This article first appeared in The Edge Malaysia Weekly on October 12, 2020 - October 18, 2020

This monthly report is compiled and briefly summarised by a group of lawyers on a voluntary basis for the benefit of readers of The Edge.

Please consult your own lawyers if you need advice on the cases, issues and related matters highlighted here.

Federal Court (‘FC’) upholds decision of Court of Appeal (‘CA’) that House Rules prohibiting use of residential strata units for commercial purposes or temporary homestays are lawful

In the July issue of The Edge Court Judgments Report, it was reported in a summary manner that the CA held that house rules prohibiting the use of strata title units or apartments for commercial purposes by letting them out for short-term rental for tourists and vacationers are valid: Innab Salil & Ors v Verve Suites Mont Kiara Management Corporation [2020] 2 MLJ 163. An appeal was lodged against this decision to the FC. On 5.10.2020, the FC upheld the decision of the CA.

Summary of issues of law on appeal and decision

The title to Verve Suites is categorised as ‘Building’ with an express condition imposed by the State Authority under its general power in s 120 of the National Land Code 1965 (‘NLC’) that the land shall be used as a commercial building with the purpose of service apartments and commercial only (‘Category of Land Use’). A house rule was passed by the majority of unit owners prohibiting short-term rental activities involving Verve Suites’ residential premises, that is, when units would be advertised to tourists and holidaymakers seeking short-term accommodation via internet platforms, booking websites and other related mediums (‘HR’). In the appeal, the FC considered two questions of law (‘QL’) posed by the appellants. The first QL was whether the HR prohibiting the owners of the commercial service suites from commercial usage was valid, in particular, for short-term rental, which is consistent with the Category of Land Use. The second QL was whether the enforcement of HR violates s 75(5)(a) of the Strata Management Act 2013 (‘SMA’) in that short-term rental arrangements constitute collectively a ‘dealing’, or are tenancies exempt from registration. In a unanimous decision dated 5.10.2020 delivered by Tengku Maimun CJ (Rohana Yusuf PCA and Mohd Zawawi Salleh FCJ concurring), the HR was held to be valid and the appeal on the two QL was dismissed.

Decision on QL 1

The appellants argued that (a) the HR cannot override the Category of Land Use and that House Rules may only regulate and not prohibit entirely the use of the apartments for the business of short-term rentals; and (b) Dewan Bandaraya Kuala Lumpur (‘DBKL’) had expressed its opinion in a letter that so long as the Category of Land Use is not purely for residential purposes, the appellants may use their apartment units for short-term rentals. The FC noted that on its face, there appeared to be a conflict between the HR made pursuant to s 70 of the SMA and the Category of Land Use imposed under s 120 of the NLC. The learned CJ held that where the provisions of two statutes are in ‘apparent conflict’, the Court will strive to read the relevant provisions ‘harmoniously such that they do not diametrically contradict each other’. Thus, is the management corporation precluded from promulgating further rules under s 70 of the SMA because the State Authority has issued conditions and restrictions of use in the title of land? The FC held that s 120 of the NLC provides for the general power of the State Authority. In contrast, the SMA is a specific statute and is a piece of social legislation aimed at safeguarding community interests and social legislation should not be construed restrictively. In this respect, the SMA empowers the management corporation to make rules regulating the control, management, administration, use and enjoyment of sub-divided buildings and common property. The powers to grant leases and tenancies under s 225 of the NLC are expressly made subject to other rules and conditions stipulated under any other written law. The other written law includes the SMA.

Decision on QL 2

Under the NLC, a ‘dealing’ includes a tenancy of less than three years and is a tenancy that is exempt from registration. A tenancy may be on a week-to-week basis or other periodic basis under s 224(a). Section 70(5)(a) of the SMA provides that ‘no additional by-law’ may operate ‘to prohibit any transfer, lease or charge…or any other dealing’ with parcels of a sub-divided building. QL 2 concerns the issue of whether short-term rental arrangements are ‘dealings’ or are tenancies exempt from registration, or are licences. The learned CJ held that there is no singular decisive test to determine whether an occupancy is a tenancy or licence as established by local and foreign case law. Rather, the entire circumstances must be considered, including whether there was exclusive possession, the intended nature and quality of the occupation, the labels used by the parties to describe their arrangement and length of stay (not necessarily conclusive indicators) and the substantive obligations of the parties. On examination of the terms of the Airbnb agreement, the relevant terms negate against the concept of a tenancy. The negating terms include that (a) the occupant has no exclusive possession because the host retains the right to re-enter the premises and remove an occupant who fails to leave the premises on time; and (b) the host can regulate the number of guests allowed into the premises and this indicates that the renters do not have the right to manage the use of the premises to the exclusion of the host. These matters are inconsistent with tenancies where the landlord cannot evict a tenant who holds over except with an order of possession obtained from the court and a true tenant has the right to manage the use to the premises. Also, it can be gleaned from the terms of the Airbnb Terms of Service, that the intention on the part of owners is to let out their premises to be used like a hotel or lodging facility and there is no dispute that the appellants operated their activities in the same way from the arrangement that hotels make with their guests.

