A Publication of the Kuala Lumpur Bar Lawyers dont walk

A Publication of the Kuala Lumpur Bar "Lawyers dont walk everyday. Not even every month. But when they walk, then something must be very wrong" - Ambiga Sreenevasan Issue No. 3/07 PP8492/9/2007 December 2007 A publication of the Kuala Lumpur Bar For the Sake of the Country For the longest time, there was an air of despondency in the legal fraternity. The 1988 crisis. Ayer Molek. Mega awards in libel suits. Holiday pics. This feeling then turned to hopelessness and resignation with the revelations of Datuk Kamil Awang and Dato’ Shaikh Daud. The video clip was, for many, the last straw. It was all that was needed to stir up powerful emotions. Members of the Bar expressed their shock and disgust. Many members angrily demanded action and called for change. They walked for justice. The Walk for Justice revealed many things. Senior members of the Bar have rejoined the fight. They probably realise that their contributions are needed now when it appears to matter most. And they have done so quietly without fanfare, seeking no publicity or recognition for their efforts. Some have decided to offer to lead again. Others continue to work tirelessly in the back room. And then there are the younger members of the Bar. Growing up in an era bereft of conflict and perceived to be smothered and pampered by the comforts of life and luxury, they took to the streets in numbers. Dispelling all theories about their inability to care about real issues. We have not as yet been given an opportunity to read the reports prepared by the members of the Independent Panel. And it does not seem likely that we will. But at least it would appear that the Federal government now shares our concern and have moved to form a Royal Commission. This came as a relief to many. A shock to others. The terms of reference of the 5-member Royal Commission have been announced. And it is limited in scope. It falls short of what most members of the Bar would have wished for. 3 more months will now pass focusing on narrowly framed questions. It would appear that Issue No. 3/07 December 2007 Kuala Lumpur Bar Committee 2007/08 Chairman Ravindra Kumar a/l G Rengasamy Members Anand Ponnudurai (Hon Secretary) Brendan Navin Siva Abdul Rashid Ismail Richard Wee Thiam Seng Sanjeev Kumar Rasiah Ivan Wong Ee-Vern N. Sivananthan Dahlia Lee Wooi Mien Dipendra Harshad Rai Baljit Singh Sidhu Ravindran Nekoo Raja Riza bt Raja Badrul Shah Representative to the Bar Council Steven Thiru Editorial Board 2007/08 Editor Brendan Navin Siva Members Cheng Poh Heng Nicole Fiona Wee Sue-Ren Rishwant Singh Brent Yap Hon Yean Yudistra Darma Dorai Shanmuga Kanesalingam Sudharsanan Thillainathan Sukhjit Kaur Gill Audrey Quay Sook Lyn S. Saravana Kumar Relevan welcomes and invites articles, letters and other contributions from readers. However, the Editorial Board reserves the right to edit or not to publish any such article, letter or contribution. All articles, letters or other contributions should be forwarded (preferably via email or CD) to: Contents Letter to Editor Tribute to Tan Sri Abdul Malek Ahmad By Tan Sri Dato’ Seri Siti Norma Yaakob Opening address by HRH Sultan Azlan Shah at the 14th Malaysian Law Conference Written Advocacy (Part 2) By Honourable Justice K.M. Hayne AC Malaysian Lawyers Overseas My Fault? Your Fault? Whose Fault? Answer: No Fault? By Richard Wee Thiam Seng What Does the Future Hold? By Karen Kimkana Restraining Winding up Petitions By Lee Shih The Silent Majority By Brendan Navin Siva BUDGET 2008:“Together Building the Nation and Sharing Prosperity” By Sudhar Thillainathan Book Review - A Comprehensive Guide to Malaysian Taxation Under Self-Assessment System, 3rd Edition By S. Saravana Kumar “Stop. You’re under arrest for taking a walk!” 23 3 4 5-7 8-10 11-14 15 16 18 19 20 The Editor RELEVAN Kuala Lumpur Bar Committee Tingkat 8, Wisma Kraftangan, No. 9 Jalan Tun Perak 50050 Kuala Lumpur All views, unless expressly stated to be that of the Committee or the Editorial Board, are the individual writer’s personal views Relevan is the newsletter of the Kuala Lumpur Bar and is published by the Kuala Lumpur Bar Committee Tingkat 8, Wisma Kraftangan, No. 9 Jalan Tun Perak 50050 Kuala Lumpur Printed by: LINE & TONE SDN BHD (76223-H) No. 22-25, Jalan Tamming Jaya 10, Taman Tamming Jaya, 43300 Balakong, Selangor Darul Ehsan. 25 By K. Shanmuga ON THE COVER Quote by the Malaysian Bar President on 26 September 2007 at the steps of the Palace of Justice, just before the Walk for Justice. 2 relevan • editorial the Government is still not prepared to accept that this incident raises anything more than an authenticity issue. That to go beyond the issue of authenticity would be premature. The Royal Commission must now be viewed as nothing more than a first step in the larger process of reinstating public confidence in the Judiciary, severely eroded in the last 20 years. But do we really need to wait for a Royal Commission to look into the state of the Judiciary ? What we do really need is an unwavering focus and commitment to restore public confidence in the integrity of the Judiciary. What we do really need is to come up with and implement measures to ensure that, once restored, the integrity of the Judiciary is never again subject to the ills it now faces. And in this quest, the Bar does not appear to be alone. The appointment of the new Chief Justice, Dato’ Abdul Hamid bin Haji Mohamad, has received unanimous support from the Bar. His Lordship’s speech on 12 December 2007 was most telling. It promises strong leadership. It demands strong character. Leadership and character are undoubtedly the most important elements to effect change. More so when what is required is radical and immediate change. His Lordship is correct in many respects. The Judiciary cannot be expected to resolve the problems by itself. As much as Judges have to take up the fight internally, they must also be offered an environment free of temptation, intimidation and interference. There must be a unified declaration and affirmation from the Government, the Judiciary and the Bar to eradicate corruption at all levels of the Judiciary. A pledge of zero tolerance for corruption at all levels of the Judiciary and within the legal profession. And a pledge of non- interference from all levels of government. On their part, the Bar Council must come up with express and detailed measures against members of the Bar who wrong. The Bar Council must come up with express and detailed measures to implement checks and balances to ensure that members of the Bar do not commit further wrongs. The Bar Council must also engage the Judiciary and put forward the proposal for the setting up of a Judicial Apppointments Commission clearly and with conviction. It must contain a detailed study of the mechanism in other jurisdictions and a review of how these measures in judicial reform have fared so far. The Bar Council must dispel the myths and inaccuracies circulating about such a mechanism for appointments. The Chief Justice also addressed the need for improvement in the administration of justice. His Lordship did not merely express a willingness to engage the Bar. He appealed for our co-operation. But this is not new. There are many proposals and measures that are presently being considered to improve the administration of justice. There has been a genuine and committed effort by the Judiciary to look into ways to improve. The KL Bar Committee has been involved throughout the year with many such proposals. Our views and opinions have been sought and considered. But of course more can be done. What is required is a wholesale review of the present system of the courts. A large scale examination of what works and what does not work. Strong leadership will facilitate implementation of proposals to improve the courts. Strong character will determine its effectiveness. We must all work hard together. A year is a long, long time if honest men and women have the strength and conviction to do what is right and what is necessary. Letter to the Editor Dear Sir, I am writing in response to Dato’ V.C. George’s comment that appeared in the July 2007 issue of Relevan (pg. 6). I am sympathetic to many of his views and wishes. Like him, I, too, wish to see the end of “Bumiputra-ism” (by which, I presume, he means State policies and practices that propagate “Kuturunan Melayu”) and religious extremism and wantonness, and the strengthening of the Judiciary that safeguards our Constitutional rights. But I am terribly shocked by his biasness against and ignorance of Tamil Schools, their role, and their contribution in Malaysia – that he was moved to wish for their abolishment! I am no lawyer, but I believe his singling out of Tamil Schools is against the letter and spirit of Article 12 of the Malaysian Constitution. Secondly, numerous studies (both local and international) have shown that children learn better in their mother language, particularly during their early years. And, furthermore, giving recognition and support to National Minority languages (like Tamil or Mandarin) is simply a good policy, and is the bedrock on which we may build a vibrant multicultural nation that Malaysia truly is or aspires to be. The relevant documents could be found here: http://unesdoc.unesco.org/images/0012/001297/129728e.pdf, here: http://www.osce.org/hcnm/documents.html?lsi=true&limit=10&grp=45 , and here: http://www.unesco.org/most/ln2pol.htm. Finally, as a Tamil School Alumnus, I may also testify for the virtues of the values (cultural, aesthetic, religious) that Tamil Schools impart, and in a sense acting as bulwark against the commodifying tendencies of our present Global Market Economy. Regards, Ve. Elanjelian Head of Projects Centre for Community Initiatives (A Unit of Malaysian Community & Education Foundation) Ed: Dato’ VC George has since explained the basis for his statement in a press conference and also clarified that what he was doing was providing emphasis to the need to significantly improve the quality of tamil schools. 3 relevan • editorial TAN SRI ABDUL MALEK AHMAD A TRIBUTE TO The Right Honourable Tan Sri Dato’ Seri Haji Abdul Malek Ahmad passed away on 31st May 2007 and writing about him now in the past tense is the most painful exercise for me. This is so as he was so full of life and acceptance of his death takes a long time to sink in. He never forgets birthdays, anniversaries and good tidings that come to his friends and you can always count on him to receive birthday greetings, anniversary wishes and congratulatory messages. His birthday greetings normally take the form of an early morning call on your birthday itself and it will end with him successfully extracting a birthday lunch from the birthday girl or boy! He was a kind and compassionate person and many a friend has been known to seek his advice and wise counsel on matters ranging from career developments to matters effecting the heart and the home. This is so as he was a sympathetic listener and would offer his assistance if that was possible to any friend in need. I will always remember him as a true and trusted friend and an able and respected brother Judge. It is this trait in his character that endeared him as a very patient and courteous Judge. This is due in no small measure to the vast experience he acquired in the course of his career in the Judicial and Legal Service spanning a period of over forty years. During that period he had served as a (1) (2) (3) (4) (5) (6) (7) (8) Magistrate President Sessions Court Senior Federal Counsel Parliamentary Draftsman Judge of the High Court, Malaya Judge of the Court of Appeal Malaysia Judge of the Federal Court Malaysia President Court of Appeal Malaysia In his lifetime, he received many recognitions and accolades both at home and abroad. This is due in no small measure to his loyal and exemplary service in the various capacities he held culminating in his securing the second highest ranking position in the hierarchy of the Malaysian Judiciary, that of the President of the Court of Appeal, Malaysia. Had he lived to this day I have no doubt that he would have headed the Malaysian Judiciary as its Chief Justice and steered it with the leadership that is so sadly lacks. Unfortunately it was not to be and we are now left with the memory of a man who is true to his words and actions. May his soul rest in peace. Al-Fatihah. Tan Sri Dato' Seri Siti Norma Yaakob Being a member of his panel in the Federal Court was always a welcome pleasure. As the final arbiter in any contentious matters, he always took the view that Counsel appearing before the Court should be given every opportunity to make their submissions with little interruption from the Bench. It was at one of such sittings, that a third member of the panel, impatient at what he perceived to be a one sided attack on the questionable activities of the opposing party, intervened to say that the so called questionable activities could not have been done single handedly and ended with the remark that “It takes two to tango”. On hearing this, Tan Sri Abdul Malek leaned towards me and under his breath muttered, “Shall we dance?” It is this sense of humour and wit that endeared him to all who had the privilege of knowing him. 4 relevan • tribute Opening address by HRH Sultan Azlan Shah at the 14th Malaysian Law Conference “50 Years of Constitutionalism and the Rule of Law" Assalamaualaikum Warahmatullahi Wabarakatuh. Salam Sejahtera. Bismillahi Rahmanir Rahim. This year marks the 50th year of our nation’s Independence. It is also the 50th year of our Merdeka Constitution. Malaysia and its people have every reason to celebrate this joyous occasion as the country prospers as a constitutional democracy with a constitutional monarchy in the form as established by the Merdeka Constitution in 1957. Not all countries that achieved their freedom at the end of the colonial period are today able to celebrate their independence with pride. Some are under military rule, whilst others have had their institutions undermined or even abolished. The 50th anniversary of our independence is therefore an appropriate moment for all of us to reflect upon the strength of our constitutional system. As we rejoice in our success, It is important to be alert to the pitfalls of failure if proper regard is not given to our constitutional mechanisms. We must ever be mindful that written constitutions are mere parchment pieces. It is important that there must be, in the hearts and minds of those who are entrusted to administer and uphold the constitution, a belief in the values and principles that animate the august document. I had occasion to