Monthly Archives: June 2018

Bread & Kaya: Dear Attorney General Tommy Thomas, we need to speak about our Malaysia cyberlaw and IT laws reforms

By Foong Cheng Leong | Jun 22, 2018

– Act is clearly against the very fundamental principal of “innocent until proven guilty”
– Need law to curb creation of fake news, especially if created to stoke racial or religious sentiments

Repeal of 114A of Evidence Act 1950

WHEN s. 114A was introduced in the Parliament in 2012, a protest was held by netizens to urge the Government to repeal s. 114A. The #stop114A campaign was held and Malaysia had it first Internet Blackout Day to protest this section.

S. 114A provides for three circumstances where an Internet user is deemed to be a publisher of a content unless proven otherwise by him or her. The relevant section, namely s. 114A(1), states that “A person whose name, photograph or pseudonym appears on any publication depicting himself as the owner, host , administrator, editor or sub-editor, or who in any manner facilitates to publish or re-publish the publication is presumed to have published or re-published the contents of the publication unless the contrary is proved”.

In simple words, if your name, photograph or pseudonym appears on any publication depicting yourself as the aforesaid persons, you are deemed to have published the content. So, for example, if someone creates a blog with your name, you are deemed to have published the articles there unless you prove otherwise. If you have a blog and someone posts a comment, you are deemed to have published it.

Subsection (2) provides a graver consequence. If a posting originates from your account with a network service provider, you are deemed to be the publisher unless the contrary is proved. In simple terms, if a posting originates from your TM Unifi account, you are deemed to be the publisher. In the following scenarios, you are deemed to be the publisher unless you prove the contrary:-

(1) You have a home network with a few house mates sharing one internet account. You are deemed to be the publisher even though one of your house mates posts something offensive online.
(2) You have wireless network at home but you did not secure your network. You are deemed to be the publisher even though someone “piggybacks” your network to post something offensive.
(3) You have a party at home and allows your friends to access your PC or wireless network. You are deemed to be the publisher even though it was a friend who posted something offensive.
(4) Someone use your phone or tablet to post something offensive. You are deemed to be the publisher.

As for subsection (3), you are presumed to have published a content if you have custody or control of any computer which the publication originates from. Here, you are deemed to be the publisher so long your computer was the device that had posted the content. If someone “tweetjacks” you or naughtily updates your Facebook with something offensive, you are deemed to be the publisher unless you prove otherwise.

Clearly, it is against our very fundamental principal of “innocent until proven guilty”.

Position of intermediaries (e.g. platform providers)

Currently, many platform providers are vulnerable to be sued or charged in Court for what their users do. For example, an online forum owner would be liable for publishing defamatory statements made by their users pursuant to s. 114A of the Evidence Act 1950. Online marketplace operators may also be sued because their users sold counterfeit products.

It would be ideal for the Government to induce new laws to protect such platform providers but also the punish errant platform providers. For example, a one-strike or three-strikes rule. Under such proposed one-strike rule, an aggrieved person may file a complaint against the platform provider to remove certain postings. If the platform providers remove such posting within a specific time, the platform provider should be absolved from liability. However, if it fails to do so, it will be liable for the acts of its users.

S. 43H of the Copyright Act 1987 is a good example on how to deal with intermediary’s liable in respect of copyright infringement.

In this regard, the Sedition (Amendment) Act 2015, which is not in operation yet, should be repealed. The said amendment creates, among others, liability on website operators such as online forums, online news portals, and even Facebook page/ group owners. [Read http://foongchengleong.com/2015/04/bread-kaya-how-the-new-sedition-act-affects-netizens/]

Specific laws to govern blocking of websites or other electronic platforms.

All blocking orders should be made public and their detailed reasons to block websites. Currently, there is no public list other than one independently maintained by Sinar Project and reasons given are usually one-liners (e.g. in breach of s. 233 of the Communications and Multimedia Act 1998).

However, there could be specific websites which need not be reviewed due to national security issue, among others. As we all know, blocked websites can still be accessed via other means.

Blocking orders should also be made by the Courts rather than the arbitrary decision of the Minister. The current s. 263 of the Communications and Multimedia Act 1998 is used by the Ministry of Communications and Multimedia to direct internet service providers to block platforms in order to prevent the commission or attempted commission of an offence under any written law of Malaysia. In the past however, we have seen websites being blocked due to political reasons e.g. medium.com and bersih.org.

The Anti-Fake News Act 2018 and Sedition (Amendment) Act 2015 have provisions for websites to be blocked by way of application to the Court. All these blocking order sections and s. 263 of the Communications and Multimedia Act 1998 should be replaced with one single law to govern blocking of electronic platforms.

