Obnet Sdn Bhd v Suruhanjaya Komunikasi dan (BA-12NCVC-7-01/2016)

This is an appeal by the Appellant who was the Defendant on the decision of the Sessions Court dated 29.12.2015 which allowed the Respondent, which is the Plaintiff, for summary judgment dated 22.9.2015.

The dispute before this Court is in relation to the Plaintiff’s cause of action against the Defendant for the payment of license fee for the years 2009, 2010 and 2011 amounting to RM300,000.00. The Plaintiff is a body incorporated under the Malaysian Communications and Multimedia Commission Act 1998 (Act 589) (the MCMCA 1998) and the Defendant is a company incorporated under the Companies Act 1965.

The parties, in this judgment, will be referred to as they were in the Sessions Court. 4

The relevant background giving rise to this appeal based on the written submissions of both counsels may be briefly stated as follows:

On or about 20.4.2005, the Minister of Energy, Water and Communications, being the Minister charged with the responsibility for communications and multimedia back then (“Minister”) had granted an individual Network Facilities Provider (“NFP”) and Network Service Provider (“NSP”) licenses (collectively “Licenses’) to the Defendant who is the Licensee.

The Defendant claimed that the Defendant applied for an exemption of the payment for Individual License fee for 2009 and 2010 via its letters of 1.4.2009 and 8.6.2010 as the Selangor State Government due to the change of leadership in 2008 delayed the implementation of the Selnet Project. 5

The Defendant claimed that the Selnet Project was based on two agreements with former Selangor State Government in year 2003, namely the Selangor Broadband Internet Access Agreement dated 10.10.2003 and Subscription Agreement dated 23.9.2005 to construct and provide an infrastructure for high-speed broadband network within the state.

The Defendant claimed that the Selangor State Government’s failure to meet its obligation under the Selnet Project caused the Defendant to suffer high losses and as a result the Defendant terminated the Selnet Project agreements and proceed with legal action against the Selangor State Government for breach of contract.

The Plaintiff issued the Licenses to the Defendant on behalf of the Minister and the Licenses are subjected to, inter alia, the following terms and conditions:- 6

the validity of the Licenses are for a period as specified in the licenses, that is 10 years from 20.4.2005 until 19.4.2015.

(ii) the Licensee was to pay the applicable annual license fee for each of the Licenses held as follows:-  on the 1st anniversary of each license and annually thereafter, a sum of Rm50,000.00 as an initial payment of the applicable annual license fee: and  the balance due, if any, within the time period specified in the notice by the Commission;

(iii) the Licensee would comply with all the provisions of the CMA 1998 and the subsidiary legislations, instruments, guidelines and regulatory policies made thereunder.

The Plaintiff claimed that the Defendant had failed to make payment for the license fees for the years 2009, 2010 and 2011 7 which the Plaintiff claimed that the Defendant did not dispute this fact.

The Plaintiff issued various letters to the Defendant in respect of the payment for the license fees since the year 2009 dated 3.9.2009, 16.2.2010 and 24.3.2011 but to no avail.

The Plaintiff through its solicitors, Messrs. Shook Lin & Bok, had issued letters of demand to the Defendant since the year 2010 to demand for the payment of license fees for the Licenses for the years 2009, 2010, 2011 (two dated 6.7.2010 (A.R. Registered and Certificate of Posting), 16.3.2011 and 17.3.2015) (at pages 51, 53, 57, 61 and 63 of the Appeal Record).

However, the Defendant had failed, neglected and/or refused to payment the annual license fees for the Licenses amounting to a total sum of RM300,000.00 despite the said demands. 8

On 16.7.2015, the Plaintiff filed its Writ and Statement of Claim against the Defendant.

On 30.7.2015, a copy of the Writ and Statement of Claim was served on the Defendant.

On 20.8.2015, the Defendant’s solicitors filed its Memorandum of Appearance.

On 22.9.2015, the Plaintiff filed its summary judgment application against the Licensee for the outstanding sum of RM300,000.00, judgment interest and costs.

On 29.12.2015, the learned Session Judge allowed the Plaintiff’s summary judgment application with costs of RM4,000.00.