observe when sitting in the Federal Court in 1977 that the “constitution is not a mere collection of pious platitudes”. I spoke then of the 3 essential features of our constitution. I said: “It is the supreme law of the land embodying three basic concepts: One of them is that the individual has certain fundamental rights upon which not even the power of the state may encroach. The second is the distribution of sovereign power between the states and the federation,… The prescription that “we are a government of laws, not of men” describes the basic principle that runs through our entire constitution-the principle of the Rule of Law. The Rule of Law is the defining feature of democratic government. In delivering the eleventh Tunku Abdul Rahman lecture in November 1984, I again defined it as follows: “The rule of law means literally what it says: The rule of the law. Taken in its broadest sense this means that people should obey the law and be ruled by it. But in political and legal theory it has come to be read in a narrow sense, that the government shall be ruled by law and be subject to it. The ideal of the Rule of Law in this sense is often expressed by the phrase “government by law and not by man”” In a speech delivered in Kuala Lumpur in April 2004, Lord Woolf spoke of the ‘rule of law’, “The Rule of Law is the rule by the laws that govern a true democracy. They are the laws that provide for a proper balance between the protection of human rights and the interests of the State. Laws which an independent and responsible judiciary can enforce to protect all members of society from abuse of power.” The reference by Lord Woolf to the role of the judiciary is highly significant. I wish to state with all fortitude that without a reputable judiciary-a judiciary endowed and equipped with all the attributes of real independence-there cannot be the Rule of Law. The third is that no single man or body shall exercise complete sovereign power, but that it shall be distributed among the executive, legislative and judicial branches of government, compendiously expressed in modern terms that we are a government of laws, not of men.” 5 relevan • speech All countries, including those that are totalitarian regimes, have courts. But as I observed previously: “The [mere] existence of courts and judges in every ordered society proves nothing; it is their quality, their independence, and their powers that matter.” In matters concerning the judiciary, it is the public perception of the judiciary that ultimately matters. A judiciary loses its value and service to the community if there is no public confidence in its decision-making. In this regard the principal quality a judiciary must possess is “impartiality”. Lord Devlin said of “judicial impartiality” that it exists in two senses-the reality of impartiality and the appearance of impartiality. He emphasised that the appearance of impartiality was the more important of the two. Impartiality also means that judges are not only free from influence of external forces, but also of one another. No judge however senior can dictate to his brethren as to how a decision should be arrived at. It is of the essence of a judge’s character that he must be a person of unquestionable integrity who brings an unbiased mind to his task. Like Caesar’s wife, he should be above suspicion. It is said that public confidence in the judiciary is based on four evaluating criteria. They are: (1) the principle of independence of the judiciary; (2) the principle of impartiality of adjudication; (3) the principle of fairness of trial; and (4) the principle of the integrity of the adjudicator. How does our judiciary measure today against these criteria? Sadly I must acknowledge there has been some disquiet about our judiciary over the past few years and in the more recent past. In 2004, I had stated that it grieved me, having been a member of the judiciary, whenever I heard allegations against the judiciary and the erosion of public confidence in the judiciary. Recently there have been even more disturbing events relating to the judiciary reported in the press. We have also witnessed the unprecedented act of a former Court of Appeal judge writing in his post-retirement book of erroneous and questionable judgements delivered by our higher courts in a chapter under the heading “When Justice is Not Administered According to Law”. There are other serious criticisms. I am driven nostalgically to look back to a time when our Judiciary was the pride of the region, and our neighbours spoke admiringly of our legal system. We were then second to none and the judgements of our courts were quoted confidently in other common law jurisdictions. As Tun Suffian, a former Lord President of the then Federal Court, said of the local judges who took over from the expatriate judges after Merdeka that the transformation was without “any reduction in standards”. Admittedly society is more complex today and the task of judges may be more difficult then what it was before, but the values I speak of are universal and eternal. There is no reason why judges with the assured security of tenure they enjoy under the Constitution should not discharge their duties impartially, confidently and competently. Judges are called upon to be both independent and competent. In these days, judges must ever be mindful that the loss of independence can come from many sources, and not just from the executive. Therefore, judges must piously resist the lure of socialising with business personages and other well connected people. They may discover at their peril that they have compromised themselves in the cases that come before them with the unedifying spectacle of recusal applications. Nothing destroys more the confidence the general public, or the business community has in the judiciary than the belief that the judge was biased when he decided a case, or that the judge would not be independent where powerful individuals or corporations are the litigants before him. Confidence in the judiciary may also be eroded where the business community perceives incompetence in decisionmaking. A judgement in a banking or commercial transaction that is contrary to the established norms or which is incomprehensible in its reasoning is bound to give rise to suspicion and loss of confidence. It therefore becomes apparent, that our attempts to establish ourselves as a leading financial and commercial center will fail, if we do not have a competent judiciary to decide on complex commercial disputes. In this regard, it is utmost importance that the foreign investor have faith in the competence and integrity of our judiciary. The international foreign investor also expects a speedy resolution of their cases before the courts. Delays cause a loss of profits to the business community. In the recent World Bank survey on resolution of commercial disputes, Malaysia ranks poorly, 63 amongst 178 economies. A similar report by the US State Department warns American businessmen to be wary of the slow process of adjudication of cases before the Malaysian courts. This is indeed a poor reflection on our courts. Countries such as Singapore and Hong Kong, who have a similar legal system and who share similar laws, and whose judges and lawyers are trained as ours, are ranked in these surveys as amongst the best in the world (Hong Kong is placed first and Singapore ranks as fourth in the world). The reason is obvious: these countries have undertaken major reforms in their court structure and procedures and have introduced more efficient and transparent commercial courts so as to attract the foreign investor. Maybe it is also time for us to consider such changes in our legal system and introduce a strong central commercial court in Putrajaya as in London, with especially trained judges who are familiar with the new and ever changing commercial laws and their developments, so that we too can become the center for the resolution of commercial disputes in the region. I should point out that mere cosmetic changes alone would not suffice. If we wish to achieve this goal, it is imperative that major reforms are introduced. Many other countries have taken such steps to establish specialised commercial courts. Recently, the Dubai Commercial Court (where one of our own former Chief Judge has recently been appointed to sit as a 6 relevan • speech judge in this new court), and the Qatar Commercial Court have been established. I know that judging is an arduous task calling for a good mind and a capacity for hard work. The inevitable consequence of incompetence is delayed judgments and backlog in cases leading to all round dissatisfaction. Only last week, I read in a latest Malaysian law report that a case of medical negligence involving a death of a lawyer took 23 years to reach the Court of Appeal. Similarly there have been reports that some judges have taken years to write their grounds of judgements involving accused persons who have been convicted and languishing in death row. Surely, such a situation cannot be tolerated in any progressive nation. It will also be appropriate for me to say a few words on lawyers. The administration of justice is not just the role of the judiciary. I had said previously in July 1984 on the occasion of a farewell dinner speech to the Bar Council on leaving office as the Lord President, that there cannot be an independent Judiciary without an independent Bar. I stated further that the judiciary cannot function without legal profession. This symbiosis calls for a proper understanding of the relationship between the Bench and the Bar. The Bar and its leadership must ensure there is a high standard of integrity and ethics among its members. A Bar that is riddled with bad practices cannot assist the administration of justice. In this respect the relationship between judges and lawyers must be a proper and correct one. As I have said earlier, judges are supposed to be no respecters of persons who appear before them. This rule applies not only to litigants but also to lawyers. It is not just a matter of prudence and good practice, but fundamentally one of ethics. As is often said, there are good lawyers and bad lawyers. Whilst the majority of the lawyers discharge their duties as officers of the court with professionalism and dedication, there have been cases of some others who have brought disrepute to the legal profession. There have been allegations against some lawyers that in clear dereliction of their responsibilities, they have either misled the courts, or attempted to choose the judges or courts for their cases to be heard so as to obtain a favourable decision in their client’s favour. This is serious interference with the administration of justice and the process of the court. There is one further important point that I feel compelled to say. This deals with a judge’s quality in decision-making. We in Malaysia live in a multi-cultural and multi-religious society. Our founding fathers accommodated this diversity into our Constitution that is reflected in the social contract, and saw this diversity as strength. Judging in a diverse society is not an easy task. Judges in many parts of the world face similar difficulties. Those of you who were present at the lecture delivered by Justice Albie Sachs at the Second Tun Hussein Onn Lecture last week will know how the Constitutional Court of South Africa, as the guardian of the constitution, wrestle to arrive at a just decision when dealing with the issues relating to diversity or discrimination. Judges in Malaysia must be ever mindful that they are appointed judges for all Malaysians. They must be sensitive to the feelings of all parties, irrespective of race, religion or creed, and be careful not to bring a predisposed mind to an issue before them that is capable of being misconstrued by the watching public or segments of them. I am reminded of the proud accolade of the late Tun Suffian in his Braddel Memorial Lecture in 1982, when speaking of the Malaysian judiciary to a Singapore audience he said: “In a multi-racial and multi religious society like yours and mine, while we judges cannot help being Malay or Chinese or Indian; or being Muslim or Buddhist or Hindu or whatever, we strive not to be too identified with any particular race or religion – so that nobody reading our judgement with our name deleted could with confidence identity our race or religion, and so that the various communities, especially minority communities, are assured that we will not allow their rights to be trampled underfoot.” I have found it necessary to speak at some length on these matters because it is my earnest hope that the Malaysian judiciary will regain the public’s confidence and it will once again be held in high esteem as it once was held. In conclusion, I wish to say as I have said on previous occasion ‘in the judiciary, people place their trust and hope’. It now gives me great pleasure in officially declaring open the 14th Malaysian Law Conference. I wish all of you a fruitful and meaning full discussion and exchange of ideas. Reproduced with the permission of the webmaster of the Malaysian Bar Website. BHARWANI ENTERPRISE VISHU R BHARWANI Former Director of KAJ CHOTIRMALL & Co KL No. 2 Jalan Kasipillay, Suite 2-16-8 Menara KLH, 51200 Kuala Lumpur Tel : 03 - 7490 0167 HP : 019 215 9184 Email : vishurb1@gmail.com Specialises in Lawyers Robes, Syariah Robes, Wing Collar Shirts, Round Collar Shirts, Bibs, Studs for Wing Collars, Wing Collars 7 relevan • speech Written Advocacy PART 2 A Paper prepared for and delivered as part of the Continuing Legal Education Program of the Victorian Bar by the Honourable Justice K.M. Hayne AC, Judge of the High Court of Australia The Paper was delivered in two parts on 5th and 26th March 2007. The first part of the Paper was reproduced in Issue 02/2007. The second part of the Paper is reproduced below with the permission of Honourable Justice K.M. Hayne AC and by courtesy of the High Court of Australia. The Statement of Facts In considering the statement of facts, the statement of the argument, and the statement of the orders you want the court to make, it will be necessary to say something about what I earlier described as questions of English expression and style. As I said earlier, those are very dangerous subjects. So before daring to enter upon them, let me make some other points about these three sections of written submissions - fact, argument and orders. I have already emphasised that written submissions must be clear, concise, accurate and comprehensive. These principles may be thought to have particular application to the section of written submissions that is devoted to