Success Plus Co Ltd v 1. ) Mohd Khairi Bin Othman (KA-21NCvC-5-05/2019)

KERAJAAN MALAYSIA --- DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT A. INTRODUCTION [1] The Plaintiff, a company registered in Myanmar, commenced this action against the Defendants, alleging the unlawful seizure of goods belonging to the Plaintiff and the wrongful detention of a chartered vessel. The Plaintiff also seeks damages arising from the alleged wrongful and unlawful doings of the Defendants. The Defendants deny all allegations made against them. 22/06/2025 16:29:57 KA-21NCvC-5-05/2019 Kand. 95 S/N vO5qlqgqa0g5vBzd/Cnw [2] This matter has undergone a lengthy trial process. In the course of proceedings, the Court granted an order for security for costs, pursuant to which a sum of RM200,000 was deposited with the Court. [3] Upon hearing the testimonies of witnesses, along with both oral and written submissions from both parties, the Court dismissed the Plaintiff’s claim and ordered costs of RM50,000 to be paid to the Defendants from the security for costs. Additionally, the Court orders that the remaining balance of RM150,000 from the security for costs be returned to the Plaintiff. B. BACKGROUND FACTS [4] For ease of reference, all the named Defendants in this action shall be referred to as RMCD and the Marine Department of Malaysia shall be referred to as MDM. [5] The Plaintiff had chartered a vessel known as Kamberra (IMO 8840236), a Mongolian-flagged vessel, for the purpose of transporting a consignment of cigarettes it had purchased. The cargo was loaded onto Kamberra at Batam Port, and the vessel commenced its voyage on 31.3.2019, bound for Yangon, Myanmar, where the cargo was to be discharged. The consignment consisted of 9,600 master cases of cigarettes. [6] On 6.4.2019, Kamberra entered Malaysian territorial waters off Langkawi for bunkering. On the same day, the vessel was detained by S/N vO5qlqgqa0g5vBzd/Cnw the First Defendant on suspicion of involvement in the smuggling of illicit cigarettes. [7] Of the cargo, 4,801 master cases were seized by the First Defendant. Subsequently, the vessel was detained by MDM on 11.4.2019 and later by RMCD on 16.4.2019. [8] Criminal charges were brought against the crew members of Kamberra before the Langkawi Magistrates’ Court pursuant to section 135 of the Customs Act 1967 [Act 235]. The prosecution ended unsuccessfully on 27.4.2022. The appeal filed by the Deputy Public Prosecutor was subsequently withdrawn on 5.12.2022. The seized goods, being 4,801 master cases of cigarettes, were ordered by the Court to be returned to the Plaintiff as the lawful owner. [9] On 18.7.2019, Kamberra was offered release upon the furnishing of a security bond. The Plaintiff accepted this offer on 2.8.2019. Thereafter, on 19.8.2019, Kamberra sailed from Langkawi to Lumut for maintenance and docking purposes, with the approval of the MDM. [10] The Plaintiff contends that the vessel sustained damage as a result of the detention and claims the costs of repair. Additionally, the Plaintiff alleges that a press conference held by RMCD caused reputational damage to the Plaintiff, for which it now claims damages. [11] For ease of reference and to assist in the appreciation of the factual matrix, the chronology of events is set out below in sequential order by date and corresponding occurrence. S/N vO5qlqgqa0g5vBzd/Cnw Date Events 31.3.2019 Kamberra departs from Batam to Yangon 5.4.2019 Kamberra is alleged to have arrived in Yangon waters 5.4.2019 Kamberra arrives in Langkawi waters 6.4.2019 Kamberra is searched, and cargo is seized 6–10.4.2019 Cargo is unloaded from Kamberra to the Customs warehouse 7.4.2019 Crew members are remanded and charged in the Langkawi Magistrates’ Court 7.4.2019 Kamberra is detained under an interim detention order 11.4.2019 Kamberra is detained by the Marine Department of Malaysia 11.4.2019 A press conference is held 16.4.2019

Kamberra is detained by RMCD

7.2019 Offer made to release Kamberra upon bond 2.8.2019 Offer accepted by Plaintiff’s solicitors 8.8.2019 Physical possession of Kamberra taken by Plaintiff’s representative 19.8.2019 One-way voyage from Langkawi to Lumut approved by

20.

