotation: The appeal against the above judgment has been struck off by the Federal Court in FCCA No 165 of 1983.]

1573 Censorship certificate -- Non-compliance with Films (Censorship) Act 1952 (Act 35)

10 [1573] PUBLIC ENTERTAINMENT Censorship certificate – Non-compliance with Films (Censorship) Act 1952 (Act 35) – Whether affects acquisition of copyright – Claim to copyright of films in video cassette form – Copyright – Cinematograph films in video tapes uncensored – Non-compliance with provisions of Films (Censorship) Act does not affect the acquisition of copyright of films under Copyright Act – No sufficient nexus between two Acts – Films (Censorship) Act 1952 (Act 35) – Copyright Act 1969 (Act 10).

Summary :

In this case, the appellants who claimed copyright in certain films in video cassette form alleged infringement by the respondents of their copyright and instituted proceedings for relief by way of injunctions, delivery of the offending articles, discovery, and damages. On the issue of the writs, they applied ex parte for and obtained Anton Piller orders. The respondents then applied to set aside these orders and for the return of all the cassettes, documents and other articles removed from their premises pursuant to the ex parte order. The learned judge found no merit in the contentions advanced by the respondents in their application to set aside the orders made except on the question of the publication of the films under the Copyright Act 1969 (Act 10) taken in conjunction with the Films (Censorship) Act 1952 (Act 35). He held that as no certificates of approval were obtained as required under the Films (Censorship) Act 1952 there was no valid publication of the films within the provision of the Copyright Act 1969 as the publication in Malaysia must be a lawful one. He accordingly adjudged the publication of the films by the appellants to be unlawful, illegal and an offence punishable under the Films (Censorship) Act 1952 and decided in effect that no copyright had been acquired as a result. He therefore allowed the respondent's applications, set aside the ex parte orders he had previously made and ordered the return of the articles removed from the respondent's premises see [1983] 2 MLJ 409. The appellants appealed.

Holding :

Held, allowing the appeals: (1) there was no prohibition in either of the Acts which would preclude the appellants from acquiring copyright if they were otherwise qualified although they were in breach of the provisions of the Film (Censorship) Act 1952 which is concerned only with criminal liability and provides a penalty for breach of its relevant provisions; (2) non-compliance with the provisions of the Film (Censorship) Act 1952 does not affect the acquisition of copyright under the Copyright Act 1969. There is no express or implied prohibition linking the respective requirements of the two statutes and, accordingly, no nexus to justify reading these conjunctively and importing the requirements of one as a condition precedent to the operation of the other; (3) in this case, since the appellants have in the first instance ex facie acquired copyright this needs to be protected pending a full hearing of the action instituted.

Digest :

Asia Television Ltd & Anor v Viwa Video Sdn Bhd & Connected Cases [1984] 2 MLJ 304 Federal Court, Ipoh (Abdul Hamid CJ (Malaya).

1574 Cinematograph films -- Illegal entry and search of premises

10 [1574] PUBLIC ENTERTAINMENT Cinematograph films – Illegal entry and search of premises – Whether obscene film found in search admissible in evidence – Cinematograph films – Seizure of obscene films – Production of in evidence.

Summary :

The accused had been charged for being in possession of obscene films and for abetment thereof. It appeared that the films were seized when the premises were entered into by the police. It was submitted that the entry was not made in compliance with s 24(2) of the Cinematograph Films Ordinance and therefore the exhibits seized could not be produced in evidence. The learned magistrate held that the failure to comply with s 24 of the ordinance vitiated the trial and he discharged the accused.

Holding :

Held: the fact that evidence was illegally obtained did not affect its admissibility and, as the learned magistrate was wrong in discharging the respondents, there must be an order for retrial in this case.

Digest :

Public Prosecutor v Foong Kow & Ors [1967] 1 MLJ 141 High Court, Ipoh (MacIntyre J).

1575 Cinematograph films -- Whether video tapes come within definition of 'cinematograph films'

10 [1575] PUBLIC ENTERTAINMENT Cinematograph films – Whether video tapes come within definition of 'cinematograph films' – Whether copyright acquired – Copyright – Cinematograph films made in Hong Kong – Whether video tapes come within definition of cinematograph films – Publication in Malaysia – Whether copyright acquired in respect of cinematograph films – Copyright Act 1969 (Act 10), ss 2, 3, 4, 5, 6, 12 & 20.

Summary :

The first respondent, a limited company incorporated in Hong Kong, are the makers and owners of the copyright in certain cinematograph films in Hong Kong, and the second and third respondents are respectively the licensee and sub-licensee in Malaysia. The films were video recordings to be shown on television screens for which purpose they were copied on to tapes for sale and hire as video cassettes. The films were published in Malaysia within 30 days of their first publication in Hong Kong. The appellants in a representative action suing on behalf of themselves and other members of the Perak Video Tape Dealers Association issued a writ seeking a declaration that the first respondent is not entitled to copyright in Malaysia in respect of the cinematograph films produced by them in Hong Kong and consequential injunctive relief and damage. George J dismissed the appellants' claim and they appealed against the decision.

Holding :

Held: (1) video tape comes within the definition of 'cinematograph film' in s 2(1) of the Copyright Act 1969 (Act 10). The definition of 'cinematograph film' makes no reference to cinematography or any other process but concentrates chiefly on the essential characteristic of a sequence of visual images capable of being shown as a moving picture; (2) the marginal note to s 5 of the Copyright Act 1969 reads 'Copyright by virtue of citizenship or residence' and that to s 6 'Copyright by reference to country of origin'. It is therefore abundantly clear that they are distinct provisions to be read separately and operating independently of each other; (3) the provisions of the Act under consideration call for a purposive and literal construction which is one that follows the literal meaning of the enactment where that meaning is in accordance with the legislative purpose and applies where the literal meaning is clear and reflects the purposes of the enactment. There is no justification or warrant to read the provisions of ss 5 and 6 together so as to restrict the application of s 6 only to works eligible for copyright as specified therein of which the author is a qualified person as defined in s 5; (4) there is no ambiguity in s 2(2) of the Act and on the provisions of the Act as they now stand 'any country' must necessarily mean Malaysia and would include any other qualifying country to which the Act is extended under the provisions of any regulations if and when made under s 20. In this case, there was publication in Hong Kong in the first instance and upon publication in Malaysia within a period of 30 days of the earlier publication in Hong Kong within the intendment of s 2(2)(c), the provisions of s 6(1)(a) of the Act would operate to confer copyright on the films in question. The first respondent, as the author, is accordingly vested under s 12 of the Act with copyright in respect thereof.

Digest :

Foo Loke Ying & Anor v Television Broadcasts Ltd & Ors [1985] 2 MLJ 35 Supreme Court, Kuala Lumpur (Abdul Hamid CJ (Malaya).

1576 Exhibiting obscene film -- Abetment of offence

10 [1576] PUBLIC ENTERTAINMENT Exhibiting obscene film – Abetment of offence – Whether mere attendance constitutes abetment – Penal Code (FMS Cap 45), ss 109 & 292(a) – Theatres and Places of Public Amusement Enactment 1936, s 3 - Charge – Whether would lie against operator or exhibitor.

Summary :

The nine accused were arrested when they were trying to escape from premises that were being raided. The raiding police party found a projector and four reels of film and the accused were charged under ss 109 and 292(a) of the Penal Code (FMS Cap 45). The learned magistrate after being satisfied as to the obscenity of the films convicted all of them under ss 109 and 292(a) of the Penal Code. On revision,

Digest :

Public Prosecutor v Tee Tean Siong [1963] MLJ 201 High Court, Kota Bharu (Hashim J).

Annotation :

[Annotation: Observations on s 24 of the Cinematograph Ordinance 1952 and s 3 of the Theatres and Places of Public Amusement Enactment 1936.]

1577 Licence -- Operation and management of discotheque

10 [1577] PUBLIC ENTERTAINMENT Licence – Operation and management of discotheque – Agreement by which appellants would operate discotheque for the respondents – Licence in the name of respondents' director – Whether agreement in breach of Public Entertainments Act and Public Entertainments Rules – Scheme of the Act and the Rules – Public Entertainments Act (Cap 257), ss 3, 6, 11 & 18 – Public Entertainments Rules 1969, rr 3(2) & 5

Digest :

Nova Management Pte Ltd v Amara Hotel Properties Pte Ltd & Anor [1994] 1 SLR 263 Court of Appeal, Singapore (Yong Pung How CJ, Karthigesu and LP Thean JJA.

See CONTRACT, para 2183.

1578 Offences under Films Act -- Exhibiting films without certificate of approval

10 [1578] PUBLIC ENTERTAINMENT Offences under Films Act – Exhibiting films without certificate of approval – Whether there is subsidiary legislation providing for issue of certificate – Films (Censorship) Act 1952 (Act 35), ss 9(2), 9A & 15(1)(a)

Summary :

The respondent had been charged with exhibiting films without a certificate of approval, an offence punishable under s 15(1)(a) of the Films (Censorship) Act 1952 (Act 35). In the magistrates' court, the respondent raised the preliminary objection that the certificate of approval must be prescribed by regulations and since there were no such regulations, the respondent could not therefore be guilty of an offence under s 15(1)(a) of the 1952 Act. The magistrate upheld the preliminary objection and discharged the respondent. The prosecution appealed to the High Court.

Holding :

Held, allowing the appeal: (1) the function of the court is simply to ascertain the meaning of the statute as it stands. If the words of a statute are plain, effect is given to them. The court has no authority to limit a statute or put upon the words of a statute a limitation which is not according to the ordinary meaning of the words; (2) as far as possible, a statute should not be read to give it an effect such that it is a pointless piece of legislation; (3) the words of s 15 of the 1952 Act are plain and clear. There must not be any exhibition of films without a certificate issued under ss 9(2) or 9A of the 1952 Act; (4) if there are no subsidiary legislation providing for the application or issuance of the certificate, it only means inconvenience for the public but this does not make ss 9, 9A or 15 of the 1952 Act invalid. It is for the legislature to rectify, if ever there are such problems; (5) if the preliminary objection was sustained in this case, this would turn the 1952 Act into a pointless piece of legislation. The magistrate was therefore directed to hear this case on its merits.

Digest :

Public Prosecutor v Tan Kah Pin [1993] 1 CLJ 83 High Court, Tawau (Ian Chin JC).

1579 Offences under Films Act -- Sentencing

10 [1579] PUBLIC ENTERTAINMENT Offences under Films Act – Sentencing – Whether sentences of imprisonment given in default of payment of fines excessive and/or wrong in law – Criminal procedure – Sentencing – Section 224(c)(iii) of Criminal Procedure Code – Explanation of – Whether sentences of imprisonment given in default of payment of fines excessive and/or wrong in law – Factors to consider – Criminal Procedure Code (Cap 68, 1985 Ed), ss 224(b)(iv) & 224(c)(iii)(B) & (C).

Summary :

The appellant was convicted of four offences under the Films Act (Cap 107, 1985 Ed) as follows: (a) making video tapes without a licence under s 6(1) of the Act; (b) distributing uncensored video tapes under s 6(1); (c) having in his possession 217 video tapes without a valid certificate authorizing the exhibition thereof under s 21(1) of the Act; (d) having possession of an obscene video tape under s 29(1) of the Act. He was sentenced to a fine of S$5,000 (in default three months' imprisonment) on the first charge; a fine of S$5,000 (in default three months' imprisonment) on the second charge; a fine of S$100 per tape (in default three days' imprisonment) for each tape on the third charge and a fine of S$500 (in default five weeks' imprisonment) on the fourth charge. The first and second charge did not specify the number of video tapes that the appellant allegedly made or distributed. The first submission by defence counsel was that the default sentences on the first and second charges were excessive in that they bore no proportion to the maximum penalty that could be suffered by the accused. The second submission was that by imposing a default sentence of 651 days' imprisonment in respect of the third charge, the district judge had erred in law as the maximum default sentence, by virtue of s 224(c)(iii)(C) of the Criminal Procedure Code (Cap 68, 1985), was only six months and therefore the default sentence of 651 days' imprisonment exceeded the maximum punishment allowed by the law. The respondent submitted that the sentence on the third charge was correct as s 224(c)(iii) applies to each fine. According to the respondent, each of the fines falls within s 224(c)(iii)(B) of the code and, therefore, the total default sentence may exceed four months.

Holding :

Held, allowing the appeal: (1) sub-paras (A), (B) and (C) of s 224(c)(iii) must be read subject to the terms of the main para (c) which refers to 'the offence'. The offence was not having unlawful possession of one tape but of 217 tapes. There was only one offence. Although a fine was imposed for each tape, the total fines on all the tapes constitute the collective punishment for that one offence. Accordingly, the default sentence on the total fine of S$21,700 must fall within sub-para (C) which provides that the default term of imprisonment shall not exceed six months; (2) as the appellant was a first offender and as the culpability of the accused in respect of the first three charges overlapped to a certain extent, the default sentences on the first and second charges were excessive even though they cannot be said to have ignored the principle of proportionality in sentencing. The sentence on the third charge was wrong in law and the default sentence had the effect of a maximum sentence against a first offender. Even taking into account the large number of tapes involved in the offence, the sentence was still excessive. The sentence on the fourth charge ignores the principle of proportionality in sentencing; (3) taking into account the fact that the appellant was charged with making a tape rather than a big number of tapes, the benefit of the doubt should be given to the accused since the charge did not specify the number of tapes that was involved and the facts showed that at the time of the police raid only one tape was in the process of being made. Similarly, taking into account the situation that the charge of distributing tapes did not specify the number being distributed and after considering all the above factors, the following default sentences should be adequate. On the first charge, the sentence should be one and a half months; on the second charge one and a half months; on the third charge four months and on the fourth charge two weeks.

Digest :

Seow Puay Seng v Public Prosecutor [1988] 2 MLJ 160 High Court, Singapore (Chan Sek Keong JC).

1580 Possession of offending video tapes -- Defective charge

10 [1580] PUBLIC ENTERTAINMENT Possession of offending video tapes – Defective charge – Qualified plea of guilty – Criminal law and procedure – Charge – Defective charge – Qualified plea of guilty – Films (Censorship) Act 1952 (Act 35), s 15 – Revision – Criminal Procedure Code (FMS Cap 6), s 305.

Summary :

In this case, the respondent had been convicted on a charge alleging that he was found in possession of video tapes. The respondent was fined $2,000 or in default four months' imprisonment. The Public Prosecutor appealed against the sentence.

Holding :

Held: (1) the charge was defective as possession of the offending tapes per se did not constitute an offence within the meaning of s 15(1) of the Films (Censorship) Act 1952 (Act 35); (2) when the respondent said in mitigation that the tapes were not meant for hire, the respondent was in fact making a qualified plea which ought to have led the magistrate to reject the plea of guilty and enter instead a plea of 'Not guilty'; (3) the conviction should therefore be quashed and a retrial be ordered.

Digest :

Public Prosecutor v Lim Yoo Hock [1984] 1 MLJ 309 High Court, Ipoh (Edgar Joseph Jr J).

1581 Theatres -- Entertainment by infants and children

10 [1581] PUBLIC ENTERTAINMENT Theatres – Entertainment by infants and children – Suffering a child to take part in public entertainment – Theatres and places of public amusement – Entertainment by infants and children – Suffering a child to take part in public entertainment.

Summary :

The respondent was charged that he being the licensee of a singing troupe did suffer a child under the age of 12 years and a child under the age of 17 years to take part in a public entertainment in contravention of s 10(1) and s 10(3) respectively of the Children and Young Persons Ordinance. He was acquitted on the ground that the prosecution had failed to prove mens rea.

Holding :

Held: (1) it was sufficient if such knowledge could be inferred from the facts that have been proved; (2) it was unnecessary to prove actual knowledge that the children had taken part in the public entertainment;in this case, such an inference could be drawn from the facts and, therefore, the case should be remitted to the magistrate's court for the respondent to be called upon for his defence.

Digest :

Public Prosecutor v Yeoh Joo Hong [1965] 2 MLJ 142 High Court, Penang (Hepworth J).

1582 Theatres -- Excessive payment for food and drinks in cafe

10 [1582] PUBLIC ENTERTAINMENT Theatres – Excessive payment for food and drinks in cafe – Whether this amounts to payment of a lump sum on payment for a ticket under s 7 – Entertainments Duty Proclamation, ss 5 & 7 – Revenue – Entertainments Duty Proclamation – Prosecution under s 5 – Whether excessive payment for drinks and food in a cafe providing entertainment is a payment of a lump sum or a payment for a ticket within the meaning of s 7.

Summary :

This was a prosecution under s 5 of the Entertainments Duty Proclamation. The defendant was the proprietor of a cafe providing music and vocal recitators inside an amusement park in Penang. Melon seeds were automatically served on customers who were charged an exorbitant price for them by means of a printed form to every customer, and the charge paid for coffee was also excessive. The prosecution alleged that part of the price paid for the coffee and melon seeds must represent the price of a seat for the entertainment.

Holding :

Held: (1) payment (whether excessive or otherwise) for melon seeds was not a payment in a lump sum or a payment for a ticket within the meaning of s 7 of the proclamation; (2) in a prosecution, the strict law of proof in criminal proceedings must be applied. It cannot be inferred that the excessive charge for coffee and melon seeds must represent or include a charge for admission to the cafe.

Digest :

R v Khoo Joo Tiang [1952] MLJ 237 High Court, Penang (Spenser-Wilkinson J).

1583 Theatres -- Licence

10 [1583] PUBLIC ENTERTAINMENT Theatres – Licence – Breach of condition of licence – Responsibility of licensee – The Theatres Enactment 1910, s 9(iii) – Breach of conditions of licence – Responsibility of licensee.

Summary :

Only the licensee can be convicted under the provisions of s 9(iii) of the Theatres Enactment 1917. It is impossible for the licensing officer to create an offence against a stranger by a condition endorsed on a licence to which he is not a party. It is inconsistent with the scheme of the enactment that the Legislature intended that the licensee should be responsible for a breach committed by himself, and not by his servants.

Digest :

Public Prosecutor v Manager, Great Eastern Park, Kuala Lumpur [1934] MLJ 270; [1933-34] FMSLR 250 High Court, Federated Malay States (Burton J).

1584 Theatres -- Licence

10 [1584] PUBLIC ENTERTAINMENT Theatres – Licence – Breach of condition of licence – Responsibility of licensee for breach committed by servant

Summary :

Where, in breach of r 4 made under the Public Amusement Enactment 1913, two boys under 16 years of age were admitted to the premises of a shooting gallery to the knowledge of a servant of the licensed person who was in charge of the premises, but without any knowledge or connivance on the part of the licensed person,

Holding :

Held: the licensed person was responsible for the act of his servant under the Public Amusement Enactment 1913, and was rightly convicted.

Digest :

Siew Yong v Public Prosecutor [1931-32] FMSLR 364 High Court, Federated Malay States (McFall J).

PUBLIC HEALTH

1585 Illegal dumping -- Forfeiture of vehicle

10 [1585] PUBLIC HEALTH Illegal dumping – Forfeiture of vehicle – Whether necessary that owners be charged first – Proper procedure to be followed

Summary :

Digest :

Chandra Kumar v Public Prosecutor [1995] 3 SLR 123 High Court, Singapore (Yong Pung How CJ).

See PUBLIC HEALTH, para 1553.

1586 Illegal dumping -- Forfeiture of vehicle

10 [1586] PUBLIC HEALTH Illegal dumping – Forfeiture of vehicle – Written application by Public Prosecutor – Factors to be considered in the exercise of court's discretion – Environmental Public Health Act (Cap 95, 1988 Ed), s 20(4) & (5)

Summary :

The appellant was convicted in the district court of the offence of illegally dumping refuse contrary to s 20(1) of the Environmental Public Health Act (Cap 95, 1988 Ed). The vehicle which he used in the commission of the offence was ordered to be forfeited under s 20(4) of the same Act. It was held in the district court that under s 20(4) there was no discretion to order anything else but forfeiture. The appellant appealed, arguing that the proper construction of s 20(4) and s 20(5) of the Act was that there was such a discretion. The Public Prosecutor did not challenge the existence of a discretion under that section, but argued that the case should be remitted back to the district court for the judge to exercise his discretion.

Holding :

Held, allowing the appeal: (1) a number of factors could be relevant in considering whether the discretion should be exercised, namely, the participation of the owner of the vehicle, the benefit derived by the owner from the offence and peripherally, the value of the vehicle in question. Where the owner in question was not himself guilty of an offence, it was not relevant that forfeiture would deter other offenders. The extent of use of the vehicle and the steps taken by the owner to prevent the use of the vehicle in such offences were also not relevant; (2) it was not appropriate for the case to be remitted to the district judge. There could be no disposal inquiry. Section 386 of the Criminal Procedure Code (Cap 68) (CPC) was not the appropriate section governing disposal of the vehicle. Such disposal must be made under s 20 itself. But this would amount to a retrial of the case; (3) this was not an appropriate case for either a retrial under s 256, the calling of further evidence under s 257(1) or the revision of proceedings under s 268(1) read with s 266(1) of the CPC. The Public Prosecutor could not be given another attempt to obtain forfeiture, for that would be unjust; (4) this was not sufficient proof of their guilt; (5) furthermore, if the case was remitted, the owners would not actually have the opportunity to be heard, for they were not in fact charged with the offence. The proper procedure when forfeiture was sought was to charge the owners so that they would be able to defend themselves; (6) in any event, the evidence sought to be adduced to obtain forfeiture would give rise only to a suspicion of the involvement of the owners of the vehicle;(per curiam) the forfeiture of vehicles is not a suitable punishment for offences of this nature. A range of fines of up to S$100,000 would be a better tool in combating illegal dumping.

Digest :

Chandra Kumar v Public Prosecutor [1995] 3 SLR 123 High Court, Singapore (Yong Pung How CJ).

1587 Illegal dumping -- Whether site was 'public place'

10 [1587] PUBLIC HEALTH Illegal dumping – Whether site was 'public place' – Whether the ingredients of dumping made out – Environmental Public Health Act (Cap 95, 1988 Ed), s 20

Summary :

The appellant was caught by environment health officers after he was seen tipping some 17 cubic metres of refuse from a lorry (the vehicle) on a plot of land off Lorong Buangkok (the site). The appellant was a director of Sung Teong Constructions Pte Ltd (the company). The company was the owner of the vehicle. The company had been engaged by the Housing and Development Board to, inter alia, demolish certain structures on the site and level it. The Land Office then allowed the company to maintain the site. There was a limited length of damaged fence around parts of the site. There was a gate leading to the site. However, one could get unto the site by going through holes in the fence and in the gate. It appeared that one side of the site was not fenced at all. An officer from the Land Office testified that if members of the public were to walk on the site, they would not be stopped or prosecuted. The district judge held that the site was a public place. The appellant was convicted under s 20(1) of the Environmental Public Health Act (Cap 95, 1988 Ed) (the Act) for illegal dumping. The district judge held that as the prosecution had made a written application for the forfeiture of the vehicle, he had no discretion but to make the order. Accordingly, he ordered that the vehicle be forfeited. The appellant appealed.

Holding :

Held, allowing the appeal in part: (1) while it was not possible to hold that a place was a public place merely because it was state land, having regard to the object of s 20 of the Act and the mischief it was aimed at, the words 'public place' must be given as wide an interpretation as was permissible under the Act and in the light of the authorities. Any place to which the public had access was a 'public place' for the purposes of s 20. Where it was state land, whether the public did in fact go there was irrelevant. The district judge's finding that the site was a public place was therefore justified; (2) the appellant had admitted in court that he had no right to occupy and was not in occupation of the site. He therefore knew that he had no right to deposit refuse on it, temporarily or otherwise. Whether the company was under an obligation under the maintenance contract to remove the refuse or not was irrelevant. The district judge was therefore justified in finding that the refuse had been disposed of at the site under the ruse of maintaining the site. The appellant was therefore rightly convicted; (3) the word 'shall' in s 20(4) of the Act was used in the directory sense. Hence, notwithstanding its use in sub-s (4), the court nevertheless retained the discretion whether or not to make a forfeiture order. In this case, forfeiture of the vehicle, which was not even owned by the appellant, was out of all proportion to the offence committed by the appellant. The forfeiture order was therefore set aside.

Digest :

Toh Teong Seng v Public Prosecutor [1995] 2 SLR 273 High Court, Singapore (Yong Pung How CJ).

Public Servants

1588 Civil proceedings -- Act in breach of duty

10 [1588] PUBLIC SERVANTS Civil proceedings – Act in breach of duty – Slander – Merchant Shipping Act 1859

Summary :

An action for damages will lie against a public servant for acting in breach of his official duty, to the injury of any person. The defendant, the Master Attendant or Shipping Officer at Singapore it was alleged, refused to place the plaintiff, a duly qualified seaman, on the articles of a merchant vessel as chief officer whereby the plaintiff was unable to get the berth and suffered great loss.

Holding :

Held,

Held: (1) and even if it was, it was not done by the defendant in breach of his public duty; (2) (if the evidence had supported the case): the action would lie. The defendant advised the captain of a ship, who was about to ship the plaintiff as his chief officer, not to take him as such (on account of his previous conduct on board other ships) whereupon the captain changed his mind, and would not take the plaintiff on. this was not obstructing the plaintiff from being engaged;if the plaintiff had any remedy, for such statement made by the defendant concerning him to the captain, it was in a different form of action. Quaere: whether an action for slander, or libel, would lie under the circumstances? The duty of the shipping officer, under s 4 of the Merchant Shipping (Indian) Act 1 of 1859 is not to facilitate engagements generally, but only in the way pointed out by s 22 and that is, not by assisting them to get employment, but to see they were not imposed on, when employment was offered them.

Digest :

Collins v Burn (1868)1 Ky 186 High Court, Straits Settlements (Maxwell CJ).

1589 Civil proceedings -- Assault and false imprisonment

10 [1589] PUBLIC SERVANTS Civil proceedings – Assault and false imprisonment – Proof of malice – Police Act 48 of 1860

Summary :

By s 29 of Act 48 of 1860, in an action against a police officer for anything done, or intended to be done, by him in the execution of his duty, it is not only necessary to allege in the pleadings that he acted maliciously and without reasonable and probable cause, but it must clearly be made out, by evidence, that the officer so acted. Therefore, in an action against a penghulu for assault and false imprisonment, although it was clearly proved by the plaintiff that he was assaulted and imprisoned, and that the defendant in so acting against him, had no reasonable or probable cause, yet, as no actual malice on the part of the penghulu was shown, the defendant had judgment with costs.

Digest :

Ko Bo An v Punghulu Shaik Beenan [1872] 1 Ky 273 High Court, Straits Settlements (Hackett J).

1590 Civil proceedings -- Garnishee proceedings

10 [1590] PUBLIC SERVANTS Civil proceedings – Garnishee proceedings – Whether officers of the Federal Land Development Authority were public officers – Meaning of public officers – Interpretation Act 1967 (Act 23/1967), s 3 – Federal Constitution, art 132(1) – Rules of the Supreme Court, O 43 r 5(2) – Garnishee proceedings – Order against garnishees to pay into court $15,502.10 being sum paid out to judgment debtor – Appeal against order – Whether officers of the Federal Land Development Authority were public officers – Meaning of 'public officers' – Land Development Ordinance 1956 (Ord 20/1956), ss 64 and 65 – Interpretation Act 1967, s 3 – Federal Constitution, art 132(1) – RSC 1957, O 43 r 5(2).

Summary :

Officers of the Federal Land Development Authority are not public officers within the meaning of O 43 r 5(2) of the Rules of the Supreme Court 1957. Public services under the Interpretation Act 1967 (Act 23/1967) means the public services mentioned in art 132(1) of the Federal Constitution which sets out a list of public services. The Federal Land Development Authority is not one of the services mentioned in the Constitution.

Digest :

Ramalingam v Chong Kim Fong; Lembaga Kemajuan Tanah Persekutuan (Garnishees) [1978] 1 MLJ 83 High Court, Seremban (Ajaib Singh J).

1591 Civil proceedings -- Injunction

10 [1591] PUBLIC SERVANTS Civil proceedings – Injunction – Whether injunction can be granted against government or government officer – Government Proceedings Ordinance 1966, s 29 – Application to declare subsidiary legislation void and of no effect – Application made by originating motion – Whether injunction can be granted against government or government officer – Misnomer of defendant – Government Proceedings Ordinance 1966, s 29 – RSC 1957, O 52 r 1, O 54A rr 1 & 1A.

Summary :

The court has no jurisdiction to entertain an application for an injunction against the government or an officer of the government which would have the effect of an injunction against the government.

Digest :

Haji Ismail bin Che Chik v State Commissioner, Penang [1975] 1 MLJ 271 High Court, Penang (Chang Min Tat J).

1592 Civil proceedings -- Mandamus

10 [1592] PUBLIC SERVANTS Civil proceedings – Mandamus – Crown servant – When remedy lies

Digest :

Re Bukit Sembawang Rubber Co Ltd & Sembawang Estates Ltd [1961] MLJ 269 High Court, Singapore (Chua J).

See PUBLIC AUTHORITIES, Vol 10, para 1501.

1593 Civil proceedings -- Mandamus

10 [1593] PUBLIC SERVANTS Civil proceedings – Mandamus – Liability arising out of breach of contract

Summary :

Per Sharma J: 'É any duty or obligation falling upon a public servant out of a contract entered into by him as such public servant, cannot be enforced by machinery of a writ of mandamus or an order under s 44 of the Specific Relief Ordinance 1950. Mandamus does not lie to enforce a civil liability arising out of a breach of contract to enforce rights based on contract. A civil suit for damages or for the enforcement of the civil liability may be the only proper remedy in such a case. Similarly, mandamus does not issue to enforce a civil liability arising under torts.'

Digest :

Koon Hoi Chow v Pretam Singh [1972] 1 MLJ 180 High Court, Ipoh (Sharma J).

1594 Civil proceedings -- Negligence

10 [1594] PUBLIC SERVANTS Civil proceedings – Negligence – Public authority not sued simultaneously – Plaintiff's right of action – Whether barred by Public Authorities Protection Ordinance 1948, s 2 – Government Suits – Plaintiff's right of action – Whether barred by Public Authorities Protection Ordinance 1948, s 2.

Digest :

Ponnusami v Ratnam & The Government of Malaysia [1965] 2 MLJ 268 High Court, Penang (Ong J).

See PUBLIC AUTHORITIES, Vol 10, para 1464.

1595 Civil proceedings -- Negligence

10 [1595] PUBLIC SERVANTS Civil proceedings – Negligence – Writ not issued till after expiry of 12 months – Whether action would lie against government as principal when servant of government was not made a party – Government Proceedings Ordinance 1956, ss 5 & 6 – Government Suit – Writ not issued till after expiry of 12 months – Whether action would lie against Government as principal when servant of Government was not made a party – Government Proceedings Ordinance 1956 (Ord 58/1956), ss 5 & 6.

Summary :

The plaintiff brought an action to recover damages arising out of a traffic accident. The accident took place on 2 April 1963. The writ was submitted to the Registry on 1 April 1964, with instructions that it was not to be issued until further instructions were received from the solicitors for the plaintiff and it was not finally sealed and issued till 18 January 1965. The driver of the government motor vehicle was not made a party to the action.

Holding :

Held: as the action was not commenced within 12 months after the neglect or default complained of and as the servant of the government was not also made a defendant to the action, the action could not proceed and must be dismissed.

Digest :

Haji Abdul Rahman v Government of Malaysia & Anor [1966] 2 MLJ 174 High Court, Kota Bahru (Abdul Aziz J).

1596 Civil proceedings -- Plea for clemency

10 [1596] PUBLIC SERVANTS Civil proceedings – Plea for clemency – Injunction to Superintendant of Prisons pending execution – Whether court can grant interim injunction – Government Proceedings – Whether court can grant declaration and injunction – Government Proceedings Ordinance 1956, s 29(2) – Specific Relief Ordinance 1950, s 54(d) – Effect of.

Summary :

The court has no jurisdiction to entertain a claim for an interim injunction against the Superintendant of Prisons in view of s 29(2) of the Government Proceedings Ordinance 1956 (Ord 58/1956) and s 54(d) of the Specific Relief (Malay States) Ordinance 1950.

Digest :

Law Kiat Long & Ors v Pardons Board, Johore & Ors; Oie Hee Koi & Ors v Pardons Board Johore & Ors [1968] 2 MLJ 249 High Court, Johore Bahru (Ali J).

1597 Compulsory retirement -- Claim that applicant prematurely retired

10 [1597] PUBLIC SERVANTS Compulsory retirement – Claim that applicant prematurely retired – Statement as to age in record of service – Application to have date amended rejected – Whether applicant entitled to take action against railway authority – Whether employees of Malayan Railways are in the service of the government of the Federation

Summary :

In this case, the respondent had declared at the time of his joining the railway service on 19 February 1941 that his date of birth was 26 June 1916. On that basis he was compulsorily retired from service on attaining the age of 55 on 26 June 1971. The respondent claimed that his correct date of birth was 21 June 1921. He obtained authenticated documents from India relating to his actual date of birth and on the presentation of these documents to the Registrar of Identity Cards, his identity card was amended to show the date of birth. He applied to the Principal Establishment Officer to have his date of birth amended but his application was turned down. He thereupon applied to the High Court for a declaration that he had been prematurely and unlawfully retired before his retiring age of 55 and in the High Court, Mohamed Azmi J made the declaration and ordered that he be reinstated in his employment ([1974] 1 MLJ 201). On appeal,

Holding :

Held: (1) by virtue of s 4(1A) of the Railway Ordinance 1948 (Ord 8/1948), the respondent being in the service of the Railway Administration is deemed to be in the service of the government of the Federation and therefore General Orders are applicable to him; (2) in the absence or his having failed to take such proceedings he had no right of action against the appellant; (3) under General Order A 19(e) the Principal Establishment Officer has absolute discretion in determining the application for amendment of the date of birth and if the respondent was dissatisfied with his decision in the exercise of such discretion, it was open to him to take proceedings against the government;under General Order 19(d), the respondent was bound by his statement which he made as to his date of birth when he was appointed to the railway service.

Digest :

General Manager, Keretapi Tanah Melayu v Veeriah [1975] 1 MLJ 123 Federal Court, Kuala Lumpur (Gill CJ, Ali and Ong Hock Sim FJJ).

1598 Compulsory retirement -- Claim that applicant prematurely retired

10 [1598] PUBLIC SERVANTS Compulsory retirement – Claim that applicant prematurely retired – Statement as to age in record of service – Doraisamy v Government of Malaysia [1982] 2 MLJ 155 Federal Court, Ipoh (Gill CJ (Malaya), Raja Azlan Shah and Ong Hock Sim FJJ)

Summary :

In this case, the respondent had required the appellant to retire from the service of the government on the ground that he had attained the age of 55 years. The respondent took the appellant's birth date as stated in the appellant's record of service. The Director of Public Service had refused a request for amendment of the recorded birth date. The appellant alleged that his birth date was wrongly recorded and brought an action for wrongful termination of his service alleging that the respondent had contravened s 10 of the Pensions Ordinance and art 136 of the Federal Constitution and the rule of natural justice. Wan Hamzah J dismissed the claim, following the decision of the Federal Court in General Manager, Keretapi Tanah Melayu v Verriah [1975] 1 MLJ 123. The appellant appealed.

Holding :

Held, dismissing the appeal: the learned trial judge was correct in dismissing the claim for the reasons set out in his judgment.

Digest :

Doraisamy v Government of Malaysia [1982] 2 MLJ 155 Federal Court, Ipoh (Gill CJ (Malaya).

1599 Compulsory retirement -- Mental illness

10 [1599] PUBLIC SERVANTS Compulsory retirement – Mental illness – Medical Board proceedings – Breach of natural justice – Purported retirement a nullity

Summary :

The plaintiff in this case was a police inspector in the Singapore Police Force. On 4 December 1974, he was transferred to the Woodbridge Hospital for an examination where he was detained until 12 December 1974 when he was granted leave by the said hospital at the request of his relatives. He was instructed to return to the said hospital for a review on 18 December 1974 but he never did. Instead the plaintiff tried to report for duty at the Police Reserve Unit but he was told to report to Woodbridge Hospital for a review of his mental condition and not to rejoin his Unit before then. On 15 January 1975, the plaintiff was instructed not to report for duty and to obtain from the medical superintendent of the said hospital a certificate of fitness. The plaintiff thereafter went into hiding and stayed in Malaysia for sometime. On 8 April 1975, the Permanent Secretary (Home Affairs) requested the Director of Medical Services to convene a Medical Board to examine the plaintiff. Attempts were made to serve notice of the said matter on the plaintiff but without success. The plaintiff failed to appear at the first meeing of the Medical Board and it was adjourned to 3 June 1975. The report of the second meeting stated, inter alia, that the plaintiff was suffering from paranoid disorder and that it was likely to prove permanent and the plaintiff was therefore unfit for duty as a police officer. In his letter of 16 June 1975, the Permanent Secretary of the Ministry of Home Affairs proposed to retire the plaintiff under s 7(2)(c) of the Pensions Act (Cap 55, 1970 Ed) 'by reason of an infirmity of mind and that the infirmity is likely to be permanent'. On 28 June 1975, the plaintiff's solicitors wrote to the Permanent Secretary requesting for a copy of the request to the Director of Medical Services to convene the Medical Board and a transcript of the evidence that was presented before the board. This request was not acceded to. In a subsequent correspondence the defendant claimed that 'no notes of evidence were taken during the proceedings of the board'. On 20 August 1975, the President gave his approval to retire the plaintiff under s 7(2)(c) of the Pensions Act. The plaintiff claimed that he was denied his rights to be heard by the Medical Board and that the provisions of s 7(2)(c) of the Pensions Act were not strictly complied with.

Holding :

Held: (1) the government in the various steps it took to comply with the provisions of s 7(2)(c) had to act fairly and observe the requirements of natural justice; (2) the action taken by the government in shutting out the plaintiff altogether from making any representation whatever and forwarding the report of the Medical Board to the President with a request that the plaintiff be retired under s 7(2)(c) of the Pensions Act was manifestly unfair to the plaintiff. It constituted a denial of natural justice; (3) the plaintiff was entitled to know all the evidence given before the Medical Board but the evidence was not disclosed to him on the ground that the Medical Board had made no record of it. If relevant material is not disclosed at all to a party who is potentially prejudiced by it, there is prima facie a breach of natural justice; (4) the report of the Medical Board did not state what the evidence was and the President reached his decision without consideration of and in ignorance of the evidence; (5) there was clearly a failure to comply strictly with the provisions of s 7(2)(c) of the Pensions Act. The plaintiff's retirement under the said section was a nullity and he was entitled to a declaration that he was still an inspector in the Singapore Police Force and was entitled to be remunerated as such.

Digest :

Aziz bin Abdul Rahman v Attorney General, Singapore [1979] 2 MLJ 93 High Court, Singapore (Choor Singh J).

Annotation :

[Annotation: The Attorney General appealed to the Court of Appeal (Civil Appeal No 65 of 1978, Wee Chong Jin CJ, Kulasekaram and Chua JJ, 26 June 1979). The Court of Appeal in dismissing the appeal decided that s 7 of the Pensions Act makes no provision for the retirement of a public officer.]

1600 Compulsory retirement -- Whether dismissal

10 [1600] PUBLIC SERVANTS Compulsory retirement – Whether dismissal – Whether termination of service amounts to punishment – Pensions Ordinance 1951, s 10(a) – Constitution of Malaysia, art 135(2)

Summary :

In this case, the plaintiff who was 58 1/2 years old was required to retire under s 10(a) of the Pensions Ordinance 1951 (Ord 1/1951). The plaintiff contended that he was entitled to remain in service until he had attained the age of 60 years, in accordance with the service circular No 6 of 1961 and that therefore the compulsory retirement was bad in law and therefore void and inoperative.

Holding :

Held: (1) the decision to retire the plaintiff could validly be made under s 10(a) of the Pensions Ordinance by the Principal Establishment Officer under powers delegated to him by the Yang di-Pertuan Agong; (2) the compulsory retirement under s 10(a) of the Pensions Ordinance is not equivalent to dismissal and the plaintiff was therefore not entitled to be given a reasonable opportunity of being heard before he was compulsorily retired.

Digest :

Thambipillai v The Government of Malaysia [1969] 2 MLJ 206 High Court, Alor Star (Wan Suleiman J).

1601 Contract -- Contract of Employment

10 [1601] PUBLIC SERVANTS Contract – Contract of Employment – Expatriate officers – 'Entitled officers' – Plaintiffs' application for declaration as – Examination of terms of circular and advertisement

Summary :

This was a consolidation of three actions by order of court. The plaintiffs were recruited in Australia as qualified accountants in the service of the Board. This was in response to an advertisement dated 23 March 1955 which, inter alia, stated that the 'Recruitment will be on a three-year gratuity-earning contract (renewable) and such officers may be considered by the Board after not less than three years' satisfactory service for emplacement on its pensionable establishment under a non-contributory pension scheme.' On 29 September 1955, the plaintiff Kennedy signed the contract which stated, inter alia, that the appointment was on gratuity earning contract effective from the date of taking up duty and was for a tour of three years' resident service commencing from that date which might be extended on such terms and such periods which might be mutually agreed (Clause I and II); Clause 10 provided for a gratuity on satisfactory completion of service provided the officer concerned was not emplaced on the Pensionable Establishment. A circular letter dated 24 May 1957 was sent by the Board stating that '... for several years now the recruitment policy and training programme of the Board have been directed towards early Malayanisation of Division I posts of the Board's establishment. Thus in accordance with this policy, since the end of 1955 when it has become necessary to recruit expatriate officers this has been done on contract terms only.' The plaintiffs became worried about their positions, and on the assumption that they were non-entitled officers they jointly wrote to the general manager setting out the circumstances which they said gave them reasons to assume that their employment, subject to an initial period of satisfactory service, would be permanent and pensionable. In reply, the general manager wrote stating that the plaintiffs were not considered to be 'An entitled officer.' Several correspondence ensued thereupon between the plaintiffs and the Board. On 3 April 1958 the Board wrote to all non-entitled officers, setting out offers either to remain on the present contract terms until the expiration of the current contract or to apply for further employment under a new form of contract. Under the new contract there was no prospect of pension of any kind. It was purely a gratuity contract. The plaintiff Kennedy signed it on 25 July 1958. On 15 September 1958 the Board credited the gratuity due to him under the old contract to his bank account. It was this conduct of the plaintiff which was considered as a waiver by the Board. On 1 August 1963, Kennedy and the other plaintiffs wrote to the Board asking for their cases to be reopened. The sole question before the court was whether by the terms of service and considering the previous practice of the Board the plaintiffs had reasonable prospects of appointment to the permanent establishment.

Holding :

Held, dismissing the plaintiff's claim: (1) they did not give an enforceable right to permanent and pensionable employment; (2) it was not the circular or the advertisement but the concluded contract between the parties which determined whether the plaintiffs were recruited with reasonable prospects of permanent and pensionable employment. There was no ground for holding that the plaintiffs could reasonably have supposed that their terms of service would give them the legal right to permanent and pensionable employment; (3) the circular and the advertisement were merely an invitation to an offer of employment on a three-year gratuity-earning contract (renewable) with an indication that such officers might be considered for emplacement on the pensionable establishment after a minimum period of 3 years of satisfactory service;the essence of waiver was that there must be an intention to affect the legal relations between the parties. If that could not be inferred from the conduct, there was no waiver.

Digest :

GB Parker & Ors v Central Electricity Board, Kuala Lumpur [1967] 4 MC 86 High Court, Kuala Lumpur (Raja Azlan Shah J).

1602 Criminal offence -- Assault by public servant

10 [1602] PUBLIC SERVANTS Criminal offence – Assault by public servant – Injuries received in course of struggle between public servant and complainant in course of getting him under control – Criminal law and procedure – Assault – Injuries received in course of struggle between public servant and complainant whilst getting him under control – Conjecture as to circumstances – Discrepancies in accounts given by witnesses.

Summary :

The appellant, a police officer, was convicted of voluntarily causing hurt to one Leong Peng Keen. The assault complained of was alleged to have taken place inside the Beach Road police station just prior to or in the course of the complainant's removal to the lock-up. Shortly before the alleged assault, the complainant, a taxi-driver, had been involved in an altercation with two women passengers in his taxi; his behaviour apparently became so threatening as to lead to the intervention of the appellant. The complainant declined to proceed to the police station peaceably and assaulted the appellant. The complainant alleged that upon arrival at the charge room at the police station, he was assaulted by two police officers, one of them being the appellant, in the course of which he received a kick from the appellant on the inner side of his left thigh. The case for the prosecution depended entirely upon the evidence of the complainant and the doctor who examined the complainant on the day following the incident. The defence was that the complainant was a man of violence who was not only obstreperous outside the police station, but continued to be so after his arrival in the charge room. In the course of getting him under control, a struggle developed in which the complainant and a number of police officers were concerned. It was suggested that the injuries which the doctor spoke were incurred in the course of this struggle and that no deliberate kick was aimed at the complainant either by the appellant or by any other police officer at the station.

Holding :

Held: (1) such an injury to the thigh could have been caused by a kick with a shoe as alleged by the complainant, but it could also have been caused in other ways, and when it comes to conjecture as to the circumstances of the impact which was responsible for this particular injury, a doctor is in no better position to speculate than is anybody else; (2) the fact that there were discrepancies in the accounts given by witnesses is a matter which might well be in favour of their truthfulness rather than the reverse. It would seem to be highly probable that the persons taking part in a brief and confused episode of this nature would not be in a position to state precisely how any particular bruise or injury was sustained. It is therefore not a ground for suspicion that the defence witnesses should have ventured differing suggestions as to the cause of the injury; (3) however obstreperous a member of the public may be at the time of his detention outside the police station, there can be no justification for a retaliatory assault upon him once he has arrived inside the police station. Any such conduct on the part of a police officer would be regarded by the courts as a most serious matter, and severe penalties would be appropriate, regardless of the serious professional results which would almost certainly follow a conviction.

Digest :

Leo Fernando v R [1959] MLJ 157 High Court, Singapore (Rose CJ).

1603 Criminal offence -- Assaulting public servant

10 [1603] PUBLIC SERVANTS Criminal offence – Assaulting public servant – Fine of RM80 held inadequate – Criminal law and procedure – Sentence – Assaulting public servant – Fine of $80 held inadequate – Prevention of Crime Ordinance 1959, s 3 – Penal Code, s 353.

Summary :

A fine of RM80 for an offence of assaulting a public servant in the execution of his duty is inappropriate.

Digest :

Yeo Hock Heng v Public Prosecutor [1969] 1 MLJ 126 High Court, Penang (Ong J).

1604 Criminal offence -- Bribery and corruption

10 [1604] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Menteri Besar – Whether agent of Ruler of State – Bribery and Corruption – Whether accused solicited gratification – Whether gratification was solicited corruptly – Gratification solicited as inducement to obtain approval of application for State land – Whether accused solicited and accepted money corruptly – Whether accused 'agent' – Prevention of Corruption Act 1961, ss 3, 4 and 9.

Summary :

This was an appeal from the decision of Raja Azlan Shah J ([1977] 1 MLJ 15). The appellant had been convicted on three charges of corruption, in that he as Mentri Besar of Selangor (a) solicited the sum of RM250,000 for UMNO as an inducement to obtain the approval of the Executive Council in respect of an application for a piece of state land; (b) being a member of a public body accepted for UMNO the sum of RM25,000 as inducement to obtain such approval; and (c) accepted for UMNO the sum of RM225,000 as an inducement to obtain such approval. The learned trial judge sentenced the appellant to one year's imprisonment in respect of the first charge and two years' imprisonment in respect of each of the second and third charges, all the sentences to run concurrently. He also ordered payment of the sum of RM225,000 to UMNO Selangor. The appellant appealed. The Public Prosecutor cross-appealed against the acquittal of the accused at the end of the prosecution's case on two charges alternative to the second and third main charges.

Holding :

Held, inter alia: in the circumstances of the case, the appellant was an agent within the meaning of s 4(a) of the Prevention of Corruption Act 1961 (Act 57) and he was correctly charged on the alternative charges. However, in the circumstances, it would not be proper or expedient to order the appellant to be convicted under that section also.

Digest :

Datuk Haji Harun bin Haji Idris v Public Prosecutor [1977] 2 MLJ 155 Federal Court, Kuala Lumpur (Suffian LP, Ali Hassan and Wan Suleiman FJJ).

1605 Criminal offence -- Bribery and corruption

10 [1605] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Money paid as gratification – Cautioned statement amounting to confession – Use in joint trial for same offence

Summary :

The appellant, a police officer, was convicted of voluntarily causing hurt to one Leong Peng Keen. The assault complained of was alleged to have taken place inside the Beach Road police station just prior to or in the course of the complainant's removal to the lock-up. Shortly before the alleged assault, the complainant, a taxi-driver, had been involved in an altercation with two women passengers in his taxi; his behaviour apparently became so threatening as to lead to the intervention of the appellant. The complainant declined to proceed to the police station peaceably and assaulted the appellant. The complainant alleged that upon arrival at the charge room at the police station, he was assaulted by two police officers, one of them being the appellant, in the course of which he received a kick from the appellant on the inner side of his left thigh. The case for the prosecution depended entirely upon the evidence of the complainant and the doctor who examined the complainant on the day following the incident. The defence was that the complainant was a man of violence who was not only obstreperous outside the police station, but continued to be so after his arrival in the charge room. In the course of getting him under control, a struggle developed in which the complainant and a number of police officers were concerned. It was suggested that the injuries which the doctor spoke were incurred in the course of this struggle and that no deliberate kick was aimed at the complainant either by the appellant or by any other police officer at the station.

Holding :

Held: (1) such an injury to the thigh could have been caused by a kick with a shoe as alleged by the complainant, but it could also have been caused in other ways, and when it comes to conjecture as to the circumstances of the impact which was responsible for this particular injury, a doctor is in no better position to speculate than is anybody else; (2) the fact that there were discrepancies in the accounts given by witnesses is a matter which might well be in favour of their truthfulness rather than the reverse. It would seem to be highly probable that the persons taking part in a brief and confused episode of this nature would not be in a position to state precisely how any particular bruise or injury was sustained. It is therefore not a ground for suspicion that the defence witnesses should have ventured differing suggestions as to the cause of the injury; (3) however obstreperous a member of the public may be at the time of his detention outside the police station, there can be no justification for a retaliatory assault upon him once he has arrived inside the police station. Any such conduct on the part of a police officer would be regarded by the courts as a most serious matter, and severe penalties would be appropriate, regardless of the serious professional results which would almost certainly follow a conviction.

Digest :

Public Prosecutor v Lai Pong Yuen & Ors [1968] 1 MLJ 12 High Court, Seremban (Ismail Khan J).

1606 Criminal offence -- Bribery and corruption

10 [1606] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Obtaining bribe as public servant – Whether Town Councillor a 'public servant' within the Penal Code – Town councillor – Whether a 'public servant' within Penal Code – Whether the Butterworth Town Council was lawfully constituted.

Digest :

Public Prosecutor v Phee Joo Teik [1962] MLJ 56 Court of Appeal, Kuala Lumpur (Thomson CJ, Good JA and Ong J).

See LOCAL GOVERNMENT, Vol 10, para 105.

1607 Criminal offence -- Bribery and corruption

10 [1607] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Penghulu in State Land Office – Misdescription as agent of Federal Government – Whether charge defective

Summary :

The appellant was charged under s 4(a) of the Prevention of Corruption Act (Act 57). It was alleged that in the capacity of agent of the government of the Federation, he accepted various sums as gratification in respect of his principal's affairs. The main evidence against him came from the complainant who was held to be an accomplice. The learned President of the Sessions Court believed the complainant's evidence as a whole and in particular, as to the sums which were alleged to have been paid to the appellant. He looked for corroboration and found the required corroboration from the evidence of the wife of the complainant as well as another witness. The appellant was convicted and he appealed. One of the grounds of appeal was that the charge was erroneously framed as the appellant, being a penghulu attached to the state land office and discharging his duty in connection with lands, was in fact a servant or agent of the state rather than the federal government.

Holding :

Held: the misdescription of the word 'Federation' instead of the word 'State' in the charge had not in any way prejudiced the appellant's defence and the mistake was an irregularity which was curable by s 422 of the Criminal Procedure Code (Cap 6).

Digest :

Pie bin Chin v Public Prosecutor [1985] 1 MLJ 234 High Court, Malacca (Wan Yahya J).

1608 Criminal offence -- Bribery and corruption

10 [1608] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Presumption of corruption against accused – Degree of proof required to rebut presumption

Summary :

In this case, the respondent had been in the employment of a public body and it was found that a gratification had been paid or given to him. His defence was that it was not paid or given and accepted corruptly. He was acquitted by the President, Sessions Court, Mr W Satchithanandhan, who found the agent provocateur who delivered the money to be a witness wholly unworthy of credit, that in respect of the respondent's alleged corrupt motive there was no corroboration of the evidence of the prosecution witness and that the respondent's explanation was not only 'probable and credible in all the circumstances of the case' but also 'consistent and compatible with the superior probability of his innocence'. The acquittal was upheld on appeal to the High Court by Ali J. The following question of law was however reserved for the decision of the Federal Court under s 66 of the Courts of Judicature Act 1964 (Act 91): 'Whether in a prosecution under s 4(a) of the Prevention of Corruption Act 1961 (Act 57), a presumption of corruption having been raised under s 14 of the said Act the burden of rebutting this presumption can be said to be discharged by a defence as being reasonable and probable or whether that burden can only be rebutted by proof that the defence is on such fact (or facts) the existence of which is so probable that a prudent man would act on the supposition that it exists. (s 3, Evidence Ordinance).' The Federal Court preferred the description in the first part of the question and held that the burden of discharging the presumption may be discharged by a defence which is reasonable and probable ([1968] 1 MLJ 238). On appeal to the Privy Council,

Holding :

Held, dismissing the appeal: upon the true construction of the Evidence Ordinance 1950 (Act 56), and the Prevention of Corruption Act 1961, there is no relevant difference between the two descriptions of the burden of rebutting the presumption of corruption which are contained in the question if 'the burden of rebutting this presumption can be said to be discharged by a defence as being reasonable and probable' is understood as meaning 'the burden of rebutting such presumption is discharged if the court considers that on the balance of probabilities the gratification was not paid or given and received corruptly as an inducement or reward as mentioned in ss 3 or 4 of the Prevention of Corruption Act 1961.' Semble: the Evidence Ordinance applies to civil and to criminal proceedings alike and the definitions of 'proved' and 'disproved' draw no explicit distinction between facts required to be proved by the prosecution in criminal proceedings and facts required to be proved by a successful party to civil proceedings. Yet it cannot be supposed that the Evidence Ordinance intended by a provision contained in what purports to be a mere definition section to abolish the historic distinction fundamental to the administration of justice under the common law, between the burden which lies upon the prosecution in criminal proceedings to prove the facts which constitute an offence beyond all reasonable doubt and the burden which lies upon a party in a civil suit to prove the facts which constitute his cause of action or defence upon a balance of probabilities. Where an enactment creating an offence expressly provides that if other facts are proved, a particular fact, the existence of which is a necessary factual ingredient of the offence, shall be presumed or deemed to exist 'unless the contrary is proved', the test is the same as that applied in civil proceedings: the balance of probabilities.

Digest :

Public Prosecutor v Yuvaraj [1969] 2 MLJ 89 Privy Council Appeal from Malaysia (Lord Hodson, Lord Guest, Lord Pearce, Lord Pearson and Lord Diplock).

1609 Criminal offence -- Bribery and corruption

10 [1609] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Statement to CPIB – Accused told to tell the truth – Whether statement admissible – Bribery and corruption – Statement made to CPIB investigating officer – Accused told to tell the truth – Whether statement admissible – Prevention of Corruption Act (Cap 104), ss 6(a) & 26.

Summary :

This was an appeal against the conviction of the appellant on charges of corruption. At the trial, the prosecution relied on a statement made by the appellant to an officer of the Corrupt Practices Investigation Bureau ('CPIB'). A trial within a trial was held; and according to the evidence it appeared that the appellant was confronted with proof that he was not telling the truth about his presence at the market, that the appellant was asking for lenient treatment if he told 'everything', and that the appellant was told that he should tell the truth.

Holding :

Held: (1) in the circumstances, the statement could not be said to be a voluntary statement, that is, that it was not obtained by inducement or threat, and it was wrongly admitted in evidence; (2) there was ample evidence before the trial judge apart from the statement to convict the appellant and the appeal should therefore be dismissed. It was clear from the grounds of decision that no reliance was placed by the trial judge on the appellant's statement to an extent which affected his finding on the crucial question he had to decide.

Digest :

Lim Kim Tjok v Public Prosecutor [1978] 2 MLJ 94 High Court, Singapore (Wee Chong Jin CJ).

1610 Criminal offence -- Bribery and corruption

10 [1610] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Whether Commissioner of Malacca Municipality a public officer

Summary :

The first respondent was charged as a public officer in his capacity as Commissioner of the Malacca Municipality with corrupt practices in the approval of plans. The second and third respondent were charged with abetment of the offences. The learned trial judge found that the first respondent in approving the plans in his capacity as Commissioner of Malacca Municipality had used his public office for his pecuniary or other advantage. But he held that the first respondent was not a public officer and in the absence of this first essential ingredient of the charge, he found that he had no case to answer and, therefore, acquitted him. He also acquitted the second and third respondents. The Public Prosecutor appealed.

Holding :

Held, inter alia: the first respondent was a public officer within the definition of public officer in the Prevention of Corruption Act 1961 (Act 57) and for the purposes of a charge of corrupt practice under the Emergency (Essential Powers) Ordinance 1970.

Digest :

Public Prosecutor v Datuk Tan Cheng Swee & Ors [1979] 1 MLJ 166 Federal Court, Kuala Lumpur (Suffian LP, Raja Azlan Shah Ag CJ (Malaya).

1611 Criminal offence -- Bribery and corruption

10 [1611] PUBLIC SERVANTS Criminal offence – Bribery and corruption – Whether Minister an agent of government – Prevention of Corruption Act (Cap 104, 1970 Ed), ss 2, 6(a) & 8 – Bribery and corruption – Charges under Prevention of Corruption Act – Meaning of 'agent' – Whether Minister an agent of government – 'Dealing' with Government Statutory presumption – Burden of proof to rebut presumption – Prevention of Corruption Act (Cap 104), ss 2, 6(a) and 8.

Summary :

In this case, the appellant appealed against his conviction on five charges of corruption. The facts as found by the learned district judge showed that the appellant, who had since 1965 held ministerial office, had beginning from November 1970 until October 1974 personally interceded on many occasions with civil servants in various departments of govenment and on one occasion with a fellow Minister on behalf of a wealthy Indonesian citizen, Lauw, or Lauw's company in connection with matters which these civil servants were dealing with. These intercessions were not made at the direct request of Lauw but at the request of Ong Keng Kok, a friend whom he had known since school, the secretary and a director and the person in charge of the day-to-day running of the business of Lauw's company. The matters in which the appellant interceded were promptly considered and decided and in one instance in which the decision was an adverse one, the appellant interceded still further with eventually a favourable result. It appeared to be the common practice for Members of Parliament to communicate direct with civil servants on behalf of the members of the public within their respective constituencies. During the period 1972 to the end of 1974 Lauw's company paid for the cost of new galvanized roofing for the appellant's house; Lauw and his company guaranteed to the extent of S$300,000 the overdraft of the appellant's father with a bank, the overdraft facilities being for shares purchased by the appellant in the name of his father; Lauw's company offered and the appellant agreed to accept a bungalow house to be built by Lauw's company valued at S$532,000 and lastly Lauw paid for the cost of seven return air fares to Jakarta when the appellant flew to Jakarta with his family for a holiday as Lauw's guest. On appeal, it was contended that: (a) the appellant as a Minister of State was not an 'agent' within the meaning of s 6(a) of the Prevention of Corruption Act as defined in s 2 of the Act: (b) the gratifications in this case were not paid or given or received from a person or agent of a person who had or sought to have any 'dealing' with the government or any department thereof; (c) the district judge should have found that the appellant had discharged the burden of proof which lay upon him to prove that the gratifications had not been accepted by him corruptly as rewards for acts done in relation to the affairs or business of the government; (d) the district judge was wrong in holding that the representations made by the appellant were in relation to the principal's affairs or business; (e) the charges were defective for lack of essential particulars. It was also contended by the appellant and conceded on behalf of the Public Prosecutor that the conviction of the appellant on the fourth charge that he did corruptly 'accept' the bungalow could not be supported but it was contended that the court could substitute a conviction on the charge of 'did corruptly agree to accept' the bungalow, which was the original charge, before it was amended by the trial court.

Holding :

Held: (1) (c) the payment, gift or receipt was from a person or agent of a person who has or seeks to have any dealing with the government or any department thereof or any public body. Upon proof of these ingredients, the existence of the fourth ingredient, namely, that the gratification was paid or given or received corruptly as an inducement or reward for doing or forbearing to do an act in relation to the affairs of the government or a department thereof or a public body as the case may be, is to be presumed until the contrary is proved; (2) the question whether the appellant was an 'agent' within the meaning of s 2 of the Prevention of Corruption Act and for the purposes of s 6(a) of the Act has to be determined by construing the words of the sections and by applying the sections to the holders of the office of a Minister, appointed by the President on the advice of the Prime Minister, under the Constitution. The definition of 'agent' in s 2 covers a person who is employed by another, or who is acting for another or who is serving the government. In the performance of his duties as a Minister of State, the appellant was clearly acting for the government, it being necessary for the government to exercise its functions through some human agency and in receiving remuneration for the performance of his duties and the discharge of his responsibilities as a Minister he was clearly a person serving or employed by the government and, accordingly, he fell within the definition of 'agent' in the Act; (3) the expression 'any dealing with the government or any department thereof' in s 8 of the Act means 'any matter of the government or any department thereof'. In this case, there could be no reasonable doubt that the gratifications were paid or given by or received from a person or agent of a person who had at the material time dealings with one or more departments of the government; (4) in this case, on the evidence and having regard to the findings of fact by the trial judge, the appellant had failed to prove that he had legitimate reasons for accepting the gratifications; (5) where a person is charged with an offence under s 6(a) of the Prevention of Corruption Act and the prosecution seeks to rely on the presumption embodied in s 8 of the Act, the burden lies on the prosecution to prove the following factual ingredients of the offence namely that: (a) a gratification was paid or given to or received by the accused; (b) at the time of the payment, gift or receipt, he was in the employment of the government or any department thereof or of a public body;the words 'in relation to the principal's affairs or business' in s 8 of the Act must be given a wide construction and it was a question of fact whether the acts fell within those words. In this case, the appellant's acts were clearly in relation to the affairs or business of the government.

Digest :

Wee Toon Boon v Public Prosecutor [1976] 2 MLJ 191 High Court, Singapore (Wee Chong Jin CJ).

1612 Criminal offence -- Criminal breach of trust by public servant

10 [1612] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Circumstances in which a government servant is considered a public servant within the meaning of s 21 of the Penal Code

Summary :

A temporary clerk in the employment of the government is a public servant within the meaning of cl 9 of s 21 of the Penal Code.

Digest :

Lim Kee Butt v Public Prosecutor [1954] MLJ 35 Court of Appeal, Kuala Lumpur (Mathew CJ, Brown Ag CJ (S).

1613 Criminal offence -- Criminal breach of trust by public servant

10 [1613] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Denial of receipt of money – Dishonest misappropriation

Summary :

The appellant was convicted of criminal breach of trust of money entrusted to him as clerk in the parcels office, Malayan Railways. The evidence was that a passenger handed 50 cts to the appellant as demurrage charge but was not issued any receipt for the payment. When the appellant was subsequently questioned, he denied receiving the money. On appeal, it was argued, inter alia: (a) there was no evidence of misappropriation and (b) the money was not due to the railway and therefore, there could be no criminal breach of trust of it.

Holding :

Held: (1) the denial of the receipt of money proved to have been received by an accused person is evidence of dishonest misappropriation; (2) when money is given to any person in his official capacity, whether he has any right to take it or not, he is entrusted with it within the meaning of s 406 of the Penal Code.

Digest :

Bahru Zaman v Public Prosecutor [1949] MLJ 23 High Court, Ipoh (Storr J).

1614 Criminal offence -- Criminal breach of trust by public servant

10 [1614] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Disciplinary proceedings taken after conviction – No appeal against conviction – Application for declaration that dismissal null and void – Action dismissed

Digest :

Kathiravalupillai v Government of Malaysia [1976] 2 MLJ 114 Federal Court, Kuala Lumpur (Gill CJ (Malaya).

See PUBLIC AUTHORITIES, Vol 10, para 1497.

1615 Criminal offence -- Criminal breach of trust by public servant

10 [1615] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Doctrine of criminal negligence – Gross carelessness alone not evidence of dishonesty – Penal Code, s 409 – Criminal breach of trust – Doctrine of criminal negligence – Gross carelessness alone not evidence of dishonesty.

Summary :

The accused was charged with criminal breach of trust of cash entrusted to him in his capacity as Johore records officer. The only evidence the prosecution produced of misappropriation or misuse of the sum was the fact that the sum was not in the accused's safe, when it was examined.

