Chapter Two: TribunalsCHAPTER TWO TRIBUNALS LEARNING OBJECTIVES Upon completion of this chapter, you should be able to: - Explain the reason for the growth of tribunal - Discuss the importance and significance of tribunal compared to the court of law. - Explain the weaknesses of tribunal - Discuss the examples of tribunal organization in Malaysia - Describe on the suggestion put forward by the Frank Committee. 2.1 CHARACTERISTICS OF A TRIBUNAL The term tribunal has not been used with consistency. Hence, no accurate definition can be given. However, according to Garner, any statutory body which possesses most or all of the following characteristics, can be regarded as a tribunal: a) It is independent of the administration, and decides cases impartially as between the parties before it. b) It reaches a binding decision in relation to the case heard. c) Its decisions will usually be reached by a panel of tribunal members rather than by a lone adjudicator. d) It will adopt a procedure akin to, though rather simpler and more flexible than, that of a court of law. Impartially= neutrally, fairly, without bias, open-mindedly Statutory= legal Adjudicator= judge Adopt= take up, accept 3 the tax base is being expanded and many disputes between the tax-payers and the tax assessors arise as regards tax liability. clash. 2. Proliferation= huge number. large amount Enacted= passed. The tribunal is established specifically to deal with a particular type of case. the courts have lost their monopoly of the adjudicatory function and have come to share it with administrative bodies. To finance these activities. New laws occasion disputes between one individual and another individual and a government agency. endorsed Dispute= argument. Law are being enacted to modify existing inter-personal rights and obligations. controversies and disputes not only between an individual and a department (eg Board of Review Income Tax) but also between two individuals (eg Tenants’ Compensation Board) The basic reason for the emergence of the system of administrative adjudication. or with a number of closely related types of case.Chapter Two: Tribunals e) It will have a permanent existence. in modern times. quarrel. hierarchical judicial system.2 REASON FOR THE EMERGENCE OF TRIBUNAL Traditionally the function of adjudicating upon disputes between the individuals or between the state and the individual belongs to the courts. But the fact remains that. as in case of growth of subsidiary legislation is an expansion in the functions and responsibilities of the administration. and machinery is needed to adjudicate upon them. This results in the proliferation of tax-assessing authorities. It is undertaking vast socio-economics activities. A number of bodies have been established by statutes outsides the judicial system which decide questions of fact as well as of law and determine a variety of claims. in every democratic country there exists a well-regulated. disagreement 4 . For this purpose. one create news ones. Many socio-economic laws are being enacted. 2. 5 .2 Informal In many cases.1 Expedition Normally cases handled by tribunal is a minor case and therefore tribunal can settle the case in a short period of time. most of which consist of small claims against the administration. formal. Disposal of cases will be very much delayed and this will slow down the administrative process as well since the administration cannot act in disputed matter until the controversy is decided. Modern legislation does not include exhaustive norms applicable to defined fact situations and experts are needed to work out vague standards in the context of varied fact situations. 2.3 STRENGTHS OF TRIBUNAL 2. what may be needed are an informal atmosphere and a procedure unencumbered by too many technical and elaborate rules of procedure and evidence which can possibly be achieved in a tribunal system.Chapter Two: Tribunals If all these disputes were to be left to the traditional judicial system it will be overloaded with work. 2. It is not best suited always to adjudication of disputes being generated by modern legislation.3. rigid and expensive. Members of tribunal are generally expert in their field and fit for specific hearing such as tax assessment and urban development.3. Tribunal has its own advantages over the court of law.3. as it is not tied with the technical hearing procedure as adopted by the court of law. Therefore the system of administrative tribunals has positively contributed to the preservation of our ordinary judicial system. The court procedure is tardy.3 Expertise Then there is a question of expertise. A judge is a generalist while adjudication of newly generated controversies needs some expertise in various other disciplines. 4 Independent Tribunals seem to constitute the best mechanism to settle disputes outside the court system because they enjoy some element of separation and independence from the administration and come very near a court. some of the danger inherent therein ought not to be ignored. 2.Chapter Two: Tribunals 2. Such independence is essential because in many cases. in short. a court is more independent). b) The tribunal members may not be legally trained. expertise. Generally. 2.3. They may not be trained in fact-finding procedure and may be tempted to base their decision on surmises and conjectures rather than on evidence. The concept of autonomy is important to give credibility to decisions by an adjudicatory body. So. an administration is a party to the dispute. preference should be given to the ordinary courts of law rather than to a tribunal unless there are demonstrably special reasons. accessibility. expedition. freedom from technicality and flexible of approach are some of the reasons leading to the adjudicatory system outside the courts. a tribunal is not as independent as a court (in other words. cheapness.3. 