[UPDATED] Are You Rich Enough for the Federal Court?

[UPDATED with Bar Council memorandum on the proposed amendments, viewable here, and Nazri’s statement on the same. Last updated 9 July 2010.]

A proposed bill to to drastically extend the monetary jurisdiction of the Subordinate Courts has far-reaching consequences but who does it benefit? Cui Bono?

That's one perplexed looking crowd

Even the crowd think it odd

Extending The Subordinate Courts Civil Jurisdiction

There is currently a proposal to increase the jurisdiction of the Subordinate Courts for civil cases. The proposal is in the shape of a Bill of Parliament. It has not yet been passed by Parliament to become law. To understand the implications of the proposal, it is necessary to view it in the context of the present courts structure in Malaysia.

The Present Courts Structure

There are 4 tiers in the hierarchy of the courts. At the top is the Federal Court. Below that is the Court of Appeal, then the High Court and thereafter the Subordinate Courts.

The Subordinate Courts consist of the Magistrates’ Courts and the Sessions Courts. Civil cases can start in either one of them, or in the High Court. Generally, cases involving values of up to RM25,000.00 should be initiated in the Magistrates’ Courts, RM25,000.01 to RM250,000.00 in the Sessions Courts, and those above RM250,000.00 in the High Court.

If a party is unhappy with a decision of the Subordinate Courts, he can appeal to the High Court. If the decision of the High Court is unsatisfactory, he can appeal further to the Court of Appeal but he has to first obtain leave (i.e. permission) to do so. The Court of Appeal is the final appeals court for cases originating from the Subordinate Courts. There is no avenue for a further appeal to the Federal Court.

Where a case originates from the High Court, a party can appeal to the Court of Appeal and thereafter, with leave, to the Federal Court. Unlike cases starting from the Subordinate Courts, High Court cases can go on appeal up to the Federal Court.

(There are exceptions to the above – if you really want to know, please consult your friendly neighbourhood lawyer.)

The Brilliant Proposal

Generally, the Bill seeks to increase the monetary jurisdiction of the Subordinate Courts. The Magistrates’ Courts and Sessions Courts will be able to handle cases with values up to RM100,000.00, and RM1,000,000.00 respectively. Those are the mechanics, or the means to an end. The end itself is not stated in the Bill. The Explanatory Statement in the Bill does not tell us what is the purpose of the amendment; it just describes the amendments themselves in different words.

Upon searching the Malaysian Bar website, I found an article of the News Straits Times dated 12 June 2010 entitled “Don’t abandon cases, CJ warns promoted judges”. In the middle of this article, the CJ was reported to have said that the extension of the jurisdiction of the Sessions Court and Magistrates’ Court would allow cases to be resolved faster. He also said that the proposed amendments would see the creation of more senior posts and in turn encourage the officers to perform better to earn promotions.

With respect, I find it difficult to understand how the proposed amendments will allow cases to be resolved faster. Due to the amendments, the Subordinate Courts will receive a lot more cases, i.e. those which would have been filed in the High Court under the present regime. The Subordinate Courts are already flooded with cases. When you give them more cases, you should increase their personnel. That is only natural. But will that result in the cases being disposed of quicker than presently? It doesn’t follow.

Let’s take the Sessions Court as an example – the present monetary range of Sessions Court jurisdiction is from RM25,000.01 to RM250,000.00, that is a range value of RM225,000.00. Under the proposed amendments, the range will become from RM100,000.01 to RM1,000,000.00, i.e. a range value of RM900,000.00. That is a 400% increase over the present range value!

Other things being equal, judicial manpower will have to be increased by 400% just to be on par with the present rate of disposal. To exceed the present rate – which is the aim of the amendments – more than 400% will have to be hired.

So, where are we going to find so many people to join the judiciary? Malaysia is experiencing an unprecedented period of brain drain. The country is hemorrhaging talent. Will there be a proper filter in place so that only quality candidates are appointed, or will that be jettisoned for the sake of expediency to fill the new positions?

Pushing more cases to the Sessions Court may not reduce the caseload of the High Court or the Court of Appeal. Decisions of the Sessions Court can be appealed against to the High Court and thereafter to the Court of Appeal.

Cui Bono?

But there is one certainty that will result from the amendments – the Federal Court will have less work. Civil cases which originate from the Subordinate Courts will be excluded from the Federal Court by virtue of s 96(a), Courts of Judicature Act 1964. That section reads as follows:

96. Conditions of appeal.

Subject to any rules regulating …, an appeal shall lie from the Court of Appeal to the Federal Court with the leave of the Federal Court –

(a) from any judgment or order of the Court of Appeal in respect of any civil cause or matter decided by the High Court in the exercise of its original jurisdiction involving a question of general principle decided for the first time or a question of importance upon which further argument and a decision of the Federal Court would be to public advantage;(emphasis mine) or

(b) from any decision as to …”

The highlighted phrase means that the case must have started in the High Court. Cases that started in the Subordinate Courts are excluded.

Presently, cases with a value of RM250,000.01 to RM1,000,000.00 are filed in the High Court and therefore have a chance of going to the Federal Court. With the amendments, those cases will have to start in the Sessions Court and will be excluded from the Federal Court.

Are you rich enough for the Federal Court?

The amendments can also be analysed from a class perspective. First, a working assumption – high value disputes usually involve rich persons since they are more likely to enter into high value transactions that give rise to such disputes.

As a result of the amendments, only disputes exceeding RM1,000,000.00 will have a chance of entering the doors of the Federal Court. This is because such disputes will emanate from the High Court in its original jurisdiction, thereby fulfilling one of the opening conditions of s 96(a). Consequently, the wisdom of the Federal Court will be reserved only for millionaire litigants. The class divide between the rich and poor will be further accentuated.

This can be contrasted with the regime in the UK. The conditions for leave to appeal to the UK Supreme Court (formerly House of Lords) do not include a monetary threshold. In general, leave to appeal is granted for cases which involve legal issues of public importance.

There is a small consolation for the majority of the population who are not millionaires – they will be spared the extremely distressing experience of obtaining leave to appeal to the Federal Court only to have a subsequent Federal Court panel decline to answer the questions for which leave was granted. (This is a very interesting topic which will have to be reserved for another day.)

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Posted on 6 July 2010. You can follow any responses to this entry through the RSS 2.0.

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