Sepakat Efektif Sdn Bhd v. Menteri Dalam Negeri & Anor and Another Appeal

Bread & Kaya: 2019 Malaysian Cyber Law Cases

– Launch of Lexscout.com for public to search unreported Court judgments & lawsuits
– Emergence of new businesses in digital economy sees new rules, regulations, Court cases
– 2014 fatwa directing MCMC to block certain sites, deemed not contravening law
– Movement Control Order to generate more cyber & IT related disputes in the Court

There had been a steady increase of cyber-defamation cases filed in our Courts in 2019. The number of cyber-related tort cases filed in the Kuala Lumpur High Court in 2019 increased to 70 over from over 60 cases in 2018.

The emergence of new types of business in our digital economy saw the grow of new types of rules and regulations, and Court cases.

We saw the first digital currency Court case in our Court which led to the Court recognising that digital currency is a form of an intangible asset.

Peer-to-peer (P2P) lending brought a new way of funding to businesses but like many other credit businesses, they had to resort to Court proceedings to recover their debts.

The Court also had to deal with an e-hailing company’s liability in a road accident involving its e-hailing vehicle. The Department of Industrial Relation had to deal with whether a Grab car driver is an employee and may file a claim with the Department of Industrial Relation contrary to Grab’s position that e-hailing drivers are independent contractors.

Burgielaw and I had also jointly developed Lexscout, a portal for the public to search unreported Court judgments and lawsuits. The judgement search allows users to search more than 14,000 legal case judgments of the Malaysia Subordinate Courts up to the Federal Court. Many of these judgements are not reported by local law journals. The lawsuit search function is first of its kind in Malaysia. Users can now search if a person or company has been involved in a lawsuit in Malaysia.

WhatsApp

Malaysia’s most popular instant messaging application has got some people in trouble with the law.

In Pegawai Pengurus Pilihanraya Dewan Undangan Negeri Bagi Pilihan Raya Dun N.27 Amino Agos Bin Suyub v Dr. Streram a/l Sinnasamy & 2 Lagi [2019] 1 LNS 589, the appellant, an election official of the State Legislative Assembly for By-Election of District of Rembau, Negeri Sembilan, was found guilty of contempt of Court in the High Court for coaching a witness through WhatsApp. The Court of Appeal however allowed the appeal on the ground that such act may not fall under contempt in the face of court per se if the court has not warned the particular person that he should not communicate with the witness. Further, the Court of Appeal found that there was a breach of natural justice when the witness was not called to testify in the contempt proceedings. The Court of Appeal ordered the contempt proceedings to be sent to the High Court for retrial.

An employee was terminated by her employer after she left the WhatsApp Group of the Company (Thilagavathy a/p Arunasalam v Maxis Mobile Sdn Bhd [2019] 2 LNS 1050). For purpose of communicating with employees it was common practice by the employer at Maxis Retail Centres to create WhatsApp Groups among its employees for ease of communication, fast updates and responses for business operations. Two WhatsApp Groups were created for employees at Maxis Centre E-Curve, namely “Maxis e @ Curve” and “MSSC e @ Curve Home & EOMC”. The Head of Maxis Centre E-Curve (COW-2) stated that he had informed all employees (including the Claimant) stationed at Maxis Centre E-Curve that they had to inform him in advance if they wish to exit from the WhatsApp Group. It required his approval before they could exit the group.

The Claimant’s employment was terminated by her employer after she had exited from her employer’s WhatsApp groups twice without permission. She had also failed to submit her sales report, as required by her employer.

The Industrial Court held that Claimant was in breach of her terms of employment with the Company when she failed to follow the reasonable oral and written instructions of COW-2 i.e. to obtain approval prior to exiting the WhatsApp Group.

In the meantime, a man was jailed for sharing a video of his wife’s cousin taking a bath on his family WhatsApp group. In Pendakwa Raya v Nor Hanizam Bin Mohd Noor [2019] 1 LNS 944, the accused was charged under s. 509 of the Penal Code for outraging the modesty of wife’s cousin. The accused pleaded guilty and the Magistrate Court Judge sentenced him to two (2) months imprisonment. The Prosecution was not satisfied with the sentence and appealed to the High Court.

