Disclaimer: The author is not a competition lawyer and merely analysed the issue at hand utilising statutory interpretation, from the perspective of a civil litigator
During the 75th Annual General Meeting of the Malaysian Bar, inter alia, two resolutions in relation to minimum remuneration for pupils were adopted (“The Resolutions”).
Recently, vide Circular No 340/2021, the National Young Lawyers and Pupils Committee (“NYLPC”) provided a progress update on The Resolutions.
In the circular, the NYLPC points out the following:
“There may also be a competition law issue in which the Bar Council is awaiting independent legal opinion on the matter. It is pending ongoing deliberations internally”
During a Clubhouse talk titled “Bar Council Action Plan: Waras or Wayang?” on 15th September 2021, a Bar Councillor (in his individual capacity) expounded on the competition law issue at play.
The Bar Councillor also provided examples of organisations which were found to have engaged in anti-competitive practices when it had fixed salaries.
Section 4(1) of the Competition Act 2010 (“CA 2010”) is the relevant provision in question.
It provides that, “A horizontal or vertical agreement between enterprises is prohibited insofar as the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services.” (emphasis mine)
The elements of Section 4(1) of the CA 2010 can be summarised as follows:
i. there must be an agreement;
ii. the agreement must be between enterprises; and
iii. the agreement must have the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services.
Is there an agreement between “enterprises”?
Section 2 of the CA 2010 defines an “enterprise” as:
“… any entity carrying on commercial activities relating to goods or services, and for the purposes of this Act, a parent and subsidiary company shall be regarded as a single enterprise if, despite their separate legal entity, both form a single economic unit within which the subsidiaries do not enjoy real autonomy in determining the actions of the subsidiaries on the market.” (emphasis mine)
Advocates and Solicitors of the High Court of Malaya could be construed as enterprises for the purposes of CA 2010 since they are entities which carry out “commercial activities relating to … services,” namely the provision of legal services.
The Resolutions, meanwhile, could be construed as a horizontal agreement between Advocates and Solicitors of the High Court of Malaya for the purposes of Section 4(1) of the CA 2010.
If that is the case, then the Resolutions would appear to contravene Section 4(1) of the CA 2010 unless it can be shown that the Resolutions do not “have the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services.”
The Resolutions are for the creation of minimum remuneration to be paid to pupils, the Resolutions would significantly prevent, restrict, or distort the ability of legal firms currently paying below the minimum remuneration to be implemented to compete with other legal firms for pupils.
Is there an alternative perspective/approach?
One possible option to sidestep the application of Section 4(1) of the CA 2010 is to view the entire matter as the Malaysian Bar, a regulatory body, or the Bar Council as the management arm of the Malaysian Bar, imposing a minimum remuneration for pupils on all of its members.
After all, the Malaysian Bar is not an “enterprise” for the purposes of the CA 2010 as it does not “[carry] on commercial activities relating to goods or services.”
The purpose of the Malaysian Bar, amongst others, is “to represent, protect and assist members of the legal profession in Malaysia and to promote in any proper manner the interests of the legal profession in Malaysia.”
If the Malaysian Bar is not in fact an “enterprise,” then an arguable case can be put forth that Section 4(1) of the CA 2010 does not apply and the implementation of minimum remuneration for pupils does not give rise to a competition law issue.
If the implementation of The Resolutions would violate Section 4(1) of the CA 2010 by virtue of The Resolutions being an agreement between legal firms to fix a floor wage, the Malaysian Bar can pass a subsequent resolution to revoke The Resolutions
Notwithstanding the revocation of The Resolutions, the Bar Council presses ahead with the imposition of minimum remuneration for pupils in line with the above mentioned purpose of the Malaysian Bar, and pursuant to Sections 56 and 57 of the Legal Profession Act 1976.
Would the implementation of minimum remuneration be in line with the long title of the CA 2010?
In the long title of the CA 2010, one of the purposes of the CA 2010 is “… protecting the interests of consumers.”
Section 2 of the CA 2010 defines a “consumer” as “any direct or indirect user of goods or services supplied by an enterprise in the course of business …”
In the context of the legal profession, pupils use the services provided by legal firms as a means of obtaining training, obtaining qualification for entry to the Bar, obtaining livelihood, etc.
As such, it could be argued that the interests of the consumers (for the purposes of the CA 2010 and in the context of the legal profession) would include the interests of pupils.
