Monday, June 11, 2007

Proposed move to curb fraud

The Star

Bar Council seeks to tighten rules on handling of clients’ money

KUALA LUMPUR: Under a proposed move to tighten the rules governing handling of clients' accounts, lawyers may soon find it hard to withdraw money from these accounts.

The Bar Council's conveyancing practice committee chairman Roger Tan said the move was aimed at curbing incidences of fraud.

He said his committee was working with the Legal Profession Committee to propose amendments to the Solicitors Accounts Rules 1990, which were drawn up under the Legal Profession Act 1976.

Among the changes being looked at include:

· PROHIBITING lawyers from issuing cash or bearer cheques or drawing money from their clients’ accounts via ATMs or online banking services;

· REQUIRING lawyers to issue only account payee cheques;

· INTRODUCING a two-signatory rule for withdrawals from the clients’ account if it exceeds a certain limit;

· WHETHER a sole proprietor is required to hire a bookkeeper to comply with the two-signatory rule; and

· ONLY a partner of a firm may sign a cheque to withdraw money from the clients’ account.

Tan said the Bar Council was always conscious of its responsibility to protect the public against errant lawyers and the maintenance of public confidence in the lawyers who hold their clients’ money as stakeholders or trustees.

Among the situations where lawyers hold clients' money as stakeholders are when property purchasers pay the balance amount for the property they are purchasing to the lawyer to enable their loans to be released, and when lawyers collect the 10% deposit from clients when the sale and purchase agreement is signed.

The House Buyers Association lauded the move as it came in the wake of reports that more than 100 lawyers were wanted by police regarding investigations into criminal breach of trust cases.

The association's secretary-general, Chang Kim Loong, said the proposed changes were good as they made the whole process a lot more transparent.

Chang said it was also necessary to ensure that if two partners in a firm with multiple partners colluded to cheat, the firm had to be held responsible.

He added that ensuring young lawyers were educated in managerial and accounting practices would also curb instances of cheating.

Law conference to examine 50 years of independence

The Star

PETALING JAYA: A biennial law conference will be organised by the Bar Council in October which will discuss topics including constitutional law, trade and globalisation and Islamic commercial law.

In a statement last Saturday, its organising committee chairman Roger Tan said that the 14th Biennial Malaysian Law Conference would be held from Oct 29 to 31 at the Kuala Lumpur Convention Centre.

The Sultan of Perak, Sultan Azlan Shah, will open the conference and deliver the opening address 50 Years of Constitutionalism and the Rule of Law, a reflection of the conference's theme, 50 Years of Merdeka, to celebrate the country's independence, he said.

Prime Minister Datuk Seri Abdullah Ahmad Badawi is scheduled to give the keynote address while Minister in the Prime Minister's Department Datuk Seri Nazri Aziz will close the conference.

Among the other subjects to be discussed are local government, housing and land laws, intellectual property law, the criminal justice system, gender issues and freedom of religion.

He said the forum would examine the development of the country's laws after 50 years of independence, reflect on Malaysia's achievements, raise present issues and challenges and generate discussions for the next five decades.

Papers will also be delivered by local and Commonwealth jurists such as Prof Lee Hoong Phun from Monash University, Australia, and Prof Teo Keang Sood from the National University of Singapore.

Iskandar Development Region chief executive officer Datuk Ikhmal Hijaz Hashim will also give a talk.

Conference details can be obtained from Catherine Eu and Syirin Junisya at 03-2031 3003, 03-2034 2071 or fax 03-2032 2043/2034 2825/2072 5948, or e-mail mlc2007@malaysianbar.org.myThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it or log on to www.malaysianbar.org.my/mlc.

Sunday, May 20, 2007

Instil filial piety in young ones



New Sunday Times
by Roger Tan


IT is indeed a blessing that I was able to celebrate Mothers Day with my 83-year-old mother and 89-year-old mother-in-law last Sunday.

The picture shows both the octogenarians beaming with joy as their children, grandchildren and great grandchildren went home to Yong Peng to celebrate the occasion with them.

For my mum, life was especially hard when she first came over with dad to Malaya in March 1947. Living in extreme poverty then, her pregnancies were often fraught with problems.

She suffered three miscarriages, and two boys died one week after their births. Another girl had to be given up for adoption by the Christian missionaries at the Seremban Convent High School in 1957, whose records showed had died of pneumonia three months later.

In China in 1943, her first child, a girl, was born when mum was a weak and frail 19-year-old herself. It was also in that year that our paternal grandmother died in her 40s.