Federal Court (‘FC’) upholds the sacrosanct rights of an affected person to be accorded the right to be heard in his own defence

The principle that there must be finality to litigation or in judicial decisions is a necessary dictate of public policy. Otherwise, it opens the floodgates to endless litigation. A competing interest may arise in rare cases where, based on their particular facts and circumstances, the Court in doing justice may give greater primacy to the competing interest and the finality principle takes second place.

Issues

If an order is obtained against a person in his absence, should the principle of finality to litigation or in judicial decisions take primacy over the sacrosanct rights of the affected person to be accorded the right to be heard in his own defence? Is the order obtained in the absence of the affected person null? These issues confronted the FC in Dr. Lourdes Dava Raj a/l Curuz Durai Raj v Dr. Milton Lum Siew Wah and the Malaysian Medical Council.

Case summary and decision

Dr. Lourdes was the Chief Medical Officer in charge of Assunta Hospital. He circulated clinical summaries of patients (‘Documents’) to doctors (one of whom was Dr. Milton) for discussion at a Medical and Dental Advisory Committee (‘Committee’) meeting to study the morbidity and mortality in those cases with the aim of improving medical care at the hospital. Dr. Milton complained that the Documents were not circulated under the cover of confidentiality and without informing the Committee that prior consent from the patients had not been obtained, breaching the Code of Professional Conduct of the Malaysian Medical Council (‘MMC’). Based on Dr. Milton’s complaint, the MMC charged Dr. Lourdes for ‘infamous conduct’. At the MMC inquiry, Dr. Lourdes explained that he (a) was newly appointed; (b) did not realise he had breached the confidentiality rule until Dr. Milton raised the issue; (c) the Documents were requested by the doctors prior to the Committee meeting; (d) disclosed the patient names innocently and did not realise the confidentiality rule was applicable in the context of a mortality and morbidity assessment. By a majority, the MMC found Dr. Lourdes had no case to answer but noted that there were lapses and deficits in handling documents in the hospital and advised him to make improvements. The decision of the majority was officially conveyed in writing to Dr. Lourdes and he thought the matter had ended. However, Dr. Milton proceeded to apply for leave to institute judicial review proceedings to quash the decision of the MMC. Leave was granted and in the review application, (a) a declaration was prayed that Dr. Lourdes was guilty as charged; and (b) an order that the MMC hear his plea in mitigation and impose an appropriate sentence. The application was filed only against MMC, and Dr. Lourdes was not made a party. The High Court (‘HC’) dismissed the application but the Court of Appeal (‘CA’) in October 2015 allowed the appeal and the MMC was ordered to hear Dr. Lourde’s plea in mitigation and to mete out the punishment. In June 2016, the MMC convened the mitigation hearing. Dr. Lourdes attended the mitigation hearing under protest and raised preliminary objections, stating he was not bound by the decision of the CA in October 2015 as he was not a party to the proceedings. The MMC issued a reprimand against him. Dr. Lourdes filed an action under s 31 of the Medical Act to set aside the reprimand on grounds he was not bound by the decision of the CA given in October 2015. The HC dismissed the action on the grounds that the MMC was bound by CA’s decision. Dr. Lourdes then filed a motion to intervene in the proceedings pursuant to which the CA made the October 2015 order. The CA dismissed the motion on grounds that (a) there was inordinate delay of about two years in taking action; (b) he had attended the mitigation hearing in June 2016 and had admitted his wrongdoing; (c) he had not suffered prejudice merely because he was not given notice of the judicial review application; and (d) since proceedings have come to an end, intervention should not be allowed.