8.2019 Kamberra arrives in Lumut for maintenance 14.9.2019 Maintenance of Kamberra completed 20.9.2019 Statutory Certificate of Kamberra expires 15.4.2020 DPP applies to forfeit the bond in the Kuala Lumpur Magistrates’ Court 5.5.2021 DPP’s application dismissed 27.4.2022 Crew members acquitted and discharged 5.12.2022 DPP withdraws High Court appeal 16.3.2023 RMCD issues notice to Plaintiff for cargo return 11.7.2023 RMCD notice served by registered post S/N vO5qlqgqa0g5vBzd/Cnw C. ISSUES FOR DETERMINATION [12] The Court is required to determine several legal and factual issues, as follows:

Whether the Plaintiff is the owner of the vessel Kamberra;

Whether Kamberra entered Kuah waters for the purpose of refuelling;

Whether the cargo on board Kamberra belongs to the Plaintiff and was being delivered to Yangon;

Whether the detention of Kamberra, its Captain, and 9 crew members was lawful;

Whether the Second Defendant’s press conference regarding the detention tarnished the reputation and good name of the

Whether Kamberra, its Captain, and 9 crew members committed offences under Act 235, the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613] and/or applicable maritime laws;

Whether the Defendants are liable to pay the Plaintiff general and special damages. D. ANALYSIS AND FINDINGS OF THE COURT [13] In its deliberation, the primary consideration of this Court centres on the statutory framework governing the subject matter in dispute. The applicable legislation includes, inter alia, Act 235 and, with particular reference to section 132 of Act 235 and section 77 of Act 613. S/N vO5qlqgqa0g5vBzd/Cnw [14] These provisions are material in determining whether the Defendants were acting within their statutory authority in relation to the seizure, forfeiture, and the question of liability for compensation, costs or any other relief arising from such seizure by the RMCD. In that regard, the related provisions to be read together with the aforesaid sections are sections 144, 44, 45, 46, and 135 of Act 235, all of which collectively confer and regulate the enforcement powers exercised pursuant to section 132. [15] In their submissions, the Defendants began by raising a threshold legal issue of statutory immunity under section 132 of Act 235 and section 77 of Act 613. Section 132 of the Act 235 provides: “No person shall in any proceedings before any court in respect of the seizure of any goods seized in exercise or the purported exercise of any power conferred under this Act, be entitled to the costs of such proceedings or to any damages or other relief other than an order for the return of such goods or the payment of their value unless such seizure was made without reasonable or probable cause." [16] This provision bars any claim for costs, damages or other relief unless the seizure was made without reasonable or probable cause. Only the return of goods or their value may be ordered in such cases. [17] The understanding of this provision is that the key elements to invoke statutory immunity are:

The seizure must be made pursuant to powers under Act 235.

The seizure must be supported by reasonable or probable cause. S/N vO5qlqgqa0g5vBzd/Cnw [18] The Defendants submit that section 114 of the Act 235 grants seizure powers to Customs officers. It reads: "All goods in respect of which there is reasonable cause to suspect an offence under the Act… may be seized by any Customs officer in any place either on land or in territorial waters." [19] A Notice of Seizure was also issued in accordance with subsection 114(3), thus satisfying the first element. A Vessel Seizure Notice, as exhibited in Exhibit “D41” was issued by the RMCD pursuant to subsection 45(2) Act 613. The provision reads as follows: “Seizure of movable property

In the course of an investigation into an offence under subsection 4(1), an investigating officer may, upon obtaining approval from an investigating officer senior in rank to him, seize any movable property which he has reasonable grounds to suspect to be the subject matter of such offence or evidence relating to such offence.” [20] Regarding the second element, the term “reasonable or probable cause” has been defined in Hicks v Faulkner [1878] 8 QBD 167 (per Hawkins J) as an honest belief based on reasonable grounds that an offence had likely occurred. [21] The Defendants submitted that the First Defendant had such cause to suspect offences based on the following facts:

Acting on a tip-off;

Boarding and inspecting the vessel;

Failure of the captain to produce relevant documents; S/N vO5qlqgqa0g5vBzd/Cnw

Non-duty-paid cargo on board;

