Sunday, July 29, 2007

Keeping the path to justice clear

IN Malaysia, like many other Commonwealth countries, judges’ decisions form one of the sources of our laws. These decisions, primarily made after interpreting the written laws enacted by parliament and state legislatures, are collectively known to lawyers as case law.

Case law then operates by the doctrine of judicial precedent, known loosely to lawyers as stare decisis, which means "stand by the decision".

To a lawyer, that part of the decision which is binding and is to be followed is called ratio decidendi, or the reason or rationale for the decision. Therefore, it is more accurate to call the doctrine stare rationibus decidendi which means "stand by the rationes decidendi (plural of ratio decidendi) of decided cases".

In simple terms, it means the decisions of higher courts are binding on the courts below them. This makes sense because if a precedent has already been created on a point of law, it is easy for other judges to follow. Hence, the legal maxim, stare decisis et non quieta movere which means "stand by decisions and do not move that which is quiet". In other words, let sleeping dogs lie.

But one great British judge, Lord Denning (1899-1999), would not keep quiet about any ratio which was unfair and unjust.

Denning sat in the British apex court, the House of Lords, from 1957 to 1962, but thereafter decided to helm the court immediately below it, the Court of Appeal, as its Master of the Rolls. The reason being before 1966, the House of Lords was bound by its own decisions even if they were unjust. To the Law Lords then, it was the job of parliament to correct any injustice caused by past decisions, albeit parliament was not interested in reforming the law.

Fed up with often being the dissenting judge in the House of Lords, Denning felt it would do some good to return to the Court of Appeal since not all cases resolved at his court went on appeal to the House of Lords. The good that came out of it was that many of his judgments, though overruled by the House of Lords, were subsequently vindicated and reproduced by parliament into statutes.

In the Romanes Lecture at the University of Oxford in May 1959 entitled "From Precedent to Precedent", Denning argued that the House of Lords should not be bound by a previous wrong precedent.

He added that if lawyers held to their precedents too closely, forgetful of the fundamental principles of truth and justice which they should serve, they might find the whole edifice tumbling down about them, losing themselves, in the words of the poet Lord Tennyson, in "that codeless myriad of precedent, that wilderness of single instances".

Denning later wrote in his book The Discipline of Law that: "Let it not be thought from this discourse that I am against the doctrine of precedent. I am not. All that I am against is its too rigid application — a rigidity which insists that a bad precedent must necessarily be followed. I would treat it as you would a path through the woods. You must follow it certainly so as to reach your end. But you must not let the path become too overgrown. You must cut out the dead wood and trim off the side branches; else you will find yourself lost in thickets and brambles. My plea is simply to keep the path to justice clear of obstructions which would impede it."

The above is being taught to law students throughout the Commonwealth. They will also be told that:

• Denning succeeded in his campaign against rigid application of stare decisis when the Lord Chancellor, Lord Gardiner, finally issued a practice statement in 1966 that the House of Lords could thenceforth depart from its previous decisions, recognising that "too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law".

• In Cassell & Co Ltd v Broome & Anor (1971), Denning refused to follow a decision of the House of Lords, and when the case went up to the Law Lords, he was severely rebuked by the Lord Chancellor, Lord Hailsham, who wrote: "The fact is, and I hope it will never be necessary to say so again, that, in the hierarchical system of courts which exists in this country, it is necessary for each lower tier, including the Court of Appeal, to accept loyally the decisions of the higher tiers."

Here, the most senior Court of Appeal judge, Datuk Gopal Sri Ram, said on July 13 in Au Meng Nam & Anor v Ung Yak Chew & Ors that the controversial 2000 decision of the Federal Court in Adorna Properties v Boonsom Boonyanit should not be followed because it was wrongly decided.

This immediately drew a sharp extra-judicial reply from Chief Justice Tun Ahmad Fairuz Sheikh Abdul Halim that the lower courts could not be allowed to ignore the ruling of a superior court just because it felt the higher court had made a wrong decision, "otherwise, every court will not be bound by the Federal Court".

