Noor Ismahanum Mohd Ismail v Pendakwa Raya (S-05-39-01/2016)

The AMLATFA is the predecessor to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLATEPUA”). By operation of section 35(2) of the Interpretation Acts 1948 and 1967, references in the AMLATEPUA to the AMLATFA are to be construed as references to the AMLATEPUA.

The Notice of Motion was supported by the affidavit of a Deputy Public Prosecutor and the affidavits of Bank Negara Investigation officers and was in the following terms: “Bahawa Pendakwa Raya di bawah kuasa-kuasa yang diberi oleh subseksyen 56(1) Akta Penggubahan Wang Haram, Pencegahan Pembiayaan Keganasan dan Hasil Daripada Aktiviti Haram 2001 (Akta 613) dibaca bersama Seksyen 376 Kanun Tatacara Jenayah (Akta 593) telah berpuas hati bahawa harta-harta alih yang disita oleh Pegawai Penyiasat Bank Negara Malaysia pada 10.01.2014 sebagaimana tersebut di atas adalah hasil suatu kesalahan di bawah subseksyen 4(1)(a) Akta Pencegahan Wang Haram, Pencegahan Pembiayaan Keganasan dan Hasil Daripada Aktiviti Haram 2001.”

The seized properties were:

Money amounting to RM2,111,256.20 and any additional amount thereof in current account No.14290008397053 in the CIMB Bank Bhd. Seri Petaling Branch belonging to the appellant;

(ii) Money amounting to RM815,934.49 and any additional amount thereof in current account No.560193057354 (a company account under the name of Worldwide Far East Bhd.) in Malayan Banking Berhad Lintas Square Kota Kinabalu Branch belonging 3 to the appellant and one Yong Thain Vun. Both were signatories to the account. [5] The application was made under section 56(1) of the AMLATEPUA, which provides as follows: “56.(1) Subject to section 61, where in respect of any property 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 seizure, or where there is a freezing order, twelve months from the date of the freezing, apply to a judge of a High Court for an order of forfeiture of that property if he is satisfied that such property is –

the subject-matter or evidence relating to the commission of such offence;

terrorist property;

the proceeds of an unlawful activity; or

the instrumentalities of an offence.” [6] Section 61 is not relevant for the purposes of this appeal, nor was it raised as an issue by the appellant. Therefore we shall not touch on it. As stated in the Notice of Motion, the Public Prosecutor’s application was grounded on the fact that the monies in the two bank accounts were the proceeds of money laundering, an offence under section 4(1)(a) of the AMLATFA. Section 4(1) of the AMLATFA reads: “4. Offence of money laundering

Any person who –

engages in, or attempts to engage in; or

abets the commission of, 4 money laundering, commits an offence and shall, on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both.” [7] “Money laundering” is defined by section 3(1) to mean an act of a person who – “(a) engages, directly or indirectly, in a transaction that involves proceeds of any unlawful activity;

acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes, uses, removes from or brings into Malaysia proceeds of any unlawful activity; or

conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of any unlawful activity, where – (aa) as may be inferred from objective factual circumstance, the person knows or has reason to believe, that the property is proceeds from any unlawful activity; or (bb) in respect of the conduct of a natural person, the person without reasonable excuse fails to take reasonable steps to ascertain whether or not the property is proceeds from any unlawful activity.” [8] So, any person who engages in a transaction that involves “proceeds of any unlawful activity” commits the offence of money laundering. As to what “proceeds of an unlawful activity” means, it has been given the following definition by section 3(1): “any property derived or obtained, directly or indirectly, by any person as a result of any unlawful activity.” [9] “Unlawful activity” means: “any activity which is related, directly or indirectly, to any serious offence or any foreign serious offence.” 5 [10] “Serious offence” on the other hand is defined to mean: “(a) any of the offences specified in the Second Schedule;