Dissatisfied with the said judgment, the Defendant filed its appeal on 7.1.2016. 9 Defendant’s Submission [5] The learned counsel for the Defendant raised the triable issue as to whether the Plaintiff has the power to reject the Defendant’s application for exemption under Regulation 33(5) of the Communication and Multimedia (Licensing) Regulations 2000 [P.U.(A) 129/2000] (the Regulations 2000) without the decision of the Minister. The counsel submitted that the Sessions Court did not address this issue and is of the view that the Sessions Court did not reject the Defendant’s contention that it is for the Minister to decide on the Defendant’s application for exemption and not the Plaintiff. [6] The Defendant’s counsel relied on the wording of Regulation 33(5)(b) of the Regulations 2000 and referred to the case of Jill Ireland Bt Lawrence Bill v Menteri Bagi Kementerian Dalam Negeri & Anor [2015] 3 MLJ 743 stating that the power to decide rests with the Minister. In reference to Jill Ireland case (supra), the counsel highlighted the similarity of that case with the instant case which in the former was in relation to an undesirable publication that such power can only be 10 exercised by the Minister and no other person, by quoting, reproduced partly, “(1)…it is the Minister who has to exercise the power. Only him and no other person…

….a statutory and discretionary power must be exercised by the person to whom the Parliament had vested the power onto and cannot be sub-delegated to any other authority or official.” (emphasis was from Defendant’s counsel) [7] On his submission for triable issue, the counsel for the Defendant argued on three issues:

The Sessions Court erred in its finding that the Defendant did not fulfill the pre-condition for an application under Regulation 33(5)(b) of the Regulations 2000;

There is no requirement for the return of the individual license to the Ministry before applying for a waiver under Regulation 33(5)(b) of the Regulations 2000; 11

A Minister’s decision under Regulation 33(5)(b) of the Regulations 2000 will override the Plaintiff’s claim. [8] The counsel for the Defendant pointed out to this Court that the Plaintiff had admitted as in paragraph 5 of its Affidavit in Reply (page 149 of the Appeal Record) that the Plaintiff should implement directions given by the Minister consistent with the provisions of the CMA 1998 and therefore Plaintiff has acted ultra vires and in contrary of the Regulations 2000 and CMA 1998 for rejecting Defendant’s application for exemption. [9] The Defendant’s counsel submitted that the Defendant can seek for an exemption order from the Minister, arguing that it could be applied at any time and not just when applying for a license. It was submitted that based on paragraph 7 of the Defendant’s Affidavit in Reply, the Defendant believes that it has valid reasons to qualify and obtain exemption for payment of fee for the individual License. The counsel added that the Plaintiff’s claim is premature as Defendant’s application is pending Minister’s decision. 12 [10] The counsel for the Defendant referred this Court to the Session Judge’s grounds of judgment that the Defendant only failed to fulfill the precondition of Regulation 33(5)(b) of Regulations 2000 that the Selnet Project must be for non-commercial purpose as this would be for the Minister to decide and therefore there is a triable issue. It was also submitted that in the alternative if this Court has the authority to decide whether Selnet Project is commercial or non-commercial purpose, this would be a triable issue. [11] Counsel for the Defendant argued that the Plaintiff has not shown any material averment in its affidavit that the Minister had given directions to the Plaintiff regarding the Defendant’s application for exemption. The learned counsel for the Defendant further submitted that as there was no “material averment”, nor did the Plaintiff exhibit the Ministerial direction regarding Minister’s decision, this if left unanswered by the Plaintiff would mean a fact that there was no conclusive evidence that the Minister had rejected, based on the Federal Court’s case of Sunrise Sdn Bhd v. Profile (1996) 3 MLJ

13 [12] The Defendant’s counsel also submitted that there was no statutory requirement under the Regulations for the Defendant to surrender the license to the Plaintiff pending the Minister’s decision. Plaintiff’s Submission [13] The learned counsel for the Plaintiff advanced several grounds against the Defendant’s appeal. In relation to the pertinent triable issue that the Plaintiff has no power to reject Defendant’s application for an exemption and that the learned Session Judge did not address this issue was raised for the purpose of opposing the Plaintiff’s summary judgment. The Plaintiff’s counsel submitted that the Defendant’s alleged defence for that Defendant ought not to be liable to pay the license fees lacks merit and relied on the Supreme Court case of Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400, for the following reasons: “(a) the Licensee is bound under Clauses A(5) of the Licences, B(4) of the NSP License and B(5) of the NFP License, Section 43(5) of the CMA (Tab 1, RBA) and Regulations 33(1)(b) and 33(3) of the Communications and Multimedia (Licensing) Regulations 2000 14 (Tab 2, RBA) to continue to pay for the annual license fees for the Licenses unless and until the Licenses have been surrendered to the Minister pursuant to Section 38 of the CMA (Tab 1, RBA) through a Ministerial Declaration – the learned Judge did not err in making this determination in her grounds of decision (at pp. 15 and 16 of the