The law should also allow any person such as users of the platforms to challenge any blocking orders. When the previous Government decided to block medium.com, as far as I know, the site owners did not file any challenge in Court to unblock their website. Many netizens were denied access to informative and educational content from medium.com. There were no specific laws allowing them to challenge the block. They were also unsure if they could meet the threshold to file an action for judicial review.

Specific channels to allow litigants to obtain information about wrongdoers

In the present case, a person who wishes to obtain information about another person, for example another Facebook user who had defamed or harasses him, would need to go through a long and expensive process to obtain such information. Normally these wrongdoers will use platforms provided by foreign companies to attack another user.

It would be ideal if a straight forward process be made to such person to obtain such information. For example, filing a request to the Government for it to request the same from the platform providers.

SS. 211 and 233 of the Communications and Multimedia Act 1998

S. 233 of the Communications and Multimedia Act 1998 (which is similar to s. 211) has been used by the previous administration against dissent. The Bar Council has called for the repeal of Section 233(1)(a) of the Communications and Multimedia Act 1998 as it is a serious encroachment on the freedom of speech and expression guaranteed by Article 10(1)(a) of our Federal Constitution. I concur with the Bar Council on this.

However, I suggest that new laws be introduced to stop contents which can cause hatred and disturbance about certain individuals or organisations. We cannot have people sending fake messages which can cause a riot, for example.

Anti Fake News Act 2018

Many calls have been made to repeal the Anti Fake News Act 2018, which came into operation weeks before the 14th General Election. One person has been sentenced and many have been investigated for spreading fake news. Prime Minister Dr Mahathir Mohamad has confirmed that this Act will be repealed.

Notwithstanding such calls to repeal the law, I am of the view that there should be laws to curb the creation of fake news especially those created to stoke racial or religious sentiments. Note that s. 233 of the Communications and Multimedia Act 1998 requires a communication to target a certain person. Fake news may not necessary be targeting a certain person. It could target a race and a place, for example.

Revamp of the Admissibility of Electronic Evidence

Currently, almost every document printed by a computer is admissible under s. 90A of the Evidence Act 1950. This section should be examined to define clearly on what admissible and not admissible.

The Court’s electronic system should also be upgraded to allow the admissible of all forms of electronic media such as songs, videos and animated files. Currently, lawyers have to burn those evidence in a CD to be filed in Court. This defeats the open justice system where all Court proceedings are accessible to the public.

[Postscript] In addition, the Court’s file search system should also be updated. Currently it allows a user to conduct a file search for 30 minutes (per ticket) via its slow system. It loads page by page and one cannot download all the documents at one go. It should be revamped to allow a user to download the entire file with one single fee.

Laws to protect netizens

New laws should be introduced to criminalise cyberbullying, stalking and harassment. It is noted that this type of acts these days are not made directly against a person.

Government should also study the criminalisation of maintaining cybertroopers. Many organisations in the world including Governments use the services of cybertroopers to attack individuals. They would send threatening, harassing or annoying messages, posting private information of that individual and create fake content about that individual.

Lastly, what we need is meaningful and effectively consultation with the Government. The previous administration had basically shoved us with laws with little consultation. I remember when our #Stop114A team went to meet the then Deputy Minister of Law, V.K Liew, to hand in our petition to repeal s.114A, he said that the Bar Council needs professional advice. I trust that the new Government will make a wise choice in deciding the right people for the right job.


First published on Digital News Asia on 22 June 2018

Bread & Kaya: 2017 Cyberlaw cases Pt3 – sexual offences against children and computer crimes

By Foong Cheng Leong | Mar 30, 2018
– Sending death threats using someone else’s mobile phone is not OK
– 2018 will mark interesting year for cyber related cases including Uber driver suing Uber

THE first statute in Malaysia to use the term “social media” is part of the law designed to protect children against sexual offences and not any computer crimes related or media related law.

At the same time a bank officer got into hot soup for using their superior’s email account and password. Let’s go through these cases now.

Crime

Sexual Offences Against Children Act 2017

The Sexual Offences Against Children Act 2017 was introduced to address the seriousness of sexual offences committed against children in Malaysia. The ultimate object of the proposed Act is to provide for better protection for children against sexual offences and to safeguard the interest and well-being of children and to provide effective deterrence.

