Pendakwa Raya v Awalluddin Bin Sham Bokhari … Responden (05-7-01/2016(W))

This is an appeal by the Public Prosecutor (‘the appellant’) against the decision of the Court of Appeal which set aside the order of forfeiture against the properties of the 5 respondent, made by the Kuala Lumpur High Court pursuant to section 56(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (“the Act”)

On 3.11.2011, the appellant filed a criminal application by way of a Notice of Motion for an order of forfeiture of the properties of the respondent and two others, pursuant to section 56(1) of the Act and for a notice to be published in the 15 Gazette pursuant to section 61(2) of the Act calling upon any third party who has interest in the said properties to attend on the date as specified in the Gazette to show cause as to why the said properties should not be forfeited. 20 [3] Section 56(1) of the Act states; “….where in respect of any property frozen or seized under this Act there is no prosecution or conviction for an offence under subsection (4)(1) or a terrorism 25 financing offence, the Public Prosecutor may, before the expiration of twelve months from the date of the 3 freeze or seizure, apply to a judge of the High Court for an order of forfeiture of that property if he is satisfied that such property had been obtained as a result of or in connection with an offence under subsection 4(1) or a terrorism financing offence, as the case may be, or is 5 terrorist property”.

In this case, there was no prosecution for an offence under section 4(1) of the Act. The properties had earlier been 10 seized pursuant to orders of seizure made under sections 45(1) and 50(1) of the Act.

By the said application the appellant sought an order of forfeiture of the following properties of the respondent:

A sum of RM7,274.60 in investment Account No,

A motorcycle BMW R 1200 RT bearing registration 20

A motorcycle, Harley Davidson Sportster – XL 883N bearing registration No. WTY54; 25

