Bursa Malaysia Securities Berhad v Mohd Afrizan Bin Husain (W-02(A)-696-06/2020)

1 DALAM MAHKAMAH RAYUAN MALAYSIA 5 (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: W-02(A)-696-06/2020 10 ANTARA BURSA MALAYSIA SECURITIES BERHAD … PERAYU (NO. SYARIKAT: 635998-W) 15 DAN MOHD AFRIZAN BIN HUSAIN … RESPONDEN 20 (NO. K/P: 670821-03-5159) [Dalam perkara mengenai Notis Pendengaran Permohonan Bagi Semakan Kehakiman bertarikh 17-9-2019 (Lampiran 9) dalam 25 Permohonan Bagi Semakan Kehakiman No. WA-25-362-08/2019 dalam Mahkamah Tinggi Malaya di Kuala Lumpur] ANTARA 30 MOHD AFRIZAN BIN HUSAIN … PEMOHON (NO. K/P: 670821-03-5159) 35 DAN BURSA MALAYSIA SECURITIES BERHAD … RESPONDEN (NO. SYARIKAT: 635998-W) 40 CORAM LAU BEE LAN, JCA 45 ABU BAKAR BIN JAIS, JCA GUNALAN A/L MUNIANDY, JCA 2 GROUNDS OF DECISION 5 Introduction [1] This is an appeal from the Appellant against the decision of the High Court dated 15/6/2020 allowing the Respondent’s judicial review 10 application primarily for the following orders:

(ii) the Respondent was found to have breached Rule 2.22(3)(a) and (b), ACE LR due to Wintoni’s failure to announce or issue the Financial Statements. The power to run and manage Wintoni was vested with the Respondent upon 25 his appointment as liquidator. The Respondent had provided the LOU to the Appellant in his capacity as a Controlling Person pursuant to Rule 2.22, ACE LR;

(iii) s. 480 of the Companies Act 2016 (Act 777) (‘the 30 Companies Act’) imposes a duty on the Respondent to observe all requirements imposed on him by “any written law 7 or otherwise.” The ACE LR is part of the requirements 5 imposed on the Respondent and has statutory force;

(iv) the Appellant decided to impose a public reprimand on the Respondent under Rule 16.19(1)(b), ACE LR and directed the Respondent to make the necessary arrangements to 10 ensure the announcement or issuance of the Financial Statements; and

(ii) his withdrawal of the LOU stating that it was signed for the Respondent to obtain the User ID so that the announcement of Wintoni’s winding-up status could be made; 30

(iii) the Respondent cannot be expected by the Appellant to continue making quarterly announcements when Wintoni had ceased operations; 8 5

(iv) that the Appellant ought to have de-listed Wintoni as it had been wound-up; and

(ii) notwithstanding the Winding-Up Order, the Appellant had the power and discretion not to de-list Wintoni pending the final disposal of the Court proceedings as the latter could potentially negate or suspend the effects of the Winding-Up Order;

(iii) as the Appellant was entitled to and empowered to maintain Wintoni’s listing status, the Respondent, as the Controlling Person of Wintoni and having provided the Appellant with the LOU, was bound to comply with the ACE 30 LR as long as Wintoni remained on the Appellant’s Official List and was bound to ensure Wintoni’s compliance with the ACE LR. 9 5

(iv) the Respondent, pursuant to s.480 of the Companies Act, has a duty to observe all the requirements imposed on him as liquidator by any written law or otherwise, including the ACE LR; and 10

(2) The Exchange shall de-list a listed corporation in any one of the following circumstances: 35

pursuant to a directive, requirement or condition imposed by the SC, after which the Exchange will notify the SC of the decision to de-list;

