Tengku Dato’ Kamal Ibni Sir Sultan Abu Bakar v Bursa Malaysia Securities Berhad (W-02(IM)(NCC)-1394-08/2016)

1.

LT. KOL. TENGKU DATO’ KAMARUL ZAMAN IBNI

ABDUL RAHIM BIN SENDIRI …APPELLANTS AND BURSA MALAYSIA SECURITIES BERHAD …RESPONDENT [In the High Court in Malaya at Kuala Lumpur (Commercial Division) Originating Summons No. D-24 NCC – 168 – 2010 Between Bursa Malaysia Securities Berhad …Plaintiff And 1. Tengku Dato’ Kamal Ibni Sultan Sir Abu Bakar 2. Lt. Kol. Tengku Dato’ Kamarul Zaman Ibni Alamrhum Sultan Sir Abu Bakar 2

Kassim bin Mohamed Ali 4. Abdul Rahman bin Sendiri …Defendants] CORAM: ROHANA BINTI YUSUF, JCA UMI KALTHUM BINTI ABDUL MAJID, JCA HASNAH BINTI DATO’ MOHAMMED HASHIM, JCA GROUNDS OF JUDGMENT A.

The Appellants/ the 1st, 2nd and 4th Defendants (collectively referred to as the “Defendants”) were the former directors of Cepatwawasan Group Berhad (“Cepatwawasan”), a company listed on the Main Board of Bursa Malaysia Berhad.

The Respondent/Plaintiff is Bursa Malaysia Securities Berhad which is a stock exchange licensed under the Capital Markets and Services Act 2007 (“Act 671”). The Respondent/Plaintiff has, among others, a statutory duty under sections 11 and 21 of the Act to ensure a fair and orderly market for the securities traded through its facilities.

For ease of reference parties will be referred to as they were in the High Court. 3

The Plaintiff had on 28.12.2010 obtained an order from the High Court of Malaya in Kuala Lumpur vide Originating Summons No. D- 24NCC-168-2010 against the Defendants (“High Court Order dated 28.12.2010”).

The High Court Order dated 28.12.2010 in the main are as follows:

5.1 that within 30 days of the High Court Order, the 1st and 2nd Defendants, jointly and severally, restore to Cepatwawasan the RM 13 million paid to Opti Temasek Sdn Bhd; and 5.2 that within 30 days of the High Court Order, the Defendants, jointly and severally, restore to Cepatwawasan the RM 3 million paid to Sheikh Abdul Rahim.

The Defendants (including the 3rd Defendant) appealed to this Court against the High Court Order dated 28.12.2010 and this Court upheld the High Court Order dated 28.12.2010 on 16.8.2012 vide Civil Appeal No. W-02-(NCC)-89-2011 (“Court of Appeal Order dated 16.8.2012”), save for the variation that all the payments and acts stated in the Order shall be carried out within thirty (30) days of the date of the Court of Appeal Order dated 16.8.2012. 4

The Defendants filed an application to the Federal Court for leave to appeal vide Federal Court Civil Application No. 08(i)-702-09/2012. The leave application was dismissed with costs on 28.2.2013.

As the Defendants failed to comply with the Court of Appeal Order dated 16.8.2012, on 5.11.2014, the Plaintiff, after obtaining leave from the High Court, filed a Notice of Application for an Order of committal against the Defendants pursuant to Order 52 rule 4 of the Rules of Court 2012 (ROC) in Enclosure 48.

Enclosure 48 was heard before the learned High Court Judge and the learned High Court Judge granted the Order for committal on 24.3.2016. The matter was then adjourned to another date for parties to submit on the issue of sentencing.

On 1.7.2016, the learned High Court Judge pronounced the sentence against the Defendants as follows (the order for committal and sentence collectively referred to as “Committal Order”):

10.1 a fine of RM 2 million imposed on the 1st Appellant/1st Defendant to be paid within 90 days from 1.7.2016 and, in default of payment, 30 days imprisonment; 5

10.2 a fine of RM 2 million imposed on the 2nd Appellant/2nd Defendant to be paid within 90 days from 1.7.2016 and, in default of payment, 30 days imprisonment; and 10.3 a fine of RM 100,000.00 imposed on the 3rd Appellant/4th Defendant to be paid within 90 days from 1.7.2016 and, in default of payment, 14 days imprisonment.