6 . which make a tribunal more appropriate. As the Franks Committee suggested. as in many cases it is. may not have much knowledge of law and may find interpretation of the parent statute a difficult exercise.5 Cheapness The cost to file a case to the tribunal is much cheaper than the court of law and therefore is suitable for a small administration cases. It has some links with the administration such as the government itself.4 WEAKNESSES OF TRIBUNAL SYSTEM While the tribunal system is a modern necessity. Thus. at times. this may put its objectivity to test when the government itself is the party to dispute before it. a) A tribunal is not as good as a court in deciding disputes. to the Special Commissioners of Income Tax.Chapter Two: Tribunals c) Informality of procedure in a tribunal may degenerate into complete lack of procedure resulting in whimsical decisions which is not based on law. The Special Commissioners are appointed by the YDPA out of the list of names put up by the Minister of Finance. If the assessee does not agree with the assessment. facts or evidence. there will be a review undertaken by the Director-General. Although the power of reviews is formally vested in the Director-General he seldom reviews the cases personally and this function is also delegated to subordinate officers. their decisions may not be published and people may not have any idea as to how a tribunal will resolve the cases coming before it. within 30 days of the notice of assessment. A taxpayer is obligated to submit his income tax return to the DirectorGeneral of Inland Revenue. read with Schedule 5 thereto. eccentric Presides= heads. The chairman is a person having judicial or legal qualifications or experience.5. It is only when no satisfactory conclusion is reached after the review as to the tax liability of the assessee that the matter comes up before the Special Commissioner. The Special Commissioners do not hear the appeal immediately as soon as it is filed. Whimsical= odd.1 Special Commissioners Of Income Tax It is set-up under Chapter II of the Income Tax Act 1967. leads Obligated= required 7 . First. d) The tribunals often do not give reasons for their decisions. 2. There may be three or more such Commissioner and one of them is to be appointed as the Chairman who presides at the hearing of an appeal. he can file an appeal.5 ADJUDICATORY BODIES IN MALAYSIA 2. peculiar. consider Onus= responsibility Object= protest. believe. The onus of proving that the assessment appealed against is excessive or incorrect is on the appellant. Parties may attend the hearing before the Special Commissioners either personally or through their representatives. The Commissioners may also call expert witnesses to give evidence before them in respect of any hearing. Cross-examination of witnesses is permissible.Chapter Two: Tribunals The Director-General himself may forward the appeal from the DirectorGeneral to the Special Commissioner if he feels that there is no reasonable prospect of reaching an agreement with the assessee. Hearings before the Special commissioners are to be held in camera but the Director-General may apply for an open hearing in a particular case where he deems that to be necessary. the Special Commissioners are the final judges of the facts and the High Court in deciding the case stated may not go beyond the facts as found by the Commissioner. The only obligation on them is that when they state a case to the High Court. Alternatively. discharge or Deem= think. In practice. It has been judicially emphasized that the Special Commissioners have to follow natural justice in their proceedings. The Commissioners have power to summon witnesses and examine them on oath. they are bound to add the grounds to their decision to the case stated. the Commissioners give a reasoned decision in all cases. There is no statutory obligation on the Special Commissioners to give reasons for their decisions. They can summon any person to produce documentary evidence under his control. advocates or accountants. however. Ordinarily. The Special Commissioners are obligated to hold the hearing in open court even though the assessee may object to that. Special Commissioners have power to admit or reject any evidence whether admissible or inadmissible. the assessee may himself ask the Director-General to forward the appeal to the Special Commissioner. The High Court has power to confirm. oppose 8 . The Minister of Finance has power to make rules of procedure to be followed by the Commissioners. A party may be represented before the court by any official of a trade union or. All these persons are appointed by the Minister after consulting such organization representing employers and workmen respectively as he may thinks fit. or by a legal practitioner. a panel of independent persons. The court is required to act according to equity and good conscience and the substantial merits of the case without regard to technicalities and legal form. The President of the court is appointed by the YDPA. Decisions are made by a majority of votes and the President has a casting vote in case of equality votes. A trade dispute may be referred to the court by the Minister on his own motion or he may also make the reference on the joint request of the trade union representing the workmen who are parties to the dispute and a trade union representing the employer. All these appointments are notified in the Gazette. which may be made for the purpose. On the whole. with permission of the President. The court can take evidence on oath.5.Chapter Two: Tribunals amend the order of assessment or remit the case to the Special Commissioners with its opinion. There are 3 panels of members.2 Industrial Court Provisions for setting up an Industrial Court in Malaysia are made in Part VII of the Industrial Relation Act. The President is to regulate the court’s procedure subject to the Act and any regulations. the court is constituted of the President along with 3 members. 