(3) For the purpose of sub-Rule 1(a) above, failure to comply with these Requirements will exclude failure to comply with Rules 8.03, 50 8.04, 8.05 and 9.28. 12 [Cross reference: Guidance Notes 2 and 3]” 5 (Emphasis added) [10] The learned Judge found that it was mandatory for the Appellant, pursuant to Rule 16.11(2), ACE LR, to immediately de-list Wintoni upon it 10 being wound up as is reflected in His Lordship’s findings as follows: “[40] Berhubung isu ini juga, adalah penting untuk syarikat yang telah dikeluarkan perintah penggulungan seperti Wintoni untuk dibatalkan dari penyenaraian bagi melindungi pelabur dan bakal pelabur. Justeru itu perkataan ‘shall’ di bawah Peraturan 16.11 (2) tersebut hendaklah 15 bersifat mandatori. [41] Di sini, tindakan responden yang tidak mematuhi Peraturan 16.11

(2) tetap mengambil tindakan terhadap pemohon kerana tidak menyediakan ‘Penyata Kewangan Tertunggak’ saya dapati, adalah 20 suatu tindakan yang tidak munasabah." [11] Counsel for the Appellant submitted that the learned Judge had erred by placing undue emphasis on the word “shall” appearing in Rule 25 16.11(2), ACE LR arguing that a strict interpretation of the said Rule would mean that the Appellant has no option but to de-list Wintoni despite the fact there was ongoing challenge against the Winding-up Order which may later be set aside which would have caused serious inconvenience or injustice and prejudice to Wintoni and to the public investor as Wintoni 30 would then have lost its listing status without reason. To bolster its contention that the word “shall” in a legal provision does not necessarily connote that it is mandatory but rather, the construction therein depends on the intention of legislature, the facts and circumstances of the case and the injustice which will be brought if interpreted in a mandatory manner, 35 Counsel for the Appellant relied on the following 2 apex Court authorities of: 13

(ii) Benjamin William Hawkes v Public Prosecutor [2020] 5 15 MLJ 417 at paragraphs 43 to 49 of the report, where among others, it is observed the Federal Court referred to other Federal Court authorities, including Hee Nyuk Fook (supra) and at 417[49], opined “It is clearly untenable in this case to allude to the word “shall” as mandatory, thus stultifying the justice of the case, when a document 20 was not delivered to the accused persons before the commencement of the trial.”

(iii) Ho Kean Pin v Malayan Banking Berhad & 2 Ors [2020] MLJU 1435 at paragraph 23 where the High Court followed the 25 principle in the superior Court authority of Hee Nyuk Fook. [12] Counsel for the Appellant further submitted that Rule 16.11(2), ACE LR must be read in conjunction with Rule 2.07(2), ACE LR which reads as follows: 30 “2.07 Waivers and modifications

(1) The Exchange requires strict compliance with these Requirements.

(2) Notwithstanding sub-Rule (1) above, the Exchange may at any time, waive or modify compliance with a Requirement or any part of a 35 Requirement. If the Exchange waives or modifies compliance with a Requirement or part of a Requirement subject to a condition, the condition must be complied with or the waiver or modification of compliance to be effective.” 14 Counsel argued that Rule 2.07(2) empowers the Appellant to modify 5 and/or waive compliance of Rule 16.11(2), ACE LR. [13] Further, Counsel for the Appellant submitted that the exercise of discretion by the Appellant not to de-list Wintoni upon the Winding-Up Order is consistent with the Appellant’s statutory duties under s.11, CMSA 10 to act in the public interest for the protection of investors as spelled out here- “Duties of exchange 11.

(1) For the purposes of this section, sections 12, 13 and 27-

(2) It shall be the duty of an exchange to ensure, so far as may be reasonably practicable, an orderly and fair market in the securities or 20 derivatives that are traded through its facilities.

