Deputy Public Prosecutor v Amar Asyraf bin Zolkepli (Public Islamic Bank Bhd, third party) (Messrs Wan Shahrizal, Hari & Co, intervener), [2020] 12 MLJ 287

Deputy Public Prosecutor v Amar Asyraf bin Zolkepli (Public Islamic Bank Bhd, third party) (Messrs Wan Shahrizal, Hari & Co, intervener), [2020] 12 MLJ 287

Court of Appeal (Putrajaya)

Payment of Legal Fees from the proceeds of unlawful activity

Facts 1. The Respondent, Amar Asyraf bin Zolkepli was arrested on 30 June 2016 for the offences of-

(a) Section 5 of the Computer Crimes Act 1997 (Act 563)-

“For the purposes of this Act, access of any kind by any person to any program or data held in a computer is unauthorized if—

(a)    he is not himself entitled to control access of the kind in question to the program or data; and

(b)    he does not have the consent or exceeds any right or consent to access by him of the kind in question to the program or data from any person who is so entitled”.

 

(b) Section 124 of the Penal Code (Act 574)-

Assaulting Member of Parliament, etc., with intent to compel or restrain the exercise of any lawful power-

Whoever, with the intention of inducing or compelling or attempting to induce or compel a member of Parliament or of any Legislative Assembly or of any State Executive Council to exercise or refrain from exercising in any manner the lawful powers of such member, assaults or wrongfully restrains, or attempts wrongfully to restrain, or overawes by means of criminal force, or the show of criminal force, or attempts so to overawe, such member shall be punished with imprisonment for a term which may extend to seven years, and shall also be liable to fine”.

 

(c)  Section 130 of the Penal Code (Act 574)

“Aiding escape of, rescuing, or harbouring such prisoner-

Whoever knowingly aids or assists any prisoner of State or prisoner of war in escaping from lawful custody, or rescues or attempts to rescue any such prisoner, or harbours or conceals any such prisoner who has escaped from lawful custody, or offers or attempts to offer any resistance to the recapture of such prisoner, shall be punished with imprisonment for life, or with imprisonment for a term which may extend to twenty years, and shall also be liable to fine”.

2.   Investigations found that the Respondent had acquired computer software that allowed him to log into the Immigration Department’s MYIMMs system without using a password or finger print as a biometric.  The Respondent subsequently gave the software to a syndicate, which used it to illegally apply for and approve “Pas Penggajian Pengurusan Pegawai Dagang” and “Pas Penggajian Pegawai Dagang” while gaining access to the MYIMMs system.  The Respondent was paid RM1,000 for each approval made using the aforementioned software in return.

3. On 19 September 2016, the Public Prosecutor issued a seizing order against the Respondent’s properties.  Later, an order of forfeiture of the properties was applied by the Public Prosecutor pursuant to section 56(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613)-

“Forfeiture of property where there is no prosecution

 

(1)   Subject to section 61, where in respect of any property frozen or seized under this Act there is no prosecution or conviction for an offence under subsection 4(1) or a terrorism financing offence, the Public Prosecutor may, before the expiration of twelve months from the date of the freeze or seizure, apply to a judge of the High Court for an order of forfeiture of that property if he is satisfied that such property had been obtained as a result of or in connection with an offence under subsection 4(1) or a terrorism financing offence, as the case may be, or is terrorist property”.

 

4.   The third party in this appeal, Public Islamic Bank Bhd, then filed a claim against the fixed saving in Public Bank Bhd and a property in Batu Caves, Selangor.

5.  Messrs Wan Sharizal, Hari & Co. (“the Intervener”) has asserted a claim against the seized assets of the Respondent for RM398,722 (legal expenses) for representing the Respondent.

6.  The Prosecution is now appealing against the decision of the High Court for allowing the Intervener claim for legal fees.

Issue

1.     Whether legal fees can be paid from the seized property derived from the proceeds of unlawful activity?

Ratios

1.The objective of Act 613 is to prevent money laundering and forfeiture of proceeds from an unlawful activity.  This includes prohibiting any individual or group from profiting in any way from the illegal activities.

2.  Given the situation, it is necessary to interpret section 61(4) of Act 613 using a purposive approach which provides the following:

“Bona fide third parties

(4) The court or enforcement agency shall return the property to the claimant when it is satisfied that-

(a) the claimant has a legitimate legal interest in the property;

(b) no participation, collusion or involvement with respect to the offence under subsection 4(1) or a terrorism financing offence which is the object of the proceedings can be imputed to the claimant;

(c) the claimant lacked knowledge and was not intentionally ignorant of the illegal use of the property, or if he had knowledge, did not freely consent to its illegal use;

(d) the claimant did not acquire any right in the property from a person proceeded against under circumstances that give rise to a reasonable inference that any right was transferred for the purpose of avoiding the eventual subsequent forfeiture of the property; and

(e) the claimant did all that could reasonably be expected to prevent the illegal use of the property”.

 

3. The word ‘legitimate legal interest’ in section 61(4)(a) is not defined under Act 613.   Therefore it is fair to apply the purposive approach to examine the legislature’s intention, including the proposition that no one should benefit from an unlawful property.  This involves paying the legal fees to the Intervener.

4. Furthermore, there is no specific clause in the Act that permits the use of the illegal activity’s revenues to pay legal expenses.

5. The Court then referred to the judgment of Singapore Court of Appeal in the case of Centillion Environment & Recycling Ltd v Public Prosecutor and others and another appeal [2013] 1 SLR 444 where the Court acknowledged the difference between Singapore’s Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“the CDSA”) and South African Prevention of Crime Act 1998 (“the POCA”) that in the South African POCA, there is an express provision which empowers the High Court to direct legal expenses to be paid from the illegal proceeds seized by the authority.

6. Based on the case above, it can be clearly said that both Malaysia and Singapore law has no such express provision to allow the payment of legal expenses from the seized property.

7.In this case, there was a contractual relationship between the Intervener and the Respondent, i.e. a contract between a solicitor and client.

8. Given the current situation, the Intervener has the right to sue the Respondent for the unpaid legal fees owed under the said contract.  The Respondent’s seized properties, which are the proceeds of illegal activity, cannot be assigned to any proprietary interest because this is an action in personam.

9. In a nutshell, the Respondent’s legal fees cannot be paid from the seized properties and the Intervener has no legitimate interest in the property and cannot be regarded as a bona fide third party.

Decision

1. The Court of Appeal allowed the appeal made by the Public Prosecutor and has set aside the decision by the High Court judge in allowing the payment of the Intervener’s legal fees from the Respondent’s seized property.

Key Take Away

1. Article 5(3) of the Federal Constitution states that-

“Liberty of the person

(1)   Where a person is arrested he shall be informed as soon as may be of the grounds of his arrest and shall be allowed to consult and be defended by a legal practitioner of his choice”.

2.  Even though Article 5(3) stipulated that the Respondent has the right to be represented by a lawyer, nothing in this Article that can be discerned to impose the responsibility to pay the legal fees from the proceed of unlawful activity and should not be considered as hindering the rights to counsel.

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