On appeal to the FC, in a unanimous decision delivered by Nallini FCJ (Tengku Maimun CJ, Rohana Yusuf PCA, Azahar Mohamed CJM and David Wong Dak Wah CJSS (as he then was) concurring), the appeal was allowed. The FC stressed that the right of a person to be heard in his own defence is a sacrosanct right in matters that directly affect his interest. The FC was not convinced by the reasons given by the CA in not according that right to Dr. Lourdes. It was held that the CA in dismissing Dr. Lourdes’s case on account of (a) inordinate delay did not consider the subsequent events that occurred during the two-year period; (b) his attendance at the mitigation hearing was under protest; (c) he did not admit to breaching the patient confidentiality per se and had only admitted to circulating the Documents to a limited number of persons and for a limited and legitimate purpose; and (d) he did suffer prejudice when he was deprived of his right to be heard and the October 2015 order directly affected him.  

Federal Court: The relevant time to consider a debtor’s inability pay his debts and the circumstances an Adjudicating Order and Receiving Order (‘AORO’) may be annulled

The Bankruptcy Act 1967 (‘BA’) provides that on the date of the hearing of a creditor’s bankruptcy petition, the Court must consider the debtor’s ability to pay his debt, or his solvency or insolvency. If satisfied that the debtor is unable to pay his debt, an AORO will be made against a debtor. Section 105 of the BA provides two circumstances under which an AORO may be annulled — (a) the Court is of the opinion that the debtor ought not to have been adjudged a bankrupt; or (b) the debts are paid in full.

Issues

On the hearing date of a bankruptcy petition for the purpose of the making an AORO, is the Court obliged or entitled to examine events that might take place at a future date that might render the debtor able to pay his debts? If after the making of an AORO, the bankrupt becomes able to pay his debt, may the adjudged bankrupt make an application under s 105 of the BA to annul the AORO? These issues came before the Federal Court (‘FC’) in Affin Bank Berhad (formerly known as Perwira Habib Bank) v Abu Bakar bin Ismail.

Case summary and decision  

Affin Bank Berhad (‘Bank’), a judgment creditor, commenced bankruptcy proceedings against Abu Bakar (‘Debtor’). The Debtor failed to set aside the bankruptcy notice and his opposition to the creditor’s petition was dismissed. As a consequence, an AORO was recorded against him on 17.1. 2013. In December 2013, the Debtor sought to annul the AORO (‘1st Annulment Application’) dated 17.1. 2013 on the grounds that he ought not to have been adjudged a bankrupt as he was solvent and had means to pay his debts. In support of the 1st Annulment Application, the Debtor averred he had assets in the form of a judgment of the Singapore Court of Appeal (‘Singapore Judgment’) granted in his favour in February 2013 and damages (if assessed) would have a value of SGD$35 million. The registrar of the High Court (‘HC’) dismissed the 1st Annulment Application. On appeal to the Judge of the HC, the appeal was allowed. However, on appeal by the Bank to the Court of Appeal (‘CA’), the AORO was restored. Nine months later, the Debtor made another annulment application (‘2nd Annulment Application’) premised on the ground that pursuant to the Singapore Judgment, damages had been assessed and that he had assets equivalent to about RM33.5 million, which exceeded the Bank’s claim in the sum of about RM8.3 million. The 2nd Annulment Application was allowed by the registrar of the HC and was affirmed by the Judge of the HC. On appeal by the Bank to the CA, the Bank’s appeal was dismissed.

On the Bank’s appeal to the FC, in a unanimous decision delivered by Tengku Maimun CJ (Azahar bin Mohamed CJM, David Wong Dak Wah CJSS (as he then was), Rohana binti Yusuf FCJ (now PCA) and Nallini Pathmanathan FCJ concurring), the Bank’s appeal was allowed. The learned CJ held that on construction of s 6(3) of the BA and examining local as well as English and Australian case law, it is settled principle that the relevant date to consider whether a debtor is able to pay his debts is the date of the AORO. The FC rejected the argument that the time to consider whether a bankruptcy order ought to have been made must be after such an order and not at the time of the order as being against established principles and the construction of s 6(3) read together with s 105(1) of the BA — solvency does not relate to the debtor’s ability to pay his debts subsequent to the making of the AORO. It was further held that subsequent to the making of the AORO, a bankrupt could always seek annulment of the AORO by making payments to the Director of Insolvency pursuant to s 33 of the BA.

Court of Appeal (‘CA’) upholds right to economic interest and finds ex-director for conspiring with others to injure former employer

Malaysia, like other common law jurisdictions, recognises that business entities or people are free to compete with each the other and may take legitimate steps to promote their business over their rivals. The law nonetheless imposes limits with respect to the means employed by business competitors when competing with each other — employing unlawful means with intention of damaging the business of another is a tort.