stating the facts. Ordinarily, it is the appellant who is primarily responsible for setting out the principal statement of the relevant facts. The facts that are to be stated by an appellant are not just those which the appellant relies on to advance that party's argument, or those which the appellant hopes that the appellate court will act upon. Rather, the statement of factual background to an appeal "will not fulfil its function unless it states concisely but comprehensively the facts found or acted upon and considered relevant by the court whose order is the subject of the appeal"5. This proposition, stated by McHugh J in delivering reasons for refusal of an application for special leave to appeal, is of general application. The relevant facts to be stated in written submissions are the facts which the court whose orders are challenged, found or acted upon and considered relevant. As McHugh J went on to say6: "In the case of a jury trial, the statement of factual background should state the evidence as to every material fact that could support the jury's verdict." The need for this statement to be accurate and comprehensive should be self-evident but let me say something about why this is so. The statement of facts is intended as a tool for use by the court in understanding what happened in the court below. Only if that is known can there be a useful examination of whether what was done was wrong. So the statement of facts is a critically important building block for the court. It will usually be very important 5 6 also to the development of the parties' arguments. But if you do not know what the court below did, you cannot decide whether what it did was wrong. And if a party does not state the facts found and acted upon by the court below in a way that is both accurate and comprehensive, what faith will the appellate court have in whatever else that party says in its written submissions? Of course there will be many cases where an appellant will want to say that findings made and acted upon in the court below were wrong, or that findings that should have been made were not made. While I cannot exclude the possibility of saying something about either an allegation of incorrect findings or insufficient findings in that part of the written submissions directed to giving the factual background to an appeal, it seems to me to be much more probable than not that any such statement will find its proper place in the statement of argument. Your summary of factual background may be clear, concise, accurate and comprehensive but it is, I think, essential to supply complete references to each of the propositions that you set out in the summary. Again, the way in which judges prepare reasons for judgment is infinitely varied. But one way of approaching that task is to include in the draft reasons a complete critical apparatus that will enable a proof reader to check every factual assertion in the reasons against its source in the appeal record. In the High Court, for example, it is very common for reasons to be prepared in a form which reads: "On 31 May 2005 [AB 1], the appellant was convicted [AB 196] of a charge of murdering John Henry Smith [AB 3] after a trial that had occupied 37 days [AB 18]..." The appeal book references given in the reasons enable those who proof-read the judgment to check the accuracy of every fact asserted. The appeal book references remain in the draft reasons until the draft is to be made ready for publication. Whether or not the court or particular judges follow a practice like this, the fact is that a judge, confronted by a statement of what are said to be the relevant facts, whether they are the facts found or acted upon in the court below or other facts said to be established in the evidence, will often want to go back to the source of the statement that is made in the party's written submissions. You cannot do that easily if the parties do not identify the sources they have used. Enough about the statement of facts. Before dealing with the statement of the argument, which is, after all, not an Hancock Family Memorial Foundation Ltd v Porteous (2000) 201 CLR 347 at 349. (2000) 201 CLR 347 at 349. 8 relevan • article unimportant part of written submissions, let me say something about the statement of the orders you want the court to make. The Statement of Orders The notice of appeal should set out the form of orders that an appellant seeks. Why then do the High Court's Practice Directions require the parties to deal with this subject in their written submissions? Experience dictates that too little attention is given by parties to formulating the orders that they want the appellate court to make and their arguments, if accepted, would entitle them to have made. All too often, the parties think of the problem of orders as solved by identifying that, in the case of the appellant, that side wants the appeal allowed with costs and, in the case of the respondent, that side wants the appeal dismissed with costs. If an appeal is to be dismissed with costs, little more need usually be said. By contrast, if an appeal is to be allowed, you have to consider what follows from that fact. What is to happen about the orders made in the court below? Which of those orders are to be set aside? Are any orders to be made in their place, or is the matter to go back to that court for reconsideration? What is to happen about the costs in the court below? When you have successive appeals, as you do in the High Court, you have to repeat those inquiries about the orders of the intermediate court by asking generally similar questions about the orders of the primary judge. At the end of that process you will find that the orders proceed sequentially. First, there are the orders of the appellate court: Appeal allowed with costs. Set aside the orders of the [ ] Court made on [ ]. Then there is any substitution that must be made for the orders of the court below: In their place order that the appeal to that Court is allowed with costs and the orders of the [ ] Court are set aside. Lastly, there is any substitution that must be made for the orders of the primary court: In their place order that there be judgment for the [ ]for[ ]with costs. Formulation of orders is far more important than some obsession with forms and solemnities. Disobedience of court orders can bring serious consequences. Orders, therefore, are to be prepared with care and accuracy. But no less importantly, it is often the case that only when you work out what orders are sought that you can decide whether the argument that is advanced justifies those orders or some other, lesser, form of order. Now is not the time to divert further into the otherwise fascinating byways of drafting particular forms of order. It is enough to say that the drafter can find guidance about the way in which orders should read if only he or she takes the trouble to look. Of course, your first port of call should be the relevant rules of court, and then recent decisions of the court concerned. But in the more complicated cases, why not go back and seek guidance from the old works like Seton's Judgments and Orders, or Chitty's Queen's Bench Forms, or Robertson's Law and Practice of Civil Proceedings by and Against the Crown and Departments of the Government. But enough about orders. What about the written argument? Is that not the heart of written advocacy? The Statement of Argument Those of you who have patiently waited for me to complete an apparently endless disquisition on issue-framing, a homily on the subject of summaries of facts, followed by reference to the minutiae of framing an order, must have begun to wonder whether I would ever come to what you thought would be the centrepiece of these presentations. I make no apology, however, for spending the time that I have on the three other parts of a written argument. Each part of a written argument has its place in moulding the thinking of the court. None of the three sections I have mentioned is to be put aside as being of no importance and suitable for a clerk to attend to while the great advocate focuses attention only upon the statement of the argument. In stating your argument you must, again, be guided by the four watchwords: clear, concise, accurate and comprehensive. It is to be hoped that your statement of argument follows on naturally from the way in which you have stated the issue or, if you are for a respondent and have not restated that issue, from the way in which the appellant has identified it. If your statement of argument does not follow on from the statement of issue, why did you bother stating the issue in the way you did? Why did you not restate the issue? If the statement of issue is useful, it will tend to impose an order upon the statement of argument. If the premises for the issue are undisputed, a short restatement coupled with some cross-references to the summary of facts (if the premises are factual) or to the relevant statements of principle or applicable law (if the premises are legal) may well suffice. Then you may plunge into answering the question that has been posed in the statement of issue. Do you need to break up the argument into separate steps? If you do (and in many cases you will have to), deal with the steps separately. Maybe it will help to state the steps one after the other and then develop each separately. Much turns on the nature of the argument that you are advancing. But whether the argument is one that proceeds in a single step or by a series of steps, each step must be encapsulated in a proposition that is clear, concise, accurate and comprehensive. Formulating propositions of this kind is not easy. The fate of the appeal may hang upon the court's acceptance or rejection of what you say. The temptation therefore is to fudge the proposition: to give yourself room to move. I do not say that you must never do this. But you should do so only if you can articulate a reason for doing so, and a reason better than "I can decide about that later". Lawyers are innately cautious. How often have you entered a lift in Owen Dixon Chambers, asked whether it is going up, and been met with the answer "I hope so". No definite affirmatives for lawyers. It is, therefore, not surprising that advocates want to leave a back door ajar at all times. But do you need to? Must the proposition be qualified? Why? Does the qualification swallow the substance of what you want to say? In the end, there can be no clear and accurate statement of the propositions unless there is clear and accurate thought 9 relevan • article underpinning them. If there is that clear and accurate thought underpinning what you are doing, you will usually find it not just desirable, but absolutely essential, to drop the qualifications. Let me say something now about an appeal which raises the most common form of question that arises in the courts today - a question of statutory construction. I leave aside from consideration the practical considerations that bedevil the High Court of trying to find out what form of the legislation we are concerned with and where that form of legislation may be found. I will assume that those problems have been addressed by counsel and that we are all agreed upon the applicable form of legislation that is to be construed. The parties to the appeal will be contending, respectively, that the relevant provision on its true construction does, or does not, have a particular operation in the facts of the case. The kind of case I want to direct attention to is one in which those contentions turn on a disputed question of construction of the particular provision rather than a disputed question of fact which, if decided one way engages the section, but if decided the other, does not. What exactly is the construction for which your side of the argument contends? How exactly does your side contend that that construction follows from the words of the statute? It is of little use to say to a court that "On a proper construction of the relevant section, we win and they lose." And it is of only slightly more help to say "And what's more the Second Reading Speech supports us." If there really is a disputed question of construction it will very often be because those who drafted the legislation, or more relevantly, those who prepared the drafting instructions, did not have the particular combination of facts in mind that now fall for consideration. So how exactly do you say the statutory words work? How does that fit in with the rest of the Act in question? Is there anything in the extrinsic material which really does assist, or do you say that nothing is to be gained from that extrinsic material? All of this is capable of reduction to a series of propositions each of which can then be amplified in turn. All too often, however, the argument is wrapped up in a form that is only slightly more sophisticated than saying "we win; they lose". Inevitably, principal focus will fall in argument upon the particular provision immediately in issue. But on no account should you confine your attention to that provision. That provision can be understood only in its proper context. Sometimes that context is very complicated. Without understanding it, the court will go astray. One particular example of the kind of problem I have in mind is provided by transitional provisions of the Corporations legislation considered by the High Court in Forge v Australian Securities and Investments Commission7. The oral exposition of that legislative chain was first rate. But it was a chain of legislative provisions that was described carefully and completely in the written submissions. Only when that chain of provisions was understood could the relevant statutory construction question be resolved. That was a task that had first to be undertaken in the written arguments. That required very clear thought and exposition. 