Bankruptcy (Part 2)

Exactly one year ago, on our last treatment of the subject, we discussed the processes one undergoes when becoming a banktrupt. In this article, we will examine the scope of the Recieving Order and the Ajudication Order (together known as a Bankruptcy Order) and the functions of the Director General of Insolvency (formerly known as the Official Assignee). We shall also take a look at how and by what process an undischarged bankrupt may get his bankruptcy annulled or discharged.

(More to come)

Advertisements

Members vs Directors of company: who wins?

The directors are bestowed with powers to act in the best interest of the company. Directors are given such powers in the article of the association of their company. Often they collide with the direction of the members, shareholders and creditors as to whether or not the directors are acting for the best interest of the company or vice versa. Quite often the members and the directors will have different views in determining what is best for the company. Since then, the law have been developed in order to distinguish the powers between the directors and the members. At the early historical development of company law where division of powers between the members and the directors may concern, director seen as nothing but agent. The General meeting and the board of directors are integral part of the company.

Basically we will have to look into the article of association to see the powers of the members and the directors, but in default situation, we have to refer to article 73 Table A of the Companies Act if only the company follows Table A.

Director acts in accordance with the resolution passed by Board of Director’s meeting. Directors are empowered to act on behalf of the company since the company is only an artificial person. The shareholders who have invested their money in the company are given voting power on certain matters reserves to them under the company’s articles of association, the Companies Act and the general principles of law to determine the company’s course of conduct. Meanwhile Board of Director involve in the management of company’s affairs. However conflicts always occur between Board of Director and the shareholders in deciding what the company capable of. The issue here is whose direction will prevail? In resolving this issue, company law have divided the authority of these two entities of a company by referring to the provision in Companies Act 1965 and the articles of association. Management powers has expressly been given to the Director as determined by the articles and memorandum of association , with specific statutory provisions requiring certain conduct of director to be subjected to shareholder’s approval. Management power of Board of Director is bestowed under Article 73 of Table A, Fourth Schedule, Companies Act 1965 which provides that:

The business of the company shall be managed by the directors who may pay all expenses incurred in promoting and registering the company, and may exercise all such powers of the company as are not, by the Act or by these regulations, required to be exercised by the company in general meeting, subject, nevertheless, to any of these regulations, to the provisions of the Act, and to such regulations, being not inconsistent with aforesaid regulations or provisions, as may be prescribed by the company in general meeting; but no regulations made by the company in general meeting shall invalidate any prior act of the directors which would have been valid if that regulation has not been made. Read more of this post

Criminal sentencing principles (Part 1)

The jurisdiction and authority of a criminal court judge to pass sentence in Malaysia can be found within various statutes, not least Article 121 of the Federal Constitution, as well as section 87 of the Subordinate Courts Act 1948 in respect of First Class Magistrates’ Courts, section 64 of the same Act in respect of Sessions Courts, and section 22(2) of the Courts of Judicature Act 1964 in respect of the High Court. According to section 173(f) and 173(m) of the Criminal Procedure Code (section 180 when the Court is a High Court), upon finding the accused guilty, it shall sentence according to law.

It was said by Hashim Yeop Sani J in the case of PP v Loo Choon Fatt [1976] 2 MLJ 256 that while courts generally exercise a discretion when they pass sentence, these ought to be within well established judicial principles and this article will attempt to identify what those are. Split into four parts, the first will discuss the factors to be considered in assessing sentence, the second in fixing sentences, the third in passing such sentences and lastly, the fourth part will identify the kinds of sentences that are in force within Malaysia, and the considerations to be had when the law proscribes for them to be applied.

The court when assessing sentence takes into account the nature of the offence, the circumstances of the commission, degree of deliberation, public interest, the plea entered, the age, the background and other similar factors. But there must be some proportion between the offence and the penalty. It must be proportion to the guilt of the offender and the nature and gravity of the offence. Each sentence must be an individual one, personal to the offender, assessed with regard to his moral and financial circumstances and the nature of the offence even when public interest demands a deterrent sentence to be passed, each case must be judged according to its own individual merits. These considerations may be categorized into three, namely public interest, circumstances in which the offence was committed and the background of the offender.

