Assoc. Prof. Dr. Nuraisyah Chua Abdullah

Faculty of Law, Universiti Teknologi MARA (UiTM)

Shah Alam, Selangor, Malaysia

LEGAL CIVIL REMEDIES IN MALAYSIA:

DEVELOPMENTS AND CHALLENGES

DISPUTE RESOLUTION

The Structure of Malaysian Judiciary (Civil Jurisdiction)

Federal Court

Court of Appeal

High Court of Malaya

High Court of Sabah & Sarawak

Sessions Court Sessions Court

Magistrates Court Magistrates Court Native Court

• The Subordinate Courts (Amendment) Act 2010 (Act A1382) has been enacted and 1st March 2013 is the date of coming into operation of the Subordinate Courts (Amendment) Act 2010 [A1382].

• Under the amended Subordinate Courts Act 1948, the jurisdiction of the Subordinate Courts, in particular, the Sessions Court, has been enhanced significantly.

Changes in the civil jurisdiction of the Sessions Court

• The pertinent changes to the jurisdiction of Sessions Court, effected by Act A1382 are as follows:

a) The monetary jurisdiction of the Sessions Court has been increased

from RM250,000.00 to RM1,000,000.00 [s. 7(a)(ii) of Act A1382];

b) The Sessions Court has been conferred with jurisdiction to try all

actions and suits of a civil nature for the specific performance or

rescission of contracts or for cancellation or rectification of

instruments, within the jurisdiction of the Sessions Court [s. 7(a)(iii) of

Act A1382]; and

• Prior to 1st March 2013, the First Class Magistrate have civil jurisdiction to try all actions and suits of a civil nature where the amount in dispute or

value of the subject matter does not exceed RM 25 000 under section 90

of the Subordinate Courts Act, 1948.

• The pertinent changes to the jurisdiction of the First Class Magistrates’

Courts by virtue of Act A1382 is that the monetary jurisdiction of a First

Class Magistrate has been increased from RM25,000.00 to RM100,000.00,

effective on the 1st March 2013 [s. 11 of Act A1382].

c) A Sessions Court may, in respect of any action or suit within the

jurisdiction of the Sessions Court, in any proceedings before it - (i)

grant an injunction; and (ii) make a declaration, whether or not

any other relief, redress or remedy is or could be claimed [s. 7(b) of

Act A1382].

Changes in the civil jurisdiction of the Second Class Magistrates

Changes in the civil jurisdiction of the Second Class Magistrates

• Prior to 1st March 2013, a Second Class Magistrate shall only have jurisdiction to try original actions or suits of a civil nature where the

plaintiff seeks to recover a debt or liquidated demand on money

payable by the defendant, with or without interest, not exceeding RM

5,000.00 under section 92 of the Subordinate Courts Act, 1948. However,

the monetary jurisdiction of a Second Class Magistrate has been

increased from RM5,000.00 to RM10,000.00 [s. 13 of Act A1382], effective

on the 1st March 2013.

• Penghulu Court is also being abolished by the Act Al382.

SMALL CLAIMS PROCEDURE

• Limit: maximum: RM5,000.

• Legal representation is not allowed.

• Plaintiff initiate the proceeding by serving the claim in Form 164 (4 copies).

• Defendant: Defence in Form 165 to be filed in 4 copies within 14 days after service of the claim.

• Judgment: Absence of one party, or both parties.

• Filing fee:

I. Plaintiff – RM20 for statement of claim

II.Defendant – RM4 for statement of defence

– RM20 for counterclaim (if any).

• If the matter not settled, the Court may proceed to hear the case and give a decision thereon or may adjourn it to another date for final disposal, and the judgment to be entered after a hearing shall be in Form 173.

• The Malaysian legal system experiences a drastic change in its civil

dispute litigation with the establishment of the Tribunal for the

Consumer Claims in 1999 and Homebuyer’ Tribunal in 2003.