Exempt any person from the payment of any or all of the fees under subregulation (1) if the Minister is satisfied that the facility or service is provided on a non-commercial basis and for the benefit of the public or national interest.” 18 On this basis, the counsel for the Plaintiff submitted that the Defendant has made no application to the Minister to be exempted from paying its outstanding annual license fee. [18] On the issue that the senior officer of the Plaintiff had exceeded its powers and acted ultra vires, it was asserted by the Plaintiff’s counsel in its submission in reply that this Court is not the proper forum and the Defendant should make an application for a judicial review. Authority referred is the Federal Court’s case of Ahmad Jefri bin Mohd Jahri @ Md

the Licensee did not surrender the Licences to the Minister even though the Licensee terminated the Selnet Project in 2009. The Licenses were ultimately cancelled by the Minister through the Ministerial Declaration dated 21.7.2011;

therefore, the Licensee is obligated to pay the annual license fees for the Licenses until the Licenses were cancelled by the Minister through the Ministerial Declaration dated 21.7.2011;

furthermore, it is undeniable that the Licensee has utilized the Licenses; 15

the Licenses were issued by the Commission in favour of the Licensee for a period of 10 years;

the burden to surrender the Licenses upon termination of the Selnet Project is on the Licensee. There is no legal obligation on the part of the Commission to demand for the surrender of the Licenses from the Licensee;

it was the Licensee themselves that terminated the Selnet

in the Licensee’s letters dated 1.4.2009 and 8.6.2010 to the Commission, the Licensee did not raise the issue of them not needing to pay the license fees for the Licenses as the Selnet Project was terminated. This issue was only raised for the first time after the writ and statement of claim and the summary judgment application were served on the Licensee in 2016 even though demands had been issued by the Commission for payment of the said fees in 2009, 2010, 2011 and 2015. It is clear that this issue is an afterthought.” 16 [14] On that note, the Plaintiff’s counsel further submitted by referring to the case of OCBC BANK (M) v Omega Horizon Sdn. Bhd. & Ors [2005] 1MLJ 183 (Tab 6, RBA) quoting Lau Bee Lan JC (as Her Ladyship then was) at page 195: “[23] … If what they contend is genuine, they should as any reasonable man would grab the earliest opportunity possible rather than remain silent and raise it as a defence only when proceedings are commenced against them…”. [15] It was submitted that the fact still remains that the Defendant had defaulted under the Licenses preconditions and the Regulations 2000 which are not disputed. In relation to the issue of exemption by the Minister, the Plaintiff’s counsel submitted that the Defendant as Licensee is misconceived in contending that the Plaintiff’s action against them is premature on the basis that the Plaintiff cannot make any decision with regards to the Defendant’s application for exemption to pay its annual license fees. [16] The Plaintiff’s counsel referred to the letter by the Defendant of 1.4.2009 (at page 77 of the Appeal Record) showing that it was a request 17 for a kind averment, for an exemption from the Plaintiff. The counsel for the Plaintiff further submitted that the letter of 8.6.2010 (at page 79 of Appeal Record) showed that the letter was addressed to the Plaintiff and not to the Minister. [17] On the material averment, as argued under paragraph 13 at page 73 of the Appeal Record, the Plaintiff submitted that it had replied to the Defendant’s request on 3.9.2009, 16.6.2010 and 24.3.2011 (pages 39 – 46 of the Appeal Record) and asserted that there is no factual information to prove that the Defendant applied for exemption from the Minister. The Plaintiff’s counsel also referred to Regulation 33(5)(b) of the Regulations 2000 that the Minister is to be satisfied that the service to be provided to be exempted is on a non-commercial basis, as follows: “The Minister may by an order published in the Gazette-

