160 Current Law Journal [2019] 4 CLJ

ERNST & YOUNG v. SJ ASSET MANAGEMENT A

SDN BHD (IN LIQUIDATION) & ANOR
COURT OF APPEAL, PUTRAJAYA
TENGKU MAIMUN TUAN MAT JCA
HARMINDAR SINGH DHALIWAL JCA
AB KARIM AB JALIL JCA B
[CIVIL APPEAL NO: W-02(NCC)(W)-2311-11-2017]
9 JANUARY 2019

CIVIL PROCEDURE: Discovery – Application for – Application for discovery of

documents – Seeking disclosure of certain documents – Whether documents fell C
within ambit of s. 148B of Securities Commission Malaysia Act 1993 – Whether
Securities Commission’s authority required for disclosure of discovery documents –
Whether Securities Commission led sufficient evidence to justify non-disclosure –
Balance of public interest – Consideration of – Whether disclosure of documents
beneficial to all parties – Securities Commission (Amendment) Act 2015, s. 64(4), D
(8) – Rules of Court 2012, O. 24
SJ Asset Management Sdn Bhd (‘SJAM’) was a small private company which
carried on business as a licensed fund manager. In August 2009, as part of
an increased scrutiny of asset management companies, Securities
Commission (‘SC’) conducted an examination of SJAM and in April 2010, E
the SC appointed BDO Consulting Sdn Bhd (‘BDO’) to attend at SJAM and
examine its books, accounts and records, which led to an admission by
SJAM of certain regulatory breaches. The SC subsequently revoked SJAM’s
fund manager license and BDO was later appointed as liquidator, and in that
role reported an alleged discrepancy between the trust assets that had been F
reported to SJAM’s clients and the trust assets held by custodians. SJAM was
then wound up. Separate suits were thus instituted against SJAM and the
appellant, Ernst & Young (‘EY’) by CIMB Investment Bank Berhad
(‘CIMB’) and various other individual investors (‘the plaintiffs’). The
plaintiffs pursued a claim against EY, SJAM’s auditor, on the basis that EY G
failed to detect the alleged fraud. EY denied the plaintiffs’ allegations and
contended, among other things, that the fraud was not reasonably
recoverable. The discovery application, the subject matter of the instant
appeal, was filed by EY vide encl.197 to seek disclosure of certain documents
(‘the discovery documents’). The High Court found that, notwithstanding
H
that the discovery documents were relevant and necessary, the said
documents fell within the ambit of s. 148B of the Securities Commission
Malaysia Act 1993 (‘SCMA 1993’) and, therefore, ought not to be disclosed
without the authorisation of the SC and that their disclosure would impede
the proper functioning of the SC pursuant to the SCMA 1993. The issues that
arose were (i) whether the SC’s authorisation was required in order for SJAM I
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 161

A to disclose the discovery documents; and (ii) whether the trial judge had erred
in finding that the balance of public interest favoured the non-disclosure of
the discovery documents.
Held (allowing appeal)
Per Harmindar Singh Dhaliwal JCA delivering the judgment of the court:
B
(1) The issue of the SC’s authorisation arose as a result of the provision
relating to the obligation of secrecy advocated by s. 148 of the SCMA
1993. The trial judge had taken the position that was the current s. 148
introduced by the Securities Commission (Amendment) Act 2015 (‘2015
Amendment’) which came into force on 15 September 2015, that was
C
applicable. Regardless of Parliament’s intention to widen the secrecy
obligations with the said 2015 Amendment, Parliament’s intention was
to clearly also preserve any rights which accrued prior to the
amendment through s. 64 of the 2015 Amendment. The ‘right’ or
‘privilege’ acquired or which accrued under s. 64(4) and 64(8) of the
D 2015 Amendment included an application for discovery of documents.
Thus, there was no need for the consent of the SC. Sections 148A and
148B which were also introduced by the 2015 Amendment Act were
ineffective and could not deprive EY of its right to obtain disclosure.
(paras 16-20)
E
(2) The discovery application was made in the context of a private action
between the two private parties where the SC was not even a party. It
did not affect SC’s public functions. Further, the disclosure of the
discovery documents did not trigger any recognisable head of public
interest immunity ie national security, international relations, workings
F of central government, other branches of public service, the police and
armed forces, confidentiality and informants. Also, the deponent to the
affidavit filed by the SC was not the appropriate person to properly
consider the documents or the basis for the claim to immunity from
disclosure. The deponent did not seem to be familiar with the effect of
G the documents and depended upon the solicitors’ advice to come to a
view that disclosure should not be allowed. The SC’s affidavits were
lacking in specificity and detail to support the SC’s argument that, on
the facts, the documents ought not to be disclosed due to public interest.
The SC had not led sufficient evidence to justify non-disclosure.
H (paras 25, 32, 33, 34 & 35)
(3) After determining that the discovery documents were relevant and
necessary for a fair trial, the trial judge should not have refused to make
an order for production without examining the documents and
considering them in light of the other materials. Any concerns about
I future investigations being affected and public confidence in the SC
being undermined was unwarranted. As for the ground concerning the
162 Current Law Journal [2019] 4 CLJ