Civil Disputes & Tribunals

Tribunal for Consumer Claims

Statistics for service sector, 2010-2012

No Category 2010 2011 2012 Total

1 Maid agencies 228 495 463 1186

2 Treatment & beauty centres 253 441 419 1113

3 Tour agencies 267 439 241 947

4 Umrah package 183 569 404 1156

5 Workshop 189 483 419 1091

6 House renovation 141 373 332 846

7 Higher learning institutions 109 149 115 373

8 Telcos 96 0 122 218

9 Transport 95 0 109 204

10 Club membership 201 249 213 663

Grand total 1762 3198 2837 7797

No Category Total

1 Tour agencies 210

2 Time sharing 6

3 Workshop 262

4 Employment agencies 15

5 Maid agencies 303

6 House renovation 205

7 Small repair 47

8 Treatment/beauty centres 226

9 Higher learning institution 75

10 Umrah package 426

Statistics for service sector, 2013

No Category Total

1 Scratch & win/ lucky draw 606

2 Car 253

3 Handphone 553

4 Electrical appliances 304

5 Furniture 257

6 Computer 136

7 Motorcycle 64

8 Spare parts 113

9 Clothing 37

10 Camera 17

Statistics for goods sector, 2013 (cont’d)

No Category Total

11 Jewellery 16

12 Watch 24

13 Computer Scheme (EPF) 0

14 Toys 14

15 Cloth 6

16 Pets 7

17 Stationary 1

18 Other goods 964

Grand total 3372

Statistics for goods sector, 2013 (cont’d)

TRIBUNAL FOR CONSUMER CLAIMS

• Action before the Tribunal for Consumer Claims can only be initiated by

the consumer.

• Limitations:

i. Claims not exceeding RM25,000;

i. Petition must be made within three years of the claim accruing

[section 99(2)];

ii. Under the act, parties are entitled to attend and be heard [section

108(1)] but are not entitled to legal representation [section 108(2)].

• The success of the cases in the tribunal very much depends on the

following:

i. the capability of consumer and sometimes there is no equality in

legal capacity;

ii. the understanding of the president. On technical issues, presidents

do not have adequate knowledge.

• According to S 112(1), an award must be made within 60 days from the

first day the hearing before the tribunal commences.

• Comment: Speed sometimes denies justice. Experts are rarely called

during trial since tribunal is a speedy and less formal forum.

The tribunal has very wide powers.

• Enables the tribunal to direct the payment of money or to direct the

refund of the consideration paid for goods or services or to direct

payment of compensation or to vary or set aside a contract wholly or

in part.

Judgement is final. No right of appeal.

• Comment: Sometimes judgment is wrongly decided. No redress for

consumer except for review of the case in court.

Non application of precedent.

• Comment: Inconsistency of judgements between presidents and

sometimes cases are wrongly decided.

• Objective: The tribunal was established with the objective to hear and adjudicate homebuyer’s claims in in an easy, cheap and fast way.

• 5 tribunals in Msia: Zone: North (Penang), East (Terengganu), south (Johor), middle (Putrajaya), Sabah and Sarawak

• Composition of the tribunal: The Tribunal consists of a Chairman and Deputy Chairman and not less than 5 other members, all of whom are members of the judicial and legal services. They are appointed by the Ministry of Housing and Local Government.

Tribunal for Homebuyer’s Claim

• The jurisdiction of TTPR is limited to a claim that is based on a cause of

action arising from the sale and purchase agreement entered into

between the homebuyer and the licensed housing developer which is

brought by the homebuyer not later than 12 months from:

i. the date of the issuance of the certificate of completion and

compliance (CCC);

ii. the expiry date of the defects liability period as set out in the sale

and purchase agreement; or.

iii. the date of the termination of the sale and purchase agreement by

either party before the date of issuance of CCC, whichever is later.

• Fee – RM 10 for filing a claim, Max claim: RM 50K

• Documents need to be filed: 4 copies of Form 1 and copies of the

following:

• The developer may file his defence or counter-claim in Form 2 (4 copies)

with a fee of RM10 within 14 days of the date of receiving a copy of Form

1.

i. Sale and Purchase Agreement;

ii. Letter of vacant possession;

iii. Certificate of Fitness of Occupation (if any;)

iv. Letter of Notice of Claim issued by the buyer to the developer (if

available);

v. Any other documents which support your claim.

Tribunal for Homebuyer’s Claim – Form 1

Tribunal for Homebuyer’s Claim – Form 2

Tribunal for Homebuyer’s Claim – Hearing Procedures

• The Tribunal will issue a notice in Form 4 stating the date, venue and time

of the hearing on both the claimant and the developer, in not less than

14 days before the date of the hearing.

• No party shall be represented by an advocate and solicitor during a

hearing before the Tribunal. Both parties have the right to adduce

evidence, call any witness, or tender any documents, records or things

necessary in support of their respective claims.