Johari v Pengarah Kebudayaan & Kesenian Johor & Ors [2010] 3 MLJ The counsel for the Plaintiff further asserts that the Plaintiff regulates licenses on national objectives under section 3 of the CMA 1998. [19] The Plaintiff’s counsel also submitted that Defendant is estopped to from reverting to its earlier position that it had accepted the Plaintiff’s decision based on Defendant’s letter of 19.7.2010 and could not now raise the legality of the Plaintiff’s rejection and referred to the case of Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331. 19 Session Court’s Decision [20] The Sessions Court allowed Plaintiff’s application as follows: “Keputusan Mahkamah “Kedua-dua pihak telah memfailkan hujahan bertulis di dalam kes ini. Setelah membaca hujahan bertulis dan otoriti-otoriti yang dikemukakan Mahkamah memutuskan Notis Permohonan, Lampiran 4 dibenarkan dengan kos. Kos dibenarkan RM4,000.00. Peguam Defendan telah memfailkan rayuan di dalam kes ini kerana tidak berpuas hati dengan keputusan Mahkamah.

Di dalam membaut keputusan Mahkamah telah meneliti kesemua Afidavit Sokongan, Afidavit Balasan dan ekhsibit-ekhsibit yang telah disertakan di dalam affidavit-afidavit yang berkaitan. Pada 20.4.2005, Menteri Tenaga, Pada 20.04.2005, Menteri Tenaga Air dan Komunikasi telah memberikan lesen-lesen Individu “Network Facilities Provider” serta “Network 20 Service Provider” (secara kolektif “lesen-lesen tersebut’) kepada Defendan. Plaintif telah mengeluarkan lesen-lesen tersebut kepada Defendan bagi pihak Menteri selaku badan pengawasan yang diperbadankan di bawah Akta Suruhanjaya Komunikasi dan Multimedia Malaysia 1998 yang terlibat, dalam penyelarasan industri-industri komunikasi dan multimedia di bawah Akta Komunikasi dan Multimedia Malaysia 1998.

Lesen-lesen tersebut tertakluk antara lainnya kepada terma-terma dan syarat-syarat yang berikut:- a. bahawa keesahan lesen-lesen adalah bagi satu tempoh sepertimana yang ditetapkan di dalam lesen tersebut iaitu 10 tahun bermula dari tarikh 20.4.2005 sehingga 19.4.2015; b. bahawa Defendan henadaklah membayar kepada Plaintif fi lesen tahunan yang boleh dipakai untuk setiap daripada lesen-lesen tersebut; dan 21 c. bahawa Defendan akan mematuhi kesemua peruntukan Akta Komunikasi dan Multimedia Malaysia 1998 dan perundiangna subsidiary yang dibuat di bawahnya.

Sejak tahun 2009, Defendan telah gagal untuk membuat bayaran fi tahunan sebanyak RM50,000.00 setahun untuk lesen-lesen tersebut. Peguamcara Plaintif telah mengeluarkan sura-surat tuntutan kepada Defendan sejak tahun 2010. Walau bagaimanapun Defendan telah gagal, abai dan/atau enggan untuk membayar kepada Plaintif fi lesen-lesen tahunan yang dituntut sebanyak RM300,000.00.

Berdasarkan di dalam kes Mahkamah Persekutuan, National Company For Foreinh Trade v. Kayu Raya Sdn Bhd [1984] 2 MLJ 300, di muka surat 301 perenggan F dipetik:- “……. We think it appropriate to remind ourselves once again that in every application under Order 14 the first considerations ara (1) whether the case comes within the Order and (b) whether the plaintiff has established the preliminary 22 requirements for proceeding under Order 14. For the purpose of an application under Order 14, the preliminary requirements are:

The defendant must have entered and appearance;

(ii) The statement of claim must have been served on the defendant; and

(iii) The affidavit in support of the application must comply with the requirements of Rule 2 of the Order 14…….”. Dan di muka surat 302 perenggan B;- “…….. if however, these consideration are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him…….” 23 Plaintif adalah secara prima facie berhak diberi suatu penghakiman terhadap Defendan kerana pra-syarat yang dinyatakan di dalam Aturan 14 kaedah 1(1) dan kaedah 2 (1) Kaedah-Kaedah Mahkamah 2012 telah dipatuhi.

