Can properties held under trust be seized under AMLA?
FYI, a public prosecutor can order the seizing of properties of a person that is charged under AMLA. However, can they seize properties that are under trust? If the answer is yes, under what condition can they do so? Let’s briefly have a look at the Court of Appeal case of Tetuan Khana & Co v Saling Bin Lau Bee Chiang & Ors And Others Appeals to find out more.
Brief facts of the case
The Johor Government acquired a large piece of land in the Linggui Valley in Kota Tinggi in the 1990s. This acquisition deprived 52 orang asli families in three villages of the use of their ancestral land and traditional sources of income as they were restricted from entering the acquired area to forage for their livelihood and food.
Stemming from that, the orang aslis appointed a lawyer from Tetuan Khana & Co to bring an action (claiming compensation) against the government. The matter was fought all the way to the Court of Appeal, where the court sided with the orang aslis and gave (amongst others) the following orders:
- A sum of RM22 Million as compensation to be paid to the orang aslis;
- The sum is to put under a trust;
- Tetuan Khana, the representatives of the orang aslis and the Director-General of Jabatan Hal Ehwal Orang Asli Malaysia is to be appointed as trustees; and
- The trustees have the liberty to apply in relation to the implementation of the trust and the performance of their duties under the said trust.
The compensation was duly paid to Tetuan Khana by the Johor Government. However, the lawyer from Tetuan Khana had mismanaged the trust funds by withdrawing some of the funds to buy 27 condominiums under the lawyer’s name.
Upon the revelation, the lawyer, Tetuan Khana and the parties that were involved in the transaction were sued by the orang aslis and the orang aslis successfully obtained an injunction against them to prevent them from further dissipating the 27 condominiums and the trust funds and also to deliver the 27 condominiums to them.
They were simultaneously prosecuted under AMLA. In the AMLA suit, while they were cleared for the charge of criminal breach of trust (CBT), the properties of the parties involved were nonetheless seized under AMLA (the second suit).
Tetuan Khana and the parties involved in the condominium transaction appealed the first suit to the Court of Appeal claiming that the first suit contravenes section 54(3) of AMLA, which states that as long as the seizure of any property remains in force, no civil proceedings can be instituted/ no pending suit (such as the first suit) be maintained or continued in any court. This, as they claim, effectively renders the first suit null and void as the 27 condominiums effectively part and parcel of the lawyer’s property.
The court’s decision and rationale
The court dismissed the appeal. In coming to its decision, the court (amongst others) pointed out that:
- The properties in question, i.e. the 27 condominium units do not belong to the lawyer but belong to the trust, and the said 27 condominium units are the subject matter of the injunctions ordered by the High Court which still remain in force. As such, the 27 condominium units do not fall within the ambit of the notice of seizure issued to the lawyer.
- The appeals involved the enforcement of the trust and the allegation of mismanagement of the trust by the trustees. AMLA can only be invoked for the offence of money laundering, the measures to be taken for the prevention of money laundering and terrorism financing offences. The Act empowers the relevant authority to forfeit property involved in or derived from money laundering and terrorism financing offences, as well as terrorist property, proceeds of unlawful activity and instrumentalities of an offence and for matters incidental thereto and connected therewith.
- Since the 27 condominium units were purportedly purchased by the lawyer as a trustee to the trust, to invest on behalf of the orang aslis, they cannot fall within the scope of the notice of seizure issued. The 27 condominium units are also the subject of the injunctions which have not been lifted, set aside or varied and therefore remain enforceable. What it meant was this- as the 27 condominiums involved did not derived from the offences listed under AMLA, the condominiums CANNOT be seized.
TLDR, the answer is this: prosecutors cannot seize property that is held under the trust if the properties involved has no relation at all to the AMLA suit.