Issues

What acts tantamount to ‘unlawful interference’ to the economic interest of distributorship of products and may conspiracy be established by inferential evidence? These issues were considered by the CA in Borneo Technical Co (M) Sdn Bhd v Yokohama Batteries Sdn Bhd, Yokohama Distribution Services Sdn Bhd and Goh Swee Heng (judgment dated 20 August 2020).

Case summary and decision

In 2009, the plaintiff (‘Borneo Technical’) was the appointed the exclusive distributor of Yokohama batteries (‘Batteries’) manufactured by the first defendant (‘Yokohama Batteries’) pursuant to a Distributorship Agreement (‘DA’). Yokohama Industries Bhd (‘YIB’) wholly owned Yokohama Batteries, and indirectly, the second defendant, Yokohama Distribution Services Sdn Bhd (‘YDS’). The third defendant, Goh Swee Heng (‘Goh’), was a director and chairperson of Borneo Technical until his resignation in 2015 when he joined YDS, the new distributor of the Batteries, as its President.

The DA allowed Borneo Technical in its discretion to fix the selling price of the Batteries and provided for sharing of profits based on sales revenue. The DA was due to expire in May 2015 (‘Expiration Date’) but it provided for automatic renewal on a yearly basis in the absence of breach of its terms. For the purpose of its distributorship business, Borneo Technical rented the premises of Yokohama Batteries for storage of the Batteries (‘Tenancy’). Prior to the Expiration Date of the automatically renewable DA, Yokohama Batteries terminated the Tenancy and refused to renew the DA on the grounds that Borneo Technical had breached the DA by selling the Batteries at a discounted price and had also refused to supply 40,000 Batteries ordered by Borneo Technical prior to the Expiration Date. Borneo Technical sued (a) Yokohama Batteries for breach of the DA; (b) Goh for breach of fiduciary duties; (c) Yokohama Batteries and Goh for unlawful interference with economic interest; and (d) all the defendants for the tort of conspiracy. The High Court (‘HC’) (a) held that Yokohama Batteries was in breach of the DA; (b) dismissed the claim against Goh because he had every right to resign and there was no evidence of breach of his duty of loyalty; (c) there was no unlawful interreference with economic interest because Yokohama Batteries had the right to choose its distributor; and (d) dismissed the conspiracy claim for lack of evidence.

In a unanimous decision of the CA delivered by Zaleha Yusof JCA (now, FCJ) (Yaacob Md Sam and Lau Bee Lan JJCA concurring), the CA affirmed the decision of the HC that Yokohama Batteries was in breach of the DA. However, the CA reversed the other decisions of the HC. Concerning Goh’s breach of fiduciary duties, the evidence demonstrated that prior to his resignation, Goh played an important role in gearing up YDS to take over the distributorship from Borneo Technical, was offered to lead the new distribution network, had enticed the employees of Borneo Technical to join YDS and had told a few employees and ten senior officers of Borneo Technical in advance that Borneo Technical would not be the distributor once YDS was ready to be the new distributor. The CA held that on the facts, there was unlawful interference with economic interest and conspiracy.

On conspiracy, the CA held that direct evidence is rare and conspiracy may be inferred from circumstantial evidence. On the facts, conspiracy was inferred.

PART 2

Pendakwa Raya v Dato’ Sri Mohd Najib Bin Hj Abdul Razak

Note: Below is a brief summary of the decision of Justice Mohd Nazlan of the High Court concerning the criminal breach of trust charges and the anti-money laundering charges. The abbreviations in Part 2 have the same meaning with those used in Part 1 published last week (Issue 1339, Oct 5, 2020).

Section 405 of the Penal Code defines CBT as follows:

405. Whoever, being in any manner entrusted with property, or with any dominion over property either solely or jointly with any other person dishonestly misappropriates, or converts to his own use, that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits “criminal breach of trust”.

Section 409 provides for the offence:

Whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant or an agent, commits criminal breach of trust in respect of that property, shall be punished…

Section 402A defines the term ‘agent’:

“agent” includes any corporation or other person acting or having been acting or desirous or intending to act for or on behalf of any company or other person whether as agent… director… or in any other capacity either alone or jointly with any other person and whether in his own name or in the name of his principal or not…

Save for the differences in dates and the amount that was involved, the three CBT Charges are identical to one another. The charges were premised on the basis that (a) the Accused was entrusted with the property, or with dominion over the property, of SRC in his capacity as an agent; and (b) he had dishonestly misappropriated, or converted the same to his own use, or had disposed of the property in violation of any direction of law prescribing the mode in which such trust is to be disposed.  