Mahkamah mendapati Defendan tidak mempunyai pembelaan bermerit. Defendan mendakwa bahawa Projek Selnet yang dikendalikan oleh Defendan merupakan suatu projek demi kepentingan dan manfaat awam dan kepentingan nasional dan Defendan beranggapan boleh dikecualikan daripda pembayaran fi lesen individu. Penegasan Defendan bahawa mereka boleh meminta suatu pengecualian daripada pembayaran fi lesen individu adalah tidak benar kerana Defendan memang tidak memenuhi syarat-syarat yang telah ditetapkan khususnya Projek Selnet adalah bersifat komersial. Projek Selnet hanya merupakan suatu jaringan dalam komputer bagi agensi-agensi kerajaan Negeri Selangor dan bukannya untuk manfaat orang awam. Walau bagaimanapun Projek Selnet tersebut telah ditamatkan. 24

Defendan diwajibkan di bawah Klausa-Klausa A(5) dan B(5) lesen-lesen tersebut, Seksyen 43(5) AKMM dan Peraturan 33(1)(b) dan 33(3) Peraturan-Peraturan Komunikasi dan Multimedia (Perlesenan) 2000 yang digubal oleh Menteri di dalam Perlaksanaan kuasanya di bawah Seksyen 16(1)(b) dan

AKMM bagi pembayaran fi lesen tahunan bagi lesen-lesen tersebut dipulangkan kepada Menteri selaras dengan Seksyen 35 AKMM. Walau bagaimanapun, Defendan tidak pernah menyerah balik lesen-lesen tersebut kepada Menteri walaupun Projek Selnet telah ditamatkan. Tanggungjawab Defendan untuk membayar fi lesen tahunan adalah berterusan walaupun projek Selnet telah ditamatkan. Kesimpulannya Plaintif telah memenuhi pra-syarat permohonan sepertimana yang diperuntukkan oleh Aturan 14, kaedah 1(1) dan kaedah 2(1) Kaedah-Kaedah Mahkamah 2012. Defendan telah gagal menunjukkan sebarang pembelaan yang bermerit dan tidak membangkitkan sebarang isu yang perlu dibicarakan ataupun isu bona fide. Atas alasan-alasan seperti yang dinyatakan seperti di atas, Notis 25 Permohonan, Lampiran 4 dibenarkan dengan kos. Kos dibenarkan RM4,000.00. Bertarikh: 12 Januari 2017…” THE COURT’S FINDINGS [21] This is an appeal against the Session Judge in allowing Plaintiff’s application under Order 14 rule 1 ROC 2012. The Plaintiff submitted that it had complied with the conditions of Order 14 rule 1 ROC 2012 following the Federal Court’s decision in National Company For Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300 and the case of Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400, Supreme Court’s decision that the Plaintiff had established a prima facie case and is entitled to the judgment and that the Defendant’s defence lacks merit. [22] The Defendant’s contention as a triable issue was that the Plaintiff has no power to reject the Defendant’s application for exemption under Regulation 33(5) of Regulations 2000 on behalf of the Minister when it is 26 only the Minister who decides. The Defendant argued that the letter of 1.4.2009 was an application to the Minister for an exemption. [23] Generally for summary judgment under Order 14 ROC 2012, there are preliminary requirements to be followed where the burden is on the plaintiff to discharge and once the burden had been discharged by the plaintiff, the onus then shifts to the defendant with the burden to raise triable issues, as decided in the Federal Court case of Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) [2006] 2 MLJ 685. Therefore it is for the Plaintiff who brought this suit to establish its cause of action that the Plaintiff has a prima facie case and whether the defence could show that there is a triable issue or some other reason that there ought to be a trial. [24] Based on the Bank Negara Malaysia (supra) case, the requirement under Order 14 is that it is for the Court to be satisfied on affidavit evidence that the defence not only has raised an issue but also that the said issue is triable. As the heart of the matter revolves around the licenses fee exemption and its application for exemption, it is incumbent upon the Court to see the intention of the parties sought based on the letter of 1.4.2009 (at 27 page 77-78 of the Appeal Record). Surely, the Plaintiff must have the functions and powers to grant licenses to the Defendant with the required terms and conditions provided under the governing laws. [25] Of pertinence to note would be, for the Plaintiff to prove that it has a prima facie case. The Plaintiff is established under the MCMCA 1998 and is governed by its law, MCMCA 1998 and the CMA 1998. The CMA 1998 provides for and to regulate the converging communications and multimedia industries where the objectives of the CMA 1998 are meted out under section 3 of the CMA 1998 which at subsection 3(1)(b) and (c) are among others, to establish a licensing and regulatory framework in support of national policy objectives for the communications and multimedia industry and to establish the powers and functions for the Malaysian Communications and Multimedia Commission. [26] Section 16 of the MCMCA 1998 provides the powers and functions of the Plaintiff as a Commission. The Plaintiff is to advise the Minister on all matters concerning the national policy objectives for communications and multimedia activities under part (a) of subsection 16(1) and at part (j) of the same, 28 “(j) to carry out any function under any written law as may be prescribed by the Minister by notification published in the Gazette.” Section 16(2) of the MCMCA 1998 provides that, “(2) The Commission shall have all such powers as may be necessary for, or in connection with, or reasonably incidental to, the performance of its functions under the communications and multimedia laws.” [27] In interpreting statutory functions and powers, it would be ideal to read the whole Act but for the purpose of this judgment, suffice to say that only the relevant provisions pertinent to this case will be referred. In interpreting the provisions governing the powers and duties stipulated in a statute, we look at section 93 of the Interpretation Acts 1948 and 1967 for guidance which is stated as follows, “Construction of provisions as to exercise of powers and duties 93.