7 (2006) 80 ALJR 1606 at 1631-1632 [104]-[111 ]; 229 ALR 223 at 251-253. So where have we got to? Clear, concise, accurate and comprehensive. I have said this several times. Formulate the propositions. Formulate them in more precise terms than "we win; they lose". But how are you to make any of this persuasive? Alas, here begins the Year 9 English expression class. All of us know the rules. All of us disobey them constantly. How often are we told, "prefer the active voice to the passive voice"? And what about Garner's rules: "strike out and replace fancy words"; "challenge vague words"; "shun vogue words"; "eschew euphemisms"; "toss out timid phrases"; "discard empty dogmatisms". How often do we disobey these? I will not say more about these precepts except, again, to invite you to go back and look at a recent piece of your writing with a view to seeing whether you are obeying them. Perhaps the essence of all of these precepts is captured by the word "simplicity". And that is not the description that most readily attaches to a lot of legal writing. In part that is because legal writing deals with difficult and technical ideas. The use of technical terms is therefore inevitable. How can you write about the distinctions between "pledge" and "mortgage" without using the language of the law of property? But all too often we find ideas that are not difficult, and not technical, buried in a torrent of words. If there ever was any clarity of thought, it lies buried by the torrent. The more you clarify and simplify what you want to say, the more apparent will be the order in which you need to deal with the content, and the more apparent will be the way in which you are dealing with it. The more apparent the way in which you are dealing with the problem, the easier it is for the reader to understand and evaluate what you are saying. Clarity and simplicity are usually assisted by providing headings and other pointers to what you are about to deal with. The layout of the page is also important. Sometimes, defining particular expressions may help. But I must say that overuse of definitions is distracting and can be confusing. Long slab quotations are often unhelpful. If you consider that you must quote a lengthy passage of evidence, judgment or other material, introduce it by telling the reader why you are quoting the passage. Highlight the words that lead you to set the passage out in full. And then, after the quotation, tell the reader again why you have quoted it. Only then does the reader avoid the temptation to skip what someone other than the author of the document has said to find out what it is that the author next wants to tell the reader. Preparing written submissions is not easy. I have tried to point out some considerations that affect how you may go about the task and in doing that I have, at least inferentially, tried to identify some of the reasons why the task is difficult. Oral advocacy retains a central place in the way in which Australian courts transact their business. Written argument in Australian courts is intended to make the transaction of that business more efficient. That can be done only if the written argument is prepared in a way that focuses the reader's mind upon the determinative issue or issues in the case, explains how that issue should be determined, and why it should be determined in favour of one side rather than the other. That must be done clearly, concisely, comprehensively and accurately. 10 relevan • article Malaysian Lawyers Overseas As the issue of foreign lawyers entering the Malaysian market continues to be discussed, RELEVAN interviewed several Malaysian lawyers going the other way - plying their trade overseas in other jurisdictions. They were asked to provide a brief description of their career before they moved overseas, their present working environment, difficulties they face and the differences in work culture. Finally, they were asked what areas they thought Malaysian lawyers could learn or benefit from lawyers overseas. CANADA WOO SO YIN : I was a corporate commercial lawyer and a partner of Messrs Lee Hishammuddin. I had practiced for approximately ten years before moving to Canada. I was seeking to improve the quality of my life and wanted my two young children to grow up in a different environment. I am now a corporate and financial services associate of Miller Thomson LLP, a firm of about 500 lawyers practising across nine offices in major cities in Canada. In the Vancouver office, where I work, there are approximately 50 lawyers. I had to re-qualify in order to practice in Canada. It meant sitting for five written exams and serving a partial article term. It took about one year and was considered relatively fast. After requalifying, I had to accept that my work experience in Malaysia would not be given full credit here. This setback was expected but it was still a humbling experience. The working culture in Canada is indeed different. Canadians are generally very polite and pleasant. Being politically correct is valued, as well as the ability to express criticisms, disapprovals and disagreements in a careful and thoughtful manner. Most clients respect a lawyer’s personal space outside normal business hours. There is however a greater focus on billable hours. On average, associates have a target of 1600-1700 billable hours and 200-300 non-billable hours a year. In order to meet these demands and find time for skiing, hiking, kayaking (all the things that Canadians love to do), lawyers here are more careful with their time in the office and how they use it, especially non-billable time. I had to learn to be more efficient at the office and be more conscious of how I use other people’s time. Although there is a great emphasis on billable hours, there is also more flexibility in how billable hours are delivered. Most lawyers carry a Blackberry. We don’t have to be in the office to work on a file. It is not uncommon for lawyers to work from home, on the bus or train or while waiting outside their children’s music classes. Alternative work schedules are becoming more acceptable. Last year I decided that I wanted to spend more time with my children after school. After some discussion, my firm agreed to a reduced hours and alternative work schedule. Although there is a reduction in pay for the reduced hours, I am now able to work from 7.30 a.m. to 2 p.m. and pick up my kids after school at 3 p.m. I am impressed with the consistency in the quality of legal services in Canada. I think Malaysian lawyers, particularly young lawyers, would benefit from having greater initiatives by the Bar Council to establish “standards” for the profession. This could be in the form of a more systematic continuing education program. It could also be through publication of guidelines, practice manuals, precedents/model form documents for various practice areas. This will require the active participation and input of experienced legal practitioners who are prepared to invest their time and effort. The establishment of such standards would facilitate dealings between lawyers and improve the 11 relevan • article quality of legal services. Another area is the training of legal support staff. I don’t recall encountering any programs or courses for the training of legal support staff in Malaysia. Most learn on the job. It is important to train the support staff to improve their standard and quality, to encourage delegation of work and increase efficiency. One issue that is close to my heart is alternative work arrangements. Many of you who are reading this article would dismiss the flexible work arrangement that I have at my firm as “unworkable” or unacceptable to clients in Malaysia. I have a number of female friends in Malaysia who quit legal practice after having children, because it was overwhelming to practice full-time and take care of young children. Their departure is a loss to the legal profession because they were skilled and experienced lawyers whom, if given flexibility in work arrangements for a few years, could have continued on as full-time contributing members of the Malaysian Bar for the next 20-30 years. Although tempted, I won’t discuss the case for alternative work arrangements here. I challenge you to keep an open mind and read “Balanced Lives: Changing the Culture of Legal Practice” published by the ABA Commission on Women in the Profession. From my personal experience, I have received positive feedback from my firm that the arrangement is a beneficial one to them. I have no plans at present to return to Malaysia. UNITED KINGDOM services and reviewing their general business terms to ensure that it will be shariah compliant. There is always a teething stage when you move to any new workplace and having to familiarise with the culture, environment and the style of your immediate superior. There is also some difficulty with the use of English in the workplace. Everyday interaction is littered with jargon such as ‘bells and whistles’, ‘old chestnut’, ‘plain vanilla’, ‘tip’, ‘naff’ etc. But it does not take long to get used to it. The best thing about working here is shorter working hours. We work during office hours, have our lunch at our desks and try to leave by 7pm. We have a more balanced work and personal life here. Holidays are considered important and it is even part of the law that you must take at least 20 days leave in a year. Work is demanding but the firm gives us the flexibility to work from home if required. We are given our own blackberry and laptop so that we can work from home and have access to the office documents as if we were in the office. The IT system and the organisation structure here are far more advanced with their own precedent bank and ‘google’ equivalent to find the relevant documents or item. Since we have branch offices all over the world, it saves us a lot of time trying to source for local firms. The lawyers here are trained to think beyond the law by considering the accounting, tax, regulatory and other issues. Malaysian lawyers could benefit from this. In our particular situation, there are so many Islamic structures that are being developed in Europe and the Middle East. The matters here are highly structured and use complicated Islamic structures. I think Malaysian lawyers can learn more about product development under other Islamic structures for retail and commercial matters (apart from BBA and Bai Inah). Yes, we will definitely be returning to Malaysia in the future. HONG KONG ASMAHIN IBRAHIM : I was a corporate banking lawyer in Messrs Zul Rafique & Partners, specialising in both conventional and Islamic banking, project finance and private debt securities. I married an Englishman and decided to move overseas. I now work in the Islamic Financing Department at Norton Rose, a law firm in London. FARA MOHAMMAD : I did my pupilage in Messrs. Zaid Ibrahim & Co. in 1999. However, after completing my pupilage I decided to work in-house. After three years of this and completing my MBA, I joined Messrs. Shearn Delamore & Co (specialising in corporate matters) and later, Messrs. Zaid Ibrahim & Co. (specialising in banking and finance matters - both conventional and Islamic). ASMAHIN & FARA : We do many types of work ranging from project financing, ship financing, aviation financing, equity funds, sukuks, corporate governance related matters, and product development i.e. developing Islamic banking products for the Bank, working closely with the Shariah scholars. Our clients range from bankers to corporations, from Europe, the Middle East and Asia. It is more challenging as our firm gets to work as the lead solicitor in the transactions. We also assist banks who want to introduce Islamic banking products and services by helping them to form a Shariah Advisory Board (“SAB”), drafting the terms and conditions of the SAB, develop Islamic products and TAN CHOO LYE : I worked in Messrs Kadir, Tan & Ramli and then in its successor, Messrs Kadir Andri Aidham & Partners, for 5 years, focusing mainly on corporate work such as IPOs, M&As, restructurings, schemes of arrangement, banking and project finance. I felt that I had gone as far as I could in Malaysia and I was curious to find out what it would be like to work on a deal from the other side – on behalf of the international banks and financial houses. I am now working in Hong Kong with the firm of Kirkpatrick & Lockhart Preston Gates Ellis LLP. Since leaving Malaysia, I have been employed by 3 firms in total – the other 2 being Conyers Dill & Pearman and Allen & Overy. Malaysians tend to be much friendlier and more “real”, whereas Hong Kong residents tend to be isolative and exclusive. Relationships can be very superficial but if you 12 relevan • article take the effort to find out more about people here, you will realise that it’s because everyone is from somewhere else and naturally, with such cultural differences, it is much harder to form meaningful relationships. It’s difficult but not impossible for someone who does not speak Cantonese or Putonghua to work here (I’m a living example of this) though I foresee that the further we get away from 1997, the harder it will be to do so. In terms of the practice, I still feel the quality and variety of the work that I did in Malaysia far surpasses anything I have done since leaving though this may be a result of Malaysia being a developing country rather than a developed one where everyone has been there, seen that, done it, as is the case in Hong Kong. In HK, practicality and costs are the overriding factors and it’s all about getting things done quickly. Because of lawyers’ high billable hours, no client wants to see “research” showing up in their bill so specialisation is derived from continually doing the same thing over and over again and from experience, rather than research. HK definitely has an obsession with billable hours which sometimes overrides all else but makes for a much more efficient working environment as I discovered. Further, there is no such thing as shielding lawyers during the downtimes – firing a lawyer, something virtually unheard of in Malaysia, is the norm here and employers give no quarter for any “disabilities” you may have. It’s an extremely competitive, ferocious, inhumane, sometimes unfriendly environment but it toughens up a person very quickly. Working relationships are very professional, almost clinical whereas in Malaysia, clients would spend time getting to know their lawyers and discussing nonbusiness affairs. On the flip side, however, the efficiency and speed at which the Hong Kong business environment functions is amazing – it can be stimulating and exciting but perhaps an eye-opener to those much used to a slower pace – a client of mine and fellow Malaysian with whom I’d previously worked in Malaysia used to joke about how it took us more than a year to complete one capital reduction exercise in Malaysia whereas, in Hong Kong, in the space of a year, we could do five or six. And, while the rapidity at which Hong Kong professionals get down to business can be somewhat startling, it makes for a much, much more efficient use of time – we hardly ever have all-day-long meetings because the concept of Malaysian time, waiting for stragglers to arrive, having a chit-chat, sipping coffee, cannot happen in Hong Kong where time is money. I am still close friends with the people I met as colleagues in Malaysia; I have far fewer friends who are colleagues in Hong Kong but the few that I do have are good