23 August 2012

My Experience As An Intern at RWY - Tan Sue Vern

Before I started my attachment at RWY, I was terrified as I didn’t have a clue as to what was going to happen. The only idea I had was that it was going to be different from my previous attachment at a different law firm. I recalled Richard telling me during my interview with him that I would be treated as a lawyer. With the little experience I had, the idea of being treated as a lawyer was extremely daunting. Yet, a little part of me was excited that I would finally get a glimpse of life as a lawyer.

My first day started off on a good note. I got to know others at the firm as well as how the firm worked. I spent my first day learning and doing general clerical tasks. At the risk of sounding like an ignorant person, I actually learnt to do things such as posting letters (i.e knowing what stamps to put, learning about the AR post etc.) I also had the opportunity to learn the clerical side of legal work from Kak Sal who was kind enough to sit me down and teach me the whole process of how a legal suit is initiated and what needs to be done (clerical wise) to file a suit. I remember her telling me, “They will never teach you this at law school”.

As time went on, I started taking on other tasks such as learning how to draft an opinion letter, writing formal letters to clients, and preparing statement of claims and also grounds of appeal for an employment case originating from the Jabatan Tenaga Buruh. I even had the opportunity of writing my own legal opinion to a client under the supervision of one of the legal associates, Ezhan. In addition to that, I also went to court several times. During my court visits, I was able to sit in for awhile to watch criminal proceedings in the magistrate courts, visit the Court of Appeal in Putrajaya (where I met and shook hands with several “star” lawyers such as Edmund Bon and Gobind Singh Deo and also saw Karpal Singh from a distance) as well as to watch a cross examination take place (which was actually quite dramatic). I also had the opportunity of observing how a case is dealt with in the Jabatan Tenaga Buruh.

During my attachment at RWY, I was also fortunate enough to have a glimpse of what conveyancing is like. I learnt about the various forms involved in conveyancing but more importantly, I realised how meticulous one has to be when it comes to conveyancing. I had the opportunity to work with Sarah where she took time off to teach me even the smallest things like formatting on Microsoft Word noting that even small matters such as formatting can have an impact on how you come across as a lawyer to others.

I was also roped in to help out in the Safer Malaysia project. During the planning of the candlelight vigil held by Safer Malaysia, I was able to join in the meetings with several influential people such as the OCPD of Petaling Jaya and Eugene Teh of PEMANDU. The experience of being part of the Safer Malaysia team is definitely an invaluable experience as it is not everyday where one has the opportunity of being involved in a community project of such a scale.

To cut the long story short, my experience at Richard Wee and Yip was definitely enriching. From knowing so little about what it is like to be a lawyer, I definitely have learnt that being a lawyer is not so much about the glitz and the glam like what we see on television but a lot of hard work and perhaps paper work. I also realised that I have so much more to learn not only in terms of legal knowledge but also in terms of character. Having sat in and observing how the lawyers at RWY worked, I realised that it is very important to pay close attention to every detail and to work hard to prepare as much as you can. More importantly, a lawyer must always be organised. Having completed my attachment programme at RWY I realised that what Kak Sal told me at the beginning of my attachment was true. They really don’t teach you all these at law school. To everyone at RWY, thank you so much for your patience and willingness to teach me.

Tan Sue Vern

22 August 2012

When Can a Liquidator Be Removed?

RWY Intern, Caroline Leong trying to make sense of the principles governing the laws when applying to remove a Liquidator

What Is a Liquidator and What Does a Liquidator Do?

A liquidator is a person who manages a company’s assets in the event that the company gets wound up. It should be noted that a company can be wound up in two ways, voluntarily or involuntarily. Involuntary winding up can also be described as the winding up of a company by the Court. When a company is wound up, only an approved liquidator or the Official Receiver may be appointed as the liquidator. Section 227 of the Companies Act 1965 lays out the process of the appointing a liquidator.

A liquidator’s responsibility is to sell the assets and use the proceeds to pay the company’s creditors. Basically he collects all the assets belonging to the company in liquidation before cashing it out to settle all the creditor’s claims. In the event that there are any surplus assets, he will distribute them to the company’s shareholders according to their entitlement.

This article will attempt to answer two questions. Can we remove a liquidator who is appointed by the court and if so, in what circumstances?

Section 232(1) of the Companies Act 1965 states as follows: -

(               " A liquidator appointed by the Court may resign or on cause shown be removed by the Court."