(3) In performing its duty under subsection (2), the exchange shall-

(ii) the drafters of the ACE LR clearly distinguish the 5 circumstances where discretion can be exercised when it employs the word “may” and where the word “shall” is employed, mandatory requirement for “de-listing” becomes non-negotiable;

(iii) Rule 16.11(1) and Rule 16.11(2), ACE LR exist in successive 10 fashion clearly without a doubt shows the intent of the drafters of the ACE LR. [15] We can do no better than to replicate the following table drawn by the Respondent as shown below to demonstrate the clear intent of 15 legislature on the distinction to be drawn between Rule 16.11(1) and Rule 16.11(2), ACE LR as adverted in paragraph 14 (i) above: “7. Merujuk kepada Peraturan 16.11 LR pada Sub-Para (1) berbanding dengan Sub-Para (2) menunjukkan perbezaan yang mana niat “legislature” adalah tepat dan jelas:- 20 Sub-Para 1 Sub-Para 2 Perkataan The Exchange may at any time de-list The Exchange shall de-list Keadaan-Keadaan Terdapat peruntukan 5 peristiwa di mana budibicara dibenarkan samaada syarikat tersebut wajar disingkirkan penyenaraian Terdapat peruntukan 5 peristiwa mewajibkan Perayu menyebabkan penyingkiran syarikat daripada penyenaraian [16] The proper mode of interpretation to be adopted when the word used in the legislation is precise with no tinge of ambiguity at all, in our 25 judgment, is the literal and strict interpretation as opposed to the purposive approach as enunciated by the Federal Court in Asia Pacific Higher Learning Sdn Bhd (registered owner and licensee of the 16 higher learning institution Lincoln University College) v Majlis 5 Perubatan Malaysia & Anor [2020] 2 MLJ 1 at 21 to 22 [33] as follows: “[33] In the process of discovering the true intention of the Legislature, the court is also duty-bound to adopt an approach promoting the purpose or object underlying that particular statute. It is a well-established principle that the purposive approach to the interpretation of legislation only applies where doubt 10 arises from the terms or words employed by the legislation. Where the words used are precise and unambiguous, then the literal and strict construction or plain meaning rule will apply.” 15 [17] In so far as the authorities relied on by the Counsel for the Appellant on the construction of whether the word “shall” in a provision is to be construed as mandatory or directory, as pointed out by Counsel for the Respondent, they can be distinguished in that none of the cases, unlike the legal provision before us which involved 2 subparagraphs (sub para 20 1 and sub para 2), one following the other, critically qualified by the prescribed circumstances of when de-listing is an act of discretion (sub para 1) and when it is otherwise (sub para 2) within one legal provision (Rule 16.11, ACE LR). As night follows day, one provision stands in stark contrast with the other, as they are vividly presented in 25 paragraph 15 above. For clarity, as to the difference in the intention of the legal draftsman, in Hee Nyuk Fook, the Supreme Court was confronted with the interpretation of the word “shall” in s.158 (ii), CPC which reads- “Section 158 states: “(i) Any court may alter or add to any charge at any time before judgment is 30 pronounced or in the case of trials by jury or trials with the aid of assessors before the verdict of the jury is returned or the opinions of the assessors are expressed.

(ii) Every such alteration or addition shall be read and explained to the 35 accused.” [18] In Benjamin William Hawkes (supra), the Federal Court had to determine the effect of the word “shall” in s.51A (1), CPC as to whether 17 the Court was obliged to construe the word as mandatory. The said 5 provision, among others, reads- “[40] Section 51A of the CPC provides-

(1) The prosecution shall before the commencement of the trial deliver to the accused the following documents: … 10 (Emphasis added) Applying the principles of referencing the word “shall” to the scheme of the statute and the context in which it is used and adopting the purposive 15 rule of interpretation, the Federal Court held respectively at 434 [49] and 436 [55] the following: “[49] It is clearly untenable in this case to allude to the word ‘shall” as mandatory, thus stultifying the justice of case, when a document was not delivered to the accused persons before the commencement of the trial. 20 … [55] Hence, a more liberal meaning must be given to the word ‘shall” in s 51A of the CPC rather than a rigid interpretation, so as not to curtail the administration of justice in the manner of a case to be carried out.” 25 Comparing the positioning of the word “shall” in Rule 16.11(1) and (2), ACE LR with s. s.158 (ii) and s.51A (1) of the CPC, it is our respectful view that the intention of the legislature is crystal clear and we reiterate that the literal and strict interpretation is to be adopted and not the liberal interpretation, whereby the word “shall “in Rule 16.11 (2), ACE LR is to be 30 construed as mandatory and not the liberal interpretation urged upon us by Counsel for the Respondent that the Appellant has the discretion not to de-list Wintoni, notwithstanding the Winding-Up Order. [19] In light of the interpretation which we have accorded to Rule 16.11 35