Where a written law confers a power or impose a duty, then unless the contrary intention appears, the power may be 29 exercised and the duty shall be performed from time to time as occasion requires.

Where a written law confers a power or imposes a duty on the holder of an office as such, then, unless the contrary intention appears, the power may be exercised and the duty shall be performed by the holder of the office for the time being or by a person duly appointed to act for him.

(deleted by Ord. No. 41 of 1953).” Therefore in view of MCMCA 1998 confers the powers to the Plaintiff, unless the contrary intention appears, the powers may be exercised by the Plaintiff. [28] Reverting to the facts, the Plaintiff has granted two individual Licenses (at page 25 – 37 of the Appeal Record) with effect from 20.4.2005 until 19.4.2015. The Licenses were granted pursuant to sections 30 and 126 of the CMA 1998. The Licenses come with the conditions which is consistent with section 43 of the CMA 1998. Based on the CMA 1998 and 30 the MCMCA 1998 governing the Plaintiff, the Licenses can be suspended or cancelled and such Licenses must be surrendered to the Minister by virtue of section 38 and section 35 of the CMA 1998 respectively. [29] Therefore based on the Defendant’s defence that the exemption application was to the Minister, the intention of the parties must be sought to ascertain the true intention behind the said application. The letter of 1.4.2009 is reproduced here for ease of reference, as follows: “1st April 2009 SURUHANJAYA KOMUNIKASI DAN MULTIMEDIA MALAYSIA 63000 Cyberjaya Selangor Darul Ehsan Attn: En Megat Ishak Maamunor Director Licensing Department ANNUAL FEE FOR NSP (NSP/I/2000/48) & NFP (NFP/I/2000/45) INDIVIDUAL LICENSE REQUEST FOR EXEMPTION We would like to refer to our above request for your kind assessment and the Commission’s approval accordingly. 31 Our due date for payment of the Annual Fee falls on the 19th of April 2009 amounting to minimum of RM100,000.00 in total for the two individual licenses. The underlying adverse factors for our humble request are as follows:

Our core business revenue is major based upon our SELNET concession agreement with the State of Selangor where we provide high speed broadband connectivity and integration within all Departments and Agencies for them to be in one electronic platform. However, due to unforeseen circumstances with the change in the Selangor Government, our project was stalled since early 2008 and to date we only managed to connect 33 sites out of the 345 sites.

This shortfall has affected us financially especially in our commitments to our financing bank which we are failing to meet all out scheduled obligations on repayments of interest and principal sums.

Due to the long delay and non-positive response as yet from the Selangor State, we are now on drastic cost-cutting measures to reduce our operating expenses to the bare minimum. 32

In the mean time we are also trying to seek for new business outside of the concession, but due to the current economic downturn most organizations are on austerity drive and securing higher sales are getting more difficult.

Our operational costs to keep SELNET running and maintaining our current assets are very high as we developed our network based upon the contention of 345 sites to be connected and these expenses exceeds our revenues from the current 33 sites connected.