A motorvan, Hyundai Starex TQ 2.5 GLS(A) bearing registration No. WTM54; and 4

A motorvan, Toyota Hilux Double Cab 2.5 AT bearing registration No. WSH 854. (collectively called “the properties”) 5 [6] The appellant’s application was supported by the affidavits affirmed by a Deputy Public Prosecutor and two senior police officers, namely Deputy Superintendent Amran bin Yaakob (‘the investigation officer’) and Deputy Superintendent Ku Ismail bin Ku Awang. Both officers filed 10 lengthy affidavits supported by voluminous exhibits. The other two respondents, namely Simathari a/l Somenaidu and Sharafaizan binti Abdul Samad, did not appear at the hearing to contest the application and the High Court thereupon ordered their properties to be forfeited to the government. The 15 case before us is only between the appellant and the respondent. No third party made any claim to the properties. The respondent did not file any affidavit in reply. He elected to contest the application in person, by giving evidence on oath denying that the properties were acquired out of 20 proceeds of an unlawful activity by showing, albeit unconvincingly, that they were acquired through legitimate sources of income including salary and loans from financial 5 institutions. He also called three witnesses to testify on his behalf. In rebuttal, the appellant called three witnesses including the investigation officer, DSP Amran bin Yaakob. Thus, the decision of the High Court against the respondent was based on affidavit evidence as well as oral testimony of 5 witnesses. [7] The crux of the appellant’s case was that the properties had been obtained out of the proceeds of an unlawful activity. The phrase ‘unlawful activity’ is defined in section 3 of the Act 10 as “any activity which is related, directly or indirectly, to any serious offence or any foreign serious offence”. The term ‘serious offence’ refers to, among others, offences specified in the Second Schedule to the Act, which include the offence under section 420 of the Penal Code, that is, cheating and 15 dishonestly inducing delivery of property. A person who engages directly or indirectly in a transaction that involves proceeds of any unlawful activity, knowing or having reason to believe that the property is proceeds from any unlawful activity, is said to be involved in money laundering: See 20 definition of money laundering in section 3 of the Act. Money laundering is an offence under section 4(1) of the Act. 6 [8] The modus operandi of the respondent was quite straightforward. The respondent was an employee of Malaysia Airlines Bhd (MAS), who handled bookings by and sales of airline tickets, to passengers. He was also the sole proprietor of a firm, known as Ashha Leisure Resources, 5 which carried on business as ticketing and commission agent. [9] Simathari a/l Somenaidu (originally 1st respondent) was attached to the Administrative Section of Markas Tentera Laut (“MTL”), Ministry of Defence, Jalan Padang Tembak, Kuala 10 Lumpur, whose duty was to prepare and issue air travel warrants to MAS via various travel agents on behalf of MTL’s personnel. The air travel warrants were only for MTL’s personnel and not for members of the public. 15 [10] Sharafaizan binti Abd Samad (originally 2nd respondent) was a ticketing clerk at YHA Travel and Tours (M) Sdn Bhd. She had frequent dealings with the respondent relating to sales of airline tickets. 20 [11] The respondent, after receiving confirmed bookings of airline tickets from passengers, sent the names of the passengers to Sharafaizan binti Abd Samad, who in turn contacted Simathari a/l Somenaidu for approval before the 7 latter issued the air travel warrants to MAS via YHA Travel and Tours (M) Sdn Bhd. MAS would have to present the warrants to MTL for payment. Each air travel warrant consisted of 4 copies. The 1st copy (original) would be kept by MTL. The other 3 copies were given to the travel agent. 5 The names of the approved passengers, who were members of the public were then entered in the copies of the air travel warrants together with the names of MTL’s personnel. The names of members of the public would not appear in the original warrant. Tickets purchased by the use of the 10 warrants were sold at lower prices. The tickets purchased by members of the public through the travel agents were sold at market price. Members of the public would not know what transpired between the respondent, Simathari and Sharafaizan. Sharafaizan then presented the warrants to 15 MAS for payments and MAS in turn claimed reimbursement from MTL. As a result, MTL ended up paying MAS not only for the costs of travel by MTL’s personnel but also the travelling costs of members of the public, whose names appeared in the warrants. 20 8 [12] The proceeds derived by the respondent through this modus operandi were used by the respondent to purchase the said properties or for investment. This modus operandi was explained in detail in the affidavit of DSP Ku Ismail bin Ku Awang and in the rebuttal testimony of the investigation 5 officer, DSP Amran bin Yaacob. High Court [13] In determining whether the properties were the subject 10 matter of an offence under section 4(1) of the Act, the court shall apply the standard of proof required in civil proceedings: See section 55(3) and section 70(1) of the Act. On 24.10.2014 the High Court allowed the appellant’s application and ordered the respondent’s properties to be forfeited to the 15 government. The High Court was satisfied that the applicant had, on balance of probabilities, shown that the respondent acquired the properties out of proceeds of an unlawful activity. The respondent, on the other hand, had failed to discharge the burden to show that the properties had been acquired 20 through his legitimate sources of income. The High Court found that his income from known legitimate sources were insufficient to support the purchases of the properties. 9 [14] The respondent, being dissatisfied, appealed to the Court of Appeal against the decision of the High Court. The respondent listed fourteen grounds of appeal in his Petition of Appeal. The Court of Appeal was of the opinion that there 5 were only two issues for its determination, namely, “(a) Whether the trial High Court Judge had satisfied the first threshold of section 56(2) of the Act which required the Applicant to prove, on the balance of 10 probabilities, that the seized properties were the subject matter of or used in the commission of an offence under section 4 of the Act.