Aggrieved by the Committal Order, the Defendants filed an appeal to this Court (the present appeal) on 26.7.2016.

On 15.9.2016, the Plaintiff filed a cross-appeal against the learned High Court Judge’s decision dated 1.7.2016 to impose a monetary penalty on the Defendants instead of a custodial sentence. We have heard both the appeal and cross-appeal together. B.

The facts that led to the filing of Enclosure 48 are as follows. The Defendants, who were the directors of Cepatwawasan at the material time, had from 8.7.2004 to 5.8.2004 caused Prolific Yield Sdn. Bhd. (“Prolific Yield”), a wholly owned subsidiary of Cepatwawasan, to make payments of RM 16 million to a company called Opti Temasek Sdn. Bhd. and one individual by the name of Sheikh Abdul Rahim. 6

Such payments were in violation of the provisions of the Listing Requirements of Bursa Malaysia (“Listing Requirements”), specifically section 16.11(a), a provision relating to financial assistance.

The Plaintiff then issued a notice to show cause dated 12.7.2005 against the Defendants. On 13.10.2005, the Plaintiff’s Listing Committee made a finding that the Defendants had breached the Listing Requirements and the Listing Committee imposed penalties against the Defendants under section 360(1)(c)(i), (A) and (K) of Act 671. The Defendants alleged that they had no knowledge and were never informed of this matter and were only aware of the abovementioned hearing through advertisements in newspapers.

The Defendants appealed to the Appeals Committee of the Plaintiff against the decision of the Listing Committee raising, among others, on the allegations of sub-judice due to a pending civil suit in Kuala Lumpur High Court Civil Suit No. D3-22-1168-2004.

On 12.6.2006, after having heard the submissions of the Defendants’ counsel, the Appeals Committee dismissed the Defendants’ appeal. 7

Subsequently, on 14.6.2006, the Defendants filed a judicial review application at the Kuala Lumpur High Court vide Judicial Review Application No. R1-25-270-2006 to challenge the decision of the Appeals Committee.

On 18.1.2010, the Kuala Lumpur High Court dismissed the judicial review application with costs. The Defendants appealed to this Court against the aforesaid decision and the appeal was also dismissed on 19.3.2013. There was no application for leave to appeal filed at the Federal Court.

The Plaintiff subsequently on 26.5.2010 filed Originating Summons No. D-24NCC-168-2010 to enforce the penalties imposed by the Listing Committee on 13.10.2005 which was later affirmed by the Plaintiff’s Appeals Committee on 12.6.2006. The Originating Summons was allowed with costs on 28.12.2010 (“the High Court Order dated 28.12.2010”). The gist of the High Court Order dated 28.12.2010 are stated in paragraph 5 above.

The Defendants then appealed to this Court, which dismissed their appeal and affirmed the High Court Order dated 28.12.2010 save for a slight variation where this Court varied the said High Court Order by providing that all the payments and acts stated in the said High Court 8 Order shall be carried out within 30 days of the date of this Court’s Order dated 16.8.2012. The leave application to the Federal Court was dismissed by the Federal Court on 28.2.2013.

Thereafter the Plaintiff then filed Enclosure 48 application and its outcome as referred to in paragraphs 8 to 12 above. C.

The Defendants submitted to this Court that there was a Civil Suit No. D3-22-1168-2004 filed by Cepatwawasan (“Suit 1168”) which the Defendants alleged that the Plaintiff had full knowledge of.