If the implementation of minimum remuneration for pupils would be in line with one of the objectives of the CA 2010, Section 4(1) of the CA 2010 could (and should) be interpreted in a less restrictive manner so as to not render The Resolution nugatory.
1. The relevant laws include the Aboriginal Peoples Act 1954, and Article 89(4) of the Federal Constitution
Other laws occasionally of relevance include Article 5(5)(c) of the Federal Constitution, the Malay Reservations Enactment 1913, the Land Acquisition Act 1960, and the National Forestry Act 1984.
2. The Crown’s right or interest in a piece of land is subject to any native rights over such land
This was held by the Federal Court in Superintendent of Land & Surveys Miri Division & Anor v Madeli bin Salleh (suing as Administrator of the Estate of the Deceased, Salleh bin Kilong)  2 MLJ 677 (“Madeli bin Salleh”) to be the common law position throughout the Commonwealth:
“With respect, we are of the view that the proposition of law as enunciated in these two cases reflected the common law position with regard to native titles throughout the Commonwealth. And it was held by Brennan�J, Mason CJ and McHugh J, concurring, in Mabo (No 2) that by the common law, the Crown may acquire a radical title or ultimate title to the land but the Crown did not thereby acquire absolute beneficial ownership of the land. The Crown’s right or interest is subject to any native rights over such land.” (emphasis mine)
This legal proposition was followed by the Court of Appeal in Ketua Pengarah Jabatan Hal Ehwal Ehwal Orang Asli & Anor v Mohamad bin Nohing (Batin Kampung Bukit Rok) & Ors and another appeal  6 MLJ 527.
3. Common law only recognises the claim of customary lands to areas which form the natives’ settlement and not the area where they used to roam and forage in the jungle
In Superintendent of Lands & Surveys, Bintulu v Nor Anak Nyawai & Ors and another appeal  1 MLJ 256 (“Nor Anak Nyawai”), the Court of Appeal affirmed the decision of the High Court in Sagong bin Tasi & Ors v Kerajaan Negeri Selangor & Ors  2 MLJ 591 in relation to this legal proposition:
“… we are inclined to agree with the view of the learned trial judge in Sagong bin Tasi & Ors that the claim should not be extended to areas where ‘they used to roam to forage for their livelihood in accordance with their tradition’. Such view is logical as otherwise it may mean that vast areas of land could be under native customary rights simply through assertions by some natives that they and their ancestors had roamed or foraged the areas in search for food.” (emphasis mine)
4. The common feature which forms the basis of claim for native customary rights is the continuous occupation of land
In Nor Anak Nyawai, the Court of Appeal also held as follows:
“From the above two cases [i.e. Kerajaan Negeri Johor & Anor v Adong bin Kuwau & Ors  2 MLJ 158 and Sagong bin Tasi & Ors v Kerajaan Negeri Selangor & Ors  2 MLJ 591], we note that the common feature which forms the basis of claim for native customary rights is the continuous occupation of land.”
5. There can be occupation without physical presence on a piece of land provided there exists sufficient measure of control to prevent strangers from interfering
The Court of Appeal in Ketua Pengarah Jabatan Hal Ehwal Ehwal Orang Asli & Anor v Mohamad bin Nohing (Batin Kampung Bukit Rok) & Ors and another appeal  6 MLJ 527 held that:
“In the light of the principles enunciated in the abovementioned authorities, we agree with the state appellants that the native customary rights are established by the aborigines’ occupation of the subject land. Whilst actual physical presence on the land is not necessary, there can be occupation without physical presence on the land provided there exists sufficient measure of control to prevent strangers from interfering. In this case, there is no evidence produced by the respondents to show that there exists sufficient let alone any measure of control to prevent strangers from interfering on the land.” (emphasis mine)
6. Native customary land rights of the aboriginal peoples can only be extinguished by clear, unambiguous and plain legislation or by an executive act expressly authorised by such legislation
In Madeli bin Salleh, the Federal Court affirmed the Court of Appeal’s approach :
“The Court of Appeal relying on Sugar Refining Co v Melbourne Harbour Trust Commissioners  AC 343 adopted the rule of statutory interpretation that ‘a statute should not be held to take away rights of property without compensation unless the intention to do so is expressed in clear and unambiguous terms.’ In this regard we agree with the Court of Appeal that there is no provision in the 1921 Order seeking to extinguish the respondent’s right over the said land.”