Whether the trial High Court Judge had evaluated 15 the Appellant’s evidence, on the balance of probabilities, before he granted the order of forfeiture in respect of the seized properties”. 20 The correct provision is section 56(4), not section 56(2). [15] On 12.1.2016 the Court of Appeal allowed the respondent’s appeal. The main ground was that the prosecution relied heavily on paragraph 32 of the affidavit of 25 the investigation officer which, “in substance was purely heresay” and that the contents of the affidavit also did not satisfy the criteria set out in Order 41 r.5(1) of the Rules of 10 Court 2012. Paragraph 32 of the investigation officer’s affidavit states, “Saya seterusnya menegaskan bahawa saya telah menjalankan siasatan terhadap Saksi-saksi dan 5 Responden-responden dan merekodkan percakapan Saksi-saksi dan Responden-responden di bawah Seksyen 32 AMLATFA 2001, yang mana saya sesungguhnya mempercayai dari keterangan-keterangan yang ada bahawa harta-harta alih yang disita di atas adalah harta- 10 harta yang berkaitan dengan suatu kesalahan di bawah Subseksyen 4(1) AMLATFA 2001 yang mana kesemua harta tersebut telah diperolehi hasil daripada aktiviti haram iaitu hasil daripada pemalsuan Waran-waran Udara MTL untuk menipu TLDM bagi mendapatkan tiket-tiket kapal 15 terbang untuk dijual kepada orang awam yang dilakukan oleh Responden Pertama bersama-sama Responden Kedua dan Responden Ketiga yang merupakan satu kesalahan di bawah Seksyen 420 Kanun Keseksaan. Sebahagian harta-harta Responden Pertama juga 20 diperolehi daripada aktiviti haram iaitu hasil penipuan dalam tuntutan Waran-waran Bas MTL dan tuntutan perbatuan”. 25 [16] The Court of Appeal ruled that the learned trial judge “was in grave error in even relying on an affidavit which is not worth the paper it is written on”. The other ground in setting aside the judgment of the High Court was that the order of forfeiture is against the law and the Federal Constitution. On 30 this ground, we note that this was not an issue which was decided by the High Court nor was it raised in the Petition as 11 a ground of appeal. Perhaps, it would be useful to remind ourselves of what this Court in Dato’ Tan Chin Woh v Dato’ Yalumallai @ M Ramalingam s/o V Muthusamy [2016] 5 MLJ 590 said: 5 “While it is true that the Court of Appeal can consider a point not expressly taken in the memorandum of appeal or argued in the court below based on the broad wording of s 69(4) of the CJA and r 18(2) of the Rules of the Court of Appeal 1994, this is subject to the overriding discretion of 10 this court to do justice. …………………….. In so doing, it is however not the duty of the Court of Appeal, to invent or create a cause of action or a defence under the guise of doing justice for the parties as it is also trite that parties in litigation are bound by the four corners of their pleadings”. 15 [17] The essence of the judgment of the Court of Appeal can be seen in paragraphs 12, 14 and 16 of its judgment: “12. The contents of the affidavit also do not satisfy the 20 criteria set out in Order 41 rule 5(1). In consequence, the learned trial judge was in grave error in even relying on an affidavit which is not worth the paper it is written on. 25 14. Thus, when a case is dealt by affidavit as well as oral evidence, EA 1950 will become applicable save to say that where documents have been exhibited by affidavit, it remains admissible but the Court has to deal with the totality of the evidence to give relevant 30 probative value to the exhibits. Where an exhibit or evidence is credibly challenged the burden of proof of prima facie case placed on a plaintiff or petitioner and/or applicant as the case may be, does not shift 12 even though in a normal trial by oral evidence a plaintiff’s case on prima facie basis need to be established before the defence is obliged to call his evidence. If a prima facie case is not established, a defendant may elect not to call his evidence. The law 5 in this area is well established. However, when the application is by affidavit and oral evidence, the applicant cannot rest on laurels to assume that the affidavit in support with the hearsay evidence and/or exhibit is sufficient to succeed on balance of 10 probabilities, that too in a Quasi-criminal Application like the Anti-Money Laundering and Anti-Terrorism Financing Act 2001, where the statute expressly says that the prosecution has to establish its case on the balance of probabilities.

We have read the appeal record and the able submission of the parties. After much consideration to the submission of the learned Deputy Public Prosecutor, we take the view that the prosecution has 20 not established the case according to law and the order of forfeiture is against the law and the Federal Constitution and in consequence the order of the High Court is set aside and the property seized is ordered to be returned to the appellant.”. 25 Appeal to the Federal Court [18] The appellant listed six grounds of appeal in his Petition 30 of Appeal to this Court but opted to proceed on only one ground, namely, that the Court of Appeal erred in holding that the affidavit of the investigation officer, in particular, paragraph 32 of DSP Amran bin Yaacob’s affidavit was “in 13 substance purely heresay”. It was submitted that the appellant’s case was not based on the affidavit of DSP Amran bin Yaacob alone. It was also based on the affidavit of DSP Ku Ismail bin Ku Awang and the oral evidence of three rebuttal witnesses who were called to rebut the respondent’s 5 testimony that he acquired the properties from income derived from his salary and earnings from his businesses and that his income was sufficient to purchase the properties. The Court of Appeal totally disregarded the affidavit evidence of DSP Ku Ismail bin Ku Awang and his oral evidence and 10 the evidence of two other witnesses who were called to rebut the oral testimony of the respondent. DSP Ku Ismail bin Ku Awang deposed that he had interviewed and recorded statements from witnesses who purchased tickets from the respondent. He exhibited the warrants containing the names 15 of the purchasers who were members of the public: See for example Ex. KIKA 2, 3, 12, 14, 20 and 21. He had also prepared in minute detail, two charts (Ex. P48 and P49) to show, for example who purchased the tickets and the amount paid. Ex. P48 was a flow chart which showed the amount of 20 money paid in cash or cheques by the members of the public to the respondent, which were then deposited into several bank accounts of the respondent. These members of the 14 public did not know that tickets purchased by the use of the warrants were sold at lower prices. [19] It was contended by the appellant that the contents of the affidavits affirmed by both police officers and the 5 documents exhibited therein were based on their personal knowledge which were directly obtained from witnesses in the course of their investigations under the Act. The powers of the investigation officer are clearly stated in section 32 of the Act. Any property, record, report or document produced 10