Suit 1168 was a proceeding against 18 defendants, which includes the Defendants in this appeal. Suit 1168 inter alia sought for:

24.1 the sum of RM 16 million from the 1st to 4th defendants and the 14th to 17th defendants;

24.2 the sum of RM 13 million from the 5th to 7th defendants and 9th to 13th defendants;

24.3 the sum of RM 4 million from the 8th defendant; and 24.4 interest. 9

The Defendants submitted that the parties, including the Defendants, themselves in Suit 1168 had entered into a Consent Judgment dated 29.10.2010 (“Consent Judgment”) and the salient terms of the Consent Judgement are as follows: “(a) The 1st Defendant shall pay to the 1st Plaintiff the sum of RM 3,000,000.00 as full and final settlement of the aforementioned suit (“Suit”) and the payment of RM 3,000,000.00 shall be effected in the following manner:-

the 1st Defendant is to pay the sum of RM 1,000,000.00 to the 1st Plaintiff on the 4th November 2010;

(ii) the 1st Defendant is to pay a further sum of RM 2,000,000.00 to the 1st Plaintiff within the period of six (6) months from the date of this consent judgment (“2nd payment).

The Suit shall be withdrawn by the Plaintiffs against the 1st Defendant to the 18th Defendant with no order as to costs and without liberty to file afresh;

This consent judgment is entered into without any admission of liability on the part of all the Defendants.”

The Defendants argued that the learned High Court Judge had erred in law and in fact when he failed to consider that Suit 1168 and Originating Summons No. D-24NCC-168-2010 both sought similar reliefs. The fact that the Defendants had complied with the terms of the Consent Judgment made the conviction and the sentencing against the Defendants in the committal proceedings to be wrongful. The Defendants went on to suggest that even the committal proceedings itself should not have been allowed in the first place. 10

The Defendants also submitted that the sentence meted out by the learned High Court Judge were excessive and did not commensurate with the nature of the alleged non-compliance of the High Court Order dated 28.12.2010. The Defendants further submitted that the sentence passed by the learned High Court Judge failed to consider that the 1st Defendant is a bankrupt and therefore the amount of RM 2 million imposed as fine was excessive and unreasonable.

At the same time, the Plaintiff submitted that there has been a non-compliance by the Defendants of the High Court Order dated 28.12.2010 and as affirmed and varied by the Court of Appeal Order dated 16.8.2012.

The Plaintiff also submitted that the reasons given by the Defendants to justify their non-compliance of the said Orders had already been considered and dismissed in the substantive judicial review application and the enforcement proceedings. These alleged reasons or justification, it was submitted, were no answers to the committal proceedings before the High Court. The Plaintiff relied on the doctrine of estoppel to stop the Defendants from rehashing the same issues that had been considered and dismissed in the judicial review and enforcement proceedings. 11

As for the Plaintiff’s cross-appeal on the sentence passed by the learned High Court Judge, the Plaintiff argued that custodial sentence would have been a proper and more appropriate sentence against the Defendants as their disobedience is a continuing act. D.

The principles of law pertaining to contempt of court had been set out in the Supreme Court decision of Wee Choo Keong v MBf Holdings & Anor and another appeal [1993] 2 MLJ 222 as per Abdul Hamid Omar (LP)(as he then was) at page 220: “Obedience to court order It is established law that a person against whom an order of court has been issued is duty bound to obey that order until it is set aside. It is not open for him to decide for himself whether the order was wrongly issued and therefore does not require obedience. His duty is one of obedience until such time as the order may be set aside or varied. Any person who fails to obey an order of court runs the risk of being held in contempt with all its attendant consequences.”

It was apparent to us that the Defendants have unabashedly failed to comply with the High Court Order dated 28.12.2010 and as varied by the Court of Appeal Order dated 16.8.2012.

The committal proceedings were not the forum for the Defendants to challenge the High Court Order dated 28.12.2010 and as varied by the Court of Appeal Order dated 16.8.2012. The Defendants have had their 12 opportunity to do so when they appealed against the said decisions/Orders and have exhausted their rights to appeal against the said decisions/Orders when the Defendants’ leave to appeal was dismissed by the Federal Court. Hence, the Defendants were estopped from any attempt to relitigate and to reargue their case on its merits in this appeal against the said decisions/Orders.

