Australia v Midford (Malaysia) Sdn Bhd

• Jurisdiction: Malaysia
• Judgment Date: 09 February 1990
• Date: 09 February 1990
• Court: Supreme Court (Malaysia)

Malaysia, Supreme Court.

(Hashim Yeop Sani CJ; Mohamed Yusoff and Gunn Chit Tuan SCJJ)

Commonwealth of Australia

and

Midford (Malaysia) Sdn Bhd and Another

State immunity Nature of immunity Whether absolute Position in common law countries Distinction between acts jure gestionis and jure imperii Acts of foreign customs officials within territory of forum State The law of Malaysia

Summary: The facts:On 16 September 1988, the High Court at Kuala Lumpur ordered two officers of the Australian Customs Service and one member of the Royal Customs, Malaysia, to return documents and files seized by them belonging to Midford (Malaysia) Sdn Bhd (Midford) and one U Mat. The Director General of Royal Customs, Malaysia, and the Commonwealth of Australia applied to have the order set aside. The Court, in refusing to grant the order, held that Australia was not entitled to pure, absolute immunity from the jurisdiction of the Malaysian courts and was therefore not immune from the criminal jurisdiction of the Court.

The Commonwealth of Australia appealed to the Supreme Court. It contended that it was a foreign sovereign State and that the certificate from the Malaysian Foreign Ministry was conclusive evidence that it was immune from the jurisdiction of the Malaysian courts. Australia argued that in Malaysia the absolute doctrine of State immunity applied because under Section 3 of the Malaysian Civil Law Act 1956 the common law of England was applicable in Malaysia and provided for absolute immunity that could only be restricted by an Act of Parliament. In addition, Australia maintained that the concept of diplomatic immunity also applied to criminal proceedings unless waived and that the discharge of duties by the Customs Service of the Government of Australia was an act jure imperii.

Midford submitted that the injunctive relief was founded on criminal jurisdiction under Section 5 of the Criminal Procedure Code (concerning the applicability of the law of England relating to criminal procedure where there was no local law); that the restrictive doctrine of sovereign immunity applied at common law; and that the certificate of recognition left the courts to decide whether a foreign State had sovereign immunity and the type and extent of such immunity.

Held:The appeal was allowed. The order of the High Court was set aside.

(1) The High Court, in the exercise of its criminal jurisdiction, and notwithstanding the provisions of Section 5 of the Criminal Procedure Code, could not have granted relief by way of an injunction to individuals (p. 650).

(2) The doctrine of absolute sovereign immunity at common law in the United Kingdom was applicable in Malaysia by virtue of the Malaysian Civil Law Act 1956. It developed in the United Kingdom from the theory of absolute immunity in 1956 to the position at common law in 1975, when the doctrine of absolute immunity applied to actions in personam only and the doctrine of restrictive immunity applied to actions in rem (The Philippine AdmiralINTL).1 In 1977 the effect of the decision in the TrendtexINTL2 case was that the theory of restrictive sovereign immunity came to be applied at common law, which was further confirmed by the I CongresoINTL3 case. Although of no more than persuasive authority in Malaysia, the Court was inclined to apply the restrictive theory of sovereign immunity. Parliament could, at a later date, decide to define the limits and extent of sovereign immunity in Malaysia (p. 650).

(3) The acts of the customs arm of the Australian Government, considered in the circumstances of the case, could not be classed as acta jure gestionis, that is, within the trading or commercial activity of the foreign State. They were acts which came within the sphere of acta jure imperii, acts falling within the governmental or sovereign activity of a State (p. 651).

(4) International comity required that in applying the doctrine of sovereign immunity, whether in the exercise of civil or criminal jurisdiction, the Court should have disclaimed jurisdiction after the production of the certificate from the Executive stating that Malaysia recognized Australia as a foreign sovereign State (p. 651).

The following is the text of the judgment of the Supreme Court, delivered by Gunn Chit Tuan SCJ:

In a notice of motion entitled Federal Territory Criminal Application No CR 5420 of 1988 the Criminal Division of the High Court at Kuala Lumpur on 16 September 1988, ordered, inter alia, one Brian Robinson and one Brendan O'Shannassy of the Australian Customs Service and also one Vijayandran of the Royal Customs, Malaysia, to forthwith return all documents/files and any copies made of the documents seized by them belonging to Midford (Malaysia) Sdn Bhd and one U Mat.

They as well as the Director General of the Royal Customs, Malaysia, and the Commonwealth of Australia and their servants/agents were also restrained from conducting any further illegal searches/seizures on the premises of Midford (Malaysia) Sdn Bhd, its employees, agents or partners.

On 21 September 1988, the Director General of Royal Customs, Malaysia and the said Vijayandran of Royal Customs, Malaysia, applied by notice of motion for the whole order of the Court made on 16th day of September 1988, to be set aside on the grounds that the Court had no jurisdiction to grant the relief sought and that the

proceedings adopted in applying for an injunction in a criminal application was misconceived in law as there are no provisions in the Criminal Procedure Code to enable the Court to grant the injunction sought.

On 2 December 1988, the Commonwealth of Australia also applied by a notice of motion, inter alia, for the following orders:

1. That the Commonwealth of Australia be granted leave to appear in this action under protest, without prejudice to an application by it to set aside the original application and all its subsequent proceedings;

2. Alternatively, that the order dated 16th day of September 1988, be set aside;

on the grounds, inter alia, that the Commonwealth of Australia is not subject to the jurisdiction of the Court by reason of the fact that it is a foreign State recognized by the Supreme Head of the State of Malaysia and is clothed with sovereign immunity; and that there was no jurisdictional basis in law and/or in procedural basis for the action and/or the form and nature of the relief sought.

Anuar J, who heard the said notice of motion dated 2 December 1988, noted that it was not disputed that the Commonwealth of Australia is a foreign sovereign State but it was contended by Mr Hira Singh, counsel for the said Midford (Malaysia) Sdn Bhd and U Mat that the Commonwealth of Australia as well as the two Australian customs officers did not enjoy pure absolute immunity. And the learned Judge on 15 June 1989, ruled that the Commonwealth of Australia was not entitled to pure absolute immunity from the jurisdiction of the Malaysian Courts. The Court is fortified by the fact that if this case were to be in an English Court or if the Commonwealth of Australia were to be Malaysia in an Australian Court, the Commonwealth of Australia would not be granted the order asked for, especially the immunity from criminal jurisdiction of the Court.

A notice of appeal was filed by the Commonwealth of Australia on 20 June 1989, and before us Mr Cecil Abraham, its...