On appeal, the High Court has this to say, in Bahasa Malaysia, about invasion of privacy –

Keseriusan isu ini menjadi lebih memuncak di dalam zaman siber yang serba canggih di mana sesuatu berita atau imej sudah boleh dihebahkan kepada dunia dengan sekelip mata. Muat naik berita, imej dan video sudah menjadi sesuatu perkara yang sangat mudah dan selera masyarakat terhadap sesuatu berita, imej atau video sudah mencapai kepada suatu peringkat di mana nilai privasi, maruah dan keaiban sesorang dikompromi dan diketepikan dengan sewenang-wenangnya. Bahan lucah, berita palsu, fitnah, tohmahan dan sebagainya sudah menjadi suatu pengisian media yang dinantikan oleh sebahagian masyarakat dan ia mendatangkan masalah moral yang sangat serius di kalangan masyarakat sehingga menular di kalangan remaja.

In short, what the Court said was, “In this digital age, information and content can spread in the blink of an eye. The ease of uploading images and videos, too easily done, with society’s appetite for such reaching an unhealthy level where privacy and dignity are compromised and disregarded too easily. Fake news, slander and pornography have become media staples eagerly consumed by a segment of society resulting in serious moral problems in society and our youth.

The High Court Judge also held that the words “intrudes upon the privacy” under s. 509 of the Penal Code includes recording a person without permission and distributing the video.

The High Court enhanced the imprisonment period to six months from the date of conviction.

Peer-to-peer (P2P) Lending

Peer-to-peer lending, also abbreviated as P2P lending, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers.

In Malaysia, the Securities Commission governs the operation of P2P financing. The Securities Commission only allows P2P operator to facilitate businesses or companies to raise funds from both retail and sophisticated investors through an online platform.

P2P operators are not permitted to facilitate individuals seeking personal financing. This is because the primary objective of introducing market-based financing is to help build small businesses which in turn help to spur and promote growth of the economy. Through the Securities Commission registered P2P platform, an investor may invest in an investment note or an Islamic investment note issued by businesses or companies for a specified tenure with the expectation of a predetermined financial return.

Since 2017, there have been 2,505 successful peer-to-peer (P2P) financing campaigns across 643 issuers, with a total of US$49.3 million (RM212.65 million) raised. Issuers raising funds on P2P financing platforms have maintained a campaign success rate of 99%. In 2018, a total of RM180.05 million was raised reflecting 452% growth from 2017. Among the successful fundraising campaigns, 91% raised RM200,000 and below. 22% of the successful issuers raised more than once. (Data from Securities Commission Annual Report 2018.)

Notwithstanding the above success, some issuers could not repay what they have raised. The operator of “Funding Societies”, Modalku Ventures Sdn Bhd, had to commence legal proceedings against a few companies to recover the facilities. Modalku is registered as a recognized market operator under s. 34 of the Capital Market and Services Act 2017 to operate a P2P platform.

In Modalku Ventures Sdn Bhd v Reliance Shipping & Travel Agencies (Sarawak) Sdn Bhd & Anor (Kuala Lumpur Sessions Court Suit No. WA-B52NCC-392-06/2019) raised a novel defence by claiming that P2P financing is illegal under the Moneylenders Act 1951.

The Plaintiff granted the 1st Defendant facilities of RM650,000 to be utilised as working capital of the 1st Defendant. The 2nd Defendant is a director and guarantor of the 1st Defendant. An investment note certified was issued by the 1st Defendant to the investors of the 1st Defendant.

The 1st Defendant defaulted in the loan and the Plaintiff sued for the outstanding amount. The Plaintiff sought for an order for summary judgment of the outstanding amount.

The Defendants argued that the Facility Agreement is illegal pursuant to the Moneylenders Act 1951 and Moneylenders (Amendment) Act 2003 because the Plaintiff is not licensed to carry out money lending activities.

In view that the Plaintiff is a registered market operator, the Sessions Court held that Moneylenders Act 1951 does not apply to the Plaintiff. S. 2A(1) read together with Item 10 of the First Schedule of the Moneylenders Act 1951 provides that the Moneylenders Act 1951 does not apply to any person licensed, registered or regulated under the Capital Markets and Services Act 2007.

Accordingly, the Sessions Court granted the summary judgment. Appeal to the High Court was dismissed in Civil Appeal No. WA-12ANCC-69-09/2019.