Reasonable suspicion of offences under the Act. [22] Investigations conducted by the RMCD confirmed that Kamberra had committed multiple offences under sections 44, 45, 46 and 135 of Act

Thus, the seizure was made with valid legal justification, and therefore immunity under section 132 of Act 235 applies. [23] Hence, RMCD submitted that the only relief allowed under section 132 of Act 235 is the return of goods or their value. However, evidence has shown that the goods had previously returned to the Plaintiff according to a court order dated 27.04.2022. Notice of collection was sent on 16.03.2023 and 11.07.2023, via email and registered post, but the Plaintiff failed to act. Therefore, the Defendants argued that nothing more is owed, and the Plaintiff is not entitled to both the goods and their value. [24] At this juncture, upon hearing the testimonies of the Defendants’ witness, the Court believes that there existed reasonable grounds to believe that the vessel Kamberra was involved in various offences. SD2, the RMCD raiding officer, who is also the First Defendant in this case, in his evidence elaborated in detail on the offences suspected to have been committed by Kamberra. Most significantly, Kamberra was found to be transporting prohibited customs goods. This alone may constitute a material element and evidence of the commission of smuggling offences, as contemplated under section 45 of Act 613. S/N vO5qlqgqa0g5vBzd/Cnw [25] As submitted by the Defendants, this legal position has been affirmed as settled law through previous judicial decisions. In the case of Jabatan Kastam Diraja Malaysia & Ors v. Apple International Co Ltd (Japan) [2017] 3 MLJ 421, the court evaluated the suspicious circumstances surrounding the importation process and held that the claimant was not entitled to compensation. The relevant excerpt from the court’s judgment reads as follows: “[46] Mr Akihiko Haibara went on to confirm that he had known Jerry Tan even before 2005. The circumstances under which the cars were imported into Malaysia were very suspicious indeed and this is magnified by the fact that no one came forward to produce the import permit and to pay customs duties for the cars. Under the circumstances, the respondent was not, in any event, entitled to damages: see s 132 of the Customs Act which provides as follows:

No person shall in any proceedings before any court in respect of the seizure of any goods seized in exercise or the purported exercise of any power conferred under this Act, be entitled to the costs of such proceedings or to any damages or other relief other than the order for the return of the goods or the payment of their value unless such seizure was made without reasonable cause.” (Emphasis added.) [26] In this present case, the suspicious circumstances surrounding Kamberra’s entry into Malaysian waters were found upon inspection by the Defendants, where in SD2’s evidence it was found that, among others the Plaintiff has committed the following offence –

No approval to enter Malaysian waters.

Failure to produce Customs Form K4;

Carriage of prohibited goods; S/N vO5qlqgqa0g5vBzd/Cnw

Failure to activate the Automatic Identification System (AIS);

Expired Certificates of Recognition for crew members;

Incomplete Log Book;

No authorisation or permit for bunkering activities;

Vessel located outside designated bunkering areas;

No outward manifest or port clearance from Yangon;

Outward manifest from Batam did not match the quantity of cargo;

Cargo manifest did not tally with the actual quantity of cargo on board;

Packaging consistent with smuggling modus operandi; and

Eleven other offences under the supervision of the Malaysian Marine Department, involving breaches of international maritime laws. [27] Therefore, the Court is of the view that there were ample grounds to suspect that Kamberra was used for smuggling prohibited goods. Precedent from Jabatan Kastam Diraja Malaysia & Ors v Apple International Co Ltd (Japan) [2017] 3 MLJ 421 supports the view that suspicious circumstances surrounding importation disqualify claimants from damages under section 132 of Act 235. These facts justified the seizure and detention of Kamberra for further investigation. Section 132 Act 235 is a valid defence against the claims. [28] In its defence, RMCD also relied on section 77 of Act 613, which protects enforcement agencies from legal action so long as their actions were taken in good faith. Section 77 states: S/N vO5qlqgqa0g5vBzd/Cnw “No action, suit, prosecution or other proceedings shall lie or be brought, instituted, or maintained in any court or before any other authority against—

the competent authority or the relevant enforcement agency;

any director or officer of the competent authority or the relevant enforcement agency, either personally or in his official capacity; or