floodgate effect, this was against the established jurisprudence as the law A
in the form of O. 24 Rules of Court 2012 allowed for discovery of
documents in civil litigation. Disclosure orders would be made only in
the appropriate cases where the legal test has been met. The court
functions as a gatekeeper by assessing the merits of each individual
application. The fear of floodgate effect was unjustified and unfounded. B
(paras 36-39)
(4) The SC must act fairly in that there must be equal access to documents
to prevent one party from having a litigious advantage or disadvantage
as the case may be. As SJAM has had the benefit of having the
documents sought for in the application, the SC’s stand in opposing C
disclosure was rather curious. The documents concerned were no longer
confidential. It was to the benefit of all parties that it be disclosed as to
how the fraud had occurred and the reasons why action was taken
against SJAM. (para 40)
(5) The courts are entrusted with the duty of being the guardians of the D
public interest, and in the exercise of this duty, to weigh both the public
interest in the administration of justice and other public interests that
may arise. The fact that the SC was a public body did not vindicate its
failure to give clear, reasoned and valid justifications for its position in
resisting disclosure. Bare assertions for non-disclosure would not suffice. E
Further, the trial judge’s assessment of the balance of public interest was
flawed and the final decision to disallow disclosure was unsupported by
principle and by the evidence. The trial judge had failed to properly
weigh the likelihood of harm that non-disclosure would cause to the
party seeking disclosure and to the administration of justice as a whole. F
Thus, the decision of the trial judge was plainly wrong and could not be
upheld. (paras 44-47)
Bahasa Malaysia Headnotes
SJ Asset Management Sdn Bhd (‘SJAM’) adalah sebuah syarikat swasta kecil
G
yang menjalankan perniagaan sebagai pengurus dana berlesen. Pada Ogos
2009, sebagai sebahagian pengawasan yang meningkat terhadap syarikat
pengurusan aset, Suruhanjaya Sekuriti (‘SS’) melakukan pemeriksaan
terhadap SJAM dan pada April 2010, SS melantik BDO Consulting Sdn Bhd
(‘BDO’) untuk memeriksa SJAM serta buku-bukunya, akaun-akaunnya dan
rekod-rekodnya, yang mengakibatkan pengakuan SJAM terhadap H
pelanggaran peraturan-peraturan tertentu. Lesen pengurusan dana SJAM
kemudian dibatalkan oleh SS dan BDO dilantik sebagai pelikuidasi, dan
dalam peranan tersebut, telah melaporkan dakwaan percanggahan antara
aset-aset amanah yang dilaporkan kepada pelanggan-pelanggan SJAM dan
aset-aset amanah yang dipegang oleh pemegang-pemegang. SJAM I
kemudiannya telah digulung. Guaman berasingan telah dimulakan terhadap
SJAM dan perayu, Ernst & Young (‘EY’) oleh CIMB Investment Bank
Berhad (‘CIMB’) dan pelbagai pelabur individu lain (‘plaintif-plaintif’).
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 163

A Plaintif-plaintif membuat tuntutan terhadap EY, juruaudit SJAM, atas alasan

EY gagal mengesan penipuan yang didakwa. EY menafikan dakwaan-
dakwaan plaintif-plaintif dan menghujahkan, antara lain, bahawa penipuan
tidak dapat dikenal pasti secara munasabah. Permohonan penzahiran, subjek
perkara rayuan ini, difailkan oleh EY melalui lamp. 197 untuk menuntut
B pendedahan dokumen-dokumen tertentu (‘dokumen-dokumen penzahiran’).
Mahkamah Tinggi mendapati, walaupun dokumen-dokumen penzahiran
relevan dan perlu, dokumen-dokumen tersebut terangkum dalam lingkungan
s. 148B Akta Suruhanjaya Sekuriti Malaysia 1993 (‘ASSM 1993’) dan oleh
itu tidak boleh didedahkan tanpa kebenaran SS dan bahawa pendedahannya
C
akan menghalang SS berfungsi dengan baik menurut ASSM 1993. Isu-isu
yang timbul adalah (i) sama ada kebenaran SS diperlukan untuk SJAM
mendedahkan dokumen-dokumen penzahiran; dan (ii) sama ada hakim bicara
terkhilaf apabila mendapati bahawa keseimbangan kepentingan awam
memihak pada tidak mendedahkan dokumen penzahiran.
D Diputuskan (membenarkan rayuan)
Per Harmindar Singh Dhaliwal HMR menyampaikan penghakiman
mahkamah:
(1) Isu kebenaran SS timbul akibat peruntukan berhubungan kewajipan
kerahsiaan disokong oleh s. 148 ASSM 1993. Hakim bicara telah
E mengambil kedudukan bahawa s. 148 semasa ini diperkenalkan oleh
Akta Suruhanjaya Sekuriti (Pindaan) 2015 (‘Pindaan 2015’) yang
berkuat kuasa pada 15 September 2015, yang diguna pakai. Tanpa
mengambil kira niat Parlimen untuk memperluaskan kewajipan
kerahsiaan dengan Pindaan 2015 tersebut, niat Parlimen dengan jelasnya
F adalah untuk memelihara mana-mana hak yang terakru sebelum pindaan
melalui s. 64 Pindaan 2015. ‘Hak’ atau ‘keistimewaan’ yang diperoleh
atau terakru bawah sub-s. 64(4) dan 64(8) Pindaan 2015 termasuk
permohonan untuk penzahiran dokumen-dokumen. Oleh itu, tiada
keperluan untuk kebenaran SS. Seksyen-seksyen 148A dan 148B yang
juga diperkenalkan melalui Akta Pindaan 2015 tidak berkesan dan tidak
G
boleh menafikan hak EY memperoleh pendedahan.
(2) Permohonan penzahiran dibuat dalam konteks tindakan persendirian
antara kedua-dua pihak swasta dan SS bukan pihak yang terlibat. Fungsi
awam SS tidak terjejas sama sekali. Tambahan lagi, pendedahan
H dokumen-dokumen penzahiran tidak menjejaskan mana-mana tajuk
imuniti kepentingan awam iaitu keselamatan negara, perhubungan
antarabangsa, kerja-kerja Kerajaan pusat, cawangan lain dalam
perkhidmatan awam, pihak polis dan angkatan tentera, kerahsiaan dan
pemberi maklumat. Juga, deponen afidavit oleh SS bukanlah pihak yang
sesuai untuk mempertimbangkan dokumen-dokumen atau dasar tuntutan
I
imuniti daripada pendedahan. Deponen seolah-olah tidak biasa dengan
kesan dokumen-dokumen dan bergantung pada nasihat peguam cara
untuk mencapai keputusan bahawa pendedahan tidak patut dibenarkan.
164 Current Law Journal [2019] 4 CLJ