Holding :

Held: it is essential before criminality can attach to the non-accounting of sums entrusted to a government servant that there should be some evidence leading to the unmistakable inference that the non-accounting covered a deliberate misappropriation by the trustee, and as there was no such evidence in this case, the accused must be acquitted.

Digest :

Public Prosecutor v Mohamed [1948-49] MLJ Supp 74 High Court, Johore Bahru (Laville J).

1616 Criminal offence -- Criminal breach of trust by public servant

10 [1616] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Falsification of accounts – Series of offences

Summary :

The appellant was charged with criminal breach of trust in respect of RM23 paid to him on 23 separate occasions within the space of a year. To this charge were appended particulars of the person from whom the payments were made. The second charge alleged that with an intent to defraud, he committed falsifications of accounts by wilfully omitting to enter the 23 payments in his cash book. At the trial, a third charge was added of omitting to enter in the certificate books, particulars of the 23 marriages and divorces in respect of which each RM23 was received. The appellant was convicted on the first charge and acquitted on the other two.

Holding :

Held, on appeal to the Court of Appeal: (1) the first charge was really of a general deficiency of RM23, the particulars being not so much particulars of separate misappropriations as indications as to how the deficit was arrived at and was a good charge under s 153(ii) of the Criminal Procedure Code (Cap 6); (2) the criminal breach of trust charge was one offence though made up of 23 items, and when the falsifications charged were confined to those items, the criminal breach of trust and the falsifications were so closely interrelated that the 23 falsifications became a single offence like the 23 breaches of trust which formed a single offence and that the falsifications were related to the criminal breach of trust items by community of purpose and they stood to one another in the relationship of cause and effect; hence the two charges were properly joined.

Digest :

Sheikh Hassan v Public Prosecutor [1940] MLJ 69 Court of Appeal, Federated Malay States (Poyser CJ, McElwaine CJ (SS).

1617 Criminal offence -- Criminal breach of trust by public servant

10 [1617] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Joinder of charges – Exceptional circumstances to warrant quashing sentence of imprisonment

Summary :

This was an appeal from the decision of the President of the Sessions Court where the accused was convicted on three charges of criminal breach of trust under s 409 of the Penal Code. It was argued that the joinder of the three charges was bad, and that there was evidence of dishonest intention.

Holding :

Held: (1) the criminal intention of the accused in misappropriating money in this case became manifest when the shortage was discovered and therefore, the joinder of the charges was good; (2) though the general punishment in these cases is imprisonment, in the particular circumstances of this case, an exceptional course is to be taken by quashing the sentence of imprisonment. Per curiam: 'If the accused had given an explanation which, even the court does not believe it, the court considers it consistent with truth on considering the whole of the evidence, then the court must give the accused the benefit of the doubt... In assessing the sentence, it is necessary that the court take into consideration all the circumstances...'

Digest :

Mohamed v Public Prosecutor [1961] MLJ 170 High Court, Johore Bahru (Adams J).

1618 Criminal offence -- Criminal breach of trust by public servant

10 [1618] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Misappropriation of public fund – Proper punishment

Summary :

In cases where public officers, placed in a position of trust and, by virtue of that position, handling public funds, think fit to misappropriate to themselves part of those public funds, the right and proper punishment, unless there are very good reasons to the contrary, is one of imprisonment.

Digest :

Public Prosecutor v Mohamed Hashim [1961] MLJ 11 High Court, Penang (Rigby J).

1619 Criminal offence -- Criminal breach of trust by public servant

10 [1619] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Onus – Test

Summary :

To bring an offence within s 409 of the Penal Code, it is necessary to show that property was entrusted to a public servant and that he accepted the property entrusted, being in his public capacity required or authorized to accept it. The test is the liability of the government to make good the loss of the moneys entrusted to it under s 10 of the Government Suits Enactment (Cap 17). The appellant was penghulu of his kampong, and two persons, applying for land, paid moneys to him in respect of fees payable to the Collector of Land Revenue. The appellant applied for land on their behalf and gave them receipts, but did not pay the money to the Collector of Land Revenue.

Holding :

Held: the offence committed was not one under s 409 but under s 406.

Digest :

Wan Ali v Public Prosecutor [1939] MLJ 85 High Court, Federated Malay States (Cussen J).

1620 Criminal offence -- Criminal breach of trust by public servant

10 [1620] PUBLIC SERVANTS Criminal offence – Criminal breach of trust by public servant – Sentence – Inadequacy – Consideration of public interest

Summary :

The accused was convicted of the offence of criminal breach of trust as a public servant, an offence under s 409 of the Penal Code, and was bound over under s 294(i) of the Criminal Procedure Code (Cap 6).

Holding :

Held: the sentence was inadequate and must be altered to one of six months' imprisonment. The first and foremost consideration of punishment is public interest. The object of punishing crime is not only to punish the offender but also to deter others. Although it is desirable that the first offender should, if possible, be kept from coming into contact with hardened criminals, nevertheless, other public servants submitted to temptation will not be deterred from succumbing to temptation if they see that the only punishment which it involves is some form of binding over.

Digest :

Public Prosecutor v Ismail bin Loyok [1958] MLJ 223 High Court, Seremban (Smith J).

1621 Criminal offence -- Disobeying an order from a public servant

10 [1621] PUBLIC SERVANTS Criminal offence – Disobeying an order from a public servant

Summary :

Where a subpoena requiring attendance on the ninth of the month was not served until the 14th and the accused was not told of any extension of time, a conviction for not obeying the subpoena was quashed.

Digest :

R v Chow Ah Soh [1886] MAC 55

1622 Criminal offence -- Incorrect record

10 [1622] PUBLIC SERVANTS Criminal offence – Incorrect record – Public servant making incorrect entries with knowledge that person may be saved from legal punishment – Prosecution to prove that entries were incorrect and made with requisite intent or knowledge – Penal Code, s 218

Summary :

The appellant, an inspector of police and a public servant was charged, inter alia, under s 218 of the Penal Code of making incorrect entries knowing that he would thereby save the registered owner and driver of a lorry from legal punishment. A lorry containing wet sand and suspected of being overloaded was brought to the police station to be weighed. The lorry was found to be in excess of 1 ton 4 cwt 2 qt of permissable laden weight. The excess weight was punched on weighing cards and recorded in the station diary. Subsequently, the owner of the lorry met the appellant. The appellant altered the record of excess weight in the station to 0 ton 3 cwt 1 qt. The altered weight was also recorded in the weight register and weighing cards. The appellant was convicted of offences under s 218 of the Penal Code. In an appeal against the conviction.

Holding :

Held, dismissing the appeal against the conviction under s 218, Penal Code: (1) in order to sustain a conviction under s 218 of the Penal Code, it was not sufficient merely to prove that the entry was incorrect. It must be further proved that the entry was made with intent thereby to save, or knowing it to be likely that he would thereby save some person from legal punishment; (2) in this case, there was ample evidence to show that the entries were altered without the lorry being weighed. The appellant had therefore made incorrect entries knowing them to be likely that he would thereby save the registered owner and the driver of the lorry from legal punishment; (3) where a witness may be regarded as having a purpose of his own to serve, the judge must direct his mind on the danger of convicting on the uncorroborated evidence of such witness; but if there is clear and convincing evidence to such extent that an appellate court is satisfied that no miscarriage of justice has arisen by reason of the omission of direction, the court will not interfere.

Digest :

Lim Boon San v Public Prosecutor [1968] 2 MLJ 45 HIgh Court, Kuala Lumpur (Raja Azlan Shah J).

1623 Criminal offence -- Obstructing public servant in discharge of his public function

10 [1623] PUBLIC SERVANTS Criminal offence – Obstructing public servant in discharge of his public function – Penal Code, s 186

Summary :

Obstruction in s 186 of the Penal Code means some interruption or hindrance to the progress of work being carried out by a public servant in the discharge of his public duties, and such public servant may be directly or indirectly obstructed.

Digest :

Public Prosecutor v Bahadar Khan [1940] MLJ 180 High Court, Federated Malay States (Poyser CJ).

1624 Criminal offence -- Obstructing public servant in discharge of his public function

10 [1624] PUBLIC SERVANTS Criminal offence – Obstructing public servant in discharge of his public function – Refusing to leave public servant's office when asked to do so – Whether voluntary obstruction – Penal Code, ss 186 & 39

Summary :

The appellant was charged with obstructing the chief assistant district officer, Kuala Lumpur, in the discharge of his public function, an offence punishable under s 186 of the Penal Code. He was unrepresented in the court below. He claimed trial and was duly convicted and sentenced to three months' imprisonment. The appellant had for the last 3[1/2] years been frequenting the district office in order to apply for a piece of land on Mountbatten Road. It was not disputed that he pestered the district officer with his claim about four times a week during that period. The appellant after being in the chief assistant district officer's office for half-an-hour, that officer requested the appellant to leave his room as there were others outside his office who were waiting to see him. He told the appellant that he would have to call the police if he did not leave. The appellant dared him to do so and stood up and banged his file on the table. He then raised his fists and challenged the officer to a fight. He said that he could even call in his wife, and just then the wife rushed in with her hands ready for a fight. Both of them were threatening the said officer and he realized then that he had to call in the police. Subsequently, the police arrived and the appellant was apprehended.

Holding :

Held: (1) for an offence under s 186 of the Penal Code the prosecution has to prove the following: (a) that there was obstructing of a public servant, (b) that the public servant was at that time discharging his public function, and (c) that the person obstructing did so voluntarily. It is clear therefore, that to obstruct under s 186 is to do an act which makes it more difficult for a public servant to carry out his duties; (2) the definition of the term 'voluntarily' bears resemblance to the definition of 'wilfully' current in the English law. 'Wilful' in this context means not only 'intentional' but also connotes something which is done without lawful excuse.

Digest :

Tan Teck Yam v Public Prosecutor [1968] 1 MLJ 57 High Court, Selangor (Raja Azlan Shah J).

1625 Criminal offence -- Obtaining valuable thing without consideration

10 [1625] PUBLIC SERVANTS Criminal offence – Obtaining valuable thing without consideration – Penal Code, s 165

Summary :

In this case, the appellant, an Inspector of Police, was charged under s 165 of the Penal Code with accepting S$50 without consideration from one Hanifa against whom a charge of attempted rape was withdrawn. The appellant was convicted by the district judge and sentenced to 18 months' imprisonment. The prosecution evidence disclosed that the complainant, Hanifa, a glazier employed by the Public Works Department was arrested by the appellant on 3 October 1957 on a charge of attempted rape and taken to the Joo Chiat Police Station. The appellant after questioning the complainant took from him his watch, gold wrist band and glass cutter while another police officer took the remainder of his property before putting him in the lock-up. On being released on bail the same evening, the complainant informed one of his bailers, Gafor by name, that the appellant had taken from him his watch, wrist band and glass cutter. On 8 October the appellant who still retained possession of the articles asked the complainant to give him the gold wrist band and if he did so the case against him could be fixed up. The complainant declined and the appellant then returned the articles to him. On 1 November the appellant renewed his request for the gold wrist band indicating to the complainant that he would make some arrangement concerning the case against the complainant. The appellant had in fact on that very day received instructions from the Deputy Public Prosecutor to have the charge against the complainant withdrawn. The complainant said he had pawned the band and the appellant thereupon substituted a demand for cash, the subject matter of the charge preferred against him. The complainant reported the matter to one Ramoo who advised him to report the matter to the Corrupt Practices Investigation Bureau which the complainant did. At the Corrupt Practices Investigation Bureau, an officer named Ramakrishnan interviewed the complainant and thereafter at his suggestion co-operated in laying a trap to catch the appellant. It was argued on appeal that hearsay evidence was wrongly admitted of statements which the complainant made to other witnesses in the absence of the appellant.

Digest :

Kanapathy v R [1960] MLJ 26 High Court, Singapore (Buttrose J).

1626 Criminal offence -- Offences by public servants

10 [1626] PUBLIC SERVANTS Criminal offence – Offences by public servants – Principles of sentence – Dismissal

Summary :

In assessing the sentence for an offence by a public servant the court ought not to take into consideration the probability of dismissal.

Digest :

Mansell Jones & Anor v Public Prosecutor [1952] MLJ 43 High Court, Kuala Lumpur (Taylor J).

1627 Criminal offence -- Personating public officer

10 [1627] PUBLIC SERVANTS Criminal offence – Personating public officer – Penal Code, s 170

Summary :

In this case, the applicant had been charged for the offence of personating a public servant. It appeared that he had gone to a police station to lodge a report and pretended to hold the office of a detective police constable. The learned magistrate acquitted the applicant holding that the applicant had not done any act 'under colour of such office', as making a report is a right open to any member of the public. On appeal, the order of acquittal was set aside by the High Court, but the judge agreed to refer the question of law to the Federal Court as follows: 'Do the words "in such assumed character does or attempts to do any act under colour of such office" appearing in s 170 of the Penal Code refer only to such acts as could legally be done by a person who in fact and in truth holds such office or do such words also cover acts which fall outside the permitted limits of the actual authority or power conferred or vested in the public servant whose character the accused pretends to assume.'

Holding :

Held: an offence under s 170 of the Penal Code is committed whenever any person falsely holds himself out to be a public servant and does or attempts to do any act whatsoever under colour of such office. The harmless character of that act or attempt may be relevant as to punishment, but the offence under s 170 is nonetheless committed whenever any act is done or attempted to be done by a person impersonating a public servant.

Digest :

Tomm Wong v Public Prosecutor [1973] 1 MLJ 215 Federal Court, Ipoh (Ong CJ, Gill and Ong Hock Sim FJJ).

1628 Criminal offence -- Subpoena

10 [1628] PUBLIC SERVANTS Criminal offence – Subpoena – Non-attendance – Liability – Penal Code, s 174

Summary :

A person cannot be punished under s 174 of the Penal Code for disobeying a subpoena, when the time between the service of the subpoena and the time he is therein directed to appear before the magistrate is not reasonably sufficient to enable him to appear. Any statement made at the time by the person serving the subpoena to the person served, that the date mentioned in the subpoena had been extended to enable him to appear, cannot alter the directions of the subpoena, or legally bind the person served to appear at such extended date. Quaere: can the public servant whose own order has been disobeyed, hear a charge against the accused under s 174 for disobedience of that order, and punish him for it.

Digest :

R v Tan Sim Ho [1886] 4 Ky 156 High Court, Straits Settlements (Wood J).

1629 Designated officer -- Declaration

10 [1629] PUBLIC SERVANTS Designated officer – Declaration – Declaration concerning person not a party to action – Contract of employment – Claim for inducement pay – Prerogative of Governor-in-Council

Summary :

The plaintiff, a doctor, after serving in various capacities in India went to England in 1955 for post-graduate studies. While he was working in England (after completion of his studies) he applied for the post of medical officer in Sarawak. He was interviewed in England but his letter of provisional appointment was sent to him at an address in Calcutta which he had provided. The plaintiff received his formal letter of appointment on his arrival in Sarawak on 6 December 1958 and he was confirmed in his appointment on 4 December 1961. He was, however, not in receipt of inducement pay like other expatriate officers. Sometime in 1963, all expatriate officers except the plaintiff were informed of their future in the service and the benefit they would get under the Malaysia Retirement Scheme. The plaintiff thereupon brought an action against the government of Sarawak by making the Attorney General of Sarawak the nominal defendant claiming three declarations that: (1) he is a member of Her Majesty's Overseas Civil Service; (2) he is a 'designated officer' within the meaning of the Schedule to the Overseas Service Ordinance; (3) it would be unlawful to refuse to the plaintiff benefits such as inducement pay payable to a member of Her Majesty's Overseas Civil Service. At the trial, it was admitted on behalf of the defendant that the plaintiff was a member of Her Majesty's Overseas Civil Service, that all such members except the plaintiff was in receipt of inducement pay, and that the plaintiff was an 'entitled officer' for the purposes of the Compensation and Retiring Benefits Order-in-Council, 1963.

Holding :

Held: (1) as the defendant has conceded that the plaintiff is a member of Her Majesty's Overseas Civil Service, there was no reason to make the first declaration as the plaintiff's right was no more in dispute; (2) the plaintiff was entitled to a declaration that he was a 'designated officer' within the meaning of the Schedule to the Overseas Service Ordinance 1961; (3) as to the question whether a civil servant is entitled to inducement pay or not is entirely a prerogative for the Governor-in-Council as laid down in the General Orders, it would be contrary to public policy for the court to make such a declaration resulting in the unnecessary interference of a prerogative right.

Digest :

Majumder v Attorney General of Sarawak [1966] 1 MLJ 41 High Court, Kuching (Lee Hun Hoe J).

1630 Designated officer -- Declaration

10 [1630] PUBLIC SERVANTS Designated officer – Declaration – Declaration concerning person not a party to action – Contract of employment – Claim for inducement pay – Prerogative of Governor-in-Council

Summary :

The appellant had claimed three declarations in the High Court as follows: (a) that he is a member of Her Majesty's Overseas Civil Service; (b) he is eligible for designation as a designated officer within the meaning of the Schedule to the Overseas Service Ordinance; and (c) it would be unlawful to refuse the plaintiff benefits such as inducement pay payable to a member of Her Majesty's Overseas Civil Service. The High Court ([1966] 1 MLJ 41) granted the second declaration and refused the third; the first declaration was not granted as it was held that there was no question in dispute. The appellant appealed against the court's refusal to grant declarations (a) and (c) and the respondent filed a cross-appeal on the ground that the learned trial judge erred in law in granting the second declaration.

Holding :

Held: (1) the learned trial judge was right in exercising his discretion in not making the first declaration to declare something not in dispute especially as the first declaration would not assist in determining the appellant's rights to extra pay, if he has any such rights; (2) the appellant did not have a valid claim to inducement pay on the contract of employment or on the general orders and in any event the question of expatriation pay was a matter within the authority of the Governor-in-Council; (3) the designation of an officer as a designated officer was a matter for the Secretary of State of the United Kingdom and as the United Kingdom government was not a party to the action, the High Court was wrong in making the declaration that the appellant was a 'designated officer'.

Digest :

Majumder v Attorney General of Sarawak [1967] 1 MLJ 101 Federal Court, Kuching (Harley Ag CJ (Borneo).

1631 Designated officer -- Declaration

10 [1631] PUBLIC SERVANTS Designated officer – Declaration – Declaration concerning person not a party to action – Contract of employment – Claim for inducement pay – Prerogative of Governor-in-Council

Summary :

The appellant in this case who had been appointed Medical Officer, Sarawak, claimed three declarations in the High Court as follows: (a) that he is a member of Her Majesty's Overseas Civil Service; (b) that he is eligible for designation as a designated officer within the meaning of the Schedule to the Overseas Civil Service Ordinance; and (c) that it would be unlawful to refuse him benefits such as inducement pay payable to a member of Her Majesty's Overseas Civil Service. At the trial, an admission was made on behalf of the respondent that the appellant was a member of Her Majesty's Overseas Civil Service. The High Court ([1966] 1 MLJ 41) granted the second declaration and refused the third; the first declaration was not granted as it was held that there was no point in dispute. On appeal, the Federal Court ([1967] 1 MLJ 101) affirmed the decision of the learned trial judge as regards the first and third declarations, but further decided that the appellant was not entitled to the second declaration as the designation of an officer as a designated officer was a matter for the Secretary of State of the United Kingdom and as the Secretary of State was not a party to the action, the High Court was wrong in making the declaration that the appellant was a 'designated officer'. The appellant appealed to the Privy Council.

Holding :

Held, dismissing the appeal: (1) the learned trial judge was right in exercising his discretion in not making the first declaration but in view of the circumstances, there should be a recital that the order was made upon the court taking into account that the respondent conceded that the appellant had been a member of Her Majesty's Overseas Civil Service since 1 December 1958; (2) as regards the second declaration it was within the discretion of the Secretary of State whether to designate an officer or not, and as the Secretary of State was not a party to the proceedings, the Federal Court was right in holding that the High Court could not make the declaration; (3) as the question whether an officer is entitled to inducement pay is for the Governor-in-Council whose decision is final and as on the facts the terms of the contract of employment did not entitle the appellant to inducement pay, the learned trial judge was right in refusing the third declaration.

Digest :

Majumder v Attorney General of Sarawak [1969] 1 MLJ 132 Privy Council Appeal from Malaysia (Lord Guest, Lord Upjohn and Lord Diplock).

1632 Disciplinary action -- Procedure

10 [1632] PUBLIC SERVANTS Disciplinary action – Procedure – Whether disciplinary action had been carried out lawfully – Public Officers (Conduct and Discipline) (Chapter D) General Orders 1980, orders 24, 26(4) & (5)

Summary :

In 1973 P accepted D1's appointment as a clerk, inter alia, on the condition that she would be subject to government circulars in respect of work, behaviour and conditions of service. D1 issued a circular in 1985 which prohibited any attire covering a female public servant's face when on duty ('the circular'). P had acknowledged seeing 'the circular'. P however was in the habit of wearing 'purdah' which covered her whole face except her eyes since 1983. P refused to comply with 'the circular' on the ground that as a Muslim, she was required to cover her face. X, the chairman of the disciplinary board, decided to take disciplinary action against P after receiving a report concerning P's non-compliance with 'the circular'. X then referred the matter to D1. D1 subsequently wrote a letter to P requesting her to show cause as to why she should not be dismissed from public service. P gave a lengthy explanation. In 1986 D1 sent P a letter dismissing her from public service. P applied to the High Court for a declaration against D1-D2, inter alia, that her dismissal was unlawful and that 'the circular' had contravened her constitutional right to practise her Islamic religion under art 11(1) of the Federal Constitution. P firstly argued that order 24 of the Public Officers (Conduct and Discipline) (Chapter D) General Orders 1980 had not been complied with. P then contended that the name of the person who lodged a complaint or report to X, was never disclosed to P. P also alleged that D1 should make a 'finding of guilt' before dismissing her. D1-D2 called X, a mufti, to testify that Muslim women are not required to cover their faces and 'the circular' was not therefore against the practice and teachings of Islam.

Holding :

Held, dismissing the application: (1) under order 24 of the 1980 General Orders, disciplinary action against P started when a report was received by X, the chairman of the disciplinary board. When X received such a report, he was not required to convene a board meeting. It was enough if X considered the gravity of the alleged disciplinary offence and decided whether proceedings should be taken with a view to dismissal or not. X's decision was not required to be conveyed to P or to anyone else. X would then refer the matter to D1. Accordingly in this case, order 24 of the 1980 General Orders was complied with; (2) the 1980 General Orders does not require the complainant's name to be disclosed to P or anyone else. The complainant's name would most probably be disclosed to P if D1 decides to appoint a committee to inquire into the complaint under order 26(5) of the 1980 General Orders. This matter is however left to the wisdom of D1 wherein the court will not interfere; (3) order 26(4) of the 1980 General Orders does not require D1 to make a 'finding of guilt' before dismissing P. D1 was only required to decide whether P's explanation had exculpated her to the satisfaction of D1; (4) art 11(1) of the Constitution is intended to protect absolutely the religious beliefs of the people but in exercising religious practices, art 11(5) of the Constitution forbids any act which may lead to public disorder or which may affect public health or public morality; (5) there is nothing illegal in laying down conditions for clothings to be worn by government officers while at work for the sake of discipline of the service provided the conditions do not militate against public order, morality or health. Accordingly there should be no objection to 'the circular' on the ground that it was unconstitutional even though the conditions imposed may restrict to some extent, the religious practices of the public servants; (6) 'the circular' is therefore lawful and reasonable. P's disobedience of 'the circular' would justify the taking of disciplinary action against her.

Digest :

Hajjah Halimatussaadiah v Public Service Commission, Malaysia & Anor [1992] 1 MLJ 513 High Court, Kuala Lumpur (Eusoff Chin J).

Annotation :

[Annotation: Affirmed on appeal. See [1994] 3 MLJ 61.]

1633 Disciplinary proceedings -- Committee of inquiry

10 [1633] PUBLIC SERVANTS Disciplinary proceedings – Committee of inquiry – When ceases to exist – Whether PSC entitled to require committee to hear further evidence – Public Service (Disciplinary Proceedings) (Procedure) Rules 1964

Summary :

The appellants in this case were members of a committee of inquiry appointed by the Public Service Commission under r 4 of the Public Service (Disciplinary Proceedings) (Procedure) Rules 1964, to inquire into certain charges preferred against the respondent, who was an Assistant Superintendent of Police in the Singapore Police Force. The committee inquired into the charges and reported to the Public Service Commission. Subsequently, the Public Service Commission by letter addressed to the first appellant as chairman of the committee directed the committee to establish the full facts of the case and in particular to call the Commandant of the Police Training School. Consequently, the committee informed the respondent that it would meet to hear further evidence. The respondent through his solicitor objected to such further proceedings and took out proceedings against the appellants for a declaration that the appellants had ceased to hold office as members of the committee of inquiry and that the decision of the appellants to hear further evidence was illegal, void and inoperative. The respondent also sought an injunction to restrain the appellants from hearing further evidence. An applicaion was made for an interlocutory injunction to restrain the appellants from hearing the further evidence. Chua J heard the application and granted the interlocutory injunction. The appellants appealed.

Holding :

Held, allowing the appeal: (1) although the Public Service (Disciplinary Proceedings) (Procedure) Rules 1964 are statutory rules, they are except for such rules as are for the purpose of carrying out the object of art 135(2) of the Constitution of Malaysia, procedural rules which are not mandatory but merely directory and, therefore, any breach or non-compliance with any such purely procedural rule or sub-rule does not give a person aggrieved a legal right to redress in a court of law; (2) as there was no provision in the rules to say when a committee of inquiry shall cease to exist, the Public Service Commission was entitled to require the committee to consider further evidence; (3) in this case, it would appear that if the action had proceeded to trial, the respondent would prima facie fail to obtain the two declarations and consequential injunction sought and, therefore, the respondent was not entitled to obtain the interlocutory injunction.

Digest :

Wong Keng Sam & Ors v Pritam Singh Brar [1968] 2 MLJ 158 Federal Court, Singapore (Wee Chong Jin CJ, Tan Ah Tah FJ and Ambrose J).

1634 Disciplinary proceedings -- Inquiry under Public Service (Disciplinary Proceedings) (Procedure) Rules 1964

10 [1634] PUBLIC SERVANTS Disciplinary proceedings – Inquiry under Public Service (Disciplinary Proceedings) (Procedure) Rules 1964 – Whether committee of inquiry performing a judicial or quasi-judicial function – Whether holding of inquiry contravened Industrial Relations Ordinance, 1960, s 77

Summary :

This was an application for an order of prohibition to prohibit the chairman of the committee of inquiry from proceeding with an inquiry which had been instituted at the instance of the Public Service Commission with a view to the dismissal of a public officer, who was an official of the appellant union. The main ground relied on was that s 77 of the Industrial Relations Ordinance 1960 would be contravened if the inquiry was held.

Holding :

Held: (1) and even if it was such a threat, it could not be said to be a threat to dismiss him by reason of the circumstances that he was dissatisfied with working conditions under para (d) or because he was a member of a trade union falling within para (e) of s 77 of the Industrial Relations Ordinance as the charges preferred against the officer in this case fell outside the ambit of these paragraphs; (2) the institution of disciplinary proceedings against an officer in contemplation of his dismissal is not necessarily a threat to dismiss him;it was doubtful, even if the committee of inquiry could be said to be exercising quasi-judicial functions, whether its decision could be said to affect any legal right which a civil servant may possess, because art 132 of the Federal Constitution provides that public officers hold office during the pleasure of the Yang di-Pertuan Agong or the Yang di-Pertuan Negara as the case may be.

Digest :

Amalgamated Union of Public Employees v Permanent Secretary (Health) & Anor [1965] 2 MLJ 209 High Court, Singapore (Winslow J).

1635 Disciplinary proceedings -- Police officers assaulting accused during investigations

10 [1635] PUBLIC SERVANTS Disciplinary proceedings – Police officers assaulting accused during investigations – Reference to PSC for disciplinary action – Whether ultra vires – Interdiction and withholding of emoluments

Summary :

The plaintiffs, police officers in this case, were each separately charged with voluntarily causing hurt to one P on 12 July 1973 for the purpose of extorting information from him which may lead to the detection of an offence. They were each interdicted from the performance of duty on half pay from 22 July 1974 onwards. The criminal charge against them was dropped but they continued to be interdicted from the performance of their duty on half pay. On 31 May 1975, they received identical letters of disciplinary proceedings against them with a view to their dismissal. By a separate letter of the same date, they were each notified that they were interdicted from duty on no pay with effect from 2 June 1975. The plaintiffs submitted exculpatory statements in answer to the charges made against them but the Public Service Commission, acting under reg 4(3) of the Public Service (Disciplinary Proceedings) Regulations 1970, appointed a committee to inquire into the matter. The plaintiffs were represented by counsel and the inquiry at which 30 witnesses gave evidence concluded on 27 July 1976. Several letters were written by the plaintiffs' counsel regarding the result of the inquiry and only on 25 June 1977 were they told that the plaintiffs were found guilty of the charge of assaulting P. The plaintiffs contended that the Public Service Commission or the committee had no jurisdiction to hear or inquire into the two charges preferred against them.

Holding :

Held, dismissing the plaintiffs' action: (1) s 28A of the Police Force Act (Cap 78, 1970 Ed) could not be construed as having deprived a subordinate officer of any right prior to the enactment of s 28A; (2) whether or not the said s 28A has retrospective effect, the Commissioner of Police had lawfully exercised the discretion vested in him under s 28A of the Act to refer the cases against the plaintiffs for them to be dealt with by the Public Service Commission in accordance with the regulations governing disciplinary proceedings in the public service; (3) under reg 7 of the Public Service (Disciplinary Proceedings) Regulations 1970, the Public Service Commission is empowered to interdict a public officer and to withhold the whole of his total emoluments during the period of his interdiction.

Digest :

Chang Song Liang & Ors v Attorney General, Singapore [1980] 2 MLJ 4 High Court, Singapore (Wee Chong Jin J).

1636 Disciplinary proceedings -- Proceedings conducted under Police (Conduct and Discipline) (Junior Officers and Constables) Regulations 1970

10 [1636] PUBLIC SERVANTS Disciplinary proceedings – Proceedings conducted under Police (Conduct and Discipline) (Junior Officers and Constables) Regulations 1970 – Regulations was made under the Police Act 1967 vide s 2(1) of the Emergency (Essential Powers) Ordinance (No 2) 1969 – Ordinance was subsequently repealed – Whether Regulations were still in force – Whether disciplinary proceedings was valid – Police Act 1967, s 96 – Emergency (Essential Powers) Ordinance (No 2) 1969, s 2(1)

See administrative law, para II [3].

Digest :

Azman bin Abdullah v Ketua Polis Negara [1997] 1 MLJ 263 Court of Appeal, Kuala Lumpur (Siti Norma Yaakob, Abdul Malek Ahmad and Mokhtar Sidin JJCA).

1637 Dismissal -- Acquittal in criminal proceedings

10 [1637] PUBLIC SERVANTS Dismissal – Acquittal in criminal proceedings – Whether criminal proceedings can be brought on the same facts – Whether plea of autrefois acquit available – Res judicata

Summary :

The plaintiff, who was a school teacher, had been charged on five charges of using criminal force to four girls in his class to outrage their modesty. He was acquitted on those charges. Subsequently, the Public Service Commission instituted disciplinary proceedings against the plaintiff with a view to his dismissal. The plaintiff was charged with five charges that he abused his position as teacher by outraging the modesty of the same four pupils. He applied for a declaration that regulation 11 of the Public Service (Disciplinary Proceedings) Regulations 1970 is ultra vires art 7(2) of the Federal Constitution, as it applies to Singapore, and that the determination in the magistrate's court was a conclusive acquittal and discharge of the plaintiff which constituted issue estoppel or res judicata, thus making it improper for the Public Service Commission to proceed on the same charges.

Holding :

Held: (1) no principle of law precludes a man who has been acquitted or convicted upon a set of facts alleged to constitute an offence being subsequently subjected upon the same facts to disciplinary action by a domestic tribunal; (2) therefore reg 11 of the Public Service (Disciplinary Proceedings) Regulations 1970 is not ultra vires art 7(2) of the Federal Constitution; (3) it was not improper for the Public Service Commission to institute disciplinary proceedings in this case as the exercise by the Public Service Commission of its powers is not by way of punishment but rather to enforce a high standard of propriety and professional conduct; (4) there was no res judicata in this case as the parties were different and the facts were relevant to the accusation of a different character, that is, misconduct.

Digest :

Mohamed Yusoff bin Samadi v Attorney General [1975] 1 MLJ 1 High Court, Singapore (Chua J).

1638 Dismissal -- Appeal

10 [1638] PUBLIC SERVANTS Dismissal – Appeal – Statutory right of appeal – Right to counsel – Regulations silent on right to legal representation – Whether aggrieved person can be deprived of fundamental right

Summary :

The applicant was employed as an office-boy at the Registry of Societies, Kuala Lumpur. On 5 May 1969, he was arrested and kept in custody under the Emergency (Public Order and Prevention of Crime) Ordinance 1969. He was then placed under a restricted residence order. Accordingly, he had thus committed a breach of code of conduct under reg 3(e) of the Public Officers (Conduct and Discipline) (General Orders Chapter 'D') Regulations 1969 in that he had conducted himself in such a manner as to bring the Public Services into disrepute or to bring discredit thereto. The Public Services Disciplinary Board recommended disciplinary proceedings against the applicant with a view to dismissal. The applicant was given an opportunity to be heard and he was represented by his solicitors. The board dismissed the applicant from his service. He appealed to the appeal board through his solicitors. The chairman of the Disciplinary Board noticing that the appeal was made by the applicant's solicitor, wrote a letter to the applicant in the following terms: 'I have the honour to inform you that your appeal against your dismissal from the service cannot be considered by the Public Services Commission as the appeal was made through your solicitor and not by you personally in writing as provided by reg 13(1) of the Public Services Disciplinary Board Regulations 1967. In view of the above, your dismissal from the service has now become absolute É' Regulation 13(1) states: 'An appeal shall be made in writing by a person aforesaid (hereinafter referred to as "the appellant") to an appeal board through his head of department É' The applicant applied for an order of mandamus against the Public Services Commission and the Public Services Disciplinary Appeal Board to hear the applicant's appeal against dismissal. The main issue was whether the presentation of the appeal may be made by a solicitor on behalf of an aggrieved person.

Holding :

Held: (1) although reg 13(1) is silent on the right to assistance of counsel, it is not adequate to deprive the aggrieved person of such right. The considerations requiring assistance of counsel in the ordinary courts are just as persuasive in proceedings before disciplinary tribunals. This is especially so when a person's reputation and livelihood are in jeopardy. If the ideal of equality before the law is to be meaningful, every aggrieved person must be accorded the fullest opportunity to defend himself at the appellate review stage; (2) where he has a statutory right of appeal and the regulations are silent on the right to the assistance of counsel, the aggrieved person cannot be deprived of such right of assistance; (3) therefore, there was nothing from reg 13(1) which limited the applicant's right.

Digest :

Doresamy v Public Services Commission [1971] 2 MLJ 127 High Court, Kuala Lumpur (Raja Azlan Shah J).

1639 Dismissal -- Appeal to Public Service Commission

10 [1639] PUBLIC SERVANTS Dismissal – Appeal to Public Service Commission – Enhancing sentence to dismissal – Whether exercise of appellate or original jurisdiction – Right to be heard

Summary :

The plaintiff, an inspector attached to the Special Branch, had on 14 June 1965, four charges preferred against him for breach of discipline under the Police Force Ordinance. The then acting Commissioner of Police, Singapore Component, Royal Malaysian Police, appointed a board to conduct a disciplinary inquiry in accordance with the Police Regulations 1959. The board found the plaintiff guilty of two out of the four charges (as amended in the course of the proceedings). The Commissioner informed the plaintiff that the board had found him guilty of two charges and that he had accepted the board's finding and decided to impose a fine of S$50 for the first charge and to reprimand him for the second charge. The plaintiff being dissatisfied with the decision appealed against it. The Public Service Commission, after the appeal, decided that he should be dismissed from the service. The plaintiff then commenced this action claiming a declaration and damages. Counsel for the plaintiff submitted four arguments: (a) the board had no power to amend the charges; (b) the board acted on no or no sufficient evidence or acted contrary to the evidence before it and was therefore wrong in law; (c) the appeal against the Commissioner's award should have been preferred to the President according to the Police Force Ordinance and not to the Public Service Commission; and (d) even if the Public Service Commission did have the power to hear the appeal, it had no power to enhance the punishment awarded by the Commissioner of Police.

Holding :

Held: (1) the board did have power to amend the charges; (2) the present case did not warrant such an interference; (3) although under the Police Force Ordinance, an inspector may appeal to the President, this provision since 10 September 1963 must be read in the light of art 140(1) of the Constitution of Malaysia, which sets up a Public Service Commission. Under an instrument of delegation of powers and duties of the Public Service Commission, an inspector awarded disciplinary punishment by the Commissioner of Police, Singapore, may appeal to the Inspector-General. However, since the separation of Singapore from Malaysia, there is no longer an Inspector-General in Singapore and as such the appellate authority delegated to the Inspector-General has reverted to the donor of the former, namely, the Public Service Commission as successors to the Police Service Commission. Even otherwise since under the Constitution, the Public Service Commission is in control of disciplinary proceedings of the police officers, the provisions of the Police Force Ordinance must give way to the Constitution whenever there is a conflict between the said provision and the Constitution; (4) even if the board was acting in a judicial or quasi-judicial capacity, the court can only exercise supervisory jurisdiction over the board by ensuring that the proceedings against an officer who has been found guilty on departmental charges has not been conducted in any manner inconsistent with the rules of natural justice, or in violation of statutory rules prescribing the mode of inquiry or that the finding is not, on the face of it, so wholly arbitrary and capricious that no reasonable person could even have reached it;an appellate body is barred from enhancing sentence in the absence of a clear power conferred by the relevant legislation unless the body is vested with revisional jurisdiction. In the present case, the Police Force Ordinance which is the only relevant legislation gives no such enhancing power to the Public Service Commission, nor is the Public Service Commission exercising any revisional jurisdiction, and as such, the Public Service Commission has no power whatsoever to enhance the sentence as imposed upon by the Commissioner of Police. Even if the commission purported to act in exercise of its original jurisdiction, yet since the plaintiff had not been given an opportunity of being heard on the proposed punishment of dismissal, the requirements of art 135(2) had not been complied with.

Digest :

Ling How Doong v Attorney General, Singapore [1968] 2 MLJ 253 High Court, Singapore (Winslow J).

1640 Dismissal -- Appeal to Public Service Commission

10 [1640] PUBLIC SERVANTS Dismissal – Appeal to Public Service Commission – Enhancing sentence to dismissal – Whether valid

Summary :

This was an appeal against the judgment of Winslow J who made a declaration that the order of dismissal of the respondent by the Public Service Commission was null and void ([1968] 2 MLJ 253). The respondent had originally been charged with four charges of breaches of discipline under the Police Force Ordinance and after an inquiry by a disciplinary board, he was found guilty on two of the four charges and the Commissioner of Police imposed a fine of S$50 on the first charge and reprimanded him on the second charge. The respondent thereupon appealed against the decision of the Commissioner and, subsequently, he was informed that the Public Service Commission had decided after hearing the appeal that he should be dismissed from the service. The respondent commenced an action claiming a declaration and damages. As a result, Winslow J made the declaration above mentioned. The questions which were raised on the appeal were: (a) whether the Public Service Commission, in ordering the dismissal of the respondent, was acting in exercise of its original jurisidiction conferred on it by the Constitution of Malaysia or in exercise of its appellate jurisdiction conferred on it by s 28(2) of the Police Force Ordinance; (b) if the Public Service Commission was acting in exercise of its appellate jurisdiction, whether it had power, in an appeal by the respondent against his conviction and sentence, to enhance the punishment awarded by the Commissioner of Police; (c) if the Public Service Commission was acting in the exercise of its original jurisdiction, whether the respondent had been dismissed without being given a reasonable opportunity of being heard.

Holding :

Held, dismissing the appeal: (1) it was beyond doubt that the Public Service Commission in ordering the dismissal of the respondent in this case was acting in the exercise of its appellate jurisidiction under s 28(2) of the Police Force Ordinance; (2) the Public Service Commission had no power to enhance the punishment and, therefore, in dismissing the respondent it was acting without jurisdiction.

Digest :

Attorney General, Singapore v Ling How Doong [1969] 1 MLJ 154 Federal Court, Singapore (Wee Chong Jin CJ, Tan Ah Tah FJ and Chua J).

1641 Dismissal -- Binding over order made in criminal proceedings

10 [1641] PUBLIC SERVANTS Dismissal – Binding over order made in criminal proceedings – Whether can be construed as a conviction – Criminal Procedure Code (FMS Cap 6), s 173A(ii)(b) – Public Officers (Conduct and Discipline) Chapter 'D' General Orders 1980, O 3, O 33 & O 35

Summary :

The plaintiff, a senior assistant of a primary school, was arrested and charged with two counts of criminal breach of trust by a public servant under s 409 of the Penal Code (FMS Cap 45). The sessions court convicted the plaintiff and sentenced him to six months' imprisonment. On appeal, the High Court bound over the plaintiff conditionally upon his entering into a bond to be of good behaviour for a period of three years under s 173A(ii)(b) of the Criminal Procedure Code (FMS Cap 6) ('the CPC') in the sum of RM5,000 without sureties. The defendant, the Education Service Commission ('the Commission'), then decided to dismiss the plaintiff because 'with the said conviction, [the plaintiff] had lowered the reputation of the civil service', an offence under para 4(2)(d) of the Public Officers (Conduct and Discipline) Chapter 'D' General Orders 1980 ('the GO'). The dismissal was effected under orders 33 and 35(1) of the GO. The plaintiff subsequently wrote to the Commission asking for a lesser punishment but the Commission confirmed that its decision was final. The plaintiff insituted this action which questioned the validity of his dismissal. The sole question to be decided was whether the binding over order made by the High Court under s 173A(ii)(b) of the CPC could be construed as a 'conviction' under orders 3, 33 and 35 of the GO.

Holding :

Held, dismissing the plaintiff's claim: (1) the word 'conviction' is not defined in the CPC but is defined in order 3 of the GO to include 'a finding or an order involving a finding of guilt by a criminal court in Malaysia'; (2) while no conviction is recorded when a court orders a binding over under s 173A(ii)(b) of the CPC, the court before so ordering must first find that the charge has been proved. Since the court must first find that the charged has been proved, that would necessarily mean that there must also be a concurrent finding of guilt, which fell within the ambit of the definition of 'conviction' in order 3 of the GO. Consequently, the Commission was correct when deciding to dismiss the plaintiff under orders 33 and 35 of the GO; (3) no objection could be taken against the words 'with the said conviction' used by the Commission because once the court found that the charge against the plaintiff had been proved, the Commission was entitled to proceed under orders 33 and 35 of the GO to order the plaintiff's dismissal. There appeared to be no necessity for the court to record a conviction before the plaintiff could be dismissed on the ground of conduct in respect of which a criminal charge had been proved or for conducting himself in such manner as to bring the public service into disrepute or to bring discredit thereto; (4) by virtue of the proviso to art 135(2) of the Federal Constitution, the fact that the plaintiff was not given a reasonable opportunity of being heard was of no consequence as he had been dismissed on the ground of conduct in respect of which a criminal charge had been proved.

Digest :

Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1995] 2 MLJ 476 High Court, Johor Bahru (Abdul Malik Ishak J).

1642 Dismissal -- Binding over order made in criminal proceedings

10 [1642] PUBLIC SERVANTS Dismissal – Binding over order made in criminal proceedings – Whether public servant could be subject to disciplinary punishment of either dismissal or reduction in rank without right of hearing – Public Officers (Conduct and Discipline) (Chapter 'D') General Orders 1980, General Orders 33 & 35(1) – Federal Constitution, arts 5(1), 8(1), 135(2) & (2)(a)

Digest :

Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1996] 1 MLJ 261 Court of Appeal, KUala Lumpur (Gopal Sri Ram, NH Chan JJCA, and Ahmad Fairuz J).

See CIVIL PROCEDURE, para 149.

1643 Dismissal -- Conviction for criminal breach of trust

10 [1643] PUBLIC SERVANTS Dismissal – Conviction for criminal breach of trust – Disciplinary proceedings leading to dismissal – No appeal brought against conviction – Application for declaration that dismissal null and void

Digest :

Kathiravalupillai v Government of Malaysia [1976] 2 MLJ 114 Federal Court, Kuala Lumpur (Gill CJ (Malaya).

See PUBLIC AUTHORITIES, Vol 10, para 1497.

1644 Dismissal -- Dismissal from Police Force

10 [1644] PUBLIC SERVANTS Dismissal – Dismissal from Police Force – Charge of wilful disobedience of order – Failure to obtain approval before purchasing a car – Applicant pleaded guilty – Whether applicant ought to be dismissed – Police (Conduct and Discipline) (Junior Police Officer and Constables) Regulations 1970 Schedule – Perintah Tetap Ketua Polis Negara Bhg A HTKPN Bhg A207 – Public Officers (Conduct and Discipline) Regulations 1993 (Cap D), reg 28

Summary :

The applicant had, on 1 February 1991, applied to his head of department to buy a car bearing registration No MU 8059. This was done in order to comply with the Perintah Tetap Ketua Polis Negara Bhg HTKPN (`A207'). The application was approved on 9March 1991. On 12 November 1993, the applicant bought a new car bearing registration No MAB 6020 without obtaining any prior approval from his superiors. On 4 June 1996, the applicant received a letter from the OCPD of Melaka Tengah, who signed as the `pegawai penguasa pengadil' (`the presiding officer') informing him of a decision to initiate disciplinary proceedings against him pursuant to the Police (Conduct and Discipline) (Junior Police Officer and Constables) Regulations 1970 (`the Regulations') and attaching the charge alleging that the applicant had committed an offence of wilfully disobeying a lawful order. On 10 June 1996, the applicant submitted the relevant application regarding the usage of the new car which was supported by the applicant's immediate head of department. At the hearing of the disciplinary proceedings, the applicant, who was not informed of the possibility that he would be dismissed in the event of being found guilty of the charge, pleaded guilty to the charge. The presiding officer referred to the applicant's past records and without according him the opportunity to explain, justify or even correct the records meted out the sentence of dismissal. The applicant was dismissed from the police force after having been found guilty of a disciplinary offence under the Schedule to Regulations for wilfully disobeying an order.

Holding :

Held, allowing the application for certiorari and quashing the order of dismissal: (1) as it was contemplated that the applicant would be dismissed and was indeed dismissed, pursuant to the Regulations and reg28 of the Public Officers (Conduct and Discipline) Regulations 1993 (Cap D), the applicant should have been informed of that contemplation. By the addendum in A207, the provisions in reg28 of Cap D 1993 which necessitated the officer who was to be dismissed or reduced in rank to be informed of the possible sentence if found guilty, apply to junior police officers and constables. By not informing the applicant of the possible dismissal, the tribunal was in breach of the audi alteram partem rule; (2) the disciplinary board took into account the previous records of the applicant which were extremely prejudicial to the applicant's case without affording the applicant the opportunity to explain or reply to those records. This procedural defect had infringed the rights of the applicant and was clearly an infringement of the rule of natural justice; (3) the sentence handed down by the presiding officer was irrational and disproportionate to the offence. The only error committed by the applicant was his failure to obtain permission from his head of department for the usage of the car which was merely administrative in nature which certainly did not create untold damage or bring the name of the police force into disrepute. The applicant's offence certainly did not merit a dismissal. Therefore, the sentence went against all tenets of rationality and was a decision which was 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.

Digest :

Ekambaram a/l Savarimuthu v Ketua Polis Daerah Melaka Tengah & Ors [1997] 2 MLJ 454 High Court, Melaka (Suriyadi J).

1645 Dismissal -- Dismissal from Police Force

10 [1645] PUBLIC SERVANTS Dismissal – Dismissal from Police Force – Sentence, whether irrational and disproportionate to the offence commited – Charge of wilful disobedience of order – Failure to obtain approval before purchasing a car – Applicant pleaded guilty – Applicant was dismissed – Whether sentence of dismissal was irrational and disproportionate – Police (Conduct and Discipline) (Junior Police Officer and Constables) Regulations 1970 Schedule – Perintah Tetap Ketua Polis Negara Bhg A HTKPN Bhg A207 – Public Officers (Conduct and Discipline) Regulations 1993 (Cap D), reg 28

See public servants, para VII [107].

Digest :

Ekambaram a/l Savarimuthu v Ketua Polis Daerah Melaka Tengah & Ors [1997] 2 MLJ 454 High Court, Melaka (Suriyadi J).

1646 Dismissal -- Dismissal of employee of local authority

10 [1646] PUBLIC SERVANTS Dismissal – Dismissal of employee of local authority – Whether employees of local authorities are holders of public offices – Whether incorporation of General Orders into contract of service had the legal effect of making an employee the holder of public office – Federal Constitution, art 132

See labour law, para VII [95].

Digest :

Mohd bin Ahmad v Yang Di Pertua Majlis Daerah Jempol, Negeri Sembilan & Anor [1997] 2 MLJ 361 Federal Court, Melaka (Chong Siew Fai CJ).

1647 Dismissal -- Dismissal from Police Force

10 [1647] PUBLIC SERVANTS Dismissal – Dismissal from Police Force – Reference to PSC for disciplinary action – Whether PSC bound by decision of committee of inquiry – Necessity of considering exculpatory statements before interdicting plaintiff

Summary :

The plaintiff joined the Singapore Police Force as a recruit police constable on 1 March 1958. He was confirmed as a sergeant in January 1979. The terms and conditions of his service were governed by the Police Force Act (Cap 78, 1970 Ed), the Police Regulations, the Police General Orders and various letters of appointment, promotion and confirmation sent by the relevant authorities and accepted by the plaintiff from time to time. On 14 October 1980, the plaintiff was handed a letter dated 8 October 1980 from the Acting Permanent Secretary (Home Affairs) in which he was informed that the Commissioner of Police acting under s 28(A) of the Police Force Act (the Act) had referred to the Public Service Commission (PSC) a case where disciplinary proceedings were to be taken against the plaintiff and that the same were thereby commenced against him under reg 4 of the Public Service (Disciplinary Proceedings) Regulations 1970 (the 1970 Regulations) on four charges. The said letter also requested the plaintiff to state in writing any representations which he wanted to make to exculpate himself from the charges. On 21 October 1980, the plaintiff wrote to the Permanent Secretary (Home Affairs) stating the grounds on which the plaintiff was entitled to be exculpated. On 22 October 1980, the plaintiff was interdicted from duty by the PSC and on 13 September 1982, he was dismissed from the Police Force by the PSC. The plaintiff brought this action against the defendant claiming that his dismissal from the Singapore Police Force on 13 September 1982 was null and void or alternatively that his dismissal was wrongful. The plaintiff contended, inter alia, that the PSC acted in breach of regs 4(3) and 7(i) of the 1970 Regulations by interdicting the plaintiff from duty without considering the exculpatory statement of the plaintiff.

Holding :

Held, dismissing the plaintiff's claim: (1) they are not a judicial or quasi-judicial body and they have no power to make any decision in any inquiry. No decision can emanate from the Inquiry Committee; (2) the PSC may have to act judicially or quasi-judicially by the very nature of the power they exercise and the decisions they make which can affect the livelihood of public officers, but they are not obliged to give reasons for their decisions; (3) the respective functions of the Inquiry Committee and the PSC are mutually exclusive. The Inquiry Committee are not a delegated body of the PSC for the purpose of making any decision;the PSC in interdicting the plaintiff from duty acted in accordance with reg 7 of the 1970 Regulations. Rule 7(i) does not require the PSC to consider the exculpatory statement of the plaintiff before interdicting him. It empowers the PSC to interdict any officer in the public interest instantly and this must mean without having to hear him. The power of the PSC under reg 7 is not dependent on or related to their power under reg 4.

Digest :

Heng Kai Kok v Attorney General, Singapore [1987] 1 MLJ 98 High Court, Singapore (Chan Sek Keong JC).

1648 Dismissal -- Dismissal of clerk for failure to comply with civil servants' dress code

10 [1648] PUBLIC SERVANTS Dismissal – Dismissal of clerk for failure to comply with civil servants' dress code – Whether decision to dismiss made by proper authority – Public Officers (Conduct and Discipline) Chapter 'D' General Orders 1980, O 24 & O 26

Summary :

The appellant, a clerk in the Perak State Legal Adviser's office, had been wearing the 'purdah' during office hours, in contravention of a government circular which prohibited lady civil servants from wearing attire covering the face during office hours. The disciplinary board for Group C officers at the Attorney General's chambers ('the disciplinary board') decided that disciplinary proceedings should be taken against her with a view to her dismissal and informed the Public Services Commission ('the PSC') of its decision. The secretary of the PSC requested the appellant to show cause as to why she should not be dismissed. The appellant's reply gave her reasons for wearing the 'purdah' and quoted verses from the Quran. The PSC decided to dismiss the appellant from service under general O 26 of the Public Officers (Conduct and Discipline) (Chapter 'D') General Orders 1980 ('GO 'D''). The appellant brought an action in the High Court challenging the validity of her dismissal by the PSC. The action dismissed. (See [1992] 1 MLJ 513.) The appellant has appealed on the grounds that: (i) the decision to dismiss her had effectively been made by the disciplinary board and not the PSC, which was in fact the appropriate disciplinary authority under order 24 of GO 'D'; (ii) she was not obliged to comply with the circular as it did not mention the word 'purdah'; (iii) her constitutional right under art 11(1) of the Federal Constitution to profess and practise her religion had been infringed; and (iv) she was obliged to wear the purdah to avoid a 'fitnah' (slander) against her as, according to Surah 24 of the Quran, a Muslim woman must always cover her face, except the eyes. Held, dismissing the appeal: (1) the procedure adopted by the disciplinary board and the PSC had complied strictly with O 24 and O 26 of GO 'D'. The disciplinary board had decided that proceedings for dismissal should be taken against the appellant and referred the matter to the PSC, which then wrote a show cause letter to her. The appellant was given every opportunity to exculpate herself and, after due consideration of her representations, the PSC decided to dismiss her. Therefore, the appellant failed on the first ground; (2) there was no ambiguity in the circular which did not allow lady civil servants to wear, inter alia, any attire covering the face. The dictionary meaning of 'purdah' is a cloth or curtain for keeping women from sight or a veil or cloth to hide a woman's face. It could not be said that the circular was unclear to the appellant or that she did not understand its meaning or purpose; (3) the freedom of religion guaranteed under art 11(1) of the Federal Constitution is not absolute as art 11(5) does not authorize any act contrary to any general law relating to public order, public health or morality. The prohibition against the wearing of attire covering the face by lady civil officers during work does not affect the appellant's constitutional right to practise her religion. The wearing of purdah had nothing to do with the appellant's constitutional right to profess and practise her Muslim religion; (4) the appellant's interpretation of Surah 24 was misconceived. In the circumstances, the judge was right to reject this aspect of the appellant's evidence regarding the wearing of purdah.

Digest :

Hajjah Halimatussaadiah bte Hj Kamaruddin v Public Services Commission, Malaysia & Anor [1994] 3 MLJ 61 Supreme Court, Malaysia (Abdul Hamid Omar LP, Edgar Joseph Jr and Mohamed Dzaiddin SCJJ).

1649 Dismissal -- Dismissal of detective police constable

10 [1649] PUBLIC SERVANTS Dismissal – Dismissal of detective police constable – Breach of 'audi alteram partem' rule – Real likelihood of bias – Contravention of Police Regulations and General Orders

Summary :

The plaintiff sought a declaration that his dismissal from the Singapore Police Force was void, inoperative and of no effect on three grounds: (a) breach of the 'audi alteram partem' rule, (b) bias, and (c) the disciplinary proceedings were not held in accordance with the Police Regulations or General Orders. A complaint against the plaintiff was made by a member of the public and as a result of a preliminary investigation a disciplinary offence was disclosed and it became necessary to charge the plaintiff in accordance with the Police Regulations 1959. The third defendant was delegated to conduct the disciplinary proceedings. There was sharp conflict of evidence as to when the plaintiff was first informed of the charge. The court, however, arrived at the conclusion that the plaintiff was first charged at the commencement of the disciplinary proceedings on 13 May 1963. During the proceedings, the charge was read to the plaintiff but no copy of it was supplied to him either before, at or during the proceedings. The plaintiff's request for an adjournment to prepare his defence was refused. The third defendant had before him the investigation papers, plaintiff's service sheet and personal record, miscellaneous files containing complaints concerning the plaintiff's behaviour which were unconnected with the charge and a previous conviction on an extortion charge which was quashed on appeal. All these were taken into consideration by the third defendant in arriving at his decision and in making his recommendations. The contents of these documents were not disclosed to the plaintiff and he was never given an opportunity of answering or explaining them. Furthermore, the third defendant had been previously the plaintiff's senior officer and had direct charge and control over him and would thus have access to his personal file and service sheets.

Holding :

Held: (1) the plaintiff was not given adequate notice to meet and answer the charge. Even if the plaintiff was charged on Friday or Saturday there was totally inadequate notice to meet and answer the charge on the following Monday bearing in mind that the weekend had all but arrived and the plaintiff was on 24 hour reserve duty the whole of the Sunday and Sunday night; (2) there was a real likelihood of bias, that is, an operative prejudice whether conscious or unconscious on the part of the third defendant; (3) the disciplinary proceedings were unsatisfactory and not in accordance with the Police Regulations 1959, Part III. None of the witnesses against the plaintiff gave evidence before the third defendant in the presence of the plaintiff. Nor was their evidence recorded by the third defendant as was required by the regulations save for a few questions in cross-examination. The pre-recorded statements which were never made available to the plaintiff were merely read out by the third defendant to the plaintiff and he was thereupon told to cross-examine the witnesses. The recorded statements were not signed by the third defendant as required by reg 7(6). There was also a breach of the Police General Order 463(27); (4) the plaintiff was entitled to the declaration that his dismissal was void. Observation on conduct of disciplinary proceedings. Per Buttrose J: 'É the strict rules of evidence are not applicable to domestic tribunals, but on the other hand, they must conduct themselves in accordance with the principles of natural justice.'

Digest :

Phang Moh Shin v Commissioner of Police & Ors [1967] 2 MLJ 186 High Court, Singapore (Buttrose J).

1650 Dismissal -- Dismissal of police constable by Chief Police Officer

10 [1650] PUBLIC SERVANTS Dismissal – Dismissal of police constable by Chief Police Officer – Delegation of powers by Police Force Commission – Power of appointment not delegated – Amendment of Federal Constitution with retrospective effect – Effect on dismissal

Summary :

This was an appeal from the decision of Abdul Hamid J ([1975] 2 MLJ 262) in which it was decided that as the Chief Police Officer had not been delegated with power to appoint but merely with the power to dismissal, the purported dismissal of the respondent by the Chief Police Officer was in violation of art 135(1) of the Federal Constitution and therefore void. The government of Malaysia appealed. Before the hearing of the appeal, art 135(1) of the Federal Constitution had been amended to provide that it shall not apply where power to dismiss had been delegated to an authority and the amendment was given retrospective effect from 31 August 1957. Notice that the appellant would rely on the amendment had been given to the respondent's counsel. It was argued for the respondent that the amendment could not be applied to this case.

Holding :

Held: (1) the amendment to art 135(1) can be made with retrospective effect and therefore the Chief Police Officer must be deemed to have power to dismiss the respondent; (2) appeals to the Federal Court are by way of rehearing and the Federal Court is authorized to make such order on appeal as ought to be made according to the law at the date of the appeal.

Digest :

Government of Malaysia v Zainal bin Hashim [1977] 2 MLJ 254 Federal Court, Kuala Lumpur (Suffian LP, Lee Hun Hoe CJ (Borneo).

Annotation :

[Annotation: See the Privy Council decision [1979] 2 MLJ 276.]

1651 Dismissal -- Dismissal of police constable by Chief Police Officer

10 [1651] PUBLIC SERVANTS Dismissal – Dismissal of police constable by Chief Police Officer – Delegation of powers by Police Force Commission – Power of appointment not delegated – Amendment of Federal Constitution with retrospective effect – Effect on dismissal – Necessity for oral hearing – Failure to comply strictly with procedures

Summary :

In this case, the appellant had pleaded guilty to a charge of an offence of assault under s 353 of the Penal Code and he was discharged conditionally upon his entering into a bond for a period of two years. The Chief Police Officer did not apply for a copy of the notes of evidence as laid down in the Public Officers (Conduct and Discipline) (General Orders, Chapter D) Regulations 1969 but wrote to the appellant stating that action to dismiss him was intended to be taken and asking him to make representations. The appellant submitted representations but he was dismissed without being given an oral hearing. The appellant brought an action for a declaration that his dismissal was void and inoperative on the ground that as the Chief Police Officer had no power to appoint constables, dismissal of a constable by him contravened art 135(1) of the Federal Constitution. Abdul Hamid J in the High Court found in favour of the appellant see [1975] 2 MLJ 262. Subsequently, the Federal Constitution was amended, by adding a proviso that cl (1) of art 135 shall not apply to a case where a member of the public services was dismissed or reduced in rank by an authority in pursuance of a power delegated to it by a Commission and it was provided that the proviso 'shall be deemed to have been an integral part of this clause as from Merdeka Day.' The government of Malaysia appealed to the Federal Court and the Federal Court held that the proviso operated to validate the appellant's dismissal see [1977] 2 MLJ 254. The appellant appealed from the decision.

Holding :

Held, dismissing the appeal: (1) in this case, the Legislature clearly intended to give retrospective effect to the amendment and to secure that no action started after Merdeka Day, whether proceeding or not started when the amendment was made, should succeed on the ground that the power to dismiss had not been exercised by someone with power to appoint. It made no difference that the action started had got to the stage of judgment being given and was under appeal when the amendment was made. The Federal Court therefore rightly allowed the appeal from the High Court on this ground; (2) the word 'authority' in art 135(1) and in the added proviso includes a person; (3) the right to be heard given by art 135(2) does not require that the person concerned be given an oral hearing and it could not be argued that the failure to give the appellant an oral hearing was a denial of natural justice; (4) although there was a failure to comply with the procedure laid down in the regulations in this case, it did not appear that compliance with it would in this case have served any useful purpose and non-compliance did not therefore render the dismissal invalid.

Digest :

Zainal bin Hashim v Government of Malaysia [1979] 2 MLJ 276 Privy Council Appeal from Malaysia (Lord Wilberforce, Viscount Dilhorne, Lord Edmund-Davies, Lord Russell of Killowen and Lord Keith of Kinkel).

1652 Dismissal -- Dismissal of police constable by Chief Police Officer

10 [1652] PUBLIC SERVANTS Dismissal – Dismissal of police constable by Chief Police Officer – Purported delegation of powers by Police Force Commission – No delegation of power to appoint – Dismissal by Chief Police Officer void and of no effect

Summary :

This was an appeal from the decision of Sharma J (sub nom Isman bin Osman v Government of Malaysia [1973] 2 MLJ 143). The respondent, a police constable, had been convicted of the offence of permitting his car to be used as a public service vehicle without a licence and after his conviction he was informed that his dismissal was contemplated and he was told that if he wished to make representations he should do so in writing to the Chief Police Officer. The respondent sent in a letter asking that he be re-employed but the Chief Police Officer decided to dismiss him. The Chief Police Officer purported to act under the powers given by the Police Force Ordinance. The Police Force Commission had purported to delegate its functions under art 140(1) of the Constitution to the Chief Police Officer. The respondent applied for a declaration that his dismissal was void and inoperative and that he was still a member of the Police Force. Sharma J held that the dismissal by the Chief Police Officer was null and void and inoperative. The appellant appealed to the Federal Court.

Holding :

Held, dismissing the appeal: as it was not shown that the Police Force Commission had delegated the power to appoint constables to the Chief Police Officer, the purported dismissal of the respondent by the Chief Police Officer was contrary to the prohibition in art 135(1) of the Federal Constitution and therefore void.

Digest :

Government of Malaysia v Iznan bin Osman [1975] 2 MLJ 61 Federal Court, Ipoh (Suffian LP, Lee Hun Hoe CJ (Borneo).

1653 Dismissal -- Dismissal of police constable by Chief Police Officer

10 [1653] PUBLIC SERVANTS Dismissal – Dismissal of police constable by Chief Police Officer – Purported delegation of powers by Police Force Commission – No delegation of power to appoint – Dismissal by Chief Police Officer void and of no effect

Summary :

This was an appeal from the decision of the Federal Court reported at [1975] 2 MLJ 61. The respondent, a police constable, had been convicted of the offence of permitting his car to be used as a public service vehicle without a licence and after his conviction he was informed that his dismissal was contemplated and he was told that if he wished to make representations he should do so in writing to the Chief Police Officer. The respondent sent in a letter submitting his representations but the Chief Police Officer, purporting to act under the powers conferred on him as per the First Schedule to the Police Force Ordinance 1952, decided to dismiss him. The Police Force Commission had purported to delegate its powers under art 140(1) of the Federal Constitution to the Chief Police Officer. The respondent applied for a declaration that his dismissal was void and inoperative and that he was still a member of the Police Force. The High Court held that the dismissal by the Chief Police Officer was null and void and inoperative and this was confirmed by the Federal Court. The appellant appealed to the Yang di-Pertuan Agong and, on the hearing of the appeal before the Privy Council, it was sought to present a new argument based upon the amendment to art 140 by the Constitution (Amendment) Act 1976 (Act A354).

