Pendakwa Raya v Soh Weng Thiam (W-09-456-09/2018 & W-09-457-09/2018)

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CHIANG HENG KIENG … RESPONDENTS (In the High Court of Malaya in Kuala Lumpur Criminal Trial No.: WA-41LB-25-10/2017 & WA-41H-58-10/2017 Between Public Prosecutor And

Soh Weng Thiam 2. Ng Shaw Hwa 3. Ng Poh Hwa 4. Lee Kian Kah 5. Tee Lian Eng 6. Tan Su Cheng 7. Toh Mei Ling 8. Chiang Heng Kieng) 2 Coram: YAACOB HAJI MD. SAM, JCA ZABARIAH MOHD. YUSOF, JCA RAVINTHRAN PARAMAGURU, JCA JUDGMENT OF THE COURT Introduction [1] This is an appeal by the Public Prosecutor against the decision of the High Court that affirmed the decision of the Magistrates’ Court. The Public Prosecutor is also appealing against the decision of the High Court that allowed the cross-appeal of the eight respondents against the order of forfeiture made by the Magistrates’ Court in respect of the luxury cars belonging to them. The eight respondents faced identical charges save for the particulars of the vehicles that they owned. All the charges were jointly tried in the Magistrates’ Court. Background facts [2] The background facts relevant to the instant appeal and the appeal before the learned High Court Judge were largely undisputed. They are well laid out by the learned High Court Judge in his judgment. We find it convenient to reproduce the following passages of the High Court judgment in which said facts are set out: 3 [3] The subject matters of this appeals are eight vehicles – all Ferraris (Spider, Scuderia, California and Italia) which had been imported into Port Klang with approved import permits. These Ferraris were then registered in Langkawi in the name of the respondents without payment of import duty pursuant to Section 163E of the Customs Act 1967. [4] These duty free Langkawi-registered vehicles were allowed to be transported outside Langkawi into where and what is known as a Principal Customs Area (PCA) (which means the whole of Malaysia exclusive of Langkawi, Labuan and Tioman under Section 163A) without payment of customs duty under Customs Duties (Exemption) Order 1988 ("the Exemption Order"). One of the conditions specified in the Exemption Order is that the entry and presence of such a vehicle in the PCA without payment of customs duty must not exceed 30 days per trip or 90 days in a year. [5] The vehicles in this case were found to have been in the PCA for more than the stipulated period. This resulted in the respondents, as the owners of the vehicles being charged under Section 138 of the Customs Act 1967. The respondents were acquitted and discharged by the Magistrate without their defence being called. However, the vehicles were ordered to be forfeited. [6] Hence the appeal and counter-appeal now before me. [3] We would only add that the subject matter of the appeals, i.e. appeal by the Public Prosecutor and cross appeal by the respondents were not the eight luxury vehicles alone. The subject matter includes the order of acquittal and discharge of all the respondents at the end of the case for the prosecution. 4 [4] The learned Deputy Public Prosecutor submitted that the acquittal and discharge of the respondents by the learned Magistrate without their defence being called cannot be sustained for the reason that on the undisputed facts, the prosecution had established a prima facie case. However, the learned Magistrate’s decision was affirmed by the High Court. The learned DPP also submitted that the reversal of the decision of the learned Magistrate to forfeit the vehicles by the High Court cannot be sustained. [5] We propose to address the question whether defence should have been called by the learned Magistrate before addressing the issue of forfeiture of the vehicles. In the event the respondents are ordered to enter their defence, the issue of forfeiture of the vehicles should be addressed at the end of the trial. Findings of the Magistrate [6] As stated earlier, there was no dispute that the eight respondents were found to have allowed the vehicles that they owned to remain in the Principal Customs Area (PCA) for a period exceeding 30 days. At paragraph 23 of the judgment, the learned Magistrate made a finding that the vehicles were found near Hilton Hotel, Jalan Tun Razak, Kuala Lumpur which is outside of the PCA. In the same paragraph, he also found that the vehicles had been brought in for a period of more than 30 days into the PCA. 5 [7] The charge against the respondent under section 138 was for breaching a condition of the Customs Duties (Exemption) Order 1988 (the Exemption Order) which states that vehicles purchased under the said Order cannot be brought to the PCA for a period exceeding 30 days. Despite his finding that the vehicles in question were found outside the PCA for more than 30 days after being taken out of Langkawi, he acquitted and discharged all eight respondents without calling for their defence. [8] The learned High Court Judge summarized the principal findings of the learned Magistrate for not calling the defence. As we find it to be an accurate summary, for sake of convenience, we reproduce the relevant passages below: [7] The learned Magistrate principally held that as the Exemption Order was silent on the effects of breaches of or non-compliances with its conditions, such transgressions could not be the basis of preferring criminal charges premised on Section 138 of the Customs Act 1967. [8] Any such breach or non-compliance, according to the learned Magistrate would only amount to a contractual matter between the respondents and the Customs authorities which the former had violated, entitling the latter to claim, including in the context of a civil claim, from the former the amount of duties payable on the cars. The learned Magistrate has thus made a finding that failure to adhere to the requirement of the Exemption Order would cause the exemption to cease and the respondents be liable to pay the customs duties. [9] The learned Magistrate also made the finding that in the context of Section 15, and given the failure to adhere to the relevant conditions of the Exemption Order, the cars in question would be considered as "dutiable goods" and not "uncustomed goods". 6 [10] In addition, the learned Magistrate ruled that Section 119 on the reversal of the burden of proof must be positively invoked by the appellant before it could be applied by the Court, and that on the issue of forfeiture of the said cars, the learned Magistrate found the same to be warranted under Section 127 of the Customs Act 1967. Decision of High Court [9] The learned High Court Judge affirmed the decision of the Magistrate to acquit and discharge the respondents without calling for their defence. His Lordship’s decision turned on his interpretation of the offence creating provision in question, i.e. section 138 of the Customs Act