Afidavit-afidavit SS kekurangan kekhususan dan keperincian untuk A

menyokong hujahan SS bahawa atas fakta dokumen-dokumen tidak patut
didedahkan kerana kepentingan awam. SS tidak mengemukakan
keterangan mencukupi untuk menjustifikasikan ketidakdedahan.
(3) Selepas menentukan dokumen-dokumen penzahiran adalah relevan dan
perlu untuk perbicaraan adil, hakim bicara tidak sepatutnya menolak B
untuk membuat perintah pengemukaan tanpa memeriksa dokumen-
dokumen dan mempertimbangkannya berdasarkan bahan-bahan lain.
Apa-apa kebimbangan tentang siasatan masa depan akan terjejas dan
keyakinan orang ramai terhadap SS akan terjejas tidak wajar. Berkenaan
alasan kesan kebanjiran, ini bertentangan dengan perundangan yang C
terbukti kerana undang-undang dalam bentuk A. 24 Kaedah-kaedah
Mahkamah 2012 membenarkan penzahiran dokumen-dokumen dalam
tindakan undang-undang sivil. Perintah-perintah pendedahan hanya akan
dibuat dalam kes-kes yang sesuai apabila ujian undang-undang telah
dipenuhi. Fungsi mahkamah adalah sebagai ‘penyaring maklumat’ D
dengan menilai merit-merit setiap permohonan. Ketakutan akan kesan
kebanjiran tidak wajar dan tidak berasas.
(4) SS harus bertindak secara adil bahawa akses yang sama harus diberikan
pada dokumen-dokumen untuk menghalang satu pihak daripada
kelebihan atau kelemahan litigasi mengikut kes yang berkenaan. Kerana E
SJAM telah mendapat manfaat menerima dokumen-dokumen yang
dituntut dalam permohonan, pendirian SS menentang pendedahan agak
aneh. Dokumen-dokumen berkenaan tidak lagi sulit. Semua pihak
berkenaan akan menerima manfaat pendedahan berkenaan penipuan
yang berlaku dan alasan-alasan kenapa tindakan diambil terhadap F
SJAM.
(5) Mahkamah-mahkamah diamanahkan dengan tugas melindungi
kepentingan awam, dan dalam pelaksanaan tugasnya, untuk mengambil
kira kedua-dua kepentingan awam dalam pentadbiran keadilan dan
kepentingan-kepentingan awam lain yang mungkin timbul. Fakta G
bahawa SS adalah sebuah perbadanan awam tidak menjustifikasikan
kegagalannya memberi justifikasi yang jelas, munasabah dan sah untuk
pendiriannya menolak pendedahan. Pengataan kosong berkenaan
ketidakdedahan tidak memadai. Tambahan lagi, penilaian hakim bicara
berkenaan keseimbangan kepentingan awam adalah cacat dan keputusan H
muktamad untuk tidak membenarkan pendedahan tidak disokong oleh
prinsip dan keterangan. Hakim bicara gagal mempertimbangkan dengan
betul kemungkinan keburukan yang akan berlaku pada pihak yang
menuntut pendedahan dan pada pentadbiran keadilan secara keseluruhan
jika tiada pendedahan. Oleh itu, keputusan hakim bicara dengan jelas
I
salah dan tidak boleh disahkan.
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 165

A Case(s) referred to:

Air Canada v. Secretary of State for Trade (No 2) [1983] 1 All ER 161 (refd)
BA Rao & Ors v. Sapuran Kaur & Anor [1978] 1 LNS 14 FC (refd)
Compaignee Financiere du Pacifique v. Peruvian Guano Co (1882) 11 QBD 55 (refd)
Competition Commission v. Nutanix Hong Kong Limited and Others [2018] HKCT 1 (refd)
Conway v. Rimmer and Another [1968] 1 All ER 874 (refd)
B Conway and Burmah Oil Co Ltd v. Bank of England [1979] 3 All ER 700 (refd)
D v. National Society for the Prevention of Cruelty to Children [1977] 1 All ER 589 (refd)
Duncan v. Cammell Laird & Co Ltd [1942] 1 All ER 587 (refd)
Goodridge v. Chief Constable of Hampshire Constabulary [1999] 1 All ER 896 (refd)
Lees v. Motor Insurers’ Bureau [1953] 1 WLR 620 (refd)
Science Research Council v. Nasse [1979] 3 All ER 673 (refd)
C SFC v. Wong Yuen Yee & Ors [2017] 2 HKC 332 (refd)
Slaney v. Kean [1970] 1 Ch 243 (refd)
Suruhanjaya Sekuriti v. Datuk Ishak Ismail [2016] 3 CLJ 19 FC (refd)
Wallace Smith Trust Co Ltd (in Liq) v. Deloitte Haskins & Sells [1996] 4 All ER 403
(refd)
Yekambaran Marimuthu v. Melayawata Steel Bhd [1994] 2 CLJ 581 HC (refd)
D
Legislation referred to:
Interpretation Acts 1948 and 1967, s. 77
Rules of Court 2012, O. 24 rr. 3, 7, 15
Securities Commission Malaysia Act 1993, ss. 148A, 148B

E Other source(s) referred to:

Disclosure, Sweet & Maxwell, 4th edn, 2012, paras 12.17-12.26
For the appellant - Gopal Sreenevasan, Kelvin Seet, Vendee Chai & Lim Lay Yee;
M/s Cecil Abraham & Partners
For the 1st respondent - Ang Hean Leng & Choy Kay Chun; M/s Lee Hishammuddin Allen
& Gledhill
F
For the 2nd respondent - Lim Chee Wee, Sharon Chong & Joyce Lim; M/s Skrine
[Editor’s note: For the High Court judgment, please see CIMB Investment Bank Bhd v. Ernst
& Young (AF 0039) & Anor [2018] 1 LNS 1133 (overruled).]
Reported by Suhainah Wahiduddin
G
JUDGMENT
Harmindar Singh Dhaliwal JCA:
[1] This appeal raises conflicting policy issues in relation to the right of
discovery, including what we were told are novel questions of law in
H Malaysia pertaining to the application of the doctrine of public interest
immunity in so far as disclosure of documents is concerned.
[2] The appeal arose as a result of the order of the Kuala Lumpur High
Court dated 1 November 2017. The learned judge had dismissed the
appellant’s (“EY”) application for discovery filed pursuant to O. 24 r. 3 and/
I or r. 7 of the Rules of Court 2012 (“ROC 2012”) (“discovery application”).
In that discovery application, EY had sought for documents and information
166 Current Law Journal [2019] 4 CLJ