One of the laws introduced is the law against child grooming. S. 12 of the Act states that child grooming is an offence punishable with imprisonment of no more than 5 years and liable for whipping. The Act specifically stated that the following amounts to child grooming :-

(a) A communicates with Z, a child via social media by pretending to be a teenager and develops a love relationship with Z with the intention of using Z in the making of child pornography. A never meets Z. A is guilty of an offence under this section .

(b) A communicates with Z, a child via e-mail and befriends Z with the intention that A’s friends C and B could rape Z. A never meets Z. A is guilty of an offence under this section.

This law is also the first statute in Malaysia to use the words “social media”.

Last year, we were anticipating the amendments of the Communications and Multimedia Act 1998. However, the amendments never came. Nevertheless, numerous people were investigated under s. 233 of the Communications and Multimedia Act 1998. Notably, in the case of Mohd Fahmi Redza Bin Mohd Zarin Lawan Pendakwa Raya dan Satu Lagi Kes (Kuala Lumpur Criminal Application No. 44-103-08/2016), the accused was charged under s. 233 of the Communications and Multimedia Act 1998 for publishing an offensive Instagram posting using the username kuasasiswa. The accused filed an application to strike out the charge on the grounds that:-

– s. 233 of the Communications and Multimedia Act 1998 is unconstitutional and/or ultra vires in view of Article 5(1), 8 and 10(1)(a) of the Federal Constitution
– the charge against him acts as and/or has the characteristic of a censorship and therefore in contravention of the objectives of the CMA according to s. 3(3) of the CMA; and
– the charge against the accused is defective as it does not have the details of the parties that were offended by his acts.

The Public Prosecutor applied to have the matter heard before the Federal Court in respect of the issues on the constitutionality of s. 233 of the CMA (in accordance with ss. 30 and 84 of the Courts of Judicature Act 1964. Upon hearing the parties, the High Court referred the matter to the Federal Court for the latter to decide on the following question:-

Whether Section 233(1)(a) of the Multimedia and Communication Act (Act 588) is Inconsistent with Article 5(1), 8 and 10(1)(a) of the Federal Constitution?

However, the Federal Court dismissed the application for non-compliance of the Courts of Judicature Act 1964 (Federal Court Criminal Application No. 06-04-04/2017(W)).

In Nik Adib Bin Nik Mat v Public Prosecutor (Rayuan Jenayah No 42S(A)-39-7/16), the accused was charged under s.233(1)(a) of the Communications and Multimedia Act 1998 for sending indecent and false photos of cabinet leaders titled “Pesta Bogel” on Facebook. He was also charged under s. 5(1)(a) of the Film Censorship Act 2002 for possession of 883 pieces of pornographic videos in his laptop. The Session Court sentenced him to the maximum sentence of 1 year imprisonment for the first offence and another 1 year imprisonment for the second offence.

On appeal, the High Court Judge stated that “cyber offences are serious offences especially the offence at hand, as those offensive materials could be easily disseminated to the public at large within seconds at a touch of a button” and agreed with the Sessions Court Judge that public interest is of paramount importance and should supersede the interest of the accused.

However, the learned High Court Judge was of the view that personal interest of the accused should not be disregarded at all and thus, allowed the appeal against the sentence. The learned High Court Judge took into account the grounds submitted by the accused and held that the misdirection of Session Court on imposing maximum sentence for the first offence warrants the appellate intervention and a special consideration ought to be given so that he can mend his ways and “turn over a new leaf”.

The High Court substituted the original sentence with 1 week imprisonment and a fine of RM3,000 in default 3 months imprisonment for the first charge and for the second charge, a fine of RM10,000 in default 1 ½ years imprisonment.

In Pendakwa Raya v Dato’ Dr Ahmad Ramzi Bin Ahmad Zubir (Rayuan Jenayah No. T-09-15-01/2014), the Respondent was charged with criminal defamation after he had sent text messages containing death threats to various individuals using another person’s (SP5) mobile phone number via an online platform registered in the name of a colleague of the Respondent (SP16). The said online platform allows users to broadcast SMS to numerous mobile numbers via the Internet. The Respondent had changed the sender’s mobile phone to SP5’s mobile number. The Respondent’s convicted by the Sessions Court but his conviction was overturned by the High Court.

On appeal, the Court of Appeal restored the conviction. In the grounds of judgment, the Court of Appeal discussed on the method used to determine whether the SMS was sent by the Respondent. The investigation had showed that the internet protocol address that was used to send the SMS was registered to the Respondent’s internet account. The MAC Address found was the same MAC Address of the Respondent’s router. According to the evidence provided by Cyber Security Malaysia, a MAC Address is a unique number provided by the Internet Service Provider and in order to connect to the Internet, it must be done through a router.