Similarly, in Modalku Ventures Sdn Bhd v Reliance Shipping & Travel Agencies (Sabah) Sdn Bhd & Anor (Kuala Lumpur Sessions Court Suit No. WA-B52NCC-393-06/2019), the Defendants, in resisting an application for summary judgment, argued that the Facility Agreement and security documents are illegal pursuant to the Moneylenders Act 1951 and Moneylenders (Amendment) Act 2003 because the Plaintiff is not licensed to carry out money lending activities and a contravention of s. 15A of the Moneylenders Act 1951 which provides that “no moneylending agreement in respect of money lent after the coming into force of this Act by an unlicensed moneylender shall be enforceable”.

The Plaintiff argued that s. 2A of the Moneylenders Act 1951 read together with Item 12 of the First Schedule of the Moneylenders Act 1951 provides that the Moneylenders Act 1951 does not apply to any person licensed, registered or regulated under the Capital Markets and Services Act 2007.

The Sessions Court agreed with the Plaintiff that the Moneylenders Act 1951 does not apply and therefore the Facilities Agreement and security documents are valid and enforceable.

E-hailing company’s liability in accidents

In Tea Chew Chin v Grabcar Sdn Bhd & Ors (Sessions Court Suit No. JA-A53KJ-610-10/2018), the Plaintiff was injured when the Grabcar driven by the 2nd Defendant and owned by the 3rd Defendant was involved in an accident. The Plaintiff claims that Grabcar was also responsible for his injuries as they have failed to provide a safe transportation platform. Grabcar on the other hand argued that they are not vicariously liable for the negligence of the driver or owner of any car that used the Grab application to participate in the Grab ride hailing service. Grab applied to strike out the case but the suit was later withdrawn.

A few months later, the insurer of the car owned by the 3rd Defendant sued the Plaintiff and all the other Defendants in the earlier suit (MPI Generali Insurans Berhad v Tea Chew Chin & 3 Ors (Johor Bahru High Court Suit No. JA-24NCvC-320-05/2019) and sought an order to declare that the insurance policy is invalid as the car was not used for private use. Grab again argued that it should not have been joined as a party to this action as they were merely providing the mobile application on the “Grab” platform for various car owners and drivers to operate ride hailing services, they had no connection whatsoever with the car and the insurance policy. The High Court dismissed the insurer’s action. However, no grounds of judgment is available.

Digital Currencies

In my article Bread & Kaya: Malaysia’s first digital currency court case, I wrote about Malaysia’s first digital currency court case. In Luno Pte Ltd & Anor v Robert Ong Thien Cheng (Sessions Court Civil Suit No. BA-B52NCVC-389-12/2017), the 1st Plaintiff mistakenly transferred 11.3 Bitcoins onto the Defendant’s e-Wallet which the Defendant refused to return. The Plaintiffs sued the Defendant for the return of the 11.3 Bitcoins under s. 73 Contracts Act 1950. The Defendant argued that, among others, Bitcoins are not a “thing” capable of being returned as envisaged under s. 73 Contracts Act 1950, cryptocurrency is illegal in Malaysia and therefore, the Plaintiffs are not entitled to recover the same. The Sessions Court allowed the Plaintiffs’ claim and the Defendant appealed to the High Court.

The High Court (Shah Alam High Court Civil Appeal No. 12BNCVC-91-10/2018) dismissed the appeal and held that, among others, cryptocurrency trading is not illegal in Malaysia, digital currency is a form of an intangible asset and digital currency is a “thing” that has to be returned if it is mistakenly delivered. The matter is now pending at the Court of Appeal

Discovery of the Identity of Facebook User

In the past, Court actions were filed overseas against online service providers such as Google to obtain information of certain online users. Such action can be done either through a pre-action discovery application or a Court subpoena. It can cost the aggrieved party substantial amount of legal fees as foreign counsels have to be engaged to conduct the matter in Court. Further, it is not guaranteed that the service provider will provide the information.

However, through Lexscout.com, I found a case which shows that pre-action discovery application against Facebook can be made in Malaysia instead of filing such application outside Malaysia. In Universiti Utara Malaysia v Facebook Inc (Alor Setar High Court Originating Summons No. KA-24-1-01/2019), Facebook agreed to disclose basic subscriber information of certain Facebook users who allegedly have published defamatory statements against the Plaintiff (also known as a pre-action discovery order).