Ironically, in Koperasi Rakyat Berhad v Harta Empat Sdn Bhd (2000), Sri Ram, sitting at the Federal Court, made clear the need to observe with rigour the doctrine of stare decisis.

He thundered: "In our view, every word of what Lord Hailsham said regarding the status of judgments and relevance of precedent in the House of Lords, the circumstances, the duty of the Court of Appeal to accept loyally the decisions of the House of Lords and the chaotic consequences which would follow should the Court of Appeal fail in this duty apply with full force, mutatis mutandis, to this country and we adopt what his Lordship said. Clearly, the Court of Appeal in Harta Empat flew in the face of the principles enunciated by Lord Hailsham and we can only express the hope that it will not be necessary for the Federal Court hereafter to have to remind the Court of Appeal of those principles."

Then, in an admonitory judgment delivered last June, the Federal Court castigated the Court of Appeal for not conforming to stare decisis. The then Chief Judge of Sabah and Sarawak, Tan Sri Steve Shim, sitting with Tan Sri Siti Norma Yaakob and Datuk Abdul Hamid Mohamad, in the case of Datuk Tan Heng Chew v Tan Kim Hor, said it was axiomatic that stare decisis had become the cornerstone of the common law system practised in this country.

He added that the doctrine had attained the status of immutability, and failure to observe it would create chaos and misapprehensions in the judicial system.

Hamid went on to say that if the Court of Appeal thought that it had good reasons for disagreeing with the Federal Court, it may, while following the latter’s judgments, point out why they should be reviewed by the apex court, but the review, if it were to be done, should be done only by the apex court.

The same sentiments were expressed more recently by Datuk Augustine Paul in Fawziah Holdings Sdn Bhd v Metramac Corporation Sdn Bhd (2006).

Coming back to the Adorna case, Sri Ram argued that the Court of Appeal could ignore it because it was decided per incuriam — an exception to the doctrine often adopted by Denning — which meant the judgment was made through want of care, without reference to, or in ignorance, or forgetfulness of a statutory provision or an earlier judgment.

This happened in R v Northumberland Compensation Appeal Tribunal ex-parte Shaw (1951) when Lord Chief Justice Goddard, sitting as a High Court judge, decided not to follow a Court of Appeal judgment because a relevant House of Lords’ decision was not cited in that judgment.

According to Sri Ram, Tun Eusoff Chin’s four-page judgment had overlooked at least two authorities which held otherwise — the High Court’s decision in Mohammad bin Buyong v Pemungut Hasil Tanah Gombak & Ors (1982) and the Supreme Court’s decision in M & J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor (1994), and Section 5 of the National Land Code.

It follows that whether Sri Ram was correct to rely on this exception is a matter for the Federal Court to decide upon appeal, if any. However, it must be stressed that Adorna was re-affirmed by a separate panel of the Federal Court in 2004.

The Bar Council is, therefore, of the view that the government must intervene to legislatively reverse Adorna which ruled that a forger could transfer a real property to a bona fide purchaser without notice of the forgery. This decision has not only "wreaked havoc" for the last six years, but has also put every landowner at risk of losing his property to fraudsters.

This is one unfortunate case where the wheels of justice are grinding too slowly. At the moment, any proprietor who intends to set aside a forged transfer must first set aside enough funds to take the case all the way to the Federal Court because, unlike in the United Kingdom, we do not have a procedure for a case to leap-frog from the High Court to the Federal Court, bypassing the Court of Appeal, where it involves a point of general public importance such as this.

A fortiori, the proprietor must also prove that the purchaser is not a bona fide purchaser and has knowledge of the forgery.

In fact, asking parliament to intervene is nothing new. Parliament has done it before.

For example, in January 1997, the government acted rather swiftly by amending Sections 173(f) and 180 of the Criminal Procedure Code after a strong seven-member panel of the Federal Court, headed by Eusoff Chin, decided six months earlier in July 1996 in Arulpragasan Sandaraju v PP not to follow the Privy Council’s decision in Haw Tua Tau v PP (1981) and the Supreme Court’s decision in Tan Boon Kean v PP (1995), holding that at the close of the prosecution’s case, the court could only call for a defence if the prosecution had proved its case beyond a reasonable doubt.

