Case Commentary: Lim Hui Jin v. CIMB Bank Bhd & Ors [2018] 8 CLJ 327 (Court of Appeal, Putrajaya)

  1. Introduction

    The Court of Appeal dismissed the development of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (“the AMLATFA”) where there are numbers of amendments made under the new Amendment Act, Anti-Money Laundering and Anti-Terrorism Financing (Amendment) Act 2014 (“the AMLATEPUA”) with effect from 1 September 2014.

  2. Brief Facts

    1. The police investigated an individual named Tan Hoo Eng (Appellant’s mother) for money laundering offences under Section 4(1) of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (Act 613) (“AMLATEPUA”).

    2. Subsequently the police obtained a Freezing Order under Section 44(1) of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (“the AMLATFA”) against the Appellant. The Freezing Order was obtained in order to freeze the Appellant’s CIMB bank account (Account No.: 25164) (“the Appellant’s account”). The Appellant’s account was held at CIMB Bank (the 1st defendant).

    3. The said Freezing Order was issued and in effect on 24th June 2014 by virtue of Section 44(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (“the AMLATFA”) and subsequently a Seizure Order was issued and in effect on 11th September 2014 pursuant to the same provision and Section 50(1) of AMLATFA. Both of the orders were issued as it was alleged that the monies in the Appellant’s account is a subject matter to the commission of an offence committed by Tan Hoo Eng (the Appellant’s mother) who was charged under Section 4(1) of AMLATEPUA in Ipoh Session Court.

    4. As stated in the Paragraph 3 of the Freezing Order and Section 44(5) of AMLATFA, the Order shall be valid for 90 days. Hence, it would cease to have effect on 21 September 2014 (provided that the Appellant was not charged with an offence under AMLATFA or a terrorism financing offence).

    5. On 11 September 2014, which was ten (10) days before the Freezing Order be expired on 21st September 2014, the Public Prosecutor issued a Seizure Order on the Appellant’s account under Section 50(1) of AMLATEPUA alleging those monies in the account was the subject matter of an offence under Section 4(1) of AMLATEPUA.

    6. However, as the AMLATEPUA (the new Amendment Act) came into force in 1st September 2014, Section 52A of AMLATEPUA was introduced and states that: -

      “Expiry of seizure order

      52A. A seizure order made under this Act shall cease to have effect after the expiration of twelve months from the date of the seizure order, or where there is a prior freezing order, twelve months from the date of the freezing order, if the person against whom the order was made has not been charged with an offence under this Act.”

    7. Therefore, as argued previously by the Appellant in the High Court (previously known as the Plaintiff), both of the Orders shall cease to be in effect after 12 months subjected to Section 52A of AMLATEPUA. The Freezing Order that was issued on 24th June 2014 shall be expired on 23th June 2015 and the same with the Seizure Order that was issued on 11th September 2014 shall be expired on 10th September 2015. However, it was dismissed by the High Court. Hence, the present appeal.

    8. When the present Originating Summons was filed by the Appellant on 5th May 2016 at the High Court, the Respondents continued to freeze the Appellant’s account although the freezing and seizure orders had long expired, along with the fact that the Appellant had never been charged with an offence under the AMLATEPUA. The Respondents further argued that the said Section 52A of AMLATEPUA does not apply retrospectively and therefore the Seizure Order which was issued pursuant to the Freezing Order dated 24th June 2014 was not subjected to the 12 months limitation period prescribed under Section 52A.

  3. Questions of Law before the Court of Appeal

    The following questions of law were raised for the determination: -

    1. i. Whether the court can order the release of the plaintiff’s CIMB account No: 25164 (held by the 1st defendant) which is argued to be directly linked to the subject-matter or evidence relating to the commission of an alleged offence under AMLATFA (an ongoing criminal proceeding in the Sessions Court).