Filing a pre-action discovery application is one of the most efficient ways. The use of private investigators may also help and it is much more affordable and may be faster. However, it comes with a risk. The investigation by the private investigator may not be conclusive enough for the Court. This happened in the case of P.T. Tarakusuma Indah & Anor v The Qbee Motor Group Sdn Bhd [2019] 1 LNS 1619 where the Plaintiffs alleged that the Defendant was the person behind a certain Facebook page that had defamed them. The Plaintiff relied on the investigation report by a private investigator (PW2). The investigation report concluded that the administrator of the Facebook page “is someone employed or related‟ to the Defendant company or any other related companies such as QBEE Superbike Centre Sdn Bhd, Quian Long Auto Parts Sdn Bhd”.

The High Court dismissed the Plaintiffs’ action and held that they have failed to prove that the Defendant had published or distributed the impugned statements or had caused the impugned statements to be made or published or distributed in the Facebook page. The finding in the investigation report was vague and inconclusive and uncertain as to who the administrator for the Facebook page was. The Plaintiffs’ evidence on this point was purely based on assumption that it was the Defendant who made those impugned statements.

Legality of contracts made online

The High Court recognised that contract can be proven through WhatsApp conversation. In Lim Choon Hau v. Simpson Wong [2019] 1 LNS 217, HC, the High Court held that a WhatsApp conversion can be direct evidence of the Defendants receiving money as friendly loan from the 1st Plaintiff.

Thousands of contracts are made online every day. Many of us accept that such contracts are binding on the parties without having to meet each other physically or putting in a manuscript signature. Unfortunately, many do not read the contracts whenever they purchase the goods or services.

One of these online contracts is called browsewrap agreement. In a browsewrap agreement, the contract is located in another page. To view the contract, the user would need to click on the link to access the page. The defining feature of browsewrap agreements is that the user can continue to use the website or its services without visiting the page hosting the browsewrap agreement.

In Ragindran a/l Sivasamy v Airasia X Berhad (Penang Magistrate Court Civil Suit No. PD-A72-1-1/2019), the Magistrate Court dealt with the legality of an online contracts commonly known as a browsewrap agreement.

The Plaintiff had purchased his air ticket from the Defendant’s website to travel to Melbourne, Australia. The Plaintiff lost his luggage during his flight to Kuala Lumpur International Airport 2 (KLIA 2) and thereafter to Melbourne. The Defendant then offered compensation to the Plaintiff based on the tariff that had been set at USD20.00 per kilogramme. The Plaintiff however rejected the tariff and claimed for the sum of RM11,700 for the loss of, among others, his watch, glasses, winter wear, clothing and additional clothing that he had to purchase in Melbourne due to the loss of clothing.

The Defendant argued that the Plaintiff is bound by its terms and conditions incorporated into the Terms and Conditions of the Defendant’s international flight and are available on the Defendant’s website.

However, the Plaintiff claims that he is not bound to the Defendant’s terms and conditions as-

(a) the terms and conditions were not brought to his attention at the time of purchase of the tickets. Instead each purchaser is required to click on the words “Terms and Conditions” to see the complete terms and conditions of the flight;
(b) the terms and conditions were only applicable to his domestic flight to Kuala Lumpur but not his international flight to Melbourne;
(c) the Defendant had caused the loss of his luggage; and
(d) the total compensation offered by the Defendant is lower than what he had lost.

During the trial, one of the Defendant’s witnesses demonstrated in Court how to purchase tickets through the Defendant’s website. The said witness testified that there is a notice above the payment button stating “By clicking “Purchase”, you confirm that you understand and accept our Terms and Conditions of Carriage, which address cancellation, refund and rebooking, no show, baggage allowance and travel documents, and other policies. ”

The “Purchase” button is placed next to the notice. For the display of the detailed flight terms and conditions, a user simply has to click on the words “Terms and Conditions of Carriage ” in red in the notice and upon doing so, the website will direct the user to another page displaying the terms and conditions of flight.

The learned Magistrate held that it would be reasonable for the Defendant to expect that any person purchasing an airline ticket from the Defendant’s website would know of the terms and conditions of the flight.