Last Tuesday, the Bar Council handed a memorandum to Natural Resources and Environment Minister Datuk Seri Adzmi Khalid urging the government to amend Section 340 of the National Land Code and correct this injustice perpetuated by Adorna for the last six years.

It is hoped that the minister will do the needful as soon as possible, rather than waiting for stare decisis to save the day.

This article was published in the New Sunday Times on 29 July 2007.

Thursday, July 19, 2007

Sabah JPs want review

Daily Express, Sabah

Kota Kinabalu: The Sabah Council of the Justices of the Peace (Majaps) feels that the Federal Court should review at the earliest opportunity, a decision it made six years ago pertaining to a land ownership case which the Court of Appeal in a recent ruling declared wrong.

Majaps honorary secretary Datuk Dr Lawrence S H Thien on Wednesday said the 2001 case pertained to Adorna Properties Sdn Bhd v Boonsom Boonyanit in which the Federal Court decided in favour of the bona fide purchaser of land whose ownership had been forged.

He said the Appellate Court in Kuala Lumpur last Friday (July 13) in a case similar to Adorna ruled in favour of two brothers who had lost their land to forgers.

Court of Appeal judge Datuk Gopal Sri Ram said the principle set out in the Adorna case should not be followed as it was contrary to the National Land Code.

Sri Ram declared that the said Federal Court ruling where a landowner lost his property to a forger was wrong.

Certain quarters including the MCA Public Services and Complaint Department lauded Sri Ram's stance, while others say the onus to prevent fraud is on the lawyers who handle the transactions.

One victim, for instance related that a stranger had turned up at his home on an oil palm estate and claimed he was the new owner of the property.

Since that day three years ago, the victim has been locked in a legal tussle over the ownership of the 3.72-hectare oil palm estate.

The Bar Council opined, a reform of the National Land Code is the only solution to put a stop to fraudulent land transfers.

The Federal Court decision has reportedly been criticised by the legal fraternity in the Peninsula for undermining the integrity of land titles and leaving the original owners without any means to recover their land.

The Bar Council stressed however that no matter how loud the Court of Appeal can shout, the local courts are still bound by the doctrine of judicial precedent or stare decisis.

Bar Council Conveyancing Practice Committee, Roger Tan explained, this means the lower courts must follow the decisions of the courts, which are superior to them in the legal hierarchy.

Thien said a review would be appropriate to correct any injustice, adding that Majaps concurred with the Bar Council.

"We sympathise with the plight of the parties in such cases and hopes justice will prevail with review/reform of the relevant law. Majaps also note with great concern the calls not to follow the Federal Court decision in Adorna' case."

"Such calls will have grave consequences for the legal system and administration of justice in Malaysia as they disregard the time-tested and foundational doctrines of stare decisis (abiding by precedent)."

Thien said the Federal Court was the dominant and apex court in Malaysia and its rulings were binding on all courts below it including the Court of Appeal.

He said to adopt a different rule would bring chaos and uncertainty to the justice system with resultant detriment to the public.

Meanwhile, the Sabah Law Association and the Sarawak Advocates Association in a joint statement added that a lower court was bound to follow a decision of the Federal Court even if that decision may be criticised as "wrong".

According to them, the application of such decision could be changed by the Federal Court overruling it or by Parliament passing the necessary law.

In relation to the case of Adorna, it may be pointed out that Sabah and Sarawak have their own respective Land Codes, which respectively differs from the National Land Code in certain respects.

The associations stated that the case was under the National Land Code, which does not apply in Sabah and Sarawak and on that narrow interpretation, it does not apply to Sabah and Sarawak.

Sunday, July 15, 2007

Landowners need protection

The Sunday Star

PETALING JAYA: The Bar Council wants the Government to amend the National Land Code to protect landowners and bona fide purchasers from losing or buying property through others' fraudulent actions.