• At the hearing, the Tribunal shall, where appropriate, assist the parties to

effect a settlement of the claim by consent (negotiation stage). Upon

completion of the hearing, the Tribunal will make an award.

• The award must be complied with within the stipulated period set by

the Tribunal’s President.

• Any person who fails to comply with an award made by the Tribunal

commits an offence and upon conviction shall be liable to a fine not

exceeding five thousand ringgit (RM5,000) or to imprisonment not

exceeding two (2) years or both. In the case of a continuing offence,

the offender shall be liable to a fine not exceeding one thousand

ringgit (RM1,000) for each day until the award is abided by.

• Hearing is open to public.

Tribunal for Homebuyer’s Claim – Statistics

• Statistics of cases in the Tribunal for Homebuyer’s Claim, 2005 –

June 2008

2005 2006 2007 2008

Registered 5624 3821 3293 1265

Solved 5545 3628 2583 447

Pending 79 193 710 818

Tribunal for Homebuyer’s Claim : Success Story

• In 2010, it was reported that the tribunal managed to settle 93% of

the 27,277 cases referred to it.

• The total amount of compensation awarded to the complainants

were about RM 400 million.

• The Tribunal hears about 15 -20 cases a day. From Jan 1, 2003 till Dec 31,

2012, there was an average of 320 cases a month or 3,800 cases a year.

• During that time, 34,122 cases were heard with an average of 98.4 per

cent of all cases settled, out of which 97.4 per cent of cases were

settled within the required time-frame of 120 days from the date they

were filed.

• A total of RM115,098,317.90 was awarded by the Tribunal over that 10-

year period since it was established on Jan 1, 2003.

Tribunal for Homebuyer’s Claim – Challenges

• To approach the Tribunal, the homebuyer must be an individual

purchaser and the claim must be within the Tribunal’s jurisdiction.

• The claim must be brought to the Tribunal not less than 12 months from

the date of issuance of the certificate of fitness for occupation (CFO)

or the expiry date of the defects liability period as set out in the SPA.

• The tribunal has no jurisdiction to hear claims regarding abandoned

projects. The Tribunal only hears cases where buyers have been given

vacant possession of their properties.

• The Tribunal itself has no power to enforce its own award.

Complaints of non-compliance with the Tribunal‘s award are made

by purchasers to the Enforcement Division of the Ministry of Housing

and Local Government.

• The Enforcement Division will then investigate every such complaint

and often discovers that in many such cases, the developer has

been wound up.

• The decision of the Tribunal is final and binding on all parties. There

is no right of appeal except only by way of Judicial Review.

• The losing party has 90 days from the date of the decision to file a

Judicial Review to the High Court where the award can be upheld,

reduced or set aside.

• Legal representation is not normally allowed except in complicated

cases where complex issues of laws are involved.

• Although the President of the Tribunal can assist the parties to come to

an amicable solution and call experts such as engineers and architects

to help out, the house buyer still has to organise his case and gather

evidence in the form of documents and records, and in some cases,

call witnesses, much like what a lawyer does in a case filed in court.

Marriage Tribunal & Majlis Sulh

(conciliation)

• In Malaysia, disputes with regard to matrimonial issues will be

referred to either Marriage Tribunal (non-Muslims) or Majlis Sulh

(Muslims).

Some data on the Marriage Tribunal

• On March 14, 2006 the Sun Daily reported that despite the he aim of

marriage tribunals is to counsel couples against divorce, but the opposite

is true. Of the 4,307 couples counselled last year, only 103 marriages (2.4%)

were saved.

• According to the then Home Minister Datuk Seri Syed Hamid Albar's

statement in the Dewan Rakyat, only a small number of marriages had

been reconciled by the tribunals. He had said that only 368 out of 12,666

cases referred to marriage tribunals between 2004 and 2006 had been

resolved.

• Bernama reported on November 28, 2013 that 263 divorce petitions were

received in 2011 by the marriage tribunal, involving 129 Chinese couples

and 125 Indian couples, and this rose in 2012 to 284 applications, involving

137 Chinese couples and 144 Indian couples. In 2013, up to October, the

state NRD had received a total of 242 applications involving 111 Chinese

couples and 129 Indian couples.

Some data on the Majlis Sulh

• Sulh cases in Selangor, May 2002-2005

Court Registered Solved Tried Postponed

High Court 902 342 497 63

Subordinate Court 4420 3249 1090 81

Total 5322 3591 1587 144

Percentage (%) 100 67 30 3

• Sulh cases in Kuala Lumpur, 2005-2008

No Year Registered

Solved Total Pending

Success Failure Absence

1.