The Magistrate found that the Defendant had put sufficient notice on its website for its users by putting a notice next to the Purchase button with a red hyperlink. It is the Plaintiff’s obligation to read the terms and conditions. A contract is formed as soon as the payment is made, and any terms and conditions of the flight would bind the parties as soon as the contract is made.

This matter is pending before the Penang High Court (Civil Appeal Suit No. PA-11B-37-09/2019).

Trade marks

After 43 years, the Trade Marks Act 1976 was repealed and replaced with the Trademarks Act 2019. The new law finally implemented the Madrid Protocol which allows a trade mark owner to file an international trademark application in 122 countries (subject to additional fee for every country) through the Intellectual Property Corp of Malaysia (MyIPO) beginning from 27 December 2019.

Prior to the repeal of the old law, the Court made a few important decisions in respect of online trade mark infringement.

In 30 Maple Sdn Bhd v. Siti Safiyyah Mohd Firdaus Chew [2019] 1 LNS 404, the Defendant was found to have infringed the Plaintiff’s registered trade marks for selling counterfeit dUCk products on her social media accounts such as Instagram, Instagram Stories, Facebook, etc. In addition, the Intellectual Property High Court found that the social media postings amount to advertising circulars or other advertisement representing as having the right either as the registered proprietor or user to use the trade mark. Therefore, the Defendant was in breach of s. 38(1)(b) of the Trade Marks Act 1976 (repealed and replaced by the Trademarks Act 2019) which prohibits the use of a registered trade mark on goods or in physical relation thereto or in an advertising circular, or other advertisement.

In Telekom Malaysia Berhad & Anor v CA Multimedia Sdn Bhd & Ors [2019] MLJU 1664, the Intellectual Property High Court found that certain Defendants had infringed and passed off the trade mark TMPOINT for using the domain name tmpoint.com and the mark TMPOINT on their website. The Defendants have attempted to differentiate between website and domain name. Though they may be technically different in function, the Court found that they operate in unison and hence ought to be treated as one for purposes of trade mark infringement.

What amounts to parody?

Prior to the fall of the Barisan Nasional Government in the 2018 General Election, several people were charged in Court for publishing content which were themed as anti-Government. One of them is Fahmi Reza, who is also known as kuasasiswa. He was charged under s. 233(1)(a) of the Communications and Multimedia Act 1998 in the Sessions Court for publishing a false notice purporting to be by the Malaysian Communications and Multimedia Commission featuring the logo of the Commission and an image of a clown resembling the then Prime Minister Najib Bin Razak on his Facebook page with an intent to annoy (Mohd Fahmi Reza Mohd Zarin lwn. PP [2019] 1 LNS 120). He was found guilty and sentenced to 1 month jail and fine of RM30,000.

On appeal, the accused argued that the notice is a parody and political satire to criticise the authorities for restricting freedom of expression and the Internet.

Justice Mohd Radzi Harun found that the notice is a fine and creative artistic work created by the accused to criticise the authorities, however it is false in nature and was created with an intention to annoy a person. His Lordship was of the view that there is no need for the Prosecution to prove that the accused annoyed the complainant but whether he intended to annoy him.

His Lordship also found that the notice cannot be considered as a parody because it does not fall within the definition of parody set out in the case of Sepakat Efektif Sdn Bhd v. Menteri Dalam Negeri & Anor and Another Appeal [2015] 2 CLJ 328 which provides-

“The pithy observation by Justice Albie Sachs of the Constitutional Court of South Africa in Laugh it Off Promotions CC v. South African Breweries International (Finance) Case [2005] 5 LRC 475, is quoted to indicate the proper approach courts should take when assessing parodies and satires:

“If parody does not prickle it does not work.”

Therefore, his Lordship held that the notice is an artistic work but due to its nature of annoying another, it therefore has no right to be displayed by the accused and is not protected by freedom of speech.

His Lordship however replaced the Sessions Court’s sentence with a fine of RM10,000 in lieu of 6 months imprisonment in view of, among others, media reports stating that the Minister of Communication and Multimedia is making amendments to s. 233 of the Communications and Multimedia Act 1998 to repeal elements which are considered as draconian.