In Pendakwaraya v Charles Sugumar a/l M. Karunnanithi (Mahkamah Majistret Kota Bharu Kes Tangkap No: MKB (A) 83-43-02/2016), the accused was charged under s. s. 424 of the Penal Code for dishonestly concealing money of a scam victim in his bank account knowing that the said money does not belong to him. The victim had befriended a person by the name of Alfred Hammon from UK through Facebook. Alfred Hammon then made the victim transfer money to the accused’s bank account on the pretence that he needed the money to cash his cheque of US$3 million. Alfred Hammon promised that he will return the money together with interest. However, after transferring RM36,300 the victim realised that she was scammed.

The accused claimed that he is not part of the scam. The accused claimed that when he was working as a tour driver, he was requested by his customer to receive money on the customer’s behalf. The accused claimed that he did it to give his customer the best service so that he can attract more customers. He said that he was informed by the customer that the customer’s friend had to transfer money to him so that the customer can continue his tour in Malaysia. The accused said that he did not gain any remuneration or commission from that assistance.

The Magistrate acquitted the accused as the Magistrate found that, among others, the accused’s evidence is consistent and is a credible witness. The Magistrate agree that the accused was made a scapegoat by the customer who took advantage of his goodness and sincerity in giving the best service as a tour driver.

Computer Crimes Act

In Rose Hanida Binti Long lwn Pendakwa Raya (Kuala Lumpur High Court Criminal Appeal No. 42K–(115–124)-09/2016), the appellant was charged under the Computer Crimes Act 1997 (unauthorised access to computer material with intent to facilitate the commission of an offence involving fraud or dishonesty or which causes injury) and s. 420 of the Penal Code (for cheating) for making false claims to his employer, a bank, by using his superior’s account and password to without his superior’s knowledge. She was initially sentenced by the Sessions Court with 4 years of imprisonment and fine of RM260,000 in default of 15 months jail. She appealed the sentence but withdrew it later. Notwithstanding that it had been withdrawn, the High Court Judge exercised his revisionary powers and enhanced the sentence to 6 years and fine of RM260,000 in default of 15 months jail due to the seriousness of the offence.

In Kangaie Agilan Jammany lwn PP [2017] 1 LNS 1640, the accused was charged under s. 5(1) of the Computer Crimes Act 1997 for making modification of the contents of Air Asia’s flight booking system without authorisation. The accused had allegedly used the function “move flight function” in those unauthorised transactions to change, among others, the flight details and customers’ emails for the purpose of notification. The said function is a critical function to allow authorised staff to make changes so that no charges are made to customers.

The accused was given an ID ‘6954’ and password to access Air Asia flight booking system but he had limited access to it. Thus, one of the witnesses, SP4, had given his ID and password to the accused after the accused had requested for it on the ground that the latter is unable to access to the system using his own ID. SP4 did not know that the accused had misused his account. The accused had then used the said account to help his family members and friends to get cheaper flight tickets, among others. Air Asia alleged that it had lost about RM229,100.42 due to the accused’s actions.

In the system log, it was found that the accused had changed the flight schedule and also that there were a few customer email notifications which involved the agent code 6954 which had made the flight changes. Further, there was an incident whereby SP4 was asked by the accused to provide his new password after it had been changed.

The Sessions Court found the accused guilty and had applied the statutory presumption under s. 114A of the Evidence Act 1950 after the accused could not rebut the evidence that the agent code 6954 belongs and used by him.

Under 114A of the Evidence Act 1950, a person is deemed to be a publisher of a content if it originates from his or her website, registered networks or data processing device of an internet user unless he or she proves the contrary. In 2014, this new law sparked a massive online protest dubbed the Malaysia Internet Blackout Day or also the Stop114A.

On appeal, the High Court concurred with the Sessions Court Judge. The High Court Judge also held that s. 114A of the Evidence Act 1950 applies retrospectively notwithstanding that the offence was committed prior to the enforcement of s. 114A as the presumption did not alter the original subject matter and even includes the same subject matter that did not prejudice the accused before and after. In other words, without using such presumption, the Prosecution would still have to prove that the Accused was the person who used his ID and password to access the employer’s system had committed an offence to change the flight schedule without authorisation. On the contrary also by applying the presumption of the law, the Prosecution will still have to prove that the accused alone has a specific ID and password to access the system.