Holding :

Held, dismissing the appeal: (1) the provisions of the Commissioner's Standing Order and of Sch 1 to the Police Force Ordinance 1952 which authorized the dismissal of a constable by a commanding officer was not in accord with the Federal Constitution prohibiting dismissal of a member of the police force by an authority subordinate to that which had power to appoint him and as the respondent was dismissed by the commanding officer, his dismissal was void; (2) the commanding officer had no power under the Police Force Ordinance to appoint a police constable and, therefore, the purported delegation by the Police Force Commission of its functions under art 140(1) of the Federal Constitution was ineffective to delegate the power of appointment of a constable to the Chief Police Officer and, therefore, the Chief Police Officer having no power to appoint could not dismiss the respondent; (3) it would not be proper in this case to entertain the new argument based on the amendment to the Federal Constitution as the respondent had not been given adequate opportunity to meet it.

Digest :

Government of Malaysia v Iznan bin Osman [1977] 2 MLJ 1 Privy Council Appeal from Malaysia (Viscount Dilhorne, Lord Hailsham of St Marylebone, Lord Edmund-Davies, Lord Fraser of Tullybelton and Lord Keith of Kinkel).

1654 Dismissal -- Dismissal of police constable by Chief Police Officer

10 [1654] PUBLIC SERVANTS Dismissal – Dismissal of police constable by Chief Police Officer – Purported delegation of powers of Police Force Commission – Whether Commission has power to delegate its functions in so far as they relate to the dismissal or reduction in rank of public servant

Summary :

In this case, the plaintiff, a police constable, was dismissed by the Chief Police Officer, Perak. He had been convicted of the offence of permitting his car to be used as a public service vehicle without licence and after his conviction he was informed that his dismissal was contemplated and he was told that if he wished to make any representations he should do so in writing to the Chief Police Officer. The plaintiff sent in a letter asking that he be re-employed but the Chief Police Officer decided to dismiss him. The Chief Police Officer purported to act under the powers given by the Police Force Ordinance 1952. The Police Force Commission had purported to delegate its functions under art 140(1) of the Constitution, to the Chief Police Officer.

Holding :

Held: (1) the Police Force Commission has no power to delegate its functions in so far as they relate to the dismissal or reduction in rank of a public servant; (2) the Chief Police Officer was in fact not acting under any delegation of authority by the Police Force Commission when he dismissed the plaintiff; (3) the dismissal from service of the plaintiff in this case was therefore null and void and inoperative.

Digest :

Isman bin Osman v Government of Malaysia [1973] 2 MLJ 143 High Court, Ipoh (Sharma J).

1655 Dismissal -- Dismissal of police constable by commanding officer

10 [1655] PUBLIC SERVANTS Dismissal – Dismissal of police constable by commanding officer – Appeal to Commissioner dismissed – Whether action will lie against the Commissioner

Summary :

The plaintiff had issued a writ against the Commissioner of Police praying for a declaration that his dismissal from the Singapore Police Force was illegal, void, inoperative and of no effect. The complaint of the plaintiff was that he was never given adequate notice of the charge nor was he given any opportunity to rebut the charge and the evidence against him. Disciplinary proceedings had been taken against the plaintiff under the Police Force Ordinance 1958, and as a result, the commanding officer had ordered that he be dismissed. He appealed to the Commissioner of Police who dismissed the appeal. The Commissioner of Police entered conditional appearance and applied for an order to set aside the service of the writ of summons on the contention that the Commissioner of Police was not the proper defendant as the complaint of the plaintiff was not against the Commissioner of Police but against the officer who held the inquiry.

Holding :

Held: the complaint of the plaintiff was not only against the officer who held the inquiry and the commanding officer who dismissed him but also against the Commissioner of Police for dismissing his appeal and, therefore, the Commissioner of Police was a proper defendant in this case.

Digest :

Phang Moh Shin v Commissioner of Police, Singapore [1966] 1 MLJ 187 High Court, Singapore (Chua J).

1656 Dismissal -- Dismissal of police inspector

10 [1656] PUBLIC SERVANTS Dismissal – Dismissal of police inspector – Commencement of proceedings by Inspector-General of Police – Actual dismissal carried out Deputy Inspector-General of Police – Whether entire process relating to dismissal must be exercised by same party

Summary :

Digest :

Hngh Ah Leong v Inspector-General of Police & Ors Civil Appeal No R8 21-8-87 High Court, Kuala Lumpur (Abu Mansor J).

1657 Dismissal -- Dismissal of police inspector as a result of disciplinary action taken against him

10 [1657] PUBLIC SERVANTS Dismissal – Dismissal of police inspector as a result of disciplinary action taken against him – Whether null and void – Rules of natural justice

Summary :

The plaintiff in this case was an inspector in the police force. By a letter dated 6 April 1977, the acting Permanent Secretary of the Ministry of Home Affairs informed him that disciplinary proceedings under reg 4 of the Public Service (Disciplinary Proceedings) Regulations 1970 had been commenced against him on the three charges stated therein. On 26 April 1977, the plaintiff submitted to the Public Service Commission his exculpatory statement, denying all the said three charges. The Commission not finding the exculpatory statement satisfactory, appointed a Committee of Inquiry under the said reg 4. Thereafter correspondence ensued between the Chairman of the Committee and the plaintiff regarding the procedural aspects of the pending inquiry. On 6, 8 and 9 September 1977, the plaintiff appeared by counsel before the Committee of Inquiry. On 7 December 1977, the plaintiff received a letter from the acting Permanent Secretary of the Ministry of Home Affairs, stating that he had been dismissed from the service with effect from the day following the date the said letter was received by him. The said letter was silent on the plaintiff's guilt on the said charges. On 24 May 1978, the plaintiff's solicitors inquired of the Permanent Secretary the charges on which the plaintiff had been found guilty. A reply was received saying that the plaintiff had been found guilty on two of the said charges. The plaintiff commenced the present action and contended, inter alia, that the proceedings before the Committee of Inquiry were conducted in breach of the regulations and were contrary to the rules of natural justice thereby rendering any finding or decision based on the said proceedings null and void. He also contended that the Public Service Commission had contravened the provisions of art 78(3) of the Constitution of Singapore (art 110(3) of the Reprint edition) by not giving him a reasonable opportunity of being heard before he was dismissed from the police force. The present court also found that (a) the Committee had no power or authority to deal with nor did it invite submissions on punishment; (b) no submissions were made by the plaintiff to the Committee as to punishment; (c) there was no invitation by the Public Service Commission to the plaintiff either to address them on punishment or to show cause why he should not be dismissed.

Holding :

Held, allowing the plaintiff's application: (1) a police inspector's tenure of office is governed by the Police Force Act (Cap 78, 1970 Ed). He falls under a class of persons 'holding office where there must be "something" against him to warrant his dismissal'. In this class of cases, an officer cannot lawfully be dismissed without first telling him what is alleged against him and hearing his defence or explanation; (2) what art 110(3) of the Singapore Constitution (Reprint) does for an inspector of police is that it entrenches in the Constitution the right of being heard before dismissal or reduction which he had previously enjoyed under the Police Force Act; (3) it is settled law that both in Malaysia and Singapore, the phrase 'of being heard' does not mean an actual hearing in the way the plaintiff was afforded a hearing when he was answering the three charges. The said art 110(3) would have been satisfied had the public officer been afforded an opportunity to present his views on punishment to the Public Service Commission; (4) as the opportunity to be heard had not been afforded to the plaintiff at the inquiry stage then that opportunity should have been provided sometime between the termination of the inquiry and the imposition of the punishment or penalty. The opportunity not having been so provided the rule of fairness was broken and any punishment or penalty imposed in such circumstances is against the rules of natural justice; (5) the purported dismissal of the plaintiff in this case was null and void and must be set aside. Obiter dictum: 'É if the PSC does not wish to delegate both its powers of inquiry and of punishment to a committee then it should take appropriate steps to comply with the provisions of art 110(3) of the present Consitution. In the circumstances, similar to the instant case É the PSC would avoid contravention of the article if they were either to write to the public officer concerned asking him what he has to say on punishment, or, to invite him to show cause why a certain punishment such as dismissal, should not be imposed in respect of the charge or charges on which he had been found guilty.'

Digest :

Lee Keng Kee v Attorney General, Singapore [1981] 2 MLJ 220 High Court, Singapore (Rajah J).

Annotation :

[Annotation: Overruled by the Court of Appeal. See Attorney General, Singapore v Lee Keng Kee [1982] 2 MLJ 6.]

1658 Dismissal -- Dismissal of police inspector as a result of disciplinary action taken against him

10 [1658] PUBLIC SERVANTS Dismissal – Dismissal of police inspector as a result of disciplinary action taken against him – Whether null and void – Rules of natural justice

Summary :

This was an appeal from the judgment of Rajah J in which the learned judge held (see [1981] 2 MLJ 220) that the dismissal of the respondent from the police force was null and void and that the respondent was still an inspector in the police force and was entitled to be remunerated as such. The learned judge held that the respondent was not given a reasonable opportunity of being heard before he was dismissed and was accordingly denied his constitutional rights as a police officer under art 110(3) of the constitution.

Holding :

Held, allowing the appeal: the learned trial judge had erred in holding that the requirements of art 110(3) of the Constitution had not been complied with. He failed to give weight to the letter of the acting Permanent Secretary and had misunderstood the decision in Jacob v Attorney General [1970] 2 MLJ 133. The respondent had been informed at the earliest stage that a range of punishments, including dismissal, was under consideration. Although he did not avail himself of the opportunity, the respondent was nevertheless afforded the opportunity of being heard on the contemplated dismissal.

Digest :

Attorney General, Singapore v Lee Keng Kee [1982] 2 MLJ 6 Court of Appeal, Singapore (Wee Chong Jin CJ, Sinnathuray and Lai Kew Chai JJ).

1659 Dismissal -- Dismissal of police officer

10 [1659] PUBLIC SERVANTS Dismissal – Dismissal of police officer – No formal inquiry held – Whether oral hearing necessary – Validity of regulations

Summary :

The plaintiff, who was a police officer, was detained under an order issued by the Minister of Home Affairs. Whilst in detention, he received a statement in writing sent by the Police Force Commission pursuant to General Order 30(2) of the Public Officers (Conduct and Discipline) (General Orders, Chapter D) Regulations 1969, requiring him to show cause why he should not be dismissed from the Police Force. The plaintiff sent a written reply to the Police Force Commission. There was no formal inquiry held and the plaintiff was dismissed from the Police Force by the Police Force Commission. The plaintiff sought, inter alia, a declaration that his dismissal was void.

Holding :

Held: (1) the Public Officers (Conduct and Discipline) (General Orders, Chapter D) Regulations 1969, are valid, although the effect may be to deprive an officer of the guarantee embodied under art 135(2) of the Federal Constitution; (2) if the dismissal of the officer was made by the appropriate Service Commission empowered under the Federal Constitution, it was perfectly valid and effective, even though no inquiry was held.

Digest :

Najar Singh v Government of Malaysia & Anor [1973] 2 MLJ 191 High Court, Kuala Lumpur (Abdul Hamid J).

1660 Dismissal -- Dismissal of police officer

10 [1660] PUBLIC SERVANTS Dismissal – Dismissal of police officer – Police Force Commission having power to appoint – Dismissal by Commissioner of Police without authority – Rules of natural justice

Summary :

The plaintiff (appellant in this appeal), an inspector in the Royal Federation of Malaya Police Force, was first appointed on probation in 1951 and permanently appointed to the rank of inspector on 1 June 1953. On 7 July 1958, he was dismissed by the Commissioner of Police. Having exhausted his department rights of appeal, he commenced these proceedings on 1 October 1959. He asked for a declaration and other consequential reliefs stating that his purported dismissal on 7 July 1958 was void and inoperative and of no effect and that he was still a member of the said police force because (a) the dismissal had been effected by an authority subordinate to that which at the time of dismissal had power to appoint a member of the police force of equal rank and that this was contrary to art 135(1) of the Constitution and (b) it was effected without him being given a reasonable opportunity of being heard (at the board of inquiry held by the police force) and that this was contrary to art 135(2) of the Constitution and natural justice. In the High Court ([1960] MLJ 115), Rigby J held that art 144(1) was to be read with art 135(1) at the material time and that the power to appoint and consequently the power to dismiss officers of his rank was vested in the Police Service Commission and that the Commissioner of Police was an authority subordinate to the Police Service Commission and as such he had no power to dismiss him. He also held that even if the Commissioner had power to dismiss the plaintiff, his dismissal as actually effected was contrary to natural justice and in breach of the Constitution because the plaintiff was not afforded a reasonable opportunity of being heard. The learned trial judge granted the declaration that the purported dismissal was void, inoperative and of no effect and that he was still a member of the said police force. The government appealed to the Court of Appeal ([1961] MLJ 121) which by a majority (Thomson CJ and Hill JA, with Neal J dissenting) allowed the appeal and held that the plaintiff was validly dismissed. From this judgment, the plaintiff appealed to the Privy Council.

Holding :

Held: (1) therefore under art 135(1) it was the authority to dismiss him. The Commissioner of Police was without such authority. The dismissal was void; (2) the words 'subject to the provisions of any existing law' in art 144(1) meant only that the Police Service Commission shall operate pursuant to existing laws which are not in conflict with the Constitution. In case of conflict between existing law and the Constitution, the latter must prevail and as such it is necessary for the court to modify the existing law under the authority of art 162. The Police Service Commission was the authority to appoint an officer of the appellant's rank;the right to be heard carries with it the right of the accused to know the case made against him, the evidence given, and the statements made affecting him; and he must be given a fair opportunity to correct or contradict them. The judge or whoever has to adjudicate must not hear evidence or receive representations from one side behind the back of the other. The court will not inquire whether the evidence or representations did work to his prejudice. The court will not go into the likelihood of prejudice. The risk of it is enough. Applying these principles, the applicant was not given a reasonable opportunity of being heard. Judgment of the Court of Appeal [1961] MLJ 121 set aside.

Digest :

Surinder Singh Kanda v The Government of the Federation of Malaya [1962] MLJ 169 Privy Council Appeal from Malaysia (Lord Denning, Lord Hodson and Lord Devlin).

1661 Dismissal -- Dismissal of police officer

10 [1661] PUBLIC SERVANTS Dismissal – Dismissal of police officer – Whether proceedings should have been under different regulations – Reasonable opportunity to be heard – Whether oral hearing necessary

Summary :

The appellant who was a police officer was detained under an order issued by the Minister of Home Affairs. Whilst in detention he received a statement in writing sent by the Police Force Commission pursuant to General Order 30(2) of the Public Officers (Conduct and Discipline) (General Orders, Chapter D) Regulations 1969 requiring him to show cause why he should not be dismissed from the Police Force. The appellant sent a written reply to the Police Force Commission. The appellant was dismissed from the police force and he sought, inter alia, a declaration that his dismissal was void. The High Court dismissed his claim ([1973] 2 MLJ 191) and the appellant appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) in this case, although the respondents could have proceeded against the appellant either under the Public Officers (Conduct and Discipline) (General Orders Chapter D) Regulations 1969 or the Police (Conduct and Discipline) (Junior Police Officers and Constables) Regulations 1970, they were within their rights in choosing to proceed under the 1969 Regulations (Chapter D); (2) in any case, even when proceeding against the appellant under the 1969 Regulations (Chapter D) the respondents should have given him a reasonable opportunity of being heard; (3) in the circumstances of this case an oral hearing was unnecessary and the respondents had given the appellant a reasonable opportunity of being heard.

Digest :

Najar Singh v Government of Malaysia & Anor [1974] 1 MLJ 138 Federal Court, Kuala Lumpur (Azmi LP, Suffian CJ and Ong Hock Sim FJ).

1662 Dismissal -- Dismissal of police officer

10 [1662] PUBLIC SERVANTS Dismissal – Dismissal of police officer – Whether proceedings should have been under different regulations – Reasonable opportunity to be heard – Whether oral hearing necessary

Summary :

The appellant who was a police officer had been detained under an order issued by the Minister of Home Affairs. While he was being detained, he received a letter from the Inspector General of Police asking him to show cause why he should not be dismissed from the police force. The appellant sent a written reply. Eventually, he was dismissed from the police force and he sought a declaration that his dismissal from the police force was void. Abdul Hamid J dismissed his claim ([1973] 2 MLJ 181) and an appeal to the Federal Court was dismissed ([1974] 1 MLJ 138). The appellant appealed with leave of the Federal Court to the Yang di-Pertuan Agong, and the appeal was referred to the Privy Council. The grounds of appeal were (a) instead of being dealt with under the Public Officers (Conduct and Discipline) (General Orders Chapter D) Regulations 1969, he should have been dealt with in accordance with the procedure prescribed in the Police (Conduct and Discipline) Junior Police Officers and Constables Regulations 1970; and (b) contrary to natural justice and reg 27 of the Chapter D Regulations, he was not afforded a reasonable opportunity of being heard before he was dismissed.

Holding :

Held, dismissing the appeal: (1) even if the appellant could have been dealt with under the Police Regulations 1970, that would not prevent his being dealt with under the Chapter D Regulations 1969; (2) reg 27 of the Chapter D Regulations is not to be interpreted as imposing an obligation to hear an officer orally; (3) in the circumstances, the plea by the appellant that there has been a failure of natural justice must be rejected.

Digest :

Najar Singh v Government of Malaysia & Anor [1976] 1 MLJ 203 Privy Council Appeal from Malaysia (Lord Wilberforce, Lord Morris of Borth-y-Gest, Viscount Dilhorne, Lord Hailsham of St Marylebone and Lord Fraser of Tullybelton).

1663 Dismissal -- Dismissal of probationary police officer

10 [1663] PUBLIC SERVANTS Dismissal – Dismissal of probationary police officer – Allegation of breach of Police Regulations and rules of natural justice – Sufficiency of evidence – Whether reviewable by court

Summary :

The appellant, a former probationary inspector of the Singapore Police, was dismissed by the Commissioner of Police after he was found guilty by a board of two charges of assaulting a person under police custody. He appealed to the Public Service Commission which confirmed the Commissioner's decision. Instead of applying for an order of certiorari, the appellant commenced an action in the High Court seeking a declaration that his dismissal from the Police Force was null and void and for consequential relief. The appellant's case is based on two main grounds: (a) the proceedings of the board were conducted in breach of the provisions of the Police Regulations and/or in breach of the rules of natural justice and he was deprived of his constitutional right under art 110(3) of the Singapore Constitution which provides that no public officer shall be dismissed without being given a reasonable opportunity of being heard. The appellant also alleged that the chairman of the board was biased against him; (b) the appellant claimed that the evidence before the board was not capable in law of warranting the findings that he was guilty of the two charges of assault and that the findings were so arbitrary and capricious that no reasonable person could have come to such findings on the evidence before the board.

Holding :

Held, dismissing the appeal with costs: (1) the board's findings of fact are not open to review by the court in the exercise of its supervisory powers except on the principles laid down in Edwards v Bairstow [1956] AC 14. There was sufficient evidence for the board to come to its finding that the appellant was guilty of both charges; (2) the board had given the appellant the opportunity to be heard and that it had acted fairly towards him in carrying out its decision-making process. All the complaints of the appellant against the board and its chairman were on the evidence in the High Court properly rejected by the learned trial judge.

Digest :

Leong Kum Fatt v Attorney General, Singapore [1986] 1 MLJ 7 Court of Appeal, Singapore (Wee Chong Jin CJ, Lai Kew Chai and Thean JJ).

1664 Dismissal -- Dismissal of subordinate police officers

10 [1664] PUBLIC SERVANTS Dismissal – Dismissal of subordinate police officers – Reference to PSC for disciplinary action – Whether PSC bound by decision of Committee of Inquiry – Sufficiency of evidence – Whether reviewable by court

Summary :

The facts of this case were briefly as follows. The first plaintiff was a detective police sergeant in the Police Force and was attached to the Gambling Suppression Branch of the Criminal Investigation Department of the said Force. The second plaintiff was a detective police constable, also attached to the Gambling Suppression Branch of the Criminal Investigation Department. On 5 March 1977, the two plaintiffs conducted a raid on No 46B Holy Innocents Lane, Singapore. The premises was occupied by Madam Chia with her son Lee Boon Keng and his family. During the raid, betting slips were found on the premises. Chia Yak Moy, an adopted son of Madam Chia, was arrested and taken to the police station. The next day he was taken court where he pleaded guilty to a charge of being in possession of betting slips and was fined. By a letter dated 13 January 1978, the first plaintiff was informed that disciplinary proceedings under reg 4 of the Public Service (Disciplinary Proceedings) Regulation 1970 (the regulations) had been commenced against him on two charges, ie conniving with the second plaintiff in 'demanding and accepting a gratification of S$1,200 from a member of the public, one Chia Yak Moy, as an inducement for not taking action against one Lee Boon Keng under the Common Gaming Houses Act (Cap 96)' and for perverting 'the proper administration of justice by putting one Chia Yak Moy under arrest and subsequently charging him for an offence under the Common Gaming Houses Act when (he) knew that the real culprit was one Lee Boon Keng'. The second plaintiff too received a similar letter dated 13 January 1978 almost on identical terms informing him that disciplinary proceedings had also been commenced against him on the corresponding two charges. Both plaintiffs submitted their exculpatory statement by letters dated 19 January 1978 wherein they denied the said two charges. The Public Service Commission (PSC) were not satisfied with these exculpatory statements of the two plaintiffs and they appointed a Committee of Inquiry under reg 4(3) of the regulations. The committee in their report stated both the charges against the two plaintiffs had not been proved. The first plaintiff received a letter dated 15 August 1978 from the Permanent Secretary (Home Affairs) that the PSC after careful consideration of the facts of the case and the report of the committee had decided that he be dismissed and he was thereby dismissed from the service with effect from the date following the receipt of the letter by him. A similar letter was also received by the second plaintiff on 18 August 1978. As the two letters of 15 August 1978 addressed to the two plaintiffs did not mention on which of the two charges that had been preferred against them that they had each had been found guilty, counsel for the plaintiffs wrote to the Permanent Secretary (Home Affairs) on 5 September 1978 for clarification on this point. The Permanent Secretary (Home Affairs) by letter of 15 September 1978 informed that they were found guilty of the first charge. Counsel for the plaintiffs submitted that the PSC had no powers to differ from the findings of the committee which had found them not guilty on both the charges that had been preferred against each of the two plaintiffs. It was also contended that the PSC had disregarded the rights of the plaintiffs under art 135(2) of the Malaysian Constitution, and had acted in violation of those rights.

Holding :

Held, dismissing the plaintiffs' action: (1) if the committee in its report makes any finding as to the guilt or otherwise on the charge preferred against the subordinate officer concerned, it is purely expressing its opinion and no more, and it is best a matter which may be taken into consideration by the PSC and is by no means binding on the PSC. In this case, the PSC were perfectly entitled to differ from the views of the committee on the question of whether the officers concerned were guilty on the charge or not; (2) the jurisdiction over inferior tribunals is supervision and not review. Its supervision would be to ensure that the inferior tribunal acts within the jurisdiction permitted by Parliament in its mandate to the tribunal. If the tribunal on a true construction of the Police Force Act (Cap 78, 1970 Ed) is to inquire into and finally decide questions within a certain area, the court's supervisory function is to see that it makes the authorized inquiry according to natural justice and arrives at a decision whether right or wrong; (3) the PSC were not bound by the procedure set out in s 27 of the Police Force Act and the Police Regulation but by the procedure set out in the Public Service (Disciplinary Proceedings) Regulation 1970; (4) while art 135(2) of the Malaysian Constitution applied to all members of the Police Force, the new article 78(3) provided by the Constitution (Amendment) Act 1970 was applicable only to police officers of the rank of inspector and above. The clear implication is that art 135(2) has been repealed impliedly and such a provision is no longer applicable to subordinate police officers like the plaintiffs.

Digest :

Wong Kim Sang & Anor v Attorney General [1982] 1 MLJ 176 High Court, Singapore (Kulasekaram J).

1665 Dismissal -- Dismissal of teacher

10 [1665] PUBLIC SERVANTS Dismissal – Dismissal of teacher – Dismissal following finding of guilt on criminal charge – No reasonable right to be heard given – Whether dismissal valid – Federal Constitution, art 135(2) proviso

Digest :

Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1995] 2 MLJ 476 High Court, Johor Bahru (Abdul Malik Ishak J).

See PUBLIC SERVANTS, para 1607.

1666 Dismissal -- Failure to give required days' notice

10 [1666] PUBLIC SERVANTS Dismissal – Failure to give required days' notice – Procedural regulation mandatory before dismissal of public servant

Summary :

The plaintiff challenged his dismissal from the post of police constable. It was not disputed that the plaintiff, who had pleaded guilty to the charge against him, had not been given the 14 days' notice required by the relevant regulations.

Holding :

Held, allowing the plaintiff's claim: (1) except and save in cases where art 135(2) was applicable, procedural rules were only directory. In this case, however, art 135 clearly applied; (2) where strict compliance was required, it was not open to the court to say that the public servant was not prejudiced by the application or to decide if a shorter period was sufficient.

Digest :

Narinder Singh a/l Jaswant Singh v Ketua Polis Daerah Georgetown & Ors Civil Suit No 21-4-1991—High Court, Penang (Vincent Ng J).

1667 Dismissal -- Initiation of proceedings

10 [1667] PUBLIC SERVANTS Dismissal – Initiation of proceedings – Conduct appearing to Head of Department to merit dismissal – Proceedings need not be initiated by Head of Department – Extraneous considerations – Whether rules of natural justice violated

Summary :

This was an appeal against the dismissal by Raja Azlan Shah J ([1969] 1 MLJ 219) of a motion for certiorari to quash the decision of the Public Services Commission terminating the appellant's appointment. It was contended for the appellant: (a) the proceedings being instituted by the Secretary to the Ministry of Labour and not by the Head of Department was ultra vires the provisions of General Order 38 and therefore void; (b) the Committee of Inquiry had failed to inform the applicant of its decision on the question of jurisdiction and this was a serious procedural defect; (c) the Public Services Commission was possibly influenced by extraneous considerations without giving the applicant an opportunity to explain them thereby violating the rules of natural justice; (d) the Committee of Inquiry had admitted and acted on hearsay evidence.

Holding :

Held, dismissing the appeal: (1) and therefore in this case the proceedings were not invalid although they were initiated by the Secretary to the Ministry of Labour who is at least equal in official status to the Head of Department; (2) the Committee of Inquiry in this case did consider the collateral question of jurisdiction and its failure to convey its decision to the applicant was not a breach of the rules of natural justice; (3) although there were allegations in the letter of the Secretary to the Ministry of Labour which contained allegations of misconduct against the appellant which were not made the subject matter of charges preferred against him, there was no reason to doubt in this case that neither the committee nor the Public Services Commission was influenced in their decision by anything contained in that letter and, therefore, there was no evidence of a real likelihood of bias; (4) the learned trial judge was right in holding that although the procedural provisions in the General Orders were mandatory, and must be strictly construed, the phrase 'appears to the Head of Department to merit dismissal' which precedes those provisions is only a machinery providing for the mode in which the question is to come before the disciplinary authority;the court was not justified in rejecting the inferences drawn by the Committee of Inquiry in relation to the hearsay evidence admitted by them.

Digest :

R Sambasivam v Public Services Commission & Anor [1970] 1 MLJ 61 Federal Court, Kuala Lumpur (Ong Hock Thye CJ (Malaya).

1668 Dismissal -- Initiation of proceedings

10 [1668] PUBLIC SERVANTS Dismissal – Initiation of proceedings – Conduct appearing to Head of Department to merit dismissal – Proceedings need not be initiated by Head of Department – Non-disclosure of letter of complaint – Letter not shown to committee of inquiry – No failure of natural justice

Summary :

In this case, disciplinary proceedings had been taken against the appellant under reg 38 of General Orders Cap 'D'. After reading the report of the committee of inquiry, the Public Services Commission directed that the appellant be dismissed. The proceedings against the appellant were instituted by the secretary of the Ministry of Labour, who sent a letter of complaint to the Public Services Commission. At the hearing before the Committee of Inquiry, the case against the appellant was presented by the Commissioner of Labour, who was the Head of Department of Labour in which the appellant was employed. The appellant applied for an order of certiorari to quash the decision of the Public Services Commission and this application was dismissed in the High Court ([1969] 1 MLJ 219) and on appeal in the Federal Court ([1970] 1 MLJ 61). On further appeal to the Privy Council, it was argued: (a) the Committee of Inquiry had no jurisdiction to hear the charges against the appellant because the condition precedent to the initiation of proceedings namely 'that the appellant's conduct should appear to the Head of Department to merit dismissal' was not complied with; (b) the failure to provide the appellant with a copy of the letter of the secretary to the Ministry of Labour constituted a breach of the rules of natural justice.

Holding :

Held, dismissing the appeal: (1) reg 38 of General Orders Cap 'D' does not require that the decision to invite the Public Services Commission to initiate proceedings with the view to an officer's dismissal should be taken by the head of department. All that is required is that at the appropriate time the Head of Department should in fact be of the opinion that the conduct of the officer merits dismissal. In this case, having regard to the fact that the head of department himself conducted the case against the appellant before the Committee of Inquiry, the inference is irresistible that by the date when the charges were formulated, the Head of Department considered that the appellant's conduct, taken as a whole, as set out in the charges, merited dismissal; (2) the policy disclosed by reg 38 of General Orders Cap 'D' and the immediately preceding orders dealing with officers of lesser rank is that, except in the case of conviction for a criminal offence, an officer should not be dismissed unless both the head of his department and the disciplinary authority consider that his conduct merits dismissal; (3) there was no breach of the rules of natural justice in this case as there was no evidence that the letter of the secretary to the Ministry of Labour was ever shown to any member of the Committee of Inquiry. The fact that the appellant was not given an opportunity of dealing with the other complaints in the letter of which the Public Services Commission were cognisant but did not regard as sufficiently serious to justify investigation by the Committee of Inquiry did not amount to any breach of the rules of natural justice.

Digest :

R Sambasivam v Public Services Commission & Anor [1971] 2 MLJ 181 Privy Council Appeal from Malaysia (Lord Diplock, Lord Hodson and Lord Cross of Chelsea).

1669 Dismissal -- Initiation of proceedings

10 [1669] PUBLIC SERVANTS Dismissal – Initiation of proceedings – Proper party – Rules of natural justice – Rules of evidence need not be strictly followed

Summary :

This was a motion for an order of certiorari to quash the decision of the Public Services Commission, in terminating the appointment of the applicant as Junior Assistant Commissioner for Labour. It was alleged that: (a) the proceedings being initiated by the Secretary to the Ministry of Labour and not by the Head of Department, were ultra vires the provisions of General Order 38 and therefore void, (b) the Committee of Inquiry had failed to consider the question of jurisdiction, (c) the Public Services Commission had been influenced by extraneous considerations without giving the applicant an opportunity to explain them, thereby violating the rules of natural justice, (d) there was likelihood of bias against the applicant, and (e) the Committee of Inquiry had admitted and acted on hearsay evidence.

Holding :

Held: (1) the procedural provisions in the General Orders are mandatory but in this case as the Secretary to the Ministry of Labour was also a Head of Department there had been no breach of the provisions of the General Orders; (2) in this case, the Committee of Inquiry had considered the question of jurisdiction but had only failed to convey its decision to the applicant; (3) the rules of natural justice had not been violated; (4) on the facts there was no evidence of likelihood of bias; (5) the committee of inquiry is not a court of law and, so long as the rules of natural justice are observed, it is not bound to follow strictly the procedure laid down in the Evidence Ordinance.

Digest :

Re R Sambasivam [1969] 1 MLJ 219 High Court, Kuala Lumpur (Raja Azlan Shah J).

1670 Dismissal -- Inquiry

10 [1670] PUBLIC SERVANTS Dismissal – Inquiry – When subordinate officers can be represented by agent at disciplinary inquiry – Whether plaintiff given reasonable opportunity to be heard – Authority having power to dismiss in Singapore Police Force

Summary :

The plaintiff sought a declaration that his purported dismissal from the Singapore Police Force was ultra vires, null, void and inoperative and that he was still a corporal and entitled to be remunerated as such. It was argued on his behalf, inter alia, that: (a) he was not permitted to be represented by an agent at the disciplinary inquiry; (b) he was not given reasonable opportunity of being heard before he was dismissed; (c) an Assistant Commissioner of Police had no power to dismiss him. It was contended that only the Commissioner had the power to dismiss the plaintiff. Counsel for the defendant submitted that under s 4(1) of the Police Force Ordinance 1958, an Assistant Commissioner of Police had the power to dismiss the plaintiff.

Holding :

Held: (1) reg 7 of the Police Regulations 1959 is silent on the question whether subordinate officers can be represented by anyone at an inquiry. On the authority of Enderby Town Football Club Ltd v The Football Association Ltd [1971] 1 All ER 215 the chairman of the inquiry had a discretion whether or not to allow the plaintiff to be represented by someone at the inquiry. But as the plaintiff on his own admission never raised the matter, the question of an exercise of discretion never arose; (2) the plaintiff was given a reasonable opportunity of being heard before he was dismissed. There had been no contravention of art 135(2) of the Constitution of Malaysia; (3) s 4(1) of the Police Force Ordinance 1958 did not confer on the Commissioner the power to delegate any of his powers. The effect of s 4(1) is that any act which may be done by the Commissioner may, subject to orders and directions, be done by an Assistant Commissioner of Police. The right of the Commissioner to give orders and directions is controlled by s 54 of the Police Force Ordinance 1958, which provides, inter alia, that the Commissioner may make such orders not inconsistent with the provisions of the ordinance as he may think expedient. Therefore s 4(1) of the ordinance conferred the power on the Assistant Commissioner of Police to dismiss the plaintiff from the Police Force.

Digest :

Sithambaran v Attorney General [1972] 2 MLJ 175 High Court, Singapore (Tan Ah Tah J).

1671 Dismissal -- Inquiry under Public Service (Disciplinary Proceedings) Regulations 1962

10 [1671] PUBLIC SERVANTS Dismissal – Inquiry under Public Service (Disciplinary Proceedings) Regulations 1962 – Revocation of 1962 Regulations – Whether dismissal subsequent to revocation of regulations valid

Summary :

The plaintiff, a senior cleansing inspector, was dismissed from the public service on 27 September 1965. His dismissal was the final act in a disciplinary action first initiated in June 1963. He was requested to state in writing on or before 4 July 1963, the grounds upon which he relied to exculpate himself on the alleged charges. A committee was appointed by the Public Service Commission to inquire into the matter. The plaintiff was notified to appear to give evidence in person. The plaintiff's application to the committee for permission to be represented by an advocate and solicitor was refused. His application for representation by an officer of the public service was also refused. The committee conducted the entire proceedings without the assistance of anyone acting on behalf of the government or of the plaintiff. Subsequently, the committee in accordance with the Public Service (Disciplinary Proceeding) Regulation 1962, submitted its report to the Public Service Commission. This report stated that the committee was of the opinion that three of the four charges were well founded but there was no evidence to support the fourth charge. The Public Service Commission acting in accordance with the 1962 Regulations advised the Yang di-Pertuan Negara to dismiss the plaintiff from the public service. The advice was approved by the Yang di-Pertuan Negara and it was decided to dismiss the plaintiff, but for reasons which had not been disclosed to the court, that decision was not implemented and was never communicated to the plaintiff up to the time when the 1962 Regulations were revoked and replaced by the Public Service (Disciplinary Proceedings) (Procedure) Rules 1964. The question to be decided was whether or not the plaintiff had been validly dismissed. The plaintiff claimed that his purported dismissal by the Public Service Commission was illegal, ultra vires and invalid on the following grounds: (i) the Public Service Commission had no power to dismiss the plaintiff under the said rules since the commission's power in relation to the said disciplinary proceedings had been exhausted by reason of action taken under the said regulations; (ii) there was no basis upon which any reasonable person or body of persons could come to the conclusion that the plaintiff was guilty of the allegations made against him; (iii) the said committee acted in violation of art 135(2) of the Malaysia Constitution; (iv) in any event, the Public Service Commission had no power either under the Constitution or under any other written law to dismiss to plaintiff.

Holding :

Held: (1) the High Court in the exercise of its supervisory jurisdiction over inferior tribunals would not interfere merely on the ground of insufficiency of evidence; (2) a right to question the witnesses brought against a man is not required by natural justice and the principles or rules or requirements of natural justice are, apart from impartiality, those elementary and essential principles of fairness contained in the passages from De Verteuil v Knaggs [1918] AC 179 and Byrne v Kinematrograph Renters Society Ltd [1958] 2 All ER 579; [1958] 1 WLR 762. Therefore in this case, the committee of inquiry had not denied the plaintiff a reasonable opportunity of being heard merely because it had refused the plaintiff's request to be represented before it by an advocate and solicitor; (3)(i) having regard to the letter of dismissal dated 27 September 1965, the Public Service Commission had acted under r 4(14)(a) of the 1964 Rules and was entitled to so act by virtue of r 14, the whole purpose of and the proper interpretation of the latter rule being to enable disciplinary proceedings commenced under the 1962 Regulations but not completed before the 1964 Rules came into force to be lawfully continued to a conclusion under the 1964 Rules without the necessity for fresh disciplinary proceedings having to be commenced; (ii) the Public Service Commission is, under the Constitution of Singapore, an independent authority, independent of executive control, and art 75(1) of the Constitution confers on the Public Service Commission the power to appoint and to exercise disciplinary control over public officers. A power to appoint must necessarily imply a power to dismiss unless the power of dismissal is expressly vested in some other person or authority. A power to exercise disciplinary control enables that power to be exercised in the form of dismissal, unless the power of dismissal is expressly vested in some other person or authority.

Digest :

VC Jacob v Attorney General [1970] 2 MLJ 133 High Court, Singapore (Wee Chong Jin CJ).

1672 Dismissal -- Natural justice

10 [1672] PUBLIC SERVANTS Dismissal – Natural justice – Breach of – Applicant was not informed of possibility of dismissal if found guilty – Whether breach of rule of audi alteram partem – Police (Conduct and Discipline) (Junior Police Officer and Constables) Regulations 1970 Schedule – Perintah Tetap Ketua Polis Negara Bhg A HTKPN Bhg A207 – Public Officers (Conduct and Discipline) Regulations 1993 (Cap D), reg 28

See public servants, para VII [107].

Digest :

Ekambaram a/l Savarimuthu v Ketua Polis Daerah Melaka Tengah & Ors [1997] 2 MLJ 454 High Court, Melaka (Suriyadi J).

1673 Dismissal -- Natural justice

10 [1673] PUBLIC SERVANTS Dismissal – Natural justice – Breach of – Authorized officer making up mind on evidence of witness – Failure to comply with provisions in Act – Mandatory provisions – Dismissal void – Commanding officer considering assessment report before ordering dismissal

Digest :

De Souza Lionel Jerome v Attorney General [1993] 1 SLR 882 High Court, Singapore (Lim Teong Qwee JC).

See POLICE, Vol 10, para 1054.

1674 Dismissal -- Natural justice

10 [1674] PUBLIC SERVANTS Dismissal – Natural justice – Whether public servant's dismissal was valid – Whether rule of natural justice was breached – Whether public servant was entitled to be given reasons for his dismissal

Summary :

D1, the chairman of the Public Service Disciplinary Board, wrote to A, a public servant, informing him that D1 was contemplating taking disciplinary action against him. A was also informed of the charges and was asked to make representations. A wrote to D1 answering the charges but he was subsequently informed that he had failed to exculpate himself and he was thus dismissed. A wrote to D1 requesting copies of all documents used by D1 in reaching the decision to dismiss him and the reasons for the decision so as to enable him to appeal to D2. D1 refused A's request on the ground that the information sought for was classified. D2 subsequently rejected A's appeal against his dismissal and he applied to the High Court for a certiorari to quash the decisions of D1-D3.

Holding :

Held, allowing the application: (1) a reasoned decision can be an additional and an essential constituent of the concept of fairness so that A could be informed on what ground he had been dismissed. Fair play and justice demand the reasons D1 acted on to merit the severe punishment of A's dismissal; (2) A had therefore succeeded in showing that D1 had breached the rule of natural justice and this also applied to D2 in confirming D1's decision.

Digest :

Mohamad bin Mohd Amin v Pengerusi Lembaga Tatatertib Perkhidmatan Awam (Kumpulan D) & Ors [1992] 2 CLJ 1047 High Court, Johore Bahru (Abu Mansor J).

1675 Dismissal -- Non-compliance of government circular

10 [1675] PUBLIC SERVANTS Dismissal – Non-compliance of government circular – Circular prohibited covering of face of female public servants – Whether circular was lawful and reasonable – Whether circular restricted religious practices

Digest :

Hajjah Halimatussaadiah v Public Service Commission, Malaysia & Anor [1992] 1 MLJ 513 High Court, Kuala Lumpur (Eusoff Chin J).

See PUBLIC SERVANTS, Vol 10, para 1599.

1676 Dismissal -- Principles determining dismissal of public servant

10 [1676] PUBLIC SERVANTS Dismissal – Principles determining dismissal of public servant – No oral inquiry held – Whether bare allegation that irrelevant matters were taken into account were sufficient to quash decision of disciplinary board – Whether action was misconceived as there was no entity referred to as the respondent in the action – Telecommunication Services (Successor Company) Act 1985

See administrative law, para VIII [4].

Digest :

V Paul Raj Chelladurai v Jabatan Telekom Malaysia Bhd & Ors [1997] 2 MLJ 764 Court of Appeal, Kuala Lumpur (Siti Norma Yaakob, Mahadev Shankar and Denis Ong JJCA).

1677 Dismissal -- Principles determining dismissal of public servant

10 [1677] PUBLIC SERVANTS Dismissal – Principles determining dismissal of public servant – Tenure of office – Power of dismissal at pleasure of Sultan – Public policy

Summary :

Per Sproule J: (1) that the power to dismiss a public servant of the colony at will does not depend upon the prerogative but upon rules of contract and of public policy; (2) a contract of service with the Crown is to be construed as containing an implied term, well known to all public servants, that they hold office at pleasure only; (3) in the absence of any statute or custom the courts should apply this fundamental rule of public policy and good government in the State of Kedah and hold that into all contracts of service under the state must be read an implied term, well known to all public servants that they hold office only during pleasure and are dismissible at will, without any right or recourse to suit for salary or pension or for damages for wrongful dismissal. Per Stevens J: (1) there was nothing to show that the act of the Sultan in Council in dismissing one of his servants is not a valid exercise of his royal prerogative; (2) a public servant by the terms of his agreement has no legal right as against the Crown to continuity of employment, promotion or pension; (3) the position of a public servant in the service of the State of Kedah is precisely similar to that of public officers in the service of the colony of the Straits Settlements; (4) the omission of the State Council to follow the provisions of the General Orders cannot confer on the appellant any actionable right as against the state.

Digest :

Pillai v State of Kedah [1927] 6 FMSLR 160 Court of Appeal, Federated Malay States (Sproule and Stevens JJ).

1678 Dismissal -- Procedure

10 [1678] PUBLIC SERVANTS Dismissal – Procedure – Tax officer absent from work pending appeal against transfer – Tax department sent warning by AR registered letter – Letter not sent to correspondence address and returned undelivered – Whether tax department could send letter without attempting to trace officer – Whether sending of letter an attempt to trace officer – Whether dismissal void – Public Officers (Conduct and Discipline) (Chapter 'D') General Orders 1980, O 21(4), (5) & (6)

Summary :

The respondents, who were officers of the Department of Inland Revenue ('the department'), were transferred from the Kuala Lumpur office to the Kuala Terengganu office but appealed against their transfers. While the respondents were waiting for the result of their appeals, the department sent AR registered letters to the respondents to an address different from that stated in the respondents' correspondence with the department, stating that the respondents would be dismissed in accordance with Public Officers (Conduct and Discipline) (Chapter 'D') General Orders 1980 ('the General Orders'), if they failed to report for work immediately. The letters were returned undelivered, and the department later published a notification to the same effect in the Gazette. The respondents were then dismissed as they did not report for duty. However, they successfully obtained a declaration from the High Court that their dismissals were void, on the ground that the department had failed to comply with order 21(5) of the General Orders which states that an AR registered letter could only be sent if an officer is absent and cannot be traced. In this case, the AR registered letters were returned undelivered and were not addressed to the respondents' correspondence address. The department has appealed, arguing that order 21(5) had been satisfied, as the act of sending the AR registered letters amounted to an attempt to trace the respondents.

Holding :

Held, dismissing the appeal: (1) O 21(5) of the General Orders which provides that the AR registered letter preparatory to the Gazette notification can only be sent where an officer is absent and cannot be traced, is a mandatory provision; (2) the word 'trace' in order 21(5) means to discover, find by investigation, ascertain, or search out. The tracing of an officer is a precondition to the sending of the AR registered letter. Therefore, the department had to be satisfied that the respondents could not be traced before resort could be had to the sending of the AR registered letter.

Digest :

Ketua Pengarah Jabatan Hasil Dalam Negeri, Malaysia & Anor v Aria Kumar & Anor [1995] 2 MLJ 533 Court of Appeal, Kuala Lumpur (Gopal Sri Ram, Siti Norma Yaakob and Mahadev Shankar JJCA).

Public Officers (Conduct and Discipline) (Chapter 'D') General Orders 1980, O 21(4), (5), (6).

1679 Dismissal -- Refusal to comply with transfer order

10 [1679] PUBLIC SERVANTS Dismissal – Refusal to comply with transfer order – Senior accounting officer dismissed from executive and sub-professional group – Investigation and dismissal proceedings by Sarawak Public Services Commission – Whether State Secretary had power to transfer – Whether Public Services Commission acting without jurisdiction – Sarawak State Constitution, art 36(1) – Government of Sarawak General Orders, O 69 – Public Services Commission Rules 1964, r 26(2)

Summary :

The applicant was a senior accounting officer serving in the Jabatan Kerja Raya ('the JKR') in Kuching. By a letter dated 28 April 1987 ('the transfer order'), the State Secretary of Sarawak had directed the applicant to proceed on transfer to the Treasury Department at Limbang, within two weeks from the date of the letter. The applicant appealed to the State Secretary against the decision but his appeal was refused. He made a second appeal, but received no reply. The applicant decided to stay put in JKR, Kuching and the State Secretary reported this to the Sarawak Public Services Commission ('the PSC'). The PSC subsequently appointed a committee to inquire into the conduct of the applicant, pursuant to r 26(2) of the Public Services Commission Rules 1964 ('the Rules'). After considering the committee's report, the PSC decided that the applicant's misconduct was serious enough to warrant his dismissal from the civil service, pursuant to O 69 of the Government of Sarawak General Orders ('the General Orders'), and ordered his dismissal effective from 1 January 1989 ('the dismissal order'). Dissatisfied, the applicant applied for an order of certiorari to quash the dismissal order on the ground, inter alia, that the PSC had proceeded against him without jurisdiction. On the other hand, it was argued on behalf of the PSC, inter alia, that the court ought not to grant the certiorari because: (i) the applicant had two pending suits for damages against the Sarawak State Government and the PSC, and should be left to pursue that remedy; (ii) the effect of the grant of certiorari would be to reinstate the applicant; and (iii) the transfer order had not been declared invalid by the court.

Holding :

Held, allowing the application: (1) O 40(1)(a) of the General Orders appears to give the State Secretary the power to transfer only administrative officers, administrative service and general clerical service officers from one department to another and not the applicant, who was a senior accounting officer from the executive and sub-professional group; (2) the only way for the State Secretary to lawfully transfer the applicant was by way of a written direction by the PSC delegating such power to him. This was because pursuant to art 36(1) of the Constitution of the State of Sarawak ('the Constitution'), the original power to transfer public officers was vested in the PSC. Without this express delegated power, the transfer order by the State Secretary could not be a lawful order. It was irrelevant that the PSC agreed with the decision made by the State Secretary subsequent to the issue of transfer order; (3) the power to exercise disciplinary control over members of the public service of the state was with the PSC pursuant to art 36(1) of the Constitution. However, if the transfer order was not lawful, then clearly the PSC was acting outside its jurisdiction in dismissing the applicant. It follows that the applicant's failure to comply with it would not attract the provisions of O 69 of the General Orders upon which the dismissal order was based; (4) although the PSC attempted to delegate its power to the State Secretary to transfer the applicant on behalf of the PSC through an instrument of delegation which was stated to have retrospective effect, the instrument was dated after the date of the transfer order. The instrument could not have retrospective effect as this would affect the applicant's substantive rights and hence, it could not ratify the unlawful transfer order; (5) under r 26(1)(b) of the Rules, the PSC was required to arrange for a preliminary investigation before framing any charge against the applicant. However, as the PSC did not satisfy itself that the transfer order was lawful before embarking with the dismissal proceedings, the PSC was acting ultra vires and without jurisdiction; (6) under O 53 of the Rules of the High Court 1980, the court could only grant the order of certiorari to the applicant, and not consequential reliefs such as damages or declaration unlike O 53 of the English Rules of the Supreme Court 1965. Therefore, it was open to the applicant in this case to pursue for other consequential remedies in the two pending suits; (7) furthermore, although the effect of certiorari would be to reinstate the applicant, there was no authority to show that this is a ground for refusing the grant of certiorari; (8) it was not a prerequisite for the applicant to have obtained a court order that the transfer order was invalid before he could bring this application for certiorari.

Digest :

Re Sarjit Singh Khaira [1995] 3 MLJ 112 High Court, Kuching (Abdul Kadir Sulaiman J).

1680 Dismissal -- Restriction on dismissal and reduction of rank

10 [1680] PUBLIC SERVANTS Dismissal – Restriction on dismissal and reduction of rank – Position of probationer – Right to be heard

Digest :

Munusamy v Public Services Commission [1967] 1 MLJ 199 Privy Council, Appeal from Malaysia (Lord Morris Borth-y-Gest, Lord Hodson and Lord Wilberforce).

See PUBLIC SERVANTS, Vol 10, para 1677.

1681 Dismissal -- Termination of service

10 [1681] PUBLIC SERVANTS Dismissal – Termination of service – Appointment terminated after disciplinary action taken – Whether a dismissal – Distinction between dismissal and termination of service

Summary :

In this case, the respondent had been appointed in 1953 as a temporary clerk/interpreter in the Police Clerical Service. His appointment was on the terms that his engagement would be 'terminable at one month's notice or on payment of one month's salary in lieu of notice on either side' and that in so far as they were relevant to the duties of his appointment and to his employment as a public servant, he would 'throughout such employment comply with the provisions of the General Orders applicable to his employment within the Federation'. In 1962, disciplinary action was taken against him by the Chief Police Officer, Johore, under reg 32 of the General Orders, Chapter D, for acts of alleged indiscipline. He was required to exculpate himself but his representations were not accepted and the Chief Police Officer informed him by letter that in effect he had failed to exculpate himself and that it had been decided to terminate his services as a temporary clerk. The respondent appealed to the Public Services Commission for reconsideration of his case but his appeal was dismissed. In 1966, the respondent sought a declaration that his purported dismissal by the Chief Police Officer was void, inoperative and of no effect. The High Court dismissed the action but on appeal to the Federal Court, the appeal was allowed and a declaration as sought made ([1971] 2 MLJ 172). The government appealed to the Yang di-Pertuan Agong and the appeal was referred to the Privy Council.

Holding :

Held: (1) members of the general public service obtained a degree of security of tenure under the Constitution of their appointments and it is not correct to say that they were guaranteed security of tenure under Part X of the Constitution; (2) under the laws of Malaysia, a distinction is drawn between dismissal and termination of services and there is nothing in the Constitution which affects the rights of the government to terminate temporary employment in accordance with the terms of the engagement. The Board could not agree with the Federal Court that reg 36 of the General Orders was invalid and inconsistent with the Constitution; (3) the learned trial judge in this case was right in holding that the respondent had not been dismissed but that his services were validly terminated in accordance with the terms of his appointment.

Digest :

Government of Malaysia v Lionel [1974] 1 MLJ 3 Privy Council Appeal from Malaysia (Lord Wilberforce, Viscount Dilhorne, Lord Simon of Glaisdale, Lord Solomon and Sir Gordon Wilmer).

1682 Dismissal -- Termination of service

10 [1682] PUBLIC SERVANTS Dismissal – Termination of service – Claim of summary dismissal – Distinction between dismissal and termination of service

Summary :

The plaintiff was appointed temporary clerk of works by the Public Service Commission. His services as such were terminated by the state engineer. The plaintiff claimed that the termination of his services was void by reason of art 135(1) and (2) of the Federal Constitution as it was made by an authority subordinate to that which appointed him as clerk of works and which had no authority to appoint or terminate his services.

Holding :

Held: the plaintiff was not dismissed from service and art 135 of the Federal Constitution did not apply to this case. Hence, it does not matter if the authority which terminated the service was subordinate to the Public Service Commission so long as that authority did so on behalf of the government.

Digest :

HA Gomez v Government of Malaysia [1978] 2 MLJ 69 High Court, Kuala Lumpur (Harun J).

1683 Dismissal -- Termination of service

10 [1683] PUBLIC SERVANTS Dismissal – Termination of service – Disciplinary action taken – Dismissal by Chief Police Officer – No delegation of powers by Public Services Commission – Whether dismissal void

Summary :

In 1953, the appellant was appointed as a temporary clerk-interpreter in the Kelantan Police Contingent. In 1958, he was transferred to Contingent Police Headquarters in Johore Bahru. In 1962, disciplinary action was taken against him by the Chief Police Officer, Johore, under reg 32 of the General Orders, Chapter D, for acts of alleged indiscipline. His explanations were not accepted and by letter dated 29 May 1962, the Chief Police Officer informed him, in effect, that he had failed to exculpate himself and that it had been decided to terminate his services as a temporary clerk. The appellant appealed to the Public Services Commission for reconsideration of his case but his appeal was dismissed. He therefore sought a declaration that his purported dismissal by the Chief Police Officer was void, inoperative and of no effect.

Holding :

Held, allowing the appeal: the authority which had power to dismiss the appellant was the Public Services Commission who had not delegated the power and the act of the Chief Police Officer in this case was clearly contrary to the Constitution and therefore void.

Digest :

Lionel v Government of Malaysia [1971] 2 MLJ 172 Federal Court, Johore Bahru (Ong CJ (Malaya).

Annotation :

[Annotation: Overruled on appeal. See [1974] 1 MLJ 3.]

1684 Dismissal -- Termination of service

10 [1684] PUBLIC SERVANTS Dismissal – Termination of service – Temporary employment – Whether valid

Summary :

In this case, the appellant was employed as a stenographer on probation. After she got married, she was offered a temporary appointment on a month-to-month basis. She continued to serve the government until her services were terminated by notice. She claimed that the purported temination was null and void, inoperative and of no effect. Her application was dismissed in the High Court and she appealed to the Federal Court.

Holding :

Held: in this case, the appellant was employed temporarily on a month-to-month basis and the respondent was entitled to exercise the right to terminate her services in accordance with the terms and conditions of service.

Digest :

Ratnam Bikai Seevaratnam v Government of State of Pahang [1982] 1 MLJ 16 Federal Court, Kuala Lumpur (Raja Azlan Shah CJ (Malaya).

1685 Dismissal -- Termination of service

10 [1685] PUBLIC SERVANTS Dismissal – Termination of service – Termination in accordance with terms of offer of appointment – Application for certiorari – Whether necessary to afford hearing

Summary :

The applicant applied for an order of certiorari to quash the decision of the Public Services Commission terminating the appointment of the applicant as a temporary officer. The application was made more than six months after the decision of the Public Services Commission and the applicant applied for enlargement of time to make the application.

Holding :

Held: (1) the court will only extend the time where a strong case for it is shown and the only delay that the court will excuse is the delay involved in the pursuit of a legal remedy open to the applicant; (2) in this case, the relationship between the government and the applicant was one of contract and the government was therefore entitled to terminate the employment of the applicant by payment of a month's salary in lieu of notice, as provided in the contract; (3) the applicant in this case was not dismissed from the service and, therefore, the provisions of art 135(2) of the Constitution did not apply so as to give him an opportunity to be heard; (4) in the circumstances, no strong case had been established to warrant the court in enlarging the time in respect of the application and, therefore, the application must be dismissed.

Digest :

Gnanasundram v Public Services Commission [1966] 1 MLJ 157 High Court, Kuala Lumpur (Raja Azlan Shah J).

1686 Dismissal -- Termination of service of Kathi

10 [1686] PUBLIC SERVANTS Dismissal – Termination of service of Kathi – Appointment under contract terminable by notice – Termination of appointment – Whether this was in fact a dismissal for alleged misconduct

Summary :

This was an appeal against the decision of Raja Azlan Shah J dismissing the claim of the appellant. The appellant was a Kathi in the service of the State of Pahang and his services had been terminated by giving him three months' notice. The appellant claimed that he had been unlawfully dismissed and that he had not been given opportunity to defend himself before his services were terminated. On appeal, it was argued that only the Ruler could terminate the services of the appellant as he had been appointed by the Ruler and that his dismissal was not in accordance with law or the rules of natural justice, as he had not been given an opportunity to meet any charges brought against him.

Holding :

Held, dismissing the appeal, (Barakbah LP and Suffian FJ, MacIntyre FJ dissenting): (1) the Pahang State Government had the right to appoint a Kathi on contract subject to termination of service on notice or payment of salary in lieu and such a contract is not inconsistent with the Constitution; (2) the appellant's service in this case had been lawfully terminated and such termination did not involve a penalty or punishment so as to make it a dismissal within the meaning of art 135(2) of the Constitution of Malaysia and to make it necessary first to give him a reasonable opportunity of being heard; (3) on the facts the appointment of the appellant had been revoked by the Ruler and it was not necessary for the letter of revocation to be signed by the Ruler.

Digest :

Haji Ariffin v Government of Pahang [1969] 1 MLJ 6 Federal Court, Kuala Lumpur (Barakbah LP, Suffian and MacIntyre FJJ).

1687 Dismissal -- Termination of service of permanent officer

10 [1687] PUBLIC SERVANTS Dismissal – Termination of service of permanent officer – Officer holding office at pleasure of Yang di-Pertuan Agong – Whether officer has right to be heard

Summary :

The respondent was an officer on the permanent establishment. As a result of a report made by the officer's head of department, his services were terminated by the Director of Operations under reg 44 of the General Orders Cap D. The respondent brought an action against the government for a declaration that the termination of his service was void. In the High Court, the learned judge gave judgment in favour of the respondent. The appellants appealed. The main issue on the appeal was whether the purported termination of the respondent's service by the government was lawful.

Holding :

Held, allowing the appeal: (1) a pensionable officer has no right, lien, or title to his post and all Federal public officers hold office at the pleasure of the Yang di-Pertuan Agong; (2) reg 44 of General Orders (Cap D) is not inconsistent with the Federal Constitution and is therefore valid; (3) the government had power to terminate the respondent's service in the public interest under the regulation and as the government's decision to do so did not involve punishing or penalizing the respondent, he had not been dismissed and, therefore, was not entitled to a reasonable opportunity of being heard under art 135(2) of the Federal Constitution.

Digest :

Government of Malaysia v Mahan Singh [1975] 2 MLJ 155 Federal Court, Kuala Lumpur (Suffian LP, Lee Hun Hoe CJ (Borneo).

Annotation :

[Annotation: Reversed on appeal. See [1978] 2 MLJ 133.]

1688 Dismissal -- Termination of service of permanent officer

10 [1688] PUBLIC SERVANTS Dismissal – Termination of service of permanent officer – Whether officer had been dismissed – Test for dismissal – Right to be heard

Summary :

The appellant was an officer of the permanent establishment. As a result of a report made by the officer's head of department, his services were terminated by the Director of Operations under reg 44 of General Orders Chapter D. The appellant brought an action against the government for a declaration that the termination of his service was void. It was argued that the appellant had been dismissed and as no reasonable opportunity had been given to him to be heard, the dismissal was void. In the High Court, judgment was given for the appellant, but on appeal ([1975] 2 MLJ 155) the Federal Court held in effect that the appellant had not been dismissed and, therefore, was not entitled to a reasonable opportunity of being heard. The appellant appealed.

Holding :

Held: (1) for dismissal to arise, the decision to terminate the employment must be connected with conduct of the servant in relation to his office which was regarded by the government as unsatisfactory or blameworthy and the consequences of termination must involve an element of punishment; (2) the fact that the government decided to terminate the appellant's service under reg 44 of Chapter D, if taken by itself, was equivocal as to whether the termination satisfied the first of the two criteria of what constituted dismissal for the purposes of art 135 of the Federal Constitution. The decision might have been connected with the conduct of the appellant in relation to his office which was regarded by the government as unsatisfactory or blameworthy or it might have been unconnected with this. The best evidence as to whether it was or was not would be provided by the report of the officer's head of department but as privilege was claimed for this report it was not available and it was necessary to rely upon such inferences as might legitimately be drawn from the available facts; (3) in this case, the appellant's pension was made subject to a deduction of 10% and from this it followed that the government must have been satisfied when they terminated the service of the appellant that he had been guilty of negligence, irregularity or misconduct in his office; (4) it was a necessary inference of fact from this that termination of the appellant's service at a reduced rate of pension involved an element of punishment and was connected, at any rate in part, with conduct on his part in relation to his office which the government regarded as unsatisfactory or blameworthy; (5) the two criteria of dismissal in the relevant sense were therefore satisfied and what the government purported to do was to dismiss the appellant within the meaning of art 135(2) of the Federal Constitution; (6) as the appellant was not given a reasonable opportunity of being heard, the purported dismissal or termination of service was void.

Digest :

Mahan Singh v Government of Malaysia [1978] 2 MLJ 133 Privy Council Appeal from Malaysia (Lord Diplock, Lord Edmund-Davies, Lord Russell of Killowen, Lord Scarman and Sir Garfield Barwick).

1689 Dismissal Customs officer[cc] 22[e -- Officer alleged he was given one day's notice to attend inquiry

10 [1689] PUBLIC SERVANTS Dismissal Customs officer[cc] 22[e – Officer alleged he was given one day's notice to attend inquiry – Application for adjournment refused – Whether refusal unreasonable – Whether a ground to quash decision to dismiss – Whether officer innocent because he was not jointly charged with third party who had pleaded guilty to offence

Digest :

Suruhanjaya Perkhidmatan Awam Malaysia v Noordin bin Hassan [1995] 3 MLJ 495 Court of Appeal, Kuala Lumpur (Mahadev Shankar, VC George JJCA and Abdul Malek J).

See ADMINISTRATIVE LAW, para 192.

1690 Housing allowance -- Contract of employment between government and police officer

10 [1690] PUBLIC SERVANTS Housing allowance – Contract of employment between government and police officer – Whether married woman police officer entitled to housing allowance

Summary :

The respondent, a woman inspector of police, was while unmarried given by the government rent-free quarters or an allowance in lieu. After she married on 20 August 1962 and went to live with her husband, however, she received neither the rent-free quarters nor an allowance in lieu. She applied for a rent allowance and eventually the government agreed to give her a rent allowance but with effect from 1 March 1965. She brought an action against the government for the housing allowance from the date of her marriage to 28 February 1965 and judgment was given in her favour in the sessions court. The government of Malaysia appealed.

Holding :

Held: (1) the contract between a public servant and the government is of a special kind, as once appointed the government servant acquires a status and his rights and obligations are no longer determined by consent of both parties but by statute or statutory or administrative rules made by the government; (2) there was nothing in the circulars and regulations in this case that entitled the respondent to a housing allowance and, therefore, her claim should have been dismissed.

Digest :

Government of Malaysia v Rosalind Oh Lee Pek Inn [1973] 1 MLJ 222 High Court, Kuala Lumpur (Suffian FJ).

1691 Pensions -- Derivative pension

10 [1691] PUBLIC SERVANTS Pensions – Derivative pension – Whether appellant a 'widow' and 'independant' under pension laws – Whether non-conversion of appellant to Islam within three months of her husband's conversion dissolves marriage between parties – Pensions Adjustment (Amendment) Act 1983, s 4 – Pensions Act 1980 (Act 227), s 15(1)(a) – Pensions Regulations 1980

Summary :

P married V according to Hindu rites and the marriage was registered. V subsequently embraced Islam. V was a pensioner under the Pensions Act 1980 (Act 227). Upon V's death, P applied to the Public Services Department for derivative pension. The Pensions Department rejected P's application on the ground that P was not a widow under the pension laws as claimed because she did not convert to Islam within three months of her husband's conversion. P sought declarations from the High Court that she was a 'dependant' as defined in s 4 of the Pensions Adjustment (Amendment) Act 1983 and that she was entitled to a derivative pension under s 15 of the Pensions Act 1980 (Act 227). The learned judge refused to grant the declarations sought and P appealed to the Supreme Court.