On this legal proposition, the Court of Appeal in Ketua Pengarah Jabatan Hal Ehwal Ehwal Orang Asli & Anor v Mohamad bin Nohing (Batin Kampung Bukit Rok) & Ors and another appeal  6 MLJ 527 (“Mohamad bin Nohing”) followed Madeli bin Salleh.
Mohamad bin Nohing summarised Madeli bin Salleh’s position as follows:
“Federal Court held that native customary land rights of the aboriginal peoples can only be extinguished by clear, unambiguous and plain legislation or by an executive act expressly authorised by such legislation. To adopt the words of the Federal Court, such a ‘drastic measure’ must be justified in clear and unambiguous terms and not by mere implication.”
Two weeks ago, Dato’ Sri Azalina Dato’ Othman Said, the former Deputy Speaker of the House of Representatives (Dewan Rakyat), mooted the idea that a Member of Parliament from the Federal Opposition should be elected as one of the Deputy Speakers of the Dewan Rakyat (“The Proposal”).
Unfortunately The Proposal, a very novel one in Malaysia’s history and in the context of Malaysian politics, did not receive much consideration by politicians across the political divide.
The Proposal is worthy of further discussion as there is no prohibition against it, it would promote check and balance, and it has international precedent.
There is no prohibition against The Proposal in the Federal Constitution and Standing Orders of the Dewan Rakyat.
The Federal Constitution merely requires the Deputy Speaker to be a Member of the Dewan Rakyat.
That being the case, theoretically, a Member of the Dewan Rakyat from the Federal Opposition can be elected as one of the two Deputy Speakers.
Promote check & balance
The Deputy Speaker presides over proceedings in the Dewan Rakyat, in the absence of the Speaker.
When doing so, the Deputy Speaker is vested with all of the powers of the Speaker.
In the past, there have been claims that the Speakers (at different time periods) were biased against Members of Parliament from the Federal Opposition.
A Deputy Speaker from the Federal Opposition could negate or reduce claims of bias, and would act as a check and balance against the Speaker (who more often than not leans in favour of the Federal Government who elected him/her).
Where motions of no-confidence are involved, for example, the Deputy Speaker from the opposition could preside over the tabling, debate, and voting of the motion so as to minimise any apparent (or appearance of) conflict of interest.
The Proposal has happened in other countries in the past, mutatis mutandis.
There have been instances of elected representatives from the opposition being elected as Deputy Speakers. Examples include:
i. Ishkhan Saghatelian, Armenia, 2021;
ii. Andrius Mazuronis, Lithuania, 2020;
iii. Peter Slipper, Australia, 2010; and
iv. Michel Bissonnet, Quebec, 1989.
In India and Lithuania, there is arguably a constitutional convention that the Deputy Speaker of the Lok Sabha (in India’s case) and two of the maximum seven Deputy Speakers of the Seimas (in Lithuania’s case) would be elected from the opposition.
Besides that, there is also precedent for an opposition Member of Parliament being elected as Speaker:
i. Alban Sumana Kingsford Bagbin, Ghana, 2021; and
ii. Betty Boothroyd, United Kingdom, 1992.
All of the above goes to show that The Proposal deserves serious consideration. It is a shame that The Proposal, a constructive and yet unconventional parliamentary reform, disappeared as quickly as it had arrived on mainstream media.
Constitutionally, the Yang di-Pertuan Agong (“YDPA”) has the discretion in the appointment of the Prime Minister.
The YDPA is required to appoint the person in his judgment is likely to command the confidence of the majority of the members of the House of Representatives (Dewan Rakyat).
Interestingly, the Federal Constitution does not prescribe the method of ascertaining who commands the confidence of the majority.
Over the years, however, we have developed precedents for various methods.
Vote of Confidence
A vote of confidence motion in Parliament would arguably be the clearest method of finding out if a particular individual commands the confidence of the majority.
Notwithstanding that, if the motion were introduced by way of a Private Member’s Bill, the motion would likely not see the light of day unless it receives the Government’s backing as the Government business has precedence over Private Members business.
This method would also require Parliament to be sitting ordinarily, or for a special Parliamentary sitting to be held, in order for the vote of confidence motion to be debated and voted on.
Letter of Support
In Dato’ Seri Ir Hj Mohammad Nizar bin Jamaluddin v Dato’ Seri Dr Zambry bin Abdul Kadir (Attorney General, intervener)  2 MLJ 285 (“Nizar Jamaluddin”), 31 out of 59 members of the Perak State Legislative Assembly issued a letter stating that they would support whoever is named by YAB Dato’ Seri Mohd Najib bin Tun Abdul Razak as the candidate for the new Chief Minister of Perak.