    2. Whether the Freezing and Seizure orders have reached its limitation period.

    3. Whether there was an application for forfeiture by the Public Prosecutor under Section 56 of AMLATEPUA.

    4. Whether the civil court may review Freezing and Seizure orders by virtue of Section 54 of AMLATEPUA.

  4. Decisions of the Court of Appeal

    Abdul Rahman Sebli JCA dismissed the High Court decision and allowed the Appellant’s appeal with costs. Few matters have been considered by the Abdul Rahman Sebli JCA which are as follows: -

    1. Determination of lifespan of the seizure order

      Since the seizure order was effected on the Appellant’s account on 11th September 2014, which was after the coming into force of Section 52A of the AMLATEPUA on 1 September 2014, both Freezing and Seizure Orders are said to be bound by the Amendment Act. Hence, the limitation period is 12 months after the issuance of the order. Therefore, the Freezing Order shall be expired on 23rd June 2015 as it was issued on 24th June 2014 whereas the Seizure Order which shall be expired on 10th September 2014 as it was issued on 11th September 2014. Thus, it can be seen that both orders have ceased to have effect by the time the present originating summons was file by the Appellant, which was on 5th May 2016.

    2. No perpetuity under Section 50(1) of AMPLATEPUA

      Section 50(1) allows seizure of movable property in financial institution where the Public Prosecutor is satisfied on information given to him by an Investigating Officer that any movable property is the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence. However, the Court in this case stressed that Section 50(1) must not be read in isolation and must be read together with Section 52A of the Act. Clearly, once the seizure order had expired by effluxion of time, there is nothing for the Public Prosecutor to revoke. To hold otherwise would be to violate Article 13(1) of the Federal Constitution, which provides that no person shall be deprived of property save in accordance with law.

    3. Application for forfeiture by the Public Prosecutor under Section 56

      Section 56 of the AMLATEPUA speaks of forfeiture of ‘any property seized under this Act’ where there is no prosecution or conviction for an offence under s. 4(1) or a terrorism financing offence. The Court held that the Appellant’s Account fell under this class of properties. This is because there was no application for forfeiture was made by the Public Prosecutor within 12 months from the date of seizure, failing which Section 56 (3) mandates that the property must be returned to the person from whom it was seized. In this case, it is clear that there was no such application made by the Public Prosecutor in the present case.

    4. Forfeiture of property upon prosecution for an offence

      Section 55(1) of the Act allows forfeiture of property by way of a proceeding when a person was prosecuted under an offence. Here, the Judge held that such forfeiture under Section 55(1) could not be allowed as no prosecution was made against the Appellant. Further, if it was allowed, it would only allow the Public Prosecutor to ignore and circumvent the limitation period which has been specifically prescribed by both Section 52A and Section 56(3) of AMLATEPUA. It is clear that under Section 52A, the seized property shall be released upon the expiration of the Freezing or Seizure Order. In addition, it is clear that under Section 56(3), when there is no application is made under Section 56(1) for forfeiture of property where there is no prosecution, at the expiration of twelve months from the date of seizure, the property shall be released to the person from whom it was seized.

    5. Review by the Court in a civil proceeding

      Section 54 provides that dealing with property after seizure to be void, so long as such seizure remains in force. One of the grounds raised by the respondent was mentioning that pursuant to Section 54(3) of the Act, the Freezing and Seizure Orders could not be reviewed by the Court in a civil proceeding as Section 54(3) states that:

      “(3) For so long as a seizure of any property under this Act remains in force, no action, suit or other proceedings of a civil nature shall be instituted … be maintained or continued in any court or before any other authority in respect of the property which has been so seized … except with the prior consent in writing of the Public Prosecutor.”

      The Court held that this provision did not apply to the current case as the condition in the operative words “For so long as a seizure of any property under this Act remains in force” was not satisfied as the Seizure order already has expired at the time the Appellant commenced a proceeding in the High Court to release his bank account.

  5. Conclusion

    1. Since there is a new Amendment Act amending and/or adding few provisions in the old Act, any application to freeze or seize must refer to Section 52A of the AMLATEPUA where the expiration period is 12 months after the order comes into force.

    2. Although seizure of property can be allowed by the Court upon being satisfied under Section 50(1) of AMLATEPUA, the Public Prosecutor must be aware of the circumstances of the case whether to make an application to forfeit or not based on the time limitation period of the Freezing or Seizure order issued.

    3. It is important to determine and take note on the lifespan of any Freezing or Seizure order issued.

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