Ng Yok Gee & Anor v CTI Leather Sdn Bhd; Metro Brilliant Sdn Bhd & Ors (Interveners) (2006) 3 CLJ 360 is a case which sets outs the principles of law whereby a liquidator can be removed, which include:-

“The normal ground for removal is that the liquidator has a personal unfitness, has failed to act impartially or is in a position where his duty and interest are in conflict.”

“A liquidator who fails to investigate the affairs of the company to the prejudice of an applicant is in neglect of his duty and can be removed. (In re Sir John Moore Gold Mining Company (supra))”

The court will take into account certain factors such as the majority of creditors being unsatisfied with the liquidator (Re Oxford Building and Investment Co [1883-1884] 49 L.T 495) or whether it would be in the interest of the liquidation for him to be replaced (Chua Boon Chim v JM MacCormack [1979] 2 MLJ 156). In a recent local case, the court stated that it “must be shown that the liquidator can no longer act impartially and objectively to protect” the interest of the liquidation (Wong Sin Fan & 2 Ors v Ng Peak Yam @ Ng Peak Yeow & Anor (2012) 1 AMR 818, CA)

Therefore, the above Section 232(1) can be understood to mean that the court can remove a liquidator if it can be shown that his removal would be generally advantageous for those interested in the company’s assets (Re Adam Eyton, Limited, Ex Parte Charlesworth (1887) 36 Ch. D 229).

What about a situation where a liquidator faces a vote of no confidence?

As a result, this author feels that a vote of no confidence from the creditors should certainly be a factor to take into account. The judge in the case of Ng Yok Gee & Anor (2006) 3 CLJ 360 felt that it was “not a sufficient ground for removal of a liquidator that a substantial minority or even the majority of shareholders want the liquidator to be removed.” However, this was clarified when the judge in Bina Puri Sdn Bhd v Jambulingam Sethuraman-Raki [2012] 8 MLJ 141 reasoned that if the applicant had shown that “all the creditors and/or contributories play a significant role, the overriding consideration is that the court must be satisfied that it is against the interest of the liquidation.”

What if there is no personal misconduct on the part of the liquidator?

This brings us to the issue of how to define “cause shown”. There are several cases which can be referred to with regards to this. The English Court was of the opinion that the phrase “on due cause shewn” does not have to be confined to “personal unfitness in the liquidator” (Re Adam Eyton (1887) 36 Ch. D 229). In another case, the court was seen as having “a discretionary power to remove the liquidator appointed by a company without any proof of misconduct or unfitness on their part if, having regard to all the circumstance, it is of opinion that their removal will conduce to the more efficient winding up of the company” (Re Marseilles Extension Railway and Land Company [1867] L.R. 4 EQ 692). Furthermore, the court in Re Buildlead Ltd Quickson (South and West) Ltd v Katz and Another [2004] EWHC 2432 (Ch) interpreted a similar phrase, found in Section 108(2) Insolvency Act 1986, to mean:-

                     “The burden is on the applicant to show a good cause for removal of a liquidator, but it is well established that the statutory provision confers a wide discretion on the court which is not dependent on the proof of particular breaches of duty by the liquidator.”

Chi Liung Holdings Sdn Bhd v Soon Kok Seng (liquidator) Chi Liung & Sons Sdn Bhd [1996] 2 BLJ 9 is a Malaysian case stating that there need not be misconduct on the part of the liquidator to enable removal as long as it is “in the best interest of the company being liquidated”. If a liquidator acts “outside the scope of his appointment” or fails to “protect the interest of the creditors and/or contributories”, then he can be removed as well.

The judge in TR Hamzah & Yeang Sdn Bhd v City Centre Sdn Bhd [2012] 1 MLJ 383 clearly explains in his judgment that “cause shown” is to be interpreted in a manner that does not insist on personal misconduct for the removal of a liquidator:-

“There is no specific methodology or formula attached to the word 'cause shown'. The court is obliged to remove the liquidator in limine if he has failed to act within the spirit and intent of the several provisions of the CA 1965 and more importantly when he acts outside the scope of his appointment or order of court or failed to protect the interest of the creditors and/or contributories or is not justly, expeditiously and economically pursuing to conclude the liquidation process as it must not be forgotten that he is an officer of court and his acts or omission must not place the administration of justice to disrepute.”

However, there have been cases where the court takes a different stance. In the recent case of Wong Sin Fan & 2 Ors v Ng Peak Yam @ Ng Peak Yeow & Anor [2012] 1 AMR 818, the Court was seen to be of the opinion that “some unfitness in the liquidator must be shown in order to justify his removal”.