To date, and in the absence of any stay order, the High Court Order dated 28.12.2010 and as varied by the Court of Appeal Order dated 16.8.2012 stand as they are. Thus, we were of the view that the Defendants, despite being fully aware of the terms of the said Orders, had in fact failed to obey the said Courts’ Orders and had failed to carry out the necessary acts within the stipulated time frame provided by the said Orders. The lackadaisical and cavalier attitude of the Defendants towards the observance of the said Courts’ Orders and the absence of any attempt to comply with the said Orders are testament to the Defendants’ disobedience and defiance of the said Courts’ Orders, notwithstanding the ample time given for their compliance. We were of the view that this was in fact clear acts of contempt as set out under Order 52 rule 4 of the ROC.

In respect of the Plaintiff’s cross-appeal, we were guided by the decision of this Court in Lee Lim Huat v Yusuf Khan bin Ghows Khan 13 & Anor [1997] 2 MLJ 472, as per Gopal Sri Ram (JCA)(as he then was) at page 486: “…However, it is axiomatic that when it comes to sentence, subject to the questions of policy, each case must be dealt with according to its own facts. …The sentence passed should, apart from reflecting the gravity of the particular offence, act as a deterrent to would-be violators of injunctions…”

We were of the view that the Defendants were recalcitrant despite having exhausted all the avenues to appeal their case by insisting on relitigating the matter in the contempt proceedings at the High Court as well as before us. Such behaviour showcased a clear contempt of the Court’s proceedings and total disregard of the law applicable to them in these proceedings.

Thus, we were of the view that a heavier sentence must be meted out by this Court to reflect the seriousness of the offence committed by the Defendants. We agreed with the submission of the learned Plaintiff’s counsel that a custodial sentence is the more appropriate sentence to match the gravity of the offence committed by the Appellants. We viewed the imposition of fine was neither suitable nor appropriate in the given circumstances of the case before us. 14 E.

Thus, having given our consideration to all the submissions of parties, we found no merits in the Defendants’ appeal and therefore we unanimously dismissed the Defendants’ appeal on the finding of liability of all the Defendants by the High Court. We agreed with the findings of the learned High Court Judge that both the Orders of the High Court dated 28.12.2010, as affirmed and varied by the Court of Appeal Order dated 16.8.2012, have not been complied with by the Defendants. We therefore affirmed that part of the High Court Order dated 1.7.2016.

In respect of the Defendants’ appeal against sentence and the Plaintiff’s cross-appeal on the same, we found there were merits in the cross-appeal based on our findings as we had referred to earlier and we thereby unanimously allowed the cross-appeal and dismissed the Defendants’ appeal on the sentence. We therefore set aside that part of the High Court Order dated 1.7.2016 and we substituted it with the following orders:

39.1 the Defendants/Appellants shall comply with the orders of the High Court dated 28.12.2010, as affirmed and varied by the Court of Appeal Order dated 16.8.2012, within 3 months from 13.2.2017; 15

39.2 in default of the above, we imposed the sentence of imprisonment on the respective Defendants/Appellants as follows:

39.2.1 for the 1st Defendant/1st Appellant (Tengku Dato’ Kamal Ibni Sir Sultan Abu Bakar), five (5) years imprisonment from the expiry of the three-month period;

39.2.2 for the 2nd Defendant/2nd Appellant, (Lt. Kol. Tengku Dato’ Kamarul Zaman Ibni Al Marhum Sultan Sir Abu Bakar), five (5) years imprisonment from the expiry of the three-month period;

38.2.3 for the 4th Defendant/3rd Appellant (Abdul Rahim bin Sendiri), one (1) year imprisonment from the expiry of the three-month period, or upon the said Defendants/Appellants purging their contempt in accordance with the terms of the Order of the High Court dated 28.12.2010, as affirmed and varied by the Order of the Court of Appeal dated 16.8.2012, whichever is earlier. sgd (UMI KALTHUM BINTI ABDUL MAJID) Judge Court of Appeal Putrajaya Dated: 27.02.2020 16 Counsels/Solicitors: For the Appellants - Jasbeer Singh A/L Banta Singh (together with Nur Hakimah Binti Mohamad) from Messrs. Jasbeer Nur & Lee For the Respondent - Preetha Pillai (together with Nimalan