The Ayer Molek Case | Part Three

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The Ayer Molek Case | Part Three

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On 4 September 1995, the Bar Council issued a further statement:

The Bar Council notes the comments attributed to Chief Justice Tan Sri Eusoff Chin in today’s newspapers. We would like an opportunity of putting the record straight.

First, despite numerous efforts, the office bearers of the Bar Council have not been able to meet the Chief Justice. In fact, since the present office bearers took office on 18th March 1995, they have only seen the Chief Justice once, that is on 31st March 1995, when the new office bearers made the traditional courtesy call to the Chief Justice. Despite numerous communications by writing and by telephone, we have not been able to see him on matters of mutual interest affecting the administration of justice. Indeed the Bar Council has been attempting to see the Chief Justice to present to him personally and discuss a Memorandum on Judicial Courtesy which it had finally to send by way of a letter dated 18 July 1995 to him after having failed repeatedly to obtain an appointment.

Secondly, we cannot, with respect, agree with his statement that there was any understanding with the Bar Council that it would not make press statements even if it affects the administration of justice. The Bar Council would not gag itself on matters affecting justice. The Ayer Molek case raises very important issues which concern all Malaysians; the Bar Council will be failing in its duty if we do not comment on these issues. We also cannot agree with the Chief Justice’s observation that because the Bar Council has not filed an application in Court, it cannot comment on the matter. The Bar Council in such matters does not concern itself with the merits of the dispute between the litigating parties. It is the right of the immediate parties to take any steps they may wish to take on the legal status of the Federal Court judgment in the light of Article 122 (2) of the Federal Constitution.

Thirdly, as to the matter being allegedly subjudice we say with respect that the Bar Council and persons concerned with the administration of justice are entitled to comment on matters already decided finally by the Courts except as to the merits of a case which is pending. This would include the right to comment on the composition of the Federal Court panel which decided the Ayer Molek case whether the matter is taken up further by the parties or not.

Finally, the Bar Council reiterates that its comments on the administration of justice should not be construed as undermining or attacking the Judiciary. The Bar values the Judiciary too much for that. It has always been recognised as an important feature of a free democracy that the Judiciary as a valued public institution should be open to constructive criticism and improvement.

In Fates of Political Liberalism in the British Post-Colony: The Politics of the Legal Complex by Terence C. Halliday, Lucien Karpik and Malcolm M. Feeley (Cambridge University Press, 2012), they wrote:

Entitled to comment they may well have been; however, it seems probable that fear of becoming entangled in extraordinary expensive defamation litigation kept many civil society critics from speaking out about corruption in the courts during this period, particularly as the high-profile defamation lawyer V.K. Lingam was counsel for MBf and Vincent Tan. The same fear of defamation – which was disproportionately directed to silence independent journalists and lawyers – probably also encouraged the Bar to phrase its criticisms circuitously, so that while condemnation of corruption and defence of the legal profession’s fight to combat it were strongly worded at the 1995 AGM, the allegations of wrongdoing were imprecise and hardly to galvanize the media or the public. (page 276)

On 10 October 1995, the Bar Council issued a terse statement:

The Office Bearers this morning met the Chief Justice of the Federal Court, Tan Sri Eusoff Chin. We had a frank and candid discussion on numerous matters relating to the administration of justice, including the Ayer Molek case. We also made representations to the Chief Justice on these matters, and he has informed us that he needs time to consider them. He hopes to revert to us on these matters as soon as possible.

The Chief Justice also agreed to have regular meetings with the Office Bearers to discuss matters of mutual interest affecting our judicial and legal systems.

The case yet again brought judicial conduct into public scrutiny, and the unusually wide media coverage damaged the reputation of the judiciary and litigants alike, wrote E. Ann Black and Gary F. Bell in Law and Legal Institutions of Asia: Traditions, Adaptations and Innovations.

12 years later in 2007, Hamid Sultan Abu Backer JC in KMA Marketing Sendiran Berhad v MBF Leasing Sendirian Berhad & 2 Ors [2008] 3 CLJ 66, HC described the situation as, ‘Such state of affairs has created much controversies and unfair prejudice, to litigants and thereby often embarrassed decision making process of trial court.’ On 24 December 2016, Dato’ Mohd Hishamudin said of NH Chan upon his death, ‘He was a good and courageous judge. Of all his old judgments at the Court of Appeal, I like most above others, will always remember when he quoted ‘something is rotten in the state of Denmark’ in the Ayer Molek case. … He was a judge who spoke out about injustice.’