Holding :

Held, allowing the appeal: (1) in the instant case, there was no evidence that the marriage between the parties had been dissolved. P was, therefore, suing as a widow as defined under the Pensions Regulations 1980. The fact that V had converted to Islam did not affect P's rights under the Pensions Act 1980 (Act 227) and the Pensions Regulations 1980; (2) the law applicable to P had always been her own personal laws and the civil laws of the country. The Pensions Act 1980 (Act 227) and the Pensions Regulations 1980 are civil laws of general application and for the purpose of the pensions laws, P was certainly a widow of V. Since P's marriage remained valid under the civil law at the time of V's death, she was therefore a dependant under the Pensions Adjustment Act 1980 and was entitled to a derivative pension regardless of whether she was a Muslim or a non-Muslim.

Digest :

Eeswari Visuvalingam v Government of Malaysia [1990] 1 MLJ 86 Supreme Court, Malaysia (Abdul Hamid LP, Hashim Yeop A Sani CJ (Malaya).

1692 Pensions -- Derivative pension

10 [1692] PUBLIC SERVANTS Pensions – Derivative pension – Whether plaintiff a 'widow' and 'dependant' under pension laws – Whether non-conversion of plaintiff to Islam within three months of her husband's conversion dissolved marriage between parties – Pensions Adjustment (Amendment) Act 1983 – Pensions Act 1980 (Act 227)

Summary :

P and V were married according to Hindu rites. V had subsequently embraced Islam before he died. P did not, however, convert to Islam. On the death of V, P claimed pension benefits under the Pensions Act 1980 (Act 227) and the Pensions Adjustment (Amendment) Act 1983. P's claim was rejected by the Pensions Department. P, accordingly, sought declarations that she was entitled to a derivative pension under the pension laws.

Holding :

Held, dismissing P's application: (1) in the instant case, as P did not convert to Islam within three months of V's conversion, her marriage to V ceased to subsist under Muslim law; (2) in the circumstances, the provisions of the Pensions Act 1980 (Act 227) could not be invoked in favour of P because she ceased to be the lawful wife of V upon his conversion to Islam.

Digest :

Eeswari Visuvalingam v Government of Malaysia Civil Suit No P21-529-86 High Court, Kuala Lumpur (Ajaib Singh J).

Annotation :

[Annotation: Reversed on appeal. See [1990] 1 MLJ 86. For digest, see para 1565.]

1693 Pensions -- Member of public service holding office at pleasure of Head of State

10 [1693] PUBLIC SERVANTS Pensions – Member of public service holding office at pleasure of Head of State – No right to pension – Pensions Ordinance 1951, ss 3, 5 & 11 – Federal Constitution, art 132(2A)

Summary :

The plaintiffs were members of the public service who had retired from the service on pensions. On retirement each of them was offered and paid in lieu of full pension (a) a reduced pension for life at the rate of 3/4 of his full pension, and (b) a lump sum gratuity equal to ten times the value of the surrendered portion of his pension. Each of the plaintiffs outlived ten years after their retirement and they sought a declaration that they were eligible for the full money value of the full pension for the remaining period of their lives.

Holding :

Held: (1) the whole tenor of the pensions legislation is permissive and no officer has therefore an absolute right to pension; (2) as the plaintiffs had been paid the gratuity in lieu of their pension, they had forfeited their eligibility for the full pensions; (3) therefore the court must decline to make the declaration sought.

Digest :

Haji Wan Othman & Ors v Government of Federation of Malaya [1965] 2 MLJ 31 High Court, Alor Star (Suffian J).

1694 Pensions -- Pensions Regulations 1951

10 [1694] PUBLIC SERVANTS Pensions – Pensions Regulations 1951 – Exercise of option under reg 15 – Whether person can claim full pension after expiry of ten years

Summary :

The appellants in this case had exercised their option under reg 15 of the Pensions Regulations 1951, to receive a pension at the rate of three-fourths of such pension together with a gratuity equal to ten times the amount of the reduction so made in the pension. Having outlived the period of ten years, they claimed that they were entitled to full pension after the expiry of the ten years. Their application for declarations was dismissed by Suffian J who held that the court had no power to adjudicate on the question and that in any event the interpretation of the regulation set up by the appellants was untenable ([1965] 2 MLJ 31).

Holding :

Held: the question was one of construction of reg 15 of the Pensions Regulations 1951, and this was clear. Where an officer was granted a pension he may at his option take that pension or take a pension at the rate of three-fourths of that pension and a gratuity consisting of a lump sum and once having exercised the option it was irrevocable.

Digest :

Haji Wan Othman & Ors v Government of the Federation of Malaya [1966] 2 MLJ 42 Federal Court, Penang (Thomson LP, Barakbah CJ (Malaya).

1695 Pensions -- Residential criterion

10 [1695] PUBLIC SERVANTS Pensions – Residential criterion – Statute providing for additional benefits – Provision applicable only to resident pensioners and their dependants – Whether classification reasonable – Whether provision ultra vires Federal Constitution – Pensions Adjustment Act 1980 (Act 238), s 1(2) – Federal Constitution, arts 8(1) & 147

Summary :

D, an Indian citizen who lives in India, sought a declaration that the provision in s 1(2) of the Pensions Adjustment Act 1980 (Act 238) which restricts the application of the Act to pensioners and their dependants who are resident in Malaysia is ultra vires the Federal Constitution and consequently D sought orders to the effect that his pension be adjusted in accordance with the Act. D had received increases in his pension along the way as and when pensions were revised by the government but when the Act was passed giving more benefits to pensioners and their dependants, D found himself precluded from receiving those additional benefits as the application of the Act was restricted to pensioners and their dependants who are resident in Malaysia. The learned judge found in favour of D and P appealed to the Supreme Court.

Holding :

Held, allowing the appeal: (1) in the instant case, there can be no doubt that the Act is discriminatory against foreign-resident pensioners. However, the discrimination is permissible as the classification between foreign and local-resident pensioners is founded on an intelligible differentia. The only question is whether the differentia has a rational relation to the object sought to be obtained by the Act; (2) it is obvious that the object of the Act is not to give additional benefits, pure and simple, to pensioners. The object is to ameliorate the financial position of pensioners in Malaysia due to the depreciating value of the ringgit and the rise in cost of living in Malaysia. As the classification has a rational nexus with the object sought to be achieved by the Act, the residential qualification imposed by the Act constitutes a permissible discrimination and therefore does not violate art 8(1) of the Federal Constitution with the result that it is not null and void under art 4(1); (3) in the instant case, the Act in question is not a law concerned with fundamental rights. To attain constitutional validity, it is sufficient if the classification made by the Act has a government purpose. As P had satisfied the court that the classification in the Act has a reasonable governmental purpose, the restriction imposed thereunder was held to be constitutionally valid; (4) the provision in art 147(1) of the Federal Constitution had no application in the instant case. It guarantees the additional pension benefits to D only if the Act applies to him. Since it was not applicable to him, that would be the end of the matter.

Digest :

Government of Malaysia v VR Menon [1990] 1 MLJ 277 Supreme Court, Malaysia (Abdul Hamid LP, Hashim Yeop A Sani CJ (Malaya).

1696 Pensions -- Rightful claimant

10 [1696] PUBLIC SERVANTS Pensions – Rightful claimant – Lawful spouse – Pension Act 1980 – Law Reform (Marriage and Divorce) Act 1976

Digest :

Ensot bte Mukiau v Chai Cho Na Originating Summons No K24-114 of 1995 High Court, Sabah and Sarawak (Tee Ah Sing JC).

See SUCCESSION, para 1526.

1697 Protection -- Banishment Enactment 1900

10 [1697] PUBLIC SERVANTS Protection – Banishment Enactment 1900 – False imprisonment – Proof of malice

Summary :

In an action against a public servant for wrongful imprisonment the burden of proving either malice or negligence and want of reasonable and probable cause is on the plaintiff; mere innocence is not even prima facie proof.

Digest :

Yap Hon Chin v Parry [1911] 2 FMSLR 70 Privy Council Appeal from the Federated Malay States (Lord Macnaghten, Lord Mersey and Lord Robson).

1698 Protection -- Government Proceedings Ordinance 1956, s 14

10 [1698] PUBLIC SERVANTS Protection – Government Proceedings Ordinance 1956, s 14 – Member of armed forces – Unreasonable action by defendant government – Costs awarded to unsuccessful plaintiff

Summary :

The respondent who was a member of the armed forces, met with an accident while travelling in a vehicle driven by Mohamed bin Hussin, also a member of the armed forces. The vehicle collided with a lorry coming from the opposite direction. The respondent sued for damages against Mohamed bin Hussin, his employer the government of Malaysia and the driver of the lorry. Under s 14 of the Government Proceedings Ordinance 1956, a member of the armed forces loses his right to sue the government if: (a) he is on duty as a member of the forces or if not on duty he is on a vehicle used at the relevant time for the purposes of the forces; and (b) the Minister of Finance certifies that he has been or will be compensated for his injuries under service regulations. In this case, the accident took place on 22 August 1973, the writ was issued on 16 May 1975 and the defence was delivered on 10 June 1975. The certificate of the Minister of Defence that the respondent was a member of the armed forces was signed on 4 November 1975 and that of the Minister of Finance that compensation would be paid to him on 20 November 1975. Both were served on the respondent on 20 December 1976, that is 13 months later. The action brought by the respondent was withdrawn and the learned judge awarded costs in his favour against Mohamed bin Hussin and the government of Malaysia, the appellants. On appeal to the Federal Court,

Holding :

Held, dismissing the appeal: the action of the government in this case was unreasonable and fully justified the exercise of the judge's discretion in favour of the respondent.

Digest :

Mohamed bin Hussin & Anor v Hashim bin Said [1978] 1 MLJ 127 Federal Court, Kuala Lumpur (Lee Hun Hoe CJ (Borneo).

1699 Protection -- Police Force Ordinance 1872

10 [1699] PUBLIC SERVANTS Protection – Police Force Ordinance 1872 – Notice of proceedings – Non-compliance valid objection to suit

Summary :

The defendant was charged for doing a rash or negligent act by discharging his gun at a dog, in breach of s 236 of the Penal Code. He raised a preliminary objection that he had not received one month's notice before the proceedings. The objection was held to be good.

Digest :

Crown v Copley [1889] 2 SLJ 143 Police Court, Straits Settlements (Birch, Magistrate).

1700 Protection -- Police Force Ordinance 1872

10 [1700] PUBLIC SERVANTS Protection – Police Force Ordinance 1872 – Notice of proceedings – Proof of malice – Bona fides of police officer

Summary :

The words, 'or otherwise' in cll 1 and 2 of s 42 of the Police Force Ordinance 1 of 1872 are not unmeaning, but include not only laws in force at the date of that ordinance, but also further laws, of whatever kind, under which police officers, and those aiding them, might be called upon to act. Sections 42 and 44 of the Police Force Ordinance are not to be read together, and before it is necessary for a plaintiff to prove malice under s 44 against a police officer, the case must fall within s 43, and before it is necessary for a plaintiff to give a month's notice under s 43, the case must fall under s 42. The words 'anything done in the execution of his duty as such police officer' in s 42, do not only mean an act within the scope of his duty, as a police officer, but also an act done in excess of his duty, under a reasonable or honest belief it was within his duty. Where an inspector of police and a Justice of the Peace entered a Common Gaming House under a warrant issued under s 8 of the Gaming House Ordinance 13 of 1879 for the search of the premises for 'appliances' of gaming (such as cards, dice etc) and arrest of all persons found therein but after making such entry and finding no gambling going on, or 'appliances' of gaming, but discovering that the place was fitted up with the 'contrivances' (such as heavy doors and trapdoors, bars, bolts, etc) mentioned in s 12 with the object of testing s 13 of the ordinance, they took away such 'contrivances' whereupon they were sued by the occupier of the premises for trespass in removing such fixtures, but without having been first served with a month's notice under s 43 of the aforesaid Ordinance 1 of 1872, or at the trial the plaintiff attempting to prove malice on their part,

Holding :

Held: as by s 13 it was plain, and the defendants could not but have seen, that it was only a magistrate who could order a demolition of the 'contrivance', and that only after summoning the parties before him to show cause, and judicially inquiring into the matter, they could not be said to have had either a reasonable or honest or bona fide belief (Ordinance 1 of 1872) that they were acting within the scope of their duty, and were therefore not entitled to notice under s 43, nor was the plaintiff bound to prove they acted maliciously under s 44. Judgment of Pellereau J affirmed on appeal. Section 47 of the aforesaid ordinance applies only to cases where a police officer does an act in 'good faith', and the act is done under that ordinance and not some other.

Digest :

Lim Seng Ee v Wray & Anor [1887] 4 Ky 240 Court of Appeal, Straits Settlements (Ford CJ, Pellereau and Goldney JJ).

1701 Protection -- Police Force Ordinance 1872

10 [1701] PUBLIC SERVANTS Protection – Police Force Ordinance 1872 – Return of specific property – Proof of title

Summary :

Sections 42-48 (both inclusive) of the Police Force Ordinance 1 of 1872 do not apply to any action against a police officer for the return of specific property. A police officer has no right, after a reasonable time from the discharge of a prisioner, to detain property taken from him, and the prisoner's possession of such property is sufficient without proof of title to enable him to maintain an action against such officer for the return of it.

Digest :

Taserip v Riccard [1887] 4 Ky 214 Court of Appeal, Straits Settlements (Ford CJ, Pellereau and Goldney JJ).

1702 Protection -- Police Force Ordinance 1872

10 [1702] PUBLIC SERVANTS Protection – Police Force Ordinance 1872 – Time limit for prosecution – Bona fides of police officer

Summary :

The prisoner, a police officer, was charged with neglect of duty under s 26 of the Police Force Ordinance 1872 and contended, under s 42 of the ordinance, that the prosecution was too late, as not having been commenced within three months of the date of the alleged neglect of duty. The magistrate upheld the objection, and discharged the prisoner without taking any evidence.

Holding :

Held: (1) the word 'prosecution' in s 42 meant a criminal prosecution; (2) the protection conferred by that section was only given where the police officer had acted bona fide in the execution of his duty; (3) the magistrate should have taken evidence (as to the bona fides of the accused in acting as he did) before upholding the objection that the prosecution was too late.

Digest :

R v Salleh [1891] SLR

1703 Protection -- Public Authorities Protection Enactment (Cap 30)

10 [1703] PUBLIC SERVANTS Protection – Public Authorities Protection Enactment (Cap 30) – False imprisonment – Proof of malice

Summary :

In the absence of proof of malice, the police officer against whom a suit was brought for damages for false imprisonment, was entitled to the protection of the Public Authorities Protection Enactment, s 2.

Digest :

Elphinstone v Lee Leng San [1938] MLJ 135 High Court, Federated Malay States (Cussen J).

1704 Protection -- Public Authorities Protection Enactment 1929

10 [1704] PUBLIC SERVANTS Protection – Public Authorities Protection Enactment 1929 – 'Person' – Whether includes the state

Summary :

The word 'person' as used in the Public Authorities Protection Enactment 1929 does not apply to the state. The preamble to that enactment appears to refer to the protection of individual officers, and had the intention been to protect the states, as well as the officer, it would have been easy to make it clear by the use of somewhat different language.

Digest :

Ramasamy Krishnan & Anor v State of Negeri Sembilan & Anor [1934] MLJ 268 High Court, Federated Malay States (Hereford J).

1705 Protection -- Public Authorities Protection Enactment 1929

10 [1705] PUBLIC SERVANTS Protection – Public Authorities Protection Enactment 1929 – Notice of proceedings – Applicability of, to criminal prosecution

Summary :

Section 2 of the Public Authorities Protection Enactment 1929 applies only to the performance or non-performance of official duties, and affords a certain amount of protection to officials in respect of their official duties by requiring that notice should be given. It does not extend to any offence committed contrary to the Penal Code, because it cannot be part of any official's duty to commit an offence contrary to the Penal Code.

Digest :

Public Prosecutor v Mohamed Shahar [1935] MLJ 281 High Court, Federated Malay States (Thomas CJ).

1706 Protection -- Public Authorities Protection Ordinance

10 [1706] PUBLIC SERVANTS Protection – Public Authorities Protection Ordinance – Notice of proceedings – Applicability of, to criminal prosecution

Summary :

The word 'action' in s 2(2)(a) Ordinance 132 (Public Authorities Protection) does not include a criminal prosecution and accordingly it is not necessary to give one month's notice in writing of an intended criminal prosecution in a case falling within that ordinance.

Digest :

R v Kappaya [1935] MLJ 237 High Court, Straits Settlements (Burton Ag CJ).

1707 Protection -- Public Authorities Protection Ordinance

10 [1707] PUBLIC SERVANTS Protection – Public Authorities Protection Ordinance – Proceedings coming within ordinance – Action for mandamus

Summary :

An action for a mandamus (as distinguished from the prerogative writ of mandamus) comes within the word 'action' in s 2(1) of Ordinance No 132 and is subject to the restrictions imposed in respect of such actions by that ordinance. Semble: applications for the prerogative writs and actions founded in contract are not 'actions, prosecutions or proceedings' within the language of s 2(1) of Ordinance No 132 (Public Authorities Protection) and are excluded from the scope of that ordinance.

Digest :

Lim Yew Hock v Municipal Commissioners of the Town and Fort of Malacca [1936] MLJ 55 High Court, Straits Settlements (Burton Ag CJ).

1708 Protection -- Public Authorities Protection Ordinance 1948

10 [1708] PUBLIC SERVANTS Protection – Public Authorities Protection Ordinance 1948 – Malicious falsehood – Public officer not acting in exercise of public duty

Summary :

In this case, the plaintiff had been employed as senior technical assistant in the Public Works Department. In 1969 his head of department, the second defendant, purported to transfer him to the Kuching Water Board, stating falsely in a memorandum that the plaintiff had agreed to the transfer. When the plaintiff requested for a copy of the option alleged to be exercised by him the second defendant, purportedly terminated the plaintiff's services within the board. In an action in the High Court, the plaintiff obtained a consent order declaring that he was and had been at all material times a servant of the government of Sarawak. Following that suit, the plaintiff instituted this action claiming, inter alia, damages for malicious falsehood. The defendants thereupon applied by motion to strike out the writ of summons and set aside all subsequent proceedings on the ground that the statement of claim disclosed no reasonable cause of action, it was frivolous and vexatious and that the proceedings were an abuse of the process of the court. It was contended that the claim was statute-barred by the Public Authorities Protection Ordinance 1948 as it was not instituted within 12 months of the alleged act, neglect or default.

Holding :

Held: (1) in this case, there was no suggestion that the second defendant had acted in the exercise of his public duty or authority so as to entitle him to the protection of the Public Authorities Protection Ordinance 1948; (2) the statement of claim in this case raised triable issues and it could not therefore be said that the writ was frivolous or vexatious.

Digest :

Joseph v Government of Sarawak & Anor [1975] 2 MLJ 38 High Court, Kuching (Yusoff J).

1709 Protection -- Public Servants (Liabilities) Perak Order in Council 1896, s 4

10 [1709] PUBLIC SERVANTS Protection – Public Servants (Liabilities) Perak Order in Council 1896, s 4 – Effect of repeal – Public Servants Liabilities Enactment 1902, Repeal Enactment 1930, s 2 – General Clauses Amendment Enactment 1924, ss 3(d)(ii) & (iv)

Summary :

Under the provisions of sub-ss 3(d)(ii) and (iv) of the General Clauses Amendment Enactment 1924, not only is the immunity conferred upon public servants by s 3 of the Public Servants (Liabilities) Perak Order in Council 1896 preserved, but also the rights and privileges conferred upon them by s 4. The fact that s 2 of the Public Servants Liabilities Enactments 1902, Repeal Enactment 1930 specifically saves the immunity of public servant from the maintenance of actions against them cannot be taken to extinguish the rights and privileges of public servants in respect of that immunity conferred upon them by s 4 of the Public Servants (Liabilities) Perak Order in Council 1896.

Digest :

Sockalingam Mudaliar v Nadasan Serang [1933] MLJ 298 High Court, Federated Malay States (Gerahty J).

Annotation :

[Annotation: The Public Servants (Liabilities) Perak Order in Council 1896 was repealed in 1930.]

1710 Protection -- Public Servants (Liabilities) Perak Order in Council 1896

10 [1710] PUBLIC SERVANTS Protection – Public Servants (Liabilities) Perak Order in Council 1896 – Commercial transaction not protected

Summary :

The appellant was a teacher in a government school at Sitiawan. He also possessed a rubber estate. He had for some time had a running account with the respondent's firm, taking advances of money and goods against sales of rubber. The respondent had over-advanced the appellant in the sum of RM1,395.12 and commenced this action to recover it. The appellant pleaded the protection of the Public Servants (Liabilities) Order in Council.

Holding :

Held: this being a commercial transaction the appellant was not entitled to the protection of the Order in Council.

Digest :

Abdul Kadir v Keap Kee & Co [1922] 3 FMSLR 201 Court of Appeal, Federated Malay States (Woodward CJC, Farrer-Manby and Reay JJC).

1711 Protection -- Public Servants Liabilities Ordinance 1889

10 [1711] PUBLIC SERVANTS Protection – Public Servants Liabilities Ordinance 1889 – Liability contracted before entering public service – Not protected

Summary :

At the date of signing the promissory note sued on in this action, the defendant was in the service of the Selangor Government, with a salary of $45 a month. Subsequently, he entered the public service of the Colony with a salary of $70 a month. Upon motion (by way of demurrer), Cox CJ made a declaration that all proceedings in the action were void, as being in contravention of the provisions of Ordinance XIII of 1889. From this order the plaintiff appealed.

Holding :

Held: the Public Servants Liability Ordinance XIII of 1889, does not protect a public servant from liabilities contracted before he entered the publice service. The scope and objects of the ordinance considered.

Digest :

Letchman Chitty v Sinnapah [1905] 9 SSLR 56 Court of Appeal, Straits Settlements (Law, Hyndman-Jones and Thornton JJ).

1712 Protection -- Public Servants Liabilities Ordinance 1889

10 [1712] PUBLIC SERVANTS Protection – Public Servants Liabilities Ordinance 1889 – Liability incurred whilst in public service – Public servants leaving service – Not protected

Summary :

A and B, while in the municipal service, on salaries not above $150 a month, borrowed money on promissory notes. After they had ceased to be public servants, they were sued.

Holding :

Held: Ordinance XIII of 1889 is a special ordinance for the protection of public servants, in respect of certain liabilities, and does not apply to public servants after they have left the public service.

Digest :

Lim Cheng Wee v Song Sian Long [1897] 4 SSLR 123 High Court, Straits Settlements (Leach J).

1713 Protection -- Public Servants Liabilities Regulations 1893

10 [1713] PUBLIC SERVANTS Protection – Public Servants Liabilities Regulations 1893 – Fireman on daily wages – Meaning of 'public servants'

Summary :

A fireman, on daily wages, employed by the Federated Malay States Railways does not come within the provisions of the Public Servants Liabilities Regulations 1893.

Digest :

Letchumanan v Sithambaram Chetty [1937] MLJ 66 High Court, Federated Malay States (Aitken J).

1714 Protection -- Public Servants Liabilities Regulations 1893

10 [1714] PUBLIC SERVANTS Protection – Public Servants Liabilities Regulations 1893 – Fitter on daily wages – Whether a public servant

Summary :

A fitter in the Federated Malay States Railways on daily wages of RM1.12 does not come within the scope of the Public Servants (Liabilities) Regulation 1893. Nor does a blacksmith.

Digest :

Wadhawa Singh v Ismail Khan [1916] 2 FMSLR 203 High Court, Federated Malay States (Innes JC).

1715 Protection -- Public Servants Liabilities Regulations 1893

10 [1715] PUBLIC SERVANTS Protection – Public Servants Liabilities Regulations 1893 – Fresh suit after leaving public service – Liability when no longer public servant – Whether res judicata

Summary :

The plaintiff/appellant lent money to the defendant/respondent on a promissory note and in August 1913 sued for recovery of the amount due on the note. The defendant at the time he borrowed the money and at the time the suit was brought was a public servant in receipt of a salary of less than RM150 a month. The suit, after appeal, was dismissed under the provisions of the Public Servants Liabilities Enactment. In November 1914, the defendant being no longer in government service, the plaintiff brought another suit against him on the same promissory note.

Holding :

Held, on appeal, reversing the decision of the court below: the defence of res judicata could not be set up and that the suit could now be brought, on the ground that in the first suit the defendant was sued in the capacity of a public servant and in the second suit in the capacity of a private person.

Digest :

Lakin Das v Suka Dial [1915] 1 FMSLR 196 High Court, Federated Malay States (Innes JC).

1716 Protection -- Public Servants Liabilities Regulations 1893

10 [1716] PUBLIC SERVANTS Protection – Public Servants Liabilities Regulations 1893 – Fresh suit after leaving public service – Suit barred by Limitation Enactment

Summary :

The defendant/appellant, a public servant, borrowed on a promissory note, the plaintiff/respondent signing as surety. Upon paying off the amount due, the plaintiff sued the defendant to recover this amount. The suit was dismissed under the Regulation of 1893. Upon the defendant retiring from the public service, the plaintiff brought a fresh suit against him in respect of the same debt. The defendant pleaded limitation. Judgement was given for the plaintiff on the ground that the judgment passed in the first suit should be treated as an order to stay the suit during the period the defendant continued in the public service and that the plaintiff was entitled to have this period excluded under s 15 of the Limitation Enactment.

Holding :

Held, on appeal, reversing the decision of the court below: the suit was barred by the Limitation Enactment.

Digest :

Venasitamby v Velupillay [1917] 1 FMLSR 307 Court of Appeal, Federated Malay States (Earnshaw, Edmonds and Farrer-Manby JJC).

1717 Protection -- Public Servants Liabilities Regulations 1893

10 [1717] PUBLIC SERVANTS Protection – Public Servants Liabilities Regulations 1893 – Liability contracted before entering public service – Not protected

Summary :

Section 3(1) of the Public Servants Liabilities Regulation does not protect a public servant from liabilities contracted by him before he entered the public service.

Digest :

Ishau Singh v De Silva [1931] 1 MC 133 High Court, Federated Malay States (Elphinstone CJ).

1718 Protection -- Rubber Restriction Enactment 1922

10 [1718] PUBLIC SERVANTS Protection – Rubber Restriction Enactment 1922 – Suit against government for public servant's act – Whether government 'person' within enactment

Summary :

The plaintiff sued the Federated Malay States Government for damages in respect of a wrong committed by a customs official in refusing to issue a licence to export rubber, after accepting coupons therefor. The plaint was dated more than three months after the accrual of the cause of action and did not expressly allege that the defendant acted maliciously or negligently and without reasonable or probable cause. For the purpose of argument on a preliminary issue, the defendant conceded that as master he would be liable for such a tort of his servant.

Holding :

Held, on the preliminary issue: the government of the Federated Malay States was a 'person' within the meaning and protection of s 6 of the 'Rubber Restriction Enactment 1922', as was the Chief Secretary to the government, and that the suit was defective in pleading and barred by time and must be dismissed with costs. Taxation ordered as between solicitor and client.

Digest :

Anglo-French Trading Co v Chief Secretary, FMS [1925] 5 FMLSR 166 High Court, Federated Malay States (Sproule JC).

1719 Reduction in rank -- Restriction on dismissal and reduction in rank

10 [1719] PUBLIC SERVANTS Reduction in rank – Restriction on dismissal and reduction in rank – Position of probationer – Reversion not amounting to reduction in rank – Right to be heard

Summary :

Article 135(2) of the Constitution of Malaysia provides that no member of the general public service 'shall be dismissed or reduced in rank without being given an opportunity to be heard'. The appellant who had previously been employed as an immigration officer was appointed assistant passport officer in the External Affairs Service on his acceptance of the terms of a letter which stated, inter alia, that 'É the appointment will extend for a period of three years in the first instance É You will be required to serve a probationary period of one year from the date of your appointment and subject to your work and conduct being satisfactory you will be eligible for confirmation in your appointment at the end of this period'. One of the conditions laid down in the advertisement for applications was that candidates should have passed the school certificate examination. The appellant did not have the requisite school certificate but he stated in his application that he had passed that examination, and when that was discovered the respondent commission, without giving the appellant the opportunity of being heard, terminated his appointment during the probationary year and reverted him to his former post. The appellant applied, inter alia, for an order of certiorari to quash the Commissioner's decision on the ground that under the Constitution his employment could not be terminated without giving him an opportunity of being heard. Ong Hock Thye J, as he then was, dismissed the application ([1960] MLJ 221) and the Federal Court upheld his decision ([1964] MLJ 239). On appeal to the Privy Council,

Holding :

Held: (1) art 135(2) of the Constitution was concerned with the right to be heard in respect of disciplinary offences and applied only when dismissal or reduction in rank was inflicted in circumstances involving the imposition of a punishment or penalty. Penal consequences or punishment existed if an order for the reduction of rank of a member of a public service entailed or, provided for forfeiture of pay or allowances, loss of seniority in substantive rank, or the stoppage or postponement of his future chances of promotion. In this case, there has been no reduction of rank enabling the appellant to rely on the provisions of art 135(2) and so obtain a hearing for the reason that the action of the respondent could not be characterized as being by way of punishment; (2) the appellant was in any event appointed to the rank of assistance passport officer only as a probationer so that he could be reverted to his substantive rank of immigration officer without the question of reduction of rank arising for consideration notwithstanding the statement in the letter that subject to his work and conduct being satisfactory he would be eligible for confirmation in his appointment at the end of the period. 'Eligible for' is not equivalent to 'entitled to' and means no more than 'fit to be chosen for'.

Digest :

Munusamy v Public Services Commission [1967] 1 MLJ 199 Privy Council Appeal from Malaysia (Lord Morris of Borth-y-Gest, Lord Hodson and Lord Wilberforce).

1720 Retirement benefits -- Whether former daily-rated employees entitled to retirement benefits

10 [1720] PUBLIC SERVANTS Retirement benefits – Whether former daily-rated employees entitled to retirement benefits

Summary :

This trade dispute was in relation to the union's claim that the former daily-rated employees of the Railway Administration who were converted to monthly-rated employees should be categorized in the appropriate divisions of service in the government with correspondening service conditions. At the end of the hearing, the union further claimed that as divisional officers, the former daily-rated employees were entitled to retiring benefits under Pensions Regulation 21 or as the case may be. The original claim was that the retiring benefits should be under Norm C of Pensions Regulation 24. The claims were based on the provisions of an industrial agreement made between the parties which put an end to the Railway Strike of 1962. Awards and Findings: (1) the extent of retiring benefits to which an officer is entitled under the Pensions Regulation is not dependent on whether or not he is emplaced in any division. The two categories under which the former daily-rated employees of the administration could fall were either the category of officers holding non-pensionable posts in the Non-Pensionable Establishment (ie officers whose salaries are paid from personal emoluments, or the category of monthly-rated officers paid from open votes in the Open Vote Establishment (ie officers whose salaries are paid from block provisisions); (2) the former daily-rated employees of the administration are by law classified as monthly-rated officers paid from open votes and, therefore, remain in in the Open Vote Establishment qualifying for retirement benefits under Pensions Regulation 24 in accordance with the appropriate Norms. They cannot be classified as officers holding non-pensionable offices as they are not paid out of personal emoluments and, therefore, cannot be considered to be in the Non-Pensionable Establishment; (3) as the law now stands, the former daily-rated employees of administration whose cases were being considered by the tribunal and whose services had been partly on daily pay and partly on monthly pay are entitled to the grant of retirement benefits under Norm F of Pensions Regulation 24; (4) the tribunal made awards in the light of the conclusions arrived at and observations made by the tribunal. Observations: (1) the services rendered (at least in some posts) by the former daily-rated employees as daily-rated staff are equally as valuable as the services rendered by them as monthly-rated staff, and therefore, on the face of it, it is difficult to understand why merely because of what appears to be difficulties in accounting and nothing else, which either could be overcome or may be found to be non-existent, there should, in calculating benefits on retirement, be any differentiation in respect of the period during which they were on daily pay and the period during which they were on monthly pay; (2) the tribunal, however, appreciated that there might be cogent reasons affecting any decision in the matter, involving, inter alia, policy and financial implications; (3) the tribunal was not called upon to make any finding in relation to the financial implications if the union's claim (for retirement benefits under Pensions Regulation 21) was accepted. The tribunal, however, made observations in relation hereto as a pointer that should an examination at some future date be made of the whole question of retiring allowance, it might well be that the financial implications of any alteration in the law might not, in fact, be as great as estimated by the administration in these proceedings.

Digest :

Malayan Railway Administration v Railwaymens's Union of Malaya [1968] 1 MLJ li Industrial Abitration Tribunal, Kuala Lumpur (Sir George Oehlers, Chairman, Mohamed Raslan bin Dato' Abdullah, Dato' Haji Abdullah bin Sahat and T Narendran, members).

1721 Salary -- Assignment of salary by public officer

10 [1721] PUBLIC SERVANTS Salary – Assignment of salary by public officer – Public policy

Summary :

The assignment by a public officer in the service of the government of the Colony of his stipend to another, to secure repayment of a loan, is contrary to public policy and illegal.

Digest :

Shellumbrum Chetty v Jones [1868] 2 Ky 204 High Court, Straits Settlements (Hackett J).

1722 Salary -- Claim for arrears

10 [1722] PUBLIC SERVANTS Salary – Claim for arrears – Appellant on secondment – Receipt of higher salary than on substantive post – Establishment principles

Summary :

The appellant had been engaged as a senior technical assistant in the Public Works Department. He was seconded to the Kuching Water Board and while working there received a salary higher than what he would have got in the PWD as he was given an acting allowance. Subsequently, the appellant claimed to return to the PWD. He sought a declaration that he was at all material times a servant of the government of Sarawak and he claimed the benefit of pay increases recommended by the Suffian and Harun Committees and arrears. The learned trial judge made an order declaring that the appellant had been at all material times a servant of the government of Sarawak. Subsequently, he dismissed the action, including the claim for arrears of salary. The appellant appealed.

Holding :

Held: in this case, the administrative ruling was that as the appellant on secondment to the statutory body received more salary than what he would get on his substantive post the question of arrears did not arise. The learned judge was therefore right in holding that the appellant had failed to prove that he was entitled in law to the arrears.

Digest :

Joseph v Government of Sarawak & Anor [1981] 1 MLJ 18 Federal Court, Kuching (Suffian LP, Lee Hun Hoe CJ (Borneo).

1723 Salary -- Public officers, conditions of service and salary scales of

10 [1723] PUBLIC SERVANTS Salary – Public officers, conditions of service and salary scales of – Whether award of Public Services Tribunal on anomaly in salary scale applicable to any public officer on same scheme – Whether public officers bound by acceptance of offers of appointment issued by government – Whether proper for court to interfere with contractual right between public officers and government – Public Services Tribunal Act 1977 (Act 186), s 15(1) & 5

Digest :

Government of Malaysia v Rohaya bte Mohd Majzub & Ors [1989] 1 MLJ 96 Supreme Court, Malaysia (Hashim Yeop A Sani Ag CJ (Malaya).

See PUBLIC AUTHORITIES, Vol 10, para 1499.

1724 Salary -- Revision of salaries in the public service

10 [1724] PUBLIC SERVANTS Salary – Revision of salaries in the public service – Public Service Tribunal set up to resolve anomalies – Implementation of Tribunal's award – Plaintiffs allege being placed on wrong salary scale

Summary :

The plaintiffs in this case were Broadcasting Assistants Grade I in the Department of Broadcasting. They were appointed on diverse dates between 1980 to 1981 and claimed that they had been placed on the wrong salary scale. On 1 July 1977, the government implemented Cabinet Committee Report No 1 effective from 1 January 1976. This report revised the salary in the public service. The second revision took effect on 1 July 1980 under Cabinet Committee Report No 2. Anticipating anomalies by these revisions, the government established the Public Service Tribunal to determine any dispute in regard to such anomalies. The gist of the present case was that the Broadcasting Assistants Grade I who were appointed on 1 January 1976 were placed on the B9 salary scale. The plaintiffs claimed for emplacement on the B3 salary scale. The difference in the two scales with effect from 1 July 1980 was (a) B3: RM1505-RM1685 and (b) B9: RM745-RM1505. The pre-1976 Broadcasting Assistants Grade I were emplaced on the B1, ie RM1685-RM1865, salary scale by an award of the Public Service Tribunal handed down on 12 August 1981. The last paragraph of the award read as follows: 'We rule that Broadcasting Assistant Grade I be given the salary scale of B1: RM1585-RM1765 on a personal-to-holder basis specially for those holding that post before 1 January 1976; and the B3 salary scale of RM1405-RM1585 for those appointed on or after that date, both with effect from 1 January 1976.' The government implemented the first part of the award in respect of Broadcasting Assistants Grade I appointed before 1 January 1986 but did not implement the second part of the award in respect of the 66 plaintiffs.

Holding :

Held, granting the reliefs in terms of the originating summons: (1) the tribunal dealt with the anomaly affecting Broadcasting Assistants Grade I as a whole and not the pre-1976 officers in isolation. The award was made on 12 August 1981 and on that date all the 66 plaintiffs were already in employment as Broadcasting Assistants Grade I. It therefore followed that the tribunal intended that the award should apply to the plaintiffs; (2) the plaintiffs were 'public officers' as defined in s 2 of the Public Service Tribunal Act 1977 (Act 186) ('the Act') and nowhere in the Act did it say that it applied only to public officers who were in employment at the time of the implementation of the Cabinet Committee Report No 1. It followed therefore that the plaintiffs were not bound by the salary offered them in their respective letters of employment; (3) by s 15(1) of the Act, the decision of the tribunal on any anomaly referred to it was final and conclusive and binding on the government; (4) there was no ambiguity on the award and it applied to all Broadcasting Assistants Grade I who held the post on the date of the award with effect from the date of their respective appointments or promotions.

Digest :

Rohaya bte Mohd Majzub & Ors v Government of Malaysia [1988] 3 MLJ 302 High Court, Kuala Lumpur (Harun J).

1725 Salary -- Stoppage of increments

10 [1725] PUBLIC SERVANTS Salary – Stoppage of increments – Rules relating to apppointment – Power to alter rules

Summary :

The appellant was a workshop clerk in the service of the government of Kelantan. When he was appointed, his letter of appointment did not state that he had to pass any examination. He was given annual increments until he reached the efficiency bar but subsequently, his increments were stopped on the ground that he had not passed the required examination. The appellant applied for a declaration that the stoppage of his increments was unlawful and void. The application was dismissed in the High Court and he appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) in view of the fact that the appellant held his office at the pleasure of the Ruler, his tenure of the office was subject not only to rules and regulations prevailing at the time of his appointment but also to any amendments to such rules and regulations made by the government; (2) in this case, therefore, the appellant could not contend that his letter of appointment made no reference to the passing of any examination; (3) in this case, the payment of salary above the bar on conversion must be regarded as an indulgence by the state in recognition of his past services but the requirement that he should pass the examination required under the rules of services remained applicable to him and therefore he had no right to further increments until he passed the prescribed examination.

Digest :

Rajion bin Haji Sulaiman v Government of Kelantan [1976] 1 MLJ 118 Federal Court, Kota Bharu (Suffian LP, Raja Azlan Shah and Wan Suleiman FJJ).

1726 Suspension from exercise of office -- Necessity of considering exculpatory statement before suspension

10 [1726] PUBLIC SERVANTS Suspension from exercise of office – Necessity of considering exculpatory statement before suspension – Public Service (Disciplinary Proceedings) Regulations 1970, reg 7

Digest :

Heng Kai Kok v Attorney General, Singapore [1987] 1 MLJ 98 High Court, Singapore (Chan Sek Keong JC).

See PUBLIC SERVANTS, Vol 10, para 1609.

1727 Suspension from exercise of office -- Whether judicial or administrative act

10 [1727] PUBLIC SERVANTS Suspension from exercise of office – Whether judicial or administrative act

Summary :

In this case, the application was for an order of certiorari to remove for the purpose of being quashed an order of the Commissioner of Police suspending the applicant from the exercise of his office of Assistant Superintendent of Police. The facts were that the applicant was travelling from Thailand to Alor Star, when his car was stopped and opium found in it. The applicant was convicted by a court in Thailand. The applicant was subsequently informed that disciplinary proceedings were contemplated against him and he was suspended from duty with effect from the date of his conviction. The applicant was informed that disciplinary proceedings were contemplated by reason of his conviction, but subsequently following objection by his counsel he was informed of an additional charge alleging that he had conducted himself in such a way as is considered prejudicial against the good name and integrity of the Royal Federation of Malaya Police and the Federation as a whole. A committee was appointed to investigate the charge against the applicant and he was informed that he would be notified of the time, date and place of the sitting of the committee.

Holding :

Held: (1) the act of the Commissioner of Police in this case in suspending or interdicting the applicant was an administrative act and, therefore, certiorari did not lie in this case; (2) although the foreign conviction could not give the Commissioner of Police jurisdiction to exercise any of his powers under reg 43 of the Public Officers (Conduct and Discipline) Regulations 1956, in this case there was the additional charge of misconduct under reg 38 of the regulations and, therefore, the order of the Commissioner of Police in suspending the applicant was not invalid.

Digest :

Augustine v Commissioner of Police, Malaya [1964] MLJ 438 High Court, Kuala Lumpur (Ong J).

1728 Termination of service -- Serving government officer appointed as assistant passport officer after application in response to advertisement

10 [1728] PUBLIC SERVANTS Termination of service – Serving government officer appointed as assistant passport officer after application in response to advertisement – Qualified acceptance of application not communicated to applicant – Subsequent termination of the 'appointment on probation' by the Public Services Commission, whether ultra vires

Summary :

The applicant, a health inspector under the Town Board, Tanjong Malim, applied for the post of assistant passport officer in the Federation of Malaya Government Overseas Missions advertised in the Malay Mail newspaper dated 19 February 1957 as follows: 'Applicants will be selected according to the following order of preference: (i) Serving assistant passport officer and serving junior assistant passport officers in the Immigration Department who have not had less than five years' service and who possess school certificate. (ii) All serving government officers who have had five years' service and who possess school certificate É officers will be eligible for overseas allowance when abroad É free passages to overseas posts É free medical (but not dental) attention É outfit allowances É applications (those from serving officers to be submitted through heads of department with confidential reports and record of service) to reach the Secretary, Public Service Commission (Designate), Young Road, Kuala Lumpur, 28 February 1957.' Consequently, the applicant was informed that he was accepted and after undergoing a period of training he was posted to the Immigration Office, Kuala Lumpur until December 1958 when he was transferred to the Immigration Office at Johor Bahru. On 5 November 1959, the Secretary to the Public Services Commission, in a letter addressed to the applicant as 'assistant passport officer on probation', informed him that following a report from the Controller of Immigration concerning his conduct in the irregular issue of certain passports, disciplinary action was being taken against him with a view to his dismissal. The applicant made representations as invited by the said letter and on 24 December 1959, the applicant was informed that the respondent had decided that he should not be dismissed but that his appointment on probation be terminated forthwith by payment of one month's salary in lieu of notice. The applicant now moved the court for an order of certiorari to quash the decision of the respondents on the grounds of error in law, want of jurisdiction and failure to observe principles of natural justice.

Holding :

Held: the Malay Mail advertisement was an invitation to qualified persons to apply and the resulting invitations were offers. The information conveyed to the applicant was an unqualified acceptance to join the overseas mission and he so understood it and no mental reservation or tacit misunderstanding on the part of the respondents should be permitted to destroy the contractual obligation. The respondents therefore acted ultra vires in purporting to terminate the applicant's services in the manner applicable to officers on probation.

Digest :

Coelho v The Public Services Commission [1964] MLJ 12 High Court, Kuala Lumpur (Ong J).

Annotation :

[Annotation: See also under the subject heading public servants (Dismissal).]

1729 Termination of service -- Termination in accordance with terms of offer of appointment

10 [1729] PUBLIC SERVANTS Termination of service – Termination in accordance with terms of offer of appointment – Action for wrongful termination – Whether person has right to be heard – Federal Constitution, art 135(2)

Summary :

The plaintiff had been appointed as temporary enforcement officer. The letter of appointment provided that his services could be terminated by giving three months' notice or one month's salary in lieu of notice. The services of the plaintiff were terminated by giving him one month's salary in lieu of notice. He then brought an action for damages for the wrongful termination of his appointment and alternatively for a declaration that he was still in the employ of the defendants. It was argued, inter alia, that the services of the plaintiff were terminated without his being given a reasonable opportunity of being heard and contrary to reg 33(a) of Chapter D of the General Orders, regs 49 and 50 of the Public Services (Conduct and Discipline) Regulations and art 135(2) and 136 of the Federal Constitution. It was also submitted in the course of argument that although the government may lawfully enter into a contract, there was no evidence in this case of a signature by the proper person for the purpose of s 2 of the Government Contracts Ordinance 1949.

Holding :

Held: as in this case the services of the plaintiff were terminated in accordance with the terms of the offer of appointment, the plaintiff could not claim a right to be heard until art 135(2) of the Federal Constitution and therefore the plaintiff's claim cannot succeed. Semble: appointment of officers in the government service, temporary or otherwise, is not made by written contracts executed in the manner provided under the Government Contracts Ordinance 1949. Such an appointment is made by the Public Services Commission. Any appointment by the Public Services Commission in exercise of its functions pursuant to art 144 of the Federal Constitution is in effect in the nature of a special contract and once an appointment is made the government is bound by the terms and conditions of such appointment.

Digest :

Gnanasundram v Government of Malaysia [1971] 1 MLJ 208 High Court, Kuala Lumpur (Abdul Hamid J).

1730 Tortious act by public servant -- False imprisonment

10 [1730] PUBLIC SERVANTS Tortious act by public servant – False imprisonment – Whether public servant could be personally liable in tort for acts carried out in the course of official duties – Whether police officer was personally liable for wrongful detention of plaintiff – Succession and Regency Proclamation 1959 [Bru], proviso to s 25(1)

Summary :

On 11 June 1990 the magistrate's court issued a warrant for the arrest of the plaintiff and for her to be brought to court on 25 June 1990 ('the warrant'). DSP Kamaludin ('Kamaludin') instructed the defendant, a police officer, to execute the warrant. At about 10am on 23 June 1990 the defendant arrested the plaintiff and brought her to the police station where she was locked up in the cells. At about 4pm on the same day, Kamaludin instructed the defendant to take the plaintiff to court. The defendant, however, was unable to carry out the instruction because it was too late to do so. The plaintiff was only taken to the magistrate's court at about 2pm on 25 June 1990. The plaintiff claimed damages for false imprisonment and sued the defendant in his personal capacity. The defendant contended that he was merely carrying out his insructions. The defendant also argued that by virtue of the proviso to s 25(1) of the Succession and Regency Proclamation 1959, action could not be brought against a public servant in his personal capacity for any wrong committed in the course of carrying out government duties. The defendant further alleged that the plaintiff was not without recourse since an ex gratia payment could be made by the Minister of Law ('the Minister'). The plaintiff claimed that her reputation was adversely affected by her wrongful imprisonment.

Holding :

Held, allowing the claim: (1) s 47 of the Criminal Procedure Code (Cap 7) provides, inter alia, that a police officer executing a warrant of arrest shall 'without unnecessary delay' bring the person arrested before the court which he is required by law to produce such a person. There was no necessary delay in this case as no effort was made to bring the plaintiff before a magistrate who should have been available for six hours after the plaintiff was arrested; (2) although the warrant itself contained no endorsement for the granting of bail, it was possible, by virtue of s 347 of the Code, for bail to have been given to the plaintiff by any police officer of the rank of inspector or above; (3) the plaintiff should have been taken from her house directly to the magistrate's court on the day of her arrest. The plaintiff was therefore falsely imprisoned from approximately 10.30am on 23 June 1990; (4) if the defendant had committed an actionable wrong, it was not a defence that he was acting in accordance with the instructions given by his superior; (5) the evidence in this case showed that the defendant had nothing to do with the plaintiff after the defendant had handed the matter over to Kamaludin at about 4pm on 23 June 1990. From then onwards, Kamaludin had charge of the plaintiff and could have released her on bail. Accordingly, the defendant's liability for false imprisonment did not extend beyond the first six hours. The plaintiff's false imprisonment thereafter was caused by Kamaludin; (6) before the Crown Proceedings Act 1947, an injured party could sue an individual public servant in tort, irrespective of whether or not the wrong was committed in the course of his duties as a public servant. Such a right should not be taken away unless this is clearly stated. Accordingly, the proviso to s 25(1) of the 1959 Proclamation does not prevent a defendant from being sued in his personal capacity for tortious acts which he carried out as part of his official duties; (7) an ex gratia payment however generous cannot be as efficacious as recourse to an independent body. The Minister cannot be said to be detached since he is part of the public service. The Minister may also offer an ex gratia payment which is less than what the citizen believes he is entitled to get. In other cases the Minister may make no offer at all although the citizen may believe otherwise; (8) there was nothing in this case to justify an award of exemplary damages. The amount of damages to be awarded to the plaintiff, should represent her annoyance at being falsely imprisoned by a police officer. Taking into account the fact that the defendant was only responsible for the plaintiff's detention for a limited period of six hours, the plaintiff ought to be awarded a sum which is more than nominal and which would compensate her for wrongful imprisonment. The plaintiff was therefore awarded B$3,000 as damages.

Digest :

Kuan Kwai Choi v Ak Zaidi bin Pg Metali [1993] 2 MLJ 207 High Court, Brunei (Denys Roberts CJ).

1731 Tortious act by public servant -- Liability of government

10 [1731] PUBLIC SERVANTS Tortious act by public servant – Liability of government

Summary :

The principles of the law of master and servant apply to the relationship between the government and its officers and the government may therefore be sued for a tort committed by a public servant.

Digest :

Naested v State of Perak [1925] 5 FMSLR 185 Court of Appeal, Federated Malay States (Woodward CJ, Farrer-Manby and Deane JJ).

Annotation :

[Annotation: See also State of Negri Sembilan v St George (1923) 4 FMSLR 93 and Chief Secretary v Soo Choon Wee (1923) 3 FMSLR 126 and generally under public authorities.]

Public Utilities

1732 Breach of statutory duty -- Death arising from tampering with electrical installation

10 [1732] PUBLIC UTILITIES Breach of statutory duty – Death arising from tampering with electrical installation – Whether defendants negligent

Summary :

The plaintiff sued the defendants on behalf of the estate of his son who died from electrocution as a result of coming into contact with a defect in the installation erected by the defendants for the supply of electricity to the plaintiff's house. The plaintiff claimed damages under ss 7 and 8 of the Civil Law Ordinance 1956, and rested his claim on two alternative causes of action, ie (a) breach of statutory duty as provided in s 67 of the Electricity Ordinance and/or (b) negligence at common law. The defendants denied that they were in breach of statutory duty or guilty of negligence. They contended that the deceased caused and/or contributed to his death by his own negligence and failure to take care of his own safety. In the alternative, they alleged that the deceased knew or ought to have known that tampering with the electrical installation involved a risk of injury and that the deceased in acting as he did consented to running the said risk.

Holding :

Held: (1) there was no evidence of any breach of s 67(1) of the Electricity Ordinance or the regulations made thereunder; (2) there was no evidence of any negligence on the part of the defendants at common law; (3) the cause of the accident in the sense of the operative cause was solely due to the deceased's own act in tampering with the defendants' installation. Observations on the main purpose of the Electricity Ordinance 1949.

Digest :

Yusoff v Central Electricity Board [1964] MLJ 374 High Court, Malacca (Ismail Khan J).

1733 Breach of statutory duty -- Death of buffalo by electrocution

10 [1733] PUBLIC UTILITIES Breach of statutory duty – Death of buffalo by electrocution – Whether electricity board liable

Summary :

The plaintiff sued the defendants for damages arising out of the death of five buffaloes and one dog belonging to him as a result of their being electrocuted by coming into contact with a telephone wire belonging to the second defendants (the government of Malaysia). The wire had been snapped on 30 November 1962 and was lying on the ground and resting on top of the aerial electricity lines belonging to the first defendants. It remained so resting till the day of the death of the buffaloes, 3 December 1962. The claim was based on the negligence of the servants of both defendants or alternately the negligence of the servants of one or other of the defendants. In the claim against the first defendants, the plaintiff also alleged breach of statutory duty under reg 16, s B(2) and/or s C(4) of the Electricity Regulations 1951. The defendants contended that they owed no duty of care to the plaintiff because the buffaloes were trespassers on the highway, that they were not being led by nose strings as required by s 2 of the Buffaloes Enactment (FMS Cap 194) and that they were not negligent.

Holding :

Held: (1) they owed a duty of care to the plaintiff as in the eyes of the law he would be a neighbour irrrespective of whether the buffaloes were or were not trespassers on the highway. Further, the buffaloes were not straying on the highway as they were being led by a person in charge and the fact that they were not being led by nose string would be relevant only in an action against the owner for any damage caused by the buffaloes; (2) when electricity was carried overhead by wires or cables, great care must be taken in addition to any precautions required by statute, to see that it was not likely to become a source of danger. The defendants were negligent in allowing the telephone wire to remain resting on the electric wires for such a long time; (3) in the circumstances of the case, the damage was not too remote, for if the danger of the telephone wire becoming live with electricity was reasonably foreseeable, then death or serious injury to any person or animal coming in contact with it could also be reasonably forseeable; (4) on the facts of the case, the first defendants were not in breach of statutory duty as laid down in the Electricity Regulations 1951. As the plaintiff was not relying on breach of statutory duty alone, both defendants were liable in damages.

Digest :

Jaswant Singh v Central Electricity Board & Anor [1967] 1 MLJ 272 High Court, Kuala Lumpur (Gill J).

1734 Charges for electricity and water supplies -- Priorities

10 [1734] PUBLIC UTILITIES Charges for electricity and water supplies – Priorities – Distribution of bankrupt's property

Summary :

Notwithstanding s 32 of the Government Suits Enactment (Cap 17), claims for sums due in respect of electricity and water supplies are not entitled to any priority in the distribution of the property of a bankrupt under s 38 of the Bankruptcy Enactment.

Digest :

Re Lim Hee Kung [1939] MLJ 51 High Court, Federated Malay States (Cussen J).

Annotation :

[Annotation: Priority in the distribution of a bankrupt's property is now governed by the Bankruptcy Act 1967 (Act 360).]

1735 Consumer -- Meaning of

10 [1735] PUBLIC UTILITIES Consumer – Meaning of – Landlord, tenant and person supplied to be included – Tampering with meter

Summary :

In construing the definition of 'consumer' in s 2 of the Electricity Enactment (Cap 201) there should be no narrowing of its plain meaning by the importation of limitations. It is wide enough to include the landlord, the tenant and also the person supplied.

Digest :

Ng Wui Piang v Public Prosecutor [1936] MLJ 111 High Court, Federated Malay States (Thomas CJ).

1736 Electricity -- Contract to supply electricity to company by electricity board

10 [1736] PUBLIC UTILITIES Electricity – Contract to supply electricity to company by electricity board – Company undercharged by mistake – Whether board estopped from claiming amount

Summary :

The respondent board had contracted to supply electricity to the appellants. By mistake, it had considerably undercharged the appellants and they claimed the amount of RM$84,624.01 from the appellants. The High Court gave judgment in favour of the board, the learned trial judge holding that the board was not estopped from claiming the amount although the appellants had utilized the accounts rendered by the board for the purpose of costing their products. The appellants appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) the cases of estoppel by negligence are associated with those cases in which the silence of one under a legal duty to speak or act is regarded as a representation and it is a breach of that duty which is relied upon as creating an estoppel. The doctrine of estoppel by negligence, however, has no application to the present case because there was an express representation by the servant or agent on behalf of the representor; (2) the plea of estoppel by representation cannot be pleaded against a public corporation on which there is imposed a statutory duty to carry out certain acts in the interest of the public; (3) such public corporation cannot indirectly do, by placing itself under the disability of estoppel, what it could not have directly done by reason of statutory prohibitions; (4) the Electricity Act 1949 (Act 116) constituting the board was founded not so much on considerations of trade as for the benefit of the public in general. The board had a statutory duty to perform to assess the appellants for rates in accordance with the prescribed tariff for electricity actually supplied and the appellants had a corresponding duty to pay at the scheduled rates for electricity energy consumed. To waive the payment at scheduled rates is prohibited by the doctrine of ultra vires. If the plea of estoppel is allowed, the scheduled rates due in respect of the actual amount of electric energy supplied would be indirectly remitted, which the board could not by any act directly remit. To allow the plea of estoppel would therefore be nullifying the statutory provisions of the Act.

Digest :

Public Textiles Bhd v Lembaga Letrik Negara [1976] 2 MLJ 58 Federal Court, Penang (Gill CJ (Malaya).

1737 Electricity -- Disconnection of electricity supply

10 [1737] PUBLIC UTILITIES Electricity – Disconnection of electricity supply – Whether TNB has power to disconnect power upon giving 24 hours' notice – Whether the power to disconnect supply should be dependent on court proceedings – Electricity Supply Act 1990, ss 37(1), (3), 38(1) & (5)

Digest :

Dai-Ichi Electronics (M) Sdn Bhd v Tenaga Nasional Bhd [1996] 4 MLJ 506 High Court, Penang (Vincent Ng J).

See CIVIL PROCEDURE, para 245.

1738 Electricity -- Exclusive right to supply electricity given to licensee

10 [1738] PUBLIC UTILITIES Electricity – Exclusive right to supply electricity given to licensee – Whether licensee has unreasonably withheld or refused consent to a company

Summary :

In this case, the respondent had been given a licence giving him the exclusive privilege of supplying electricity to Saratok in Sarawak. The charges made by the respondents were higher than those charged in other areas. Under the Sarawak Electricity Supply Corporation Ordinance 1962, the government had a scheme for rural electrification. Under the ordinance it was provided that the Corporation would not supply electricity to a consumer in an area which forms part of the area of supply of a licensee, except with his consent. It was also provided that where a licensee refuses or withholds such consent the Corporation can appeal to the Governor-in-Council, who can, if satisfied that such consent has been unreasonably refused or withheld, dispense with such consent. The Corporation asked the respondent for consent to supply electricity to some applicants from Saratok but this was refused. The respondent also turned down a request to charge the new rates for the supply of electricity fixed by the Ministry of Communications and Works. The Corporation thereupon appealed to the Governor-in-Council who, after considering the material evidence including the correspondence between the Corporation and the respondent, found that the consent of the respondent had been unreasonably withheld and refused. Licence was therefore granted to the Corporation. The respondent thereupon brought actions against the Corporation and the government of Sarawak for various declarations and reliefs on the ground that the licence to the Corporation could only be granted if his consent was obtained or if the government was satisfied that his consent had been unreasonably refused or withheld. He claimed that he had not been given the right to be heard before the Governor-in-Council made its decision. At the trial, the learned trial judge held that the respondent had not been accorded the right to be heard. He refused an injunction but granted damages to be assessed. The government and the Corporation thereupon appealed to the Federal Court.

Holding :

Held: although the audi alteram partem rule applied in this case, an adequate opportunity to be heard had been accorded to the respondent. The Governor-in-Council had all the material evidence before him to enable him to come to a fair and proper decision and the Governor-in-Council could have come to no other conclusion than that the licensee's consent had been unreasonably withheld or refused.

Digest :

Sarawak Electricity Supply Corp v Wong Ah Suan [1980] 1 MLJ 65 Federal Court, Kuching (Lee Hun Hoe CJ (Borneo).

1739 Electricity -- Notice to disconnect electricity supply

10 [1739] PUBLIC UTILITIES Electricity – Notice to disconnect electricity supply – Whether validity of notice could be questioned in court – Electricity Supply Act 1949 (Act 116), s 85(1) & (5)

Summary :

D served a notice to disconnect the supply of electricity from P's premises. P argued that such a notice was invalid because the notice did not state that the proposed disconnection of electricity supply had been authorized by the National Electricity Board. P filed a writ applying, inter alia, for an injunction to restrain D and its employees from disconnecting the electricity supply from its premises. P obtained an ex parte interlocutory injunction restraining D from taking such action. D applied to the High Court to strike out P's writ and statement of claim, inter alia, on the ground that P's writ did not disclose any reasonable cause of action.

Holding :

Held, allowing D's application: (1) under s 85(5) of the Electricity Act 1949 (Act 116) which is an 'ouster' clause, the validity of the notice is non-justiciable and cannot be questioned in court. D had also acted within its jurisdiction as conferred by law. P's claim would therefore be struck out; (2) P's interlocutory injunction was accordingly a nullity and D need not apply to set it aside..

Digest :

Slenderlin Beauty & Figure (Malacca) Sdn Bhd v Tenaga Nasional Bhd Civil Suit No 22-74-1989 High Court, Malacca (Mohd Noor J).

1740 Employee of electricity board -- Pension

10 [1740] PUBLIC UTILITIES Employee of electricity board – Pension – Whether liable to attachment

Summary :

The respondent obtained an order for maintenance against her husband who was employed by the appellant. Subsequently, the court at the instance of the respondent made a further order directing the manager of the appellant board to deduct the amount of the maintenance from the salary of the husband and pay it to the respondent's solicitors. This was done until 1963 when the husband retired to India on pension and opted to draw his pension there. As the husband ceased to be eligible for salary on retirement the appellant ceased to make further payment to the respondent's solicitors. Thereupon, the respondent obtained an order for a warrant of distress and sale to be issued against the gratuity and pension which may be found in the hands of the manager of the appellant board. The manager filed an objection, which the learned magistrate dismissed after hearing the parties. On appeal,

Holding :

Held: the pension was not liable to attachment under s 22 of the Electricity Ordinance 1949 and the order of the magistrate must therefore be set aside.

Digest :

Central Electricity Board v Govindamal [1965] 2 MLJ 153 High Court, Kuala Lumpur (Ong J).

1741 Permission obtained for electrical installation -- Damage to cable caused by servant

10 [1741] PUBLIC UTILITIES Permission obtained for electrical installation – Damage to cable caused by servant – Liability for negligence

Summary :

The respondent after obtaining the permission of the Lembaga Letrik Negara Klang, carried out certain electrical installation works at its premises. The works necessitated the driving of an earth pipe seven ft into the ground which was accomplished after the respondent had dug a three ft by three ft hole at the site and had found nothing there. There was no marker at the site. Subsequently, a fault was detected in the underground cable belonging to the appellant outside the premises of the respondent. It was found that an iron pipe had damaged the cable sheathing thus exposing a section of the lead sheet therein through which water had seeped in and caused a breakdown. In an action for damages against the respondent the appellant relied on two grounds; the first that the respondent was liable for negligence at common law or alternatively under s 88(1) of the Electricity Ordinance 1949. The lower court rejected the allegation of negligence on the part of the respondent and found with regard to s 88(1) that the respondent had complied with the requirements of the Lembaga Letrik Negara and had exercised the care of a skilled man in doing the operation. The Lembaga Letrik Negara had approved the work and supplied the electricity. On appeal to the High Court,

Holding :

Held, dismissing the appeal: (1) for the appellant to succeed at common law negligence, it was necessary for him to prove that the respondent owed a duty of care to the appellant and as a result of the respondent's failure to exercise that duty of care the appellant had suffered damage. The respondent had had a licence to carry out the works and had complied therewith. The damage caused to the cable was not something which the respondent could reasonably have foreseen; (2) s 88(1) of the Electricity Ordinance 1949 has to be read in the context of s 75 of the ordinance. Since the respondent had obtained the prior permission of the Lembaga Letrik Negara and had taken sufficient precautions before driving in the pipe, the respondent was not liable to pay compensation for the damage to the cable.

Digest :

Lembaga Letrik Negara Tanah Melayu v Syarikat Klang Electric [1974] 1 MLJ 209 High Court, Kuala Lumpur (Pawan Ahmad J).

1742 Telecommunications -- Breach of contract alleged

10 [1742] PUBLIC UTILITIES Telecommunications – Breach of contract alleged – Application for specific performance – Mandamus inapplicable

Summary :

The applicant in the present case sought an order of mandamus under the Specific Relief Act 1950 (Act 137), s 44 against the respondents to reinstall both the telephone line and the telephone at No 42 Jalan Bawang, Kuala Lumpur. The applicant alleged that the respondent's servant or agent had wrongfully disconnected the telephone line and telephone on 14 July 1978, alleging that the applicant had installed an illegal extension, which the latter denied. The applicant's requests, followed by those from his solicitor, for reinstallation had been ignored. The respondents applied to have the application struck out on the ground that it was wrong in law. They objected on the ground that the applicant should have first obtained leave of the court before an order for mandamus could be sought.

Holding :

Held: (1) since 1 June 1980, after the coming into force of the Rules of the High Court 1980, leave of court would be required under O 52 r 1(1) before an order for mandamus could be sought; (2) the applicant in this case had not succeeded in bringing his case under s 44 of the Specific Relief Act 1950. His relationship with the respondents was merely contractual under an agreement made in accordance with r 11 of the Telephone Regulations 1956. If what he alleged was true, he would have his remedy in an action for breach of contract, and therefore not be able to assert that he had 'no other specific and adequate legal remedy', a condition necessary to entitle a person to apply for relief under s 44(1) of the said Act; (3) mandamus does not lie to enforce a civil liability arising out of a breach of contract to enforce rights based on contract.

Digest :

Chan Mun Poy v Director-General of Telecommunications & Anor [1981] 2 MLJ 293 High Court, Kuala Lumpur (Wan Suleiman FJ).