The Sultan of Perak subsequently directed Dato’ Seri Ir Hj Mohammad Nizar bin Jamaluddin to tender his resignation and the resignation of the State Executive Council, and appointed Dato’ Seri Dr Zambry bin Abdul Kadir as the Chief Minister of Perak.
Dato’ Seri Ir Hj Mohammad Nizar bin Jamaluddin later filed a judicial review application to seek, inter alia, a declaration that he was the legitimate Chief Minister.
When the matter came before the Federal Court, a 5 member panel recognised the legitimacy of extraneous sources:
“We agree with the view stated above as there is nothing in art XVI(6) or in any other provisions of the State Constitution stipulating that the loss of confidence in the MB may only be established through a vote in the LA. As such, evidence of loss of confidence in the MB may be gathered from other extraneous sources provided, as stated in Akintola, they are properly established.” (emphasis mine)
Face to Face Interview
In Nizar Jamaluddin, this method was used by the Sultan of Perak post-letter of support.
The YDPA employed this method back in 2020 after Tun Dr. Mahathir bin Mohamed had tendered his resignation as Prime Minister.
The YDPA interviewed all 222 Members of Parliament to ascertain who commanded the confidence of the majority.
This, on its own, however, is a time consuming process. When it was utilised by the YDPA in 2020, it took 2 days.
In light of the Federal Court’s decision in Nizar Jamaluddin, statutory declarations would likely suffice as an extraneous source of establishing who commands the confidence of the majority of the members of the Dewan Rakyat.
During the recent political crisis, the YDPA resolved the matter by requiring all 220 Members of Parliament to submit a statutory declaration to nominate a name to be appointed as the Prime Minister.
The statutory declarations submitted revealed that Datuk Seri Ismail Sabri bin Yaakob (“DSIS”), the former Deputy Prime Minister, commanded the confidence of 114 Members of Parliament.
After a face to face interview with the 114 Members of Parliament, the YDPA was satisfied and DSIS was accordingly appointed the 9th Prime Minister of Malaysia.
i. It safeguards an individual’s expectations in the face of a change of policy by an authority.
Dr. Robert Thomas, Professor of Public Law at the University of Manchester, provided a succinct summary of the principle/doctrine of legitimate expectation:
“The principle means that expectations raised as a result of administrative conduct may have legal consequences … The principle therefore concerns the degree to which an individual’s expectations may be safeguarded in the face of a change of policy which tends to undermine them.”
In Law Pang Ching & Ors v Tawau Municipal Council  3 MLJ 452, Abu Samah JCA and Raus Sharif JCA (as their Lordships then were) held:
“A common trait in all these cases is that the aggrieved parties stand in direct relationship — without any go-between — with the decision makers. The expectation arises where a person responsible for taking a decision has induced in someone who may be affected by the decision a reasonable expectation that he will receive or retain a benefit or that he will be granted a hearing before the decision is taken. See De Smith, Woolf and Jowell, Judicial Review of Administrative Action, (5th Ed) paras 8–037.”
ii. It arises where there is an express promise by the authority, or where there exists a regular practice that one may reasonably expect would continue.
Lord Fraser in the seminal case of Council of Civil Service Union v. Minister for the Civil Service  AC 374 held:
“Legitimate, or reasonable, expectation may arise either from an express promise given on behalf of a public authority or from the existence of a regular practice which the claimant can reasonably expect to continue.”
In Zakiah bte Ishak v Majlis Daerah Hulu Selangor Darul Ehsan  6 MLJ 517, the Court of Appeal similarly decided that “… In law for legitimate expectation to arise there must be evidence of a promise or undertaking made by the respondent to that effect.”
iii. It is based on the duty to act fairly as a necessary element of good governance or good administration.
The Court of Appeal in Mayland Valiant Sdn Bhd v Majlis Perbandaran Subang Jaya  4 MLJ 685 remarked that the principle/doctrine of legitimate expectation is:
“… based on the duty to act fairly as a necessary element of good governance or good administration (see W Wade & C Forsyth, Administrative Law (8th Ed, Oxford University Press: Oxford, 2000) pp 494-495. The Privy Council in the leading case of A-G of Hong Kong v Ng Yuen Shiu  2 AC 629 held, in quashing a deportation order, that ‘when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it should act fairly and should implement its promise, so long as the implementation does not interfere with its statutory duty’.”
iv. It is a relevant consideration which must be taken into consideration in the exercise of an authority’s discretion.