an attempt to commit any of those offences; or

the abetment of any of those offences.” [11] Key to the whole issue is the meaning ascribed to the words “unlawful activity”. It is any activity that is “related to a serious offence”. In the present case, the appellant was alleged to have accepted deposits without a valid licence (illegal deposit taking), which is an offence under section 25(1) of the Banking and Financial Institutions Act 1989 (“BAFIA”). [12] Such offence is a predicate offence under section 137 of the Financial Services Act 2013 as listed in the Second Schedule to the AMLATFA. Being a “serious offence”, illegal deposit taking therefore constitutes an offence of money laundering under section 4(1)(a) of the AMLATFA as it involves the proceeds of an “unlawful activity”. [13] Going by the plain language of section 56(1) of the AMLATEPUA, there is no requirement that a conviction under section 4(1)(a) of the AMLATFA or a terrorism financing offence must first be obtained before the Public Prosecutor could apply for forfeiture. What is required is for the Public Prosecutor to satisfy himself that the seized property falls under paragraph (a) or (b) or (c) or (d) of section 56(1). [14] The duty of a High Court Judge upon receiving such application by the Public Prosecutor is prescribed by section 56(2), as follows: 6 “(2) The judge to whom an application is made under subsection (1) shall make an order for the forfeiture of the property if he is satisfied –

that the property is –

the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;

(ii) terrorist property;

(iii) the proceeds of an unlawful activity; or

(iv) the instrumentalities of an offence; and

that there is no purchaser in good faith for valuable consideration in respect of the property.” [15] The judge’s primary concern in an application under section 56(1) is with the legal status of the property, not the guilt or otherwise of any person under section 4(1)(a) of the AMLATFA. He must order for forfeiture if the property falls under paragraph (i) or (ii) or (iii) or (iv) of subsection

(2)(a). [16] In the context of the present case, what the learned JC had to determine was whether the property was “the proceeds of an unlawful activity” within the meaning of paragraph (a) (iii) of section 56(2) and not whether any person had been convicted or acquitted of an offence under section 4(1)(a) of the AMLATFA although the fact of such conviction or acquittal was relevant under section 76. [17] In determining whether the property is “the proceeds of an unlawful activity”, the standard of proof to be applied by the judge is the civil standard of proof, i.e. proof on the balance of probabilities, as stipulated by sections 56(4) and 70(1). This standard of proof must not be mistaken for proof beyond reasonable doubt, which is the heavier standard of proof that the Public Prosecutor is required to discharge in order to bring home 7 a criminal charge against any person, such as a charge under section 4(1)(a) of the AMLATFA. [18] As to the question when does a person discharge his civil standard of proof, Lord Denning in Miller v Minister of Pensions [1947] 2 All ER 372 explained: “If the evidence is such that the tribunal can say ‘we think it more probable than not’ the burden is discharged but if the probabilities are equal, it is not.” [19] Thus, if the judge in an application under section 56(1) finds it to be more probable than not that the property is derived from a transaction that involves “the proceeds of an unlawful activity”, that will be sufficient for him to make an order of forfeiture under section 56(2). There is no need for him to be satisfied “beyond any reasonable doubt” that the property is derived from an “unlawful activity”. [20] To recapitulate, “unlawful activity” means “any activity which is related, directly or indirectly, to any serious offence or any foreign serious offence” and “proceeds of an unlawful activity” means “any property derived or obtained, directly or indirectly, by any person as a result of any unlawful activity.” Illegal deposit taking is a “serious offence” by definition and is therefore an “unlawful activity” for the purposes of section 56(2)(a)(iii) of the AMLATEPUA. [21] These twists and turns in legislative acrobatics strains the tongue but what it means is that if any property is derived from any unlawful activity (of which illegal deposit taking is one such activity), it must be forfeited, irrespective of whether any person has been convicted or 8 otherwise of the offence of money laundering under section 4(1)(a) of the AMLATFA. [22] The facts giving rise to the Public Prosecutor’s application are as follows. Four investors in an illegal deposit-taking scheme had given statements to Bank Negara investigation officers under section 32 of the AMLATFA to the effect that they had either invested monies for the illegal deposit-taking scheme by depositing the monies into the two bank accounts, or had received profits from the scheme. Cheques and transaction slips were exhibited in their statements. [23] In respect of monies in the Malayan Bank account held under the joint names of the appellant and Yong Thain Vun, it was undisputed that the appellant had pleaded guilty to and had been convicted of two offences, one under section 25(1) of the BAFIA and another under section 4(1) of the AMLATFA. This fact was confirmed by Yong Thain Vun in his statement under 32 of the AMLATFA. [24] Evidence of the appellant’s convictions for these two offences was admitted pursuant to section 76 of the AMLATEPUA, which provides: “(1) For the purposes of any proceedings under this Act, the fact that a person has been convicted or acquitted of an offence by or before any court in Malaysia or by a foreign court shall be admissible in evidence for the purpose of proving, where relevant to any issue in the proceedings, that he committed or did not commit that offence, whether or not he is a party to the proceedings, and where he was convicted whether he was so convicted upon plea of guilt or otherwise.