1743 Telecommunications -- Liability of government for mistake in transmitting telegram

10 [1743] PUBLIC UTILITIES Telecommunications – Liability of government for mistake in transmitting telegram – Whether government liable for loss suffered

Summary :

In this case, the respondent was a general merchant in Miri, Sarawak, dealing, among other things, in pepper. It had business dealings with a firm in Singapore and they communicated by telegram in code. The respondent had 190.5 pikuls of white pepper stored with the Singapore firm. On 19 June 1970, the respondent received a telegram from the Singapore firm saying that the pepper could be sold at a certain price. The respondent sent a telegram to the Singapore firm in code 'Huy Eaz Auv' meaning 'Don't sell'. But owing to a mistake by somebody in the Post Office, the telegram when received by the Singapore firm read 'Huy Ear Aur' meaning 'Sell'. The Singapore firm sold and the respondent alleged that it suffered loss. The respondent sued the government of Malaysia which operated the Post Office for damages suffered as a result of the 'gross negligence of the defendant or their officers or subordinates'. The learned trial judge held that the government was liable for the loss. The government appealed.

Holding :

Held: the government had a defence as s 9(1) of the Telecommunications Act 1950 (Act 20) clearly absolved the government from liability for damages caused by failure of duty on the part of the Post Office employees concerned, even if such failure was proved. Rule 3 of the Sarawak Telegraph Rules 1934 also makes it clear that the government is not liable for loss or damage caused by inaccuracy of or error in telegrams.

Digest :

Government of Malaysia v Chop Kian Hoe [1981] 1 MLJ 23 Federal Court, Kuching (Suffian LP, Lee Hun Hoe CJ (Borneo).

1744 Telecommunications -- Possession of radio communication apparatus without licence

10 [1744] PUBLIC UTILITIES Telecommunications – Possession of radio communication apparatus without licence – Seizure of apparatus

Summary :

In this case, the appellant who was charged with an offence under s 38(1)(b) of the Telecommunications Act 1950 (Act 20) of having possession without a licence of radio communication apparatus with a view to sale, pleaded guilty and was convicted. He was fined RM100 and, in addition, the radio communication apparatus which was seized by the police was ordered to be forfeited. His appeal is against the order of forfeiture on the ground that s 43(1) of the Act which applies to an offence under s 38(1)(b), gives the magistrate no power to order forfeiture.

Holding :

Held: in the circumstances of this case, it was clear that although properly armed with a search warrant, the police had no right to seize the radio communication apparatus as there was no evidence to show that it had been installed or worked within the meaning of ss 38(1)(a), 39(1) or 39(2) of the Act. The seizure of the apparatus was therefore wrongful and not authorized by law. It followed, therefore, that no order of forfeiture could validly be made in respect of the article or apparatus which was wrongly seized.

Digest :

Sinappan v Public Prosecutor [1977] 1 MLJ 170 High Court, Kuala Lumpur (Ali Ag CJ (Malaya).

Railways

1745 Carriage of goods of perishable nature -- Goods transported at owner's risk

10 [1745] RAILWAYS Carriage of goods of perishable nature – Goods transported at owner's risk – Wilful misconduct

Summary :

This was a claim for damages arising from the delay in the delivery of a consignment of onions transported by the defendants' train. The consignment was at owner's risk and the agreed issue was whether there was wilful misconduct on the part of the defendants or their servants. The plaintiff alleged that there was wilful misconduct in that the defendants or their servants forwarded the consignment from Taiping by a slow goods train, knowing that it contained onions which were goods of a perishable nature. The onions when delivered were found to be in a rotten state.

Holding :

Held: in the surrounding circumstances of this case, wilful misconduct had been proved against the defendants' servant at Taiping when he forwarded the consignment containing the onions by a slow goods train. When he did so he had acted recklessly, quite regardless of whether the onions would rot or not.

Digest :

Kian Ann & Co v Malayan Railway Administration [1971] 1 MLJ 93 High Court, Kota Bharu (Ibrahim J).

1746 Collision between motor lorry and train -- Requirement of notice by plaintiff or his solicitor before commencement of action

10 [1746] RAILWAYS Collision between motor lorry and train – Requirement of notice by plaintiff or his solicitor before commencement of action – Strict interpretation of legislation

Summary :

In this case, the plaintiffs claimed damages against the Railway Administration for loss sustained as a result of a collision between their motor lorry and a train at a private level crossing. The Railway Administration raised two preliminary objections to the claim: (1) that no notice of the claim had been given by the plaintiffs or their solicitors as required by s 77(2) of the Railway Ordinance 1948 (Ord 8/1948); (2) that as s 37 of the Railway Ordinance 1948 did not impose any liability on the Railway Administration as far as private level crossings were concerned, the Railway Administration was also not obliged to do anything at common law. It appeared that in this case, a written notice was served by the solicitors for the insurance company, who were the insurers of the lorry belonging to the plaintiffs.

Holding :

Held: (1) the written notice in this case was not served by the plaintiffs or their solicitors and, therefore, did not constitute a proper notice as required by s 77(2) of the Railway Ordinance 1948; (2) although s 37 of the Railway Ordinance 1948 is silent as regards the obligation of the Railway Administration towards members of the public, this did not relieve them of their common law obligation to take care.

Digest :

Yeo Kian Ann & Son v Railway Administration [1973] 1 MLJ 43 High Court, Kuala Lumpur (Mohamed Azmi J).

1747 Collision between motor lorry and train -- Requirement of notice by plaintiff or his solicitor before commencement of action

10 [1747] RAILWAYS Collision between motor lorry and train – Requirement of notice by plaintiff or his solicitor before commencement of action – Strict interpretation of legislation

Summary :

In the court below ([1973] 1 MLJ 43), the plaintiffs claimed damages against the Railway Administration for loss sustained as a result of a collision between their motor lorry and a train at a private level crossing. The Railway Administration raised two preliminary objections to the claim (1) that no notice of the claim had been given by the plaintiffs or their solicitors as required by s 77(2) of the Railway Ordinance 1948 (Ord 8/1948); (2) that as s 37 of the Railway Ordinance 1948 did not impose any liability on the Railway Administration as far as private level crossings were concerned, the Railway Administration was also not obliged to do anything at common law. It appeared that in this case, a written notice was served by the solicitors for the insurance company, who were the insurers of the lorry belonging to the plaintiffs.

Holding :

Held: (1) the written notice in this case was not served by the plaintiffs or their solicitors and, therefore, did not constitute a proper notice as required by s 77(2) of the Railway Ordinance 1948; (2) although s 37 of the Railway Ordinance is silent as regards the obligation of the Railway Administration towards members of the public, this did not relieve them of their common law obligation to take care. On appeal, the Federal Court allowed the appeal and ordered that the preliminary objection raised by the defendant be dismissed, and that the trial of the action should proceed on its merits.

Digest :

Yeo Kian Ann & Son v Railway Administration [1974] 2 MLJ 14 Federal Court, Kuala Lumpur (Azmi LP, Suffian and Ong Hock Sim FJJ).

1748 Injury to passengers -- Notices warning passengers of danger

10 [1748] RAILWAYS Injury to passengers – Notices warning passengers of danger – Whether railway authority liable for negligence

Summary :

This was an appeal by the appellants against the judgment of the High Court, in which it was held that the Malayan Railway Administration and its officers were negligent because they had not taken reasonable steps to prevent passengers to be at or near the steps of the train, when they were aware that it was quite normal practice for passengers to alight from the train whilst it was still in motion. The respondent had been injured when he attempted to get off the train before it came to a stop.

Holding :

Held, allowing the appeal: the steps taken by the appellants to prevent passengers from being at or near the steps were reasonably adequate in the circumstances and, therefore, the appellants were not negligent.

Digest :

Hamzah & Ors v Wan Hanafi bin Wan Ali [1975] 1 MLJ 203 Federal Court, Kota Bahru (Suffian LP, Ali and Wan Suleiman FJJ).

1749 Liability for passenger's luggage -- Loss of articles considered as personal luggage

10 [1749] RAILWAYS Liability for passenger's luggage – Loss of articles considered as personal luggage

Summary :

When a passenger's luggage disappears from the van of a passenger train, the railway is liable only for the loss of such articles as can properly be considered personal luggage. Such things as collections of silks, fountain pens, curios, prismatic compasses, etc are not personal luggage.

Digest :

Hutton v Railway Administration [1912] 2 FMSLR 89 Court of Appeal, Federated Malay States (Woodward JC).

1750 Litigation -- Federal counsel appearing on behalf of Malayan Railway Administration

10 [1750] RAILWAYS Litigation – Federal counsel appearing on behalf of Malayan Railway Administration – Whether can be given profit costs

Summary :

This was an appeal against the allowance by the registrar of profit costs in a bill of costs brought in by the defendants. At the trial, a Federal counsel appeared for the defendants. It was argued by the plaintiff-appellant that the Federal counsel was entitled only to recover actual out-of-pocket expenses.

Holding :

Held, by Spenser-Wilkinson J: the defendants in this case could only claim their actual out-of-pocket expenses.

Digest :

Chellapah v Malayan Railway Administration [1949] MLJ xiii High Court, Selangor (Spenser-Wilkinson J).

1751 Loss of goods from warehouse -- Liability of railway authority as bailee

10 [1751] RAILWAYS Loss of goods from warehouse – Liability of railway authority as bailee

Summary :

The Railway Administration is not liable as a common carrier, but as a bailee, for goods stolen from a railway warehouse.

Digest :

Arbenz v Railway Administration [1920] 2 FMSLR 215 High Court, Federated Malay States (Sproule Ag CJC).

1752 Obstruction -- Construction of a rail by local authority

10 [1752] RAILWAYS Obstruction – Construction of a rail by local authority – Interference with access to premises – No proof of pecuniary damage

Summary :

The plaintiff sought a declaration that the defendants, a local authority, were not entitled to keep a rail in front of his clinic between it and the street and he asked for an order that the defendants pull down the rail and an injunction to restrain the defendants from obstructing his patients and himself and his staff from getting into the clinic. The plaintiff did not prove that he had in fact suffered any pecuniary loss or that his practice as a dentist was affected. The defendants denied that the plaintiff's enjoyment of his premises had been adversely affected or interfered with and claimed that the rail was properly constructed as part of the authorized powers given to the defendants.

Holding :

Held: (1) on the facts of the case, the plaintiff's access to his clinic had not been substantially interfered with; (2) the defendants had not exceeded their authority in constructing the rail which was intended to channel pedestrians along a path of safety; (3) as the plaintiff had not suffered any pecuniary damage, the plaintiff's claim must be dismissed.

Digest :

Chong Sin Onn v Kuching Municipal Council [1967] 1 MLJ 21 High Court, Kuching (Harley Ag CJ (Borneo).

1753 Premature retirement of employee -- Statement as to age given at time of joining service

10 [1753] RAILWAYS Premature retirement of employee – Statement as to age given at time of joining service – Application for amendment of date of birth – Whether employees of Malayan Railway are in the service of the government of the Federation

Summary :

In this case, the respondent had declared at the time of his joining the railway service on 19 February 1941 that his date of birth was 26 June 1916. On that basis, he was compulsorily retired from service on attaining the age of 55 on 26 June 1971. The respondent claimed that his correct date of birth was 21 June 1921. He obtained authenticated documents from India relating to his actual date of birth and on the presentation of these documents to the Registrar of Identity Cards, his identity card was amended to show the date of birth. He applied to the principal establishment officer to have his date of birth amended but his application was turned down. He thereupon applied to the High Court for a declaration that he had been prematurely and unlawfully retired before his retiring age of 55 and in the High Court, Mohamed Azmi J made the declaration and ordered that he be reinstated in his employment ([1974] 1 MLJ 201). On appeal,

Holding :

Held: (1) by virtue of s 4(1A) of the Railway Ordinance 1948 (Ord 8/1948), the respondent being in the service of the Railway Administration is deemed to be in the service of the government of the Federation and, therefore, general orders are applicable to him; (2) in the absence or his having failed to take such proceedings he had no right of action against the appellant; (3) under General Order A 19(e), the principal establishment officer has absolute discretion in determining the application for amendment of the date of birth and if the respondent was dissatisfied with his decision in the exercise of such discretion, it was open to him to take proceedings against the government;under General Order 19(d), the respondent was bound by his statement which he made as to his date of birth when he was appointed to the railway service.

Digest :

General Manager, Keretapi Tanah Melayu v Veeriah [1975] 1 MLJ 123 Federal Court, Kuala Lumpur (Gill CJ, Ali and Ong Hock Sim FJJ).

1754 Property controlled and managed by Railway Administration -- Property of Federal Government

10 [1754] RAILWAYS Property controlled and managed by Railway Administration – Property of Federal Government – Whether subject to rent control

Summary :

In this case, the respondents had brought an action against the appellants for vacant possession of the premises known as Station Hotel, Kuala Lumpur, which had been let to the appellants under a lease which had expired. The respondents applied for summary judgment under O 14. The appellants raised three defences that: (a) the premises were rent-controlled premises; (b) the appellants had been deprived of property without compensation; and (c) the refusal to renew the lease was in breach of art 153 of the Federal Constitution. The learned trial judge rejected all three defences saying in his judgment that he was disposing of them before trial under O 25 of the Rules of the Supreme Court 1957. On appeal, it was argued that: (a) the learned judge was wrong in finding that the appellant was not a tenant protected by the provisions of the Control of Rent Act 1966 (Act 56/1966); (b) the learned judge was wrong in holding that the revocation or refusal to renew the relevant leases and terms in favour of the appellant did not offend the provisions of art 153 cll (7) and (8) of the Federal Constitution.

Holding :

Held, (Gill CJ and Ali FJ, Ong Hock Sim FJ dissenting): (1) the land on which the hotel stood was the property of the Federal Government so that it was exempt from the operation of the Control of Rent Act 1966; (2) art 153 of the Federal Constitution has no application to cases of contractual rights.

Digest :

Station Hotels Bhd v Malayan Railway Administration [1977] 1 MLJ 112 Federal Court, Kuala Lumpur (Gill CJ (Malaya).

1755 Property controlled and managed by Railway Administration -- Rent-control legislation inapplicable

10 [1755] RAILWAYS Property controlled and managed by Railway Administration – Rent-control legislation inapplicable – Property of Federal Government

Summary :

This was an appeal from the decision of the Federal Court (1977] 1 MLJ 112), which dismissed the appeal of the appellants from a decision of Chang Min Tat J, as he then was, in the High Court. The learned judge had granted the respondents' application for summary judgment and had ordered the appellants to give up possession of the Station Hotel to the respondents. The issues raised on appeal before the Board were: (a) whether, as the judge and the Federal Court had decided, the premises were exempted from the provisions of the Control of Rent Act 1966 (Act 363), s 4(2)(b), and if so (b) whether the judge was correct in dealing with the respondents' application as a proceeding 'in lieu of demurrer' under O 25 of the Rules of the Supreme Court 1957.

Holding :

Held: (1) if the premises were the property of the Railway Administration, then by virtue of s 4(1A) of the Railway Ordinance 1948, they were exempted from the protection of the Control of Rent Act 1966, as if they had been the property of the government of the Federation; (2) although the premises were under the control and management of the Railway Administration, they remained the property of the Federal Government and as such were outside the Control of Rent Act 1966; (3) assuming the learned judge should have invited an application from the respondents before acting as he did under O 25, the effect of his decision was precisely the same as if he had acceded to the application under O 14 and had entered judgment for the plaintiffs. The fact that he may possibly have adopted an erroneous method did not alter the fact that the result was correct in law, just and expeditious.

Digest :

Station Hotels Bhd v Malayan Railway Administration [1980] 1 MLJ 197 Privy Council Appeal from Malaysia (Lord Diplock, Viscount Dilhorne, Lord Edmund-Davies, Lord Scarman and Lord Lane).

RESTITUTION

1756 Money had and received -- Nature of claim

10 [1756] RESTITUTION Money had and received – Nature of claim

Summary :

Digest :

Kartika Ratna Thahir v PT Pertambangan Minyak dan Gas Bumi Negara (Pertamina) [1994] 3 SLR 257 Court of Appeal, Singapore (Yong Pung How CJ, Karthigesu and LP Thean JJA).

See AGENCY, para 745.

1757 Moneys had and received -- Illegality

10 [1757] RESTITUTION Moneys had and received – Illegality – Whether sole purpose of transaction was to evade Indonesian revenue law – Whether transaction tainted with illegality

Summary :

Digest :

Brooks Exim Pte Ltd v Bhagwandas [1995] 2 SLR 13 Court of Appeal, Singapore (Karthigesu and LP Thean JJA, Goh Joon Seng J).

1758 Moneys had and received -- Tracing

10 [1758] RESTITUTION Moneys had and received – Tracing – Moneys paid out under letter of credit to beneficiary and disbursed to defendants – Fraud by seller – Whether negotiating bank could recover money from defendants

Digest :

Standard Chartered Bank v Sin Chong Hua Electric & Trading Pte Ltd & Ors [1995] 3 SLR 86 High Court, Singapore (Goh Joon Seng J).

See banking para 48.

1759 Moneyshad and received -- Whether direct recipient was a mere agent

10 [1759] RESTITUTION Moneyshad and received – Whether direct recipient was a mere agent – Whether mere payment out by recipient is a good defence – Defence of change of position – Requirement of bona fides – Whether defence available to the respondent

Digest :

Seagate Technology Pte Ltd & Anor v Goh Han Kim [1995] 1 SLR 17; (1995) CSLR XX[877] Court of Appeal, Singapore (Karthigesu and LP Thean JJA and Goh Joon Seng J).

See TORT, para 47.

1760 Quantum meruit -- Work done

10 [1760] RESTITUTION Quantum meruit – Work done – Work done prior to formation of contract – Knowledge of defendant

Digest :

Ayer Hitam Tin Dredging Malaysia Bhd v YC Chin Enterprises Sdn Bhd [1994] 2 MLJ 754 Supreme Court, Malaysia (Abdul Hamid Omar LP, Edgar Joseph Jr and Mohamed Dzaiddin SCJJ).

See CONTRACT, para 2008.

1761 Recovery of part payments -- Termination of contract

10 [1761] RESTITUTION Recovery of part payments – Termination of contract – Payment of instalments during subsistence of contract – Whether payments could be recovered – Whether there was total failure of consideration – Whether partial work performed under contract provided consideration for instalments paid

Digest :

Energy Shipping Co Ltd v UDL Shipping (Singapore) Pte Ltd [1995] 3 SLR 25 Court of Appeal, Singapore (Yong Pung How CJ, Karthigesu and LP Thean JJA).

See CONTRACT, para 2876.

1762 Repayment of deposit -- Moneys had and received

10 [1762] RESTITUTION Repayment of deposit – Moneys had and received – Whether claim void for being tainted with illegality – Whether agreement in contravention of Indonesian revenue law – Knowledge of illegality

Summary :

Regazzoni v KC Sethia [1957] 3 All ER 286 (refd); Foster v Driscoll [1929] 1 KB 470 (refd); Four Seas Communication Bank v Sim See Kee [1990] 3 MLJ 226 (refd); Singapore Finance v Soetanto [1992] 2 SLR 407 (folld); Overseas Union Bank v Chua Kok Jay [1993] 1 SLR 686 (refd); Planche v Fletcher 99 ER 164 (refd); Holman v Johnson (1775) 98 ER 1120 (refd); Lever v Fletcher (1780) (unreported) (refd); James v Catherwood [1814-23] All ER Rep 761 (refd); Government of India v Taylor [1955] AC 491 (refd); Boucher v Lawson 94 ER 1116 (refd); Pellecat v Angell 150 ER 135 (refd); Emperor of Austria v Day (1861) 3 De G F & J 217 (refd); Patriot v Lam Hong Commercial [1980] 1 MLJ 135 (folld); Lorrain Esme Osman v Elders Finance Asia [1992] 1 SLR 369 (refd); Esmail Sahib v Noordin [1951] MLJ 98 (refd); Litchfield v Dreyfus [1906] 1 KB 584 (folld); Subramaniam Dhanapakiam v Ghaanthimathi [1991] 2 MLJ 447 (folld); Newton v Pyke 25 TLR 127 (refd); Edgelow v McElwee [1918] 1 KB 205 (refd); Cheong Kim Hock v Lin Securities [1992] 2 SLR 349 (refd); Chellapah Rasadurai v Selvadurai [1971] 2 MLJ 170 (refd).

Digest :

Bhagwandas v Brooks Exim Pte Ltd [1994] 2 SLR 431 High Court, Singapore (Lai Siu Chiu JC).

1763 Tracing fraud proceeds -- Moneys had and received

10 [1763] RESTITUTION Tracing fraud proceeds – Moneys had and received – Defence of change in position

Summary :

Lonrho v Fayed [1991] 3 WLR 188 (HL); [1989] 2 All ER 65 (CA) (distd); Lonrho v Shell Petroleum Co [1981] 2 All ER 456 (distd); Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1989] 3 All ER 14 (distd); Interschiff Schiffahrtsagentur v Southern Star Shipping & Trading [1984] 1 MLJ 342 (folld); Carman v Edward and Wormald (1841) 9 C & P 596 (not folld); Agip (Africa) v Jackson [1992] 4 All ER 385 (refd); Lipkin Gorman v Karpnale [1991] 2 AC 548 (folld).

Digest :

Seagate Technology (S) Pte Ltd & Anor v Heng Eng Li & Anor [1994] 1 SLR 534 High Court, Singapore (Goh Phai Cheng JC).

Revenue Law

1764 Corporation tax -- Appeal against assessment

10 [1764] REVENUE LAW Corporation tax – Appeal against assessment – Summary judgment obtained against taxpayer – Application for stay of execution of judgment – Whether special circumstances exist justifying stay – Income Tax Act 1967, s 103(1)

Digest :

Government of Malaysia v Datuk Hj Kadir Mohamad Mastan and another application [1993] 3 MLJ 514 High Court, Tawau (Ian Chin JC).

See CIVIL PROCEDURE, para 111.

1765 Corporation tax -- Assessment

10 [1765] REVENUE LAW Corporation tax – Assessment – Companies resident in Sarawak having branches in Sabah and Brunei – Losses in branches – Corporation tax – Assessment – Companies resident in Sarawak having branches in Sabah and Brunei – Losses in branches.

Summary :

This was an appeal from a judgment and order of the Federal Court ([1968] 1 MLJ 144) dismissing an appeal against a judgment of the High Court in Borneo which consolidated and then dismissed the appeal of the appellants against the decision of the Commissioner of Inland Revenue confirming assessments of corporation tax made on the appellants. Each appellant during the relevant tax years carried on a single integrated trade or business of which the control and management was exercised in Sarawak. But the trade or business in each case was carried on also in the States of Sabah and Brunei in which areas the appellants maintained branches. The appellants had agreed with the respondent upon figures for all the years respectively relevant to the appeals which, should the question become material, may be taken as indicating the profit or loss as the case may be of their respective businesses and of the various branches. The agreed figures showed in the case of the first-named appellant that in each of the tax years 1959-1962 inclusive a loss was sustained both in the trade or business as a whole and in each of the branches. But in the tax years 1963-1965 inclusive the appellant made a profit in the trade or business both as a whole and in every branch. In the case of the second appellant, those figures showed that in the year 1962, there was a loss both in the trade or business as a whole and in each branch: in the year 1963 there was an overall loss and a loss in each branch but one in which there was a profit; in the year 1964 there was a profit both overall and in each branch. The appellants were assessed on the footing that only the losses shown in relation to the Sarawak branch in these figures could be carried forward and set off against the profits of the subsequent years. The appellants claimed that because the control and management of their respective trade or business was exercised in Sarawak, the whole of their loss should be carried forward and set off against such profits. The question raised by the appeal was whether in the assessment of corporation tax, the appellants were entitled to carry forward the whole amount of their respective accumulated losses or whether they were entitled to carry forward only so much of those losses as were 'attributable to' their respective activities in Sarawak. The appellants contended that the control and management of the appellants' business in Sarawak was relevantly an activity in Sarawak.

Holding :

Held, dismissing the appeal: (1) the crucial words of s 28 of the Inland Revenue Ordinance 1960, as far as the present appeal is concerned, are 'the amount of such loss attributable to activities in Sarawak and shall be set off, etc'. The Legislature has made it abundantly clear that it does not propose to allow the deduction of the whole of the loss ie in the instant case, the whole of the overall loss. Only some of that loss is to be set off, and be capable of being carried forward. That position is described in unambiguous language. What may be deducted or set off is that part of the overall loss which is 'attributable to activities in Sarawak'. That the appellants have activities in Sarawak and as well activities beyond Sarawak is beyond question. That it is possible to determine albeit in some circumstances with difficulty and perhaps only by approximation the financial result of those activities can scarcely be denied. Indeed, the parties have done so in the agreed figures. The result of applying the ordinance in this case is that only those amounts may be set off which have been designated by the parties in those agreed figures as losses in Sarawak; (2) the operation of s 43 is fully reflected in the computation under s 22 of the profit or of the loss as the case may be. Section 43 cannot be made to do double service either by creating an exception to s 28, which clearly it does not, or by denying any effect to the limitation contained in s 28 as to the portion of an overall loss which may be carried forward; (3) the assessments made on the appellants were rightly made.

Digest :

Borneo Airways Ltd v Commissioner of Inland Revenue, Kuching; Harper Gilfillan (Borneo) Ltd v Same [1969] 2 MLJ 58 Privy Council Appeal from Malaysia (Lord Hodson, Lord Diplock and Sir Garfield Barwick).

1766 Corporation tax -- Companies carrying on trade in Sarawak

10 [1766] REVENUE LAW Corporation tax – Companies carrying on trade in Sarawak – Reserve funds invested outside Sarawak – Whether liable to tax in Sarawak

Summary :

In considering an appeal from an assessment, the respondent stated that he had himself examined the history of the items in dispute in previous years, this history not being given in evidence on the appeal.

Holding :

Held:

Held:

Held: this course resulted in the appellant not knowing the case against it and deprived the appellant of the opportunity to rebut or comment on it. The course adopted was therefore contrary to the principles of natural justice, but, in the circumstances, it was sufficient to allow the appellant to call additional evidence on the appeal from the Commissioner's decision. The appellant made a monthly donation to the Kuching Chinese Schools Fund. When concluding a contract with shippers of goods for the shipping of goods by the appellant's ship, the appellant informed the shippers by letter that these donations would be made and this information had a bearing on the conclusion of the contract. on the evidence, the donations were made: (a) because of the appellant wished to assist Chinese education; (b) because the appellant's chairman desired to encourage other Chinese businessmen to make similar contributions to Chinese education; and (c) to keep the goodwill of the shippers; and they were therefore not outgoing or expenses wholly and exclusively incurred in the production of the profits chargeable. Both appellant companies set up reserve funds outside Sarawak and invested the proceeds at interest. The interest was not received in, or remitted to, Sarawak. In one case, the reserve fund was created for replacement of vessels, and in the other case was used to pay dividend and taxes. the reserve funds being used in conjunction with the carrying on of the appellant's trade in Sarawak, the interest formed part of the profit of that trade, and by virtue of s 43 of the Inland Revenue Ordinance 1960, must be deemed to accrue in Sarawak and was therefore liable to tax in Sarawak.

Digest :

Sarawak Steamship Co Ltd v Commissioner of Inland Revenue [1960-63] SCR 120 Supreme Court, Sarawak, North Borneo and Brunei

1767 Corporation tax -- Contract entered into in Japan by Hong Kong company

10 [1767] REVENUE LAW Corporation tax – Contract entered into in Japan by Hong Kong company – Whether corporation carrying on trade or business in Sarawak

Summary :

The appellant, incorporated in Hong Kong, entered into a contract made in Japan to supply on charter or hire tugs and lighters to a Sarawak company to be used by that company in Sarawak for transport of ore to ocean-going vessels. The 'charter hire' was calculated on the tonnage of ore transported and was paid by the Sarawak company to the appellant in Hong Kong. The appellant had no office or agent in Sarawak and no bank account there. The respondent assessed the appellant to corporation profits tax under s 18(1) of the Inland Revenue Ordinance 1960. The appellant appealed on the ground that it had not carried on a trade in Sarawak.

Holding :

Held, (allowing the appeal): the appellant had not carried on a trade in Sarawak within the meaning of s 18(1).

Digest :

Atlas Stevedoring & Lighterage Co Ltd v Commissioner of Inland Revenue (No 2) [1960-63] SCR 111 Supreme Court, Sarawak, North Borneo and Brunei

1768 Corporation tax -- Notice of Appeal filed within time limit

10 [1768] REVENUE LAW Corporation tax – Notice of Appeal filed within time limit – Additional grounds of appeal filed after that time – Whether permissible under legislation

Summary :

The appellants gave notice of appeal from the decision of the respondent Commissioner within the period of one month prescribed by the Inland Revenue Ordinance 1960, s 83. The notice contained one comprehensive ground of appeal and stated that further grounds would be submitted later. Further grounds were submitted well beyond the statutory time limit. The respondent objected to the further grounds being argued. The appellants relied on the proviso to r 15 of the Magistrates' Court (Civil Appeal) Rules, which rules are made applicable by s 84(7) of the ordinance.

Holding :

Held: (1) by reason of s 83(2), the appellants could not rely upon the additional grounds; (2) the Magistrates' Courts (Civil Appeal) Rules are made applicable only subject to the provisions of the ordinance and proviso to r 15 therefore could not prevail over the statutory provision.

Digest :

Atlas Stevedoring & Lighterage Co Ltd v Commissioner of Inland Revenue (No 1) [1960-63] SCR 108 Supreme Court, Sarawak, North Borneo and Brunei

1769 Development tax -- Company in voluntary liquidation

10 [1769] REVENUE LAW Development tax – Company in voluntary liquidation – Assets not sold five years after decision to liquidate – Whether profits or gains from assets subject to development tax – Income tax – Development tax – Income Tax Ordinance 1947, ss 9, 10 & 33A.

Summary :

This was an application by the liquidator of Kwong Lee Co Ltd (in voluntary liquidation since July 1962) for directions whether the liquidator should pay the sum of RM500 to the Comptroller of Income Tax on account of development tax payable for the year of assessment 1967 in respect of a house (one of the assets of the company) which had not been sold in order that time might run against the chargee of the land and house.

Holding :

Held: so long as the liquidator was trading within the meaning of the Companies Ordinance, the gain or profits from the trade or business would be taxable under s 10 of the Income Tax Ordinance. The development tax was, therefore, payable on the property belonging to the company even though it was in voluntary liquidation.

Digest :

Re Kwong Lee Co Ltd [1968] 2 MLJ 96 High Court, Ipoh (Chang Min Tat J).

1770 Development tax -- Default in payment

10 [1770] REVENUE LAW Development tax – Default in payment – Defence of estoppel – No right of set-off or counterclaim in government proceedings to recover taxes – Doctrine of estoppel not applicable against Crown on revenue matters – Doctrine of estoppel by record not applicable to revenue officers in performing public duties – Government Proceedings Act 1956, s 42(2)(e)(i) – Rules of the High Court 1980, O 73 r 4(1)

Digest :

Government of Malaysia v Sarawak Properties Sdn Bhd [1994] 1 MLJ 14 High Court, Kuching (Chong Siew Fai J).

See REVENUE LAW, para 1931.

1771 Development tax -- Grant of exclusive licence on payment of royalty

10 [1771] REVENUE LAW Development tax – Grant of exclusive licence on payment of royalty – Taxpayer owning patent and trade mark – Whether development tax payable on royalty received by taxpayer – Revenue law – Development tax – Whether development tax payable on royalty received by taxpayer – Taxpayer owning patent and trade mark – Grant of exclusive licence on payment of royalty – Whether taxpayer has development income – Interpretation of taxing statute – Income Tax Ordinance 1967, s 33A – 'Property' – Meaning of – Supplementary Income Tax Act 1967, s 13(2).

Summary :

In this case, the appellant company incorporated in Canada had certain patents and trade marks and they gave an exclusive licence to a company in Malaysia to purchase, manufacture and distribute goods covered by the patent and trade mark. The appellant company received royalties on the sales of the goods manufactured and sold in Malaysia. They were assessed to development tax for the years of assessment 1968-1971. On appeal to the Special Commissioners, it was argued for the Director-General of Inland Revenue that the royalties received by the appellant were development income in respect of the letting of its property within the meaning of s 33A of the Income Tax Ordinance 1967 (Act 53) and s 13 of the Supplementary Income Tax Act 1967 (Act 54). The Special Commissioners found that the appellant company had a development source and development income in respect of trade or business. An appeal by way of case stated was brought to the High Court at the instance of both parties.

Holding :

Held: (1) royalties as distinguished from rents or premiums received for letting out property situated in Malaysia do not constitute a development source or development income under s 33A of the Income Tax Ordinance1967; (2) under s 13(2) of the Supplementary Income Tax Act 1967 however, once a person derives income from property situated in Malaysia by letting it out he has a development source and it did not matter whether he let it out for rent or for royalty; (3) in the present case, the appellant company had a development source for the years of assessment 1968 to 1971 by letting out its property in return for royalty and as such the royalties received during that period are assessable to development tax; (4) the Director-General of Inland Revenue was correct in conceding that the appellant company was not engaged in a trade or business at the relevant period.

Digest :

Chesebrough-Ponds International Ltd v Director-General of Inland Revenue [1976] 2 MLJ 25 High Court, Kuala Lumpur (Mohamed Azmi J).

1772 Economic Incentives Act -- Exemption of export profits

10 [1772] REVENUE LAW Economic Incentives Act – Exemption of export profits – Computation of exempt profits – Whether capital allowances should be deducted in computing exempt profits

Summary :

This was an appeal by the appellant company against the decision of the High Court affirming the order of the Income Tax Board of Review held in favour of the Comptroller of Income Tax. In this case, the appellant company which is engaged in the business of manufacturing dry cell batteries is an export enterprise for purposes of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap 135, 1970 Ed). As an approved export enterprise, it would be exempt from income tax in respect of a portion of its export profit. For each year of assessment the law requires two computations to be made, one under the Incentives Act to determine the exempt profit and the other under the Income Tax Act to determine the taxable income. The dispute in issue concerns the method of computation of the amount of export profit that should qualify for exemption from tax, and in this regard the issue is whether s 32(1) of the Incentives Act makes it mandatory for capital allowances to be deducted in arriving at such exempt profit.

Holding :

Held: the Comptroller's contention that capital allowances should be deducted in arriving at the exempt profit is correct and is in accordance with the provisions of s 32(1).

Digest :

UCS Pte Ltd v Comptroller of Income Tax [1976] 2 MLJ 150 Court of Appeal, Singapore (Wee Chong Jin CJ, Winslow and Tan Ah Tah JJ).

1773 Economic Incentives Act -- Exemption of export profits

10 [1773] REVENUE LAW Economic Incentives Act – Exemption of export profits – Computation of exempt profits – Whether capital allowances should be deducted in computing exempt profits

Summary :

This was an appeal from the decision of the Court of Appeal of Singapore (reported at [1976] 2 MLJ 150). The appellant company was recognized as an export enterprise and was therefore exempt from income tax in respect of a part of their export profits. The Comptroller of Income Tax contended that from the amount of export profits which would qualify for exemption from tax must be deducted the capital allowances and it was only the balance which was exempt from tax. This contention was upheld in the Income Tax Board of Review and in the High Court and the Court of Appeal. The appellants contended that the amount of export profits which were exempt from tax was not affected by the fact that they were entitled to capital allowances.

Holding :

Held, allowing the appeal: (1) s 30(1) of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap 135, 1970 Ed) made it clear that an export enterprise might be entitled to both its full capital allowances and to have some part of its export profits exempted from tax without one affecting the other; (2) the section did not therefore require any deduction to be made from the export profit which qualified for relief.

Digest :

Union Carbide Singapore Pte Ltd v Comptroller of Income Tax [1979] 1 MLJ 275 Privy Council Appeal from Singapore (Viscount Dilhorne, Lord Russell of Killowen and Lord Keith of Kinkel).

1774 Estate duty -- Appeals and objections

10 [1774] REVENUE LAW Estate duty – Appeals and objections – Objection to notice of assessment – Failure to fulfil pre-condition to provide security for estate duty payable before filing application to object – Subsequent filing of summons in chambers for leave to provide security – Whether application to object nullified – Estate Duty Enactment 1941, s 43(1)

Summary :

The respondent - the executor of the estate of the deceased - filed an originating motion (`the application') against the collector of estate duty (`the collector') objecting to the collector's notice of assessment of the amount of estate duty payable by the estate. The collector filed a notice of preliminary objections in which it was contended, inter alia, that: (i) before any application to review his assessment was made to the High Court, the respondent was obliged by s 43(1) of the Estate Duty Enactment 1941 (`the Enactment') to fulfil the pre-condition that the respondent had to provide security for the estate duty payable; and (ii) the application should have been proceeded with by way of a petition under rr 6 and 9 of the Supreme Court (Estate Duty) Rules 1954 (`the 1954 Rules'). Responding to the notice of preliminary objection, the respondent in an attempt to comply with s 43(1) of the Enactment, filed a summons in chambers for leave to provide security as the pre-condition for the hearing of his application. At the hearing of the summons in chambers, the preliminary objections raised in the notice were also argued by the collector. The High Court judge dismissed the collector's preliminary objections and granted leave to the respondent to deposit four title deeds of the lands concerned into court as security before the hearing of the application against the collector's assessment could be heard on its merits, and that the hearing of the application could only be proceeded with after the security deposit had been made. The judge also concluded that the 1954 Rules were not applicable as the title of the Rules and r 6 referred to `Supreme Court' and all proceedings in the Supreme Court. The collector appealed.

Holding :

Held, dismissing the appeal: (1) the subsequent conduct of obtaining the order for security did not have the effect of nullifying the application nor did it bar the respondent from proceeding further with his application, as the merits of the application had not been argued or heard. It would have been otherwise had the application been heard and determined. In any event, the trial judge had taken the precaution of ensuring that the merits of the application would not be heard until after the security ordered to be made had been deposited by the respondent; (2) the trial judge erred in concluding that the 1954 Rules were not applicable in this case. Section 43(1) of the Enactment prescribed that an appeal against the collector's assessment could be challenged `in the manner and on the conditions directed by rules of court'. The only known rules of court relating to estate duty was the 1954 Rules made by the Supreme Court Rules Committee. The Committee had, in its wisdom, gave prominence to the 1954 Rules by referring to them as the Supreme Court (Estate Duty) Rules 1954 in line with the nomenclature of courts then existing in 1954. Usage of the word `Supreme Court' in the 1954 Rules should not narrow the application of the 1954 Rules to matters brought before the Supreme Court only. On the contrary, the 1954 Rules in the words of the second proviso to s43(1) of the Enactment were deemed to be in force with such modifications as may be necessary for the purpose of prescribing the procedure existing in respect of any provision of the Enactment. To that end, the 1954 Rules was applicable to the facts of this case; (3) the fact that the respondent had proceeded by way of an originating motion instead of a petition had not disentitled him to be heard on his application because what was in issue was only the format and not the substance. Rightly, proceedings should commence by way of a petition, but the fact that it did not, did not prejudice the collector in any way. It did not alter the fact that the substance of the application was an objection to the collector's assessment, the very same complaint that would appear had the proceedings been commenced by way of a petition. Since the merits of the application had not yet been heard, and since the preliminary objection was only as to form as opposed to substance, commencing these proceedings in the wrong format was not fatal to the respondent's case.

Digest :

Pemungut Duti Harta Pusaka v Muthukamaru a/l Veeriah (Executor of the estate of Veeriah a/l Savu, deceased) [1997] 1 MLJ 741 Court of Appeal, Kuala Lumpur (Shaik Daud, Siti Norma Yaakob and Mokhtar Sidin JJCA).

1775 Estate duty -- Appeals and objections

10 [1775] REVENUE LAW Estate duty – Appeals and objections – Affidavit – Executor's or administrator's right to inspect – Whether the beneficiary of the estate has a right to inspect

Summary :

The affidavit filed by an executor or administrator for the Commissioner of Estate Duties (commonly called the Collector's Affidavit) is a quasi-confidential document, and there is no law or rule which gives to a beneficiary of the estate the right to inspect the same.

Digest :

Re Neo Guan Chye, deceased [1935] MLJ 271 High Court, Straits Settlements (Terrell J).

1776 Estate duty -- Assessment

10 [1776] REVENUE LAW Estate duty – Assessment – Appeal by person aggrieved – Appeal from the High Court – Whether leave of the High Court or Federal Court is required

Summary :

The question for decision in this appeal was whether or not on the true construction of s 44(2) of the Estate Duty Ordinance the appellant must first obtain the leave of the High Court or the Federal Court before the appellant can be allowed to appeal against the decision of the High Court ([1967] 1 MLJ 50).

Holding :

Held: no appeal shall be allowed in respect of any decision of the High Court upon any application under s 44 except with the leave of the High Court or the Federal Court as provided in s 44(2) of the said ordinance.

Digest :

Re Aw Boon Haw deceased; Aw Sian v The Commissioner of Estate Duties [1967] 2 MLJ 80 Federal Court, Singapore (Wee Chong Jin CJ, Tah Ah Tah FJ and Chua J).

1777 Estate duty -- Assessment

10 [1777] REVENUE LAW Estate duty – Assessment – Application to court for determination of estate duty – Whether court can allow an application without 'security being given to satisfaction of the court' – Discretion of the court

Summary :

The executrix of the will of Aw Boon Haw, deceased, was aggrieved by the notice of assessment of estate duty on the estate and applied to the court under s 44(1) of the Estate Duty Ordinance to determine the estate duty. The amount of estate duty claimed by the Commissioner was S$1,669,000 and the petitioner had paid S$600,000. She applied (a) that no further estate duty or interest be paid by her and no further security be furnished to the Commissioner pending the determination by the court of the estate duty; (b) that if security is required, the court could allow the petitioner to give security for such sum as the court thinks fit.

Holding :

Held: (1) the court has no power to allow an application to be brought under s 44(1) of the Estate Duty Ordinance without security being given to the satisfaction of the court; (2) while the court has a discretion as to the mode in which the security is to be given, it has no discretion as to the amount of the security and such security must be given for the whole or any part of the estate duty which remains unpaid.

Digest :

Re Aw Boon Haw deceased [1967] 1 MLJ 50 High Court, Singapore (Choor Singh J).

1778 Estate duty -- Assessment

10 [1778] REVENUE LAW Estate duty – Assessment – Property forfeited – Forfeiture annulled after deceased's death – Whether property was property passing on death

Summary :

The deceased, together with some others, were co-owners of two pieces of property. On 5 February 1972, the property was forfeited and reverted to the state authority. The deceased passed away on 25 March 1979. Subsequently, the co-owners applied to the state authority and were granted the annulment of the forfeiture of the said property. The plaintiff, as executor, then filed a supplementary estate duty affidavit in respect of the deceased's share in the property. An assessment was made and estate duty levied on the said property. The plaintiff objected to the said assessment on the ground that at the time of the deceased's death, she had no interest in the said property because of the forfeiture.

Holding :

Held, allowing the petition: (1) the fundamental principle of construction of taxing statutes is that they must be interpreted strictly by reference to the words of the Act; (2) ss 2, 4 and 5(i) of the Estate Duty Enactment 1941, read together, provide that estate duty is leviable on property of which the deceased was at the time of his death competent to dispose of. At the time of the deceased's death, the said property remained vested in the state authority and was therefore not a property which the deceased was competent to dispose of at the time of her death.

Digest :

Tan Chin Hock (the Executor of the Estate of Goh Aai, Deceased) v Government of Malaysia & Anor [1992] 3 CLJ 180 High Court, Penang (Mohamed Dzaiddin J).

1779 Estate duty -- Assessment

10 [1779] REVENUE LAW Estate duty – Assessment – Valuation of property – Shares in a private limited company – Restriction on transfer of shares as a factor in valuation

Summary :

The value of the shares for the purpose of estate duty was to be estimated at the price which they would fetch if sold in the open market on the terms that the purchaser should be entitled to be registered and to be regarded as the holder of the shares, and should take and hold them subject to the provisions of the articles of association, including those relating to the alienation and transfer of shares in the company.

Digest :

Anderson v The Commissioner of Estate Duties; Re Hogg, deceased [1939] MLJ 139 Court of Appeal, Straits Settlements (McElwaine CJ, Horne and Mills JJ).

1780 Estate duty -- Avoidance of estate duty scheme

10 [1780] REVENUE LAW Estate duty – Avoidance of estate duty scheme – Illegality – Whether scheme was lawful – What was primary purpose of scheme – Estate Duty Enactment 1941, s 11(i)(b) – Contracts Act 1950 (Act 136), s 24(b)

Summary :

The appellant was the registered owner of land. To avoid paying estate duty upon the appellant's death, the respondent company and a holding company were incorporated. The appellant then entered into an agreement with the respondent company whereby the former would purportedly sell his land to the latter ('the agreement'). The appellant also executed a trust deed whereby the appellant would purportedly hold the land in trust for the respondent company ('the trust deed'). The appellant purportedly sold his land for RM18,970,000 in consideration of allotment to the holding company of 18,970,000 ordinary shares in the respondent company at par value of RM1 each. The holding company then recorded an indebtedness to the appellant of RM18,970,000 in its books. The appellant subsequently purchased with a premium of RM13 each of 1,355,000 RM1 ordinary shares in the holding company. The total value of the shares in the holding company purchased by the appellant was RM18,970,000 and this was set off against the holding company's indebtedness of the same amount to the appellant. The holding company then convened an extraordinary general meeting which converted the 1,355,000 ordinary shares at par value of RM1 each to non-convertible cumulative preference shares of the same par value without voting rights ('the preference shares'). The appellant's wife and children were exclusively allotted ordinary shares in the holding company with voting rights. The respondent company applied to the High Court to order the appellant to transfer the land to the respondent company. The High Court allowed the application and the appellant appealed to the Supreme Court on the ground that the whole scheme was illegal. The issue of illegality was neither pleaded nor raised by the appellant during the trial at the High Court. During the trial, evidence was led by the respondent company to show that the whole scheme was devised by a tax consultant firm for the sole purpose of avoiding estate duty under s 11(i)(b) of the Estate Duty Enactment 1941. The respondent company contended that the scheme was drawn up to avoid and not to evade paying estate duty.

Holding :

Held, allowing the appeal: (1) the courts take judicial notice of illegality of contracts and refuse to enforce them; (2) where the contract is ex facie illegal, judicial notice may be taken at any stage either at the court of first instance or at the appellate stage irrespective of whether illegality is pleaded or not. When the contract is not ex facie illegal, the court can still take judicial notice of the illegality although the illegality is not pleaded, if the facts showing clearly the illegality which have not been pleaded, emerge in evidence in the course of the trial; (3) in this case the documents, including the agreement and the trust deed, were ex facie lawful but the witnesses had given evidence showing that the documents had one purpose in common that was to avoid paying estate duty. Accordingly the facts that emerged in evidence in this case, including affidavit evidence, warranted the court to take judicial notice of the illegality of the scheme although this was not pleaded by the appellant; (4) extrinsic evidence of intention to avoid paying estate duty was admissible under s 92(a) of the Evidence Act 1950 (Act 56) to contradict or vary the agreement because such evidence was relevant for the purpose of considering the question of the illegality of the agreement; (5) while the words 'tax evasion' suggest illegality, the words 'tax avoidance' do not necessarily indicate legitimacy. The real test in any transaction is whether the primary purpose of the transaction is to avoid tax. If it is, the transaction is for an illegal purpose and is of such a nature that, if permitted, it would defeat the tax law in question, coming under s 24(b) of the Contracts Act 1950 (Act 136); (6) the primary purpose of the scheme in this case, was to avoid paying estate duty especially so when the land practically remained with the appellant's wife and children in the sense that they would exclusively control the holding company without having paid one cent towards the purchase of the land. The scheme was therefore illegal and the agreement and the trust deed were thus unenforceable; (7) when the issue of illegality was raised, the court had lifted the corporate veil of the respondent company and the holding company because it was necessary to do so in this case. The courts have a discretion to lift the corporate veil for the purpose of discovering any illegal or improper purpose.

Digest :

Lim Kar Bee v Duofortis Properties (M) Sdn Bhd [1992] 2 MLJ 281 Supreme Court, Malaysia (Harun Hashim, Mohamed Azmi and Peh Swee Chin SCJJ).

1781 Estate duty -- Bad debts

10 [1781] REVENUE LAW Estate duty – Bad debts – Must be brought in for purposes of assessment – May claim for refund of duty when irrecoverable

Digest :

Re Leong Cheong Kweng, deceased [1966] 1 MLJ 155 High Court, Kuala Lumpur (Abdul Aziz J).

See REVENUE LAW, Vol 10, para 1765.

1782 Estate duty -- Deduction

10 [1782] REVENUE LAW Estate duty – Deduction – Person resident in the state

Summary :

The debts due from the deceased which can be deducted under s 31 of the Stamp Enactment 1897 are the debts due or accruing from him at the time of his death. 'Persons resident in the state' include firms carrying on business in the state whether these firms are conducted by their principals or by their agents.

Digest :

Re Veerappa Chetty [1917] 1 FMSLR 339 High Court, Federated Malay States (Earnshaw JC).

Annotation :

[Annotation: This case is no longer law. See s 23 of the Estate Duty Enactment 1941 as amended by LN 233 of 1959 and Act No 29 of 1965.]

1783 Estate duty -- Double duty

10 [1783] REVENUE LAW Estate duty – Double duty – Interest thereon – Joint Hindu family property – Revenue – Estate Duty Enactment 1929, ss 5, 6, 25 & 30 – Gift within three years of death – Double duty – Interest on double duty – Hindu joint family property – Admission by counsel made in error – Withdrawal of admission on appeal – Amendment of plaint – Costs thrown away – Rate of interest on decree.

Summary :

A chettiar died on 4 December 1931 in India. In his lifetime, he was a partner in certain moneylending businesses in Perak and the firms in which he was a partner held moneys belonging to him on thavanai account. In 1925, the deceased who was then in India instructed the agent of the firm in Perak to transfer the moneys on thavanai account to a charity account in the books of the moneylending firms in Ipoh. No money was paid to any charity and no notification of the transfer was given to anyone. In 1928 and 1929, a new firm belonging largely to the deceased's son was commenced and the thavanai moneys in question and also the deceased's shares in the moneylending firms were transferred to charity accounts in the new firm. In the court below, Aitken J held that the deceased had done all he could to transfer the thavanai moneys to charity in his lifetime and that there was an effective gift thereof in the year 1925 and no estate duty was payable thereon but that there was no effective gift of the shares of the deceased in the moneylending firms until the year 1929, and in consequence estate duty was payable thereon. On appeal,

Holding :

Held: (1) there was no effective gift of the thavanai moneys in the year 1925 and the thavanai moneys were given in addition to the shares in the year 1929 within three years of the deceased's death and in consequence, estate duty must be paid on the thavanai moneys in addition to the shares; (2) under s 30 of the Estate Duty Enactment 1929, the court had no discretion whether or not to impose double duty and that double duty must be paid; (3) as regards interest on estate duty the same was payable at 8% per annum on the double duty, not merely on the amount of single duty.

Digest :

State of Perak v Muthukaruppan Chettiar [1938] MLJ 247 High Court, Federated Malay States (Aitken J).

1784 Estate duty -- Foreign debt

10 [1784] REVENUE LAW Estate duty – Foreign debt – Assessment – Estate Duty Enactment (Cap 136), ss 17 & 38 – Debt out of jurisdiction – Section 38: Leave to appeal.

Summary :

Palaniappa Chettiar died domiciled in India. He was the sole owner of a moneylending business carried on in the Federated Malay States. This business owed a debt to another firm carrying on a moneylending business at the same place but owned by an individual Ramanathan Chettiar who had never resided in the Federated Malay States. Both the businesses were carried on by agents.

Holding :

Held: a debt due by the deceased to a firm carrying on business in the Federated Malay States but owned by an individual never resident in the Federated Malay States is a debt due to a person resident out of the Federated Malay States.

Digest :

Re Palaniappa Chettiar, deceased [1946] MLJ 42 Court of Appeal, Federated Malay States (Terrell Ag CJ (FMS).

1785 Estate duty -- Gift of rentals of property

10 [1785] REVENUE LAW Estate duty – Gift of rentals of property – Whether rentals to be included in deceased's estate – Exclusion of donor from enjoyment of gift

Summary :

Prior to his death, D had carried on several businesses, some as sole proprietorships and some in partnership with his children. He purchased the property in question (an office building) for the purpose of his businesses. In December 1971 D admitted his son E as a partner in some of his businesses, followed by his daughter S in 1973. In 1975, a change took place in the manner in which rental for the property was charged. Whereas before each of the businesses was charged a nominal rent for accounting purposes, from 1975 a building account was created. Into this account was paid all the rents for the various offices in the building, including the offices occupied by D's businesses. The rents so received were divided between D and E in the ratio 60:40. Upon D's death, however, estate duty was charged on the 40% of the rental ostensibly paid to E. P, D's widow, challenged the assessment. Section 8(c) of the Estate Duty Act (Cap 137) provides that there is a liability to duty if a person taking a gift does not immediately upon the gift assume bona fide beneficial possession and thereafter retain such possession and enjoyment to the entire exclusion of the donor. The main issue in this case was whether E, the donee, retained bona fide possession and enjoyment of the rents to the entire exclusion of D.

Holding :

Held, dismissing P's claim: (1) D had during his lifetime treated the rents as his own and had confirmed that he was the sole recipient of all the rents. He was assessed to income tax on the basis that he received all the rents of the property; (2) the judge rejected the submission that the income tax returns were wrong and that in truth D had not received the rents. D was a knowledgeable person and he knew what he was doing. What he did was deliberate and intentional, possibly to achieve some tax or other advantage. It was unarguable that no rent had been received by D; (3) during D's lifetime he had also transferred large sums of money from the accounts of the partnership businesses to his own business. The withdrawals from the businesses included E's share of the rental income from the property. It was inferred from this that although D had admitted his children into partnership with him, he nevertheless remained in control of the partnership businesses and property; (4) from the foregoing, it was inferred that D did not divest himself of enjoyment of the rents. The assessment was upheld.

Digest :

Mary Jer Pereira v Attorney General [1988] 3 MLJ 385 High Court, Singapore (Thean J).

1786 Estate duty -- Immovable property

10 [1786] REVENUE LAW Estate duty – Immovable property – Testator holding as trustee – Trust not evidenced by documents of title

Summary :

The managing partner of a business died testate on 21 January 1930. During his lifetime he acquired immovable property for the partnership. This property was registered in the name of the testator and neither the issue copies nor the registers of titles showed that the testator held this property in trust for the partnership. In his will the testator declared that he held this property in trust for the partnership. His executor claimed that the property was exempt from estate duty under s 6 or alternatively under s 7(i) of the Estate Duty Enactment 1929.

Holding :

Held: (1) since the words 'as trustee' were not written on the documents of title, exemption from estate duty could not be claimed under s 6; (2) if the beneficiaries were looked upon as purchasers because the deceased paid for the land out of their money, the purchase was not from the person under whose disposition the property passed and therefore s 7(i) was not applicable.

Digest :

Collector of Estate Duty v Oh Khay Beng [1931-32] FMSLR 108 Court of Appeal, Federated Malay States (Elphinstone CJ, Burton and Mudie JJ).

1787 Estate duty -- Immovable property

10 [1787] REVENUE LAW Estate duty – Immovable property – Testator holding as trustee – Trust not evidenced by documents of title – Revenue – Estate Duty Enactment 1929, ss 6, 14 & 17 – Liability to estate duty of immoveable property held by a deceased person as trustee, when the trust is not evidenced by the documents of title – Property passing on the death of a deceased person.

Summary :

When a person, though the registered proprietor of immovable property, holds such property in trust for a syndicate and firm of which he is a member, but dies without such trust being evidenced as required by the second proviso to s 6 of the Estate Duty Enactment 1929, the Collector of Estate Duty is entitled to treat the immovable property of which he was the registered proprietor as though the deceased was the beneficial owner even though he was only a trustee. Further, though a portion of the immovable property was charged by the deceased to secure money for the syndicate, and the title deeds to the remainder of the immovable property were deposited with a bank to secure an overdraft by the firm, the property which passed on the death of the deceased was the whole of the immovable property, its principal value being estimated as provided for in s 14. Finally, the only deduction was under s 17, in respect of that portion of the charge for which the deceased was personally liable. No deduction could arise in respect of the overdraft, unless the firm failed to pay the debt for which they were primarily liable, and left the bank to claim against the deceased estate.

Digest :

Federated Malay States v Harnam Kaur [1933] MLJ 267; [1933-34] FMSLR 25 Court of Appeal, Federated Malay States (Terrell Ag CJ, Whitley and Gerahty JJ).

1788 Estate duty -- Inter vivos gifts

10 [1788] REVENUE LAW Estate duty – Inter vivos gifts – Partnership – Estate duty – Gifts inter vivos – Entries in account books of partnership in which deceased was a partner – Estate Duty Enactment (Cap 136), s 5 (i) & (iii) – Application to court under s 5 of the Estate Duty Enactment.

Summary :

In the case of the account of partner A, the deceased, a sum of RM75,000 was deducted and three other accounts were opened with credits of RM25,000 each. Interest subsequently credited on those accounts totalling RM39,003. On the question whether they were gifts made to sons of deceased, or whether the accounts remained property of deceased,

Holding :

Held: no gift inter vivos had been made. By the mere opening of accounts by entries in ledger and other books, the deceased had parted with nothing, since he alone had the right to draw money from the deposit accounts and might draw out the whole amount deposited together with the interest without any explanation to anybody.

Digest :

Kumarappa Chettiar v Federated Malay States [1938] MLJ 9 High Court, Federated Malay States (Thomas CJ).

1789 Estate duty -- Inter vivos gifts

10 [1789] REVENUE LAW Estate duty – Inter vivos gifts – Passing of property on death – Whether testator retained property to the entire exclusion of himself as donor – Revenue – Estate duty – Gift inter vivos by testator by way of deposit of moneys in firm – Gifts confirmed by declarations of trust and last will of testator – Passing of property on death – Whether testator as trustee had bona fide possession and enjoyment of property – Whether testator retained property to the entire exclusion of himself as donor – Estate Duty Enactment 1941, s 5(iii).

Summary :

In 1954, the deceased who was a partner in a chettiar firm caused a sum of RM15,000 to be placed on fixed deposit with the firm for each of the four infant children of the petitioner, his adopted son. In 1955, the deceased confirmed the gifts by separate documents referred to as deeds of trust. The deceased died on 20 October 1961 and by his will dated 12 April 1961 the deceased further confirmed the gifts to the infants. The Collector of Estate Duty who is the respondent, claimed and obtained estate duty on the said gifts on the ground that the gifts inter vivos were deemed to be property passing on the death of the deceased within the meaning s 5(iii) of the Estate Duty Enactment 1941. The petitioner maintained that this was wrong because (a) the gifts were perfected by the declarations of trust; (b) bona fide possession and enjoyment of the gifts were assumed by the donees through the donor as trustee immediately on the execution of the declaration of trust; and (c) such possession and enjoyment were thenceforth assumed by the donees through the donor as trustee to the entire exclusion of the donor.

Holding :

Held: the deceased did on the facts of this case assume bona fide possession and enjoyment of the gifts as trustee immediately on the execution of the declarations of trust but as these sums were used generally in the running of the business of the firm of which the deceased was a partner, the deceased could not be said in fact to have been excluded from the property under s 5(iii) of the enactment because as a partner, he enjoyed rights over it. The sums therefore on fixed deposit in the said firm in the names of the infants at the date of the deceased's death were sums which were deemed to pass on the death of the deceased by virtue of the said section of the enactment.

Digest :

Re Muthukaruppan Chettiar, deceased [1965] 2 MLJ 181 High Court, Penang (Hepworth J).

1790 Estate duty -- Inter vivos gifts

10 [1790] REVENUE LAW Estate duty – Inter vivos gifts – Payment of estate duty by mistake – Whether recoverable

Summary :

The appellant claimed: (a) the balance of his share in the estate of his deceased father; and (b) the balance of the sum kept in a trust account by his father in an account under the name of 'Gim Kee'. The respondents the trustees claimed a right to set off and counterclaim based on estate duty paid out of the estate in respect of inter vivos gifts to the appellant and by the third defendant in respect of the share of the appellants in moneys in the Gim Kee account. It was argued on behalf of the appellant that the estate duty was paid without his knowledge, consent or request and that it was paid under a mistake of law and, therefore, not recoverable. It was also contended that the respondents' right to recover the estate duty was barred by limitation. The learned trial judge gave judgment in favour of the respondents on the set off and counterclaim. The appellant appealed.

Holding :

Held: (1) in this case, the finding of the learned trial judge that the appellant knew and acquiesced in the payment of the estate duty must be accepted and therefore on the evidence on this case, even though the payment of estate duty was a mistake of law, the circumstances of the case render it inequitable that the appellant should be allowed to retain the benefit of the payment; (2) the claim of the respondents in this case was not statute-barred; (3) in view of the large number of proceedings relating to the estate and in order to make it clear that the respondents were not liable to make good to the appellant any benefit already received or enjoyed by the appellant, the respondents were entitled to an order granting relief under s 60 of the Trustees Ordinance.

Digest :

Re Estate of Choong Lye Hin, deceased; Choong Gim Guan v Choong Gim Seong [1977] 1 MLJ 96 Federal Court, Penang (Suffian LP, Lee Hun Hoe CJ (Borneo).

1791 Estate duty -- Joint Hindu family property

10 [1791] REVENUE LAW Estate duty – Joint Hindu family property – Interest not 'property passing' on death – Whether liable to estate duty – Estate duty – Hindu undivided family – Mitakshara – Death of one of two surviving coparceners – Assets of family business – Coparcener has no 'share' in family property – Interest not 'property passing' on his death – Not property of which he was 'competent to dispose' – Not interest 'ceasing on his death' – Not liable to estate duty – Ceylon Estate Duty Ordinance, No 8 of 1919, ss 7, 8(1)(a) & (b).

Summary :

In this case, a father and son, who died on 23 February 1938 and 9 July 1934 respectively, were the only living coparceners of a Hindu joint family governed by the Mitakshara school of Hindu law, which had tradings and other interests in Ceylon, India and other countries. On the death of the son, the appellant claimed that the son's 'half share' of the assets of the business carried on by the family in Ceylon was subject to estate duty as being either 'property passing on the death of the deceased' within the meaning of s 7 of the Ceylon Estate Duty Ordinance 1919, or 'property of which the deceased was at the time of his death competent to dispose' or in which he had an interest 'ceasing on his death' to the extent to which a benefit accrued or arose by the cesser of such interest within s 8(1)(a) and (b) respectively, of the ordinance. The Supreme Court of Ceylon held that estate duty was not payable. The Attorney General appealed to the Privy Council.

Holding :

Held: (1) the essential nature of his interest was that whilst the family remained undivided he could not predicate that he had a certain definite share. Although a coparcener had rights, such as those of partition and alienation which gave colour to the view that he had what might be called a 'share' as against that, the karta (head of the family) had the duty, inter alia, to maintain out of the family property not only the coparceners but the female members of the family, and to provide for such family purposes as education, marriage and religious ceremonies. In such circumstances it could not be said that the son had a 'share' of the property which 'passed' on his death within s 7; (2) although the son could at any time during his lifetime have obtained his share of the family property by partition, it would be little less than absurd to stretch 'competency to dispose' in s 8(1)(a) to the extent of assuming that the son would take the necessary preliminary step of separating from his family a step which for economic, sentimental and traditional reasons might be utterly repugnant to him. Further, if and in so far as 'competency to dispose' rested upon a right to obtain partition, the family property included interests outside Ceylon, and it could not be assumed in favour of the appellant that, had there been a partition, any part of the property in Ceylon would have fallen to the share of the son. It could not be said, therefore, that the son was at or immediately before his death 'competent to dispose' of the 'half share' of the Ceylon property of the undivided family; (3) it was a misuse of language to say that a coparcener had a 'half share' or any 'share' of the family property;for s 8(1)(b) to be applicable there must not only be a cesser of interest in property, but also a benefit arising by such cesser; and, further, the benefit, as provided by s 17(6) of the ordinance, must be capable of valuation by reference to the income of the property which the deceased had enjoyed. Here, the son merely had a right to be maintained by the karta out of the common fund to an extent in the karta's absolute discretion, and there was no basis of valuation which in relation to such an 'interest' would conform to the scheme prescribed by s 17(6). Nor, upon a cesser of that 'interest' could a 'benefit' of any value be said to have accrued to the surviving coparcener when the son's 'interest' lapsed. Accordingly, the claim to estate duty could not be upheld either under s 7 or s 8(1)(a) or (b).

Digest :

Attorney General of Ceylon v AR Arunachalam Chettiar & Ors (No 1) [1958] MLJ 39 Privy Council Appeal from Ceylon (Viscount Simonds, Lord Reid, Lord Cohen, Lord Somervell of Harrow and Mr LMD de Silva).

1792 Estate duty -- Joint Hindu family property

10 [1792] REVENUE LAW Estate duty – Joint Hindu family property – Interest of minor – Gift to charity – Estate Duty Enactment (Cap 136), ss 3, 6, 17 & 37 – Rules for regulating procedure under s 37 – Joint Hindu family – Share in partnership in name of Karta belonging to family – Interest of minor son therein – Charity – Gift to – Share of, in partnership – Liability under s 17.