In De Smith, Woolf and Jowell’s Judicial Review of Administrative Action (5th Ed), the learned authors point out that:
“Although free to alter its policy, the authority is by no means free to ignore the existence of a legitimate expectation. Now that legitimate expectation has been accepted in Law as an interest worthy of protection, its existence becomes a relevant consideration which must be taken into consideration in the exercise of a discretion. It is placed on the scale and must be properly weighed.
It is at this point that the fact that the promissee relied on the expectation to his detriment may be relevant. Detrimental reliance will add to the weight of the legitimate expectation. It may be overridden by competing public interest, but the greater the evident detriment to the promissee, the greater the countervailing weight of the public interest in order to override an expectation that is held to be legitimate.”
The above extract was cited by the Federal Court in Majlis Perbandaran Pulau Pinang v Syarikat Kerjasama-sama Serbaguna Sg Gelugor Dengan Tanggungan  3 MLJ 1.
v. It is only applicable in public law matters.
The Court of Appeal in GPQ Sdn Bhd v Constant View Sdn Bhd  6 MLJ 728 held the following:
“On the issue of legitimate expectation we agree with the point raised by the defendant that the doctrine of legitimate expectation is only applicable in public law and not to private law matters.”
This position was affirmed by a subsequent Court of Appeal panel in Daud bin Arshad & Ors (representing 61 settlers/participants of FELCRA Gugusan Sungai Ara, Mukim Ulu Sungai Sedili, Daerah Kota Tinggi, Johor) v FELCRA Bhd  2 MLJ 33 (“Daud bin Arshad”).
Tengku Maimun JCA (as Her Ladyship then was), in delivering the judgment of the court in Daud bin Arshad, held:
“As for legitimate expectation, the doctrine was only applicable to public law matters and not to private law matters (see GPQ Sdn Bhd v Constant View Sdn Bhd  6 MLJ 728;  4 MLRA 483. See also Darahman bin Ibrahim & Ors v Majlis Mesyuarat Kerajaan Negeri Perlis & Ors  4 MLJ 309;  1 MLRA 411).”
vi. It may be overridden by competing public interest.
In De Smith, Woolf and Jowell’s Judicial Review of Administrative Action (5th Ed), the learned authors note that the principle/doctrine of legitimate expectation:
“… may be overridden by competing public interest, but the greater the evident detriment to the promissee, the greater the countervailing weight of the public interest in order to override an expectation that is held to be legitimate.”
The Court of Appeal in Law Pang Ching & Ors v Tawau Municipal Council  3 MLJ 452 alluded to the possibility of a overriding public interest negating a legitimate expectation:
“All that needs to be added is that in the present instance there is no overriding public interest that calls for a negation of the legitimate expectation created in the appellants by the representation earlier adverted to.”
vii. It is likely not applicable if the authority acting upon it would invoke a breach of statute.
In Government of the State of Negeri Sembilan & Anor v Yap Chong Lan & 12 Ors; Lesco Development Corporation Sdn Bhd v Yap Chong Lan & 12 Ors  2 MLJ 123, the Respondents claimed to have acquired an equitable right or interest to remain on the respective lots allocated to them by virtue of the Collector of Land Revenue giving them permission to occupy State land. 
The Federal Court held that:
“… in the light of the statutory provisions we have referred to and the authorities we have discussed it would appear that the equity sought to be raised by the respondents would establish against the State Authority rights in respect of State land which it is prevented by statute from creating other than in the prescribed manner.”
viii. It cannot override express statutory powers vested in an authority.
The Federal Court in North East Plantations Sdn Bhd v Pentadbir Tanah Daerah Dungun & Satu Lagi  supp MLJ 293 agreed with the majority decision of the Court of Appeal and held the following:
“… keputusan majoriti Mahkamah Rayuan adalah tepat apabila dinyatakan ‘Whether or not the doctrine of legitimate expectation applies depends on the facts of each case, it cannot and should not override the express statutory power vested in the State Authority’.”
In a recent decision, the Court of Appeal in Pentadbir Tanah dan Daerah Petaling & Ors v Bandar Utama City Corporation Sdn Bhd (dahulunya dikenali sebagai Damansara Jaya Sdn Bhd) & Anor and another appeal  MLJU 222 held that:
“… the doctrine of legitimate expectation cannot be extended to bar the powers of the State Authority to acquire land under the LAA 1960.”