friends and I do believe it’s related to the office culture where you work and, of course, people’s individual tendencies. There isn’t the Hong Kong equivalent of a mamak so, of course, it’s harder to go out and socialise – Hong Kong isn’t cheap and is regularly in the top three rankings for most expensive city, highest cost of living, and the like. I, personally, believe that Malaysian lawyers are on par with the lawyers in HK and internationally. However, Malaysian lawyers tend to be humble and uncertain, not as forthright, confident and direct with their views, less commercial and more by-the-book. If anything, Malaysian lawyers should be more confident of their abilities and more practical in their application of the law. In terms of areas of work, Malaysian lawyers are not normally exposed to the intricate and unusual structures that the international financial institutions come up with in HK nor the variety of laws that are practiced in HK as Malaysian lawyers only practice Malaysian law. The use of offshore companies and offshore law is one area that is sorely lacking in Malaysia, which would be extremely beneficial to clients in Malaysia. My aim was, is and always has been to return to Malaysia and I do return on a regular basis. Malaysia is my home and I definitely want to return when I can. CHINA WILL FUNG : I started my career at Messrs Shook Lin & Bok. I was then in the banking and general litigation department. I then moved on to assist a friend of mine in his newly set-up law firm, dealing primarily in conveyancing & general commercial and corporate work. In 2004, I moved on to join a boutique law firm in Kuala Lumpur as a Partner. I was involved in the organisation of the 13th Malaysian Law Conference. I spoke to Dato’ Loh Siew Cheang at the conference – he was one of the pioneers in doing business in China. He told me I could secure a law firm posting without getting admitted to the Chinese Bar. He encouraged me to pursue this. So, I started to read up a little bit more on Chinese Law and sent out my CV to a few Chinese Law Firms. I got a response and was officially engaged on a secondment basis in one of the leading law firms here in Beijing, Lehman, Lee & Xu. I have recently accepted an invitation to be a partner in Grandall Legal Group, the second largest law firm in China. I have obtained valuable international exposure here in Beijing. In China, there is an unofficial saying: “If you want to invest in something, make it the biggest”. When people say that China has no law, this is utter nonsense. China has a legal system which is not easily understood. It involves a lot more than what you read from any literature, or better known to Malaysians as Statues. It is a very challenging environment for legal practitioners, in view that laws / regulations / measures / opinions / implementation guidelines / notices could be passed or promulgated from the State, or the relevant government bodies / departments that literally had every right and authority to promulgate laws. I did not encounter any difficulty when I first started working here. The Chinese people are a friendly lot and very eager to learn from each other. As long as one adopts an open mind, be humble, friendly, helpful and willingness to learn from others, then it will be fine here in 13 relevan • article China. Right now, the whole world is aiming at China, and would want to be a player in this very rapid and vibrant economic environment. I am not sure about other firms. In the firm that I am attached to, we are strongly encouraged to learn, learn and learn. Most of the attorneys spend an average of 1 hour each morning reading the news on the internet. Apart from that, we have our weekly in-house legal training. The lesson I learnt here is that practicing law is beyond merely knowing the law in our own jurisdiction, but gaining knowledge in the industry, or areas of practice in this fast moving world. How can Malaysian law firms benefit from my experience? Firstly, allow junior lawyers full access to the internet. I have been told that many law firms in Malaysia still limit access to their lawyers, being skeptical of such facilities being abused. Secondly, don’t designate junior lawyers in Malaysia as Legal Assistants. Many countries equate the designation of Legal Assistant with that of a paralegal. Overseas, lawyers are designated as Junior Associates, Attorney-at-Law, or simply, Lawyer. Thirdly, we need to liberalise the rules for law firms to advertise on websites. Try comparing the websites of Malaysian law firms and other neighboring countries, e.g. Singapore. No wonder we lose out so much to our counterpart. We have to prepare ourselves to be able to compete globally. Let me share with you a true account : On the date of announcement by the PM with regard to the Iskandar Development Region’s incentives on March 25, 2007, I received 2 queries from our existing American clients, wanting to know more about the same. They could not find any such information from any Malaysian law firm on the internet. So, at the end of the day, the email I received asked me whether I have heard of a particular law firm in Singapore, because they have some information regarding this project. It is quite amusing that a potential legal project in Malaysia is to be handled by a Singapore law firm. Finally, stop the under-cutting. Lawyers are supposed to make decent income, and my observation is a lawyer’s life in Malaysia is pretty miserable, speaking from my own experience. I do not know whether things will get better, but at least try to increase the pay at the entry level. Objectively speaking, junior lawyers are akin to factory workers. Deep down in my heart, I dare say Malaysian junior lawyers are a bunch of very hardworking lawyers but sadly, miserably paid. Reward your employees adequately and allocate a budget to cater for lawyers’ personal and professional growth. A happy lawyer will ensure a certain amount of consistency and continuity. Treat them with respect and it will pay in the long run. As for now, I do not know whether I will return to Malaysia. There are many factors and considerations. But I will certainly learn as much as possible while I am here, in terms of international and cross-jurisdictional practice. Hopefully there will be a platform for me to share my experience (if any) with my fellow brothers and sisters-atlaw back home from time to time, directly or indirectly. AUSTRALIA PAUL LIM : I commenced my chambering in March 1996 at Messrs Lee Hishammuddin and was admitted to the Malaysian Bar in December 1996. I continued my practice in Lee Hishammuddin in the corporate conveyancing department. I became a partner there in January 2003, before leaving practice in March 2005. My work was mainly in the areas of capital markets and debt financing. I left Malaysia for personal reasons and also because I was seeking a better and more relaxed work environment. I had to complete a 6 month Articles (equivalent to chambering) and take 1 unit in a local university before I could be admitted to practice law in Western Australia (in December 2005). I am now a solicitor in the Energy and Resources Department in DLA Phillips Fox, Perth. I am involved extensively in project development work, drafting the various contracts required to get the projects of the ground. The job is quite interesting because Western Australia is currently in a resources-led boom. I did not encounter any real difficulties when I first started. Australian and Malaysian law are quite similar in many respects since both are based on common law. Many Malaysian Statutes also have strong Australian flavour. I have an Australian law degree and this helped to an extent. The main difficulty I encountered was the need to be careful not to assume that what is universally accepted as Malaysian law will apply equally to Australia. There is a constant need, at the initial stage, to check if Australian law on a particular area is different from Malaysian law, for example, the Australian corporations laws have evolved a fair bit from the Malaysian position, and is much more comprehensive. I was fortunate to find employment in a firm which does not discriminate against a foreign lawyers. One difficulty is to identify with an Australian client since the attitudes and expectations of an Australian client (including the way they live and think) is very different from the many Malaysian clients that I have dealt with while practicing in Malaysia. Work life in Australia is more relaxed (although not to the extent that most people think). There is more balance between work and lifestyle in Australia compared to Malaysia. Being involved in outdoor activities and sporting events during the weekend are very common. Most firms do not expect employees to give up their lifestyles to advance their careers. I have no immediate plans to return to Malaysia although I am keeping an open mind about this. 14 relevan • article My Fault? Your Fault? Whose Fault? Answer: No Fault? By Richard Wee Thiam Seng In a Forum on 23rd October 2007, organised by the KL Bar and the Bar Council Task Force, almost 100 lawyers from all over the Klang Valley gathered at the KL Bar’s Auditorium. The Forum was organised specifically to collate views of the members regarding the proposal by the Attorney General (AG) to replace the current Fault Based system; for all Personal Injury cases, to one of a la New Zealand - No Fault Liability Scheme (NFL). The Malaysian Bar President, Ambiga Sreeneevasan has issued 2 press statements urging the AG not to replace the Fault Based System, but instead to take steps to improve the current system. A Task Force was formed to look into this matter, and members of the Task Force are from all over Peninsular Malaysia. The Task Force is jointly led by Datuk Kuthubul Zaman from Johor and G. Balakrishnan from Kedah. Similar Forums were held at Alor Setar, Georgetown, Ipoh and Johor Bahru. Other states will have the same forum soon. All Forums held so far have seen members take a similar stand – that the members were not in support of the NFL scheme. The Task Force has drafted a memorandum, approved by the Bar Council. The memorandum has been delivered to the Special Commission formed by the AG to look into this issue. The Memorandum outlines the reasons for retaining the current system and also proposals for the improvement of the system. The weakness of the NFL scheme were comprehensively canvassed and addressed in the memorandum. A major concern raised by the Task Force is the likely increase in the insurance premiums if an NFL scheme is introduced. In other jurisdictions where NFL is practised, insurance premiums have considerably risen. At meetings of the said Special Commission, the Malaysian Bar’s Task Force constantly put forward the views of the members. Dialogues and discussions with other interested parties, (PIAM, Bank Negara etc) are also ongoing. 15 relevan • report What does the future hold? By Karen Kimkana More than ten years ago, governments began negotiations on what was to become the framework convention on climate change. In December 1997, the Framework was adopted and since then there has been a lot of brouhaha about global warming and climate change. In the last few years, it has become something that is a bit hard to ignore. This year, the Intergovernmental Panel on Climate Change (IPCC) released a draft of its Fourth Assessment Report "Climate Change' which is due to be finalised soon. Its report covers the technical, political and socio-economic aspects of climate change, as well as its potential impacts. The IPCC reports on findings of scientists and socio-economic analysts on the changes to our climate and the effects that stem from such changes. IPCC reports, to put things bluntly, that things are really as bad as was thought. Fossil carbon dioxide emissions have continued to increase. An increase from an average of 6.4 gigatons of carbon per year in the 1990s to an average of 7.4 gigatons of carbon per year in 2000 to 2005. What does this actually mean to us? It is always easy to ignore statistics that are thrown about. After all, what does 7.4 gigatons of carbon really mean to you and me? • Firstly, the general consensus amongst the scientists (bearing in mind of course, that there are always those who continue to disagree) that global warming is very real. It is true that the climate on our planet is not stagnant. It has increased and decreased over hundreds and thousands of years. However, scientists now are convinced that effects of human activities have sped up global warming. What this means is that the planet’s ability to release heat and energy into the atmosphere cannot cope with the heat and energy we are generating. The temperatures have increased. And the ice sheets and glaciers are melting. Reports suggest that the overall temperature has increased from about 0.2°C to 1.0°C in the last 20 years, and from about 1.0°C to 2.0°C in some areas. In some areas over the artic circle, the increase has been from about 2.0°C to 3.5°C. While this may not sound like a lot, it is also projected that a sustained increased in temperature of about 1.9°C to 4.6°C will lead to the eventual melting of the Greenland ice sheet. This is estimated to increase sea levels by about 7 metres. Global warming is also expected to reduce most of northern China to a desert, which will result in water shortages for about half a billion people. This will also affecting crop productivity and food supplies. In December, world leaders will be meeting in Bali for the Conference of Parties on the UN Framework Convention on Climate Change. President Ban Ki-Moon is calling for concerted international action to address this issue. The decisions to be made by the world leaders will attempt to balance environmental concerns with the need for economic growth and development. We will await the outcome of the Conference of Parties in December to see what decisions are made, and how much effect those decisions will have, if implemented. 