Summary :

Ramasamy Chettiar founded the moneylending business of 'RMATM' and died in 1916 leaving three sons, namely Periya Meyappa, Chinnah Meyappa (hereinafter called the deceased) and Supramaniam, who continued to carry on the business. Periya Meyappa died in 1919 leaving a son, Ramanathan. In 1931 disputes arose, which were settled by the division of the share capital of the business which stood in vilasam of 'RMATAM' into three equal parts, which were then entered under the vilasams of 'RMM', representing Periya Meyappa, 'MRM', representing the deceased, and 'RMSP', representing Supramaniam. The remaining portion of the share capital was entered in the name of 'Pasumadam Charity', while the accretions or profits accruing on this portion of the capital were credited to the same name. The Collector of estate duty, in assessing the estate duty of the deceased (a) disregarded 'Pasumadam Charity' as owning any interest or share capital in the business, with the result that the share of the deceased was assessed on the basis of being one-third of the whole business; (b) disregarded the accretions or profits in the name of 'Pasumadam Charity' as a liability of the business; and (c) treated the whole of the share capital standing in the vilasam 'MRMM' as liable to duty in respect of the estate of the deceased. The plaintiff objected to this basis of assessment on the grounds that: (a) the 'Pasumadam Charity' related to existing entities to whom a complete gift or effective declaration of trust of share capital, and therefore of consequent accretions or profits, has been made; and (b) the deceased and his son (who was also named Meyappa) constituted a joint Hindu family; that the share of the business standing in the vilasam 'MRMM' was the property of this family; and that on the death of the deceased only one-half of this share was subjected to estate duty. At the hearing of the application, the plaintiff asked for leave to amend the originating summons.

Holding :

Held: (1) on the construction of r 4 of the rules regulating the procedure under s 37 of the Estate Duty Enactment (Cap 136), subject to the power of the court to allow an amendment the applicant shall not in his originating summons state, nor at the hearing thereof be allowed to rely upon any grounds of appeal not specifically set forth in the written statement of grounds given to the Collector under r 1; (2) (d) there was no evidence that the share capital was contributed by the charity, and consequently any claim to treat the amounts credited to the charity as a liability did not come, as it must if it is to succeed, within s 17 of the Estate Duty Enactment. Furthermore the charity is resident outside the Federated Malay States, and as such the claim failed under sub-s (2) of the same section; (3) (a) the mere transfer of moneys into the name of a charity in the books of a chettiar firm did not constitute an effective gift to the charity; (b) there was no evidence upon which it could be contended that there was an effective trust in favour of the charity; (c) there was no evidence of any agreement constituting the charity a partner in the business;the son of the deceased being a minor and there being no evidence that he had been admitted to the benefits of or to the partnership standing in the vilasam of 'MRMM', other than such interest as he may have possessed by virtue of being a member of a Hindu joint family. The deceased, as head or karta of the family, had certain exclusive rights over such share, his actions in accordance therewith being binding upon the family. He was a person competent to dispose of property as described by s 3 of the Estate Duty Enactment. He was also a trustee of the family property, which passes on his death unless the trust property has been dealt with as set out in the proviso to s 6 of the Estate Duty Enactment.

Digest :

Meyappa Chettiar v Federated Malay States [1941] MLJ 131 High Court, Federated Malay States (Gordon-Smith J).

1793 Estate duty -- Joint Hindu family property

10 [1793] REVENUE LAW Estate duty – Joint Hindu family property – Mitakshara – Statutory exemption from estate duty – Estate duty – Hindu undivided family – Mitakshara – Death of sole surviving coparcener – Subsequent adoption by widow – Continuity of family preserved – Property in coparcener's hands 'joint property of' the family – Statutory exemption from estate duty – Ceylon Estate Duty Ordinance No 1 of 1938, s 73.

Summary :

In this case, the father, the sole surviving coparcener of a Hindu undivided family, to which also a number of females belonged, died in 1938 shortly after the Ceylon Estate Duty Ordinance 1938 came into operation, which, by s 73, then provided that 'where a member of a Hindu undivided family dies, no estate duty shall be payable on any property proved to the satisfaction of the Commissioner to be the joint property of that Hindu undivided family'. No other coparcener (after the death of his son in 1934) had come into existence during the father's lifetime, but powers of adoption in his deceased son's widow and in his own widows were, in fact, exercised after his death. At all material times the female members of the family had the right of maintenance and other rights which belonged to them as such members. The appellant claimed estate duty in respect of the father's estate in Ceylon. The Supreme Court of Ceylon held that estate duty was not payable. On appeal to the Privy Council,

Holding :

Held: (1) the father was at his death a member of the Hindu undivided family, the same undivided family of which his son, when alive, was a member, and of which the continuity was preserved after the father's death by the adoptions; (2) it was only by analyzing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it could be determined whether the family property could properly be described as 'joint property' of the undivided family. While it might be correct to describe the sole surviving coparcener as the 'owner' of the family property, that which he 'owned' was joint family property. His ownership was such that on the adoption of a son it assumed a different quality; it was such, too, that female members of the family had a right to maintenance out of it. The extent to which he could alienate it was an irrelevant consideration, for if he did not alienate it, it remained joint family property. Accordingly, while the undivided family persisted, the property in the hands of a single coparcener could properly be described as the 'joint property' of that family, and was therefore exempt from estate duty under s 73 of the 1938 Ordinance.

Digest :

Attorney General of Ceylon v AR Arunachalam Chettiar & Ors (No 2) [1958] MLJ 43 Privy Council Appeal from Ceylon (Viscount Simonds, Lord Reid, Lord Cohen, Lord Somervell of Harrow and Mr LMD de Silva).

1794 Estate duty -- Liability

10 [1794] REVENUE LAW Estate duty – Liability – Burden of estate duty

Summary :

This was an application by trustees for directions as to whether estate duty on a particular fund should be borne by the residuary estate. The testator had died in 1924 having devised land to trustees on trust, inter alia, to accumulate the income during certain lives and 21 years, and then to distribute the whole estate. In previous proceedings it had been held that the trust to accumulate was valid only for 21 years from the death of the testator. There was therefore a partial intestacy and the income for the remainder of the period until distribution devolved on the next-of-kin who were the three children of the testator. They have since died and their shares of the income therefore devolved on their respective personal representatives and are subject to the debts due from their estates, including estate duty. These personal representatives contended that the proportion of the estate duty which was levied on the devolved income ought to be charged on the estate of the testator. The surviving beneficiaries under the will resisted this claim.

Holding :

Held: in this case there were in effect two distinct trusts with distinct sets of parties, one arising under the will and the other on the intestacy and the beneficiaries under one of these trusts could not shift the burden of estate duty from them to the beneficiaries under the other trust.

Digest :

Re H Somapah, deceased [1955] MLJ 87 High Court, Singapore (Taylor J).

1795 Estate duty -- Liability

10 [1795] REVENUE LAW Estate duty – Liability – Burden of estate duty – Adjustment – Estate duty wrongly paid out of income instead of capital

Summary :

A testator bequeathed property to his trustees with directions to distribute the income during a fixed period amongst a number of beneficiaries. When any beneficiary of income should die, his share passed to and became divisible amongst the remaining persons entitled to share in such income by way of accretion to their shares in the proportions mentioned in the will. Two of the beneficiaries of income died and their shares became distributable among certain other beneficiaries. The estate duty and the interest thereon were paid out of the income of the trust estate and such payments were duly brought into the accounts which were rendered by the trustees and were filed in court and which were passed by the registrar in the presence of and without objection by certain of the beneficiaries of income. In view of the judgment in Re Syed Hashim, deceased [1936] MLJ 245, it later appeared that the duty ought to have been paid out of the capital from which the life interest which had failed was derived. The trustees applied for directions for the readjustment of the payment of duty in accordance with the judgment.

Holding :

Held: the trustees ought now to adjust the payments in accordance with the correct position and to raise the necessary funds from capital under the directions of the court.

Digest :

Re Thio Tiauw Siat, deceased [1937] MLJ 257 High Court, Straits Settlements (Terrell Ag CJ).

1796 Estate duty -- Liability

10 [1796] REVENUE LAW Estate duty – Liability – Burden of estate duty – Estate duty payable on cesser of life interests – By whom should it be borne – Whether the corpus of the residuary estate or the persons benefiting by the cesser should pay

Summary :

A testator bequeathed property to his trustees with directions to distribute the income during a period represented by 12 named lives and 20 years after the death of the last survivor of them, among many beneficiaries in certain shares of certain percentages of the whole. Upon the death of any beneficiary, provision was made in the will for the redistribution of his share of income among certain others of the beneficiaries. Upon the arrival of the date of distribution provision was made for the conversion into money of all the estate of the testator and for its final distribution. Two of the beneficiaries died and their shares in the income become redistributable among certain other beneficiaries; in consequence of these deaths, estate duty was claimed by the Collector of Estate Duties and was in fact paid. The question thereupon arose whether this money paid for estate duty should be borne by the corpus of the testator's residuary estate or whether it should be borne by the annuitants benefiting by the cesser of the respective life interests.

Holding :

Held: (1) any annuitant benefiting by the cesser of a life interest is not liable to pay any part of the estate duty; (2) the estate duty should be deducted from that portion of the capital of the whole estate which was deemed to have passed upon the cesser of the respective life interests and that no part thereof was payable out of income;on the issue of the interest payable because of the late payment of estate duty, any annuitant benefiting by the cesser of a life interest is liable to refund to the trustees the difference between the total amount of any income paid to him between the date of death of any deceased annuitant and the date on which estate duty is actually paid in connection with such death, and the amount of income which should have been paid to him during that period had the estate duty been paid punctually on the date of such death.

Digest :

Re Syed Hashim bin Kassim, deceased, late Sultan of Siak [1936] MLJ 245 High Court, Singapore (Adrian Clarke J).

1797 Estate duty -- Liability

10 [1797] REVENUE LAW Estate duty – Liability – Burden of estate duty and interest for late payment – Cesser of life interests – Whether to be paid out of the corpus of the estate or out of that portion which passed or was deemed to pass on the death of the life interests

Summary :

The material provisions of the testator's will, made on 30 December 1868, provided that the net income from the testator's freehold and leasehold property was to be divided annually amongst his wife and children and their descendants according to the shares prescribed by Muslim law. The net income was to be distributed during the lifetime of the last survivor of his children and more remote issue living at his death and for 20 years after the death of such survivor. The share of a male child was to be twice that of a female child. After the death of a child, the share payable to the child was to be paid to his or her children, a male child's share being twice that of a female child, and so on from generation to generation. If a descendant of the testator died without children, then his or her share was to devolve upon other descendants of the same degree. At the expiration of the period of 20 years the property was to be sold and the proceeds of sale were to be divided amongst the several persons then entitled to receive the net income in proportion to their several rights and interests therein according to Muslim law. The date of distribution of the corpus was 28 May 1961, and estate duty had been paid on the death of each of the income beneficiaries who had died before 28 May 1961. Upon the trustees taking out a summons for the determination of the question whether estate duty payable on the death prior to 28 May 1961 of an income beneficiary should be borne by that portion of the corpus of the estate accruing to the successors of the deceased income beneficiary or by the general corpus of the estate.

Holding :

Held, where the income of property is divided into shares which are settled on persons in succession, the death of any person entitled to a life interest in any one of such shares, occasions an actual passing under s 6 of the Estate Duty Ordinance (Cap 34). Property which so passes is that proportion of the corpus out of which the life interest was payable and estate duty is payable on the proportion of the corpus which passes. The interest for late payment of estate duty was to be payable by that portion of corpus that passed.

Digest :

Re Syed Ahmed Alsagoff, deceased [1962] MLJ 361 High Court, Singapore (Ambrose J).

Annotation :

[Annotation: On appeal, see Re Syed Ahmed Alsafoff, deceased [1963] MLJ 39. For digest see para 1659.]

1798 Estate duty -- Liability

10 [1798] REVENUE LAW Estate duty – Liability – Burden of estate duty and interest for late payment – Cesser of life interests – Whether to be paid out of the corpus of the estate or out of that portion which passed or was deemed to pass on the death of the life interests

Summary :

On an appeal from the High Court decision, it was contended that the learned judge had erred in deciding that both the estate duty and interest should be borne by that portion of the corpus of the testator's estate which passed upon the deaths of the respective income beneficiaries.

Holding :

Held: the estate duty paid on the death of each of the income beneficiaries who died before 28 May 1961 and interest for late payment of estate duty, should be borne by that portion of the corpus of the testator's estate which passed upon the deaths of the respective income beneficiaries.

Digest :

Re Syed Ahmed Alsagoff, deceased [1963] MLJ 39 Court of Appeal, Singapore (Rose CJ, Tan Ah Tah and Buttrose JJ).

1799 Estate duty -- Liability

10 [1799] REVENUE LAW Estate duty – Liability – Burden of interest for late payment of estate duty – Cesser of life interests – Who should pay this interest – Whether the persons who benefit by the cesser of the life interests should pay

Digest :

Re Syed Hashim bin Kassim, deceased, late Sultan of Siak [1936] MLJ 245 High Court, Straits Settlements (Adrian Clarke J).

See REVENUE LAW, Vol 10, para 1752.

1800 Estate duty -- Liability

10 [1800] REVENUE LAW Estate duty – Liability – Burden of interest for late payment of estate duty – Cesser of life interests – Who should pay this interest – Whether to be paid out of the corpus of the estate or by the income beneficiaries

Summary :

This was an application for decision by the court of certain questions arising out of a settlement made in 1893 under which the income of the settled properties was to be paid for a period approximating to the longest permissible under the rule against perpetuities, to the sons of certain persons for life and after their respective deaths to their respective sons for their lifetimes and so on through remoter degrees of male issue with an ultimate trust of the corpus of the settled properties in favour of other beneficiaries at the end of such period. Under the provisions of Part IV of the Estate Duty Ordinance (Cap 227) when the various income beneficiaries die during the period of the income trust the trustees of the settlement are accountable for estate duty upon the cessor of the various life interests. The estate duty itself is payable out of the corpus of the settled properties. In practice the duty cannot be paid immediately on the death of a beneficiary, and under s 26 of the Estate Duty Ordinance interest upon the amount of the duty runs at the rate of 4% per annum from the date of death until the date of the actual payment of the duty. The trustees applied to the court for directions as to whether they should pay such interest out of the corpus of the settled properties or out of income and as to how the burden of it should be borne as amongst the various beneficiaries under the settlement.

Holding :

Held: (1) no part of the interest so paid should be borne by the income beneficiaries other than those succeeding to the share of the deceased beneficiary in respect of whose death the duty and interest become payable; (2) in cases where the estate duty was paid by the trustees within the period of one year from the date of death of the beneficiary in question, the whole amount of the interest upon it should be paid out of the income of the settled properties and recouped from the income under the settlement of the persons succeeding to the share of the deceased beneficiary; (3)

Held: where the duty has not been paid within one year from the date of the death of the deceased beneficiary in question, the same principles as in (2) above ordinarily apply, but special circumstances might arise which would render it impracticable or inequitable for this course to be followed and every such case would have to be considered on its own merits, as necessary. Under the terms of the settlement the trustees were directed to pay 'all expenses of and incidental to É the execution of the trusts of the settlement' out of the income of the settlement. On the question as to whether the costs of these proceedings should be in the circumstances paid out of corpus or income, although as a general rule such costs would be ordered to be paid out of corpus, in this case in view of the words of the settlement above referred to, the costs should be paid out of income.

Digest :

Re Alkaff Settlement; Alkaff & Ors v Alkaff & Ors [1955] MLJ 82 High Court, Singapore (Taylor J).

1801 Estate duty -- Liability

10 [1801] REVENUE LAW Estate duty – Liability – Estate – Domicile of the deceased – Change of domicile – Intention to abandon domicile must be final and deliberate

Summary :

Where a change of domicile is alleged, it must be proved with perfect clearness that the deceased had at the time of his death, formed a 'fixed and settled purpose', 'a determination', 'a final and deliberate intention' to abandon his existing domicile. There is a presumption in favour of the continuance of an existing domicile and, therefore, the burden of proving a change lies on the plaintiffs. This presumption may have a decisive effect for if the evidence is so conflicting or indeterminate that it is impossible to ascertain with certainty what the resident's intention was, the court will decide in favour of the existing domicile. The intention to abandon a domicile of choice must be unequivocal though the evidence necessary to establish it is less strong than that required to establish the acquisition of such a domicile. Very little reliance can be placed upon declarations of intention, especially if they are oral. Declarations as to intention are rightly regarded in determining the question of a change of domicile, but they must be examined by considering the person to whom, the purpose for which, and the circumstances in which they are made, and they must further be fortified and carried into effect by conduct and action consistent with the declared intention.

Digest :

Re Eu Keng Chee, deceased [1961] MLJ 210 High Court, Singapore (Buttrose J).

Annotation :

[Annotation: Reference may be made to Re MS Nabi, deceased [1965] 1 MLJ 121 and Re Bhagwan Singh, deceased [1964] MLJ 360.]

1802 Estate duty -- Liability

10 [1802] REVENUE LAW Estate duty – Liability – Estate of deceased – 'All property' – Whether this included foreign movables

Summary :

By s 68 of the Ordinance No 103 (Stamps) it is provided that: '(1) In the case of every person dying after the first day of February 1908 there shall, in the cases set out in Art 1 of Sch A, be levied and paid upon the principal value ascertained as hereinafter provided of all property which passes on the death of such person a stamp duty called 'estate duty' at the graduated rates mentioned in that article.' A testator who was a foreign subject domiciled in the Straits Settlements at the date of his death in Singapore left in addition to immovable and movable property in Singapore valuable assets outside Singapore. The Commissioner of Stamps in determining the value of the deceased's estate for purposes of stamp duty included the value of his immovable property situated abroad. The question at issue before the Privy Council was whether estate duty is leviable under the Stamps Ordinance on the deceased's movable property situated in a foreign country.

Holding :

Held, by the Privy Council, reversing the decision of Terrell J of the first instance as unanimously confirmed by the Court of Appeal (Murison CJ, Sproule SPJ and Thorne J): on the true construction of s 68(1) of the ordinance, the words 'all property' included foreign movables of persons dying domiciled in Singapore. The Court of Appeal has power to allow an appeal to His Majesty in Council in a matter under s 80 of the Ordinance No 103 (Stamps). The decision against which the Commissioner of Stamps appealed in this case, not being an award of an administrative character but a judgment made by a court in a civil case within the meaning of the Colonial Charter of 1855 and a final judgment within the meaning of s 1154 of the Civil Procedure Code, the Court of Appeal was wrong in refusing leave to appeal to the Privy Council.

Digest :

Commissioner of Stamps v Oei Tjong Swan & Ors [1933] MLJ 107 Privy Council Appeal from the Straits Settlements (Lord Blanesburgh, Lord Russell of Killowen and Lord MacMillan).

1803 Estate duty -- Liability

10 [1803] REVENUE LAW Estate duty – Liability – Estate of deceased – Property not deemed to pass – Gift made by deceased – Donee not retaining bona fide possession and enjoyment of gift

Digest :

Mary Jer Pereira v Attorney General [1988] 3 MLJ 385 High Court, Singapore (Thean J).

See REVENUE LAW, Vol 10, para 1741.

1804 Estate duty -- Liability

10 [1804] REVENUE LAW Estate duty – Liability – Property passing on death – Identification of the property that passed – Interest ceasing on death – Right to receive an annual sum of varying amounts

Summary :

By a settlement property was conveyed upon trusts for lives in being and a period of 21 years after the death of the survivor. During the period the income was to be used in payment of the expenses of management and thereafter of sacrificial ceremonies. The surplus income was divided into certain shares, one of which was made payable to KST, the deceased, but with a declaration that on his death the portion payable to him should be equally divided among his male children. The settlement made no provision regarding the destination of the corpus at the end of the period.

Holding :

Held: on the death of KST property passed on his death under the provisions of s 68(1) of Ordinance No 103 (Stamps). The property which passed on his death was the right to receive an annual sum of varying amounts. The estate duty ought not to be assessment under the provisions of s 69(1)(b) as upon property in which the deceased had an interest ceasing on his death, but under s 68(1).

Digest :

Re Khaw Sim Tek, deceased [1930] SSLR 81 Court of Appeal, Straits Settlements (Murison CJ, Thorne and Whitley JJ).

1805 Estate duty -- Policies of assurance

10 [1805] REVENUE LAW Estate duty – Policies of assurance – Effected for wife's benefit – Whether moneys received or receivable liable to estate duty – Estate duty – Policies of assurance effected by deceased for benefit of wife – Whether moneys received or receivable are liable to estate duty – Civil Law Act 1956 (Act 67), s 23(1) – Estate Duty Enactment 1941, ss 4 & 5.

Summary :

The deceased had taken out policies of assurance with two insurance companies for the benefit of his wife. The question which arose was whether estate duty was leviable on the moneys received or receivable under the policies of insurance.

Holding :

Held: (1) the policies in this case were effected for the benefit of the wife and came within s 23 of the Civil Law Act 1956 (Act 67); (2) in the case of the first policy it were effected less than five years before his death and moreover the property retained by the wife was not such as to exclude the deceased of any interest as the deceased had the right under the policy to assign, charge, surrender or otherwise deal with the policy without the consent of the beneficiary; (3) in the case of the second policy, although it was effected more than five years before the death of the deceased, it was quite clear that all rights, privileges, and options under the contract were reserved for the deceased alone; (4) the moneys received or receivable under the assurance policies were therefore not exempted from payment of estate duty.

Digest :

Re Kathiravelu, deceased; Sundari v Pemungut Duti Harta Pesaka Tanah Melayu [1973] 2 MLJ 165 High Court, Kuala Lumpur (Abdul Hamid J).

1806 Estate duty -- Procedure

10 [1806] REVENUE LAW Estate duty – Procedure – Objection to notice of assessment – Whether the Supreme Court (Estate Duty) Rules 1954 to apply to High Court cases – Application proceeded by way of originating motion instead of petition – Whether fatal – Supreme Court (Estate Duty) Rules 1954, rr 6 & 9

See revenue law, para IV [62].

Digest :

Pemungut Duti Harta Pusaka v Muthukamaru a/l Veeriah (Executor of the estate of Veeriah a/l Savu, deceased) [1997] 1 MLJ 741 Court of Appeal, Kuala Lumpur (Shaik Daud, Siti Norma Yaakob and Mokhtar Sidin JJCA).

1807 Estate duty -- Procedure

10 [1807] REVENUE LAW Estate duty – Procedure – Schedule of assets – Supplementary schedule attached to grant of letter of administration – Effect of the supplementary schedule issued by the Commissioner of estate duty – Whether this supplementary schedule cured any lack of title in the administrator

Summary :

The deceased died in a road accident while travelling in a motor car driven by his brother, the defendant. The deceased's parents, the plaintiffs, claimed against the defendant as the administrators of the estate of the deceased for damages for negligence for the benefit of the estate under s 8 of the Civil Law Act (Cap 30, 1970 Ed) and for the benefit of themselves as dependants of the deceased under s 12 of the Act. On 22 October 1981, the district court made an order for the grant to the plaintiffs of letters of administration of the estate of the deceased. On 2 February 1982 the grant was extracted. The schedule of assets attached to the grant contains four items of assets of the deceased passing on his death, including a claim for loss of expectation of life, but does not contain a claim for damages for loss of earnings for the 'lost years', which is the main issue in this case. The plaintiff took out the writ on 7 October 1982, claiming, inter alia, loss of earnings for the lost years. Subsequent to this, the plaintiffs filed a corrective affidavit with the Commissioner of Estate Duties in respect of the claim for the loss of earnings for the lost years, and a supplementary schedule of assets containing such a claim was issued by the Commissioner. Judgment in default of defence was entered against the defendant. The senior assistant registrar awarded, inter alia, a sum of S$75,000 for loss of earnings for the lost years based on a multiplier of 18 and a multiplicand of S$350 per month. The defendant appealed against this part of the award on two grounds: (a) the grant of letters of administration at the time the writ was issued did not give the plaintiffs the authority to sue for loss of earnings for the lost years because at that time there was no schedule of assets attached to the grant containing such a claim. The supplementary schedule issued by the Commissioner subsequently did not cure the initial absence or lack of title in suing for such a claim; (b) the damages awarded were excessive.

Holding :

Held, dismissing the appeal: (1) nor does it exclude any specific property therefrom. Nowhere in s 38 or elsewhere in the Probate and Administration Act is it provided that a grant of representation shall be issued only in respect of those assets appearing in the said schedule or that a grant is only effective in authorizing the representative to deal with only those assets and no other; (2) the purpose of s 38 of the Estate Duty Act (Cap 137, 1970 Ed) is to ensure that all estate duties payable on property passing or deemed to pass on death are paid or secured prior to the issue of a grant of representation; (3) it is the grant of letters of administration, not the schedule of assets, that confers a title on the plaintiffs in their representative capacity. Under s 37 of the Probate and Administration Act (Cap 23, 1970 Ed), where a person dies intestate his movable and immovable property vests in the Chief Justice and on the making of an order for a grant of administration by the court all such property vests in the administrator. The grant does not limit the authority or powers of the administrator to any specific property;on the question of quantum of damages, the amount awarded is not grossly or manifestly excessive.

Digest :

Kwa Hock Kee & Anor v Kwa Kian Seng [1985] 2 MLJ 283 High Court, Singapore (Thean J).

1808 Estate duty -- Property passing on death

10 [1808] REVENUE LAW Estate duty – Property passing on death – No declaration of trust as to balance of original chargee's interest in charge – Liability of transferee's estate to estate duty – Estate Duty Enactment (Cap 136), ss 4, 5 & 6 – Transfer of charge to secure less than amount due on charge – No declaration of trust as to balance – Liability of transferee's estate to estate duty.

Summary :

The original chargee transferred the whole of his interest (RM30,000) in a charge to a bank to secure his overdraft with that bank. The overdraft standing at RM12,000, the bank transferred the whole of the interest of the original chargee to the deceased, and it was admitted that the deceased's beneficial interest in the charge was to secure the repayment of this sum of RM12,000 only. The deceased made no declaration of trust in respect of the balance of the original chargee's interest in the charge.

Holding :

Held: when the deceased died he was the registered proprietor of an interest in a charge to the extent of RM30,000. Although his beneficial interest was for a lesser amount, the whole of the registered interest was property passing on his death. Once property is included in that passing on the death of the deceased duty is payable unless it can be shown to come within an exception. The exception created by s 6 of the Estate Duty Enactment (Cap 136) did not apply because no declaration of trust had been made. The deceased's estate was therefore liable to estate duty in respect of the whole of the interest, namely RM30,000, registered in the name of the deceased.

Digest :

Will and Lewis v Collector of Estate Duty FMS [1946] MLJ 14 High Court, Federated Malay States (Murray-Aynsley J).

1809 Estate duty -- Release from estate duty

10 [1809] REVENUE LAW Estate duty – Release from estate duty – Release after 12 years from death of subject – Purchaser of land may rely on release

Summary :

A agreed to purchase a piece of land from R. The sale was subject to the Law Society's Conditions of Sale 1981. In the course of investigating title, A's solicitors discovered that the land had originally been held by CKL and GCK as joint tenants. It had subsequently been conveyed by GCK as sole owner to R. The recital to the indenture of assignment stated that CKL had died and that GCK had become entitled to the property. Requisition 15 required that the grant of probate/letters of administration in respect of the estate of CKL be registered. R's solicitors declined to do so. Correspondence between the parties ensued, as a result of which the completion of the sale took place late. At the trial of the action the trial judge decided that A were not entitled to insist on the grant of probate/letters of administration. He ordered A to pay liquidated damages for late completion and the costs of the action ([1989] 1 MLJ 272). A appealed.

Holding :

Held, dismissing the appeal: (1) a grant of probate or letters of administration is not the only way of proving the death of a joint tenant. If some other acceptable evidence of death and release from estate duty liability can be produced by the vendor, the purchaser cannot insist on the grant of probate/letters of administration; (2) purchasers are bound and limited by their solicitors' statement in writing of their objections or requisitions. Under the Law Society's Conditions of Sale 1981 failure to state objections and requisitions within the time limited amounts to waiver of such objections; (3) requisition 15 served by A's solicitors did not ask for proof of the death of CKL. They specifically demanded production of the grant of probate/letters of administration. They were not entitled to rely on any other objections to title; (4) a certified true copy of a death certificate is acceptable evidence of the death of a joint tenant which vests the property in the survivor by virtue of the rule of survivorship. It is the primary and best evidence and admissible as such in court. A's solicitors could have accepted the death certificate as evidence of CKL's death; (5) because of the way the requisitions were worded, A could not rely on the objection that no satisfactory evidence had been produced that the property was free from the first charge imposed by the Estate Duty Act (Cap 96); (6) in any case, the charge would have been released after 12 years from the death of CKL vis-a-vis a purchaser for valuable consideration. A was therefore not justified in completing late and the appeal was dismissed.

Digest :

Chia Kay Heng & Anor v Chia Kim Siah & Anor [1990] 3 MLJ 193 Court of Appeal, Singapore (Wee Chong Jin CJ, Lai Kew Chai and Yong Pung How JJ).

1810 Estate duty -- Shares

10 [1810] REVENUE LAW Estate duty – Shares – Collector's valuation of shares in private company – Whether valuation excessive

Summary :

This was an appeal against the valuation of the Collector for purposes of estate duty of certain properties belonging to the estate of the deceased. Among the assets were shares in a private company and credit balances with a private company.

Holding :

Held: (1) the assessment of the value of the shares in a private company depends on the estimate of the price which in the opinion of the Collector such property would fetch in the open market at the time of the death of the deceased and the court was not prepared to say that the valuation placed by the Collector on the shares of the company in this case was manifestly excessive; (2) debts, even if they are likely to be bad must be brought in for the purposes of assessment of estate duty; if they prove irrecoverable a claim may be made for refund of duty.

Digest :

Re Leong Cheong Kweng, deceased [1966] 1 MLJ 155 High Court, Kuala Lumpur (Abdul Aziz J).

1811 Estate duty -- Shares

10 [1811] REVENUE LAW Estate duty – Shares – Collector's valuation of shares in private company – Whether valuation excessive – Estate Duty Enactment 1941 – Private limited company – Valuation of shares on death of shareholder.

Summary :

The main question raised on this appeal was the value of the ordinary shares of Boustead & Co Ltd, a private company registered in Malaya, on 4 February 1948 the date of the death of the deceased. At the trial, the learned judge fixed the value at RM150. The appellant appealed against this finding.

Holding :

Held: (1) in estimating the value of the shares the court must take into consideration every advantage and disadvantage to the company and every benefit and clog attaching to the shares as well as the nature of the particular company; (2) in the special circumstances of the private company in this case no normal investor would be prepared to pay more than RM100 for a share and therefore the value to be placed on the shares for the purpose of estate duty should be RM100.

Digest :

Re JB Young, deceased; JC Witt & Anor v Collector of Estate Duty [1955] MLJ 108 Court of Appeal, Federation of Malaya (Mathew CJ, Murray-Aynsley CJ (S).

1812 Estate duty -- Trust to accumulate under a will

10 [1812] REVENUE LAW Estate duty – Trust to accumulate under a will – Partial intestacy – Whether estate duty payable on death of next-of-kin should be borne by residuary estate

Digest :

Re H Somapah, deceased [1955] MLJ 87 High Court, Singapore (Taylor J).

See REVENUE LAW, Vol 10, para 1750.

1813 Estate duty -- Valuation of Collector

10 [1813] REVENUE LAW Estate duty – Valuation of Collector – Valuation of debts to estate and shares in a private company – Appeal – Estate duty – Valuation of collector – Appeal – Valuation of shares in a private company – Valuation of debts to estate – Estate Duty Enactment 1941.

Digest :

Re Leong Cheong Kweng, deceased [1966] 1 MLJ 155 High Court, Kuala Lumpur (Abdul Aziz J).

See REVENUE LAW, Vol 10, para 1765.

1814 Goods and services tax -- Sale of commercial property

10 [1814] REVENUE LAW Goods and services tax – Sale of commercial property – Whether vendor or ultimate purchasers of property had liability to pay goods and services tax where contract of sale was silent on the point – Goods and Services Tax Act (Cap 117A, 1994 Ed), ss 38 & 40 – Law Society's Conditions of Sale, condition 12

Digest :

Kuo Ching Yun & Anor v H & L Investments Holding Pte Ltd [1996] 1 SLR 47 High Court, Singapore (Christopher Lau JC).

See LAND LAW, para 1297.

1815 Goods and services tax -- Vendor forgetting to include tax on purchase price of property before completion of sale

10 [1815] REVENUE LAW Goods and services tax – Vendor forgetting to include tax on purchase price of property before completion of sale – Claim for GST after completion of transaction – Whether purchaser liable – Goods and Services Tax Act (Cap 117A, 1994 Ed), ss 4, 8(1), (2), (3), 11(2)(b), 40, Second & Fourth Schedules

Summary :

The plaintiffs on 3 March 1994 granted the defendants, an Indonesian citizen, an option to purchase certain property. The option fee was 1% of the sale price. The option was duly exercised by the defendant on 17 March 1994 upon payment of a further sum to the plaintiffs, being the equivalent of 9% of the sale price. This sum was held by the plaintiffs' solicitors as stakeholders pursuant to cl 9 of the option. The said option did not provide for payment of goods and services tax (GST) as at that point in time, no such tax was in existence. The Goods and Services Tax Act (Cap 117A, 1994 Ed) (the Act) only came into force on 1 April 1994 after the exercise of the option, but prior to the completion of the transaction. The completion of the sale and purchase took place on 9 June 1994 when the balance of the purchase price for the property was paid by the defendant to the plaintiffs together with the 9% of the purchase price held by the plaintiffs as stakeholders. As the Act had been newly enacted, the parties overlooked the GST payable and did not take it into account. After completion of the sale of the property, the plaintiffs discovered the oversight and wrote a letter to the defendant, dated 1 July 1994, to inform the defendant that GST was payable and demanded payment of the same. The plaintiffs originally demanded S$46,144.54 as GST, based on 90% of the purchase price (as 10% had been paid to the plaintiffs before the Act came into force). Later, the plaintiffs claimed, in the alternative, S$50,758.99 as GST, based on 99% of the purchase price, as the moneys held by the plaintiffs' solicitors as stakeholders were only released after 1 April 1994. The defendant refused to pay the GST and the plaintiffs, therefore, took out the originating summons for the determination of the liability of the defendant with respect to GST.

Holding :

Held, dismissing the plaintiffs' claim: (1) the sale of a commercial property was clearly a taxable supply as it did not fall within the ambit of the Fourth Schedule of the Act; (2) accordingly, in this case, GST was due at the time of the supply, which pursuant to s 11(2)(b) was the time when the property was made available to the person to whom it was supplied, namely, the date of completion; (3) in this case, the vendor ; (4) section 40 conferred a right on the supplier, where there had been a change in the tax charged between the making of the contract and the provision of goods and services, to add to the agreed price in the contract the amount of GST payable and thus pass on the burden of the tax to the person supplied; (5) however, the section did not automatically transfer the burden of GST to the person supplied as s 40 stated that the supplier may add to the agreed price in the contract the amount of that tax. This clearly indicated that the supplier had to make an election whether to add the GST to the price of the goods or services supplied; (6) in the present case, although the right of the plaintiffs to add to the price the amount of the tax was a statutory right, and the obligation to pay the purchase price was not one that emerged upon conveyance, nevertheless, it could not have been the intention of Parliament that s 40 should allow the supplier an indefinite period of time to decide whether to add GST to the agreed price, a fortiori, to request the purchaser to pay GST on a transaction after it had been completed; (7) it was in the public interest that there ought to be finality and certainty in business and commercial affairs and an end party ought not to be open to future uncertain liabilities when performance of the contract has been completed and the purchase price discharged; (8) from the wording of s 8(3) of the Act, it was clear that GST was the liability of the person making the supply;accordingly, since the plaintiffs had, in this case, failed to inform the defendant that they would be adding GST to the purchase price before the transaction was completed, they could not now be allowed to claim payment of GST from the defendant.

Digest :

Tropical Properties & Trading Pte Ltd v Suganung Tasani [1996] 1 SLR 677 High Court, Singapore (TS Sinnathuray J).

1816 Income tax -- 'Comptroller', definition of

10 [1816] REVENUE LAW Income tax – 'Comptroller', definition of – Whether includes a Deputy or an Assistant Comptroller

Summary :

The debtor raised the objection that the notice demanded payment of a sum in excess of what was actually due and some technical objections as to the form of the notice.

Holding :

Held: (1) after the assessment officer of the Inland Revenue Department had clearly explained the whole tax position and what was due by the debtor, it was apparent that there was no excess demand which would render the notice invalid; (2) the objections as to the form raised was unfounded in fact and law.

Digest :

Re Rengasamy Pillai; ex parte Comptroller of Income Tax, Kuala Lumpur [1968] 1 MLJ 103 High Court, Penang (Chang Min Tat J).

1817 Income tax -- 'Interest', meaning of

10 [1817] REVENUE LAW Income tax – 'Interest', meaning of – Question of law – Whether interest charged on instalment payments deductible – Revenue law – Assignment of rights and liabilities under timber concession – Consideration payable by instalments – Interest charged – Whether interest deductible – Income Tax Act 1967, ss 33(1) & 39.

Summary :

In this case, the Sabah Foundation had assigned its rights and liabilities under a timber concession obtained from the Sabah Government to the respondent company. The consideration was RM250,000,000 payable by 50 biennial instalments. The respondent company was also required to pay interest at the rate of 7% per annum from the date of the agreement on the sum of RM250,000,000 or such part thereof as was outstanding. In computing the income liable to tax for the years of assessment 1972-1974 the Director of Inland Revenue, Sabah, did not allow deduction for the interest paid in accordance with the agreement and for forest allowances on the capital expenditure incurred on the construction of the log pond and buildings. On appeal, the Special Commissioners allowed the deduction for forest allowance but rejected the deduction for interest. The learned judge on a case stated disagreed with them in respect of the deduction of interest and allowed the deduction. The appellants appealed.

Holding :

Held: (1) interest on a debt left owing, as opposed to a debt for money borrowed, cannot be deducted under s 23(1)(a) of the Income Tax Act 1967 (Act 53) but can be so deducted under the opening part of s 33(1) as one of the 'outgoings and expenses wholly and exclusively incurred during the period by that person in the production of gross income from that source. In this case the source was the taxpayer's timber trade; (2) the interest which is such an outgoing or expense would nevertheless be disallowed if it was caught by s 39 of the Act. It was not so caught in this case and therefore it is not disallowed by s 39(1)(g); (3) the question of what the statute means by 'interest' is a question of law. In this case, the facts were not disputed either by the taxpayer or the learned judge. They accepted that the finding of fact is not subject to appeal but in this case it is not simply a question of fact; (4) none of the matters raised was a question of fact on which the determination of the Commissioners was conclusive. All of them presented questions of law which are open to review by the court on appeal, the facts being agreed to by the parties before the Commissioners; (5) the learned judge was right in this case in holding the deduction should be allowed for the interest payments and the appeal must be dismissed.

Digest :

Director General of Inland Revenue v Rakyat Berjaya Sdn Bhd [1984] 1 MLJ 248 Federal Court, Kota Kinabalu (Lee Hun Hoe CJ (Borneo).

1818 Income tax -- Additional assessment

10 [1818] REVENUE LAW Income tax – Additional assessment – Appeal by taxpayer – Whether leave to sign final judgment should be given – Income tax – Leave to sign final judgment given – Appeal by taxpayer – Effect of legislation – Income Tax Ordinance 1947, ss 72(1) & 81 – Income Tax (Amendment) Act 1960, s 2 – Income Tax Act 1967, ss 2, 96, 97(1), 99, 103(1) & (4), 106, 142(1) & 143 – Rules of the Supreme Court, O 14 r 1 – Income Tax Act 1967 – Meaning of 'assessment' and 'sufficient' – Income Tax Act 1967, ss 2 & 142(1).

Summary :

The respondent/plaintiff was granted leave to sign final judgment against the appellant/defendant for RM692,722.91 being income tax due for the Years of Assessment 1961 Addition to 1971 Additional (inclusive) and 10% increase levied under s 103(4) of the Income Tax Act 1967 (Act 53). As required by the relevant provisions of the Income Tax Ordinance 1947 and the Income Tax Act 1967, the respondent had notified the appellant of the amount of chargeable income, the tax thereon, the place at which payment was to be made, the penalty for late payment increase and his rights of appeal. Notwithstanding these, the appellant failed to pay the said sum within the prescribed period. On the respondent's application, leave to sign final judgment was granted by the senior assistant registrar, High Court, and he appealed against the latter's decision.

Holding :

Held, dismissing the appeal: (1) the effect of the relevant provisions of the Income Tax Act 1967 is that on the service of a notice of assessment on the person assessed the tax payable under the assessment becomes due and payable at the place specified in the notice, whether or not the person appeals against the assessment, and the tax can then be recovered by the government by civil proceedings as a debt due to the government. On such civil proceedings brought by the government, the court has no power to entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased; (2) the provision of s 103 is not confined only to one assessment or a composite assessment. The word 'assessment'Êis defined in s 2 of the 1967 Act to mean any assessment; (3) in the context of ss 103(1), 106(1) & (3), 143(1) of the Income Tax Act 1967 the word 'sufficient' in s 142(1) means that it is conclusive for the purpose of O 14 r 1.

Digest :

Government of Malaysia v Lin Ting Hsi [1976] 2 MLJ 141 High Court, Ipoh (Hashim Yeop A Sani J).

1819 Income tax -- Additional assessment

10 [1819] REVENUE LAW Income tax – Additional assessment – Application for leave to enter final judgment – Whether taxing ultra vires the Federal Constitution – Income tax – Performance of executive duties – Whether taxing ultra vires the Constitution – Income Tax Act 1967 (Act 53), s 106(3).

Summary :

The plaintiff applied for leave to enter summary judgment in a suit for income and additional taxes on notices duly made under the Income Tax Act 1967 (Act 53). The defendant objected to the application on the ground that the action was ultra vires the Constitution.

Holding :

Held: income tax is deprivation of property in accordance with the law, for that the Income Tax Act was duly enacted. Taxing cannot therefore be ultra vires the Constitution.

Digest :

Government of Malaysia v Arumugam Pillai [1974] 1 MLJ 127 High Court, Penang (Chang Min Tat J).

1820 Income tax -- Additional assessment

10 [1820] REVENUE LAW Income tax – Additional assessment – Application for leave to sign final judgment – Whether court can entertain plea that additional tax incorrectly assessed – Income tax – Assessment of tax and additional tax for 12 years – Suit for payment of tax – Application to sign final judgment – Rules of the Supreme Court 1957, O 14 – Income Tax Act 1967, ss 103(1) and 106.

Summary :

In this case the defendant had been assessed to pay income tax and additional income tax for the years 1962 to 1973 and on his failure to pay the amount claimed, the government instituted a suit against the defendant and applied for leave to enter final judgment. The assistant registrar gave leave to the plaintiff and the defendant appealed.

Holding :

Held, dismissing the appeal: in this case the court could not entertain any plea that the tax or additional tax was not correctly assessed and therefore the leave to sign final judgment must be confirmed.

Digest :

Government of Malaysia v Abdul Rahman [1975] 1 MLJ 276 High Court, Ipoh (Arulanandom J).

1821 Income tax -- Additional assessment

10 [1821] REVENUE LAW Income tax – Additional assessment – Application for leave to sign final judgment – Whether court can entertain plea that additional tax incorrectly assessed – Income tax – Claim for income tax – Application for leave to sign final judgment – Whether taxing ultra vires the Constitution – Federal Constitution, art 13 – Income Tax Act 1967, s 106(3).

Summary :

This was an appeal against the judgment of Chang Min Tat J ([1974] 1 MLJ 127). Chang Min Tat J held that the court had to grant the application of the government to sign final judgment in the claim for income tax and he held further that the provisions in the Income Tax Act 1967 (Act 53) were not ultra vires the Constitution. The appellant appealed.

Holding :

Held, dismissing the appeal: (1) the effect of the relevant provisions of the Income Tax Act is that on service of a notice of assessment on the person assessed to tax the tax payable under the assessment becomes due and payable, whether or not the person appeals against the assessment, which tax can then be recovered by the government by civil proceedings as a debt due to the government and that on such civil proceedings being brought by the government the court has no power to entertain any plea that the amount of the tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased; (2) the ground of appeal that the learned judge erred in law on the construction of the term 'in accordance with law' in art 13(1) of the Constitution is untenable. Whenever a competent legislature has enacted a law in the exercise of any of its legislative powers, destroying or otherwise depriving a person of his property, the latter is precluded from questioning its reasonableness by invoking art 13(1) of the Constitution.

Digest :

Arumugam Pillai v Government of Malaysia [1975] 2 MLJ 29 Federal Court, Penang (Gill CJ (Malaya).

1822 Income tax -- Additional assessment

10 [1822] REVENUE LAW Income tax – Additional assessment – Best judgment assessment made by Director General of Inland Revenue – Onus on taxpayer to prove that additional assessment excessive or erroneous – Revenue law – Income tax – Notices of additional assessment of income tax – Application for order of certiorari to quash the said notices of additional assessment – Whether certiorari would issue where there is alternative remedy of appeal open – Best judgment assessment made by the Director General of Inland Revenue – Onus to prove that additional assessments are excessive or erroneous is on taxpayer – Allegation of malicious and vindictive acts not proved – Income Tax Act 1967, ss 81, 91(1), 103(3) & 120.

Summary :

In this case, the respondent had received notices of additional assessment for income tax for the years 1979 to 1984 inclusive. The respondent's accountant wrote to the Department of Inland Revenue, Ipoh, informing them of the respondent's desire to appeal against the additional assessments. However, the respondent filed a notice of motion for an order of certiorari to quash the said notices of additional assessment. The grounds relied on by the respondent were 'that the notices of assessment are based on conjecture and have been issued maliciously and as a vindictive act'. The learned judge of the High Court granted the respondent's application. The appellants appealed.

Holding :

Held, allowing the appeal: (1) the discretion is still with the courts to act by way of judicial review but where there is an appeal provision available to the applicant, certiorari should not normally issue unless there is shown a clear lack of jurisdiction or a blatant failure to perform some statutory duty or in appropriate cases a serious breach of the principles of natural justice; (2) in this case as the Inland Revenue Department was unable to make a proper assessment of the respondent's tax because of the failure of the respondent to comply with the various notices issued to him, the department was entitled to compute the tax under s 91(1) of the Income Tax Act 1967 (Act 53), according to the best of the Director General's judgment; (3) the onus of proving to the Special Commissioners on appeal that the additional assessments are excessive or erroneous lies on the respondent; (4) there was no evidence to support the allegations of malice and vindictiveness. The onus is on the respondent to prove the allegations he made in his statement in support of the notice of motion and in this case the respondent had not discharged the burden.

Digest :

Government of Malaysia & Anor v Jagdis Singh [1987] 2 MLJ 185 Supreme Court, Kuala Lumpur (Seah, Hashim Yeop A Sani and Wan Hamzah SCJJ).

1823 Income tax -- Additional assessment

10 [1823] REVENUE LAW Income tax – Additional assessment – Extending over period of 13 years – Whether statute-barred – Income Tax Act 1967 (Act 53), s 19(1) – Limitation Ordinance 1953, s 33

Summary :

P made additional assessments in respect of D's income extending over a period of 13 years. D contended that s 91(1) of the Income Tax Act 1967 (Act 53) precluded the tax department from enforcing any claim extending over the period of 12 years.

Holding :

Held, dismissing the appeal: (1) s 91(1) of the Income Tax Act 1967 (Act 53) must be read together with s 33 of the Limitation Ordinance 1953 which, inter alia, provides that limitation will not apply to any proceedings by the government for the recovery of tax; (2) reading these sections as a whole, the learned judge was of the view that s 91(1) is permissive rather than restrictive in nature and therefore not intended to be a limitation, the period of 12 years mentioned therein having been rendered irrelevant by the proviso to s 33 of the Limitation Ordinance 1953; (3) in any case, action taken by the Revenue can go beyond this period if it can be established that fraud or wilful default has been committed by or on behalf of any person or that person has been negligent. As D, in the instant case, had not refuted the Revenue's allegation in the statement of claim that he had neglected to pay the tax, the Director-General of Inland Revenue was, accordingly, authorized to make the assessment in question.

Digest :

Government of Malaysia v Chia Kee Teck [1989] 1 MLJ 197 High Court, Malacca (Wan Yahya J).

1824 Income tax -- Additional assessment

10 [1824] REVENUE LAW Income tax – Additional assessment – Failure to appeal against decision of Income Tax Board of Review – Whether assessment made final and conclusive – Practice and procedure – Affidavit – Whether affidavit of merit – Failure to appeal against Income Tax Board of Review's decision – Additional assessment – Whether illegal or ultra vires – Whether final and conclusive – Income Tax Ordinance 1947, s 80.

Summary :

This was an application by the defendant by way of motion for an order that the judgment entered against him in default of his delivery of defence be set aside as he had a good defence on the merits and that the additional assessment raised against him was illegal and void. The defendant further requested that the judgment be set aside so that he could file a declaratory suit.

Holding :

Held: under s 80 of the Income Tax Ordinance 1947 where the amount of such chargeable income has been determined on objection or appeal, the assessment as made was final and conclusive for all purposes of the ordinance as regards the amount of such chargeable income.

Digest :

Comptroller of Income Tax v Lee Beng Kong [1962] MLJ 60 High Court, Alor Star (Syed Sheh Barakbah J).

1825 Income tax -- Additional assessment

10 [1825] REVENUE LAW Income tax – Additional assessment – Interlocutory judgment – Res judicata

Summary :

The plaintiff had taken out a specially indorsed writ against the defendant for recovery of income tax, interest and cost. The defendant filed an application for an order to strike out the statement of claim on the grounds inter alia that the statement of claim was frivolous and vexatious and an abuse of the process of the court. The application was dismissed in the High Court. The defendant filed his statement of defence and counterclaim and subsequently filed an application for an order to strike out the claim of the plaintiff on the ground that the plaintiff was not entitled to maintain a claim in respect of tax and penalties for the years of assessment 1961-1967.

Holding :

Held: the defendant was estopped on the principle of res judicata from making the application and therefore the application must be dismissed.

Digest :

Government of Malaysia v Dato Chong Kok Lim [1973] 2 MLJ 74 High Court, Ipoh (Sharma J).

1826 Income tax -- Additional assessment

10 [1826] REVENUE LAW Income tax – Additional assessment – Power of Comptroller

Summary :

An assessment which has been determined by the Board of Review is final and conclusive. The proviso to s 84 of the Income Tax Ordinance (Cap 166, 1955 Ed) does not give the Comptroller power to re-open the matter and impose additional assessments.

Digest :

Comptroller of Income Tax v JKL [1961] MLJ 109 High Court, Singapore (Ambrose J).

1827 Income tax -- Additional assessment

10 [1827] REVENUE LAW Income tax – Additional assessment – Power of Comptroller – Whether further assessments can be raised after an earlier appeal

Summary :

The Comptroller of Income Tax had issued notices of assessment and additional assessment to the appellant in respect of income for the period of 1 January 1950 to 14 May 1951. The appellants objected to the assessment and appealed to the Board of Review and the High Court. The appeal was part allowed. In 1957, on the inspection of newly discovered documents, further assessment for the same period was made in respect of a matter which was undisputed in the earlier appeal. The appellant objected to the further assessment. The Board of Review, under s 82 of the Income Tax Ordinance (Cap 166, 1955 Ed) stated a case for the determination by the High Court on the question of the validity of the further assessment.

Holding :

Held: on the proper construction of ss 73 and 84 of the ordinance, the Comptroller was entitled to make further assessments on matters which were undisputed in the earlier appeal. The further assessment was therefore valid.

Digest :

Re XY & Co [1966] 2 MLJ 11 High Court, Singapore (Buttrose J).

1828 Income tax -- Additional assessment

10 [1828] REVENUE LAW Income tax – Additional assessment – Undisclosed income – Whether consideration stated in Form 14A prescribed under the National Land Code irrebuttable – Income tax – Undisclosed income – Additional assessment – Whether in assessing a taxpayer's undisclosed income the consideration stated in Form 14A prescribed under the National Land Code is irrebutable.

Summary :

In this case, the appellant sent to the respondent a notice of additional assessment of RM21,670.15 for the year of assessment 1970. That sum was assessed after comparing the capital worth of the respondent at the end of 1968 and 1969 as computed by the appellant. In 1969 the respondent and another had bought 14 lots of land which made up a certain housing estate. The consideration stated in the prescribed Form 14A which was presented and registered at the Land Office, Malacca under the National Land Code was RM126,472.50 and as the respondent's share in it was 2/3 the appellant had credited the sum of RM84,315 as the respondent's undisclosed income for that year. The respondent disputed that amount and appealed to the Special Commissioners. At the hearing before the Special Commissioners the appellant merely relied on the consideration stated in Form 14A which he alleged was irrebuttable. The Special Commissioners decided otherwise and allowed the respondent to call several witnesses and produce several documents to establish his contention that he and the other person had bought the said land not at RM126,472.50 as stated in Form 14A but at RM65,000 and that his 2/3 share of it was RM43,500. The Special Commissioners decided that RM43,500 was the actual price paid by the respondent and that amount should be taken into account to compute the respondent's capital worth as at 31 December 1969. They accordingly ordered that the notice of additional assessment for the year of assessment 1970 be amended to give effect to their decision.

Holding :

Held: (1) as Form 14A is dispositive in character, s 92 of the Evidence Act would operate in this case; (2) on the operation of s 92 other evidence was admissible to rebut the consideration stated in Form 14A as the appellant was a stranger to it; (3) in any event the court was of the view that the Special Commissioners had exercised their discretion judicially when they admitted the evidence in rebuttal adduced by the respondent; (4) not only greater mischief but also injustice would be caused if the consideration stated in Form 14A was irrebuttable and the amount of the taxpayer's capital worth was thereby deemed to be that amount when, for instance, he has raised part if not all of the amount by a loan from a bank; (5) in this case, there was overwhelming evidence adduced by the respondent to justify the Special Commissioners in coming to their decision; (6) on the facts before the Special Commissioners there was evidence to support their decision and their decision was correct in law.

Digest :

Director General of Inland Revenue v Ee Sim Sai [1977] 2 MLJ 32 High Court, Malacca (Ibrahim J).

1829 Income tax -- Additional assessment

10 [1829] REVENUE LAW Income tax – Additional assessment – Whether assessments were statute-barred – Whether assessment could be made after lapse of 12 years – Whether Director General had burden to prove fraud, wilful default or negligence – Income Tax Act 1967 (Act 53), s 91(1) & (3)

Summary :

D issued notices of additional assessments of income tax in 1985 and 1986 for the years 1967 to 1973 and served them on A. A failed to pay the additional assessments within the stipulated periods. In January 1987 D filed a writ, claiming from A the additional assessments. D's statement of claim did not raise fraud, wilful default or negligence on A's part. D applied for and was granted summary judgment by the senior assistant registrar. A appealed to the High Court.

Holding :

Held, allowing the appeal: (1) under s 91(1) and (3) of the Income Tax Act 1967 (Act 53), the Director General of Inland Revenue may make an assessment for any year of assessment where there has been fraud, wilful default or negligence on the taxpayer's part. The burden to show that fraud, wilful default or negligence has been committed, is on the Director General. If the Director General fails to discharge this burden, he cannot make an additional assessment after a lapse of 12 years. In this restrictive sense, limitation exists; (2) since D did not plead fraud, wilful default or negligence, D could not therefore raise them in its affidavit to support its application for summary judgment. This was because D was bound by its pleadings; (3) A had accordingly raised a triable issue as to whether D's claim was statute-barred on the grounds that the additional assessments were made after a lapse of 12 years and that neither fraud, wilful default nor negligence on A's part was pleaded by D.

Digest :

Government of Malaysia v Gan Chuan Lian [1992] 1 MLJ 449 High Court, Malacca (Mohamed Noor J).

1830 Income tax -- Additional assessment

10 [1830] REVENUE LAW Income tax – Additional assessment – Whether limitation applies to proceedings by government for recovery of tax – Income tax – Claim for additional tax – Leave to sign final judgment given – Appeal from decision of judge – Whether limitation applies to proceedings by government for recovery of tax – Limitation Ordinance 1953, s 33(1) – Income Tax Act 1967, ss 91 & 106(3).

Summary :

This was an appeal from the decision of Arulanandom J who had given leave to the government to sign final judgment against the appellant on a claim for additional income tax. The main contention on behalf of the appellant was that the additional assessments for the years of assessment 1953 and 1958 were statute-barred because they were not made before the expiration of twelve years from the respective years of assessment.

Holding :

Held, dismissing the appeal: (1) limitation as such does not apply to any proceedings by the government for the recovery of any tax; (2) the words 'within twelve years' in s 91(3) of the Income Tax Act 1967 (Act 53) are irrelevant where there has been any wilful default on the part of the taxpayer in disclosing part of his income for any particular year of assessment; (3) under s 106(3) of the Income Tax Act 1967 the court was not able to entertain any plea that the amount of tax sought to be recovered was excessive or incorrectly assessed.

Digest :

NTS Arumugam Pillai v Government of Malaysia [1976] 2 MLJ 72 Federal Court, Penang (Gill CJ (Malaya).

1831 Income tax -- Additional assessment

10 [1831] REVENUE LAW Income tax – Additional assessment – Whether statute-barred – Application for leave to sign final judgment – Income tax – Claim for income tax – Application for leave to sign final judgment – Defence that claim statute-barred – Whether unconditional leave to defend can be given – Income Tax Act 1967, ss 91(1), 91(1) & 103.

Summary :

In this case, the appellant filed a specially indorsed writ claiming payment of the sum of RM2,267,368.31 as income tax and penalties due. The claim was in respect of additional assessments for the years 1953 to 1970. The respondent raised the defence that the claim on the alleged income calculated on the increase in his assets for the years of assessment 1953 to 1959 were statute-barred by virtue of the provisions of ss 69(1) and 91(1) of the Income Tax Ordinance 1947 and the Income Tax Act 1967 (Act 53) respectively. The appellant applied for leave to sign final judgment. The senior assistant registrar gave leave to the appellant to sign final judgment in respect of the amounts pertaining to the years of assessment 1960-1970, but in regard to the amounts in respect of the years 1953 to 1959 he gave the respondent unconditional leave to defend on the ground that a triable issue was disclosed. On appeal,

Holding :

Held, dismissing the appeal: the taxpayer was not precluded from raising the plea that the claim was statute-barred and unless and until the court was satisfied that the Director General had exercised his powers correctly when making assessment under s 91(3) of the Income Tax Act, the court could not possibly adjudicate.

Digest :

Government of Malaysia v Ng Song Choon [1975] 1 MLJ 131 High Court, Ipoh (Arulanandom J).

1832 Income tax -- Additional assessment

10 [1832] REVENUE LAW Income tax – Additional assessment – Whether statute-barred – Onus of proof – Revenue law – Income tax – Back duty investigation – Additional assessment – Some additional assessments statute-barred unless there was fraud or wilful default – Procedure before Special Commissioners – Onus of proof – Whether taxpayer given opportunity to present his case – Whether rules of natural justice complied with – Income Tax Ordinance 1947, ss 69(1) & 76(3) – Income Tax Act 1967 (Act 53), ss 3 & 9(3).

Summary :

This was an appeal from the decision of Chang Min Tat J reported at [1977] 1 MLJ 67. The appeal was based on two issues: (a) whether the procedure followed by the Special Commissioners in arriving at their Deciding Order was correct, (b) whether the appellant had opportunity to present his case, in other words, whether the rules of natural justice had been observed.

Holding :

Held, dismissing the appeal: (1) the learned trial judge was correct in holding that the Special Commissioners were entitled to adopt the procedure they did; (2) the learned trial judge was right in holding that it could not be said that the taxpayer had not been heard or had in any way been prevented from or hindered in meeting the case against him; (3) there was no merit in the appeal or any ground upon which the court could come to a decision contrary to that of the Special Commissioners and the learned trial judge.

Digest :

NTS Arumugam Pillai v Director General of Inland Revenue [1977] 2 MLJ 63 Federal Court, Kuala Lumpur (Suffian LP, Ong Hock Sim and Wan Suleiman FJJ).

1833 Income tax -- Additional assessment

10 [1833] REVENUE LAW Income tax – Additional assessment – Whether statute-barred – Onus of proof – Revenue law – Income tax – Back duty investigation – Additional assessment – Some additional assessments statute-barred unless there was fraud or wilful default – Procedure before Special Commissioners – Onus of proof – Whether taxpayer given opportunity to present his case – Whether rules of natural justice complied with – Income Tax Ordinance 1947, ss 69(1) & 76(3) – Income Tax Act 1967 (Act 53), ss 3 & 9(3).

Summary :

This was an appeal from the decision of the Federal Court reported in [1977] 2 MLJ 63. The issues raised in this case were: (1) Whether the procedure followed by the Special Commissioners in arriving at their Deciding Order was correct. (2) Whether the appellant had the opportunity to present his case, in other words, whether the principles of natural justice had been observed. At the beginning of the hearing before them the Special Commissioners ruled that (a) the onus of proving fraud or wilful default rested on the Revenue; (b) that the onus of proving that the assessments for the years that were not time-barred were excessive or erroneous rested on the appellant taxpayer; (c) he should begin and lead evidence relating to those years.

Holding :

Held: (1) the appellant in this case was given an opportunity to call evidence in rebuttal and to deal with the matters that arose. The appellant was given a full and adequate hearing and reasonable opportunity to be heard; (2) in this case, there was nothing to show that the rules of natural justice had been broken or that the procedure was in any way improper. There was therefore no ground for interfering with the decision of the Special Commissioners.

Digest :

Arumugam Pillai v Director General of Inland Revenue [1981] 1 MLJ 171 Privy Council Appeal from Malaysia (Lord Fraser of Tulleybelton, Lord Russell of Killowen and Lord Scarman).

1834 Income tax -- Additional assessment

10 [1834] REVENUE LAW Income tax – Additional assessment – Whether statute-barred – Onus of proof – Revenue law – Income tax – Back duty investigation – Additional assessments – Some additional assessments statute-barred unless there was fraud or wilful default – Onus of proof – Whether rules of natural justice complied with – Income Tax Ordinance 1947, ss 69(1) & 76(3) – Income Tax Act 1967, ss 3 & 91(3).

Summary :

The appellant after a back-duty investigation was assessed to tax in the sum of RM8,145,841.50. This included additional assessments for the years 1953, 1957 to 1959 inclusive which would be statute-barred unless there was fraud or wilful default on the part of the taxpayer. Additional assessments were also raised for the year 1971 and assessments for the years 1962, 1966-1972. On appeal to the Special Commissioners, it was ruled that the onus of proving fraud or wilful default for the statute-barred period was on the Revenue while the onus of proving that the tax assessed was excessive and erroneous was on the appellant. The Special Commissioners also ruled that the appellant should begin and lead evidence first relating to the years of assessment after 1960. They also ruled that the time for the Revenue to prove the fraud or wilful default of the appellant in respect of the years of assessment 1953 and 1957 to 1959 was when it adduced evidence in reply to the appellant's case. If it succeeded in proving fraud or wilful default, then the onus of proving that the assessment was excessive or erroneous shifted to the appellant. The Special Commissioners after a lengthy hearing made a decision that the appellant's tax liabilities for the years in question was RM10,323,230.75. The appellant appealed to the High Court.

Holding :

Held: (1) the Special Commissioners were correct in ruling that the onus of proving fraud or wilful default in respect of the statute-barred years of assessment was on Revenue and that Revenue must prove fraud or wilful default beyond reasonable doubt. If and when Revenue had discharged this onus, the onus of proving that the assessments for the statute-barred years were excessive or erroneous passed to the taxpayer; (2) in respect of the non-statute-barred years of assessment, the onus was on the taxpayer to prove that the assessments were excessive or erroneous. The taxpayer could discharge this onus on a balance of probabilities; (3) in ruling that the taxpayer was to begin on the years of assessment that were not statute-barred and that the case in respect of the years of assessment that were statute-barred could be put to him in his cross-examination before Revenue proved fraud or wilful default, the Special Commissioners had not occasioned a denial of natural justice so long as the taxpayer was given the right to adduce evidence in rebuttal of Revenue's case on fraud or wilful default. On the facts, the Special Commissioners had given this right to the taxpayer and also the conditional right to call further evidence in rebuttal in respect of the years that were not statute-barred, and the taxpayer had elected not only not to exercise the right, but also not to call any evidence; (4) it could, therefore, not be said that the taxpayer had not been heard or had in any way been prevented from or hindered in meeting the case against him; (5) there was no justification for the inclusion of the notes of oral evidence taken before the Special Commissioners in the case stated and in any event, the case stated had been agreed to by his solicitors; (6) the High Court on an appeal from a deciding order of the Special Commissioners is bound to decide the validity or otherwise of their order on the facts as found by them and the reasonable inferences drawn by them from such facts, unless there is no evidence to justify the findings or the wrong inferences were drawn; (7) the taxpayer had not shown that the assessments of Revenue were excessive or erroneous or that the deductions claimed by him were those allowed by law. In all the circumstances of the case, it had not been shown that the Deciding Order of the Special Commissioners erred in any way.