The Bar Council had also lodged a disciplinary complaint against VK Lingam with the Advocate & Solicitors’ Disciplinary Board based on the Ayer Molek Court of Appeal decision. On 21 June 1996, the Disciplinary Board decided there was no need to convene an Investigating Tribunal against VK Lingam. The Bar Council appealed that decision to the High Court (KL High Court Civil Appeal No. 17 – 73 – 96). The panel comprising of Arifin Jaka, Selventhiranathan and Hashim Yusoff JJ (who wrote the judgment) dismissed the appeal on 2 March 1998 on the grounds that the Federal Court overruled the Court of Appeal decision and expunged the offending provisions so there was no basis to the complaint. The Bar Council’s appeal to the Federal Court was dismissed with costs.

VK Lingam applied to tax the costs awarded at the Federal Court. He claimed costs of RM 1 million. The Deputy Registrar awarded costs of RM 600,000 and maintained that on review. The Bar Council then filed a review to the Judge in Chambers. On 3 July 2000 Chong Siew Fai CJ (Sabah and Sarawak) heard the review and reduced the costs to RM 120,000. His Lordship criticized the Deputy Registrar’s decision:

I am inclined to accept the complaint of the appellant that the learned deputy registrar had failed to address her mind to any principles or give any reason in arriving at the sum of RM600,000 as getting-up fee and hence had failed to exercise properly the discretion conferred upon her. Although the arguments of counsel for both sides were neatly laid out in her judgment, nowhere therein was it stated that the factors put forth had been accepted or rejected. In the circumstance, I am constrained to reexamine the facts of this case, being of the view that the absence of such reasoning and the award of the high sum place this case within the category of exceptional cases meriting a review of the decision of the learned deputy registrar. [Emphasis mine]

Despite that, Chong Siew Fai did no better than the Deputy Registrar. He too failed to properly explain how he arrived at the amount of RM 120,000 given his two-paragraph ratio decidendi, if it can be called that: 

Taking into account all the factors, and having regard to the cases cited above, I am of the opinion that this is a case justifying interference. The getting-up fee of RM600,000 is exceedingly high and out of proportion to the magnitude and complexity of the case. To allow such a figure to stand would cause undesirable and unhealthy precedent for future cases.

In contrast to the contention of the appellant that this was just a case involving simple issues with no difficult points of law requiring special skills involved, I consider it a matter of considerable importance in that the livelihood and professional reputation of the respondent was in jeopardy. The respondent was therefore entitled to pursue his case to the full and to leave no stones unturned, even to the extent of appointing Queen’s Counsel, consulting expert or making researches overseas, to protect or restore his reputation and image in the eyes of his peers and the public even though the matter was at the inquiry-committee stage. On the same reckoning, I could not be persuaded to treat the question of costs awarded as if it were only ordinary costs given in a summary judgment application.

‘Relations hit rock bottom after what is famously known as the Ayer Molek case in 1995,’ Brendan Pereira wrote in The Straits Times, Singapore. He was referring to the relationship between the Bench and the Bar. Tommy Thomas describes how bad the relationship was then:

The Bar in the mid-80’s and the 90’s was “persona non grata” to Dr Mahathir. The Malaysian Bar’s resolution not to have any social relationship with Hamid Omar also meant that our relationship with the Bench during his Lord Presidency was hostile. Eusoff Chin, as Chief Justice, was immediately blemished by the Ayer Molek affair in 1995, and our Press Statements resulted in a further chilling of Bench/Bar relationship. Defamation and contempt of court charges (and more importantly, their threat) were rife against lawyers. Only with the appointment of Dzaiddin as Chief Justice was the open hostility against the Bar not encouraged by the higher Judiciary. [Emphasis mine]

Roger Mitton from Asiaweek claimed Mahathir intervened to calm things down between the Bar and Eusoff Chin. Mahathir’s claims should always be taken with a certain amount of sodium chloride.

Dato’ V. Kanagalingam v David Samuels, Joff Wild, Robert Menzies Walker & Euromoney Publications PLC (KL Civil Suit No. S3(S7)-22-89-1996)

On 1 September 2006, Dato’ Mohd Hishamudin bin Mohd Yunus J decided the case of Dato’ V. Kanagalingam v David Samuels, Joff Wild, Robert Menzies Walker & Euromoney Publications PLC (KL Civil Suit No. S3(S7)-22-89-1996). VK Lingam sued them for libel and damages of RM 100 million including aggravated and exemplary damages over a feature article titled ‘Malaysia justice on trial’ in the 11 November 1995 issue of the International Commercial Litigation magazine. Dato’ Mohd Hishamudin J dismissed the claim for three reasons.

Firstly, VK Lingam’s statement of claim was defective. He simply reproduced the article without setting out the offending portions and explaining them. Secondly, he disagreed with the imputation given to it by VK Lingam. Thirdly, VK Lingam could not take advantage of his own wrong.