16 relevan • article What are we doing about it? Some fast facts People in general are of the mindset that climate change is someone else’s problem. We think it is the developed countries with their industries, and their 3 gallon trucks that are to blame. But here are some facts for you to chew on. • A British study in 2000 showed that about US$571 million worth of food is wasted every year. A US study reported that one quarter of all food produced each year is not eaten. That translates to an average of about one third of food purchased by an average household that is not consumed. A WWF study shows that an average world citizen required 2.3 hectares of land each year to produce what he consumes and for a place to dump the garbage that is left. A Human Development Report 1998 reports that water and sanitation for all would cost about US$9 billion a year. Compare that with US$11 billion a year spent on ice cream in Europe. Basic education for all is estimated to cost US$6 billion a year. Compare that with US$8 billion spent on cosmetics in the United States each year. For every ton of paper recycled, 17 trees and 21 litres of water are saved. Air pollution is reduced by 30kg and landfill waste reduced by 2.3m3. A television set on standby uses one quarter of the energy it uses when it is switched on. An energy saving light bulb generates up to 25% less energy. A leaky faucet that drips about 10 drops a minute, wastes about 5.5 litres of water a day, and about almost 165 litres a month. A 5km journey in a car emits 10 times more carbon dioxide per passenger than a bus, and 25 times more than a train. • • • • There will be some sacrifices that we are not willing to make. For instance, I am not prepared to ride the bus for 2 hours to get to work everyday when driving would take me only 30 minutes. But there are other changes which can be easily implemented in our daily lives. Ultimately, it is a choice we have to make. Climate change, and how we address it, will define us, our era and ultimately the global legacy we leave for future generations. United Nations Secretary-General Ban Ki-moon References: 1. 2. 3 4. 5 Gateway To The UN System’s Work on Climate Change [www.un.org / climatechange] The Water Page [www.thewaterpage.com] Sustainable Lifestyles [www.uneptie.org] Environmental Action Desk [www.eadenvironmental.com] WWF [www.panda.org] Restraining Winding up Petitions By Lee Shih In light of a few recent Court of Appeal decisions, it is useful to set out the position in law regarding an injunction to restrain the presentation of a winding up petition. A filing of a winding up petition can often be used by a creditor as a means to exert pressure on the company to pay a disputed debt. As the presentation of such a petition must be advertised, this would have an adverse impact on the financial standing and the reputation of the company, and may also result in the freezing of the company's bank accounts. The companies court should not be used for the collateral purpose of pressuring a company to pay a disputed debt and the court, in exercising part of its inherent jurisdiction, allows the company to apply for an injunction to restrain the filing of such a petition. Prior to the filing of a winding up petition based on a debt, a creditor must issue a notice (often described as a Section 218 Notice) giving the company 21 days to pay the sum demanded . If this debt is disputed, it is within this crucial 21-day period that the company must then apply for an injunction to restrain the filing of the winding-up petition. Inherent Jurisdiction of the Court There is no specific provision under the Companies Act or the Companies (Winding-Up) Rules which allows for such an injunction. The Court exercises its inherent jurisdiction to prevent an abuse of its process when it issues such an injunction. As recognised in Fortuna Holdings Pty Ltd v The Deputy Commissioner of Taxation of the Commonwealth of Australia [1978] VR 83: present a winding up petition unless the company meets his claim. While that threat exists, the company, in order to avoid the damage involved in the presentation of a petition, is pressed to meet the claim although it may have substantial and genuine grounds for regarding itself as not required to do so." 'Bona Fide Dispute of Debt on Substantial Grounds' The position under Malaysian law has been confirmed in the Court of Appeal case of Tan Kok Tong v Hoe Hong Trading Co Sdn Bhd [2007] 4 MLJ 355 where the Court quoted with approval the above passage. When deciding whether to grant an injunction to restrain a petition that is based on a statutory demand for a debt, the Court must be satisfied that there is a prima facie case and not merely a serious issue to be tried. In demonstrating this prima facie case, the Court of Appeal held that the test to be applied is whether there is a bona fide dispute of debt based on substantial grounds. This helps to clarify the somewhat conflicting High Court authorities which held that the test in granting such an injunction is whether the winding up petition is bound to fail (for instance, see Sri Binaraya Sdn Bhd v Golden Approach Sdn Bhd [2000] 3 MLJ 465 and as highlighted in Pembinaan Lian Keong Sdn Bhd v Yip Fook Thai (practising as Messrs Yip & Co) [2005] 5 MLJ 786). For a creditor to resist such an injunction and to demonstrate that there is no 'bona fide dispute of debt on substantial grounds', a creditor should come armed with a judgment sum or with a clear admission of debt (as seen in the Supreme Court case of Chip Yew Brick Works Sdn Bhd v Chang Heer Enterprise Sdn Bhd [1988] 2 MLJ 447). Injunction to Restrain Advertisement of Petition? If the petition has been filed, can the company apply for an injunction to restrain the creditor from advertising the petition? In Chip Yew, the Supreme Court refused to grant an injunction to restrain the advertisement and this was similarly followed in the High Court decision of Azman Tay & Associates Sdn Bhd v Sentul Raya Sdn Bhd [2002] 2 MLJ 395. Now, the Court of Appeal in People Realty Sdn Bhd v Red Rock Construction Sdn Bhd (on a decision dated 26 October 2007 which has not been reported yet) has confirmed that once a winding-up petition is filed, the court is precluded from granting an injunction against advertisement or gazettal of the petition. This Court of Appeal decision must surely lay to rest the anomalous High Court decision of Celcom (Malaysia) Bhd v Inmiss Communication Sdn Bhd [2002] 3 MLJ 178 where the Court granted an Erinford injunction to restrain the advertisement and gazettal of the petition. People Realty confirms the mandatory requirements of advertisement and gazetting as set out in the Companies (Winding-Up) Rules (Note: The Appellant has filed an application for leave to the “When a court restrains the presentation of a winding up petition to that court it exercises part of its inherent jurisdiction to prevent abuse of its process. Mann v Goldstein, [1968] 1 WLR 1091, at pp. 1093-4; [1968] 2 All E.R. 769. Usually a court acts against abuse of its process after proceedings have been commenced. Thus, existing proceedings may be stayed or dismissed, or documents delivered as a step in the proceedings may be struck out. This is done to relieve a party to the proceedings from an oppressive and damaging situation in which he has been placed through abuse of court process. The law has long recognised that with proceedings to wind up a company, intervention after the commencement of proceedings would often be too late to relieve the company of oppression and damage. The courts have recognised that irreparable damage may be done to a company merely through public knowledge of the presentation of a petition. Usually the damage flows from the loss of commercial reputation which results. The courts have also been conscious of the pressure which may be put on a company, by a person with a disputed claim against it, threatening to 18 relevan • article Federal Court to appeal against this decision). Echoing the words of Vincent Ng J (as he then was) in Azman Tay, "...the court is not empowered to make any order to restrain or injunct the petitioners from carrying out their statutory obligation to comply with r.24." This makes it even more imperative for the company to obtain an injunction during the 21-day window after the issuance of the Section 218 Notice, since the filing of the petition would prevent any injunction restraining the advertisement and gazetting of the petition. The Silent Majority By Brendan Navin Siva On the morning of 8 December 2007, the front page of the New Straits Times declared “Enough ! For the sake of the nation’s silent majority and peace” The silent majority of Malaysians apparently want peace and harmony. The silent majority cannot comprehend why certain people want to take to the streets. That taking to the streets is inherently unruly and violent. The silent majority cannot comprehend that public demonstrations and rallies are to bring attention to a particular cause or issue. That it is the right of every Malaysian to bring public attention to a cause or issue that concerns him or her. That public demonstrations can be conducted peacefully and orderly. That the desire for peace and harmony does not override the inalienable right of every Malaysian to dissent. And to dissent publicly. The silent majority do not appreciate or understand dissent. They view dissent as a prelude to the catastrophic destruction of the fabric of society as they know it. That 50 years of hard work will be destroyed. The silent majority think that once a majority has been attained, the majority view must override the voice of dissent. Regardless of how sensible or logical that voice of dissent may sound. The silent majority are not able to understand that public dissent is crucial to the development of a mature and progressive society. Not able to understand that the ability to comprehend and consider the views of others and to counter them with facts and substance is key to developing a learned and mature society. Not able to understand that engaging with those who dissent makes the country stronger. That ignoring them breeds anger and frustration. The silent majority pour scorn on the views of the minority. Focusing on the language and methods employed by the minority. Complaining about the racial slant of the rhetoric of the minority. Complaining about the inconvenience they face in getting to work because of roadblocks set up to frustrate the voice of the minority. Failing to acknowledge that there are pockets of Malaysians who are in extreme poverty and are struggling on day to day basis to make ends meet in a harsh new world, with no clear prospects of an improved future. Failing to realise that the comfort and convenience of cheap, efficient foreign labour has marginalised many sections of our own people. Left behind with no skills, no resources and no assistance to re-invent or re-train themselves. Unconcerned that we are leaving behind our own people. Failing to call on their government to increase measures to help these people with better job-skills education and training programs. The silent majority accept that issues of race and religion are too sensitive for public debate and discussion. Not understanding that the political and socio-economic structure of this country has historically been race-based. And that religion is important to each and every race. And that not speaking out about these issues and discussing them openly is really what is holding us back from becoming a truly united country. The silent majority are supposedly moderate and caring. Yet they stay silent when their leaders make public statements that are hurtful and offensive to women, the disabled and the disadvantaged. The silent majority do not demand a higher calibre of leadership. Leaders that are morally outstanding and attuned to the needs and views of all Malaysians. The silent majority wake up in the morning and read one mainstream newspaper. Looking for news. And not caring that what they read is but one version of the news. Not caring that rumours, speculation and allegations are often couched as facts. The silent majority do not demand that their leaders engage them with logic and substance backed up by facts and evidence. The silent majority accept broad, generalised rhetoric. Not critically assessing the logic and substance of the statements made. And then parrots it without a second thought. The silent majority accept and submit to the “Malaysian way”. Not understanding that there is no such concept. That values and attitudes are not static. That Malaysia is an ever-changing entity influenced by what is happening within and around her. That by accepting the “Malaysian way” instead of seeking to change it, they are reinforcing outdated and unworkable concepts and handing this over to their children as their legacy. The silent majority have failed to retain the traditions, attitudes and values of their forefathers. They have failed to develop, consider or accept new ideas and values that are crucial to the development of this nation. And most tragically, the silent majority have failed to pass on to the next generation the wisdom of their ancestors and have failed to instill their young ones with strong values and critical minds. The silent majority want peace and harmony ? The silent majority need to take a good, hard look at themselves. The silent majority need to be ashamed of themselves and what they have become. 