Digest :

NTS Arumugam Pillai v Director General of Inland Revenue [1977] 1 MLJ 67 High Court, Penang (Chang Min Tat J).

1835 Income tax -- Additional assessment

10 [1835] REVENUE LAW Income tax – Additional assessment – Whether statute-barred – Revenue law – Additional income tax assessments made after a lapse of 12 years – Whether limitation provision in Income Tax Act 1967 contravened – Whether tax statute-barred – Income Tax Act 1967, s 91 – Limitation Act 1953, s 33.

Summary :

The Inland Revenue Department ('the Revenue') made some additional assessments in respect of the appellant's income for the previous years of assessments. The additional assessments were made retrogressively, the last mentioned year being a period of 16 years and the first mentioned date going right back to about 26 years from the date on which the actual additional assessments were computed. The Revenue took out an application under O 14 of the Rules of the High Court for summary judgment for the recovery of these additional assessments. The senior assistant registrar granted summary judgment against the appellant. The appellant appealed against this decision to the High Court. The appellant contended that: (a) the additional assessments made after the lapse of 12 years contravene the limitation period as contained in s 91 of the Income Tax Act 1967 (Act 53) and is therefore statute-barred; (b) summary judgment is not available to the Revenue in this instance because its claim is based on the allegation of fraud.

Holding :

Held, dismissing the appeal: (1) the Revenue action under s 91 of the Income Tax Act 1967 can go beyond any period of limitation by virtue of s 33 of the Limitation Act 1953 (Act 254) and, alternatively, they can do likewise under s 91(1) and (2) on the basis of wilful default and negligence or by establishing fraud to postpone limitation; (2) the word 'fraud' did not appear in the Revenue's statement of claim nor in any of the supporting affidavits filed in the O 14 application. It is obvious from the words used in the statement of claim that the claim was based on 'negligence' under s 91(3)(b) and not fraud.

Digest :

Government of Malaysia v Chong Woo Yit [1988] 2 MLJ 534 High Court, Malacca (Wan Yahya J).

1836 Income tax -- Additional remuneration

10 [1836] REVENUE LAW Income tax – Additional remuneration – Whether a bonus – Revenue law – Additional remuneration – 'Bonus' – Whether additional remuneration – Meaning of bonus – Income Tax Act 1967 (Act 53), ss 33 & 39(1)(h).

Summary :

This was an appeal from the Special Commissioners of Income Tax against their (majority) Deciding Order in confirming the assessment for the year of assessment 1975 raised by the Revenue in 1981 on the appellant company. The subject matter of this appeal was in respect of that part of the assessment which disallowed a deduction of RM671,091 (known as Additional Remuneration) from the gross income paid to the senior executives of the appellant company. The issue before the court was whether this Additional Remuneration is a bonus within the meaning of s 39(1)(h) of the Income Tax Act 1967 (Act 53).

Holding :

Held, allowing the appeal: (1) s 39(1)(h) clearly contemplates 'bonus' to be a payment over and above the remuneration agreed. It applies to bonus payments in respect of junior executives and non-managerial staff because the discretionary bonus payments are made over and above the agreed remuneration. It does not apply to senior executives because the fixed salary and the Additional Remuneration paid to them is the agreed remuneration and nothing is paid over and above that; (2) the payments made by the appellant under the Additional Remuneration Scheme for senior executives should accordingly be allowed as an expense wholly and exclusively incurred in the production of gross income of the appellant pursuant to s 33 of the Income Tax Act 1967.

Digest :

Harrisons & Crosfield (M) Sdn Bhd v Director General of Inland Revenue [1987] 2 MLJ 384 High Court, Kuala Lumpur (Harun J).

Annotation :

[Annotation: Reversed on appeal. See [1988] 2 MLJ 223.]

1837 Income tax -- Additional remuneration

10 [1837] REVENUE LAW Income tax – Additional remuneration – Whether a bonus or commission – Revenue law – Income tax – Group bonus scheme – Managerial staff – Commission or bonus payment – Interpretation – Whether deductible as an expense – Appeal by taxpayer – Income Tax Act 1967 (Act 53), ss 13, 33 & 39(1)(h).

Summary :

The appellant was a subsidiary of a company registered in the United Kingdom and was one of a group of 11 companies ('the Group') wholly owned by the principal company. The appellant and all companies in the Group were managed by agents and were in the plantation industry. All staff employed in the Group were engaged through standard letters of appointment and were transferable or interchangeable within the Group. Amongst its employees, there were two categories of staff, viz (a) the managerial staff (subject of this appeal) who, in addition to a monthly salary, were entitled to participate in the Group Bonus Scheme, and (b) the clerical staff, who are not the subject of the appeal. The question before the Special Commissioners was: 'Whether the additional remuneration paid to the administrative staff (ie the managerial staff) of the appellant under the scheme is a commission and therefore deductible as an expense wholly and exclusively incurred in the production of gross income of the appellant within the meaning of s 33 of the Income Tax Act 1967; or is a bonus payment within the meaning of 39(1)(h) of the Act and therefore be disallowed as a deductible expense beyond the limits stipulated therein.' The Special Commissioners decided that the additional remuneration is a bonus payment within the meaning of s 39(1)(h) of the Income Tax Act 1967 (as amended), and hence this appeal against the additional assessment of income tax amounting to RM319,066.50 for the year of assessment 1975.

Holding :

Held, allowing the appeal here and below with costs: (1) the real character of the Group Bonus Scheme is an incentive payment geared to performance and productivity and properly falls as an expense wholly and exclusively incurred in the production of gross income of the appellant within the meaning of s 33 of the Act; (2) the word 'bonus' appearing in s 39(1)(h) should be given its ordinary meaning and should not be stretched to include payments which are contractual and not gratuitous; (3) the Revenue and the Special Commissioners were in error and the additional assessment must be discharged.

Digest :

Highlands Malaya Plantations Ltd v Director General of Inland Revenue [1987] 2 MLJ 515 High Court, Kuala Lumpur (Harun J).

Annotation :

[Annotation: Reversed on appeal. See [1988] 2 MLJ 99.]

1838 Income tax -- Additional tax

10 [1838] REVENUE LAW Income tax – Additional tax – Late payment increases – Failure to make payment – Whether action to recover sums owing statute-barred – Sums owing a debt due and payable to the government – Income Tax Act 1967 (Act 53), ss 103(4), (5A) & 106(1) – Limitation Act 1953 (Act 254), s 33(1) proviso

Summary :

In the instant case, leave to enter final judgment against D was granted by the senior assistant registrar on an O 14 application by P in respect of additional tax and late payment increases imposed on D under the Income Tax Act 1967 (Act 53). In support of the O 14 application, P filed a certificate under s 142(1) of the Income Tax Act 1967 (Act 53). D appealed against the decision of the registrar on the ground that the additional tax and late payment increases were barred from recovery under s 6(1)(d) and (4) of the Limitation Act 1953 (Act 254). D contended that the registrar was wrong to give leave to P to enter final judgment against him.

Holding :

Held, dismissing the appeal: (1) in the instant case, the additional tax and the late payment increases imposed under s 103(4) and (5A) of the 1967 Act amounted to taxes due and payable under s 106(1) of the 1967 Act and may be recovered by civil proceedings as a debt due to the government thereunder; (2) having regard to decided case law and the proviso to s 33(1) of the Limitation Act 1953 (Act 254), the action to recover these amounts could not be statute-barred. Furthermore, P had filed a certificate under s 142(1) of the 1967 Act which provides that the certificate shall be sufficient evidence of the amount so due from the taxpayer and sufficient authority for the court to give judgment for the stated amount.

Digest :

Government of Malaysia v Teoh Chai Siok [1990] 1 MLJ 183 High Court, Alor Setar (KC Vohrah J).

1839 Income tax -- Adventure in the nature of trade

10 [1839] REVENUE LAW Income tax – Adventure in the nature of trade – Company buying and selling shares – Whether company carrying on business of dealing in shares or making investments in shares – Income tax – Company buying and selling shares – Whether company carrying on business of dealing in shares or making investments in shares – Purchase of shares in housing company – Whether purpose of purchase relevant – Question of fact determined by Special Commissioners – Whether court can interfere – Losses incurred by company through their branch in Singapore – Whether deductible – Double Taxation Relief (Republic of Singapore) Order 1966, art IV(1)(a) – Income Tax Act 1967 (Act 53), ss 4(a) & 40.

Summary :

In this case, the appellants were a finance company whose objects, inter alia, were the accumulation of capital by means of monthly subscriptions or otherwise and also by borrowing money from members, depositors and others. They also had powers to acquire movable and immovable properties by way of investment with a view to resale. The appellants bought and sold shares in a number of companies and in respect of the sale of some shares made a profit on which they were assessed to tax. They contended that the purchasing of the shares was made as a long term investment and the profits made were capital in nature being realization of capital investments. The appellants incurred losses through their branch in Singapore and sought to have these losses taken into account in arriving at their chargeable income. The Special Commissioners held that in buying and selling shares the appellants were carrying on the business of dealing in shares as an adventure or concern in the nature of trade and that the profits realized by the appellants were assessable to tax and they also held that the appellants were entitled to deduct their trading losses in Singapore from their income derived in Malaysia. On appeal it was held in the High Court ([1975] 1 MLJ 109) that the Special Commissioners were justified on the facts in arriving at the decision that the appellants were carrying on a business of dealing in shares and therefore that the profits from the sale of the shares were assessable to tax. It held however that the Special Commissioners had erred in law in arriving at the decision that the losses of the Singapore branch were deductible from income of the appellants derived in Malaysia. On appeal to the Federal Court,

Holding :

Held, dismissing the appeal: (1) there was evidence, which if accepted, amply supported the finding of the Special Commissioners that the appellants were carrying on the business of dealing in shares as an adventure or concern in the nature of trade; (2) the learned judge of the High Court was correct in holding that the losses of the Singapore branch could not be taken into consideration in ascertaining the appellant's total income for the year of assessment 1968.

Digest :

UN Finance Bhd v Director General of Inland Revenue [1975] 2 MLJ 224 Federal Court, Kuala Lumpur (Suffian LP, Ong Hock Sim FJ and Chang Min Tat J).

1840 Income tax -- Adventure in the nature of trade

10 [1840] REVENUE LAW Income tax – Adventure in the nature of trade – Company buying and selling shares – Whether company carrying on business of dealing in shares or making investments in shares – Income tax – Company buying and selling shares – Whether company carrying on business of dealing in shares or making investments in shares – Question of fact determined by Special Commissioners – Whether court can interfere – Losses incurred by the company through their branch in Singapore – Whether deductible – Double Taxation Relief (Republic of Singapore) Order 1966, art IV(1)(a) – Income Tax Act 1967, ss 4(a) & 40.

Summary :

In this case, the appellants were a company whose objects, inter alia, were the accumulation of capital by means of monthly subscriptions or otherwise and also by borrowing money from members, depositors and others. They also had powers to acquire movable and immovable property by way of investment with a view to resale. The appellants bought and sold shares in a number of companies and in respect of the sale of some shares made a profit on which they were assessed to tax. They contended that the purchasing of shares was made as a long term investment and the profits made were capital in nature being realization of capital investments. The appellants incurred losses through their branch in Singapore and sought to have these losses taken into account in arriving at their chargeable income. The Special Commissioners held that the profits realized by the appellants for the sale of their shares were assessable to tax and they also held that the appellants were entitled to deduct their trading losses in Singapore from their income derived in Malaysia. The appellants appealed and the Director General of Inland Revenue counter-appealed.

Holding :

Held: (1) the Special Commissioners in this case were justified on the facts in arriving at a decision that the appellants were carrying on a business of dealing in shares as an adventure or concern in the nature of trade and therefore the profits from the sale of the shares in question were assessable to tax; (2) the Special Commissioners had erred in law in arriving at the decision that the losses of the Singapore branch attributable to business carried out in Singapore should be deducted from their income derived in Malaysia in the ascertainment of the appellant's total income for the year of assessment 1968.

Digest :

UN Finance Bhd v Director General of Inland Revenue [1975] 1 MLJ 109 High Court, Kuala Lumpur (Abdul Hamid J).

1841 Income tax -- Adventure in the nature of trade

10 [1841] REVENUE LAW Income tax – Adventure in the nature of trade – Investment in land – Sale of land for profit – Revenue law – Income tax – Family company carrying on business as insurance and general agents – Investment in land – Sale of land for profit – Whether adventure in nature of trade – Income Tax Act 1967 (Act 53), s 2.

Summary :

In this case, the respondent was a family company carrying on business as insurance and general agents. Subsequently the company began to invest in land for the purpose of obtaining income from rentals. In the course of doing so, the company purchased four vacant lots of land. No steps were taken to erect buildings on the land or to submit building or development plans. The lands were sold at a profit and subsequently the company purchased two blocks of buildings from which it received rental income. The company was assessed to tax on the profits of the sale of the vacant lands but on appeal to the Special Commissioners, it was decided by a majority that the purchase and sale of the lands did not constitute an adventure in the nature of trade. It was held that the transaction constituted a realization of investment and therefore no tax was payable. The Director General appealed by way of case stated.

Holding :

Held, dismissing the appeals: in this case the Special Commissioners in their majority decision found that the respondent had acquired landed property and after an interval of time disposed of them and substituted them with some other property which were still giving rental income to the company. Looking at the surrounding circumstances of the transaction and in the absence of any evidence to indicate that the original purchase was solely for speculative purposes, it was quite difficult not to agree with the findings of the Special Commissioners in the majority decision.

Digest :

Director General of Inland Revenue v Hui Thong Co Sdn Bhd [1981] 2 MLJ 33 High Court, Kuala Lumpur (Hashim Yeop A Sani J).

1842 Income tax -- Adventure in the nature of trade

10 [1842] REVENUE LAW Income tax – Adventure in the nature of trade – Isolated sale of land – Liability to tax – Income tax – 'Trade' or 'business' – Whether isolated sale of land is trade or business.

Summary :

In this case, the appellant had purchased, jointly with four other persons, a rubber estate near Seremban for the price of RM197,837.60. Subsequently the co-purchasers of the estate negotiated for the sale of the estate to a company, one of whose objects was the development of land into housing sites. The estate was eventually transferred to the company in consideration of the company issuing fully paid up shares to the value of RM765,000. For his share in the estate the appellant became entitled to shares to the value of RM382,500. The Comptroller of Income Tax assessed the appellant to additional assessment in respect of the amount representing the excess of the value of the shares in the company to which the appellant became entitled over the amount of his share of the purchase price of the land, on the basis that this amount represented profit from business chargeable to income tax under s 10(1)(a) of the Income Tax Ordinance 1947. The appellant appealed against this additional assessment to the Special Commissioners of Income Tax but his appeal was dismissed. He then appealed to the High Court by way of case stated and again he was unsuccessful. He then appealed to the Federal Court.

Holding :

Held, allowing the appeal: the transaction by the appellant in this case was an isolated transaction and although it was an adventure in the nature of trade, it did not constitute a trade of the appellant within the meaning of s 10(10)(a) of the Income Tax Ordinance 1947. As it was a single business transaction carried out by the appellant and not part of a business carried on by him, it did not constitute the business of the appellant either within the meaning of that section. The profit arising therefrom was therefore not subject to tax under the section.

Digest :

E v Comptroller General of Inland Revenue [1970] 2 MLJ 117 Federal Court, Kuala Lumpur (Azmi LP, Suffian Ag CJ (Malaya).

1843 Income tax -- Adventure in the nature of trade

10 [1843] REVENUE LAW Income tax – Adventure in the nature of trade – Isolated transaction – Liability to tax – Income tax – Purchase of land by company and other persons acting as syndicate – Intention to develop land – Application for conversion of land for building purposes refused – Sale of land at profit – Whether member of syndicate liable to pay income tax on share of profits – Income Tax Ordinance 1947, s 10(1).

Summary :

In this case, the respondent together with a company, whose main activities were property development and housing, and certain other persons, had bought a large area of rubber land. An application was made for conversion of the land for building purposes but this was refused. Subsequently, the land was sold at a profit and the respondent obtained a share of the profits. The Director General of Inland Revenue assessed him to tax on the profits but on appeal to the Special Commissioners, it was held that the respondent was not liable to tax on his share of the profits. An appeal to the High Court was dismissed. The Director General of Inland Revenue appealed to the Federal Court.

Holding :

Held, dismissing the appeal: the learned judge was right in holding that as this was an isolated transaction by the respondent, it did not constitute a trade of the respondent within the meaning of s 10(1)(a) of the Income Tax Ordinance 1947, and therefore the profits arising therefrom were not subject to tax under the section.

Digest :

Director General of Inland Revenue v CKK [1974] 2 MLJ 104 Federal Court, Kuala Lumpur (Suffian LP, Lee Hun Hoe CJ (Borneo).

1844 Income tax -- Adventure in the nature of trade

10 [1844] REVENUE LAW Income tax – Adventure in the nature of trade – Isolated transaction – Liability to tax – Revenue law – Income tax – Purchase and sale of land – Whether adventure or concern in the nature of trade – Liability to tax – Income Tax Act 1967 (Act 53), s 4(a).

Summary :

In this case, the appellant had purchased land in Alor Star and after obtaining the permission of the government to alter the conditions in the land title from agricultural purposes to one of erecting dwelling houses he sold them at a profit. He was assessed to tax on the profit and his appeal to the Special Commissioners and to the High Court ([1977] 1 MLJ 34) was dismissed. He appealed to the Federal Court.

Holding :

Held, dismissing the appeal: both the Special Commissioners and the learned judge were right in holding that the only reasonable inference from the facts and the surrounding circumstances of the case was that the acquisition by the appellant of the piece of land and its sale not long afterwards was an adventure in the nature of trade.

Digest :

TCS v Director General of Inland Revenue [1977] 2 MLJ 212 Federal Court, Alor Star (Gill CJ, Ong Hock Sim and Raja Azlan Shah FJJ).

1845 Income tax -- Adventure in the nature of trade

10 [1845] REVENUE LAW Income tax – Adventure in the nature of trade – Isolated transaction – Liability to tax – Revenue law – Income tax – Sale of land – Isolated transaction – Whether adventure or concern in the nature of trade – Income Tax Act 1967 (Act 53), s 4(a).

Summary :

This was an appeal on a question of law from the deciding order of the Special Commissioners. The question of law for the opinion of the court was whether on the evidence before them the Special Commissioners' decision that the isolated transaction in this case was an adventure or concern in the nature of trade and any profits or gains derived therefrom was assessable to income tax, was correct. The taxpayer in this case had bought some padi land for RM31,500 and after getting approval for the alteration of the condition of tenure of the land sold it to a limited liability company for RM580,000. The taxpayer transferred the profit in the form of shares to his wife and children. The taxpayer was assessed to tax in the sum of RM538,790 and his appeal to the Special Commissioners was dismissed.

Holding :

Held: the only conclusion that could be reasonably drawn on the facts as found by the Special Commissioners was that the appellant acquired the land with the expectation and intention of selling it as a profit and that it was an adventure in the nature of trade.

Digest :

TCS v Director General of Inland Revenue [1977] 1 MLJ 34 High Court, Alor Star (Syed Agil Barakbah J).

1846 Income tax -- Adventure in the nature of trade

10 [1846] REVENUE LAW Income tax – Adventure in the nature of trade – Isolated transaction – Sale of land – Revenue law – Income tax – Sale of land – Isolated transaction – Whether adventure in the nature of trade – Deciding Order of Special Commissioners – Form of – Income Tax Act 1967 (Act 53), ss 2(1), 4(a) & Sch 5.

Summary :

In this case, the respondent and his wife had transferred their land to a development company and they made a gain of RM479,000. The Director General of Inland Revenue contended that the gain was from an adventure in the nature of trade and he raised an assessment of income tax of RM268,007 on that gain. The respondent contended that it was not a gain from an adventure in the nature of a trade but was a capital gain not assessable to tax. The Special Commissioners dismissed his appeal. He further appealed to the High Court and the learned judge allowed his appeal and set aside the Deciding Order of the Special Commissioners. The Director General of Inland Revenue appealed.

Holding :

Held: (1) the Special Commissioners in this case had not considered the issue stated in the agreed facts and submitted for their determination. Instead they pronounced a decision on an issue raised by them which was not a real issue in the case. As they had not considered the real issue but misconceived issues their decision should be set aside as being inapplicable; (2) the facts of the case do not show that the respondent had acquired the subject land because of its potential value with the intention of reselling it at an enhanced price. Nor do the facts show that the respondent spent money or took other steps to improve the land to enhance its value after he had acquired it. The facts showed that the enhancement of the value of the land, if any, was not the result of anything done by the respondent for the purpose of resale; (3) the respondent's dealing with the land was not an adventure in the nature of trade and the appeal should therefore be dismissed; (4) the Deciding Order of the Special Commissioners should state the decision and order to confirm or discharge the assessment or to direct that the assessment be amended and to specify the amendments or to require the amendments to be determined by agreement between the parties. The grounds of decision should be put up separately from the Deciding Order.

Digest :

Director General of Inland Revenue v Tay Chee Ming [1987] 1 MLJ 298 Supreme Court, Kota Kinabalu (Seah, Mohamed Azmi and Wan Hamzah SCJJ).

1847 Income tax -- Adventure in the nature of trade

10 [1847] REVENUE LAW Income tax – Adventure in the nature of trade – Land sold to developing company at price above assessed value – Liability to tax – Income tax – Land obtained as a gift – Agreement with developing company – Syndicate formed with object of erecting houses on land for sale – Land sold to developing company at price above assessed value – Single transaction – Whether profits from transaction liable to income tax – Whether agreement establishes a trade or trading in land – Whether adventure in nature of trade.

Summary :

In this case, the appellant had received a piece of land from his father as a gift. Subsequently, he wished to sell the land to a developer but as no agreement could be reached as to the price, an agreement was entered whereby the developer, a private limited company, and the appellant formed a syndicate with the object of erecting houses on the land for sale. It was agreed the land valued at RM145,920 was to be regarded as the contribution of the appellant to the syndicate and that after the scheme was completed and the houses sold, the syndicate would pay the sum of RM145,920 to the appellant and also pay to him one-half of the nett profits of the venture. The appellant took no part in the transaction except to be a party to the agreement and to receive an amount which consisted of a sum representing the expressed sale price of the land to the syndicate and a half of the profits, which together came to the price he demanded for the land. The scheme was successful and at the end the appellant received RM145,920 plus RM39,175 representing half the profits. The Comptroller General of Inland Revenue treated the sale by the taxpayer to the syndicate as carrying on the trade of dealing in land and he treated the difference of RM46,920 between the price of RM145,920 at which the land was sold and the price of RM99,000 at which the land was valued for purposes of assessing the stamp duty to be paid on the deed of gift, as assessable income, being his profit. The Comptroller General also raised additional assessment of income tax on the amount of RM39,175 as partnership income from the syndicate's business. The taxpayer appealed to the Special Commissioners, who overruled the Comptroller General in respect of the difference of RM46,920. They held that there was no sale of the land but that the value of the land represented the appellant's contribution to the capital of the syndicate. They therefore 'cancelled' the assessment of income tax on this sum and from this decision there was no appeal. The Special Commissioners also held that the sum of RM39,175 was income from the business and therefore liable to tax. The appellant appealed from this decision.

Holding :

Held: (1) on the facts of this case the transaction was a sale of property with a provision for an enhanced price and therefore only an adventure in the nature of trade; (2) as such the profits therefrom were not liable to tax under the provisions of the Income Tax Ordinance 1947, and therefore the appeal must be allowed.

Digest :

L v Comptroller General of Inland Revenue [1973] 2 MLJ 14 High Court, Penang (Chang Min Tat J).

1848 Income tax -- Adventure in the nature of trade

10 [1848] REVENUE LAW Income tax – Adventure in the nature of trade – Purchase and sale of land – Liability to tax – Revenue law – Income tax – Purchase and sale of land – Whether adventure or concern in the nature of trade – Liability to tax – Income Tax Act 1967 (Act 53), s 4(a).

Summary :

In this case, the appellant had purchased land in Alor Star, Kedah, and after obtaining the permission of the government to alter the conditions in the land title from agricultural purposes to one of erecting dwelling houses he sold the land at a profit. He was assessed to tax on the profit and his appeals to the Special Commissioners and to the High Court ([1977] 1 MLJ 34) were dismissed. A further appeal to the Federal Court was dismissed ([1977] 2 MLJ 212) and the appellant appealed.

Holding :

Held: the Special Commissioners, the High Court and the Federal Court were right in holding that the transaction, although an isolated one, was an adventure or concern in the nature of trade.

Digest :

Teoh Chai Siok v Director General of Inland Revenue [1981] 1 MLJ 269 Privy Council Appeal from Malaysia (Lord Edmund-Davies, Lord Russell of Killowen, Lord Keith of Kinkel, Lord Bridge of Harwick and Sir John Megaw).

1849 Income tax -- Adventure in the nature of trade

10 [1849] REVENUE LAW Income tax – Adventure in the nature of trade – Sale of land – Isolated transaction – Taxpayer reinvesting proceeds of sale in investment properties – Whether taxpayer sold land as investor or as trader in land – Income Tax Act 1967 (Act 53), ss 2 & 4(a)

Summary :

D, a family company, was formed as a means by which X and Y could divest their interests in their properties to their children and grandchildren by giving them shares in D to which X and Y had transferred their landed properties. D had power in its memorandum and articles to deal with land. D was an investment company but later changed its intention to that of a developer. Although it changed its intention to that of a develper, it reverted back to that of an investor before it disposed of the land in question. The sale of the land was the only sale transaction entered into by D at the material time. D reinvested the proceeds from the sale of the land in investment properties. D was assessed to income tax on the proceeds arising from the sale of the land. D appealed to the Special Commissioners against the assessment. The Special Commissioners found in favour of D holding that the disposal of the land in question was not an adventure in the nature of trade and that the profit of the disposal was not assessable to income tax and development tax as it was realization of an investment. The Director-General of Inland Revenue appealed to the High Court against the deciding order of the Special Commissioners. The learned judge dismissed the appeal and the Director-General of Inland Revenue appealed to the Supreme Court.

Holding :

Held, dismissing the appeal: (1) having regard to paras 34, 39, 41 and 42 of sch 5 of the Income Tax Act 1967 (Act 53), one may only appeal to the High Court and thence to the Supreme Court on a question of law. The decision of the Special Commissioners of Income Tax as to the facts is therefore conclusive. A court would not therefore disturb findings of fact by the Special Commissioners unless it considers that the only reasonable conclusion on the evidence contradicts the determination of the Special Commissioners; (2) in the instant case, there was evidence to support the finding of the Special Commissioners that D had a change of intention from becoming a trading company back to that of an investment company. There were no findings on the evidence by the Special Commissioners that D engaged in activities which led to the maturing of the asset sold. The land that was sold was not subdivided and nothing was done to it by D to improve its value which merely appreciated in the course of time due to development of the surrounding area. Although D had power in its memorandum and articles to deal with land, there was no evidence or any finding by the Special Commissioners that D had in fact traded in land; (3) as there was sufficient evidence to support the Special Commissioners' determination that D's sale of the land did not constitute an adventure in the nature of trade within the meaning of s 2 of the Income Tax Act 1967 (Act 53) and that the gains or profit derived from the sale were therefore not chargeable to tax under s 4(a) of the same Act, the appeal by the Director-General of Inland Revenue was therefore dismissed by the court.

Digest :

Director-General of Inland Revenue v Khoo Ewe Aik Realty Sdn Bhd [1990] 2 MLJ 415 Supreme Court, Malaysia (Lee Hun Hoe CJ (Borneo).

1850 Income tax -- Adventure in the nature of trade

10 [1850] REVENUE LAW Income tax – Adventure in the nature of trade – Sale of properties by limited company – Whether gains or profits from business or realization of investment – Revenue law – Income tax – Sale of properties by limited company – Whether gains or profits from business or realization of investment – Finding of fact by Special Commissioners – Appeal – Income Tax Act 1967 (Act 53), s 4.

Summary :

The appellant company was incorporated to have the members of a family in one company and to build houses on vacant properties to let out for rent. The appellant held a number of properties and some of these were sold for profit. The appellant was assessed to tax in respect of the sale of (a) a vacant lot bought for the construction of a factory/godown but sold when it was found unsuitable for the purpose; (b) and (c) two lots of rubber lands and (d) a sho-lot. The Special Commissioners held that the gain or realization from the sale of the vacant lot was a realization of a part of its investment and therefore not liable to tax. They considered the sales of the other three items were adventures in the nature of trade and therefore the profits were liable to tax. On appeal, the appeal was dismissed by the High Court. The appellants appealed.

Holding :

Held: (1) the Special Commissioners were entitled to find on the evidence that the appellant had engaged in a trade of dealing with land; (2) the power of the High Court to hear appeals from the Special Commissioners is to review the decision of the Commissioners on points of law being bound by the facts which they have found provided always there is evidence on which they came to such conclusions of facts; (3) in this case, the learned judge found no ground to interfere with the decision of the Special Commissioners and the appeal should be dismissed.

Digest :

Kota Kinabalu Industries Sdn Bhd v Director General of Inland Revenue [1981] 2 MLJ 186 Federal Court, Kuala Lumpur (Lee Hun Hoe CJ (Borneo).

1851 Income tax -- Adventure in the nature of trade

10 [1851] REVENUE LAW Income tax – Adventure in the nature of trade – Sale of timber logs – Whether a disposal of capital assets – Revenue law – Income tax – Land alienated to company for planting oil palms – Timber on land to be extracted – Company assessed with income tax in respect of proceeds of sale of timber logs – Whether sale of timber rights – Adventure in nature of trade – Whether deduction to be made for price of land.

Summary :

In this case, the land had been alienated to the appellant for the purpose of planting oil palms and it was a condition that all timber of commercial value on the land should be extracted. The appellant entered into an agreement with another person to cut down and remove the timber. The appellant was assessed to income tax in respect of the proceeds of sale of the timber logs. On appeal the Special Commissioners found that the purpose of the appellant's purchase of land was to sell timber logs and to plant oil palms. Consequently, they held that the proceeds of sale of timber were gains derived from an adventure in the nature of trade and thus assessable. On appeal to the High Court, counsel for the appellant submitted that the proceeds were capital receipts because the transaction out of which the sum was derived was a mere disposal of part of its capital by the appellant. It was also argued (a) that what was sold was timber rights because extraction of logs was done at the expense of the buyer, the purpose of sale being to prepare land for oil palm planting; (b) that the extraction of timber logs was done in compliance with the conditions of title to the land. It was finally argued that if the proceeds of sale were held to be revenue receipts, the appellant was entitled to deduct from such proceeds the price which it paid for the land. The High Court held: (1) the Special Commissioners had found as a fact that the purpose of the appellants' acquiring the land was twofold, namely to sell timber logs and equally to plant oil palms. It was on this basic finding that they concluded that the sale of the timber logs was a business transaction and as such the appellant was carrying on a concern in the nature of trade. Unless it could be shown that there was no evidence on which the Commissioners could make such finding, the High Court could not interfere; (2) in this case, the agreement with the buyer was for the purchase and sale of severed timber logs and not of timber rights and as the land was acquired for selling timber, the proceeds from the sale of timber were revenue assets; (3) as the Commissioners had correctly found that the purpose of the appellant's acquiring the land was to sell timber logs and to plant oil palms, the sale of timber logs was an adventure in the nature of trade and the gain derived from the transaction is not a capital receipt but a revenue receipt subject to taxation; (4) the Special Commissioners were correct in holding that the price of the land was not revenue expenditure which could be debited against revenue receipt in order to arrive at the taxable profit, but a capital expenditure which is represented by the assets, that is, land. The appellant appealed to the Federal Court. It was argued that the learned judge erred in law in holding that: (a) the more prominent purpose of the acquisition of the land was logging and not the planting of oil palm; (b) the sale of timber rights by the appellant was not a sale of its capital assets; (c) what the appellant sold were logs and not the right to extract the timber; and (d) the sale only took place after the timber was severed. In the alternative it was argued that the judge erred in law in not allowing the sum of RM500,000 paid to the Sultan of Pahang as a deduction as exclusively paid in the production of the income.

Holding :

Held: (1) in this case, the Special Commissioners had proceeded rightly to determine what was essentially a question of fact and upon such premises formed a conclusion of law. The learned judge quite rightly said that unless the Commissioner's finding was perverse and was not supported by the evidence, the court should be reluctant to interfere with it. The learned judge observed that the appeal before him raised no question of law at all but rather concerned the application of existing principles to particular facts as found by the Special Commissioners; (2) in any event it is not the function of the appeal court to substitute its conclusions of fact for those of the Special Commissioners whose duty it is to determine the facts unless the court is satisfied they are wrong. In this case, there were no grounds to warrant the interference of the appellate court; (3) there was no question in this case of any lease of the area to the buyer and no question of possession of the land not even proprietory rights in timber which can be described as a sort of interest in and possession of land. It was plain and simple a sale of timber transaction which was in fact an adventure in the nature of trade. There was therefore no question of a disposal of any part or at all of capital assets. The question of the proceeds being capital could not arise; (4) the grounds of appeal raised are essentially on questions of fact. There was no substance in the appellant's argument that the conclusions arrived at by the Special Commissioners were not warranted by the evidence or that the Commissioners had no evidence to infer that the land purchased was for selling timber and for planting oil palm;the appellant could not successfully argue that the sum of RM500,000 paid was not payment for the use of the licence or permit to extract timber within the meaning of s 39(1)(g) of the Income Tax Act 1967 (Act 53) and, therefore, the sum paid should not be allowed as deduction.

Digest :

Chin Teck Plantations Bhd v Ketua Pengarah Hasil Dalam Negeri [1981] 2 MLJ 251 Federal Court, Kuala Lumpur (Raja Azlan Shah CJ (Malaya).

1852 Income tax -- Advocate and solicitor

10 [1852] REVENUE LAW Income tax – Advocate and solicitor – Partnership income

Summary :

The appellant who is an advocate and solicitor practised in partnership. On 31 December 1962, he retired as a partner from one firm and on 1 January 1963 he became a partner in another firm. The Comptroller of Income Tax made an additional assessment against the appellant on the ground that the commencement provisions under s 35(3) of the Income Tax Ordinance (Cap 166, 1955 Ed) applied to him. On appeal to the Board of Review, the board held that the appellant had not commenced to carry on or exercise his profession on 1 January 1963 but was continuing in the exercise of his profession as an advocate and solicitor. The Comptroller appealed to the High Court and Tan Ah Tah FJ reversing the decision of the board held that s 35(3) of the Income Tax Ordinance clearly applied to the appellant. On appeal to the Federal Court,

Holding :

Held, allowing the appeal: s 35(3) of the Income Tax Ordinance was not applicable on the facts of the case as the appellant had continued to exercise his profession though in a new partnership.

Digest :

Q v Comptroller of Income Tax [1969] 1 MLJ 225 Federal Court, Singapore (Wee Chong Jin CJ, Chua and Kulasekeram JJ).

1853 Income tax -- Appeal

10 [1853] REVENUE LAW Income tax – Appeal – Appellate court – Basis for reversal of first tribunal decision – Revenue law – Income tax – Appeal against assessments – Whether gains from trade of property developer – Income Tax Act (Cap 141, 1970 Ed), s 10(1)(a).

Summary :

The Comptroller of Income Tax by his additional assessments of 27 July 1972 assessed the appellant liable to tax in the sums of S$82,127.14 and S$179,146.60 for the years of assessment 1966 and 1968. The assessments were in respect of the appellant's income earned from his trade as a property developer and dealer and exigible under s 10(1)(a) of the Income Tax Act (Cap 141, 1970 Ed). The Income Tax Board of Review affirmed the two additional assessments. The appellant's appeal against the board's decision was dismissed by the High Court. The appellant appealed against the said decision of the High Court.

Holding :

Held, dismissing the appeal: (1) the proper test to apply in this appeal is to ask whether the board had misdirected itself in law, or had proceeded without sufficient evidence in law to justify its conclusion; (2) in finding that the appellant was not holding the two pieces of land as investments in 1963 to 1966, the board was in effect saying that the appellant was carrying on the trade of dealing with land, and was seeking planning permissions to enhance the eventual realized prices of those parcels. On these facts, it could not be said that the board's finding was erroneous in law or based on insufficient evidence and therefore the board's finding could not be upset on appeal.

Digest :

CBH v Comptroller of Income Tax [1982] 1 MLJ 112 Court of Appeal, Singapore (Wee Chong Jin CJ, Lai Kew Chai and Chua JJ).

1854 Income tax -- Appeal

10 [1854] REVENUE LAW Income tax – Appeal – Appellate court – Jurisdiction – Whether court has jurisdiction to hear appeal

Summary :

The question for decision in this case was whether the Federal Court has jurisdiction to hear an appeal from the opinion of the High Court ([1966] 2 MLJ 11) delivered under s 82 of the Income Tax Ordinance (Cap 166, 1955 Ed).

Holding :

Held: the jurisdiction exercised by the High Court under s 82 of the Income Tax Ordinance is only consultative and not judicial so long as it does no more than remit the case to the board with its opinion. Such an opinion is not a judgment or order within the meaning of s 67 of the Courts of Judicature Act 1964. Therefore the Federal Court has no jurisdiction to hear an appeal from the opinion of the High Court delivered under that section.

Digest :

Re XY & Co [1967] 1 MLJ 161 Federal Court, Singapore (Wee Chong Jin CJ, Tan Ah Tah FJ and Ambrose J).

1855 Income tax -- Appeal

10 [1855] REVENUE LAW Income tax – Appeal – Appellate court – Whether findings of fact by first tribunal are open to review

Summary :

A decision by the Board of Review on the conclusion of fact which it has found proved by the facts it has ascertained, is not open to review on appeal provided that the board had before it evidence from which its conclusion could properly be drawn and secondly, provided that the board did not misdirect itself in law in any of the forms of legal error amounting to misdirection. Where the facts warrant a conclusion one way or the other, the findings of the board cannot be disturbed provided of course that the board has not misdirected itself in law in reaching its conclusion.

Digest :

HLB v Comptroller of Income Tax [1974] 2 MLJ 49 High Court, Singapore (Winslow J).

1856 Income tax -- Appeal

10 [1856] REVENUE LAW Income tax – Appeal – Application to sign final judgment – Whether court can entertain plea that tax incorrectly assessed – Income tax – Claim by government for payment of income tax – Application to sign final judgment – Whether taxpayer entitled to defend on contention that no tax at all is due – Income Tax Act 1967, ss 106 and 142.

Summary :

The appellant had appealed against the judgment of the High Court giving leave to the respondent to sign final judgment against the appellant for the sum of RM1,320,440.15 alleged to be income tax due from the appellant. It was argued on the appeal that s 106(3) of the Income Tax Act 1967 (Act 53) (which provides that in any proceedings under the section the court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed under appeal or incorrectly increased) did not apply in any case where the taxpayer contends that no tax whatever is due by him.

Holding :

Held: the learned trial judge was right in giving leave to the respondent to sign final judgment and in holding that if the taxpayer wished to dispute that the amount of tax sought to be recovered was excessive, incorrectly assessed under appeal or incorrectly increased, he has to do so by way of appeal to the Special Commissioners.

Digest :

Sun Man Tobacco Co Ltd v Government of Malaysia [1973] 2 MLJ 163 Federal Court, Ipoh (Azmi LP, Gill and Ong Hock Sim FJJ).

1857 Income tax -- Appeal

10 [1857] REVENUE LAW Income tax – Appeal – Assessment – Returns – Failure to furnish returns within specified period – Income tax – Appeal – Assessment returns – Notice of – Failure to furnish within specified period – Income Tax Ordinance 1947, ss 90(1) & (2).

Summary :

The appellant was charged and convicted of two offences under s 90(1), punishable under s 90(2), of the Income Tax Ordinance 1947, for non-compliance with a notice requesting him to furnish his income returns for the years of assessment 1959 and 1966, within 40 days of its issue. The appeal was on points of law. The appellant contended that on the day the notices were issued to him, the ordinance and all its subsidiary legislation had been 'wholly repealed and revoked'. Therefore, the conviction on the charges could not be in respect of offences known to law, for by reason of the first limb of s 29 of the Interpretation Act 1967 (Act 23/1967), the repeal had the effect of obliterating the ordinance and its subsidiary legislation. However, the appellant did not dispute that the ordinance and its subsidiary legislation were still in force and that the Comptroller General could still ask for returns under s 61A of the ordinance; but he maintained that after 1968, when the Income Tax Act 1967 (Act 53) came into force, the Comptroller General had to apply the provisions of s 77 of that Act.

Holding :

Held, dismissing the appeal: (1) the rule that the effect of repealing a legislation is to obliterate it completely, applies only where there are no express saving provisions in the repealing legislation; (2) s 1(3) of the Income Tax 1967 provides that the Act shall have effect for the year of assessment 1968 and subsequent years of assessment. The provisions of s 156 and para 3(1) of Sch 9 to the Act expressly save the ordinance and its subsidiary legislation which are still in force for matters which relate to the years of assessment from 1948 to 1967.

Digest :

Ong Lock Mui v Deputy Public Prosecutor [1972] 1 MLJ 73 High Court, Johore Bahru (Syed Othman J).

1858 Income tax -- Appeal

10 [1858] REVENUE LAW Income tax – Appeal – Assessment by Comptroller – Onus of proving that assessment excessive – Income tax – Appeal – Assessment by Comptroller – Onus of proving that assessment is excessive – Whether moneys received by appellant gifts from son or profits from business – Inferences from primary facts – Income Tax Ordinance 1947, s 76(3).

Summary :

The original appellant had been assessed to tax on certain moneys received by him from Indonesia. He claimed that the moneys were capital receipts as they were gifts from his son in Indonesia. The Comptroller-General contended that they were profits from appellant's business in Indonesia. On appeal to the Special Commissioners it was held that the moneys represented profits from the appellant's business in Indonesia and were therefore liable to tax. The appellant having since died, the appeal was brought by the personal representatives by way of case stated to the High Court.

Holding :

Held: (1) the apparent misstatement or misconception of the law relating to gifts in the grounds of decision of the Special Commissioners did not form part of their decision and did not bear upon the determination arrived at by them; (2) the inference or conclusion drawn by the Special Commissioners was the only reasonable inference or conclusion which could have been drawn under the circumstances and therefore the appeal must be dismissed.

Digest :

WSC & Anor v Comptroller General of Inland Revenue [1975] 1 MLJ 128 High Court, Kuala Lumpur (Hashim Yeop A Sani J).

1859 Income tax -- Appeal

10 [1859] REVENUE LAW Income tax – Appeal – Certificate of tax – Whether must be signed by Director General of Inland Revenue – Whether can be signed by Assistant Director General on behalf of Director General – Income Tax Act 1967, ss 136 & 142(1) – Interpretation Act 1967, s 7

Summary :

The respondent ('the taxpayer'), was assessed to income tax and additional income tax (on interest and penalties) levied under the Income Tax Act 1967 ('the Act'), in respect of the years of assessment of 1970, 1971, 1972, 1973, 1982, 1983 and 1984, by the Government of Malaysia ('the Revenue). The Revenue started summary proceedings under O 14 of the Rules of the High Court 1980 against the taxpayer for the recovery of tax. In the taxpayer's defence, he argued that: (i) the certificate issued under s 142(1) and signed by the acting Assistant Director General of Inland Revenue, was not a certificate within the meaning of s 142(1) of the Act, as it was not signed by the Director General of Inland Revenue personally; (ii) the Revenue's claim made in the writ of summons was premature as the taxpayer's appeal was still pending before the special commissioners; and (iii) the additional assessment for the year of assessment of 1971 was barred by limitation under s 91(1) and (3) of the Act, as it was levied more than 12 years prior to the date of the issue of the writ of summons. The High Court judge entered judgment against the taxpayer but upheld the defence of limitation regarding the additional assessment. Consequently, he made an order deducting the additional assessment sum of 1971 from the total sum claimed by the Revenue and granted an order for stay of execution on the balance pending determination of the taxpayer's appeal to the special commissioners. The Revenue has appealed.

Holding :

Held, allowing the appeal: (1) the very general words of s 136 of the Act, read with s 7 of the Interpretation Act 1967, were sufficient to permit an acting Director-General to sign and to issue a certificate under s 142(1) of the Act for and on behalf of the Director-General; (2) the High Court has no power to entertain a plea of limitation under s 91(1) and (3) of the Act. Only the special commissioners have such power, the reason being that if the plea of limitation were available in proceedings in court as well as before the special commissioners, then a decision by the High Court on the issue of limitation would prevent the special commissioners from deciding the same issue as they would regard themselves as being bound by the High Court's decision. Alternatively, if the special commissioners did not regard themselves as so bound, it could lead to inconsistent decisions by the High Court and the special commissioners on the identical question of limitation. The order of the High Court to deduct the additional assessment for the year of assessment of 1971 must therefore be set aside; (3) in the exercise of the inherent jurisdiction of the High Court, the judge had the power to grant a stay of execution until determination of the taxpayer's appeal by the special commissioners. But in the instant appeal, there was no formal application for stay supported by an affidavit alleging special circumstances to justify the making of the order. Although the onus was upon the taxpayer to demonstrate special circumstances justifying a stay, there was no material upon which the judge could have granted the order for a stay. Thus, the court had no option but to discharge the order for stay; (4) (obiter) the special commissioners are judges of fact and may consider issues which the court is prohibited by s 106(3) from entertaining. However, in finding the facts and drawing inferences of secondary facts from them, the special commissioners must not misdirect themselves and must draw conclusions from facts having probative value; (5) pursuant to para 34 of Sch 5 of the Act, it was possible for the taxpayer to appeal against the decision of the special commissioners on a point of law to the High Court by way of case stated. However, the High Court would not exercise its full appellate powers but confine itself to the point of law appearing in the case stated and apply the law to the facts as found by the special commissioners. Thereafter, a further appeal could be brought to the Federal Court which would be subject to the same restrictions as the High Court; (6) where summary judgment has been entered against a taxpayer and a stay of execution has been granted pending the final determination of an appeal before the special commissioners, and in the event the taxpayer succeeds on its plea of limitation in the appeal, the result of the appeal must override the order of summary judgment.

Digest :

Kerajaan Malaysia v Dato' Hj Ghani Gilong [1995] 2 MLJ 119 Federal Court, Kota Kinabalu (Anuar CJ (Malaya).

1860 Income tax -- Appeal

10 [1860] REVENUE LAW Income tax – Appeal – Effect of an appeal – Whether a limit to further assessment on matters not dealt with by the appeal

Digest :

Re XY & Co [1966] 2 MLJ 11 High Court, Singapore (Buttrose J).

See REVENUE LAW, Vol 10, para 1780.

1861 Income tax -- Appeal

10 [1861] REVENUE LAW Income tax – Appeal – Failure to furnish security – Whether a bar to appeal – Income tax – Notices of assessments – Refusal of Comptroller to amend – Appeal to Income Tax Board of Review – Requirement of security – Failure to furnish and consequences – Failure to provide security no bar to appeal – Income Tax Ordinance 1947, ss 75(1) & 76(9) – Effect of repeal of s 81 and amendment of s 82 upon s 76(9).

Summary :

By a notice of assessment dated 9 October 1964 the Comptroller of Income Tax assessed the appellants for income tax for the years of assessment 1962 and 1963. On 5 November 1964, the appellants applied to the Comptroller for the two assessments to be reviewed and revised. On the refusal by the Comptroller on 17 February 1965 to amend the two assessments, the appellants lodged an appeal to the Income Tax Board of Review under s 75(1) of the Income Tax Ordinance 1947. On 8 July 1965 the board, on the application of the Comptroller, made an order under s 76(9) of the ordinance requiring the appellants to furnish security in the sum of RM20,000 within one week and adjourned the hearing of the appeal to 18 August 1965. The appellants having failed to furnish the security as ordered, the board, when the appeal came on for hearing on 18 August 1965, ruled that as the appellants had failed to furnish security, it could not proceed with the hearing of the appeal and that the appeal was deemed to be withdrawn. An appeal was lodged to the High Court against the decisions of the board. The main ground of appeal was that the board has no power to dismiss an appeal or to deem it as withdrawn because of failure to comply with an order for security made under s 76(9) of the ordinance.

Holding :

Held: (1) the effect of the repeal of s 81 and amendment of s 82 is that an appeal to the board now no longer puts the tax in abeyance because payment of the tax within one month of the service of the notice of assessment is required notwithstanding. The provision for security under s 76(9) pending appeal in practice become superfluous and unnecessary because the Comptroller can commence proceedings for recovery of the tax after the lapse of one month as he did in this case; (2) failure to provide security is no bar to hearing of the appeal. The assumption that security under s 76(9) is security for prosecution of the appeal is wrong and it does not mean that appeal is at an end if security is not provided. The board will be directed to hear the appeal.

Digest :

DE Ltd v Comptroller of Income Tax [1968] 1 MLJ 10 High Court, Kuala Lumpur (Gill J).

1862 Income tax -- Appeal

10 [1862] REVENUE LAW Income tax – Appeal – Onus of proof

Summary :

The onus of proof on the taxpayer under s 80(3) of the Income Tax Ordinance (Cap 166, 1955 Ed) is no higher than proof on a preponderance of probability. It is not necessary for the taxpayer to attend at the hearing in order to discharge the burden.

Digest :

PQR v Comptroller of Income Tax [1961] MLJ 273 Court of Appeal, Singapore (Tan Ah Tah Ag CJ, Buttrose and Ambrose JJ).

1863 Income tax -- Appeal

10 [1863] REVENUE LAW Income tax – Appeal – Onus of proof – Fraud or wilful default – Income tax – Assessment – Notices – Validity of – Whether Comptroller is required to specify sources of income – Waiver and estoppel – Proofs of fraud or wilful default under s 73 of the Income Tax Ordinance (Cap 166) – Case stated under s 82 – Income Tax Ordinance (Cap 166) – Comparison with English and Australian legislation.

Summary :

Where on appeal to the Board of Review under the provisions of Part XII of the Income Tax Ordinance (Cap 166, 1955 Ed) there is an issue as to whether there has been fraud or wilful default, then the onus is on the taxpayer of proving to the reasonable satisfaction of the board the particular fact or facts which take the case outside the proviso to s 73(1).

Digest :

ABC v Comptroller of Income Tax [1959] MLJ 162 High Court, Singapore (Buttrose J).

1864 Income tax -- Appeal

10 [1864] REVENUE LAW Income tax – Appeal – Plea of limitation – Whether High Court or special commissioners has jurisdiction – Income Tax Act 1967, s 91(1) & (3)

Digest :

Kerajaan Malaysia v Dato' Hj Ghani Gilong [1995] 2 MLJ 119 Federal Court, Kota Kinabalu (Anuar CJ (Malaya).

See REVENUE LAW, para 1812.

1865 Income tax -- Appeal

10 [1865] REVENUE LAW Income tax – Appeal – Power of High Court to review conclusions of Special Commissioners – Whether conclusions erroneous in law – Income tax – Appeal – Power of High Court to review conclusions of Special Commissioners – Findings of fact by Special Commissioners – Hirers of taxicabs not employees – Conclusions drawn on a view of facts not erroneous in law – Income Tax Act 1967, ss 91 and 140.

Summary :

This was an appeal from the decision of the High Court ([1973] 2 MLJ 88) dismissing the appeal from the Special Commissioners on a case stated. The learned judge had held that there was sufficient evidence, on the facts found by the Special Commissioners, to support their decision that the drivers of taxi cabs were not employed by the taxpayer company and that the expenditure alleged to have been incurred by the taxpayer company in respect of wages and payments for diesel oil should be disallowed. The taxpayer company appealed to the Federal Court.

Holding :

Held, dismissing the appeal: (1) the learned judge was correct in stating the law that the determination of the Special Commissioners could not be erroneous in point of law, unless it appeared that they acted without any evidence or on a view of facts which could not reasonably be entertained or that the primary facts did not justify the inferences drawn or conclusions arrived at; (2) the conclusions drawn by the Special Commissioners were on the view of the facts not erroneous in law.

Digest :

UHG v Director General of Inland Revenue [1974] 2 MLJ 33 Federal Court, Kuala Lumpur (Azmi LP, Suffian CJ and Raja Azlan Shah FJ).

1866 Income tax -- Appeal

10 [1866] REVENUE LAW Income tax – Appeal – Question of law

Summary :

An appeal to the court from the Board of Review lies only if it is shown that the board's decision is erroneous on questions of law or mixed fact and law. What constitutes an error of law is laid down in Edwards v Bairstow 36 TC 207. There is a misconception of law where the facts found are such that no person acting judicially could have come to such a decision. But where the facts are such as to warrant a determination either way, the board's findings cannot be upset.

Digest :

Comptroller of Income Tax v QRS [1961] MLJ 276 High Court, Singapore (Wee Chong Jin J).

1867 Income tax -- Appeal

10 [1867] REVENUE LAW Income tax – Appeal – Question of mixed fact and law – Trade – Income Tax Ordinance 1947, ss 10 & 77 – Revenue derived from sale of burial plots – Whether 'income in respect of gains or profits from a trade' – Income tax chargeable on income from trade ultra vires memorandum of association – Extent of deduction allowable – Appeal – Question of mixed law and fact – Determination on a question of fact.

Summary :

Whether or not a trade is being carried on is a question of mixed fact and law. The court on appeal is entitled to overrule the decision of the Board of Review on a question of fact where it appears that a misconception of the law has led to a wrong determination.

Digest :

Re AB Ltd [1956] MLJ 197 High Court, Singapore (Whyatt CJ).

1868 Income tax -- Appeal

10 [1868] REVENUE LAW Income tax – Appeal – Question of mixed fact and law – Trade or business

Summary :

Whether or not a taxpayer is carrying on a trade or business is a question of mixed fact and law. If the Board of Review did not err in law, its decision on the issue of fact involved must stand unless it cannot be regarded as a reasonable decision.

Digest :

DEF v Comptroller of Income Tax [1961] MLJ 55 Court of Appeal, Singapore (Rose CJ, Buttrose and Ambrose JJ).

See REVENUE LAW, Vol 10, para 1848.

1869 Income tax -- Appeal

10 [1869] REVENUE LAW Income tax – Appeal – Stay of execution – Whether ss 103(1) and 106(3) of the Income Tax Act 1967 restrict inherent jurisdiction of court to grant stay – Income Tax Act 1967, ss 103(1) & 106(3)

Summary :

The respondent, Jasanusa Sdn Bhd ('Jasanusa'), had obtained an order for a limited stay of execution for six months against an order for summary judgment under O 14 of the Rules of the High Court 1980 obtained by the appellant, the Government of Malaysia ('Revenue'), pursuant to two notices of assessments in respect of tax for the years of assessment 1984 and 1986. (See [1993] 3 MLJ 514.) Jasanusa also obtained a further extension of the order for stay until the happening of any one of three specified events. The appellant appealed, contending that the High Court judge had been wrong in law: (i) in granting the order for stay contrary to ss 103(1) and 106(3) of the Income Tax Act 1967 ('the Act') which provide that the assessed amount is due and payable upon service of the relevant notice irrespective of whether there is any appeal and that the court should not entertain any plea that the amount of tax sought to be recovered was excessive; (ii) in holding that the Director General was under a statutory duty to forward Jasanusa's appeal to the special commissioners of income tax despite the absence of a written request by Jasanusa under s 102(2) of the Act; and (iii) by extending the stay of execution on entirely new conditions without fresh evidence contrary to his earlier ruling to grant a limited stay.

Holding :

Held, dismissing the appeal: (1) neither s 103(1) nor s 106(3) of the Act bars a court, in appropriate circumstances, from exercising its inherent powers of granting a stay, even in a tax case; (2) it is true that having regard to the provisions of s 102(2) of the Act, in certain circumstances, the taxpayer is entitled, upon the expiry of a period of six months from the date of the giving of the notice of appeal, to address a written request to the Director General to forward the appeal to the special commissioners, whereupon the Director General shall do so within three months from the date of receipt of such request. However, it is not obligatory for the taxpayer to exercise such right. But if the taxpayer fails or neglects to exercise that right, such failure or neglect would not, ipso facto, relieve the Director General of his duty to forward the appeal to the special commissioners, though the time constraints provided for by s 102(2) of the Act would not be applicable. Nevertheless, he would have to do so within a reasonable time and what was reasonable would depend on the particular circumstances of each case; (3) there was ample material for the judge to have exercised his discretion by extending the order for stay and his decision to do so was in no way contrary to his earlier ruling to grant a limited stay. It is well settled law that the exercise of such a discretion would be interfered with by an appellate court only in exceptional circumstances and the fact that the appellate court might have exercised the discretion differently would not constitute a sufficient ground for overturning the judge's decision to grant the limited stay.

Digest :

Kerajaan Malaysia v Jasanusa Sdn Bhd [1995] 2 MLJ 105 Supreme Court, Kuala Lumpur (Anuar CJ (Malaya).

1870 Income tax -- Appeal

10 [1870] REVENUE LAW Income tax – Appeal – Whether Director General under statutory duty to forward taxpayer's appeal to special commissioners – Whether taxpayer obliged to request in writing – Income Tax Act 1967, s 102(2)

Digest :

Kerajaan Malaysia v Jasanusa Sdn Bhd [1995] 2 MLJ 105 Supreme Court, Kuala Lumpur (Anuar CJ (Malaya).

See REVENUE LAW, para 1822.

1871 Income tax -- Appeal

10 [1871] REVENUE LAW Income tax – Appeal – Whether tax must be paid notwithstanding appeal – Income tax – Tax to be paid notwithstanding appeal – Certificate of Comptroller as to amount of tax – Federal Constitution, Art 13(1) – Income Tax Ordinance 1947, ss 82 & 86(3).

Summary :

In this case, it was argued (a) that the provisions of s 82 of the Income Tax Ordinance 1947 (which requires tax to be paid notwithstanding an appeal) are void as being inconsistent with art 13(1) of the Federal Constitution (which provides that no person shall be deprived of property save in accordance with law); (b) that s 86(3) of the ordinance (which makes the certificate of the Comptroller as to the amount of tax due by a defendant 'sufficient evidence' of the amount so due) should not be applied where an objection or appeal has been lodged.

Holding :

Held: (1) the legislation in this case was duly passed by Parliament and is therefore in accordance with law; (2) the proceedings being essentially a matter of giving effect to the statutory provisions of the law, do not in law call into question the effect of any provision of the Constitution and therefore in accordance with s 86(3) of the Income Tax Ordinance judgment must be given for the Comptroller.

Digest :

Comptroller General of Inland Revenue v NP [1973] 1 MLJ 165 High Court, Ipoh (Chang Min Tat J).

1872 Income tax -- Appeal against assessment

10 [1872] REVENUE LAW Income tax – Appeal against assessment – Profit on sale of flats – Whether company was trading in properties – Company incorporated as investment holding company – Property transferred from shareholders – Shareholders trading in properties – Company's low paid-up capital – Income lower than expenses – Isolated transaction – Income Tax Act (Cap 134, 1985 Ed), ss 10(1) & 80(3)

Summary :

This was an appeal from the decision of the Comptroller of Income Tax ('CIT') refusing to amend his notice of additional assessment assessing SCL Pte Ltd ('SCL') to tax in the sum of S$3,921,944 for the year of assessment 1982. The tax had been raised in respect of a profit amounting to S$9,973,103 derived by SCL from the sale of a block of flats in the following circumstances. In July 1979, an option to purchase the subject block of flats ('Block F') with two other blocks, had been granted to a director of SCL's two shareholders, F Ltd and S Ltd. F Ltd's business was investing in shares and dealing in immovable properties, while S Ltd's principal activity was dealing in land. Relying on a feasibility study made by a property appraisal company that the offer was attractive to an investor, for both long and short term, the option was duly exercised, and the three blocks of flats were purchased on 14 July 1979. The two other blocks of flats were sold at a profit on 21 October 1979 and 8 December 1979. On 8 December 1979, F Ltd and S Ltd each resolved that Block F be retained for investment purposes and that SCL be incorporated to hold the said block. SCL was incorporated on 12 December 1979 with an authorized capital of S$3m and paid-up capital of S$600,000. SCL had, under its memorandum of association, wide-ranging objects which included the power to invest and to deal in land. On 3 January 1980, Block F was transferred to SCL at the price of S$4.5m. SCL financed S$600,000 of the purchase price from its own funds, and the balance from an overdraft of S$4m from DBS. Some of the units in Block F were already tenanted. SCL carried out minor renovation works on 27 units, costing a total of S$15,350.70, and obtained tenants for all the vacant units. On 19 November 1980, SCL sold Block F for S$15m. Its audited accounts for its first year of operation showed a trading loss of S$65,149. SCL's main income was the rental derived amounting to S$628,823 when its expenses amounted to S$729,319, of which the sum of S$519,346 was in respect of overdraft and loan interest. SCL argued that the profit was a capital gain and was not taxable as its original intention was to hold Block F as an investment, and that this was borne out by the circumstances of the purchase and sale of Block F. SCL relied on the resolutions passed by its shareholders, the feasibility study made prior to the purchase, which showed an expected return on capital of 15.4%, and DBS's credit report. SCL also pointed out that Block F was reflected in its balance sheet as a fixed asset, that the sale was an isolated transaction and that the actual return on capital was below that projected. SCL claimed that it sold Block F only because the purchaser's agent approached its director and offered a price that was well above the market value of S$10m. CIT, on the other hand, argued that the profit was taxable, being a gain from the carrying on of a trade or business of property dealing, which SCL's objects clause clearly empowered it to do. The fact that Block F was held for a short period of 11 months was indicative of purchase with intent to resell. CIT claimed that the company's financial position was not consistent with investment holding and that SCL was set up as a vehicle for disposing Block F for its shareholders. If SCL did not intend to sell, it could have rejected the offer.

Holding :

Held, dismissing the appeal: (1) the test for determining whether SCL purchased Block F for investment or for trade is an objective one, and the surrounding circumstances leading to the acquisition and sale of Block F will have to be examined; (2) the fact that Block F was one of three acquired by the SCL's shareholders who were trading in properties, and was held for a short time, that the financial situation of SCL did not indicate that it had the capacity to hold, that SCL did not upgrade Block F so as to obtain better rental, and that SCL was controlled by people knowledgeable in property dealing, were indications that SCL did not acquire Block F for long term investment; (3) SCL was not carrying out the object of investment under its memorandum of association as it did not have its own money to invest; (4) the formation of SCL, the fact that its shares were held equally by companies who had been trading in properties, the resolutions of SCL's shareholders, the correspondence with the Registry of Companies, and the information supplied to the bank for overdraft facilities, were part of a scheme by the holding companies to set up SCL for the purpose of selling Block F as soon as the opportunity presents itself, in order to avoid paying tax on the profits arising from sale. If there was intention to hold Block F for long-term investment, the shareholders should have injected more funds, and SCL could have renovated Block F to bring in a higher rental.

Digest :

SCL Pte Ltd v Comptroller of Income Tax [1991] 3 MLJ cxvi Income Tax Board of Review, Singapore (Goh Phai Cheng JC, Chairman, Henry Tan Hoay Gie, Lim Cheng Pah, Members).

1873 Income tax -- Appeal against assessment

10 [1873] REVENUE LAW Income tax – Appeal against assessment – Whether gains from trade of property developer – Decision of fact

Summary :

This was an appeal from the judgment of the Court of Appeal ([1982] 1 MLJ 112). The appellant was assessed in 1972 for income tax upon profits for the sale of land in 1966 and 1968. The issue was whether he was carrying on a trade or business dealing in land at the time of each of those sales. The Board of Review held that he was. The High Court and the Court of Appeal upheld the decision of the Board of Review.

Holding :

Held, dismissing the appeal: the principle laid down in Edwards v Bairstow [1956] AC 14 applied.

Digest :

Chng Boon Huat v Comptroller of Income Tax [1985] 1 MLJ 6 Privy Council Appeal from Singapore (Lord Diplock, Lord Keith of Kinkel, Lord Brandon of Oakbrook, Lord Brightman and Lord Templeman).

1874 Income tax -- Appeal against assessments

10 [1874] REVENUE LAW Income tax – Appeal against assessments – Burden of proof – Onus on taxpayer to show that assessment should not have been made

Digest :

Lower Perak Co-operative Housing Society Bhd v Ketua Pengarah Hasil Dalam Negeri [1994] 2 MLJ 713 Supreme Court, Malaysia (Harun Hashim, Edgar Joseph Jr and Wan Yahya SCJJ).

See REVENUE LAW, para 1828.