Closing

2018 will mark another interesting year for cyber related cases. In late 2017 and early 2018, the following cases have been filed:-

– A Uber driver sued Uber Malaysia Sdn Bhd for non payment of his fees. The interesting question in this case would be whether Uber Malaysia Sdn Bhd is liable to pay such fees or one of Uber’s foreign entities.
– In the Intellectual Property Court of Kuala Lumpur, a brand owner had filed a law suit for trade mark infringement against a web hosting company for hosting a website that sold counterfeit products. The interesting question in this case is whether a webhoster is liable for what their subscribers do.
– In the same Court, a brand owner had also filed a law suit for trade mark infringement against online marketplace operator for using the brand owner’s registered trade mark and allowing their users to sell unauthorised products. The interesting question in this case is whether an online marketplace operator is liable for what their users do on their platform and in particular case, for selling unauthorised products.
– The same Court also granted an application to serve a Writ and Statement of Claim via email and WhatsApp messenger after it could not locate the Defendant at her last known address. Traditionally, when a Defendant cannot be located, Plaintiff would normally ask the Court to allow a notice relating to the lawsuit to be published in the newspaper, among others. We will see more and more substituted service applications to be served electronically.
PKR communications director Fahmi Fadzil filed a civil suit against the Malaysian Communications and Multimedia Commission and Nuemera (M) Sdn Bhd for allegedly failed to protect his personal data which resulted in the leakages of his personal data together with personal information of 46.2 million mobile subscribers. This was one of Malaysians’ biggest data leak.

Finally, the recent introduction this month of the Anti-Fake News Bill 2018 is too important for me to leave till next year to comment!

The word “fake news” is defined as any news, information, data and reports, which is or are wholly or partly false, whether in the form of features, visuals or audio recordings or in any other form capable of suggesting words or ideas.

The law applies to fake news concerning Malaysia or the person affected by the commission of the offence is a Malaysian citizen. Any person who, by any means, knowingly creates, offers, publishes, prints, distributes, circulates or disseminates any fake news or publication containing fake news commits an offence and shall, on conviction, be liable to a fine not exceeding RM500,000 or to imprisonment for a term not exceeding 10 years or to both.

The Court may also order the accused to make an apology. Interestingly, the new law allows civil action to be initiated by a person affected by the fake news publication for an order for the removal of such publication. I will write further on this new law on a separate article. [Postscript: The Anti Fake News Act 2018 is now in force effective from 11 April 2018]


First published on Digital News Asia on 30 March 2018

Bread & Kaya: 2017 Cyberlaw Cases Pt2 – viral content, Uber and appearance of an emoji

By Foong Cheng Leong
Mar 29, 2018

A video clip that was viewed 3 million times deemed to be the truth of an incident
Groupon has its day in court, twice with users not happy with merchants

CARRYING off from where I left off in part one of my review of the interesting Cyberlaw related cases that came to the courts in 2017, I start off with viral content and a case where a video was shared almost 50,000 times. And while Uber Technologies is merging its operations with Grab, it still had its day in court last year with a case in Sabah.

Viral Content

The case of Public Prosecutor v Poovarasan Subramaniam & 2 Others [2017] 1 LNS 1619 determined whether a viral video can be admitted as evidence in a criminal trial.

The 3 accused were charged for murder for a man who had allegedly stolen a mobile phone. In the course of trial during the Prosecution’s case, the Prosecution sought to adduce in evidence a VCD containing a video clip that captured a portion of the incident wherein the victim was assaulted by several men. The video clip went viral on the internet and a prosecution witness had downloaded the same from the blog KITABANTAI into the VCD.

The second accused strenuously objected to the admissibility of the VCD principally because the authenticity of the contents of the VCD is questionable. A trial within a trial (TWT) was held to consider the admissibility of the VCD.

During the TWT, the Prosecution called two bloggers, namely the owners of the blogs KITABANTAI and SIAKAPKELI who had published the video clip, to testify as to the origin of the video clip. KITABANTAI stated that the video came from SIAKAPKELI. SIAKAPKELI later revealed that the video clip came from an online news website called MYNEWSHUB. However, the journalist at MYNEWSHUB does not the exact source of the video clip.

Notwithstanding that the person who originally recorded the video clip live and thereafter uploaded the same in the social media could not be traced and produced in Court as witness, the learned High Court Judge was satisfied that the police investigation team and the Prosecution have used their best endeavours to produce the evidence of the chain of movement of the video clip in cyberspace till it was extracted by the police. The said video clip was admitted as evidence following ss. 90A(1) and (2) and 90C of the Evidence Act 1950. The learned Judge stated that he has no reason to believe that the video clip wasn’t authentic in the circumstances.