which were made available to the Securities Commission (“SC”) during SC’s A
supervisory assessment of the first respondent, SJ Asset Management Sdn
Bhd (“SJAM”).
[3] We heard the appeal on 5 September 2018. After hearing the parties
and taking into consideration the written submissions, we allowed the appeal
and set aside the order of the High Court. Our reasons for doing so now B
follow and will constitute the judgment of the court.
Background
[4] The background facts leading to the discovery application are not
disputed and can be stated as follows. SJAM was a small private company C
which carried on business as licensed fund manager. In that role, SJAM
administered, managed and invested clients’ funds in various investments in
the global markets. The funds managed by SJAM were held at all times by
reputable third-party custodian banks.
[5] In August 2009, as part of increased scrutiny of asset management D
companies, the SC conducted an examination of SJAM (“2009 SC
examination”). In April 2010, the SC appointed BDO Consulting Sdn Bhd
(“BDO”) to attend at SJAM and examine its books, accounts and records
(“2010 BDO examination”). The 2010 BDO examination led to an
admission by SJAM of certain regulatory breaches. E

[6] As a result of SJAM’s admission, the SC revoked SJAM’s fund

manager license on 23 July 2010. BDO was later appointed as liquidator, and
in that role reported an alleged discrepancy between the trust assets that had
been reported to SJAM’s clients and the trust assets held by custodians.
SJAM was then wound up in October 2010. F

[7] After learning of the discrepancy in trust assets, separate suits were
instituted against SJAM and EY. CIMB Investment Bank Berhad (“CIMB”),
who had advised its own clients to invest through SJAM, commenced Civil
Suit No. 22NCC-422-03-2012 (Suit 422) and various other individual
G
investors (“investors”), who used SJAM’s services, commenced Civil Suit
No. 22NCC-431-03-2012 (Suit 431).
[8] CIMB and the investors, for convenience referred together as the
plaintiffs, alleged in those suits that the discrepancy in trust assets arose as
a result of fraud committed by three defendants, namely: H
(a) Tan Whai Oon, the Managing Director of SJAM during the relevant
time period;
(b) Annalong Corporation Ltd., a company allegedly associated with
SJAM; and
I
(c) SJAM, the fund manager.
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 167

A [9] The plaintiffs also pursued a claim against EY, SJAM’s auditor, on the
basis that EY failed to detect the alleged fraud. EY has denied the plaintiffs’
allegations and contends, among other things, that the fraud was not
reasonably discoverable.
The Discovery Application
B
[10] The discovery application, the subject matter of the instant appeal,
was filed by EY vide encl. 179, to seek disclosure of the following documents
(collectively referred to as the “discovery documents”):
(i) Details and/or documents relating to all investigations and/or
C examinations by the SC on SJAM, including but not limited to the SC’s
investigation and/or examination in the 2009 SC examination;
(ii) All reports issued by BDO pursuant to its appointment as independent
auditor by the SC on 14 April 2010 (“BDO reports”);

D (iii) Documents relating to the SC issuing a notice to show cause on

30 December 2009 to SJAM and subsequent meetings with SJAM
following such notice (“SC show cause and meeting documents”);
(iv) Documents relating to SJAM responding in writing to the SC’s notice
to show cause (“SJAM response to show cause”).
E
[11] Meanwhile, an application to intervene by the SC was granted by the
High Court on 25 August 2017. After hearing the parties, the discovery
application was dismissed by the High Court on 1 November 2017 with costs
of RM12,000 to be paid to the SC and RM4,000 to be paid to SJAM.

F
[12] In dismissing the discovery application, the learned High Court Judge
found, firstly, that the discovery documents were relevant and necessary as
necessitated by O. 24 of ROC 2012. There is no quarrel about this finding.
In any event, we think that the learned judge was justified in coming to this
finding as the discovery documents contained evidence relevant to the issues
in that suit and contained information which may advance EY’s case or
G
damage the plaintiffs’ case against EY (see Yekambaran Marimuthu v.
Malayawata Steel Berhad [1994] 2 CLJ 581 and Compaignee Financiere du
Pacifique v. Peruvian Guano Co [1882] 11 QBD 55).
[13] The learned judge, however, found that notwithstanding that the
H
discovery documents were relevant and necessary, the said documents fell
within the ambit of s. 148B of the Securities Commission Malaysia Act 1993
(“SCMA 1993”) and therefore ought not to be disclosed without the
authorisation of the SC.

I
168 Current Law Journal [2019] 4 CLJ

[14] The learned judge further held that there was no waiver of the SC’s A
authorisation as EY’s remedy to challenge the SC’s omission (silence) is by
way of judicial review. And finally, the learned judge also found that
notwithstanding the relevant documents being relevant and necessary, their
disclosure as a class would be injurious to public interest as it would impede
the proper functioning of the SC pursuant to the SCMA 1993. B
The Instant Appeal
[15] Before us, the findings of the learned judge and reasons given for
dismissing the discovery application were assailed on a number of grounds.
These grounds are now the issues for consideration and decision in this
C
appeal. In this regard, we agree that the pivotal issues for consideration in
the appeal are whether the SC’s authorisation is required in order for SJAM
to disclose the discovery documents and whether the learned judge had erred
in finding that the balance of public interest favours non-disclosure of the
discovery documents.
D
Whether Authorisation Of The SC Is Required
[16] The issue of the SC’s authorisation arises as a result of the provision
relating to the obligation of secrecy advocated by s. 148 of SCMA 1993. Suit
422 and Suit 431 were instituted in 2012 when the s. 148 that existed at the
time was the one introduced by the Securities Commission (Amendment) Act E
2010 (Act A 1369) (“2010 Amendment”) which came into force on 1 April
2010. The relevant part of that provision reads as follows:
148. Obligation of secrecy
(1) Except for any of the purposes of the securities law or for the purpose
F
of any civil or criminal proceedings under any written law or where
otherwise authorised by the Commission or subject to section 124 of the
Evidence Act 1950, any:
(a) member of Commission;
(b) member of Shariah Advisory Council; G
(c) member or the Audit Oversight Board;
(d) member of any committees of the Commission, Shariah Advisory
Council or Audit Oversight Board;
(e) officer, servant or agent of the Commission; or
H
(f) person attending any meeting of-
(i) the Commission;
(ii) any committees of the Commission;
(iii) Shariah Advisory Council; or I
(iv) Audit Oversight Board,
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 169