1875 Income tax -- Appeal against assessments

10 [1875] REVENUE LAW Income tax – Appeal against assessments – Sale of land by housing society to members – Whether society trading in land – Dominant motive and intention – Whether land was capital asset or stock-in-trade – Effect of forced sale – Income Tax Act 1967, s 4

Summary :

Edwards v Bairstow and Harrison [1955] 3 All ER 48 (folld); Chua Lip Kong v Director-General of Inland Revenue [1982] 1 MLJ 235 (folld); Lim Foo Yong v Comptroller-General of Inland Revenue [1986] 2 MLJ 161 (folld); Commissioners of Inland Revenue v Fraser 24 TC 498 (folld); Norman v Golder [1945] 1 All ER 352 (folld); Scottish Australian Mining Co v Commissioner of Taxation (1950) 81 CLR 188 (folld); Simmons (as liquidator of Lionel Simmons Properties) v IRC [1980] 2 All ER 798 (folld); American Leaf Blending v Director-General of Inland Revenue [1979] 1 MLJ 1 (refd); Kirkham v Williams [1991] 1 WLR 863 (folld); Ransom v Higgs [1974] 3 All ER 949 (refd); E v Comptroller-General of Inland Revenue [1970] 2 MLJ 117 (refd); Cunliffe v Goodman [1950] 1 All ER 720 (refd); Hudson's Bay Co v Stevens (1909) 5 TC 424 (folld); IRC v Livingstone (1926) 11 TC 538 (folld); Lupton v FA & AB [1971] 3 All ER 948 (folld); Coates v Arndale Properties [1985] 1 All ER 15 (refd); Overseas Containers (Finance) v Stoker [1989] 1 WLR 606 (refd); Iswera v IRC [1965] 1 WLR 663 (folld); Religious Tract and Book Society of Scotland v Forbes (1896) 3 TC 415 (refd); Thomson v Gurneville Securities [1971] 3 All ER 1071 (refd); Taylor v Good [1974] 1 All ER 1137 (folld); Rand v Alberni Land Co (1920) 7 TC 629 (folld); Berea West Estates v SIR 38 SATC 43 (refd); Commissioners of Inland Revenue v Reinhold 34 TC 389 (folld); Commissioner of Taxes v British Australian Wool Realisation Association [1931] AC 224 (folld); Commissioner of Taxation v Whitfords Beach (1978) 8 ATR 593 (refd); Stratham v Federal Commissioners of Taxation (1988) 20 ATR 228 (refd); Rutledge v IRC (1929) 14 TC 490 (refd); Murray v IRC (1951) 32 TC 238 (refd); Frasers (Glasgow) Bank v IRC [1963] TR 17 (refd); Reed v Nova Securities [1985] 1 All ER 686 (folld); Rolfe v Wimpey Waste Management [1989] STC 454 (folld); West v Phillips (1958) 38 TC 203 (folld); Dunn Trust v Williams (1950) 31 TC 477 (refd); Page v Pogson (1954) 35 TC 545 (refd); London County Council v AG [1901] AC 26 (refd).

Digest :

Lower Perak Co-operative Housing Society Bhd v Ketua Pengarah Hasil Dalam Negeri [1994] 2 MLJ 713 Supreme Court, Malaysia (Harun Hashim, Edgar Joseph Jr and Wan Yahya SCJJ).

1876 Income tax -- Appointment of agent for taxpayer

10 [1876] REVENUE LAW Income tax – Appointment of agent for taxpayer – Power of – Corporations appointed as agents of taxpayer for purposes of Income Tax Act – Whether power of Director-General of Inland Revenue to appoint agents wrongfully exercised – Income Tax Act 1967 (Act 53)

Summary :

D, acting under s 68(1) of the Income Tax Act 1967 (Act 53), appointed certain corporations as agents of P for the purposes of the Income Tax Act (Act 53). The agents were not allowed to make any payments to P without the approval of the Income Tax Department. P filed a writ of summons against D alleging that the appointments of the agents were wrongful, ultra vires and an abuse of the powers conferred on D under s 68 of the Act.

Holding :

Held, dismissing P's application: section 68 is specific and clear and does not admit of any ambiguity or inconsistency with any other provisions in the Income Tax Act 1967 (Act 53). D was not acting ultra vires his powers under s 68 when he appointed the corporations as agents of P. There was also no evidence that he acted in bad faith. P's application was, accordingly, misconceived.

Digest :

Rotary Piling Sdn Bhd v Director-General of Inland Revenue Malaysia Civil Suit No 57-21-379-87 High Court, Kuala Lumpur (Ajaib Singh J).

1877 Income tax -- Arrears of tax

10 [1877] REVENUE LAW Income tax – Arrears of tax – Order for the sale or disposition of taxpayers' property – Whether court empowered under s 320(1)(ba) of the National Land Code 1965 to make such order

Summary :

The applicants were the registered chargees of two lots of land to secure two loans granted by them in the sum of RM470,000. The loan was subsequently reduced to RM367,216.15 ('the redemption sum'). The registered proprietors applied to the Public Bank ('the bank') for a term loan of RM350,000 and an overdraft of RM200,000, offering the same land as security. This money was to be utilized to pay the redemption sum and the balance was to be paid to the registered proprietors. The bank paid the redemption sum to the applicants subject to a condition precedent that the two charges be first discharged by the applicant. The discharge of the charges was not possible because the registrar had filed a registrar's caveat at the instance of the Director General of Inland Revenue, the second respondent, to secure the arrears of tax owed by the registered proprietors of the land. The applicants therefore filed an application for the removal of the registrar's caveat. The second respondent objected to the removal of the caveat. If the court was minded to remove the caveat, the second respondent applied for an order that the said land should not be permitted to be charged to any other party until the tax due has been paid; alternatively, for an order that the land be sold to settle the debts of the applicants and the second respondent; or, in the further alternative, that the claim be dismissed with costs and the caveat be perpetuated until the second respondent's debts are paid in such a manner as not to cause any loss to the applicants or the bank.

Holding :

Held, dismissing the application: (1) the applicants do not have any right under s 321(3) of the National Land Code 1965 to apply for cancellation of a registrar's caveat. Only the registered proprietor can do that, or the registrar on his own motion; (2) the court is not empowered under s 320(1)(ba) to enable the Department of Inland Revenue to obtain orders for the sale or disposition of a taxpayer's property or alternatively, for the caveat to be lifted just to permit the registration of the memorandum of discharge and then to be immediately reimposed to take priority over the charge to the bank; (3) the purpose of s 320(1)(ba) is nothing more than to give the government an expeditious way of effecting an attachment before judgment for the tax due and payable. Once the caveat has been filed, it behoves the revenue to take timeous action to obtain judgment and enforce it.

Digest :

MUI Finance Bhd v Pendaftar Hakmilik, Shah Alam & Anor [1993] 1 MLJ 98 High Court, Shah Alam (Shankar J).

1878 Income tax -- Assessable income

10 [1878] REVENUE LAW Income tax – Assessable income – Whether taxpayer resident in Malaya – Meaning of 'resident' – Income tax – Appeal – Determination of assessable income – Whether taxpayer was resident in Malaya – Whether temporary absences were reasonable and consistent with claim – Income Tax Ordinance 1947, s 2 – Review – Whether court can review decision of Special Commissioners where conclusion improperly drawn.

Summary :

This was an appeal from the decision of the High Court [1972] 1 MLJ 84. The question for determination was whether the appellant was 'resident'Êin the States of Malaya in the years 1966 and 1967 within the meaning of s 2 of the Income Tax Ordinance 1947. He was in Malaya for 132 days in 1966 and 141 days in 1967, but was held not to have been a 'resident'. On appeal to the Federal Court,

Holding :

Held, allowing the appeal: (1) the appellant was 'resident' in Malaya in the years 1966 and 1967. His temporary absences were reasonable and not inconsistent with his claim to be resident in Malaya; (2) on the whole of the evidence before them, the conclusion arrived at by the Special Commissioners could not be properly drawn. Thus, in those circumstances, it was open to the Federal Court, as well as the court below, to review the decision of the Special Commissioners; (3) therefore, the Deciding Order of the Special Commissioners must be set aside and an order made that the respondent do amend the assessment of income tax of the appellant on the basis of his being resident in Malaya in those two years.

Digest :

MY v Comptroller General of Inland Revenue [1972] 2 MLJ 110 Federal Court, Kuala Lumpur (Suffian, Gill and Ong Hock Sim FJJ).

1879 Income tax -- Assessable income

10 [1879] REVENUE LAW Income tax – Assessable income – Whether taxpayer resident in Malaya – Meaning of 'resident' – Income tax – Assessable income – Whether taxpayer resident in Malaya – Meaning of 'resident' – Income Tax Ordinance 1947, s 2 – Case stated – When decision of Special Commissioners reviewable by High Court – Income Tax Act 1967, Sch 5 para 34.

Summary :

This was a case stated pursuant to para 34 of Sch 5 of the Income Tax Act 1967 (Act 53), for the opinion of the High Court, whether on the facts found by the Special Commissioners of Income Tax, there was evidence to support their finding that the appellant was not resident in the States of Malaya for the years of assessment 1966 and 1967 within the meaning of the word 'resident' as defined in s 2 of the Income Tax Ordinance 1947. The facts found by the Special Commissioners were not in dispute and accordingly appear in the judgment.

Holding :

Held, dismissing the appeal: (1) in the light of the definition of the word 'resident', it would appear that to be a resident in a place, an individual must first of all reside in that place. He may be absent from that place provided that such absence is temporary and reasonable and is not inconsistent with his claim to be resident in that place. This is a matter of degree for the Commissioners to determine, and it is not for the court to say whether it could have reached the same conclusion. Whether a person is resident in a place has always been a question of fact and the decision of the Commissioners is final unless the courts decide there was no evidence on which the Commissioners could properly have come to the conclusion at which they arrived; (2) thus, in the instant case the Special Commissioners had all the material facts which they reviewed as a whole before arriving at a conclusion, which was not open to review by the court.

Digest :

MY v Comptroller General of Inland Revenue [1972] 1 MLJ 84 High Court, Kuala Lumpur (Abdul Hamid J).

Annotation :

[Annotation: The decision of the High Court was overruled by the Federal Court on appeal (see [1972] 2 MLJ 110).]

1880 Income tax -- Assessment

10 [1880] REVENUE LAW Income tax – Assessment – Basis for computing statutory income – Applicability of provisions consequent upon acquisition of source – Income tax – Assessment – Sale of business by taxpayer to wholly owned subsidiary company under a 'reconstruction agreement' – Basis for computing statutory income – 'Acquisition' of source – Applicability of provisions consequent upon acquisition of source – Income Tax Ordinance 1947, s 31(1) & (5) – Income Tax Act 1967, as amended by Income Tax (Transitional Provisions) Order 1968, Sch 9, paras 104(a) & 105(a).

Summary :

This was a case stated by the Special Commissioners of Income Tax arising out of an appeal to them against the assessment of income tax by the respondent on the appellants' income for the years 1966 and 1967. By an agreement dated 11 November 1966 the appellants' company, incorporated in Hong Kong with its registered office there, agreed to sell to RT Plantations Sdn Bhd, incorporated in Malaysia as a wholly owned subsidiary company of the appellants, the whole of the appellants' business as a going concern on the terms and conditions as set out in a 'reconstruction agreement'. The appellants owned five rubber estates and the income from these estates constituted the business income which the appellant had in Malaysia and which the Income Tax Department had been treating as one source. Clause 1 of the agreement was to the effect that 'relevant completion date' of the sale of each of the five estates was to extend over a period from 1 October 1966 to 30 September 1967. The question for determination by the Special Commissioners was whether the provisions of para 104(a) of Sch 9 to the Income Tax Act 1967 as amended by the Income Tax (Transitional Provisions) Order 1968, applied to the appellants. The Special Commissioners concluded that there was an 'acquisition' within the meaning of para 105(a) of Sch 9; that there was acquisition of five sources as at the different completion dates of sale of the five rubber estates; and that the provisions of para 104(a) of Sch 9 applied to the three rubber estates acquired after 15 June 1967, but not to the two rubber estates acquired prior to 15 June 1967. The Special Commissioners accordingly made an order directing that the notices of assessments in respect of the appellants' income for the years of assessments 1966 and 1967 be amended in that the income tax in respect of the two estates sold before 15 June 1967 be assessed under s 31(5) and in respect of the three estates sold after 15 June 1967, under s 31(1) of the West Malaysian Ordinance (Income Tax Ordinance 1947). The appellants' appealed from this order.

Holding :

Held, dismissing the appeal: (1) there was evidence to support the decision of the Special Commissioners; (2) an agreement to sell and the completion of the sale are two different things. The acquisition of the source can only date from the date of completion of the sale.

Digest :

RT Ltd v Director General of Inland Revenue [1972] 2 MLJ 205 High Court, Penang (Gill FJ).

1881 Income tax -- Assessment

10 [1881] REVENUE LAW Income tax – Assessment – Effect of service of notice of assessment – Income tax – Claim for tax – Certificate by Comptroller General of amount of tax due – Income Tax Act 1967, ss 103, 106 & 142(1).

Summary :

In this case, the action was for the sum of over RM7 million for income tax for the years 1961 and 1964-1969 and for tin profits and penalty. It was argued in this case for the defendant that the very substantial amount claimed was 'prima facie and without further and better particulars, grossly inflated and ambiguously, arbitrarily and illegally arrived at against all the rules of probability, bad in law and bad in fact'. The defendant applied for the statement of claim to be struck out or alternatively for further and better particulars.

Holding :

Held: the effect of ss 103 and 108 of the Income Tax Act 1967 (Act 53) is that once an assessment is made the tax payable under the assessment shall on the service of the notice of assessment on the person assessed be due and payable at the place specified in the notice, whether or not the person appeals against the assessment and such tax due and payable may be recovered by the government by civil proceedings as a debt due to the government. In the circumstances, the application to strike out the statement of claim must be dismissed and the application for further and better particulars refused.

Digest :

Government of Malaysia v DC [1973] 1 MLJ 161 High Court, Ipoh (Chang Min Tat J).

1882 Income tax -- Assessment

10 [1882] REVENUE LAW Income tax – Assessment – Estimated assessment – Best judgment of the Comptroller – Whether the Comptroller has to take into account losses

Summary :

This was an appeal against the Comptroller's estimated assessments raised under s 72(3) of the Income Tax Ordinance (Cap 166, 1955 Ed) on the taxpayer company for the years of assessment 1964 to 1968. The assessments were based on the known income of the company from some of the sources only and the Comptroller had not allowed any set-off in respect of alleged losses by the company from its trading sources although these sources were known to exist for the relevant years. The Comptroller claimed that as no accounts were submitted to him for the relevant years, he was entitled to raise the assessments based on known income without attributing losses in respect of other sources in respect of which no accounts were submitted. At the adjourned hearing before the Income Tax Board of Review, the taxpayer did produce some accounts for the year of assessment 1964 only, but this the board found to be unreliable and inaccurate. The board held that in view of the facts in the case, the Comptroller's assessments were correctly raised under s 72(3) of the ordinance and the defendant had not discharged the onus upon them of proving that the assessments were excessive. An appeal against the board's decision was heard by Kulasekeram J and the only substantive point argued was whether in raising the estimated assessments in this case under s 72(3), the Comptroller had exercised his best judgment since he had not taken into account the trading source of the appellant company.

Holding :

Held,

Held, (by the High Court) allowing the company's appeal: since the Comptroller's representative had stated that only known sources of income were taken into account in raising the assessments, without assessing the taxpayer on his other sources, it was not the proper exercise of his best judgment as was required by s 72(3) and hence the assessments ought to be set aside with liberty to the Comptroller 'to raise fresh assessments in respect of the five years in question within the period of limitation'. The Comptroller appealed against the decision of the High Court to the Court of Appeal. (by the Court of Appeal) allowing the appeal: in order for a taxpayer to discharge the onus on him of proving that an estimated assessment is excessive, he must not only be able to show that the Comptroller has ignored certain sources. There is the further onus to show in what way it is excessive, and applying the dicta of Mr Justice Buttrose in ABC v Comptroller of Income Tax [1959] MLJ 162 by what amount such assessment is excessive. Dicta in ABC v Comptroller of Income Tax followed.

Digest :

Comptroller of Income Tax v S & Co (Pte) Ltd [1972] 2 MLJ 234 Court of Appeal, Singapore (Wee Chong Jin CJ, Chua and Tan Ah Tah JJ).

1883 Income tax -- Assessment

10 [1883] REVENUE LAW Income tax – Assessment – Failure to appeal within time period stipulated – Whether assessment final and conclusive – Income Tax Ordinance 1947 – Application to set aside judgment for income tax – No appeal from assessment.

Summary :

This was an application to set aside a judgment on a claim for the sum of RM8,022 for income tax. The sum had been assessed by the Comptroller of Income Tax under s 68 of the Income Tax Ordinance 1947. No appeal was made against the assessment and when the action for the sum assessed was brought in court the applicant did not contest the suit. After judgment was obtained the applicant paid the amount due apart from a small balance in respect of interest and costs by instalments. Two years later the applicant applied to set aside the judgment.

Holding :

Held: a person aggrieved by an assessment has the right to appeal against it within the time specified by the ordinance. In default of such appeal the assessment is final and conclusive and the court cannot reopen the assessment.

Digest :

X v Comptroller of Income Tax [1957] MLJ 110 High Court, Johore Bahru (Buhagiar J).

1884 Income tax -- Assessment

10 [1884] REVENUE LAW Income tax – Assessment – Incomes of secondary wives – Whether can be added to taxpayer's income for assessment of tax – Income tax – Secondary wives – Incomes of – Whether can be added to taxpayer's income for assessment of tax – Income Tax Ordinance 1947, s 47(1) – Income Tax Act 1967 (Act 53), s 45(1).

Summary :

The taxpayer in this case had the incomes of two secondary wives added to his own income for assessment of tax. Upon refusal by the Comptroller to amend the tax for the year of assessment in question, he appealed to the Income Tax Board of Review on the ground that 'since the introduction of the Income Tax Ordinance 1947 the income of the secondary wives of a Chinese person have not been included in the income of that person. This has been the practice of the Department of Inland Revenue from year of assessment 1948 up to year of assessment 1965. This is a right practice and a correct interpretation of the law. Therefore it is wrong on the part of the Inland Revenue to depart from this procedure as so-called "secondary wives" are not the legal wives of a Chinese taxpayer. The laws of Muslim marriages regarding plurality of wives should not be applied to a Chinese taxpayer who is not a Muslim'. The board in allowing the appeal held that the incomes of secondary wives did not come within the ambit of s 47(1) of the ordinance and should not therefore be aggregated with the taxable income of the taxpayer. The board also accepted that this view accorded with the practice of the Inland Revenue Department from 1948 to 1965 and in a sense was supported by the definition of 'wife' in s 45(1) of the Income Tax Act 1967 (Act 53). The Comptroller appealed against this decision on the grounds that the board: (a) erred in law in deciding that the income of the two secondary wives of the respondent did not come within the ambit of s 47(1) of the ordinance; (b) was wrong in not deciding that a secondary wife was a married woman within the meaning of s 47(1); (c) erred in arriving at its decision on the ground that it was 'fortified by the fact that from 1948 to 1965 incomes of Chinese secondary wives have not been aggregated with the income of the husband'. The board was wrong to have allowed itself to be influenced by the practice of the Income Tax Department in order to arrive at the correct interpretation of the law; and (d) further erred in resorting to the provisions contained in a subsequent statute that had no relevance for the purpose of the appeal before itself.

Holding :

Held, dismissing the appeal: s 47(1) of the ordinance did not require that the incomes of secondary wives be aggregated with that of the taxpayer and the earlier practice of the Inland Revenue Department was the correct one. Observations on necessity of plain and unambiguous language. Per curiam: 'The uncertainty as to whether secondary wives ought to have their incomes aggregated with the husband's has been manifest in the attitude of the department since the inception of the Income Tax Ordinance in 1947. A decision in favour of the Inland Revenue could well result in a direct campaign to aggregate incomes of wives over the last 12 years (since the six-year time bar has been extended) and there will be cases where certain persons are dead and others will have to shoulder the tax. In effect, failure to pay will involve a number of consequences for non-compliance, which would contravene art 7(1) of the Constitution that no person shall be punished for an act or omission which was not punishable by law when it was done or made.'

Digest :

Comptroller of Income Tax, States of Malaya v HKV [1968] 2 MLJ 260 High Court, Penang (Ong Hock Sim J).

1885 Income tax -- Assessment

10 [1885] REVENUE LAW Income tax – Assessment – Incorrect returns – Whether penalty correctly imposed by Comptroller – Comptroller has to give particulars of sources of income – Power of Comptroller – Income Tax Ordinance 1947, ss 73(2), 82, 86(3) & 91(2).

Summary :

In these cases which were heard together the Comptroller of Income Tax applied to enter final judgment on a claim for income tax and penalty. In the first case, the taxpayer had failed to submit his returns and assessments were therefore made by the Comptroller. A certificate had been issued by the Comptroller setting out the amount of tax due. In the second case, the Comptroller had refused to accept the defendant's returns and had made his own assessment. It was argued by the defendant (a) that the notices of assessments did not comply with the proviso to s 73(2) of the Income Tax Ordinance 1947, in that it did not give the sources of the income of the taxpayer; (b) that s 82 of the ordinance conferred on the Comptroller unlimited powers of assessment which he could exercise arbitrarily; (c) that the Comptroller had no power to impose a penalty in the second case, as the question of the correctness of the returns had not been tested in court.

Holding :

Held: (1) the Comptroller had sufficiently complied with the requirements of s 73(2) of the Income Tax Ordinance by showing the chargeable income and the tax payable thereon; (2) the Comptroller had legally exercised his powers under s 82 of the Income Tax Ordinance and the certificate issued under s 86(3) of the ordinance sufficed, on the facts of this case, for judgment to be given against both the defendants; (3) s 91(2) of the Income Tax Ordinance gave the Comptroller power to impose a penalty on the taxpayer for an incorrect return unless he satisfied the Comptroller that the omission, understatement or incorrect information was made or given in good faith; and in this case the Comptroller was within his rights in imposing the penalty.

Digest :

Comptroller of Income Tax v AB; Comptroller of Income Tax v CD Ltd [1967] 1 MLJ 11 High Court, Kuala Lumpur (Ong Hock Thye FJ).

1886 Income tax -- Assessment

10 [1886] REVENUE LAW Income tax – Assessment – Meaning of – Whether assessment had to be made in the appropriate prescribed form – Whether calculations done on any piece of paper to enable the Inland Revenue Department to come to a decision in relation to tax leviable on taxpayers amounted to an assessment – Income Tax Act 1967, s 93

See revenue law, para IX [114].

Digest :

Enesty Sdn Bhd v Ketua Pengarah Jabatan Hasil Dalam Negeri [1997] 5 MLJ 104 High Court, Kuala Lumpur (Abdul Kadir Sulaiman J).

1887 Income tax -- Assessment

10 [1887] REVENUE LAW Income tax – Assessment – Notice of – Comptroller not required to specify sources of income

Summary :

The Comptroller of Income Tax, under the provisions of s 76(1) of the Income Tax Ordinance, served upon the appellant notices of assessment and additional assessment. The appellant challenged the validity of the notices on ground that the notices did not contain the particulars on which the assessments were made.

Holding :

Held: there is nothing in the ordinance compelling the Comptroller to specify the sources of income in the notice of assessment. The English position is irrelevant. Under the English system of schedules, income from each source is treated as a separate entity whereas in Singapore, the assessment is made on the net results to the taxpayer from all sources of taxable income. The notices of assessment are therefore valid. Such a construction of the ordinance does not place an oppressive burden of proof on the taxpayer for the taxpayer is presumed and is generally in fact, acquainted with his own affairs.

Digest :

ABC v Comptroller of Income Tax [1959] MLJ 162 High Court, Singapore (Buttrose J).

1888 Income tax -- Assessment

10 [1888] REVENUE LAW Income tax – Assessment – Notice of – Defective – Fresh assessments when made – Income tax – Assessment – Notices – Validity of – Whether Comptroller is required to specify sources of income – Waiver and estoppel – Proof of fraud or wilful default under s 73 of the Income Tax Ordinance (Cap 166, 1955 Ed) – Case stated under s 82 – Comparison with English and Australian legislation.

Summary :

Where the assessment is invalid a fresh valid assessment may be issued if it is not out of time. An assessment cannot be made by the Comptroller out of time unless there is fraud or wilful default. The Comptroller must be satisfied that these conditions are fulfilled before he can raise an assessment out of time.

Digest :

ABC v Comptroller of Income Tax [1959] MLJ 162 High Court, Singapore (Buttrose J).

1889 Income tax -- Assessment

10 [1889] REVENUE LAW Income tax – Assessment – Notice of – Defective – No amendment possible – Income tax – Assessment – Notices – Validity of – Whether Comptroller is required to specify sources of income – Waiver and estoppel – Proof of fraud or wilful default under s 73 of the Income Tax Ordinance (Cap 166, 1955 Ed) – Case stated under s 82 – Comparison with English and Australian legislation.

Summary :

The invalidity or other defect in the notice of assessment cannot be cured by amendment.

Digest :

ABC v Comptroller of Income Tax [1959] MLJ 162 High Court, Singapore (Buttrose J).

1890 Income tax -- Assessment

10 [1890] REVENUE LAW Income tax – Assessment – Notice of – Validity immaterial in determining taxpayer's objections to assessment – Income Tax – Assessment – Notices – Validity of – Whether Comptroller is required to specify sources of income – Waiver and estoppel – Proof of fraud or wilful default under s 73 of the Income Tax Ordinance (Cap 166, 1955 Ed) – Case stated under s 82 – Comparison with English and Australian legislation.

Summary :

The validity of the notices of assessment or additional assessments are not material in determining objections by the appellant to the assessments or additional assessments of tax imposed upon him by theCcomptroller.

Digest :

ABC v Comptroller of Income Tax [1959] MLJ 162 High Court, Singapore (Buttrose).

1891 Income tax -- Assessment

10 [1891] REVENUE LAW Income tax – Assessment – Notice of – Whether notices of assessment properly served

Digest :

Government of Malaysia v Dato' Mahindar Singh [1996] 5 MLJ 626 High Court, Kuantan (Arifin Zakaria J).

See CIVIL PROCEDURE, para 391.

1892 Income tax -- Assessment

10 [1892] REVENUE LAW Income tax – Assessment – Requirement of – Whether Director General of Inland Revenue was under duty or obligation to make an assessment and issue notice of assessment where no income was taxable – Income Tax Act 1967, ss 77, 95 & 96

Summary :

Pursuant to s 77 of the Income Tax Act 1967 (`the Act'), the applicant furnished the respondent with returns containing particulars for the purpose of ascertaining the chargeable income for the years of assessment 1982, 1983 and 1984 (`the years of assessment'). However, in furnishing the particulars, it failed to elect in writing to claim the normal rate of capital allowances on its assets pursuant to Income Tax (Qualifying Plant Annual Allowances) (Amendment) Rules 1980. The applicant's tax agent wrote to the respondent enclosing revised tax computations including the claim for the tax allowances. This was rejected by the respondent. The applicant again wrote to the respondent requesting, inter alia, notices of assessment (`the notices') pursuant to s 96(1) of the Act to enable an appeal to be made to the Special Commissioners. This again was rejected by the respondent. The applicant applied for an order of mandamus to direct the respondent to issue and cause to be served on the applicant notices of assessment in respect of tax for the years of assessment. The issues before the court were, inter alia: (i) whether the respondent had a duty or obligation under the law to make an assessment and to issue such notices of assessment when the returns of income submitted by the applicant disclosed that there was no income upon which tax may be assessed and levied; and (ii) whether notwithstanding that no tax was leviable, the respondent was still required under law to serve the notices because the respondent would have done an assessment to come to a conclusion that no tax was payable in respect of the years of assessment.

Holding :

Held, dismissing the application with cost: (1) when an assessment was made, by s 96(1) the Director General was required as soon as might be after that to cause a notice of assessment to be served on the taxpayer concerned. It followed therefore, that if there was no chargeable income in respect of any year of assessment, no assessment was required and therefore no notice of assessment would be served on the taxpayer who had submitted a return to the respondent under s 77 of the Act. In the present case, as the respondent found that the applicant had no chargeable income which would attract any income tax to be paid by the applicant in respect of the years of assessment, it was outside its public duty to make any assessment and this was reflected in its conduct of not serving any notices of assessment for those relevant years on the applicant as there was nothing to give notice about. There was no statutory duty placed upon it in the circumstances to be enforced through mandamus; (2) s 93 required that in order for it to be called an assessment made by the respondent, it had to be made in the appropriate prescribed form. It was not an assessment made for the purpose of s 93 of the Act if it was merely done on any piece of paper to work out certain calculation to enable the respondent to come to a decision in relation to tax leviable on taxpayers. In the circumstances, the issue of making an assessment in respect of a nil or a negative figure would not arise in relation to the requirement of the Act.

Digest :

Enesty Sdn Bhd v Ketua Pengarah Jabatan Hasil Dalam Negeri [1997] 5 MLJ 104 High Court, Kuala Lumpur (Abdul Kadir Sulaiman J).

1893 Income tax -- Bad debt

10 [1893] REVENUE LAW Income tax – Bad debt – Loan by building contractor resulting in

Digest :

X v Comptroller of Income Tax [1958] MLJ 55 High Court, Singapore (Chua J).

See REVENUE LAW, Vol 10, para 1901.

1894 Income tax -- Basis of assessment

10 [1894] REVENUE LAW Income tax – Basis of assessment – Accounting periods – Preceding year, basis period and year of assessment – When dividends accrue to a company for assessment

Summary :

This was an appeal from the decision of the High Court reported in [1968] 1 MLJ 116. A subsidiary company declared a dividend in favour of its parent company on 8 March 1965. The parent company included such dividend in its assets of the year ending 31 December 1964. The Comptroller treated the dividend as having been derived in the year in which it was declared and paid out in 1965. Winslow J held that the statutory income of the company in respect of dividends is the full amount of the income from such dividend for the year preceding the year of assessment. The appellants appealed.

Holding :

Held, dismissing the appeal: the learned trial judge was right in holding that there can be no distinction between the case of a shareholder who is an individual and the case of a shareholder who is itself a company holding shares in another company, and in both cases the statutory income from the dividends is the full amount of the income from the dividends for the year preceding the year of assessment.

Digest :

Sim Lim Investments Ltd v Attorney General [1969] 1 MLJ 5 Federal Court, Singapore (Wee Chong Jin CJ, Tan Ah Tah FJ and Chua J).

1895 Income tax -- Basis of assessment

10 [1895] REVENUE LAW Income tax – Basis of assessment – Calculation of profits – Valuation of land

Summary :

Unless there is statutory provision otherwise, in calculating profits one applies the normal commercial principles. There is no room for just and equitable considerations. Where gains or profits arise from the sale of land, the land according to ordinary commercial principles has to be valued at its cost or market price whichever is lower.

Digest :

Comptroller of Income Tax v QRS [1961] MLJ 276 High Court, Singapore (Wee Chong Jin J).

1896 Income tax -- Bonus

10 [1896] REVENUE LAW Income tax – Bonus – Whether additional remuneration bonus in character – Whether company entitled to full deduction for payments made – Revenue law – Additional remuneration scheme – Whether additional remuneration under the scheme is to be considered as bonus – Company paying senior staff monthly salary including additional remuneration under additional remuneration scheme – Liability to income tax – Deduction – Income Tax Act 1967, s 39.

Summary :

In this case, the respondent company paid to its senior executives and managerial staff a monthly salary including additional remuneration under the additional remuneration scheme. The additional remuneration was based upon a percentage of the combined audited profits of the respondent company. The junior executives and non-managerial staff of the respondent company were not paid the additional remuneration but were paid a bonus at the discretion of the company. The Inland Revenue regarded the additional remuneration as bonus and disallowed deduction in excess of 2/12 of the employee's wages and salaries in respect of the additional remuneration. The respondent company appealed to the Special Commissioners of Income Tax and it contended that the additional remuneration paid to the senior executives is not bonus but should be regarded as either commission or deferred salary. The question before the Special Commissioners was therefore whether the payment of the additional remuneration under the additional remuneration scheme of the respondent company was bonus for the purposes of s 39(1)(h) of the Income Tax Act 1967 (Act 53). The Special Commissioners by a majority decided in favour of the Inland Revenue. On appeal to the High Court, Harun J disagreed and allowed the appeal (see [1987] 2 MLJ 384). The appellant appealed.

Holding :

Held, allowing the appeal: (1) to determine whether a payment is a bonus, we have to go behind the label and seek its true character; (2) the question posed in this case is a narrow one, ie whether the additional remuneration is a bonus in character although it is called additional remuneration and not bonus. The answer is that it is a bonus and is caught by s 39(1)(h) of the Income Tax Act 1967.

Digest :

Director General of Inland Revenue v Harrisons & Crosfield (M) Sdn Bhd [1988] 2 MLJ 223 Supreme Court, Kuala Lumpur (Seah, Hashim Yeop A Sani and Syed Agil Barakbah SCJJ).

1897 Income tax -- Bonus

10 [1897] REVENUE LAW Income tax – Bonus – Whether payments made by company to managerial staff by way of profit distribution and incentive scheme are bonuses or commissions – Whether company entitled to full deduction for payments made – Revenue law – Whether payments made by a company to its managerial staff by way of a profit distribution and incentive scheme are bonuses – Bonus or commission – Statutory interpretation – Income Tax Act 1967, ss 13(1)(a), 33 & 39(1)(h).

Summary :

In this case, the respondent was a company which was a subsidiary of Highlands & Lowlands Para Rubber Co Ltd, which was one of a group of eleven companies owned by the principal company. In compliance with the policy of the group, the managerial staff were paid additional remuneration in accordance with the bonus scheme. They were each paid a monthly salary and in addition they were entitled to participate in the group bonus scheme in accordance with the standard letters of appointment. The scheme was based on a number of factors, viz status of employees, amount of salary drawn, duration of service and planted acreage managed, for which points were given for equitable distribution of a provision created by reserving 4% of the agricultural profits of the group. The amount of payment varied with the number of points earned by each participant. For the year of assessment 1975, the appellant disallowed for deduction from the gross income of the respondent the bonus paid to the managerial staff pursuant to the scheme in excess of the limits stipulated in s 39(1)(h) of the Income Tax Act 1967 (Act 53). Accordingly by a notice of assessment in 1980, the appellant informed the respondent that an additional assessment in the sum of RM319,066.50 had been made for the year of assessment 1975. The respondent contended that the additional remuneration paid to the managerial staff under the group bonus scheme was actually a commission while the appellant argued that it was a bonus payment. The question for the determination of the Special Commissioners was: 'Whether the additional remuneration paid to the administrative staff (ie the managerial staff) of the (company) under the scheme is a commission and therefore deductible as an expense wholly and exclusively incurred in the production of gross income of the (company) within the meaning of s 33 of the Income Tax Act 1967; or is a bonus payment within the meaning of s 39(1)(h) of the Act and therefore be disallowed as a deductible expense beyond the limits stipulated therein'. The Special Commissioners decided that it was a bonus payment. On appeal to the High Court, Harun J disagreed and held that it was a commission (see [1987] 2 MLJ 515). The appellant appealed.

Holding :

Held, allowing the appeal: (1) a 'bonus' in such a case as the present is in truth nothing else but an euphemism for 'addition to wages'. The payment may be gratuitous as in the case of the non-managerial staff or it may be payment to which the managerial staff are entitled as incentive but nevertheless it was still a bonus; (2) the payment may be contractual but that does not make it a 'commission'. It seem ridiculous to pay the non-managerial staff a bonus and the managerial staff a commission just because it is contractual. Also, the employers have clearly expressed the scheme to be a bonus scheme from the beginning; (3) the appeal should therefore be allowed and the decision of the Special Commissioners restored.

Digest :

Director General of Inland Revenue v Highlands Malaya Plantations Ltd [1988] 2 MLJ 99 Supreme Court, Kuala Lumpur (Lee Hun Hoe CJ (Borneo).

1898 Income tax -- Business

10 [1898] REVENUE LAW Income tax – Business – Definition of – Revenue or capital account – Trade association – Whether grant given to trade association taxable – Income Tax Act 1967, ss 4(a) & 53

Summary :

This tax appeal concerns RM11,689,783.06 which was described as a grant from the government of the State of Sabah, the beneficiary of which was the appellant, a society registered under s 7 of the Societies Act 1966. The appellant collected the grant from exporters of timber. The main objects of the appellant included developing, increasing, promoting, achieving, widening and safeguarding the trading, commercial and industrial interests of bumiputras in Sabah. It was also the object of the appellant to invest capital in whatever business, industry and trade which brought profit to the appellant and which profit was specially for advancing the objects of the appellant. It was also its objective to advance not only the interests of its members but also of other bumiputras of Malaysia. Among the activities carried on by the appellant were: (1) buying properties and letting them out; (2) managing a cocoa plantation; (3) entering into a joint-venture housing project; and (4) giving loans to bumiputras and its members. The grant received by the appellant was described by the appellant in its accounts as 'timber income' and the other gross income for the relevant year consisted of membership subscriptions and amounts reimbursed by the government for the years 1978 to 1980 in respect of the management of Pusat Latihan Perniagaan Sabah. In respect of the years of assessment 1979 to 1983, the appellant claimed and was allowed capital allowances for office equipment while plantation allowances were also allowed for the year of assessment 1983. The grant was used to buy properties and for running the appellant. The appellant had never applied nor was given any timber concession. The appellant had also never carried out activities to secure buyers of timber logs or find markets for the timber exporters. The appellant was a trade association within the meaning of s 53 of the Income Tax Act 1967. The Special Commissioners concluded that the grant was received by the appellant on revenue account and was taxable under s 4(a) of the Income Tax Act. The issue for the court was whether the grant was on capital or revenue account.

Holding :

Held, allowing the appeal: (1) tax is only payable upon the income described in s 4 of the Income Tax Act and in the case of s 4(a), only in respect of gains or profits from a business. 'Business' has been defined in s 2(1) to include 'profession, vocation and trade and every manufacture, adventure or concern in the nature of trade, but excludes employment'. This definition of business, in the case of a trade association, has been widened by s 53 when it provides: 'the total of the sums ... receivable on revenue account by the association for that basis year (including entrance fees and subscriptions) shall be deemed to be gross income for that basis year from a business of the association deemed to be carried on by that association' and the reference to 'business' in s 53 can only mean that it was for the purpose of bringing it within the ambit of the word 'business' in s 4. Income tax is payable under s 4 but chargeable on the income ascertained in the subsequent provisions, including s 53. Therefore, if the grant was received on revenue account then income tax was payable under s 4 subject to the process of ascertainment; (2) the starting point for finding out whether the grant was received on revenue account was to find out the purpose of the grant. There was no dispute that it was made for the social purpose of achieving the objectives of the New Economic Policy. However, this factor alone would not justify the conclusion that the grant was of a capital nature; (3) the way the grant was treated in the accounts of the appellant was irrelevant. Therefore, the fact that the appellant had treated the grant in their accounts as a sum receivable on revenue account, did not entitle the Special Commissioners to apply the principle of estoppel against the appellant; (4) the contention that the grant was similar to entrance fees and subscriptions and thus deemed taxable under s 53 was wrong because the grant must be receivable on revenue account before it can be deemed to be the gross income of the appellant. Therefore, it must still be shown that the grant was receivable on revenue account and the provision of s 53 does not deem the grant to be a sum receivable on revenue account; (5) an essential element of a business or trade within the meaning of the Income Tax Act is the expectation of profit by the party involved in it. There was clearly no profit which the appellant could derive from protecting its members and from assisting the government in achieving the New Economic Policy. In fact, all the activities for achieving those objectives, like training bumiputras to be entrepreneurs and giving them scholarships for learning the required skills, could only result in the depletion of the financial reserves of the appellant and with no profit in return. Such activities of the appellant could not be regarded as a business or a trade and therefore, any expenditure relating thereto could not be a sum expended for a trade or a business. This meant that any part of the grant that was meant for those purposes could not be a sum receivable on revenue account since that part of the grant was not meant for the appellant to use in its business or trade but for the non-trading or non-business purpose of protecting the bumiputras and of assisting the government in achieving the New Economic Policy. The fact that a substantial part of the grant was used to purchase properties which generated income in the forms of rentals does not make the grant a sum received on revenue account. The appellant, having been given the grant, must surely have been expected to invest the money and such investment did not make the grant lose its original purpose of assisting the government in achieving the New Economic Policy and since such activities were non-profit making, the grant could not have been received on revenue account; (6) the fact that part of the grant was used for administrative expenses was not a relevant factor in analysing the nature of the grant. The administrative expenses could not change the character of the grant being of a capital nature; (7) although the capital allowances in respect of office equipment and the plantation allowances claimed by the appellant might very well have shown that the appellant was doing business, it must not be forgotten that the appellant's primary objective was to help the bumiputra businessmen which was not a business or a trade. The grant, being for that purpose of a capital nature, could not, on account of whatever business it might have carried out, be converted from one of a capital nature to one of revenue.

Digest :

Dewan Perniagaan Bumiputra Sabah v Ketua Pengarah Hasil Dalam Negeri Tax Appeal No K05 of 1995 High Court, Kota Kinabalu (Ian Chin J).

1899 Income tax -- Business

10 [1899] REVENUE LAW Income tax – Business – Isolated transaction – Purchase and resale of rubber estate

Summary :

The appellant who had no previous dealings in land whatsoever, bought a rubber estate. He sold it 18 days later at S$245,000 profit. The Comptroller made an assessment on the income on the basis that it was 'profit from a trade or business'. On an appeal against the assessment,

Holding :

Held: the terms 'business' used in association with 'profession' and 'vocation' in s 10(1)(a) of the Income Tax Ordinance (Cap 166, 1955 Ed) connote a habitual and systematic operation. There must be a continuity or repetition of acts. An isolated transaction does not fall under s 10(1)(a).

Digest :

DEF v Comptroller of Income Tax [1961] MLJ 55 Court of Appeal, Singapore (Rose CJ, Buttrose and Ambrose JJ).

1900 Income tax -- Business income

10 [1900] REVENUE LAW Income tax – Business income – Sale of land by company in voluntary liquidation – Whether profits chargeable to tax – Income tax – Sale of land by company in voluntary liquidation – Whether company carrying on business of dealing in real property – Whether profits chargeable to tax – Income Tax Ordinance 1947, s 10(1)(a).

Summary :

In this case, the facts were that the company which had wide powers including powers to acquire and dispose of lands acquired a piece of land in 1962 for RM450,000 with planning permission to build a ten-storey block of 80 flats, 10 four-storey shops and flats and two four-storey shops and flats. The company submitted plans for these buildings and obtained approval. It also received a tender for the construction at RM1,470,000. It tried to obtain loans to finance the construction but after several failures, it decided to dispose of the property and wind up the company. The property was 10 months later sold for some RM549,000, which after allowing for certain deductions left the company with a net profit of RM91,309. The company was assessed tax on this amount. On appeal to the Special Commissioners the assessment was confirmed. The appellant appealed by way of case stated to the High Court.

Holding :

Held: on the evidence in this case the Special Commissioners were justified in coming to the conclusion that in selling the land the company was carrying on the business of dealing in real property and that the profits from the sale were chargeable to income tax.

Digest :

Liquidator, Paramount Ltd v Comptroller General of Inland Revenue [1970] 2 MLJ 193 High Court, Kuala Lumpur (Chang Min Tat J).

1901 Income tax -- Business income

10 [1901] REVENUE LAW Income tax – Business income – Whether taxpayer trading or carrying on business – Question of fact – Revenue law – Income from business activities – Gains or profits from trade or business – Whether respondent was trading or carrying on a business – Question of fact – Finding by Special Commissioners – Income Tax Ordinance 1947, s 10(1)(a).

Summary :

The respondent purchased five pieces of land at Jalan Treacher, Kuala Lumpur, and built a hotel on the site at the cost of RM2,377,490, of which RM2,000,000 was borrowed from the Employees Provident Fund Board to which the hotel and its lands were charged. The respondent also formed two subsidiary companies, the first Hotel Merlin Ltd in which the respondent held 90% interest in the form of 98,800 fully paid up shares of RM10 each, took a lease of the whole building and lands from the respondent to run and manage the hotel. The second subsidiary company was Harlequin Ltd in which the respondent held a 50% interest and this company took a sublease of a hotel restaurant from Hotel Merlin Ltd. Subsequently, the respondent entered into a deal with the Employees Provident Fund Board whereby the hotel and its lands were sold to the Board for RM5,000,000. It was also agreed that the respondent would have the right to repurchase the hotel building and land ten years later at the same price, of which RM1,000 was paid as deposit. Further it was agreed that the Employees Provident Fund Board would lease the hotel buildings and lands to the respondent. The difference between the building cost (RM2,377,490) and the sale price (RM5,000,000) gave a surplus of RM2,622,510 which was treated by the Comptroller General as taxable. Fourteen months later the respondent entered into an arrangement with a company called the Merlin Hotels Malaysia Ltd, (the Hotel Company) whereby the respondent sold to the Hotel Company its lease and its rights to repurchase the properties. The sale of the rights to repurchase was for a total consideration of RM4,201,000 and this was satisfied by the issue of 4,201,000 shares of RM1 each in the Hotel Company. This consideration was treated by the Comptroller General as subject to taxation. The Hotel Company did not only acquire the hotel properties but also acquired amongst other things the whole share capital of the Merlin Hotel Ltd of which the respondent held 98,800 shares of RM10 each. For the acquisition of these shares the Hotel Company issued to the respondent in exchange 1,482,000 fully paid up shares of RM1 each. This deal resulted in a surplus of RM494,000 (RM1,482,000 RM988,000), which was also assessed to tax. After the Hotel Company was publicly listed in the Stock Exchange, the respondent sold 1,481,000 units of the shares in the company at different prices for a total of RM1,769,332.62 thus giving it another surplus of RM288,332.62 which was also assessed to tax. Thus, the respondent was assessed to tax in respect of four sums of money, that is: (i) RM2,622,510; (ii) RM4,201,000; (iii) RM494,000 and (iv) RM288,332.62, which the Comptroller General held to be profits from trade and thereby attracted income tax under s 10(1)(a) of the Income Tax Ordinance 1947. On appeal by the respondent, the Special Commissioners upheld the assessments, but on further appeal to the High Court by the respondent, Harun J reversed the findings and order of the Special Commissioners. No reason, oral or written, was given by the learned judge for his decision. The Comptroller General appealed.

Holding :

Held: (1) the appeal in this case was an appeal against the findings of facts by the Special Commissioners; (2) in determining the question whether the surpluses were the results of the respondent's business activities or whether they were merely realizations of investments, the Special Commissioners applied the correct legal test and came to the conclusion that they were the results of the respondent's business activities. This was purely a matter of fact for the Special Commissioners to decide; (3) it had not been shown how and why the learned judge upset those findings nor had it been shown that the Special Commissioners erred in law or even in fact in arriving at those findings and conclusion; (4) the appeal must therefore be allowed and the findings and Deciding Order of the Special Commissioners restored.

Digest :

Comptroller General of Inland Revenue v Lim Foo Yong Sdn Bhd [1983] 1 MLJ 43 Federal Court, Kuala Lumpur (Raja Azlan Shah CJ (Malaya).

1902 Income tax -- Capital

10 [1902] REVENUE LAW Income tax – Capital – Land sold at enhanced value – Whether profits are capital

Digest :

DEF v Comptroller of Income Tax [1961] MLJ 55 Court of Appeal, Singapore (Rose CJ, Buttrose and Ambrose JJ).

See REVENUE LAW, Vol 10, para 1848.

Annotation :

[Annotation: See the reference to the Board of Review's decision in the judgment.]

1903 Income tax -- Capital

10 [1903] REVENUE LAW Income tax – Capital – Proceeds from sale of gold abroad

Summary :

Assessments were made on remittances which arose out of the sale of the appellant's property in Shanghai.

Holding :

Held: the remittances were capital in nature and therefore could not be taxed as income.

Digest :

STU v Comptroller of Income Tax [1962] MLJ 220 High Court, Singapore (Tan Ah Tah J).

1904 Income tax -- Capital allowance

10 [1904] REVENUE LAW Income tax – Capital allowance – Sale of plant and machinery – Special allowances under s 19A(1) and (1A) of the Income Tax Act – Election by parties under s 24(2) of the Act – Capital allowances disallowed by the Comptroller of Income Tax – Whether decision valid – Income Tax Act (Cap 134, 1992 Ed), ss 19A(1), (1A) & 24(2)

Summary :

Stubbs & Anor v Director of Public Prosecutions (1890) 24 QBD 577 (folld); Re Boddington, Boddington v Clairat (1884) 25 Ch D 685 (folld); Thompson (Pauper) v Goold & Co [1910] AC 409 (refd); Vickers, Sons & Maxim Ltd v Evans [1910] AC 444 (refd).

Digest :

GE Pacific Pte Ltd v Comptroller of Income Tax [1994] 1 SLR 307 High Court, Singapore (Lim Teong Qwee JC).

1905 Income tax -- Capital allowances

10 [1905] REVENUE LAW Income tax – Capital allowances – Special allowances under s 19A of the Income Tax Act (Cap 134) – Sale of plant and machinery between related parties – Election of parties under s 24(2) – Whether remaining allowances available to the buyer or the seller – Income Tax Act (Cap 134), ss 19A & 24

Summary :

The respondent, GE Pacific Pte Ltd, is a company incorporated in Singapore and a wholly owned subsidiary of General Electric Company of the USA ('GE'). In 1988, GE transferred to Harris Corp ('HC') its electronic components undertaking which was carried on in Singapore by the respondents. To effect this part of the transaction, Harris Semi-Conductor (Singapore) Pte Ltd ('HS') was incorporated as a wholly owned subsidiary of the respondent on 19 November 1988. Assets and liabilities of the respondent relating to its electronic components business were then sold to HS as from 30 November 1988. This sale included certain plant and machinery which qualified for capital allowances under ss 19A(1) and 19A(1A) of the Income Act (Cap 134) ('the Act'). Subsequently, all the shares in HS were transferred by the respondent to HC. By a notice dated 17 February 1989, the respondent and HS had elected for special tax treatment under s 24(2) of the Act. HS's first financial year was from 19 November 1988 to 30 June 1989 and therefore its first year of assessment was the year of assessment 1990. For the year of assessment 1989, it was the respondent who claimed the accelerated capital allowances available under ss 19A(1) and 19A(1A) even though the plant and machinery had already been sold as from 30 November 1988. The appellant, the Comptroller of Income Tax ('the Comptroller'), declined to allow the respondent these capital allowances and the respondent filed a notice of objection dated 8 August 1991, to which Comptroller replied that he did not intend to amend the assessments made. The respondent, therefore, filed a notice of appeal with the Income Tax Board of Review ('the Board'). The judgment of the Board was issued on 11 December 1992 and held in favour of the Comptroller. An appeal was made successfully to the High Court, where the decision of the Board was overturned. There, it was held that the s 19A allowances continued to be available to the respondent because s 24(2)(c) of the Act created a legal fiction that there had been no sale. The Comptroller then appealed to this court. The single issue upon which this appeal turns is the true construction to be afforded to s 24(2)(c) of the Act. Held, allowing the appeal: (1) the words of s 24(2)(c) are equivocal as to who should continue to be entitled to capital allowances on a sale of plant and machinery between related parties. Here, s 9A(1) of the Interpretation Act (Cap 1) compels the court to put Parliament's intention into effect and allows the court to look beyond the words of s 24(2)(c) in determining that intention; (2) ss 19 and 19A of the Act make it clear that Parliament's intention was to limit the availability of capital allowances to those taxpayers who had incurred capital expenditure for the purposes of their business and who continued to have the machinery in use at the end of the basis period in question. The purpose and object of the Act is for capital allowances to be available only to a taxpayer who still has the machinery in use and s 24(2)(c) must be read in accordance with this. Thus, it is the related buyer who continues to be entitled to the s 19A allowances as if no sale had taken place; (3) this construction is consistent with the fundamental reason behind the creation of capital allowances, ie to account for the depreciation of capital assets. It is the taxpayer who owns and uses the plant or machinery that suffers the 'loss' of depreciation and it is to him that the Act grants the allowances; (4) this interpretation of s 24(2)(c) is not otiose. Without s 24(2)(c), a related buyer would have taken three additional years to write off an asset regardless of the number of yearly write-offs already claimed by the related seller. Thus, it might take more than three years to completely write off the asset and this would be contrary to the intention of Parliament which was stated by the Minister for Finance in Parliament to be a 100% write-off in three years. Section 24(2)(c) secures the objective of a three-year write-off by granting to the buyer all the allowances that would have been due to the seller if there had been no sale; (5) since s 24 is expressly made subject to s 33 of the Act, any fear that this interpretation would open up the possibility of a 'tax dodge' is groundless; (6) there is nothing anomalous in the fact that this interpretation might result in a 'break' in the three-year period stipulated by s 19A during which capital allowances are available. Regardless of this 'break', s 24(2)(c) should be read in a manner that secures to the related buyer the availability of all the allowances that the seller would have been able to claim if there had been no sale. The period of three years contemplated by s 19A can, in this situation, be made up of two or more periods which together amount to three years.

Digest :

Comptroller of Income Tax v GE Pacific Pte Ltd [1994] 2 SLR 690 Court of Appeal, Singapore (Yong Pung How CJ, Karthigesu and LP Thean JJA).

1906 Income tax -- Capital allowances

10 [1906] REVENUE LAW Income tax – Capital allowances – Whether taxpayer entitled to set of capital allowances in respect of qualifying plantation expenditure against income derived from timber operation – Whether taxpayer carrying on a single business or two separate businesses – Revenue law – Income tax – Supplementary income tax – Timber profit – Company carrying on plantation operations on some estates and timber operations on other estates – Whether company carrying on single business or two separate businesses – Income Tax Act 1967, ss 4, 43 & Sch 3 – Supplementary Income Tax Act 1967, ss 19 & 21.

Summary :

In this case, the appellant company was carrying on plantation operations in some estates and timber operations in other estates. Assessments of income tax were raised for the four years of assessment 1968-1972. The appellant company was served with notices of additional assessments in 1973 as the Revenue adopted the view that the appellant company's estate or plantation operations were a separate source or business from their timber extraction operations and computed the adjusted income accordingly. The question for the determination of the Special Commissioners was whether upon the facts and in law the appellant company's timber and plantation operations constituted a single integrated business as claimed by the appellant company or were two distinct sources or businesses as claimed by the Revenue. The Special Commissioners decided that the appellant company had separate sources of income in each of its estates and the learned trial judge upheld the decision of the Special Commissioners. The appellant company appealed to the Federal Court.

Holding :

Held: the company carried out two main categories of business namely plantation activities and timber operations and there were therefore two separate businesses deriving income from the five estates or sources.

Digest :

River Estates Sdn Bhd v Director General of Inland Revenue [1981] 1 MLJ 99 Federal Court, Kota Kinabalu (Lee Hun Hoe CJ Borneo, Syed Othman and Abdul Hamid FJJ).

1907 Income tax -- Capital allowances

10 [1907] REVENUE LAW Income tax – Capital allowances – Whether taxpayer entitled to set off capital allowances in respect of qualifying plantation expenditure against income derived from timber operation – Whether taxpayer carrying on a single business or two separate businesses – Revenue law – Income tax – Company carrying on plantation operations on some estates and timber operations on other estates – Whether company carrying on a single business or two separate businesses – Whether appellant entitled to set off capital allowances in respect of qualifying plantation expenditure against income derived from its timber operations – Income Tax Act 1967, s 42 & Sch 3.

Summary :

This was an appeal from the decision of the Federal Court reported in [1981] 1 MLJ 99. In this case, the appellant appealed against assessment which arose from the refusal of the Revenue to accept that during the relevant period the appellant was entitled to set off capital allowances in respect of qualifying plantation expenditure against income derived from its timber operations. It was the Revenue's submission that in the circumstances of this case the plantation allowances were available only against income derived from the appellant's plantation operations. The case turned on whether during the relevant period the appellant carried on one single business of which timber extraction and plantation were integral parts or whether it carried on more than one business. The Special Commissioners found that during the relevant period the appellant carried on three businesses a plantation business embracing their three estates and two separate timber extracting businesses. The High Court upheld their view. The Federal Court held that the appellant carried on two businesses a plantation business and a timber extraction business.

Holding :

Held: it was not unreasonable in the circumstances of this case for the Special Commissioners to decide that the appellant carried on separate businesses. Moreover, the High Court and the Federal Court held that the conclusion in favour of separate businesses was a reasonable one. The appeal must therefore be dismissed.

Digest :

River Estates Sdn Bhd v Director General of Inland Revenue [1984] 1 MLJ 1 Privy Council Appeal from Malaysia (Lord Scarman, Lord Roskill, Lord Bridge of Harwich, Lord Brightman and Sir Denys Buckley).

1908 Income tax -- Capital receipt

10 [1908] REVENUE LAW Income tax – Capital receipt – Sale by rubber tapper of lands to invest in other pieces of land – Whether profits liable to tax – Income tax – Sale by rubber tapper of lands belonging to him in order to invest in other pieces of land – Multiple transactions – Whether constitute dealing in land – Whether profits liable to tax.

Summary :

The appellant was a rubber holder and rubber tapper. He bought certain rubber lands in 1960, 1961 and 1963 and tapped on the lands. In 1966 he sold 15 lots of the land in various transactions, making in all a profit of RM107,957. Subsequently, in the same year, he bought three portions of a rubber estate in Penang. The appellant was assessed to tax in respect of the profits, and his appeal to the Special Commissioners was dismissed. He appealed to the High Court and contended that the profits represented capital appreciation.

Holding :

Held: the sale in this case was a sale of capital assets and the difference in price, an appreciation which at law was not caught by tax. Per Chang Min Tat J: 'It is to my mind clear that what the appellant did was to sell and invest the proceeds in other pieces of land. The sale of lands in question within a very short space of time for the clear purpose of reinvestment must in the circumstances of this case take away any significance of multiple transactions.'

Digest :

LKC v Comptroller General of Inland Revenue [1973] 2 MLJ 17 High Court, Penang (Chang Min Tat J).

1909 Income tax -- Capital receipt

10 [1909] REVENUE LAW Income tax – Capital receipt – Sale of land and shares – Whether trading receipts or realization of capital assets – Revenue law – Sale of land and of shares – Whether trading receipts or realization of capital assets – Whether there was evidence before Special Commissioners upon which they could properly reach conclusion that the sum was a trading profit and taxable accordingly – Income Tax Ordinance 1947, s 10(1)(a).

Summary :

In this case, the appellant had purchased five vacant lots upon which between 1957 and 1959 it caused to be erected a hotel known as Hotel Merlin. In 1959, the appellant caused to be incorporated a wholly owned subsidiary, Hotel Merlin Ltd, whose principal object was the carrying on of a hotel and restaurant business and in which it held 95,800 shares, being over 90% of the issued share capital. The hotel was leased to Hotel Merlin Ltd, which conducted the hotel business there for the next four years. The finance for the construction of the hotel was initially found by raising a loan from a bank but was subsequently met by a loan of S$2,000,000 from the Employees Provident Fund on a security of a charge of the land. On 30 March 1962, three separate documents were executed. By the first of these the appellant agreed to sell the Merlin Hotel and the land to the EPF Board for a sum of S$5,000,000. The agreement provided that the sum of S$3,000,000 the balance due after discharging the amount due on the security of the charge to EPF should be paid on completion. It also provided for the simultaneous execution of a lease back to the appellant of the hotel for ten years at the annual rent of S$371,400 and of an agreement by the appellant to repurchase the property at the end of ten years at the original price of S$5,000,000. The documents were executed and the sum of S$2,622,510 which is included in the first of the additional assessments under challenge in this case was the profit represented by the difference between the total acquisition and construction cost of S$2,377,490 and the agreed purchase price of S$5,000,000. In the following year, it was decided to raise further capital to expand the hotel's activities and a new subsidiary company, Merlin Hotels Malaysia Ltd (the Hotel Company) was formed. On 6 July 1963, an agreement was executed between the appellant and the Hotel Company whereby the appellant agreed to sell to the Hotel Company certain assets for a total consideration of S$5,098,782. This included a sum of S$4,201,000 for the assignment of the right to repurchase the hotel land. The total consideration was under the agreement to be satisfied by the issue of 5,098,782 shares of S$1 each in the Hotel Company credited as fully paid up. The whole of the sum of S$4,201,000 attributable to the benefit of the repurchase contract was treated as trading profit and included in the additional assessment for the year 1964. There was also included in the additional assessment for 1964 two further sums. As part of the scheme for reconstruction the appellant exchanged the 98,800 shares of S$10 each which it held in Hotel Merlin Ltd for a further 1,482,000 shares of S$1 each in the Hotel Company. This represented a premium on the shares exchanged of S$494,000 over nominal value and the whole of this sum was treated by the Revenue as a trading profit and included in the assessment. Finally in the course of 1963 the appellant sold all but 1,000 of the parcel of 1,482,000 shares which it had acquired to various members of the public at the average price of S$1.20 per share thus making a profit of S$288,332.62 which was also treated as a trading profit. Thus the appellant was assessed to tax in respect of the sums of money that is (i) S$2,622,510 (ii) S$4,201,000 (iii) S$494,000 and (iv) S$288,332.62 which the Comptroller General held to be profits from trade thereby attracting income tax under s 10(1)(a) of the Income Tax Ordinance 1947. On appeal by the appellant, the Special Commissioners upheld the assessments but on further appeal to the High Court, Harun J reversed the findings and order of the Special Commissioners. No reasons, oral or written were given by the learned judge. Subsequently, the Federal Court allowed the appeal from the order of Harun J see [1983] 1 MLJ 43. The appellants appealed. On the appeal it was common ground that as the Special Commissioners had found in this case that the sums in question represented profits of a trade, the burden lies on the appellant to show that that decision was wrong in law; and since the question of whether a receipt is of a revenue or capital nature is one of fact and degree, this involved demonstrating that the true and only reasonable conclusion contradicted the conclusion at which the Special Commissioners arrived.

Holding :

Held: (1) as regards the first of the relevant transactions, it seems entirely clear both from the nature of the transaction taken as a whole and from the Special Commissioners' findings of fact in relation to it, that it was a transaction which was designed to raise finance over a fixed period on a capital asset and their Lordships are unable to agree with the Special Commissioners that the mere fact that it took the form of a sale for a sum which, no doubt, equated with, or was less than, the value of the property but which exceeded the cost of acquisition automatically results in the excess falling to be treated as a taxable profit from trading. The whole tenor of the transaction indicates an intention on the part of the appellant to retain the asset, the hotel and the profit element in it, as a capital asset and to describe finance raised in this way, which in any event was subject to a liability to pay back exactly the same sum on a repurchase, to which the vendor was contractually bound from the inception, as a profit from trade is, in their Lordships' judgment, a misuse of language; (2) turning to the reconstruction, the sums of S$4,201,000 represented by the value of the repurchase agreement and the S$494,000 representing the profit on the exchange of the appellants' holdings, the conclusion at which the Special Commissioners arrived at was both inconsistent with their own finding as to the purpose for which the transaction was entered into and unsupported by evidence of any probative value that what had clearly started out as a capital asset had somehow become trading stock which was disposed of by the appellant in the course of carrying on either a business of dealing in land or the business of carrying out a profit-making scheme; (3) the final transaction giving rise to the profit of S$288,332 was the sale by the appellant of 1,481,000 shares in the Hotel Company to friends and associates. The vast bulk of the shares issued on the reconstruction was retained by the appellant and on the face of it the sale of a minority holding arising from the disposition of a capital asset in the form of shares in a subsidiary company appears as no more than itself the disposition of a substituted capital asset; (4) the judgment of the Federal Court simply follows and adopts the reasoning of the Special Commissioners. They held that there was evidence to justify the findings of the Special Commissioners. The Board was unable to agree with this, having regard to the reasoning upon which the decision of the Special Commissioners was based and to the inconsistencies of their findings. There was no evidence of probative value upon which the Commissioners could legitimately conclude that the transactions giving rise to the additional assessments were other than the realization of capital assets. The conclusion reached was based upon fallacious reasoning and was, in any event, inconsistent with their own findings as to the purpose of the disposition. Their Lordships had very much in mind counsel's forceful submission that the statute places on the appellant the burden of demonstrating that the assessments were erroneous and that there was no express finding by the Commissioners that the hotel land was acquired and held as a capital asset nor any evidence that the appellant had expressly so resolved. That may be so, but the burden is no higher than that in any other civil proceeding and the facts found relating to the acquisition, development and holding of the hotel lands do not, in their Lordships' judgment, admit of any other reasonable conclusion than that they were acquired and held as capital assets. The Special Commissioners are, of course, as the Federal Court rightly observed, the judges of fact, but in finding the facts and drawing inferences of secondary fact from them, they must not misdirect themselves and they must draw conclusions from facts having probative value. In their Lordships' judgment, the Special Commissioners in this case both misdirected themselves by reaching conclusions inconsistent with primary facts found by them and drew inferences from matters which were of no probative value in supporting their conclusions.

Digest :

Lim Foo Yong Sdn Bhd v Comptroller General of Inland Revenue [1986] 2 MLJ 161 Privy Council Appeal from Singapore (Lord Bridge of Harwich, Lord Templeman, Lord Griffiths, Lord Ackner and Lord Oliver of Aylmerton).

1910 Income tax -- Capital receipt

10 [1910] REVENUE LAW Income tax – Capital receipt – Whether profit from sale of land capital appreciation – Revenue law – Income tax – Profit from sale of land – Capital appreciation – Sabah Income Tax Ordinance 1956, ss 9(1) & 26(1).

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