1. Public interest

Public interest is not necessarily the prime consideration in assessing sentence but it is an important one. Another thing to remember is that a major element of public interest is that it is not only justice for the accused but also justice for the society. Society through the courts must show its abhorrence to the occurrence to a particular type of crime and the only way the courts can show this is by the sentence they pass, as held in the case of R v Sargeant [1974] 60 Cr App R 74 by Lawton LJ.

Although it was said in Kenneth John Ball [1951] 35 Cri App Reports 164 that the first and foremost consideration is public interest, it was however added in New Tuck Shen [1982] 1 MLJ 27 that public interest varies necessarily according to time, place and circumstances What is public interest in one place may differ in another place and when passing sentence in public interest, the court bears in mind the theories of sentencing, the principles of which are namely retribution, deterrence, prevention and reformation.

Retribution as an object in sentencing is now said to play no part and the courts have since progressed from an ‘eye for an eye’ type of justice or to exact from victims of aggression their pound of flesh. However there is another aspect of retribution emphasized by the courts and it is to show abhorrence of particular types of crimes and criminal conduct in the length of the sentence passed. Abdullah Mohd Am [1988] 2 MLJ 368

A deterrent sentence means a sentence higher than what would normally be passed not necessarily because of the facts of the case but in order that others should be dissuaded from commission of offences of a similar kind. This necessarily involves some unfairness to the accused, since in receiving such a sentence, he is being punished more than what he would have been, having been assessed on the facts alone. This may not necessarily be incorrect because past sentences may have been too low and the time may have come for imposing those type of sentences. Yau Kau Kui [1989] 2 MLJ 139. General deterrent sentences however are of little value where offences are unpremeditated, committed on the spur of the moment.

The principle of prevention is effected by taking away from the offender the power of offending. This element is reflected in sentences such as life imprisonment and minimum sentences and orders of police supervision, the last of which serves to inhibit the offender from offending.

Reformation as a principle is generally held in favor in public interest in that it serves public interest by helping the offender turn to honest living.Teo Siew Peng [1985] 2 MLJ 25

2. Circumstances in which the offence is committed

It is universally recognized that in fixing sentence, the court would consider the nature and circumstances. Mohd Jalani [1997] 5 MLJ 551. This would encompass within its ambit its manner of commission, the type and nature of offence and rampancy of the offence.

Circumstances surrounding the manner of offence is a principle determinant and is best understood when the facts of the particular cases are known such as in the cases of Safiah Abdullah [1983] 1 MLJ 324, Joginder Singh [1984] 2 MLJ 133 and Imran Nasir [1987] 1 MLJ 166. The facts of these case were particularly repulsing and justifies the court in adopting a deterrent sentence. In Safiah Abdullah, two young offenders strangled to death a man who they had already mortally wounded. In Joginder Singh, the accused had framed the owners of two rival restaurants for possession of drugs while in Imran Nasir, the accused was a policeman who raped a young girl in a police station. Sometimes the circumstances of the case can operate as a mitigating factor. In the case of Seah Ah Kew [1974] 1 MLJ 125  based on the facts where the victim of a kidnap was not ill treated, the court did not impose a death penalty for the offence under the Kidnapping Act. Circumstances of the case include whether the offence was premeditated as in Vanaga Mootho [2003] 1 CLJ 78  and whether the accused was intoxicated as in Raja Izzaudin Shah [1979] 1 MLJ 270.

There are certain offences that the courts view seriously. Among offences that normally attract custodial sentence, even for a first offender and despite a plea of guilty would be offences of house breaking because of the traumatic effect on the occupiers. Hassan Nordin [2002] 3 CLJ 495 Other offences would include breach of trust by people holding relatively high positions in society such as in Tan Koon Suan [1987] 1 MLJ 18 and possession of firearms and ammunition because of what was said in Chong Kwong Huah [1981] 1 MLJ 316 that a man who carries a gun has a capacity to use it and it is too easy to make a transition from possession to use with disastrous results.