A shall not disclose any information which has been obtained by him in the
course of his duties and which is not published in pursuance of the
securities laws.
[17] As set out in the manner above, the 2010 Amendment allows
disclosure without the SC’s authorisation “for any of the purposes of the
B securities law or for the purpose of any civil or criminal proceedings under
any written law”. In the instant case, disclosure under the 2010 Amendment
is permissible because the discovery documents are necessary for purposes
of the securities laws. The plaintiffs in the High Court rely on the Securities
Industry Act 1983 and the Capital Markets and Services Act 2007 to find
C their causes of action. The discovery documents are also necessary for the
purpose of civil proceedings. The plaintiffs’ claims in the High Court are
founded on common law negligence and breaches of statutory duty under the
Companies Act 1965.
[18] However, the learned judge took the position that is was the current
D s. 148 introduced by the Securities Commission (Amendment) Act 2015 (Act
A1489) (“2015 Amendment”), and which came into force on 15 September
2015, that was applicable as when the discovery application was heard on
2 October 2017, the 2015 Amendment had taken effect.
[19] With respect, we are unable to accede to the learned judge’s view on
E the applicable law. We agree that the regardless of Parliament’s intention to
widen the secrecy obligations with the 2015 Amendment, Parliament’s
intention was to clearly also preserve any rights which accrued prior to the
amendment through s. 64 of the 2015 Amendment Act. The relevant part of
s. 64 of the 2015 Amendment Act reads:
F
64. Saving and transitional
… (4) Any right, privilege, obligation or liability acquired, accrued or
incurred before the effective date or any legal proceedings, remedy or
investigation in respect of such right, privilege, obligation or liability shall
not be affected by this Act and shall continue to remain in force as if this
G Act had not been enacted.
…(8) Any right, privilege, obligation or liability acquired, accrued or
incurred before the effective date or any legal proceedings, remedy or
investigation in respect of such right, privilege, obligation or liability shall
not be affected by this Act and shall continue to remain in force as if this
H Act had not been enacted.
[20] In this context, it was plain to us that the “right” or “privilege”
acquired or which accrued under sub-ss. 64(4) and 64(8) of the 2015
Amendment Act included an application for discovery of documents. In any
event, we agree that the term “legal proceedings” used in the same sub-
I sections can refer to the institution of the writ action filed by CIMB
Investment Bank against EY on 30 April 2012 which was way before the
effective date. It cannot be restricted to the time when the discovery
170 Current Law Journal [2019] 4 CLJ

application was filed on 11 July 2017 which was in effect an interlocutory A

application that emanated from the same writ action filed by CIMB
Investment Bank. It must follow that there is no need for the consent of the
SC. For the same reasons, ss. 148A and 148B which were also introduced
by the 2015 Amendment Act are ineffective and cannot deprive EY of its
right to obtain disclosure. B
[21] It is axiomatic that the preservation of rights under the 2015
Amendment Act is not unusual or novel as it is consistent with the general
rule against retrospective application as formalised under s. 77 of the
Interpretation Acts 1948 and 1967 as follows:
C
77. Effect of repeal
Where a written law repeals in whole or in part any other written law,
then, unless the contrary intention appears, the repeal shall not:
(a) revive anything not in force or existing at the time at which the
repeal takes effect; or D
(b) affect the previous operation of any written law so repealed or
anything duly done or suffered under any written law so repealed;
or
(c) affect any right, privilege, obligation or liability acquired, accrued or
E
incurred under any written law so repealed; or
(d) affect any penalty, forfeiture or punishment incurred in respect of
any offence committed against any written law so repealed; or
(e) affect any investigation, legal proceeding, or remedy in respect of
any such right, privilege, obligation, liability, penalty, forfeiture or F
punishment as aforesaid; and any such investigation, legal
proceeding or remedy may be instituted, continued or enforced, and
any such penalty, forfeiture or punishment may be imposed, as if the
repealing law had not been passed.
[22] In coming to this view, we have not overlooked the submissions with
G
regard to the consent order dated 27 July 2016. By this order, parties in Suit
422 had agreed for SJAM to produce certain documents subject to SC’s
consent. Now, the learned judge appeared to take the view that EY had
acknowledged that consent of SC was required for disclosure of the discovery
documents.
H
[23] On this score, we do not think the said consent order precludes EY
from pursuing its rights to obtain a disclosure order from the court in the
event SC fails to provide the consent. We take the view that EY had not
waived its rights to apply for specific discovery if SC had refused to give
consent. In other words, the consent order cannot be considered to be a
I
commentary on any statutory requirement for consent.
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 171

A [24] It is trite law that a statement of the law cannot be pronounced by

consent (see Lees v. Motor Insurers’ Bureau [1953] 1 WLR 620; Slaney v. Kean
[1970] 1 Ch 243). In other words, arguments must be heard and an opinion
pronounced by the court on a statement of the law. As such, we do not think
there was any acknowledgment nor any incongruity in EY’s position that the
B consent of the SC is not a requirement. Since we have indicated that
according to the prevailing law no consent of SC was required, the consent
order requiring consent has become ineffective.
[25] In view of our decision that no consent of SC is required for
disclosure, the arguments on whether EY should have sought a judicial
C review of SC’s non-action or silence with regard to the issue of consent has
also become irrelevant. We would, however, observe that the failure of EY
to mount any judicial review did not affect its right to pursue an application
for discovery against SJAM. The arguments raised in this connection appear
to overlook the point that the discovery application was made in the context
D of a private action between two private parties where the SC is not even a
party. It does not affect SC’s public functions.
Whether Disclosure Injurious To Public Interest
[26] In addition to finding that the SC’s authorisation was required by
statute, the learned judge accepted SC’s objection to disclosure on the
E
grounds of public interest immunity. The importance of public interest in the
context of discovery is echoed in O. 24 r. 15 of ROC 2012 which provides
that the rules relating to discovery are “subject to any written law or any rule
of law which authorises or requires the withholding of any document on the
ground that the disclosure of it would be injurious to the public interest” (see
F also BA Rao & Ors v. Sapuran Kaur & Anor [1978] 1 LNS 14; [1978] 2 MLJ
146; Suruhanjaya Sekuriti v. Datuk Ishak Ismail [2016] 3 CLJ 19; [2016] 1
MLJ 733). This proviso probably had its genesis in the British Crown
Proceedings Act 1947 which had preserved the so-called “Crown privilege”
as decided by the House of Lords in Duncan v. Cammell Laird & Co Ltd [1942]
G 1 All ER 587.
[27] It is inevitable that when public interest immunity is asserted, the
court will be faced with competing public interests where disclosure is
concerned. On the one hand is the public interest of preventing harm to the
nation and the public service by such disclosure of documents. On the other
H hand is the public interest of promoting the fair and effective administration
of justice where harm would be caused if the withholding of material
evidence results in the court being unable to make a fair determination of the
dispute.
[28] In the context of injury to public interest, in what came to be the
I
leading case on the subject, the House of Lords in Conway v. Rimmer and
Another [1968] 1 All ER 874 (“Conway”) held that disclosure could only be
ordered if the risk of injury to the public interest is outweighed by the injury
172 Current Law Journal [2019] 4 CLJ