any person lawfully acting in compliance with any direction, instruction or order of a director or officer of the competent authority or the relevant enforcement agency, for or on account of, or in respect of, any act done or statement made or omitted to be done or made, or purporting to be done or made or omitted to be done or made, in pursuance of or in execution of, or intended pursuance of or execution of, this Act or any order in writing, direction, instruction or other thing issued under this Act if such act or statement was done or made, or was omitted to be done or made, in good faith.” [29] There was no allegation or evidence of mala fide conduct by the officers involved. In their written submission, RMCD quoted the case of Straits Bunkering Pte Ltd v KPDNHEP Johor & Ors. [2020] 8 MLJ 450, which confirms that allegations of mala fide must be strictly proven with cogent evidence. Bare assertions only are insufficient. “[45] It is crucial to be cognisant that an allegation of mala fide must be proved and cannot be premised on bare averments. It has to be established on the basis of available cogent evidence, and not merely on some ill-defined and unsupported material. The court cannot draw inferences, much less a conclusion about the existence of mala fide, on unsubstantiated allegations. [46] When the allegations of mala fide are made and when relief seeks to interfere with a particular action of the government or its functionaries, such allegations have to be established and proved to the extent of an incontrovertible finding by the court.” S/N vO5qlqgqa0g5vBzd/Cnw [30] The Plaintiff alleged error by SD2 in seizing Kamberra. Defendants argued that no such error occurred. SD2 was aware from the outset that the vessel exceeded 200 tonnes, the limit under Act 235, and thus referred the matter for action under Act 613. This conduct was proper and supported by documentation and evidence. [31] The Court examined the evidence given by the SD2 and believes that SD2 became aware of his power to seize as early as when he discovered that the vessel Kamberra had a weight exceeding 200 tonnes, based on the Certificate of Registry in Exhibit “D20” obtained during the boarding of the vessel. [32] This can be seen in his evidence during cross-examination, where SD2 agreed that he had become aware of this fact on 6.4.2019. “Saya telah menyemak Sijil Pendaftaran (Certificate of Registry) kapal tersebut yang diserahkan kepada saya oleh kapten kapal seperti di m/s 1 Ikatan Dokumen DefendanDefendan (Ikatan C1). Saya mendapati kapal ini beratnya 217 tan di mana Akta Kastam 1967 menghadkan penyitaan kapal hanya kepada kapal seberat 200 tan ke bawah sahaja. Maka saya tidak boleh menyitanya di bawah Akta Kastam 1967 sebaliknya ia memerlukan punca kuasa yang lain untuk penyitaan. Saya telah merujuk perkara ini kepada penyelia saya dan diarahkan untuk kes ini diserahkan kepada Pegawai Penyiasat untuk siasatan lanjut di bawah Akta Pencegahan Pengubahan Wang Haram, Pencegahan Pembiayaan Keganasan dan Hasil Daripada Aktiviti Haram 2001.” S19 : Kemudian, apakah tindakan lanjut kamu? J : Saya telah menyerahkan kes ini kepada Pegawai Penyiasat, Tuan Mohd Azhiman Bin Mohd Azri, untuk siasatan lanjut di bawah Akta Kastam 1967 dan Tuan Mohd Nor Ridzuan Bin S/N vO5qlqgqa0g5vBzd/Cnw Ideris, untuk siasatan lanjut di bawah Akta Pencegahan Pengubahan Wang Haram, Pencegahan Pembiayaan Keganasan dan Hasil Daripada Aktiviti Haram 2001.” [33] Therefore, the Court believes that it is unreasonable to assume that SD2 made a mistake when he had known about the matter from the very beginning. [34] On the issue of the ownership of the vessel, it is admitted that the Plaintiff was a charterer, not the owner, of Kamberra. The Plaintiff’s witness, SP2’s representative capacity was challenged early on during cross-examination. SP2 himself acknowledged he had no legal or financial stake in the Plaintiff company. During cross-examination, SP2 was asked: Q : You are standing today given evidences in court on behalf of you and your company ? A : On behalf of the event taken place. Q : No. I’m asking you, you are today in court to give evidence on your own behalf and behalf of your company ? A : No. On behalf Success Plus. Q : The answer is no ? A : No. Q : Do you have any stake in the Plaintiff company ? A : No. We have a ship management. Q : You and Plaintiff are different