attend before him for examination;

to produce before him any property, record, report or document; or

to furnish to him a statement in writing made on 10 oath or affirmation. Any person who disobeys the order of the investigation officer commits an offence. 15 [23] The investigation officer is empowered to administer an oath or affirmation to the person being examined. The person being examined shall be legally bound to answer all the questions and to state the truth save that he may refuse to answer any question the answer to which would have a 20 tendency to expose him to a criminal charge or penalty or forfeiture. 17 [24] The admissibility of the record of examination of any person or any property, record, report or document obtained by the investigation officer is governed by section 40 of the Act. The section overrides any written law or rule of law to the contrary. It states – 5 “40. The record of an examination under paragraph 32(2)(a), any property, record, report or document produced under paragraph 32(2)(b) or any statement under paragraph 32(2)(c) shall, notwithstanding any 10 written law or rule of law to the contrary, be admissible as evidence in any proceedings in any court for, or in relation to, an offence or any other matter under this Act or any offence under any other written law, regardless whether such proceedings are against the person who was 15 examined, or who produced the property, record, report or document, or who made the written statement on oath or affirmation, or against any other person”. 20 [25] Both DSP Amran bin Yaacob and DSP Ku Ismail bin Ku Awang affirmed in their affidavits that all the information contained therein were true and within their personal knowledge. They obtained the information after examining and recording statements from persons who purchased the 25 tickets from the respondent, Simathari and Sharafaizan. They exhibited copies of the air travel warrants, containing the names of members of the public, the bank accounts or bank statements of the respondent, the documents relating to 18 ownership of the vehicles, the hire purchase agreements and numerous other documents which they obtained in the course of their investigation. They also exhibited the relevant certificates under section 90A(2) of the Evidence Act. 5 [26] DSP Amran bin Yaacob also prepared a flow chart (Ex. P33) showing the names of members of the public who purchased tickets from the respondent at market price and whose names appeared in the air travel warrants. The respondent relayed their names to Sharafaizan by way of 10 telephone calls or SMS. Sharafaizan in turn liaised with Simathari, for approval prior to the issuance of the air travel warrants. [27] DSP Ku Ismail bin Ku Awang produced two flow charts: 15 Ex. P48 and Ex. P49. Ex. P48 showed, among others, the names of members of the public who purchased tickets from the respondent, the amounts paid and the banks where the respondent deposited the money. 20 [28] Let us look at some of the names shown in Ex. P48 as illustrations. In December 2009, Zulkarnain bin Muhammad purchased return tickets for himself, his wife Zarinah bt Ismail, his friend Tun Hairuddin bin Abu Bakar and his wife for travel 19 from KLIA to Dubai and back to KLIA from the respondent for a total sum of RM36,000.00. Zulkarnain also purchased return tickets for himself and his wife to perform Umrah and paid RM6,000.00 to the respondent. Between June 2010 and July 2010, Fatimah bt Abd Rahman booked return tickets for 5 travel from KLIA to London and back to KLIA for herself, Wilson Bayan Dandot, Ismuni bin Ismail, Kamil Danial Yap, Justine Jinggut and Norlia bt Abd Rahman from the respondent at a cost of about RM90,000.00. 