2005

340

178

154

332

60

2. 2006 577 326 124 110 560 77

3. 2007 779 362 218 176 756 86

4. 2008

(Jan-Jun) 443 207 108 133 448 527

Some data on the Majlis Sulh

Issues surrounding Majlis Sulh

• Whether women should be appointed as the representative of parties

since the statutes do not expressly prohibit such appointment.

• The failure of Majlis Sulh to resolve disputes or affect reconciliation is

mainly contributed by the disputing parties’ lack of commitment,

continuous failure to attend the proceedings and the parties’ intolerance

to each other.

• Non-attendance of the parties (usually 3 times) to Sulh proceeding

can give rise to the action for contempt of court.

• However, Syariah courts are hesitant to take action for contempt

because court assumes non-attendance of a party signifies his/her

unwillingness or refusal to resolve the case through sulh process. If

one party did not attend sulh, the court will merely classify the sulh

process as a failure.

• Sulh process is affected before a case is heard in the Syariah court

(pre-trial procedure).

• The procedure is not available when the case is already being heard

in the court.

• Sulh agreement can be enforced as a consent judgment order. However,

the record from January to October 2003 showed that only 25 cases were

reported for failure of complying with the agreement. Factors which lead

to the small number of reports are:

i. The wife feels burdened to undergo a court process which is time

consuming and unpredictable;

ii. The cost for filing the case and attending the trial is not

proportionate with the claim made;

iii. Lack of knowledge and awareness on the procedures/law to

enforce the agreement entered through sulh.

Issues surrounding Marriage Tribunal

• The six month period to resolve matrimonial issues before the

Marriage Tribunal causes hardship to those who suffers grave

predicament and sufferings from the marriage who see working out

of conciliation is the last thing they want to do.

• Couples encounter inexperienced counsellors who dispense

certificates (so divorce petitions can be heard in court) without

making serious efforts to reconcile them.

• Some counsellors are bachelors and were critised for being

inexperienced.

• Another problem in getting experienced and better qualified

panellists is the absence of incentives for volunteers. There are many

volunteers such as retired welfare officers and professional

counsellors but some are not committed, due to the lack of financial

incentives.

• The tribunal is also criticised for being a merely an administrative set-

up for couples with irreconcilable differences about to obtain a

certificate for divorce and not a panel that tried to save marriages.

• Another problem in the law as regards non-attendance is that

irrespective of whether or not the couple attends the session, the chairman has to issue a certificate at the end of the six-month period, as it is required under the law. There is no discretion for the marriage

tribunal to withhold a certificate for wilful non-attendance of the parties.

• There is no provision for secrecy of the information given during

the reconciliation session under the law.

Small Claim Procedures: Rules of Court 2012

• Monetary limit: RM5,000;

• Legal representation: Not allowed;

• Plaintiff initiate the proceeding by serving the claim in Form 164 (4

copies);

• Defendant: Defence in Form 165 to be filed in 4 copies within 14 days

after service of the claim;

• Judgment: Absence of one party, or both parties.

Practice Direction No. 5 of 2010 – Practice Direction on Mediation

• The Chief Justice of Malaysia hereby directs that with effect from 16

August 2010, all judges of the High Court and its Deputy Registrars and

all judges of the Sessions Court and Magistrates and their Registrars

may, at the pre-trial case management stage as stipulated under

Order 34 Rule 4 of the Rules of the High Court 1980 or by order for

directions provided in Order 19 Rule 1(1) (b) of the Subordinate Courts

Rule 1980 give such directions that the parties facilitate the settlement

of the matter before the court by way of mediation.

Example of cases for mediation

• The following are examples of cases which are easy to settle by

mediation e.g.:

a) Claims for personal injuries and other damages due to road

accidents or any other tortious acts because they are basically

monetary claims;

b) Claims for defamation;

c) Matrimonial disputes;

d) Commercial disputes;

e) Contractual disputes;

f) Intellectual property cases.

*The list is not exhaustive.

Mediation in Malaysia: Success Story

• Penang High Court Justice Datuk Su Geok Yiam said a pilot project for

court ordered mediation as of 12 July 2006 has shown a success rate of

75%.