This case is in stark contrast with the case of Tan Chow Cheang v Pendakwa Raya (Criminal Appeal No. J-05(LB)-54-01/2016). In this case, the accused was charged with drug trafficking under s. 39B of the Dangerous Drugs Act 1952. During the examination of one of the raiding officer, the defence suddenly produced a CCTV recording in a pen drive showing that the drug was planted. On completion of the raiding officer’s evidence, the High Court granted the accused a discharge not amounting to acquittal upon the prosecution’s application notwithstanding that the defence had submitted that the accused was entitled to be acquitted and discharged as upon the production of the CCTV recording, the sole or main prop in the prosecution case collapsed prematurely.

The Court of Appeal agreed with the High Court. The Court of Appeal was of the view that the production of a certificate under s. 90A(2) of the Evidence Act 1950 is not the conclusive way to prove the pen drive’s admissibility. The Court of Appeal held that “to allow it to be admitted in such circumstances in, our view, would be open to abuse. It is not impossible during this era of modern technology for images to be superimposed or tempered with. Therefore, it is only safe for witnesses to be called either to confirm or to rebut it“.

In another case involving viral video (Datuk Wira SM Faisal Sm Nasimuddin Kamal v. Emilia Hanafi & Ors [2017] 1 LNS 1373), the Plaintiff and his ex-wife (1st Defendant) were in Syariah Court of Kuala Lumpur to resolve their matrimonial dispute/issues. Together with them were the family members of the Plaintiff and the 1st Defendant, among others.

On 20.9.2016, the Syariah Court ordered the children of the Plaintiff and 1st Defendant to spend a night with the Plaintiff at his home. The Judge of the Syariah High Court further ordered that the children must not be forced if they do not want to follow the Plaintiff. After that, the proceedings between Plaintiff and 1st Defendant was adjourned for the day.

A video recording was taken after the proceeding in the Syariah Court had ended. The video allegedly showed the aggressive behaviour and use of force by Plaintiff outside the courtroom towards both his 2nd child and wife. The 1st to 4th Defendants then shared the said video clip. The 3rd Defendant had uploaded the video clip on her Snapchat virtual page with the words “SMF shoved them to the ground when he gave up” whereas the 1st Defendant had also uploaded the video clip on her Instagram account with the caption “A mother’s heartache .” On a side note, this is probably the first written judgment in Malaysia featuring an emoji.

The Plaintiff alleged that the video clip went viral. The video clip spread so widely that:

(a) Up to 3 million people viewed the video clip;

(b) Nearly 50 thousand people shared and/or distributed the video clip;

(c) Nearly 15 thousand people made comments, conclusions and/or inferences against the Plaintiff as result of the video clip.”

The Plaintiff sued the Defendants for publishing the video clip. Notwithstanding that the video clip went viral, the High Court struck out the Plaintiff’s case. The learned High Court Judge held that:-

“The video recording that was published was undisputably a recording of an actual and real incident and therefore, cannot be denied as being the truth.”

“The objectionable words and statements complained of are not prima facie defamatory. In fact, the same do not substantially even make reference to Plaintiff nor do they directly or by implication refer to or implicate Plaintiff.”

In Synergistic Duo Sdn Bhd v. Lai Mei Juan [2017] 9 CLJ 244, the Plaintiff sued the Defendant for publishing two (2) Facebook postings in relation to the bad service by BGT Lakeview Restaurant operated by the Plaintiff. The second posting went viral and were shared more than 9,500 times and was reposted and published in newspapers, websites, blogs and other Facebook pages. The Plaintiff submitted that: (i) because of the postings, many of its customers cancelled their bookings and reservations; and (ii) if the Defendant was not restrained by way of an interim injunction, the Plaintiff would continue to suffer grave irreparable loss and damage to its reputation and goodwill.

In granting the Plaintiff’s application for interim injunction, the learned Judicial Commissioner held that the continued publication of postings on the Defendant’s Facebook would cause the Plaintiff’s to suffer further damage to their reputation and goodwill as the potential re-publication of the postings to potentially unlimited number of internet users would irreparably harm the plaintiff’s reputation: which harm cannot be adequately compensated with damages.

Digital Currencies

Due to the rising popularity of digital currencies in Malaysia, Bank Negara issued an exposure draft by the name of Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) – Digital Currencies (Sector 6). The document outlines the proposed requirements and standards that a digital currency exchanger as defined under the First Schedule of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) must carry out as reporting institutions. This is to ensure effective and robust Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) control measures are in place to safeguard the safety and integrity of the financial system as well as to promote greater transparency in the conduct of digital currencies transactions.