to the public interest in the administration of justice. In other words, a A

balancing exercise must be carried out to determine on the facts of each case
which public interest should prevail.
[29] Based on the decisions in Conway and Burmah Oil Co Ltd v. Bank of
England [1979] 3 All ER 700, Bingham J in Air Canada v. Secretary of State
for Trade (No. 2) [1983] 1 All ER 161 (“Air Canada”) summarised the B
principles to be followed with public interest immunity claims. Although His
Lordship’s decision to allow disclosure was set aside by the Court of Appeal,
the principles stated, as follows, have gained universal acceptance (at p. 165):
3. The plaintiff’s summons seeking production of documents for which
C
the Secretary of State has claimed public interest immunity.
Since the decision in Conway v. Rimmer [1968] 1 All ER 874, [1968] AC
910 the question of public interest immunity has arisen on a number of
occasions, most importantly for present purposes in Burmah Oil Co Ltd v.
Bank of England [1979] 3 All ER 700, [1980] AC 1090. From the authorities,
and that authority in particular, I derive the following as the principles to D
be followed where it is sought to withhold documents on the ground that
they belong to a class such that their production would be injurious to
the public interest and where that claim is contested by a party to the
litigation.
1. The first task of the court is to peruse the certificate or document in E
which the claim for public interest immunity is made in order to satisfy
itself (a) that the class to which the documents are said to belong is one
recognised as capable of attracting public interest immunity or is at least
closely analogous to a recognised class, (b) that there is no reason to
believe the documents do not fall within the class claimed, and (c) that
the documents themselves and the basis of the claim to immunity have F
apparently been the subject of proper consideration by an appropriate
person. If these conditions are met, in the absence of any contrary
indication the court will treat the certificate or claim, not as conclusive,
but as motivated by a concern for the public interest which (despite the
inevitable difference of viewpoint) is as genuine as that of the court itself.
In some cases the nature of the class will virtually conclude the matter G
(for example, where Cabinet papers or diplomatic dispatches are
concerned) but such cases are the exception and are not those which in
practice give rise to controversy.
2. If the court is satisfied that the party seeking to withhold the
documents has made a valid claim for public interest immunity the next H
step is to determine whether the party seeking production is able to show
a public interest in production. To do so, such party must show not only
that the documents are relevant under the Peruvian Guano test (a
condition which the claim for immunity itself assumes to be satisfied: see
Compagnie Financiers et Commerciale du Pacifique v. Peruvian Guano Co (1882)
11 QBD 55) but that they are necessary for disposing fairly of the cause I
or matter or (to put it in a different way) are necessary for the due
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 173

A administration of justice: see the Burmah Oil case [1979] 3 All ER 700 at
708, 714, 718, 731, [1980] AC 1090 at 1113, 1121, 1125, 1141. If it appears
to the court that the documents are likely to be necessary for the due
administration of justice the court is confronted by a second aspect of the
public interest, fit to be weighed in the balance against the first.

B 3. If the court is satisfied that there is a public interest both in production

and in non-disclosure it must consider the relative substance of each claim
with a view to forming a judgment whether, on balance, the public interest
will be better served by the withholding of the documents or by their
production. It might be concluded that in respect of some documents the
claim for immunity, although properly made, was of relatively little weight
C (as in the Burmah Oil case [1979] 3 All ER 700 at 714, 720, [1980] AC 1090
at 1121, 1128). It might conversely emerge (as it did in the Burmah Oil case
during argument in the House of Lords) that only very few of the
documents were truly necessary for resolving the real issues in the action,
and then the claim for immunity would have to be considered in relation
to those documents. But the task of the court is to weigh the harm which
D production would cause to the business of government or public
administration against the harm which non-disclosure would do to the
just determination of the particular case and decide where the balance of
public interest lies.
4. Where the court is of opinion that the balance of public interest lies
E clearly against production it will not inspect the documents on the
offchance that that conclusion might prove to be wrong if the documents
were looked at. But the court may privately inspect the documents,
certainly if it is provisionally inclined to order production (see Conway v.
Rimmer [1968] 1 All ER 874 at 888, 900, [1968] AC 910 at 953, 971) but
also, it would seem, if careful consideration of the conflicting claims in the
F absence of the documents leaves the court subject to grave and
disquieting doubts as to where the balance lies: see the Burmah Oil case
[1979] 3 All ER 700 at 726, 734, [1980] AC 1090 at 1135, 1145. If
provisionally inclined to order production the court would not ordinarily
make that order without first inspecting the documents privately.