Lastly, since SELNET is a government network, closing it is not an option as this will affect the service delivery systems to the public and in general this constitutes a non-commercial basis and for the benefit of the public or national interest as specified under Part V LICENSE FEES sub-clause 33.(5)(b) or the COMMUNICATIONS AND MULTIMEDIA (LICENSING) REGULATIONS 2000*. Due to the above underlying factors, we hope the Commission will give due considerations to our request for the exemption of annual fees for the current year 2009-2010. Should our SELNET project become viable upon positive commitment from the Selangor State in the nearest future, we will re-confirm the Commission to commit our payment of the annual fees respectively. Thanking you in advance for you kind consideration. 33 Yours faithfully, For, OBNET SDN BHD t.t…………… Jonedi Mohamed Chief Executive Officer” [30] Upon careful perusal of the 1.4.2009 letter, on its plain reading, the request by the Defendant for the exemption of the annual fees for two years was addressed to the Plaintiff and not to the Minister. As a matter of fact, the letter was for the attention of one Encik Megat Ishak Maamunor whom, as the designation stated, the Director of Licensing Department. The content of the said letter is plain and unambiguous, simply for Plaintiff’s assessment due to the predicament faced by the Defendant and for the Plaintiff’s approval. I cannot find anywhere in the letter requesting for the Minister’s decision on exemption nor a request by the Defendant for the exemption application to be brought to the Minister’s attention. [31] The Defendant’s counsel raised the issue that the Plaintiff has no power to reject the Defendant’s application for exemption and that only the 34 Minister can exercise such power based on Regulation 33(5)(b) of Regulations 2000. Regulation 33(5)(b) stated: “(5) Menteri boleh melalui perintah yang disiarkan dalam Warta---

Mengecualikan mana-mana pemegang lesen berdaftar di bawah Akta-Akta yagn dimansuhkan, yang memohon untuk suatu lesen individu di bawah Akta bagi menggantikan lesen lamanya, daripda pembayaran fi walau apa pun perenggan (1)(a) dan subperaturan (2); atau

Mengecualikan seseorang daripada membayar mana-mana atau semua fi di bawah subperaturan (1) sekiranya Menteri berpuas hati bahawa kemudahan atau perkhidmatan yang diberikan tidak berasaskan komersial dan adalah untuk manfaat awam atau kepentingan nasional.” (emphasis added) 35 [32] First and foremost, Regulations 2000 is a subsidiary legislation of the CMA 1998. Section 16 of the CMA 1998 provides the Minister with the power to make regulations. The enabling law for the Minister to be responsible on matters regarding communications and multimedia is the Ministerial Functions Act 1969, the relevant order under the Ministerial Functions Act 1969, the governing laws in particular the CMA 1998 and the MCMCA 1998 including its subsidiary legislations. Based on Regulations 33(5)(b) of Regulations 2000, the Minister may exempt if the Minister is satisfied that the facility or the service provided is of non-commercial and for the public or national interest. In its literal meaning, the Minister may exempt if the Minister is satisfied which is based on the two criteria for the facility or the service may be exempted, that is, of non-commercial and for public or national interest. This is consistent with the reading of the CMA 1998 that is in support of national policy objectives. [33] Based on the facts given, the Plaintiff in its Affidavit in Reply stated that the Selnet Project that was agreed between the Defendant and the State Government prior to termination was on non-commercial basis and that the Defendant had received the payment for the Selangor State Government under the concession agreement (paragraphs 6(a), (b) and (c) 36 of pages 149 -150 of the Appeal Record. The Court finds that at paragraph 6(b) of the Plaintiff’s Affidavit in Reply that, “b) Projek Selnet hanya merupakan suatu jaringan dalaman komputer (Ethernet) bagi agensi-agensi kerajaan negeri Selangor yang tidak boleh diakses oleh orang awam dan bukannya untuk manfaat orang awam atau kepentingan nasional. …” [34] This is corroborated by a list of users tendered as exhibit “SK-2” (at pages 115 – 133 of the Appeal Record). Scanning through the list of users I do not find them to be non-commercial based as the facility and services are specifically meant for those named persons and bodies comprising Government service, local authorities and statutory bodies. Obviously, the fact that the service is for those in the list of users connote that the service is not extended to the public nor could the public have access to such service provided for the listed users. Based on the affidavit and documentary evidence, the service does not conform to the conditions as stipulated under Regulation 33(5)(b) of the Regulations 2000. Having said that, the admission by the Defendant that Selnet Project had been terminated does not give rise to a defence on the part of the Defendant. 37 [35] According to the Plaintiff, the Defendant’s Licenses had been cancelled by way of Ministerial Declaration (at pages 169 – 170 of the Appeal Record) on 21.7.2011. Notwithstanding the cancellation, the Defendant has yet to make payments for the annual fees which is part and parcel of the statutory requirements that comes with the Licenses pursuant to sections 30 and 126 of the CMA 1998 and Regulation 33(1)(b) and