The draft exposure sets out the minimum requirements and standards that digital currency exchangers must observe as reporting institutions to increase the transparency of activities relating to digital currencies and ensure effective and robust AML/CFT control measures are in place to mitigate risks that digital currency exchangers may be used as conduits for illegal activities. Such requirement include conducting risk assessment, risk control and mitigation, risk profiling and customer due diligence, among others.

Digital currency exchangers must also comply with requirements in the document relating to: the identification and verification of customers and beneficial owners, on-going monitoring of customers’ transactions, sanction screening, suspicious transaction reporting and record keeping; transparency obligations; and requirements for the submission of data and statistics to the Bank for the purpose of managing ML/TF risks.

The document is applicable to reporting institutions, regardless that the person is not domiciled in Malaysia, carrying on the following activities listed in Paragraph 25 of the First Schedule to the AMLA:-

activities carried out by any person who provides any or any combination of the following services:

(i) exchanging digital currency for money;

(ii) exchanging money for digital currency; or

(iii) exchanging one digital currency for another digital currency, whether in the course of carrying on a digital currency exchange business or otherwise.

Singapore saw its first cryptocurrency dispute in its Court. The case of B2C2 Ltd v Quoine Pte Ltd [2017] SGHC(I) 11 concerns a cryptocurrency transaction dispute between the Plaintiff (a foreign electronic maker for virtual currency) and Defendant (an online virtual currency exchange platform provider in Singapore) which involves Bitcoin and Ethereum.

The Plaintiff alleged that the Defendant had acted in breach of the contract between them and breach of trust when the platform reversed transactions for the sale and purchase of the cryptocurrencies Bitcoin and Ethereum.

The transactions were unilaterally reversed after the Defendant identified that a technical glitch had occurred to the software used by the platform. Consequently, the Plaintiff had lost the benefit which it could have made if the transaction was not reversed.

The Defendant argued that there was unilateral mistake involved and they are entitled to reverse the transaction. The Plaintiff sought an order for summary judgment.

The Singapore International Court dismissed the summary judgment application by the Plaintiff as there were triable issues raised by Defendant and held that “a thorough investigation of the facts behind the setting of the abnormally high offer price is justified in order to place the court in a proper position fully to assess the state of the Plaintiff’s knowledge”as well as “the law on unilateral mistake where computers are involved in greater detail”.

E-Hailing Services

During the hype of prosecution of drivers of e-hailing vehicle, one Joe Vincent Singgoh sought an order from Court to protect drivers from such prosecution in Sabah. In the case of Joe Vincent Singgoh v Commercial Vehicles Licensing Board Sabah 1 & Ors (Sabah High Court Judicial Review No. BKI-13NCvC-10/10-2016), the Applicant, a person registered with e-hailing service provider Uber Technologies Inc. as a driver, had sought several orders amongst which an order of prohibition against the 1st and 2nd Respondents from relying on the provisions of Section 33 of the Commercial Licensing Vehicles Act 1987 to prosecute or prohibit the Applicant from using the services of Uber Technologies Inc. The Applicant also sought a mandatory injunction was also sought to restrain the prosecution, prohibition of the Applicant to drive or make drives for Uber.

The High Court held that the aggrieved person in this case is not the applicant. The proper person is Uber Technologies Inc. Uber Technologies Inc. has not made any application to the relevant authorities in Sabah for the relevant permits or licences. And in so far as Section 33 is concerned, Uber Technologies Inc. is the ‘person’ responsible to obtain such approvals and not the Applicant. It is not explained or disclosed why this is so.

The Court also held that whatever Uber is promoting is unlawful and illegal. Whether the Government will grant Uber Technologies Inc. the necessary approval or not is a matter for the former to decide as a matter of policy and the Applicants are not entitled to come to court to seek a prohibitive order to pre-empt any legal action that may be taken by the Police of JPJ to enforce the law.

However, the Government will soon be legalising operators of e-hailing service providers and their drivers. The Commercial Vehicle Licensing Board (Amendment) Act 2017 and Land Public Transport (Amendment) Act 2017 were introduced to amend the Commercial Vehicle Licensing Board Act 1987 (“CVLBA”) (applicable to Sabah, Sarawak and the Federal Territory of Labuan) and the Land Public Transport Act 2010 (“LPTA”) (applicable to Peninsular Malaysia) respectively to introduce the licensing of intermediation business. Intermediation business is defined as “business of facilitating arrangements, booking or transactions of e-hailing vehicle (pursuant to the new amendment to CVLBA) and for the provision of land public transport services (pursuant to the new amendment to LPTA). These amendments is clearly intended to regulate e-hailing services such as Uber and Grab.