In conclusion there are conflicting authorities as to whether a liquidator can be removed in certain circumstances. However, this author sees this as an opportunity for common law in this area to expand and evolve but of course, it will take time. A judgment which can clarify the law once and for all will certainly be welcomed.

Caroline Leong
22nd August 2012

17 August 2012

Selamat Hari Raya from RWY

RWY wishes all our Muslim friends, Salam Aidilfitri. Happy Holidays!

10 August 2012

The New Section 114A Evidence Act 1950 in Malaysia

Ng Kok Yong, an intern at RWY gives a shot on what he feels about the new 114A

The Evidence Act 1950 operates as conduit to allow any evidence to be tendered into court. The Act operates in an inclusionary method ie. for evidence to be tendered in into court, that evidence must fall within one of the provision in the Evidence Act.
Over and above that, the Evidence Act also provides certain presumption when dealing with evidence and Evidence Act s.114 is one of them.
Recently, Parliament enacted s.114A which reads: -
“Presumption of fact in publication”
114A. (1) A person whose name, photograph or pseudonym appears on any publication depicting himself as the owner, host, administrator, editor or sub-editor, or who in any manner facilitates to publish or re-publish the publication is presumed to have published or re-published the contents of the publication unless the contrary is proved.
(2) A person who is registered with a network service provider as a subscriber of a network service on which any publication originates from is presumed to be the person who published or re-published the publication unless the contrary is proved.
(3) Any person who has in his custody or control any computer on which any publication originates from is presumed to have published or re-published the content of the publication unless the contrary is proved.
(4) For the purpose of this section—
.                 (a)  “network service” and “network service provider” have the meaning assigned to them in section 6 of the Communications and Multimedia Act 1998 [Act 588]; and
.                 (b)  “publication” means a statement or a representation, whether in written, printed, pictorial, film, graphical, acoustic or other form displayed on the screen of a computer.”

‘Hotly-disputed’ and ‘strongly criticised’ are among the phrases used to describe the badly drafted new section 114A of the Evidence Act 2012 and how disastrous the consequences can be. In plain words, the new law raises a presumption that the owner of the websites, networks or computers is the publisher whenever a statement is made and published. Now, how is it detrimental to the society? What kind of impact does the section 114A have on you, me and everyone else within the jurisdiction of Malaysia?

Well, to answer the questions, all individuals are now prone to defamation suits, among other wrongs, when a statement or representation is posted or re-posted out of the genuine expression of concern. With the new law being enforced, everything appears on the screen of a website host could be a potential lawsuit because the onus is on the host to rebut such presumption. In essence, the fundamental rights have been encroached and infringed! Section 114A (1) concerns hosts of website and publishers of any statement or representation, subsection (2) on registered network service providers and subsection (3) on computers owners, which encompasses everyone with a computer and internet connection. To state the obvious, this section restricts our freedom; to state the worst, it may make us liable for wrong committed by others.

Among the implications of the enforcement of the section are:
(1)         Freedom of expression and freedom of speech have been crippled.
(2)         Freedom to information has been infringed. Users now see only what they are ALLOWED to see.
(3)         Presumption of culpability instead of presumption of innocence.
(4)         A great challenge to democracy.

Loose ends the Parliament forgot to tie?

(1)         Hyperlink – hyperlinks connect users from websites to websites. For instance, A, who hosts a website, hyperlinks the website to another website hosted B who makes defamatory remarks of C. Is A liable for the defamatory statement published by a website beyond his control? No to some of the jurisdictions but probably yes if this section is strictly applied!

(2)     Thefts and Hackings – it is not uncommon to have our property stolen every now and then, which includes hacking. Hypothetical scenario, if A’s laptop being unknowingly used by B to post a sensitive comment, A will be presumed to have published the comment himself even though the real culprit is B. Turn to another scenario, if B hacks into A’s network and publishes another compromising statement, A will be presumed to be liable since A is the registered network provider with unique IP address

(3)       Impersonation­ – another extreme yet probable situation would be having A being impersonated by B to publish some defamatory comments. A would simply be liable just because his picture and particulars appear on the screen. Simple trick to sabotage somebody else without getting caught!

If it is apparent to the writer to see these, it will not be difficult for others to realise how vulnerable the new law is to allow one to commit a crime at somebody else’s expense. Unless and until the authority has absolute capability to eradicate the abovementioned weaknesses, section 114A should not be enforced at all. Whether section 114A is a creation of politics or public interest, our wise readers, please decide it yourselves.

Ng Kok Yong
August 2012