(5)(b) of Regulations 2000. The Defendant remains liable for the outstanding annual fees for the years 2009, 2010 and 2011. [36] I must agree with the Plaintiff’s counsel that if the Defendant was dissatisfied with the Plaintiff’s decision, the Defendant could have made an application for judicial review. Judicial review is not an appeal from a decision. Judicial review is concerned, not with the decision, but with the decision-making process: Chief Constable of the North Wales Police v Evans [1982] 3 All ER 141, at page 154 and Order 53 ROC 2012. [37] I wish to revert to the letter of the Defendant dated 19.7.2010 (at page 49 - 50 of the Appeal Record), in particular of the second last paragraph which states, 38 “We, therefore seek your kind consideration and co-operation to grant us six (6) months time to settle the annual fees for 2009 and 2010 amounting to RM200,000.” On its plain reading, this Court finds that the Defendant had fully understood and accepted the Plaintiff’s decision in rejecting the exemption application and that there was a request for a six months period to settle the outstanding annual fees for 2009 and 2010 amounting to RM200,000. [38] In addition, the Defendant is estopped from reverting to his earlier position and raising this as a triable issue based on the authority attributed by the Plaintiff’s counsel in the case of Boustead Trading (1985) Sdn Bhd v Arab-Malaysia Merchant Bank Bhd [1995] 3 MLJ 331. The Court finds that the Defendant had replied to the Plaintiff’s demand via letter of 19.7.2010 requesting for an extension of time to pay the Licenses for the year 2009 and 2010 as pleaded in the Plaintiff’s Affidavit (at paragraph 7, page 21 of the Appeal Record). [39] This appeal arises from a summary judgment under Order 14 ROC

It is incumbent upon the Court to have the overall view to ascertain 39 whether the Defendant has a real or bona fide defence. This Court has carefully perused the affidavits and documentary evidence and finds that the Defendant did not apply for an exemption to the Minister charged with communications and multimedia. It is this Court’s finding that the Defendant in fact requested for an extension of time to settle the said outstanding annual fees. I do not find a single issue meriting trial. The legal position is clear as stated in the case of Eng Say Kuang v Hong Leong Bank Bhd [2008] MLJU 38 which made reference to the case of Abdullah Rohani v Punca Klasik Sdn Bhd [2004] 1 CLJ 772, Court of Appeal, “It is trite law that in such an application the onus on the defendant to be entitled to defend the action in a full trial, is to satisfy the court that "there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial..." [40] In light of the above reasons, the Defendant could not satisfy this Court nor am I convinced that there is an issue or question in dispute which ought to be tried. The Plaintiff, to my view has on the balance of probabilities, a prima facie case for summary judgment to be entered against the Defendant. I find that the Defendant’s grounds for appeal did 40 not give rise to any bona fide triable issue. I therefore dismiss the appeal with cost. Dated: 28 July 2017 (DATIN ZALITA BINTI DATO’ ZAIDAN) Judicial Commissioner Shah Alam High Court 41 SOLICITORS: APPELLANT : AHMAD HANAFI BIN LOP AHMAD Tetuan S Murthi & Associates Lot BM-05, Mezzanine Floor PJ Industrial Park No. 13, Jalan Kemajuan 46200, Petaling Jaya Selangor Darul Ehsan Tel : 03-7957 5780 Fax : 03-7957 5784 [(Ref: SM16750/L/SKMM(APP)] (MN: 1990074)] RESPONDENT : G. C. TAN NINA LAI Tetuan Shook Lin & Bok Tingkat 20 Bangunan Kumpulan Ambank 55, Jalan Raja Chulan 50200 Kuala Lumpur Tel : 03-2031 1788 Fax : 03-2031 1775 [Ref: TGC/17383/15SKMM/0SB/018]