The Commercial Vehicle Licensing Board (Amendment) Act 2017 and Land Public Transport (Amendment) Act 2017 also introduced a new class of commercial vehicle namely e-hailing vehicle. This would include the cars driving by Grab and Uber drivers.

Once these amendments are enforced, e-hailing providers like Grab and Uber and also their drivers would need to be registered.

E-Commerce

Groupon Malaysia had another challenging year. The Court had to decide in two (2) cases whether Groupon should be liable for the payment made to them for the purchase of products and services on the Groupon website.

In Groupon Sdn Bhd v Tribunal Tuntutan Pengguna & Anor [2016] 1 LNS 555, the Groupon user in this case bought a tour travel package vide its platform from one of Groupon’s merchants and paid RM999 (tour travel package) and RM652 (compulsory airport tax, surcharges and tipping) to Groupon and the merchant respectively. However, the said merchant allegedly cancelled the tour and Groupon made a refund of only RM999 to the user. Dissatisfied, the user demanded the refund of RM652. Upon the rejection by Groupon, the user filed a complaint to the Consumer Tribunal and it held in favour of the user i.e. Groupon is liable for the said amount of RM652.

Groupon contended that there is an exclusion provision in the travel voucher which states that the RM652 charges is to be paid to the merchant, hence, Groupon should not be compelled to pay for monies it had not received in the first place. The Court conceded and held in favour of Groupon, that “it is unmistakable that the airport tax, surcharges and tipping were not included in the tour travel deal. In other words, they were not borne or absorbed by the Applicant”.

In Groupon Sdn Bhd v Tribunal Tuntutan Pengguna & Anor [2016] 1 LNS 1009, similarly, the Groupon user in this case bought a tour travel package vide its platform from one of Groupon’s merchants and paid a RM999 (tour travel package) and RM450 (compulsory airport tax, surcharges and accommodation) respectively to Groupon and the merchant. Therein, the said merchant allegedly cancelled the tour and Groupon made a refund of only RM999 to the user. Dissatisfied, the user demanded the refund of RM450. Upon the rejection by Groupon, the user made a complaint to the Consumer Tribunal and it held in favour of the user i.e Groupon is liable for the third party payment to its merchant.

Groupon contended that there is no contractual relationship between Groupon and the user in the RM450 transaction and hence it shall not be liable to pay. The Court rejected the argument and held in favour of the user that Groupon had acted as an agent for the merchant and made a representation in the travel package voucher, instructing the user to make the RM450 payment to the merchant. Groupon shall be liable for the damages as the contractual relationship was established between Groupon and the user but not between merchant and user.

Defamation

The case of Dato’ Aishaf Falina Bt Ibrahim v Ismail Bin Othman & 2 Ors (Kuala Lumpur Civil Suit No. 22NCVC-352-07/2015) highlighted two interesting points.

The Plaintiff claimed that she was defamed by the retention of the erroneous information in the human resources information system of the 3rd Defendant (her former husband) and its “publication” via the said system. The alleged erroneous information was the information regarding the Plaintiff’s post-divorce marital status with the 1st Defendant, was kept in the 3rd Defendant’s human resources information system for a period of time after she and the 1st Defendant had been divorced. The first question is whether the publication of the erroneous information via the human resources information system amounts to defamation.

The second interesting point is whether the publication on the intranet amounts to publication.

The High Court held that the 2nd and 3rd Defendants are liable in defamation for the retention of erroneous information concerning the Plaintiff’s marital status in the 2nd Defendant’s human resources information system notwithstanding that the error was due to a glitch caused by its source code. The High Court also found that the publication of the erroneous information on the human resources information system via its intranet amounts to publication.

The High Court however dismissed the Plaintiff’s action for tort of misuse of private information as the erroneous information is not private information and there was no misuse of information.

Meanwhile, in Lye Eng Eng & Anor v Ho Kee Jin (Kuala Lumpur High Court Civil Appeal No: WA-12BNCVC-174-11/2016), the High Court, on an appeal from the Sessions Court by the Plaintiff, increased the damages awarded to RM35,000 for defaming the 1st Plaintiff by sending an email containing defamatory statements to 23 persons including those who mattered most to him, namely, his children, his friends and business associates. The Court also held that the Sessions Court Judge had failed to take into consideration of the “gravity of the libel”.

Part 3: In the final part we look at a few cases where individuals ran foul of the Communications and Multimedia Act 1998 and some cases under the Computer Crimes Act.


First published on Digital News Asia on 29 March 2018

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