The Defence for the Accused included contentions that the evidence showed that (a) the board of directors of SRC (‘SRC BOD’) was exclusively entrusted with dominion over the affairs and property of SRC; (b) SRC BOD did not act blindly in accordance with the instructions of either the Prime Minister (‘PM’), Finance Minister (‘FM’), advisor emeritus (‘AE’) or MOF Inc.; (c) the SRC BOD acted in accordance with their absolute decision-making power; (d) the PM, FM, AE or MOF Inc. was not entrusted with dominion over the funds of SRC directly or indirectly; (e) where supervision is given to a public officer over the affairs of a government linked company, no case of entrustment or dominion can be made out; (f) the evidence fell short of establishing that the RM42 million in the CBT Charges were SRC’s funds; (g) there was no misappropriation because the instruments by which funds were transferred out of SRC’s accounts were forged; and (h) the transactions of funds from SRC’s accounts were carried out by Jho Low and his cohorts, and Jho Low benefitted a sum of approximately RM290 million.

Whether the Accused was an agent of SRC

The main crux of the defence was that the prosecution failed to prove that the Accused was an agent of SRC in the orthodox sense — the capacities of PM, FM and AE cannot come within the meaning of ‘agent’ in s 409 of the Penal Code unless those capacities are subservient to SRC, which must be regarded as the principal. Also, since MOF Inc. is a shareholder, the acts of MOF Inc. cannot be equated to acts of an agent of SRC. The learned Judge rejected the arguments of orthodoxy.

It was held that if the submission of the Defence is correct that the term ‘agent’ in s 409 of the Penal Code ought to be interpreted in an orthodox sense, then a person who has complete control over a company, like the Accused had over SRC, could never commit CBT. Section 402A of the Penal Code defines the term ‘agent’ and its ending words “whether in his own name or in the name of his principal or not” and the beginning words “Whoever, being in any manner entrusted with property, or with any dominion over property” in s 409 of the Penal Code, militate against the interpretation canvassed by the Defence. The constitution of SRC entrenched controlling powers upon the Accused (appointment and removal of directors, no amendments of SRC’s constitution can be made without his consent and all matters of strategic importance must be referred to him as AE) and there was no necessity as such for the prosecution to show that the Accused was subservient to SRC. The evidence also showed that (a) the Accused had acted in his own name and not in the name of SRC; and (b) the reporting line of the management on matters concerning SRC was to the Accused as PM and FM (the letters dated 9.1.2012 and 2.12.2013 addressed to the Accused as PM).

The learned Judge held that the term ‘agent’ in s 409 is defined in s 402A to include a director and the definition of ‘director’ is given an extended meaning to include “any person occupying the position of director of a company, by whatever name called, and includes a person who acts or issues directions or instructions in a manner in which directors of a company are accustomed to issue or act, and includes an alternate or substitute director, notwithstanding any defect in the appointment or qualification of such person” [Emphasis added by the learned Judge]

Referring to decided company law cases, a person who purports to act as a director of a company and a person in accordance with whose directions and instructions the directors of the company are accustomed to act, is an agent of the company under the Penal Code. The influence of the person over the directors of the company need not cover the entire affairs of the company. On the facts, it was held that the Accused was a shadow director in that the directors of SRC were accustomed to act on the Accused’s directions or instructions.

The learned Judge cited several instances in the judgment, demonstrating that the SRC Board was accustomed to act on the instructions or directions of the Accused. These included (a) establishing a subsidiary of SRC in the British Virgin Islands, the opening of accounts with and deposit of monies in foreign banks and the establishment of a joint venture between a subsidiary of SRC and Aabar Investments PJS and contribution of USD500 million in cash to the joint venture; (b) deposit of USD500 million out of the second RM2 billion loan with a bank in Switzerland; and (c) recordation in minutes of matters had been agreed by the Accused in discussions with Nik Faisal (‘Nik’). The evidence also showed that the Accused had even made management-related decisions for SRC without reference to the directors of SRC.

On the totality of evidence, the learned Judge was further satisfied that the Accused was the controlling mind of SRC.