The court shall accept the conviction referred to in subsection (1) as conclusive unless– 9

it is subject to review or appeal that has not yet been determined;

it has been quashed or set aside; or

the court is of the view that it is contrary to the interests of justice or the public interest to accept the conviction as conclusive.

A person proved to have been convicted of an offence under this section shall be taken to have committed the act and to have possessed the state of mind, if any, which at law constitute that offence.

Any conviction or acquittal admissible under this section may be proved –

in the case of a conviction or acquittal before a court in Malaysia, by a certificate of conviction or acquittal, signed by the Registrar of that court; or

in the case of a conviction or acquittal before a foreign court, by a certificate or certified official record of proceedings issued by that foreign court and duly authenticated by the official seal of a Minister of that foreign State, giving the substance and effect of the charge and of the conviction or acquittal.” [25] The appellant’s case in answer to the Public Prosecutor’s Notice of Motion was that some of the transactions involving her CIMB Bank account were carried out without her knowledge and that the monies in both the CIMB and Malayan Bank accounts were derived from legitimate sources and were not the proceeds of any unlawful activity. According to her, she was carrying on a legitimate gold trading business. This was what she said in her affidavit in opposition to the Public Prosecutor’s Notice of Motion: “As First Respondent in this case, I build my career as a businesswoman and my company established in the line of multinationals business such as Manufacturing, Construction, Education, Film and Documentary Producer, Event Management, International Consultant for Development of Pariaman, Indonesia, Family Consultant, Transportation etc. The Second Respondent is the Branch Manager (Kota Kinabalu) of my company. The name of 10 the company is Worldwide Far East Bhd and established since 28.12.2010. The object to this company established are: i. To carry on the business as weavers or otherwise manufacturers, buyers, sellers, importers, exporters and dealers of silk, art silk, synthetic, woolen and cotton fabrics and other fibrous products including dressing and furnishing materials, uniforms, readymade garments. ii. To carry on, all or any in Malaysia or in any part of the world, the business of general merchants, traders, suppliers, importers, stores, storekeepers, removers, packers, brokers, distributors, manufacturers, manufacturers’ representatives, commission agent, insurance, managing financial and general agents, investors, franchisors, carriers ship owners and or in any other capacity and dealers in and to buy, prepare, manufacture, tender marketable, sell, barter, exchange, pledge, charge, make advances on and otherwise deal in or with or turn to account by wholesale or retail goods, education materials, event management, general merchandise, and other commodities of all kinds and description. iii. To carry out on any form of business whatsoever, trade or undertaking whether as principals, agents, sub-agents or consignees and to deal in any form of produce matter or things. As First Respondent, I had obtained a licence from Dewan Bandaraya Kota Kinabalu (DBKK) to operate business in Gold Trading. And I had obtained a letter from Polis Diraja Malaysia (PDRM) and Bank Negara Malaysia (BNM) regarding business of Gold Trading. At all material time, the licenced DBKK is under the DBKK control and two letters from PDRM and BNM is under their control which means that the business movement could only be done with the permission from them. As First Respondent in this case, I also done make a Press Conference on 08.10.2012 to show that my business is legal business and run with the permission and licenced from DBKK, PDRM and BNM. I as First Respondent is in the business of trading in gold (the goods). Between the Month of September 2013, Mohd Norazman Bin Mohd Jaya (Refer as First Buyer) and Abdullah B. Lebai Abas (Refer as Second Buyer) had purchased the goods from me on 27.09.2013. Refer to the licence, I had obtained a licence from DBKK to operate a gold trading 11 established under Ordinan Perlesenan Perdagangan 1948 (Ordinan No.16 Tahun 1948) and at that time, the licence still valid until 31.12.2013.” [26] In her affidavit affirmed on 28.9.2015, the appellant had also averred as follows: “24. As First Respondent in this serious matter, I’m successfully proved that the monies in both accounts