G [30] In the instant case, the learned judge accepted the SC’s submission that
the balance of public interest tilts on the side of non-disclosure to protect the
effective functioning of the SC pursuant to the SCMA 1993. The following
reasons were provided in coming to this conclusion:
(a) It is in the interests of public that the Discovery Documents be
H protected as a class to fully protect the investigative and supervisory
powers of the SC given that it is inevitable that each document will
be based on, or contain references to other similar investigation or
supervisory documents.
(b) It would be injurious to public interest if the Discovery Documents
were ordered to be disclosed by this Court as this would impede the
I
proper functioning of the SC i.e. there is a risk that future
investigations carried out by the SC may be affected and public
confidence in the SC be undermined.
174 Current Law Journal [2019] 4 CLJ

(c) The protection from disclosure afforded to the SC is not limited to A

a one-off situation involving merely SJAM, as codified in the SCA.
On the other hand, a precedent in allowing disclosure of the SC’s
investigation papers would be established if this Discovery
Application is allowed, resulting in a floodgate effect ie, large
amounts of subsequent litigation seeking for such a disclosure.
B
(d) Further, third parties may be discouraged from coming forward to
give evidence or from giving evidence fully and freely and likewise
it would be important to preserve the integrity and independence of
reports made pursuant to the investigations conducted by the SC.
[31] These four grounds given by the SC to oppose disclosure, and which
C
were accepted by the learned judge, were assailed by learned counsel for EY.
The criticism advanced by counsel was that the SC’s generic reasoning in
support of the claim to public interest immunity was vague, bare and
unsubstantiated. It was contended that no evidence or reasoning was put
forward to establish that the discovery documents belonged to a class which
was recognised as capable of attracting public interest immunity. Blanket and D
bare assertions that disclosure would be injurious to the public interest, it was
argued, should be rejected by the law.
[32] After careful consideration, we came to the view that this criticism
was not without merit. In the first place, the disclosure of the discovery
E
documents does not trigger any recognisable head of public interest
immunity. According to the learned authors of Disclosure (4th edn, Sweet &
Maxwell, 2012), the recognised heads of public interest immunity are
national security, international relations, workings of central government,
other branches of public service, the police and armed forces, confidentiality
and informants (at paras 12.17 to 12.26). F

[33] Secondly, as suggested in Air Canada, the court must be satisfied that the
documents and the basis for the claim to immunity have been properly
considered by an appropriate person. We agree with the appellant that the
deponent to the affidavit filed by the SC was not the appropriate person to
G
properly consider the documents or the basis for the claim to immunity from
disclosure.
[34] The deponent did not seem to be familiar with the effect of the
documents and depended upon the solicitors’ advice to come to a view that
disclosure should not be allowed. The reasons given appeared to be that of H
the SC’s solicitors. In the end, the SC’s affidavits were lacking in specificity
and detail to support the SC’s argument that on the facts the documents ought
not to be disclosed due to the public interest.
[35] In the same context, we are not persuaded that the SC has led sufficient
evidence to justify non-disclosure. For this purpose, the affidavits filed to I
oppose disclosure must be carefully scrutinised. For instance, the affidavits
filed by the SC could have contained an averment that the documents are
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 175

A required for a pending investigation or that disclosure would prejudice an

ongoing criminal prosecution. If there was such an assertion, it would be the
duty of the court to consider and if there is sufficient justification, disclosure
would be refused. However, there was no such assertion in the present case
except for bare, sweeping and unsubstantiated arguments against disclosure
B which the court would be unable to accept (see Competition Commission v.
Nutanix Hong Kong Limited and Others [2018] HKCT 1).
[36] Thirdly, we agree that after determining that the discovery documents
were relevant and necessary for a fair trial, the learned judge should not have
refused to make an order for production without examining the documents
C and considering them in the light of the other material as advocated in
Goodridge v. Chief Constable of Hampshire Constabulary [1999] 1 All ER 896.
The jurisprudence in this respect is settled in that the court should inspect
the documents in circumstances where the documents requested satisfy the
ordinary test for production and disclosure is challenged on the basis of
D public interest immunity (see Wallace Smith Trust Co Ltd (in Liq) v. Deloitte
Haskins & Sells [1996] 4 All ER 403; Science Research Council v. Nasse, BL Cars
Ltd (formerly Leyland cars) v. Vyas [1979] 3 All ER 673).
[37] Coming now to the reasons given by the learned judge for refusing
disclosure, for the first ground, we were unable to ascertain how the
E investigative or supervisory powers of the SC would be affected as this was
not explained in the affidavits. As alluded to earlier, the affidavits only refer
in broad terms to the general investigative and supervisory powers of the SC
without providing any particulars.
[38] For the second ground, we must say, with respect, that any concerns
F about future investigations being affected and public confidence in the SC
being undermined is unwarranted. There was simply no evidence of any
ongoing or forthcoming investigations into SJAM. In fact, investigations
were already completed with SJAM’s licence being revoked and
enforcement action taken to wind up SJAM. At least, evidence of any such
G prejudice to future investigations ought to have been provided in the
affidavits.
[39] As for the third ground concerning the floodgate effect, this is against
the established jurisprudence as the law in the form of O. 24 of the ROC 2012
allows for discovery of documents in civil litigation. Disclosure orders will
H be made only in the appropriate cases where the legal test has been met. The
court functions as a gatekeeper by assessing the merits of each individual
application. The fear of the floodgate effect seems to us to be unjustified and
unfounded.
[40] In this context as well, the role of the SC must be properly
I
appreciated. The SC must act fairly in that there must be equal access to
documents to prevent one party from having a litigious advantage or
176 Current Law Journal [2019] 4 CLJ