(2), ACE LR in that the Appellant cannot exercise any discretion except to de-list Wintoni, a listed corporation upon a winding-up order being made, we find it would be irrational, unreasonable and an act of illegality on the part of the Appellant to argue that it can exercise its power under 18 Rule 2.07(2), ACE LR to waive a mandatory requirement of the Listing 5 Requirements to extricate itself out of the bind. [20] Further, it is our respectful view that the argument of the Appellant that the exercise of discretion not to de-list Wintoni is to act in the public interest for the protection of investors consistent with s.11 CMSA runs 10 foul of the mandatory requirement in that the Appellant is devoid of any discretion but has to delist Wintoni, a listed corporation, in conformity with the Rule 16.11 (2), ACE LR, whereupon the assets of the company in liquidation are vested to the Respondent for settlement of the creditors. This, in our respectful view would be consistent with the legal regime 15 under the Companies Act that upon the winding-up of a company, the power of a director ceases to operate because a liquidator is appointed by the Court pursuant to s.477 of the Companies Act; the liquidator takes custody of the assets of the company in liquidation pursuant to s. 483; directors are required to provide the liquidator with particulars of the 20 company’s assets, debts and liabilities under s.484; and under s.489 of the same Act, as soon as practicable after the making of the winding–up order, the liquidator “shall” take charge of the assets and sell them off to pay the creditors and any surplus after payments will be distributed to contributories (shareholders). 25 [21] Against the backdrop of our explanation, we therefore find there is no error in the learned Judge’s finding referred in para 10 above as the finding was arrived at after His Lordship firstly, made a comparison between the provisions of Rule 16.11(1) and Rule 16.11(2), ACE LR 30 and noted there is a difference in the usage of the word “shall” in Rule 16.11(2) “adalah bersifat mandatori” whereas Rule 16.11(1), employs the 19 usage of the word “may” where “budi bicara [di]berikan kepada 5 responden.” [22] Secondly, the learned Judge reasoned that it would in a manner of speaking illogical except to construe that “[37]… Pengasingan 2 kategori [Peraturan 16.11(1) yang menggunakan “may” dan Peraturan 16.11(2) 10 yang menggunakan “shall”] ini jelas menunjukkan penggubal peraturan ini ingin menjadikan perkataan “shall’ di bawah Peraturan 16.11(2) sebagai mandatori.” Purpose and effect of the LOU 15 [23] We will now revert to the differing positions held by the Appellant and the Respondent with respect to the purpose and effect of the LOU. Counsel for the Appellant submitted that the Respondent (i) had undertaken to comply with the ACE LR in its entirety, without exception, qualification or condition; (ii) had agreed to the continued listing of Wintoni 20 and had executed the LOU in consideration of the same; (iii) had not requested for Wintoni to be de-listed but had instead assumed the obligations to comply with the ACE LR to ensure that Wintoni remained listed and that it was only after the LC’s Decision was issued that the Respondent reneged on his position; (iv) held the LOU is expressed in 25 an unconditional and unequivocal language that the Respondent undertakes to comply with the ACE LR and there was no basis for the learned Judge to accept in the face of such clearly expressed terms that the LOU was for the purpose of gaining access to the website; and (v) held the view that the contention that the LOU was to facilitate access to 30 the Appellant’s website and the learned Judge’s acceptance of the same is wholly inconsistent with the learned Judge’s finding that it is mandatory for the Appellant to immediately de-list Wintoni upon the Winding-Up 20 Order being granted because access to the Appellant’s website is 5 premised on Wintoni continuing to be listed. [24] In our judgment, points (i) to (iv) in paragraph 23 of the Appellant’s submission above can be rebutted