Challenging website access blocking order

The Malaysian Communications and Multimedia Commission (MCMC) is known to block websites without notice. The power to block website is purportedly based on s. 263(2) of the Communications and Multimedia Act 1998. MCMC or any authorities may request MCMC to “request” internet service providers to disable access by end-users in Malaysia to online location for the purpose of “preventing the commission or attempted commission of an offence under any written law of Malaysia or otherwise in enforcing the laws of Malaysia, including, but not limited to, the protection of the public revenue and preservation of national security”.

Sometime in 2014, Fatwa Committee of the State of Selangor issued a fatwa declaring that SIS Forum deviates from the teaching of Islam and directed that the MCMC block any social websites which is against the teaching of Islam and “Hukum Syarak” (see SIS Forum (Malaysia) & Ors v. Jawatankuasa Fatwa Negeri Selangor & Ors [2018] 6 CLJ 748).

The Plaintiff challenged the fatwa and filed an action in the High Court praying for, among others, a declaration that the fatwa to the extent that it directs the MCMC to block social websites is contrary to s. 3(3) of the Communications and Multimedia Act 1998 which provides that nothing in the Act shall be construed as permitting the censorship of the Internet.

After some years, the High Court recently held that the fatwa only requested the Malaysian Communications and Multimedia Commission to block any website which contravene the teaching of Islam and Hukum Syarak. The fatwa does not create any law that can block any website. As such, the issue of contravention of s. 3(3) does not arise.

Furthermore, the fatwa itself is not an offence but the offences were the acts prohibited by ss. 12 and 13 of the Syariah Criminal Offences (Selangor) Enactment 1995. The fatwa merely states certain acts are within the Hukum Syarak or otherwise. The fatwa therefore cannot be said to create offences infringed the provision of s. 3(3).

Short Term Lodging – AirBnB Effect

Last year, I reported that the High Court in Verve Suites Mont’ Kiara Management Corporation v Innab Salil & 8 Ors (Kuala Lumpur High Originating Summons No: WA-22NCVC-461-09/2017) upheld the ban of short term lodging by the Management Corporation of Verve Suites Mont Kiara through its House Rules.

The matter went up to the Court of Appeal ([2019] MLJU 1496) and the Court of Appeal upheld the High Court’s decision. The Court of Appeal held, among others, that the Strata Management Act 2013 (SMA 2013) is to advance interest in communal living within a strata scheme. Therefore, it would defeat the spirit and purpose of the SMA 2013 for the proprietors such as the Defendants to use their residential units in the form of business enterprise such as short term rentals. The majority of the residents have voted against the same. The majorities’ wish has to be taken heed of, hence there could never be any violation of s. 70(5) when House Rules No. 3 was adopted.

Challenging Court’s decision in implementing electronic bidding

Last year, I reported that The Council of Auctioneers Malaysia challenged the decision by the High Court Registrar to implement electronic bidding or e-Lelong in all courts in West Malaysia (Majlis Pelelong Malaysia v. Pendaftar Mahkamah Tinggi Malaya (Kuala Lumpur Judicial Review Application No. WA-25-313-10/2018). The High Court held that the issue of implementation of e-Lelong is justiciable as the decision to implement the e-Lelong system was made and translated with the issuance of Registrar’s Practice Direction No. 1 of 2018. This decision is made based on the Respondent’s public duty.

However, the High Court held that the implementation of the e-Lelong system is in accordance with law, in particular, O. 31A r. 7 of the Rules of Court 2012. Further, based on the literal interpretation of s. 259(1) and (2) of the National Land Code, the appointment of licensed auctioneer in a public auction is based on the discretion of Court and not a mandatory requirement to make such appointment in a public auction. Public auctioneers therefore cannot be said to have a right under the law to be appointed in a public auction.

In addition, the Registrar’s Practice Direction No. 1 of 2018 cannot be said to have infringed Article 5(1) of the Federal Constitution which provides that no person shall be deprived of his life or personal liberty save in accordance with law. The High Court held that the right of a person under Article 5 can be restricted by law. In any event, the applicant has no right in law in a public auction as the involvement of licensed auctioneers are based on the discretion of Court. The e-Lelong system is to increase the efficiency of public auction and to ensure transparency of the system. The Applicant had also failed to show any basis for the application of Article 8 of the Federal Constitution which provides that all persons are equal before the law and entitled to the equal protection of the law.