Believing that the newly born girl had brought bad luck to the family, our superstitious maternal grandmother decided to let her die in the cold outside.

Despite all these tragedies, mum is no doubt a woman of great fortitude. While dad toiled as a farmer and labourer and was often away from home, my mum performed her duties as a mother looking after us at home.

My mother-in-law is also very much an indomitable character in her own right. Hailing from China in 1932, she did not stop tapping rubber trees to support the family until she was 65.

As my father-in-law (who passed away in 1980) had asthma and was unable to work, one cannot imagine how she could have brought up a family of nine girls and three boys, including a fine daughter for me to marry.

Today, she has 37 grandchildren and 14 great grandchildren. She would often testify that she derives her strength from her strong faith in God, which she no doubt does as she still reads the Bible every day.

I am sure many others have similar if not more powerful stories to tell about their mothers. Likewise, there are many mothers out there whose children were not able to celebrate the occasion with them as depicted by the powerful Chinese New Year advertisement of Petronas in February this year.

Indeed, how we treat our parents will indirectly teach our children how they treat us later. It is often said that filial piety is becoming a thing of the past.

Surely, if our children are taught the importance of filial piety when they are young, then their children will also love them in return when they grow old.

To the Chinese community, filial piety or xiao means complete obedience to one’s parents or parents-in-law, and nothing can be more important than looking after your own parents when they are old.

So, a tale is often told that once upon a time in China, there lived a very poor family. They had a young son but the man’s mother would always give a part of her share to her grandson so that the young boy would not starve. Fearing that his mother would starve instead, the man decided to bury his son alive. But when he dug a hole, lo and behold, he discovered a pot filled with gold.

Filial piety is a universal value fundamental to the family institution.

For example, my Muslim friends are often reminded of Surah Luqman (31) verse 14 in the Quran: "And We have enjoined on man to be good to his parents: In travail upon travail did his mother bear him, And in years twain was his weaning: (Hear The Command), Show gratitude to Me and to thy parents; To Me is thy final Goal."

Our Christian friends, on the other hand, are often told that it is one of the Ten Commandments to honour our father and mother so that we may live long.

Our parents cannot just wither away in loneliness or be treated like "excess baggage" when they grow old.

It follows that our young ones should be taught, trained and imbued with filial piety as early as possible. Our primary school education system must prioritise this.

In fact, the New Sunday Times reported on April 22 that Jerai Member of Parliament Datuk Paduka Badruddin Amiruldin had urged parliament to enact a law to punish errant children who abandoned their parents.

The report also quoted the president of the National Council of Senior Citizens’ Organisations Malaysia, Lum Kin Tuck, responding that the proposed law was unnecessary and, if introduced, "can be a disgrace to us".

Of course, it was not too nice either to read the New Straits Times on March 12 that one requires between RM1.4 million and RM2.8 million in order to retire comfortably.

In Singapore, the Maintenance of Parents Act 1995 allows any person who is 60 years old or above and who is unable to maintain himself to apply to the Tribunal for the Maintenance of Parents for an order that one or more of his children pay him a monthly allowance or any other periodical payment or a lump sum for his maintenance.

In India, the Maintenance and Welfare of Parents and Senior Citizens Bill 2006 was tabled to ensure that if a person responsible for the upkeep of his parents failed to take care of them, he can face up to three months’ imprisonment and a fine in addition to being disinherited from the parent’s will.

To my mind, maintaining our parents is a family responsibility and not the state’s. If the state has to come in to compel our children to maintain us like what is being done in Singapore or India, then something is very wrong with our society.

As a parent, to know that my children are maintaining me because of a court order only grieves me further to realise that this is retribution for I have failed as a parent all these years.

It is also a damning indictment of poor parenting on our part which we, as parents, must assume full responsibility.

In conclusion, let me share with you this oft-quoted inspirational lesson written by an unknown author: A frail old man went to live with his son, daughter-in-law and four-year-old grandson.

The old man’s hands trembled, his eyesight was blurred and his step faltered. The family ate together at the table.

But the elderly grandfather’s shaky hands and failing sight made eating difficult. Peas rolled off his spoon onto the floor. When he grasped the glass, milk spilled on the tablecloth.

The son and daughter-in-law became irritated with the mess.

"We must do something about grandfather," said the son. "I’ve had enough of his spilled milk, noisy eating and food on the floor."

So the husband and wife set a small table in the corner. There, grandfather ate alone while the rest of the family enjoyed dinner.