disadvantage as the case may be. As SJAM has had the benefit of having the A
documents sought for in the application, the SC’s stand in opposing
disclosure is rather curious. The documents concerned are no longer
confidential. In other words, the documents are no longer with SC alone. As
stated earlier, it is pertinent that discovery is only sought against SJAM and
not the SC. It is to the benefit of all parties that it is disclosed as to how the B
fraud had occurred and the reasons why action was taken against SJAM.
[41] In this respect, we agree with the sentiments expressed in the recent
Hong Kong case of SFC v. Wong Yuen Yee & Ors [2017] 2 HKC 332 where
the court of first instance observed that the proper role of the Hong Kong
equivalent of the SC is to make all materials available for potential use in C
a trial to ensure a just outcome:
76. It has to be borne in mind that these are proceedings in which the
respondents are faced with an adversary in the form of a governmental
regulator which controls the investigatory process. With powers that rank
high in the 'hierarchy' of coercive powers for obtaining information and D
of investigating suspected wrongdoing (see Stern, supra, at p. 2257D), the
Commission occupies a position analogous to criminal law enforcement
agencies, with the additional advantage that an interviewee’s privilege
against self-incrimination is abrogated.
77. Given the status of the Commission as a statutory body established E
for public functions, it seems to me that the observations of Sopinka J in
R v. Stinchcombe, supra, at p 333h-i are apposite: ‘the fruits of the
investigation’ which are in the Commission's possession are not its own
property for use in securing a disqualification order but the property of the
public to be used to ensure that justice is done. The proper role of the
Commission is not a prosecutor bent on securing the disqualification of F
a respondent, but a fair-minded regulator willing if not anxious to make
all materials available for potential use in the trial to ensure a just
outcome.
78. The requirement in civil cases that discovery has to be necessary for
‘disposing fairly of the cause or matter' directs attention to the question
G
whether one party enjoys a 'litigious advantage’ or suffers a 'litigious
disadvantage’ with reference to access to documents: Taylor v. Anderton
[1995] 1 WLR 447, 462C. The notion of equal access to documents
relevant for the preparation of one's case is an important facet of fairness
in this kind of case, where the Commission has taken on the role of an
investigator. The Commission is not in original possession of any relevant H
information or documents generated by any transaction to which it was
party. It has acquired the documents only as a result of its investigation.
The respondent is generally not in a position to specify what information
and documents the Commission has, other than that which it has chosen
to disclose. It is to be questioned whether practical fairness can be
achieved if a respondent is required in this context to pinpoint a concrete I
and specific document or class of documents (so narrowly defined as to
contain no irrelevant documents) before he can obtain discovery.
 Ernst & Young v. SJ Asset Management
[2019] 4 CLJ Sdn Bhd (In Liquidation) & Anor 177

A [42] On the last ground, which alluded to third parties from being
discouraged to give evidence, again we find this reason given by the SC to
be speculative, unsupported and unfounded in principle. There was no
evidence that the 2009 SC examination or the 2010 BDO examination relied
on any information given by informants. It appears to us from the
B appointment letter to BDO that the examinations focussed solely on SJAM’s
books, accounts and records.
[43] Now, the learned judge also appeared to have relied on the case of
Suruhanjaya Sekuriti v. Datuk Ishak Ismail [2016] 3 CLJ 19; [2016] 1 MLJ 733
in arriving at the conclusion that disclosure must be refused for the effective
C functioning of departments or organs of central government. With respect,
the learned judge’s reliance on Ishak’s case is misplaced as the present
discovery application is in no way concerned with the identity of informants.
Unlike Ishak’s case, where disclosure of statements made by informants was
sought, no such disclosure is sought here. In any event, the discovery
D documents are in the possession of SJAM and if there are informants
involved, SJAM would already be aware of them. So the concerns about the
candour of future informants are unfounded.
[44] In the circumstances, we were constrained to hold that the learned
judge’s assessment of the balance of public interest was flawed and the final
E decision to disallow disclosure was unsupported by principle and by the
evidence. The learned judge had failed to properly weigh the likelihood of
harm that non-disclosure would cause to the party seeking disclosure and to
the administration of justice as a whole. The learned judge appeared to have
taken the mistaken view that once public interest immunity is raised by a
F statutory body, the decision on whether to allow or disallow discovery is
absolutely in the hands of the statutory body.
[45] We hasten to add that this proposition is wrong in law as the final
decision on disclosure must lie with the court. It is the independence of the
courts which allows them to be best placed to carry out this duty. This much
G was asserted in Conway, supra, where it was pronounced (at p 901):
In many cases it will be plain that documents are within a class of
documents which by their very nature ought not to be disclosed. Indeed,
in the majority of cases I apprehend that a decision as to an objection will
present no difficulty. The cases of difficulty will be those in which it will
H appear that, if there is non-disclosure, some injustice may result and that
if there is disclosure the public interest may to some extent be affected
prejudicially. The courts can and will recognise that a view honestly put
forward by a Minister as to the public interest will be based on special
knowledge and will be put forward by one who is charged with a special
responsibility. As Lord Radcliffe said in the Glasgow Corpn case (1956 SC
I (HL) at p 18.), the courts will not seek on a matter which is within the
sphere and knowledge of a Minister to displace his view by their own; but
178 Current Law Journal [2019] 4 CLJ

where there is more than one aspect of the public interest to be considered A
it seems to me that a court, in reference to litigation pending before it will
be in the best position to decide where the weight of public interest
predominates. I am convinced that the courts, with the independence
which is their strength, can safely be entrusted with the duty of weighing
all aspects of public interests and of private interests and of giving
protection where it is found to be due. B

[46] The courts are entrusted with the duty of being the guardians of the
public interest, and in the exercise of this duty, to weigh both the public
interest in the administration of justice and other public interests that may
arise. The fact that the SC is a public body does not vindicate its failure to
C
give clear, reasoned and valid justifications for its position in resisting
disclosure. Bare assertions for non-disclosure will not suffice. In this regard,
we are reminded of the observation of Lord Edmund-Davies in D v. National
Society for the Prevention of Cruelty to Children [1977] 1 All ER 589 at p. 616:
... Accordingly, it would be unthinkable to vest the judiciary with a power
D
to exclude in its discretion evidence relevant to the issues in civil
proceedings merely because one side wants it kept out and the judge
thinks that its disclosure is likely to prove embarrassing. In other words,
the exclusion of relevant evidence always calls for a clear justification.
Conclusion
E
[47] In the circumstances, and for the reasons we have given, we were
persuaded that the decision of the learned judge was plainly wrong and
cannot be upheld. The appeal was accordingly allowed and the order of the
High Court was set aside. We also ordered the matter to be remitted to the
High Court for the learned judge to inspect the discovery documents as its
F
final task in considering the claim for public interest immunity before
ordering disclosure.
[48] We also ordered the SC to pay costs of RM12,000 to the appellant EY
subject to payment of allocator fees. No order for costs against the first
respondent, SJAM. Deposit to be refunded. By agreement of the parties, we G
also granted a stay of two months of our order pending the application for
leave to the Federal Court.