10 [29] Sometime between February 2010 and March 2010, Abu Bakar Fikri bin Sulaiman booked a return ticket for travel from KLIA to London and back for RM21,000.00. In June 2009 Ahmad Johari bin Abd Razak and his wife Nooralzeila bt Junid bought return tickets for travel from KLIA to London and 15 back to KLIA at a cost of RM30,000.00. All these names appeared in the air travel warrants. (See Ex. KIKA 2, KIKA 3, KIKA 20, 21, KIKA 12 and KIKA 14). These were not isolated incidents. It showed a pattern of behaviour. The sum total of money paid to the respondent from the sales of these tickets 20 exceeded the respondent’s income from his salary and earnings from his businesses. What had been deposed in DSP Ku Ismail bin Ku Awang’s affidavit was neither disputed 20 nor challenged by the respondent. The way the respondent operated was highly questionable. Why did an employee of MAS who handled bookings and sales of airline tickets to passengers and carrying on business as a ticketing and commission agent through his own firm Ashha Leisure 5 Resources, chose to purchase tickets for his passengers through another travel agent, YHA Travel and Tours (M) Sdn Bhd or its ticketing clerk Sharafaizan? What was his intention? It was not disputed that Simathari used to issue air travel warrants to MAS through YHA Travel and Tours (M) 10 Sdn Bhd. Tickets purchased by way of air travel warrants were priced lower than the market price. [30] Ex. P49 was a flow chart showing the vehicles acquired by the respondent out of the proceeds of an unlawful activity, 15 the amount of monthly instalments and the banks from whom the respondent obtained the loans. It also showed the account number where the respondent invested his money. DSP Ku Ismail bin Ku Awang deposed that the income derived from the respondent’s salary and earnings from his 20 businesses were not sufficient to purchase the properties. That was also the finding of the learned trial judge. 21 [31] In an application for an order of forfeiture of property under section 56(1) where there is no prosecution, the standard of proof to determine whether the property has been obtained as a result of or in connection with an offence under section 4(1) is the standard of proof required in civil 5 proceedings: See section 56(4) of the Act. Any question of fact to be decided by the court in proceedings under the Act shall be decided on the balance of probabilities: See section 70(1) of the Act. 10 [32] We have read the affidavits of DSP Amran bin Yaacob and DSP Ku Ismail bin Ku Awang in their entirety. What was deposed in paragraph 32 of DSP Amran bin Yaacob’s affidavit should not be read in isolation and out of context. The affidavit must be viewed in its entirety. Paragraph 32 of 15 the said affidavit was not evidence per se. It was basically a conclusion based on information extracted from witnesses whose statements had been recorded by the investigation officer and from the numerous records and documents which were exhibited in the affidavit. 20 [33] Any property, record, report or document obtained by the investigation officer pursuant to section 32(2) of the Act are, 22 by virtue of section 40 of the Act, admissible as evidence in any proceedings in any court for or in relation to an offence or any other matter under the Act or any offence under any other written law. The Court of Appeal was clearly in error in holding that paragraph 32 of the investigation officer’s 5 affidavit was “purely heresay”. It also erred in ruling that the learned trial judge committed an error in relying “on an affidavit which is not worth the paper it is written on”. What had been deposed by these two senior police officers in their affidavits, which were based on their personal knowledge 10 acquired in the course of investigation under section 32 of the Act, could not be said as purely heresay. [34] The Court of Appeal was also in error in failing to consider the rebuttal evidence of witnesses called by the 15 appellant. The learned trial judge’s findings that the respondent obtained the properties out of the proceeds of an unlawful activity was based on evidence before him. The respondent failed to rebut the evidence against him on the balance of probabilities. There was no compellable reason to 20 interfere with the findings of fact by the learned trial judge. Accordingly, we allow the appeal, set aside the decision of 23 the Court of Appeal and reinstate the order of forfeiture made by the learned trial judge. Dated this 7th November 2017 5 (A SAMAH NORDIN) Judge of the 10 Federal Court, Malaysia

Puan Tetralina binti Ahmad Fauzi Deputy Public Prosecutor for the Appellant (Jabatan Peguam Negara)

Mohd Yunos bin Shariff for the Respondent (Messrs Amran-Yunos)