It wants Section 340 of the National Land Code and other relevant provisions to be amended, said the council's Conveyancing Practice Committee chairman Roger Tan.

He said they had prepared a memorandum “Prevention and Protection Against Fraudulent Land Transactions” and would present it to the Natural Resources and Environment minister as soon as possible.

Tan said this following a Court of Appeal decision on Friday which ruled that brothers Au Meng Nam and Ming Kong were the proprietors of a piece of land and not Ung Yak Chew who had purchased it from two fraudsters.

The hearing, presided by Justice Gopal Sri Ram, also comprised Justices Md Raus Sharif and Hasan Lah.

In the decision, the Court of Appeal declared that a controversial Federal Court judgment in a similar case in 2000 (Adorna Properties Sdn Bhd vs Boonsom Boonyanit) was wrongly decided.

“Notwithstanding the Court of Appeal decision on Friday, the law must be amended, and the Government must do it as quickly as possible to reverse the decision of Adorna Properties.

“This is in order to assuage the fears of landowners who now risk losing their properties to forgers and fraudsters,” Tan said.

Among the council's reasons for amending the National Land Code was the fact that ownership of land was at risk because a landowner is legally not entitled to lodge a private caveat against any dealings on his land and that it was against the principles of fairness and justice that a landowner is without remedy or compensation for loss of land following the Adorna Properties decision.

Tan added that even when Boonsom's personal representatives had asked the Federal Court to review its decision, the apex court , comprising of Justices P. S. Gill, Rahmah Hussein and Richard Malanjun, had reaffirmed the earlier decision, saying they were not convinced that the interpretation given in 2000 was patently wrong.

“The only (other) way for courts to get around the Adorna Properties case, for example, is if they find that the purchaser who bought the property from forgers to be someone who is not a bona fide purchaser, as in Friday’s decision,” said Tan.

Bar Council backs Court of Appeal ruling

New Sunday Times

KUALA LUMPUR: The Bar Council has applauded Court of Appeal judge Datuk Gopal Sri Ram’s declaration that a Federal Court ruling in a case where a landowner lost his property to a forger is wrong.

He was referring to the Federal Court’s 2001 decision in Adorna Properties Sdn Bhd v Boonsom Boonyanit favouring the bona fide purchaser of land whose ownership had been forged.

Last Friday, the Court of Appeal judge, while deciding on a case similar to that of Adorna, said the principle set out in that case should not be followed as it was contrary to the National Land Code.

The Federal Court decision has long been criticised by the legal fraternity for undermining the integrity of land titles and leaving the original owners without any means to recover their land.

However, the chairman of the Bar Council Conveyancing Practice Committee, Roger Tan, said Sri Ram’s statement was but just a drop in the ocean.

"No matter how loud the Court of Appeal can shout, the local courts are still bound by the doctrine of judicial precedent or stare decisis," he said.

This means that lower courts must follow the decisions of the courts which are superior to them in the legal hierarchy.

"That is why the Bar Council believes that a reform of the National Land Code is the only solution that will put a stop to fraudulent land transfers,"

But others like MCA Public Services and Complaints Department’s chief legal adviser, Datuk Theng Bok, see optimism in Sri Ram’s statement.

"Previously, only lawyers talked about it being a wrong ruling. Now we have support from within the system,"

Theng hopes the ruling will be overturned soon.

"Currently, there are syndicates who are capitalising on the loophole set by the 2001 decision," he said.

"They are conspiring with supposedly ‘innocent’ buyers to use the law to obtain unlawful gains."

He said the government should introduce insurance schemes that would protect land buyers from fraudulent land transfers.

But others like P.K. Nathan, a lawyer who represented the late Mrs Boonyanit’s personal representatives to apply for a review of the 2001 decision, believes that the onus to prevent fraud should be on lawyers who handle the transactions.

"Official searches at the land office should be made by the lawyer to ascertain if any duplicates were issued.

"If a duplicate has been made, the lawyer should question the land office," said Nathan.

He also believes that lawyers should be more vigilant, especially towards first-time clients.