His Lordship ruled that the Court of Appeal decision of Ayer Molek prevailed because the Federal Court was unconstitutional and therefore the decision invalid. Since the Court of Appeal decision prevailed, VK Lingam’s claim was dismissed.

As it stood, the Court of Appeal decision of Ayer Molek was still good authority. ‘Justice Hishamudin ruled that the judgment of the Court of Appeal by Chan, Siti Norma and Vohrah in the Ayer Molek case is still wholly intact and is still a valid and binding judgment and I am entitled, indeed I am duty-bound, to take cognisance of the judgment in deciding on Lingam’s claim in this action,’ KC Vohrah wrote. It was followed in the High Court decision of MRA International Sdn Bhd v SPC Diatech, LLC [2018] 1 LNS 136 by Faizah Jamaludin JC when she discussed the need for urgency in an ex-parte injunction application.

However, notwithstanding Justice Mohd Hishamudin’s decision, subsequent courts at all levels continued to cite The Ayer Molek Federal Court decision as authority for various propositions.

In the Federal Court decision of Metramac Corporation Sdn Bhd v Fawziah Holdings Sdn Bhd; Tan Sri Halim Saad & Che Abdul Daim Hj Zainnuddin (Interveners) [2007] 4 CLJ 725, FC, Richard Malanjum CJ (Sabah and Sarawak) cited it when reminding judges about unwarranted and unjustified criticisms against a court of law, litigants and their solicitors; when the Court of Appeal in Mariya Stephen @ Fredolin Mills v Lee Guat Toh [2013] 1 LNS 792, CA (Ramly Ali, Mohtarudin Baki JJCA and Hamid Sultan Abu Backer J) in deciding that an appeal cannot be based solely on adjournment per se; Hanipah Farikullah J in Siti Salmiah Abdul Aziz v Maybank Islamic Berhad [2013] 1 LNS 1070, HC when deciding deciding that an appeal against a registrar’s decision to adjourn a hearing is not appealable; Stephen Chung Hian Guan J in Sarjit Singh @ Ramday & Ors v Lembaga Pembangunan Perumahan dan Bandar [2015] 1 LNS 584, HC when citing authority that an ex-parte injunction application should be refused if there is no urgency to it; Lis-Tec Sdn Bhd (In Liquidation) & Ors v Zoomax Engineering Sdn Bhd & Other Case [2017] 1 LNS 179 when citing an authority for there being a breach of natural justice when the other party has not been heard.

In Dato’ Seri Anwar Ibrahim v PP [2014] 3 CLJ 545, FC, Anwar Ibrahim applied to review the Federal Court decision for Sodomy II to expunge the remarks by Abdul Hamid Omar FCJ who despite acquitting Dato’ Seri Anwar Ibrahim of the offence under section 377B of the Penal Code because of insufficient evidence still felt it necessary to remark injudiciously that ‘even though reading the appeal record, we find evidence to confirm that the appellants were involved in homosexual activities…’

A judge should not make such a disparaging remark unless it was proven beyond a reasonable doubt. Until then, a judge should refrain from passing such remarks because it prejudices an accused. In support of his application, among the cases cited was the Ayer Molek Federal Court decision. The Federal Court (comprising of Zulkefli Makinudin CJ (Malaya), Zaleha Zahari, Jeffrey Tan, Abu Samah Nordin and Ramly Ali FFCJ) dismissed Anwar Ibrahim’s application. Zulkefli Makinudin decided that the Ayer Molek Federal Court could be distinguished on the facts but made no comment about its validity.

Given the approach of the courts towards the Ayer Molek Federal Court decision – discussed and cited at all levels for various propositions of law – what is its status as precedent?

As it stands, a High Court has ruled the decision unconstitutional and invalid. There was no appeal against Hishamudin Yunus’ decision, which means it is binding and effective. But it begs the further question: Does the Ayer Molek Federal Court have to be specifically challenged in order to be invalid? No, it does not. Since the decision was found to be unconstitutional, it does not have the force of law, and the courts are under no obligation to follow it. It has no value as a precedent.

It is therefore curious though why later courts continued to follow an illegally decided Federal Court decision.

On 28 February 2015, Lim Kit Siang wrote an article asking Tun Arifin Zakaria, then Chief Justice, to explain whether Dato’ Mohd Hishamudin being bypassed twice ‘and denied elevation to the Federal Court, the first time in September 2013 and the second time in the latest batch of judicial elevations this year – [was] a case of former Chief Justice Tun Eusoffe Chin [exacting] his final vengeance.’

Lim Kit Siang raised that after coming across a report about KC Vohrah’s article, which perhaps was influenced by the judiciary continuing to follow the invalid Ayer Molek Federal Court decision.

That query was never responded to.

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