Since grandfather had broken a dish or two, his food was served in a wooden bowl. When the family glanced in grandfather’s direction, sometimes he had a tear in his eye as he sat alone. Still, the only words the couple had for him were sharp admonitions when he dropped a fork or spilled food.

The four-year-old watched it all in silence. One evening before supper, the father noticed his son playing with wood scraps on the floor.

He asked the child sweetly, "What are you making?" Just as sweetly, the boy responded, "Oh, I am making a little bowl for you and Mama to eat your food in when I grow up."

The four-year-old smiled and went back to work. The words so struck the parents that they were speechless. Then tears started to stream down their cheeks. Though no word was spoken, both knew what must be done.

That evening, the husband took grandfather’s hand and gently led him back to the family table. For the remainder of his days, he ate every meal with the family.

And for some reason, neither husband nor wife seemed to care any longer when a fork was dropped, milk spilled or the tablecloth soiled. Children are remarkably perceptive.

*The writer still grieves for his missing father: www.missingourdad.com

Friday, May 18, 2007

Q & A on amended housing law

The Sun

The Housing Development (Control and Licensing) (Amendment) Act 2007 (“Amendment Act”) which amended the Housing Development (Control and Licensing) Act 1966 (“Act 118”) came into force on April 12, 2007. Since then, the Conveyancing Practice Committee of the Bar Council (“CPC”) has received numerous queries from lawyers, developers and the public on the operation of some of the amendments.

While it is not the policy of CPC to proffer any legal opinion on questions of law posed to them, the CPC has decided that in order to assist the affected parties and subject to the disclaimer below, our views on some of the queries are as follows:

Section 22D(1)of Act 118 stipulates beyond any doubt that the consent of the developer is not required for the absolute assignment of rights or interests in a housing accommodation. In a case where the developer is not the proprietor of the land, is it necessary to obtain the proprietor’s consent to the assignment?
 

As the consent of the proprietor to an assignment was not required before the amendment, it is also, therefore, not required after the amendment.

The CPC is of the view that an absolute assignment is good if served by way of a notice pursuant to section 4(3) of the Civil Law Act 1956. What section 22D seeks to do is to restate the position of the law and to provide penal sanctions against a developer who requires consent to an assignment.

The CPC notes that under both the current Schedules G and H agreements, the duty to obtain the issue document of title or the strata title, as the case may be, and to deliver the same together with an instrument of transfer lies with the developer.

The CPC also notes that in a case of a sale of property for which no title has been issued at the time of sale and the developer is not the proprietor of the land, it has been the practice of solicitors for the purchaser or the purchaser’s financier to obtain the proprietor’s undertaking to deliver the issue document of title to the purchaser or the financier, when issued. It would therefore be prudent for a purchaser or financier to give notice of assignment to the proprietor as well, in which case, the undertaking from the proprietor to deliver title when issued is no longer necessary.

To reinforce this point, the amended Schedules G & H should be brought in line with section 22D by expressly stipulating that a purchaser may assign his rights and benefits under the sale and purchase agreement after the completion date without the consent of either the developer or the proprietor.

Since the developer’s consent has been dispensed with, there is no longer a need for the consent page to the deed of assignment between the assignor (vendor) and the assignee (purchaser). However, the consent page normally contains an undertaking by the developer to deliver the strata title and a valid and registrable instrument of transfer thereof in favour of the assignee. Is it necessary to request the developer to issue an undertaking by way of a separate letter to the new purchaser or to the new purchaser’s financier?


The obligation of the developer to deliver the strata title when issued together with the instrument of transfer and the right of the first purchaser to the same is already set out in clause 11 of the Schedule H agreement. In an assignment from a first purchaser to a second purchaser, all the rights and interests of the first purchaser are assigned to the second purchaser. When the second purchaser requires financing, all the rights and interests which he obtained from the first purchaser are in turn assigned to the second purchaser’s financier. Hence no further undertaking from the developer, by way of a separate letter or otherwise, is necessary.

Section 22(D)(4) states that the purchaser or his financier or their respective solicitors may request for the necessary confirmation from the developer, subject to payment of a fee not exceeding RM50 for every request for confirmation. Previously, it has been a normal practice to require the vendor to apply for the developer's consent, at the vendor's own cost and expense, and the developer's administrative fee usually includes the replies or confirmations made to the relevant solicitors. Section 22(D)(4) provides that the purchaser should pay the RM50.00 for every request made. Shouldn't the vendor be paying for this?
 