19 relevan • article BUDGET 2008: “TOGETHER BUILDING THE NATION AND SHARING PROSPERITY” By Sudhar Thillainathan Introduction On September 7, 2007 the Honorable Prime Minister, Datuk Seri Abdullah Ahmad Badawi, who is also Minister of Finance, presented the 2008 Budget Speech at the Dewan Rakyat with the theme “Together Building the Nation and Sharing Prosperity”. Budget 2008 embodies three main strategies – enhancing the nation’s competitiveness, strengthening human capital development, and ensuring the well-being of all Malaysians. The focus of this write-up is on some notable tax and non-tax measures contained within Budget 2008. Corporate tax rate cuts In line with the announcement in the 2007 Budget Speech, the corporate income tax rate for 2008 will be reduced to 26%. Further, in a move that was largely unanticipated, the Prime Minister has committed the Government to another 1% reduction in 2009 to 25%. The corporate tax rate cuts have been well received, as it is seen as a step in the right direction. It should serve to maintain, if not, enhance the competitiveness of the nation’s economy and foster a business climate that is attractive to foreign investment and also encourage companies to pay higher dividends. Further, it also follows the global trend in recent times, which is one of declining corporate income tax rates. Thus, the records will show that over the last two or three decades, the average international income tax rate has declined from a high of 48% to 28%, stimulated significantly by intense competition for investment capital. Looked at in this context, Malaysia’s corporate income tax rate of 26% for the 2008 year of assessment compares favorably. However, it is notable that in this region both Singapore and Hong Kong have substantially lower corporate income tax rates of 18% and 17.5% respectively. It is thus entirely foreseeable that there will be further gradual corporate tax rate cuts in the years to come, as the nation strives to maintain and strengthen its competitive position and to attract more foreign investment. Implementation of the single-tier corporate tax system The big news emerging from Budget 2008 is the proposed implementation of the single-tier corporate tax system (STS) in place of the current dividend imputation system (IS) and its implications for the treatment of corporate dividends. There will be a transitional period of six years (between January 1, 2008 and December 31, 2013) to ensure smooth implementation of the STS. The new system will be adopted by existing companies at different times, for example, newly incorporated companies and companies with no dividend franking credits as at January 1, 2008 will automatically move to the STS, whilst companies with dividend franking credit balances will have the option of moving to the new system during the transition period, when their dividend franking credits are exhausted, unless they elect (irrevocably) to move to the new system sooner although dividend franking credit balances still remain. From January 1, 2014 all companies will automatically switch to the STS even if they still have dividend franking credit balances. The transitional provisions apply only to dividends distributed on ordinary and not preference shares. Under the IS, income earned by the company is taxed both at the company level, and the shareholder level when received as dividends. Tax is paid by the company on its taxable income at the applicable corporate tax rate. Tax is also paid by the shareholder at the shareholder’s personal or marginal tax rate on the gross (and not net) dividend received. However, to counter the incidence of double taxation, the shareholder receives a tax credit corresponding to the amount of tax paid by the company, which is then offset against the tax payable by the shareholder on the dividend received. In this way, where the personal or marginal tax rate of an ordinary shareholder is less than the prevailing corporate tax rate, the shareholder would be entitled to a tax refund, being the excess tax paid by the company, from the government. However, double taxation does arise under the IS in the case of non-residents who, unlike resident investors, are not entitled to claim a tax credit on the dividends received. This then is an important weakness of the IS as it discriminates against the nonresident investor, and could serve as an important disincentive to the investment of foreign funds in the local equity market. By contrast, under the STS, income earned by the company is taxed once only at the company level. Thus, dividends received by the shareholder from that income will be exempted from tax and tax credits will be done away with under this system. 20 relevan • article The move from the IS to the STS will undoubtedly have broad and far reaching implications some of which are discussed below. It is said that the objective behind the move is to simplify the tax system, and specifically to ease the administration of corporate tax and cut administrative costs of the government. In this regard, an important benefit of the single-tier system is that it will enable the government to take up, as its income, the revenue from corporate taxes without the need for a refund to shareholders. Looked at in this way, the move may also be seen as a measure to enhance government revenue since no refunds will be made to shareholders under any circumstances. Indeed, some tax experts estimate that the government could save about RM3 billion to RM4 billion in tax refunds annually following the implementation of the STS. On the other hand, it is estimated that the loss to the government from a 1% tax cut would be about RM900 million. Another benefit that should accrue under the STS is an increase in the payout of dividends to shareholders. To begin with companies are likely to pay out more dividends in order not to waste their dividend franking credit balances, which would expire at the end of the six year transition period. Quite apart from the above, under the STS, dividends may be distributed more easily than under the IS. The requirement under the IS, for a company to have dividend franking credits to frank dividend payments, has curtailed or restricted the amount of dividend payments which can be made, by companies that lack tax credits, but are otherwise profitable. Under the STS, dividends are paid out of corporate profits without the need to frank dividends out of franking credits. Further, under the new system, dividends may be paid out of the company’s entire gains and profits, including capital gains, which is not permissible under the current system. Thus, in this connection, the move is seen as a good one for the distribution of higher dividends. The losers under the new system will be tax-exempt bodies such as the Employees Provident Fund (EPF) (and by extension its members), and ordinary shareholders who have marginal tax rates that are lower than the prevailing corporate tax rate, such as pensioners, as they will be unable to claim tax refunds. As noted above, under the IS, the excess tax paid by the company, which is passed on to shareholders in the form of a tax credit is refunded to shareholders whose marginal tax rates are below the prevailing corporate tax rate. However, under the STS, the tax credit system will be abolished and there will be no tax refunds. By contrast, ordinary shareholders who are taxed at a marginal tax rate higher than the prevailing corporate tax rate will benefit as they no longer have to pay the additional tax that is represented by the difference between personal and corporate tax rates. There could also be a disincentive under the STS to borrow to finance equity investments because income is tax-exempt and hence, interest expense paid on borrowings made to acquire these shares would not be deductible. However on balance, the STS is seen by many as a positive and natural step to simplify the tax system following the implementation of self assessment and aligns the Malaysian tax system with countries such as Hong Kong and Singapore and the more general global trend. It is also perceived that with the impending implementation of the Goods and Services Tax and the likely cuts in personal tax rates in the event thereof, the disadvantages under the STS are likely to be gradually ameliorated. Malaysia as a leading international financial centre Budget 2008 contains several measures intended to strengthen Malaysia’s position as a leading international Islamic financial centre. The proposed measures include:(a) allowing Islamic fund management companies to by wholly owned by foreigners; (b) funds amounting to RM7 billion to be channeled from EPF to be managed by Islamic fund management companies; (c) allowing Islamic fund management companies to invest all their assets abroad; (d) income tax exemption on all fees received in respect of Islamic fund management activities until year of assessment 2016. The Islamic fund must be approved by the Securities Commission (SC); (e) income tax exemption to non-resident consultants with the required expertise in Islamic finance until December 31, 2016. The experts have to be certified by the Malaysia International Islamic Financial Centre; (f) tax deduction on the share of distributed profits for Takaful industry. In addition to the above, Budget 2008 also contains the following proposals to promote Malaysia as a leading international financial centre:(a) allowing foreign ownership of fund management companies up to 70% - minimum bumiputera ownership requirements stays at 30%. It is anticipated that this will attract greater foreign participation in the industry promoting the growth thereof and also widen the range of products and services offered to investors; (b) securities commission to facilitate the licensing process and all dealings with other government agencies to expedite the approval process for the establishment of fund management business; (c) issuance of three new stock broking licenses to leading stock broking companies that are able to source and intermediate business and order flows from the Middle East; (d) improvements in the tax treatment for Takaful business; and (e) giving the option to Labuan offshore companies to be taxed under the Income Tax Act 1967, in addition to the existing options under the Labuan Offshore Business Activity Act 1990. This new option is however final and irrevocable. Real Estate Sector & Real Estate Investment Trusts The Real Estate sector is another beneficiary of Budget 2008. During the past year, several measures to help the property market were announced including:(a) the relaxation of Foreign Investment Committee (FIC) regulations on foreign purchases of residential property priced above RM250,000; and 21 relevan • article (b) the exemption of real property gains tax (RPGT) on April 1, 2007. To further stimulate the real estate sector and the growth of real estate investment trusts (REITs), Budget 2008 proposes the following measures:(a) EPF contributors will be allowed to make monthly withdrawals for financing of one house from the balance in Account 2. It is estimated that this move will benefit five million EPF contributors and free up to RM9.6billion annually for the purpose of purchasing houses; (b) 50% stamp duty exemption on documents of transfer in respect of property transactions not exceeding RM250,000. This is expected to reduce the cost of purchasing a house by up to RM2000; and (c) the disposal of buildings from companies to REITs is not subject to a balancing charge. As such, REITs are eligible to claim the balance of unclaimed industrial building allowances of the disposer; (d) allowing up to 70% foreign ownership for REIT management companies – minimum bumiputera ownership requirement stays at 30%. It is anticipated that this should make the REITs sector more vibrant and introduce better management practices. Small and medium size enterprises The Government has been supportive of the small and medium enterprises (SMEs) by granting special two-tier tax rates of which the first RM500,000 of chargeable income is taxed at a lower rate of 20%. Currently all companies already in operation including SMEs are required to submit their estimates of tax payable not later than 30 days before the beginning of the basis period. Estimates of the tax payable should not be less than 85% of the tax payable in the preceding year. Estimates of tax payable should be paid on a monthly installment by the due date beginning from the second month of the basis period. Budget 2008 offers SMEs commencing operations an exemption from submitting their tax estimates of tax payable as well as installment payments. The full income tax payment needs to be made only at the point of submission of the income tax returns, which is within seven months from the date of the closing of the accounts. This exemption is given effective from year of assessment 2008 for two years of assessment beginning from the date of commencement of operation. This is a welcome move as it is normal for businesses to face cash flow constraints during the initial stages of their operations. Measures to encourage conservation of energy, the generation of renewable energy and the reduction of greenhouse gas emissions Budget 2008 contains tax incentives to encourage conservation of energy, reduction of greenhouse gas emissions and the development of renewable energy resources. The proposed measures include:- (a) to encourage companies to invest in greenhouse gas emission reduction projects, income derived from trading of certified emission reductions (CERs) will have tax exemption, effective from assessment year 2008 until 2010; (b) companies providing energy conservation services will get an additional 10-year pioneer status; (c) investment tax allowance on expenditure on equipment to generate energy will be increased to 100% of qualifying capital expenditure incurred within five years. The allowance will be set off against 100% of statutory income for each year of assessment; and (d) companies which incur capital expenditure for energy conservation for own consumption will have their investment tax allowance increased to 100% of the qualifying capital expenditure incurred within five years. The allowance will be set off against 100% statutory income for each year of assessment. Service Tax Currently, professional, consultancy and management service providers that have reached the threshold i.e. sales turnover of RM150,000 within a period of 12 months or part thereof are required to be licensed under the Service Tax Act 1975 and collect 5% service tax. Professional services that are subject to service tax are accounting, legal, engineering, architecture, survey, valuation, appraisal and real estate agency. Budget 2008 abolishes the previous licensing threshold of RM150,000 per annum. Thus, consultancy, management and professional service providers will be liable to pay 5% service tax without exemption. Mergers and Acquisitions Stamp Duties Budget 2008 proposes the extension of the stamp duty exemption on all instruments related to mergers and acquisitions of public listed companies approved by the SC before January 1, 2011 for another three years until December 31, 2010. This should encourage more public listed companies to under mergers and acquisitions and consequently enhance the quality of public companies whose shares listed on the Bursa Malaysia Stock Exchange. Conclusion In the context of the matters discussed above, it may be said that Budget 2008 is a good budget as it focuses on the need to create an economy and tax regime that is competitive and an investment climate that is conducive to private sector investment in order to grow the wealth of the nation to benefit all Malaysians. This is important because private sector investment has been and will undoubtedly continue to be the main driving force behind the nation’s economic growth. Further, it is a prudent budget – although the Budget remains in deficit, the deficit continues to decline progressively, as has been the case since 1998. In 2000, the fiscal deficit was 5.5% of Gross Domestic Product (GDP); it was reduced to 3.3% of GDP in 2006 and to 3.2% in 2007. It is expected to fall to 3.1% of GDP in 2008. 