He held that section 138 does not cover a breach of the conditions of the Exemption Order and that it is limited only to the breaches of the Act. His Lordship’s reasoning on this point is stated in paragraphs [28] to [30] which we reproduce below: [28] The learned Magistrate held in paragraph [38] of his grounds of judgment that Section 138 cannot be invoked because the Exemption Order itself is entirely silent whether non-adherence thereto is created as an offence. In my view this is not entirely accurate because it can also be an offence if any provision of the Customs Act 1967 makes a breach of or non-compliance with the exemption order as an offence. But there are no such provisions relevant to this case. [29] Instead, as stated earlier, the scope of Section 138 of the Customs Act 1967 vis-a-vis the breaches contemplated in Section 138 is limited only to the provisions of the Customs Act 1967, and does not include regulations or orders made pursuant to the Customs Act 1967. 7 [30] Therefore I take the view that the charge against the eight respondents under Section 138 in respect of a non-compliance with a condition of Custom Duties (Exemption) Order 1988 or the Exemption Order, which is a subsidiary legislation, cannot be sustained. [10] After ruling that section 138 does not criminalize breaches of subsidiary regulations or orders made under the Customs Act 1967, His Lordship further held that the prosecution could have availed section 15(1) of the same Act to penalize the respondents in this case. Section 15(1) allows the application of a civil penalty against those who contravene the conditions of the Exemption Order in question. Whether section 138 criminalizes breaches of subsidiary legislations and orders? [11] Section 138 of the Customs Act 1967 under which the charges in question were preferred reads as follows: Every omission or neglect to comply with, and every act done or attempted to be done contrary to, the provisions of this Act, or any breach of the conditions and restrictions subject to, or upon which, any licence or permit is issued or any exemption is granted under this Act, shall be an offence against this Act and in respect of any such offence for which no penalty is expressly provided the offender shall be liable to a fine of not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding five years or to both. (emphasis ours) [12] There is no dispute that the vehicles in question were registered in Langkawi without payment of customs duty pursuant to the Exemption Order. The Exemption Order was made under section 14(1) of the Customs Act 1967 by the Minister. Item 21A of the Exemption Order 1988 8 imposes a condition that the said vehicles can only remain in the PCA for a period not exceeding 30 days per trip subject to a maximum period of 90 days in any one year. Given the evidence that was tendered in the Magistrates’ Court, this condition was apparently breached by the respondents. Thus, the principal question that arises is, as correctly identified by the High Court, whether the contravention of this condition attracts the penal provision of section 138 of the Customs Act 1967. [13] The first main reason of the learned High Court Judge to hold that section 138 does not apply to breaches of subsidiary legislation is because the said provision “mentions only breaches and non-compliances of the Customs Act 1967”. He said that it does not extend to “conditions or exemptions granted under any subsidiary legislation made under the Customs Act 1967”. His Lordship also reasoned that if Parliament had intended to cover subsidiary legislation, it would have included the words “or of any subsidiary legislation made thereunder”. The latter words appear in other provisions of the Act namely, sections 2(1), 33 and 127. This was also the position taken by counsel for respondents. [14] With respect, we disagree with the learned High Court Judge. Whilst it is true that, as the learned High Court Judge noted, the first part of section 138 refers to contraventions of the “provisions of the Act”, in our view, a wholistic reading of the section would reveal that it is sufficiently wide to bring within its ambit any transgression of any “condition” of any “licence, permit” or “exemption”. As shown by the italicised words of section 138 that we reproduced in paragraph [11] above, the use of the disjunctive conjunction “or” in the latter limbs of section 138 has widened 9 the reach of the provision to include a breach of a condition of any exemption that is granted under the Act. [15] For the above reason, we are of the view, that the breach of the condition in question, would necessarily attract the penal consequence stipulated in section 138. [16] The second main ground of the learned High Court Judge to hold that section 138 does not apply to the factual matrix of this case is this. His Lordship considered the import of section 15 of the Customs Act 1967. Section 15 allows the customs authority to re-impose duty on any goods that come within an exemption order if there was a breach of the specified conditions. The full provision reads as follows: Section 15: Re-imposition of duty