are comes from legal business and I had obtained a licence from Dewan Bandaraya Kota Kinabalu to operate business in gold trading. No matter what, this licence still valid until 31.12.2013 at the time both of the buyers bought the goods. And I had obtained a letter from Polis DiRaja Malaysia (PDRM) and Bank Negara Malaysia (BNM) regarding the business of Gold Trading. At all material time, the licenced DBKK is under the DBKK control and two letter from PDRM and BNM is under their control which means that the business movement could only be done with the permission from them. Refer to the licence, I had obtained a licence from DBKK to operate a gold trading established under Ordinan Perlesenan Perdagangan 1948 (Ordinan No.16 Tahun 1948) and at that time, the licensed still valid until 31.12.2013.” [27] What the appellant omitted to say in the above averments is that she had no valid licence to accept deposits, which is an offence under section 25(1) of the BAFIA. It would have been easy for her to produce the licence if indeed she possessed one, yet she chose not to. It must therefore be taken that she had none. [28] What the appellant did in this case was to write to Bank Negara to seek approval to trade in gold, to which Bank Negara vide paragraph 2 of its letter dated 11.4.2011 responded as follows: “2. Kami ingin memaklumkan bahawa aktiviti membeli atau menjual emas bukanlah di bawah bidang kuasa Bank Negara Malaysia. Sehubungan dengan itu tiada lessen khas atau kebenaran untuk jual beli emas diperlukan daripada Bank. Berdasarkan kepada pindaan terhadap Akta Kawalan Pertukaran 1953 bertarikh 15 Mei 2007, mana-mana individu di Malaysia bebas untuk membeli, meminjam, menjual dan mengeksport emas.” 12 [29] At the conclusion of the proceedings, the learned JC was satisfied that the monies from the two bank accounts were “the proceeds of an unlawful activity”, i.e. illegal deposit taking in contravention of section 25(1) of the BAFIA and that the question of there being a purchaser in good faith for valuable consideration of the properties did not arise. [30] The learned JC rejected the appellant’s claim that the monies were not the proceeds of an illegal deposit taking activity. He was satisfied that the elements of section 56(2)(a)(iii) of the AMLATEPUA had been established. Accordingly, he allowed the Public Prosecutor’s application and ordered the two properties to be forfeited. We reproduce below the learned JC’s findings, in his own words: “Thirdly, the 1st Respondent contends that some of the transactions on the CIMB account were done without her knowledge (the café renovation). I have no difficulty dismissing this contention, firstly because the account was in her personal name, and secondly because there is absolutely no proof whatsoever that the transactions were done without her knowledge. Finally, the 1st Respondent has also contended that the monies in both the CIMB account and in the Malayan Banking’s account were derived from legitimate legal sources and not illegal. This contention too suffers from lack of proof. It is a mere assertion, backed by no proof whatsoever. The 1st Respondent contends that her business was legitimate gold trading business. She said that there was a licence issued by the DBKK. She also produced 2 letters – from Bank Negara and the police. The licence from DBKK is for gold trading. But from the statements of the investors (Encl.1), it was very evidence that there was no gold that was being traded at all. It appears that the licence to trade in gold was nothing more than a front for the illegal deposit trading business. 13 The letters from the police and Bank Negara do not take 1st Respondent’s case very far. They just show that the said agencies had no objection to the gold trading, which this “business” was not at all. The fact that there was a press conference held by the Respondent, implying that the business was carried out openly, does not carry the 1st Respondent’s case anywhere. In the result, the 1st Respondent’s challenge to this application fails.” [31] We found no reason to disagree with the learned JC as his findings were supported by the evidence. This is not a case where there was no evidence or no sufficient evidence to support the findings. It is trite principle that an appellate court does not interfere willy-nilly with findings of fact made by the lower court. The appellate court will only interfere if the findings are so plainly wrong that a miscarriage of justice had thereby been occasioned. [32] Before us, learned counsel for the appellant attacked the learned JC’s decision on four fronts, namely:

the learned JC merely assumed that all the monies in the two bank accounts were illegal deposits;

the learned JC was wrong in forfeiting all monies in the two bank accounts because only a small part of the monies was tainted with illegal investment;

the learned JC erred in law in relying on the conviction of the appellant in a separate case in making the order of forfeiture; 14

the learned JC relied on hearsay evidence to determine the identity and status of the monies in the bank accounts. [33] What the argument under grounds (a) and (b) amounted to was that before the monies in the two bank accounts could be forfeited, the learned JC must satisfy himself that every single sen of the monies was the proceeds of illegal deposit taking. This was how learned counsel articulated his argument: “The learned JC did not consider whether the monies in the two bank accounts were ALL proceeds from ‘illegal deposit taking’ under section 25 BAFIA, before applying the law under section 56 AMLATEPUA. In other words, the learned JC did not apply the requirements under section 25 BAFIA to determine whether ALL of the monies in the CIMB account and/or the MAYBANK account fall under the category of ‘illegal deposit taking’ as prescribed under the said section 25 BAFIA read together with the definition of ‘deposit’ under section 2 BAFIA. Section 56 AMLATEPUA refers to the ‘forfeiture of property’ which in this case, refers to EACH AND EVERY monies in the said bank accounts. The Learned JC must comply with the requirements under section 56 to establish whether the ‘property’ to be forfeited i.e ALL of the monies in the disputed bank accounts, were proceeds from ‘unlawful activity’ which is ‘illegal deposit taking’ under section 25 BAFIA. Section 56 AMLATEPUA, DOES NOT provide that ALL moneys in a bank account must be forfeited if PART of it are proceeds from illegal deposit taking; if it is so, such will be unconstitutional under Article 13 of the Federal Constitution:” [34] We were unable to accede to the argument. In our view, once the Public Prosecutor produced prima facie proof that the monies in the two bank accounts were the proceeds of illegal deposit taking, the burden shifted to the claimant to show to the contrary by virtue of section 103 of the Evidence Act 1950 (“the Evidence Act”) which provides: 15 “103. The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.” [35] In this connection, what Whitton J said in Toh Whye Teck v The Happy World Ltd [1953] MLJ 171 when dealing with section 104 of the Evidence Ordinance (in pari materia with section 103 of the Evidence Act) is relevant. This is what the learned judge said: “The question then arises on whom does the burden lie to show what sums would come within the section; and what payments are served by this provision relating to Municipal services. Mr Lee Kuan Yew has argued with great ability that some evidence at least should have been produced by the plaintiff as to the payments made for the Municipal services. If that evidence was forthcoming he would concede that the burden is then shifted to the defence. This argument is not to be dismissed lightly, but on reflection I consider it is sufficient for the plaintiff, if, as in this case, he establishes prima facie that the rents received by the tenant exceeded in the aggregate 75% of the rent paid to himself. I would express the view that it is not only a question of section 107 of the Evidence Ordinance which has application here, but I think section 104 also has application. It reads, ‘The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person’. To sum up my conclusions, it seems to me that the landlord fulfils his responsibility if he shows prima facie that the rent paid to the tenant falls within the section. If he does that, then I think the burden shifts to the defendant to show that he is covered by the provision regarding payment for Municipal services. To hold otherwise, it seems to me, would be an unreasonable burden on the landlord, quite apart from the provisions of the Evidence Ordinance on the matter.” [36] Applying the principle to the facts of the present case, the Public Prosecutor discharged his burden by establishing prima facie that the 