The court is entitled to take judicial notice of what is notorious and prevalent. Mustapha Abdullah [1997] 2 MLJ 45. For example, this could include taking notice that the area in which the offence was committed in is notorious for that particular offence.

3. Background of the offender

In sentencing the court requires knowledge of background of the accused to strike a balance, so to speak, between the interest of the public and interest of the accused Mohd Fuad [2001] 5 MLJ 549.

There are a number of factors usually advanced to support a plea for leniency. However the court must balance these matters with other factors which may require consideration for severity. The position is best explained in Loh Oi Lin [1949] MLJ 120 that there are factors such as prevalence, difficulty of detection and injury to public revenue which operate in the direction of severity and others such as leniency to first offenders which operate in the other direction and where as frequently happens a number of these factors applied in one case. The court must balance them as best as it can. Among the factors more commonly advanced are age, antecedence, family hardship, conduct subsequent to the offence, impact of conviction, health, and delay in disposal of cases.

Age, particularly youth, is an effective mitigating factor and this is recognised in section 96(2) of the Child Act 2001 that a child aged 14 or above shall not be imprisoned if they can be suitably dealt with in any other way. However, where circumstances so warrant, the court would disregard the age of the offender particularly where the nature of the crime requires the dare, the dash and the defiance of youth in its commission Teh Ah Cheng [1976] 2 MLJ 186. Old age on the other hand is not a mitigating factor because if old age is accepted as an ingredient to light sentence, the court will give the wrong description to the public that old people are given special treatment if found guilty and by right, old age should make one more mature in taking power and experience Yahya Salaman [2006] 2 MLJ 475.

The fact the accused is a first offender is a consideration for leniency and provision is recognized in sec 173(a) and 294 that the court may proceed to buy over an offender because of his antecedence or that he is a first offender Winston Raja [1999] 1 CLJ 315. However the fact that the accused has a clean record may not necessarily operate as a factor in mitigation where there are no mitigation factors in the circumstances of the offence as in the cases of Garner [1973] 1 MLJ 106 and Leo Say [1985] 2 CLJ 155.

The view of the courts in relation to family hardship is that the accused is pleading hardship from the consequences of his own conduct and he should not expect to excite or harness any sympathy by taking the stance of a youth to kill his parents and then pleases in mitigation he is an orphan. Teh Ah Cheng [1976] 2 MLJ 186. However family difficulties have been recognized and given consideration in Mohd Hashim [1961] MLJ 11. The position of family hardship may be encapsulated in what was said in Amir Hamzah [2003] 3 AMR 626. The effect of the conviction on the accused’s family does not automatically become a mitigating factor. The accused cannot be allowed to commit offences only to hide behind the possible repercussions of a lengthy custodial sentence on his family to lighten the sentence imposed. The needs of the accused are far outweighed by issues of public interest.

A valid factor in mitigation is whether the accused regrets what he has done. There are many ways to show regret such as by cooperating in the investigations, pleading guilty and making amends with the victim of the crime such as paying of compensation. Kasavan Seenderan [1999] 1 CLJ 347. Restitution of property would also attract a lenient sentence Loo Cheng Hock [1988] 1 MLJ 316.

A person conviction suffers not only from loss of employment. He carries the stigma of being a convicted person and in assessing sentence, the court considers these factors a substantial part of the punishment. Vijaya Raj [1981] 1 MLJ 43. However these considerations was disregarded by the court in Datuk Haji Harun [1978] 1 MLJ 240 because of the impact on members of the bank who were poor people from rural areas and who expected their leaders not to touch their money entrusted to his care.

Health is another valid consideration and it was considered in the cases of Tay Chuan Beng [1989] 1 MLJ 403 and Dato Nala Karuppan [1999] 2 CLJ 59 but it was not considered in Liew Kim Yong [1989] 3 MLJ 323 who appealed not to be imposed whipping as part of the punishment for an offence of rape on the grounds that he was allergic to painkilling drugs consequential to the whipping.

The next part in will consider how sentences are fixed so stay tuned.