22 relevan • article BOOK REVIEW By S. Saravana Kumar A Comprehensive Guide to Malaysian Taxation Under Self-Assessment System, 3rd Edition By Professor Dr Jeyapalan Kasipillai This is the most current publication on Malaysian tax law in the market. Dr Jeyapalan has undertaken a commendable effort to provide a comprehensive guide to the Malaysian taxation scene. This is evident from his initiative to update the readers with recent case law and legislative developments. Under the self-assessment system, taxpayers are required to determine their taxable income, compute their tax liability and submit their tax returns. In principle, this system has shifted a substantial burden of responsibility from the IRB to the taxpayers. In light of this, it is imperative for taxpayers and more importantly, tax practitioners to educate themselves on various tax aspects and developments arising therefrom. Dr Jeyapalan is a respected figure in the Malaysian tax scene. He is a much sought after speaker or panelist in tax seminars organised in Malaysia. He is a prolific writer, where this book adds to the list of his many successful publications. Suffice to say that he is a tax expert and is presently a Professor and Chair of Malaysian Business with Monash University, Malaysia. Barely a year after the second edition of this book (published in July 2006), significant tax developments have taken place in Malaysia. Dr Jeyapalan has done an admirable work of highlighting them to his readers. This is an outstanding feature of the book, which appeals to me. Dr Jeyapalan discusses all the major amendments introduced by the Finance Act 2006 to the Income Act 1967 (ITA), which is the principal taxing statute in Malaysia. The following developments are methodically discussed: a) the issuance of Public Ruling by the Director General of Income Tax (section 138A of the ITA); b)the introduction of the Advance Ruling concept (section 138B of the ITA); c) the new definition of investment holding company (section 60F of the ITA); d)the numerous amendments to the interpretation provision (section 2 of the ITA); e) the restriction of certain business deductions, e.g. the leave passage within Malaysia for an annual event involving the employer, employees and family members of the employees (39(1)(l) of the ITA); and f ) the various tax benefits, e.g. the RM 3,000 relief for purchasing a personal computer (section 46(1)(j) of the ITA). Dr Jeyapalan has not confined the text to aspects of direct tax but has also endeavoured to explore the introduction of Customs Ruling and the establishment of the Customs Appeal Tribunal. With the same zeal, he reminds his readers that the RPGT is currently exempted but nevertheless discusses the operation of the RPGT Act 1986. Again, “comprehensiveness” and “currency” remain the theme of this book as Dr Jeyapalan discusses the recent significant Court of Appeal decisions. For instance, the Teruntum Theatre case, where the court upheld the revenue’s decision to withdraw a RPGT assessment and instead subject the taxpayer to income tax, is succinctly discussed. Likewise, the author has also commented on the principle reiterated in the Penang Realty case, where it was unanimously upheld that the profits made by a taxpayer from compulsory acquisition of land are not taxable. Meanwhile, the Suasana Indah case, where the issue was whether the joint venture agreement related to the taxpayer’s profit making apparatus, is also analysed for the readers’ benefit. I have no hesitation in recommending this book to readers having an interest in taxation. Two categories of readers will certainly benefit from this work. Firstly, those who are new to the tax scene and would like an overall view of the Malaysian taxation system. Students and taxpayers will usually fall in this category as this book serves that purpose very well. Secondly, tax practitioners who need to update their knowledge of tax law and desire the comfort of possessing a handy current publication for quick reference. Tax practice is very demanding and the law governing it changes regularly, making it imperative for tax practitioners to keep abreast at all times. Above and beyond being current and informative, its appeal also lies in its simple, practical format, both as to the content and structure. It has no unnecessary padding. For RM 116 a copy, this book is unquestionably a good bargain! 23 relevan • book review International Human Rights Day 2007 24 relevan • article “Stop. You’re under arrest for taking a walk!” By K. Shanmuga Malaysian Lawyers were arrested, held in a police lock up without bail for one night and charged on International Human Rights Day for taking a walk. p.s. Malaysia sits on the United Nations Human Rights Council. I was in Perth on Sunday, 9th December 2007 as I received a flurry of text messages all day about my lawyer friends, who had been arrested at the Human Rights Day Freedom Walk in Kuala Lumpur. Amer Hamzah Arshad, Latheefa Koya, N Surendran and Sivarasa Rasiah were walking to get to the Bar Council auditorium, where the Festival of Rights was held in conjunction with International Human Rights Day. Together with them was Eric Paulsen, a non practising advocate and solicitor and several others. willingly offered themselves to the police at everyone’s convenience for further questioning and investigations, if necessary? Of what consequence is the certainty that all would have obeyed a summons to Court to face charges against them? I received these messages as I witnessed Falun Gong practitioners hold a peaceful march in Perth, where the police accompanied them with a police escort to ensure they were not disturbed. I saw Burmese refugees peacefully demonstrating in the middle of Perth’s busiest shopping district with not a policeman in sight. On 10th December 1948, the General Assembly of the United Nations proclaimed the Universal Declaration of Human Rights. Malaysia celebrated the 50th year of its endorsement of this noble charter for human dignity when we had our Merdeka celebrations earlier this year having joined the United Nations as an independent nation in 1957. The Bar was celebrating International Human Rights Day, together with the entire community of civilized nations. Malaysia, who now incongruously sits on the United Nation’s Human Rights Council despite not having ratified most of the defining international covenants on human rights, on International Human Rights Day charged these advocates and solicitors of the High Court in Malaya for the grave crime of walking without the permission of the government. Witness the performance of the Public Prosecutor, who appeared in person in order to oppose bail for all those charged on International Human Rights Day. The 200 strong crowd of lawyers who cramped Criminal Sessions Court 1 were so aghast they forgot the normal conventions of Court decorum with boos greeting some of the statements of the Public Prosecutor, whose essential argument for opposing bail was that it was in the public interest to teach other people contemplating taking a walk that this was a no-no. When Sessions Judge Puan Komathy Suppiah said she was granting bail, the Public Prosecutor then wanted conditions imposed that those accused would not commit the same offences whilst on bail (perhaps forgetting that the accused were innocent until proven guilty!). What is important to the State is this: Malaysian lawyers must be taught a lesson. They are beginning to show the rakyat that Malaysians have rights. They have begun to display - overtly and effectively - a fierce independence. They constantly call for reform to ensure justice and fair play (hitherto unknown qualities in the machinery of the State in Malaysia since the full onslaught of Mahathirisation) become once again integral parts in the administration of this country. Edmund Bon, another friend of mine and Chair of the Human Rights Committee of the Malaysian Bar, was arrested as he tried to reason with DBKL enforcement officials who were attempting to trespass onto the Bar Council’s premises to remove banners. He was charged for obstructing a public officer from the performance of his duties. Eventually, Edmund Bon was released on RM1,000 bail whilst the others were released on RM2,000 bail each, all without sureties and without any conditions. Their trials are fixed early next year. These lawyers spent the night in a police lock up because they were denied bail by the police. After all, the Constitution allows the police to detain suspects for investigations for up to 24 hours so the police obviously feel they should use the entire time period to make their guests feel the full might of their brute force. Knowing my friends, I know they loved their time in the police cells. Those lawyers know they have won a great moral victory. In my mind, they have done absolutely nothing wrong. They walked peacefully in order to get to a destination to celebrate an international festival of the United Nations. For this peaceful walk, they are being abused by the Government of Malaysia a grim testimony indeed to the state of our democracy and the so called liberalisation of rights in Badawi’s Malaysia. Malaysia Boleh .. tapi tak boleh Jalan! Never mind that all those arrested are well established lawyers. Who cares that all have close links to the community? Does it really matter that all would no doubt have * Advocate & Solicitor. This is an updated version of an article originally written whilst the writer was still in Perth airport waiting for his flight home, and published on www.loyarburok.com and the Malaysian Bar website. 25 relevan • article Called to the Bar in Kuala Lumpur Lim Suk Yee Kartini Binti Mansor Zuriyati Binti Mohd Noor Chay Chee Yon Lee Kwee Lam Fam Yu Min Sarah Yee Shi Wen Ng Yim Hwa Ratnam Velu a/l Oddaiappan Chong Jinn May Norashikin Binti Ibrahim Lee Mun Yi Sufyan Bin Abu Bakar Azlina Bt Mohammad Sayuti Siti Humaiyah Binti Bakri Cheng Chue Wei Norkamilah Bt Aziz Idris Bin Abdullah @ Das Murthy Anida Binti Ahmad Mohd Fadzil Bin Abdul Karim Azimah Binti Zainal Gabriel Daniel Tan Boon Siang Parvinder Singh a/l Pritam Singh Donovan Cheah Swee Kin Lim Chiew Hwa Nalani a/p Murugiah Chu Yeu Foo Arun Kumar a/l S Kanesin Sri Dhevi a/p Santhana Dass Thean See Xien Teo Ee Von Melisa Hong Mun Ching Samuel Tan Lih Yau Tan Leng Lee Tze-Hui Nazlin Binti Mohd Nasir Aidawati Binti Abass Kong Weng Kuen Chin Ching Mun Cheong Moi Sum Saravana Kumar a/l Segaran Janice Chew Dianne Ng Shea Li Thang Sue Lyn Liew Wye Ming Khalid Bin Shamsudin Karen Tee Kuan Ying Tan Chong Lii Foong Pui Chi Cheng Yuan Yuan Jeffrey Su Khye San Tan Siew Boon Michele Chew Pei Sian Gan Bee Ling Musyrifah Binti Abdul Malek Ahmad Damanhuri Bin Mohd Yusof Hasbullah Bin Omar Chung Nyuk Fong Ong Tze Chin Cheong Chor Khuan Kathleen Tan Huei Ying Katherine Goh Siang Joo Susheel Kaur a/p Sarbjit Singh Vinayak Sri Ram a/l Sri Ramachandra Mohd Khairil Ezane Bin Azman Ruth Garnet Maran Conrad Francis Lopez Leena a/p Manaharan Boo Sin Sin Ho Wei Lih Haryati Binti Yusoff Ng Choi Theng Jasbir Kaur a/p Minder Singh Navrita Preet Kaur a/p Kavil Singh Jerry Loo Wai Kong Alvina Mun Sook Kwan Yeap Poay Nee Renny Tan Tsui Lyn Nur Adila Binti Abdul Rahim Nor Haslida Binti Hassan @ Mokhtar Mah Xian-Zhen Yusmahani Binti Mohd Yusak Baljit Singh Uppal a/l Jeswan Singh Meerah Deiwi a/p Rajagopal Tan Ee Jhane Chia Yan Ping Jillian Wong Kiat Ling Harvinderjit Singh a/l Manjit Singh Tan Ee Yan Liew Tean Mui Lim Ying Hui Cecilia Chiu Li Yung Choke Yet Li Sharmilee a/p Shanmugam Tan Mei Yin Noorakmal Binti Mat Bakiri @ Adnan Ho Chun Yau Tong Li Lian Tang Pui Kwan Wong Heu Peng Tang Keow Hung Tan Choi Chuan Syarifah Najahah Bt Syed Kamal Khalid Siow Pei Tee Wong Peism Ting Joshinae Yin Kiew @ Annie Yin Lau Thim Choy Lee Yin Yin Mohd Amir B Yahaya Melisa Tai Mein-Sze Saravanabavan a/l Mathialagan Shannon @ Shawn a/l V Rajan Ng Sey Ming Palani Ammal a/p A Subramaniam Wong Weng Yew Elizabeth Huang Ting Ting Loh Ing Hoe Eric Leong Kai Meng Sharon Lim Hui Yee Ong Lee Fong Ong Saw Lay Remi Christy Pereira Chow Hwei Ying Choo Shi Yi Ng Mei Quen Puteri Imee Zarilah Binti Megat Abdullah Syahredzan Bin Johan Asmah Binti Abu Hasan Sum Wai Hoe Loo Chun Boon Lim Suek Woo Ting Tzu Fei Teo Weng Seng Verghese Aaron Mathews Sam Lee Saan Cheong Jee Khuan Navinderan a/l Subramaniam @ Kubalu Wang Yien Wahida Binti Wahab Sarah Binti Kambali Surenee Chan Somchit Liau Kee Siong Mok Zhi Hao Surendran a/l K Sreetharan Farren Eva Binti Daud Zulhida Binti Abd Maurad Khalidah Edayu Binti Mohamad Khalid Jessica Teng Pei Wen Nor Hazian Binti Othman Alfred Llewellyn Fernando Akma Nadia Binti Mohamad Akhdiat Nur Zahhir bin Alwi Tiang Yin Nazihah Binti Mohd Rashid Chan Kit Kheong Azalia Abdullah Binti Abdul Aziz Izyan Shazwani Binti Ab Aziz Raidah Salwa Binti Mat Redzuan Abdullah Siddiq Bin Mohd Nasir Norhafizah Binti Zainal Abidin Azaini Binti Abdullah Nor Fazliyana Binti Muhammad Sakhih Oon Yong Hong Chai Chuan Long Tan Teck Yew Mohd Shakir Khairi Bin Othman Mahadi Bin Abdul Jumaat Afzan Binti Abd Kahar Syed Haris Bin Syed Yahya Dhiya Syazwani Izyan Binti Mohd Akhir Ahmad Mahir Bin Juhari Mohd Firdaus Bin Mohamed Shahid Roland Richard Kual Siti A’liah Binti Mansor Ahmad Zamani Bin Zainal Abidin Ahsani Bin Hj Mohd Nasir Norhanum Binti Hassan Leong Pui Yam Riny Triany Binti Muhamad Ali Norliza Binti Hussin Ng Yee Tat Siti Natasha Binti Basheer Hassan Siti Maulana Binti Manap Alister Dave Anak Henry Nohed Ringgot Jaclyn Ho Hsiau Wen 19 JUL - 13 DEC 2007 We congratulate and welcome the following members to the Bar: Shamila a/p Nathan Aida Binti Zainol Abidin Mohd Aizuddin Bin Zolkeply Wong Kin Ming Muhammad Azlan Bin Ab Malek Raine Chin Chiang Ruu Johari Bin Zakariah Khoo Nee Wei Pang Fei Pau Amalia Marsita Binti Hamdan Eunice Ong Huey Shen Hor E-Lynn Sara Idylla Binti Isbah Mohd Zein Bin Md Tajuddin Devinia a/p Loganathan Haraesh Singh Kelly Marina Binti Mokhtar Ahmad Nader Bin Ismail Lee Mei Leng Robert Hii Tim Kuok Shakiroh Binti Mohd Ezmi Azizul Ashraf Bin Abdul Aziz Anwar Ezzad Bin Zainal Mohd Azizan Bin Kamaruddin Nurdiyana Binti Abdul Rahman Mazri Bin Mohamed Md Noor Bin Mohammad Yusoff Elsa Binti Baharum Tan Sixin Tong Kuan Ling Izyan Darlina Binti Balia Yusof Susan Anak Leo Lim Ee Kiat Adibah Husna Binti Zainal Abidin Anis Naziha Binti Che Abdul Rahman Muhammad Shafiz Bin Jalil Neny Terisya Binti Kamarudin Ang Soon Roy Farah Shafinaz Binti Izhar Aimi Khalidah Binti Mohd Puzi Shamsul Qamar Bin Abd Rani Ong Yee Shin Dorothy Goh Su Cheng Zetty Edlinna Binti Mohd Nasir Danny Kummar a/l Dass Bastian Jamellah Beeve Binti Mohd Maideen Adibah Hanim Binti Ab Hamid Yus Yulandy Bin Mhd Jaafar Ahmad Khir Bin Khairuddin Muhamad Fariz Bin Mustafa Chew Wan Mei Saphirra Binti Selamat Wong Li Choo Ting Lee Ping Azlea Aziah Binti Azmi R Thipajothi a/p Ramani Chan Wai Yan Sharmila a/p Balakrishnan 26 relevan • admission Annual Dinner & Dance 2007 in conjunction with the 15th Anniversary of the KL Bar on 01.12.2007