Whether the Accused was in any manner entrusted with property/ dominion over property

Under s 409, it must be proved that the accused person was either entrusted with property, the subject matter of the charge, or was entrusted with dominion over the property. On the construction of s 409, it was held that (a) the words ‘in any manner entrusted with property’ the entrustment need not arise from any fraudulent conduct of the accused person and the entrustment of property need not be made directly by its owner to the accused; and (b) the words ‘either solely or jointly with any other person’, the entrustment need not be exclusive. Referring to precedents, the learned Judge held that there is distinction between being ‘entrusted with property’ and ‘entrusted with dominion over property’ and the determinative factor that distinguishes the former from the latter lies in the degree of control exercised by the accused person. The learned Judge held that on the totality of evidence, there was ‘entrustment’ of property to the Accused.

Whether there was misappropriation and conversion

The learned Judge traced the money trail which showed that in December 2014 from the account of SRC (RM40 million) to Gadingan Mentari Sdn Bhd (‘GMSB’), from GMSB to Perdana Sdn Bhd’s (‘IPSB’) and from IPPSB to the personal accounts of the Accused in the sum of RM32 million. Prior to the arrival of RM32 million, the Accused instructed AmBank to transfer a sum of RM27 million to PBSB and RM5 million to PPC, subsidiaries of Putrajaya Perdana Berhad. In February 2015, SRC transferred RM10 million out of its account and which sum was finally deposited into the personal Account 906 of the Accused on 10.2.2015. Prior to that date, Account 906 was already overdrawn by about RM2.3 million on 9.2.2015. This enabled the cheques issued earlier and after 10 February by the Accused to be cleared.

The Defence contended that the said SRC funds had been disbursed on the basis of forged instruments and scanned letters. The signatures of the signatories therein were “cut and paste” and sent to the bank as scanned copies. The learned Judge rejected this contention.

The Accused, it was held on the totality of evidence, had misappropriated and converted (a) the RM32 million (repayment of loans advanced to the Accused by PBSB and PPC in July and September 2014); and (b) the RM10 million for his own use.

Whether there was the mental element of dishonesty

Where the factual ingredients of CBT are proven, the Prosecution must go further to prove ‘dishonesty’ on the part of an accused person, which is defined in s 24 of the Penal Code — doing anything with the intention of causing ‘wrongful gain’ to one person, or ‘wrongful loss’ to another. Under s 23, “wrongful gain” is gain by unlawful means of property to which the person gaining is not legally entitled and “wrongful loss” is loss by unlawful means of property to which the person losing it is legally entitled. In the case, the Prosecution contended that dishonest intention had been established by direct evidence and also relied on the rebuttable presumption of dishonesty in s 409B of the Penal Code.

The learned Judge held that there was direct evidence and inference of knowledge and dishonest intention on the part of the Accused in causing wrongful gain to himself or wrongful loss to SRC. The evidence included (a) the statements he made in relation to a defamation action the Accused filed in 2016 against a member of the Cabinet, who allegedly uttered the words the Accused stole money from 1MDB. In that action, the Accused pleaded that he admitted that RM42 million went into his private accounts from SRC but he had no knowledge ‘that it was channelled through the two intermediaries as alleged by the Defendants’; (b) the Accused had personally instructed AmBank to transfer a sum of RM27 million to PBSB and RM5 million to PPC two days before the monies were credited into his personal accounts. This could not have been done by Nik as Nik was not authorised to withdraw money from his personal accounts; (c) the Blackberry Messenger messages (‘BBM’) between Jho Low and Joanna Yu (‘JY’, the relationship manager at AmBank) concerning the Accused’s personal accounts in anticipation of the Accused writing specific cheques. In the BBM conversations between Jho Low and JY, Jho Low on-sent messages he received from the Accused to JY and Jho Low also on-sent messages he received after making enquiry with AmBank.

The learned Judge also held that the Accused could genuinely believe that he was spending the last batch of ‘Arab donation’ monies in the sum of RM49 million remitted in 2014, after the Accused had returned the balance of USD620 million of ‘Arab donation’ monies in 2013 following the conclusion of the 13th General Elections. This was because the bulk of the RM49 million had been utilised by the Accused prior to the arrival of the RM42 million into the Accused personal accounts.

The predicate offences under the MACC Act and the Penal Code concerning the RM42 million having been established by the Prosecution, the learned Judge had to consider the mental element in the offence of money laundering — whether (a) the person knows, has reason to believe or has reasonable suspicion that the property is the proceeds of an unlawful activity or instrumentalities of an offence; or (b) the person without reasonable excuse fails to take reasonable steps to ascertain whether or not the property is the proceeds of an unlawful activity or instrumentalities of an offence. Under s 4(2) of the AMLATFPUAA, the mental element may be inferred from any objective factual circumstances. It was held that there were many and various factual objective set of circumstances justifying the inference of the existence of the mental element in the case.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.