Therefore, the Applicant has failed to show that the e-Lelong system in the High Court is tainted with illegality, irrationality and procedural impropriety.

Anti-Fake News Act 2018

The Government finally repealed the Anti-Fake News Act 2018 via the Anti-Fake News (Repeal) Act 2020. Before the repeal of this law, Qnet (M) Sdn Bhd managed to obtain an Order for Removal of Publication Containing Fake News pursuant to s. 7 of the Anti-Fake News Act 2018 over certain publications on Facebook. The order was then served on Facebook Malaysia Sdn Bhd and Facebook Singapore Pte Ltd. However, Facebook took the position that the order ought to be served on Facebook, Inc, the company operating Facebook service for users in Malaysia. Qnet applied to commit Facebook Malaysia and its directors for contempt of Court but was not successful (Qnet (M) Sdn Bhd v Facebook Malaysia Sdn Bhd (Sessions Court Originating Summons No. WA-B54-37- 07/2018)). The matter is now pending at the High Court (Civil Appeal No. WA-12ANCvC-290-12/2018).

In closing

In 2020, we can expect more interesting developments in the cyberlaw and IT sphere.

– Earlier this year, it was reported that Artificial Intelligence (AI) was implemented by our Court to aid sentencing for crimes committed. It will only be used for two offences in Sabah and Sarawak courts – s.12(2) of the Dangerous Drugs Act 1952 for drug possession and Section 376 of the Penal Code for rape.

In the first case where AI was used, Magistrate Jessica Ombou Kakayun sentence Christopher Divineson Moinol to nine months’ jail after he pleaded guilty to a charge of possession of 0.16g of methamphetamine.

– In another case, the counsel of Denis P. Modili objected to the use of the AI to his charge of possession of 0.01g of methamphetamine. Counsel for the accused argued that the use of the AI will be a breach of Articles 5(1) and 8(1) of the Federal Constitution. He further argued that the court should confine to only materials presented in the court. The use of the AI is not in accordance with the law. Although the court can choose to ignore (the AI recommendation), it might influence the decision.

The learned Magistrate noted the defence’s objection and said she would proceed with AI use, which makes recommendations based on information derived from the court’s database between 2014 and 2019. The AI system proposed 10 months’ imprisonment and the accused was sentenced to 12 months’ jail, to run concurrently from his existing sentence of eight months from the date of arrest.

It is understood that an appeal was filed against the Magistrate’s decision over the sentencing and the use of the AI.

– Our Court however did not publish any information on this AI system. Based on reports, it is merely a system that recommends sentencing based on the decisions of other identical or similar cases. It is not an artificial intelligence per se but merely a software making a recommendation based on existing database. Lawyers have argued that such system should be accessible to them so that they can address any recommendation provided by the system. So far, there is no news of the Court allowing such access.

– With the outbreak of Covid-19 and the Movement Control Order, we can expect this to generate more cyber and IT related disputes in the Court. People are spending more time on the Internet and using more online services and implemented work from home policy. Interesting, the Prevention and Control of Infectious Diseases (Measures Within the Infected Local Areas) Regulations 2020, Prevention and Control of Infectious Diseases (Measures Within the Infected Local Areas) (No. 2) Regulations 2020 and Prevention and Control of Infectious Diseases (Measures Within the Infected Local Areas) (No. 3) Regulations 2020 declared e-commerce as one of the essential services that may operate during the Movement Control Order. Once the Movement Control Order is lifted, we can expect more and businesses adopting e-delivery of their businesses. This would result in development and licensing of more software which would definitely cause disputes, especially, involving the quality of the development and late delivery of software.

– Courts in the world are also commencing their virtual Court to ensure that the administrative of justice is not heavily disrupted by Covid-19. Our Courts have also adopted virtual and video conferencing hearings. Court documents will soon need to be crafted in a manner which suits online conferencing or allows a Judge to peruse it seamlessly, like reading a website. Interestingly, in Blackfriars Ltd, Re [2020] EWHC 845 (Ch), the High Court refused an adjournment based on the Covid-19 pandemic and directed that the trial proceed via video conferencing and electronic bundles.

First published on Digital News Asia on 14 April 2020 and 15 April 2020. This republished article has been amended to include further updates.

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