by carefully scrutinising the contents of the LOU which is spelled out in paragraph 3 (g) above. It is correct that 10 by the LOU, the Respondent, in consideration of the Appellant allowing the continued listing of Wintoni, undertakes and agrees to comply with the ACE LR. However, it is not a blanket, unqualified and unconditional undertaking; on the contrary the compliance of the undertaking by the Respondent of the ACE LCR, inclusive of any amendment, in unequivocal 15 terms is qualified by the words “in so far as the same apply to me.” [25] We have no issue with the AC’s Decision that pursuant to s.480 of the Companies Act, the Respondent has to observe the requirements imposed on him as liquidator by any written law which would include the 20 CMSA and the ACE LR. However, for the reasons we have stated, in our judgment, it is mandatory for the Appellant to immediately de-list Wintoni from the Official List upon the Winding-Up Order being granted under Rule 16.11(2), ACE LR. Given our finding on the mandatory requirement to de-list Wintoni, it necessarily follows that (i) there is no duty imposed on 25 the Respondent to ensure Wintoni’s compliance of timely issuance of the Financial Statements pursuant to Rule 2.05(2)(a), ACE LR to comply with Rules 9.22 and 9.23, ACE LR as it was the LC‘s Decision that these obligations only remain in place as long as Wintoni remains listed; and (ii) neither can it be said that the Respondent has breached Rule 2.22(3)(a) 30 and (b), ACE LR due to Wintoni’s failure to announce or issue the Financial Statements as the LC found and upheld by the AC because the 21 Respondent had provided the LOU to the Appellant in his capacity as a 5 Controlling Person pursuant to Rule 2.22, ACE LR. [26] Further, given our finding, in respect of point (v) in paragraph 23 of the Appellant’s submission above, with respect, we were unable to agree with the learned Judge only to the extent that the LOU was for the purpose 10 of gaining access to the website. Here, the trite principle of contemporaneity of documents as submitted by Counsel for the Appellant is preferred as enunciated in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 (FC); Guan Teik Sdn Bhd v Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ 324 (CA). 15 [27] We find purely on the grounds of appeal deliberated above it is sufficient to dispose of the appeal. We agreed with the finding of the learned Judge that the LC’s Decision and the AC’s Decision are tainted with illegality (“the decision maker must understand correctly the law that 20 regulates his decision making power and give effect to it”), error of law (“misconstrues the terms of any relevant statute”, acting in excess of statutory authority) and irrationality (Wednesbury unreasonableness) such that the said Decisions are amenable to judicial review and accordingly, the learned Judge correctly allowed the judicial review 25 application. In doing so the learned Judge acted in accordance with the established legal principles governing judicial review applications laid in the Federal Court cases of Akira Sales & Services & Anor Appeal [2018] 2 CLJ 513; [2018] MLJ 537, Majlis Perbandaran Pulau Pinang v Syarikat Bekerjasama-sama Serbaguna Sungai Gelugor Dengan 30 Tanggungan [1999] 3 CLJ, Syarikat Kenderaan Melayu Kelantan v Transport Workers Union [1995] 2 MLJ 137 and Dato’ Seri Dr. 22 Ahmad Zahid BIN Hamidi, Menteri Dalam Negeri & Ors v Soo Lina 5 & Ors [2018] 2 MLJ 738 (CA) at 754 [39] and [41]. Conclusion [28] For all the foregoing reasons, we are of the considered view that there are no merits in the appeal which warranted appellate intervention. 10 In the premises we unanimously dismissed the appeal with costs and affirmed the decision of the High Court dated 15/6/2020. Dated: 02/07/2021 -sgd- 15 LAU BEE LAN Judge Court of Appeal Malaysia Putrajaya 20 COUNSEL: Preetha Pillai together with Nimalan Devaraja and Tiang Wen En for the Appellant 25 [Messrs. SKRINE Kuala Lumpur] Mohd. Faizal Khalid together with Afifah Afif binti Azman for the Respondent [Messrs. Sabri Ahmad & Co Kuala Lumpur] 30