entity all together ? A : I'm the ship manager. Q : No. You and the Plaintiff are different entity all together ? A : Yes, correct. S/N vO5qlqgqa0g5vBzd/Cnw [35] As to the purpose of Kamberra’s presence in Langkawi, the Plaintiff submitted that the sole determining factor is whether the ship was in Langkawi water for bunkering or illegal importing. The Plaintiff claimed that the vessel entered Langkawi waters for bunkering only. However, the Defendants argued that the legal question is not the purpose of entry, but whether the detention was made with reasonable suspicion. Defendants submitted that the SP2 failed to ensure proper authorisation for bunkering, and the agent was not properly paid or instructed. [36] From the evidence given, the Court found that SP2 had admitted that he was the person responsible for ensuring compliance with the requirements for bunkering, including obtaining the necessary authorisation from the authorities and appointing an agent. Therefore, the Plaintiff’s reliance on and attempt to blame the agent was merely a self-serving excuse. [37] It was found that SP2 clearly did not make any payment to the agent for the entry into Langkawi, as shown by the invoice in Exhibit “D23(b)”, in contrast with the invoice in Exhibit “D23(a)”, which indicated payment for agency clearance fees for check-in and check-out. In this situation, SP2 cannot shift the blame to the appointed agent. [38] The Court also found that it is incorrect to argue that SD3 did not conduct a thorough investigation concerning the agent. The invoices in Exhibits “D23(b)” and “D23(a)” were sufficient for SD3 to conclude that SP2 had failed to make the necessary payment to the agent to enable the agent to obtain the proper authorisation from the authorities for the bunkering operation. The invoice in Exhibit “D23(b)” clearly shows a purchase of S/N vO5qlqgqa0g5vBzd/Cnw diesel only, without any agency clearance fee for check-in and check-out. [39] After considering all the foregoing matters, the Court holds that the evidence adduced by the Defendants clearly shows that there were offences under Act 235 which warranted the detention of the vessel Kamberra and the seizure of its cargo. The Court believes that SD2 did not rely on the offences under the supervision of the MDM to effect the detention and seizure, instead, SD2 had reasonable suspicion that offences under sections 44, 45, 46, and 135 of the Act 235 had been committed, thereby justifying the detention and seizure. [40] On the issue of quantum of damages, even if the Court finds the detention unlawful, section 132 of Act 235 limits relief to either the goods or their value, not both. The cargo has already been returned. The Plaintiff’s claim for 4 months of vessel charter is unreasonable as there was a valid detention order by MDM dated 11.04.2019, which was never challenged. [41] The Plaintiff's claim of RM1.665 million for crew salaries over 37 months is unfounded. No evidence of actual payment was tendered. Moreover, employment contracts expired on 31.12.2020. Detention of the crew was ordered by the Magistrates' Court, and that order remains unchallenged. The Plaintiff’s claim for vessel damage is unsupported. The testimony from SD1, a technical expert, was credible and unshaken under cross-examination. There was no proven damage beyond normal maintenance. The Court finds that the general damages of RM1 million are excessive, unjustified, and unsupported by legal authority. S/N vO5qlqgqa0g5vBzd/Cnw [42] As a conclusion, the Court finds that the seizure, detention, or arrest was lawful when founded on reasonable suspicion that an offence under Act 235 has been committed. The enforcement agency need not prove the actual offence. In this case, the Court finds that the Plaintiff failed to demonstrate that SD2 acted arbitrarily or without reasonable cause. Accordingly, the seizure and detention on 6.4.2019 were lawful. The Plaintiff’s claim is therefore dismissed with costs of RM50,000 to be paid to the Defendants from the security for costs. Dated : 20th June 2025 ……………………………………………………… (YA PUAN MAHAZAN BINTI MAT TAIB) Judge High Court Malaya Alor Setar, Kedah. Peguam Plaintif : Encik Rajadevan A/L Vamadevan (Tetuan Rajadevan & Associates) Peguam Defendan-Defendan : Puan Aliza binti Jamaluddin (Pejabat Penasihat Undang-Undang Negeri Kedah) S/N vO5qlqgqa0g5vBzd/Cnw S/N vO5qlqgqa0g5vBzd/Cnw