The law now requires the purchaser to seek the necessary confirmation from the developer, and to pay to the developer for every request made. The Vendor is not required to pay for this.

In a sub-sale transaction, the SPA was signed before April 12 and the developer has given its conditional consent before April 12. The developer's consent was conditional, inter alia, upon:

(i) the vendor paying the administrative charges of RM500.00;

(ii) the purchaser signing a fresh deed of mutual covenants with the developer; and

(iii) the developer endorsing its consent on the deed of assignment.

All these conditions have not been complied with by the vendor and purchaser at this moment.

1. Is the developer's consent or the endorsement of its consent on the deed of assignment still required in the above case? 


2. Do the vendor and the purchaser still need to comply with the developer's conditions imposed before April 12, since the developer is now not permitted to impose any conditions under the section 22D?

3. Can the developer still insist on the compliance by the vendor and the purchaser of its conditions which were imposed before the section 22D came into force?

The answer to all the above three questions is “No”.

If an application had been made for the developer’s consent before April 12, and all the conditions and payments imposed or required by the developer have been fulfilled or paid, and the developer had endorsed its consent to the deed of assignment before April 12, then the parties to the transaction should continue and complete the transaction accordingly.

If the developer’s consent, conditional or otherwise, was granted before April 12, and the conditions or payments imposed or required have not been fulfilled or paid and the developer has not endorsed its consent on the assignment, then the pursuit of the developer’s consent should be abandoned as it no longer required. Parties are, however, required to comply with section 22(D)(2) and 22(D)(4).

After April 12, no developer is permitted to require any consent, and this will include endorsement of any consent granted before April 12. It follows that as the breach can only occur after April 12, the question of whether the legislation has any retrospective effect does not arise.

In a sub-sale of property where the individual strata title has not been issued, in view of the new section 22D, please confirm the conditions precedent to such an agreement (if any) as we are of the view that the vendor should obtain the developer’s written confirmation on the status or details of the property before the completion period can commence.
 

Before the Amendment Act, it had been the practice to require the vendor to obtain the developer’s consent and the obtaining of such consent is usually made a condition precedent to the completion of a sale and purchase transaction. After the amendment, there should be no longer any condition precedent relating to obtaining the developer’s consent.

However this should not affect the requirement of other consents from any other relevant body or authority required under any other written law, which may continue to be made as conditions precedent.

The amendment refers to any sub-sale or re-financing. In direct purchases from a developer, is the developer’s endorsement of consent necessary for the Deed of Assignment (by way of security)?

Section 22(D) applies to all these cases:

(a) financing of the acquisition by the first purchaser from the developer;

(b) sub-sale between the first purchaser and the second purchaser and purchasers subsequent thereto; and

(c) financing of the acquisition by the second purchaser and purchasers subsequent thereto.

Is the consent of the developer still required for a Deed of Receipt and Reassignment?

A Deed of Receipt and Reassignment is essentially an instrument where the financier assigns the rights and interests back to the purchaser/borrower. As such, consent of the developer is not required.

No amendments have yet been made to the Schedule G and H agreement under the 1989 Regulations. The existing provisions in the Schedule G and H SPA state that the developer shall endorse its consent to the purchaser’s assignment to any third party and charge an administrative fee of RM500 or 0.5% of the purchase price whichever shall be lower. In the event of a sub-sale of a property where no individual document of title has been issued, the principal SPA (whether under Schedule G or H) having such exiting provisions would be inconsistent with the Amendment Act. Are the parties still bound by the existing provisions?

We understand the amended Regulations are expected to be out soon. In the meantime, where there is inconsistency, the parent Act will prevail, meaning that from April 12, no consent is required and no administrative fee is required to be paid.

Does the definition of “housing accommodation” in the amended Act include serviced suites or apartments?
 

If the serviced suites or serviced apartments are intended for human habitation or partly for human habitation and partly for business premises, then they will fall within the definition of housing accommodation as amended. It does not matter if the accommodation is erected on a land designated or approved for commercial development as the Amendment Act has removed these words from the definition of housing accommodation inserted by the 2002 Amendment Act.

Does Section 22(D) apply to a housing development undertaken by DBKL, Perbadanan Kemajuan Negeri Selangor (PKNS) or the Perbadanan Kemajuan of other States?
 

Unless exempted by the Minister under section 2(2), all housing developers have to comply with Act 118 since 2002. Prior to December 1, 2002, Act 118 did not apply to any society registered or incorporated under any written law relating to co-operative societies and any body or agency established and incorporated by statute and under the control of the Federal Government or the Government of any State.