16 monies in the two bank accounts were “the proceeds of an unlawful activity”, i.e. illegal deposit taking as the appellant had no valid licence to accept the deposits. [37] Once that was established by the Public Prosecutor, the burden shifted to the appellant to either show that she had a valid licence to accept the deposits or alternatively that all or any part of the monies in the bank accounts were not the proceeds of illegal deposit taking. To hold otherwise would be to place an unreasonable burden on the Public Prosecutor. Enforcement of the AMLATEPUA would come to a standstill as money launderers would mix legal money with illegal money to beat the daylights out of the law. [38] Whether or not the appellant succeeded in discharging her burden of proof was entirely for the learned JC to determine, having regard to the evidence before him. In the present case, the learned JC’s firm finding was that the appellant failed to do so. It was therefore futile for the appellant to argue that not all but only some of the monies in the two bank accounts were the proceeds of illegal deposit taking. [39] The appellant cited the decision of this court in PP v Billion Nova Sdn Bhd & Ors [2016] 4 MLRA 226 where it was held that in an application under section 56 of the AMLATEPUA, a forfeiture order can only be made if an offence under section 4(1)(a) of the AMLATFA has been proved to have been committed. [40] We failed to see how this case could be of assistance to the appellant as the monies deposited in the two bank accounts had been found by the learned JC to be the proceeds of illegal deposit taking, i.e. 17 “the proceeds of an unlawful activity” within the meaning of section 56(2)(a)(iii) of the AMLATEPUA. In other words, it had been proved that the monies in the two bank accounts were ‘more probable than not’ the proceeds of an unlawful activity. Having made this finding of fact, the learned JC had no option but “shall” make an order of forfeiture, which he did. [41] As for ground (c), there was nothing wrong in our view for the learned JC to rely on the two convictions of the appellant in a separate case in making the order of forfeiture. This was allowed by section 76(1) of the AMLATEPUA as the convictions were relevant to the issue of whether she committed the offences under section 25(1) of the BAFIA and under section 4(1) of the AMLATFA. Even if counsel was right that section 76(1) does not apply to the facts of the case, there was in any event enough material before the learned JC for him to make the forfeiture order. [42] As for ground (d), we do not find this to be fatal to the Public Prosecutor’s case as the application was not only based on the statements of the four investors but also on documents that the Bank Negara Investigation officers had seized from CIMB Bank and Malayan Bank. [43] Further, the Notice of Motion had given the appellant sufficient particulars of the properties sought to be forfeited and the reasons for the application for forfeiture. The fact that the appellant could give a detailed explanation in answer to the Notice of Motion shows that she was not prejudiced in any way. 18 [44] The issue raised in ground (d) was also never raised in the High Court. The issues raised in the court below were:

Whether there was a delay on the part of the applicant in filing the application for forfeiture of the properties;

(ii) Whether the question of the property having been obtained from unlawful activity did not arise;

(iii) Whether the terms of the goods in the licence were in breach of the law;

(iv) Whether the typing error “can dismiss this application by application by applicant to forfeiture the property”; and

Whether the property was forfeited in violation of Article 13 of the Federal Constitution. [45] It was for all the reasons aforesaid that we unanimously dismissed the appellant’s appeal and affirmed the decision of the learned JC. Sgd ABDUL RAHMAN SEBLI Judge Court of Appeal Malaysia Dated: 6 March 2018. For the Appellant: Jamadi bin Saleh (Farah Saira binti Abd Razak with him) of Messrs Adnan Puteh & Saleh. 19 For the Respondent: Awang Armadajaya bin Awang Mahmud, Deputy Public Prosecutor, of the Attorney General’s Chambers.