• In June 2009 mediation started for motor vehicle accident cases in trial

centres such as Kota Bahru, Kuala Lumpur and Shah Alam. These cases

are considered to be suited for mediation as they involved settled law

and more often than not the dispute in these cases mainly centres on

quantum. Six months after the introduction of mediation in these courts,

a total of 341 cases were referred to mediation and 1414 cases were

settled. The success rate is 41%.

• On August 2011, the then Chief Justice Tun Zaki Tun Azmi said that the

statistics showed that the success rate of court annexed mediation

between January-June 2011 at the trial courts was 52% and at the

Court of Appeal was 15%.

• Justice Dato’ David Wong, in 2010, highlighted that the amount of

judicial time saved as a result of mediation is 3.38 years of hearing days

or judicial time as its current success rate of 44%.

Mediation in Malaysia: Challenges

• Mediation is confidential and therefore not open to any review or appeal

paves way for duress or force being used in mediations without any

avenue for review or appeal. Furthermore, parties may be merely

complying with an order rather than attempting mediation in good faith;

• Dealing with the proposed out of range settlement. In a mediation, there

would be instances that parties are about to settle on something which is

outside the range of usual settlement.

• The “range” varies from precedents of decided cases, normal convention

or standards or a simple common sense.

• A classic example of out of range settlement is when a plaintiff in a

motor vehicle accident case is willing to settle with substantially or

unreasonably less amount of claim or to part with certain claim e.g.

pain and suffering;

• In mediation, especially in family disputes, children are not parties in

the mediation nevertheless they are the person directly affected by it.

• Lack of procedural safeguards. Whilst the flexibility of mediation in

allowing parties to come to their own agreement is a key advantage,

it also represents a key criticism.

• Its critics have argued that the relaxation of procedural safeguards

and due process protections which are otherwise available to the

disputants in the formal justice system could present the greatest

danger of abuse. It lacks effective discovery procedures to require

parties, who may be unwilling, to give the substantive disclosure

needed to reach a just result.

• The discovery of information helps to equalise power imbalances as it

gives the weaker party the chance to obtain more facts about the

disputes that might otherwise remain in the exclusive possession of the

powerful party

• Prevention of precedent. Although the private resolution or

settlement in mediation may allow for various remedial outcomes

specially tailored to the parties’ needs, it creates no precedent.

• Thus, future disputants maybe greatly disadvantaged in the absence

of a precedent which might otherwise beneficial in similarly recurring

disputes. Private settlements may also affect and stifle the

development of further case law.

• As the process of mediation is voluntary and non-binding, it may seen to

be weak.

• Judges and lawyers have been legally trained to handle litigation, not

mediation. Legally trained minds are tutored and geared towards

the direction of litigation. When a dispute arises, the parties would

engage lawyers to commence proceedings in court. Although some

pre-litigation settlements may have been achieved, the process of

litigation continues unabated.

• There is no set formula for mediation. There are as many forms of

mediation such as facilitative, evaluative, transformative and

settlement mediation.

• The mandatory nature of court annexed mediation denies the freedom

of the parties to settle their dispute. This is because parties are

compelled to attend the mediation session at a fixed time on a fixed date at a fixed place even if they are not prepared.

Mediation in Malaysia: Recommendations

• Regulations. A regulation may help to familiarise the stakeholders with

mediation. Regulation promotes confidence with the mechanism in

relation to the enforceability and conduct of the parties. It is also to

encourage culture of having genuine intention to resolve dispute

and showing respect to the person who has been appointed to help

resolve the dispute.

• The court must have a system in place to ensure the effectiveness of

court-connected mediation e.g. special registry in the court for

mediation cases, training of the registrars to evaluate cases for

mediation before they go to judges for mediation; enlisting a panel

of legally trained and qualified mediators for the parties’ selection;

and having an administrative process to monitor and supervise the

cases referred to mediators and cases which return to court if

mediation fails.

• Training should be continuously provided by the relevant

organisation and institutions to ensure the stakeholders are

knowledgeable about the nature, objectives, types, conduct and

procedures of the mediation.

• Training should be continuously provided by the relevant

organisation and institutions to ensure the stakeholders are

knowledgeable about the nature, objectives, types, conduct and

procedures of the mediation.

• Education and awareness enhancement programs would help to

remove the challenges which mediators usually encounter. It will help

judges, lawyers and the general public to appreciate mediation as a

form of dispute resolution.

THANK YOU FOR YOUR ATTENTION