2. while the decisions of the Special Commissioners are subject to judicial review. selected by the Minister. a panel of persons representing employers and a panel of persons representing workmen. To decide a trade dispute. 9 . The Industrial Court is bound to follow natural justice in its proceedings. the scope of such review is rather limited. The inquiry is by and large inquisitorial in nature though at times it may also be accusatorial in nature ie to apportion blame for some mishap or failure of policy or administrative action. 10 . The fundamental basis of the decision of the Industrial Court is quicker solution of industrial disputes to achieve industrial peace. c) To democratize the administrative process by way of giving opportunity to the public to express their objections to any proposed government measure.5.Chapter Two: Tribunals The Industrial Court has power to refer a question of law to the High Court. There is a privative clause seeking to oust judicial review on the awards made by the Industrial Court. for while evidence may be tendered and received by both. 2. Inquiries differ from tribunal. The purpose of the inquiry is: a) To get the truth. the inquiry officer does not make any decision. b) Enables the decision-maker to be better informed about the state of affairs before making a decision. a tribunal makes a decision by itself.3 PUBLIC INQUIRIES Another instrument used in modern administrative process is that of holding inquiries. he reports his findings to some higher administrative authority which takes a decision as to the action to be taken thereof.. but in an inquiry. Contempt= disrespect Procure= obtain. Any person who is implicated in any way in an inquiry has a right of being represented by an advocate before the commission.Chapter Two: Tribunals Provisions exist in the Companies Act for government to appoint inspectors to conduct investigation into the affairs of companies. to compel the attendance of any person to testify or to admit any evidence whether written or oral which might otherwise be inadmissible in civil or criminal proceedings. to examine witnesses on oath. Failure to comply with the inspector’s directive is punishable as contempt of court. get Given before= presented in front of Compel= force Implicated= connected with Suit= proceedings or legal action brought against somebody 11 . Any other person may be so represented with the permission of the commission. he can examine on oath any officer or agent of the company. General statutory provisions exist for appointment of inquiry commissions. The Inquiry Commissions Act stated that the President may appoint a commission to inquire into: a) The conduct of any officer or officers in the public service b) Conduct or management of any department or public service c) Any matter in which the President thinks an inquiry would be beneficial for the public welfare The commission has the power to procure all necessary evidence. It is necessary that inspectors follow natural justice while conducting the investigation. the Commission is issued by the YDPA. In Malaysia. (Section 193210) The inspector may require the production of all books and documents pertaining to the affairs of the companies being investigated. The commission may hold the inquiry in camera or in public. All evidence given before the commission for the purpose of an inquiry is absolutely privileged and the witnesses giving such evidence are not liable to any suit or any other civil proceedings in respect of such evidence. Chapter Two: Tribunals THE FRANKS COMMITTEE Reference has already been made to the appointment of the Franks Committee in Britain in 1955. there should be a standing committee. The most significant aspect of the committee’s report is its approach to the critical question of relationship between the tribunals and the administration. Therefore. 12 . Impartiality demands the freedom of the tribunals from the influence of department concerned with the subjectmatter of their decisions. fairness and impartiality. the committee felt that tribunal chairmen should have legal qualifications. it is suggested that chairmen of tribunals ought to be appointed by the Lord Chancellor and other members be appointed by the council on Tribunals. The committee further emphasized 3 basic characteristics in the tribunal procedure ie openness. The concept of fairness requires the adoption of a clear procedure which enables parties to know their rights. It made an in-depth inquiry into the composition and working of the tribunal system and made a number of suggestions to improve the system and several of these were given statutory form in the Tribunal and Inquiries Act 1957. procedure and constitution. To achieve these objectives. It should be an advisory body. to present their case fully and to know the case which they have to meet. The concept of openness requires the publicity of proceedings and knowledge of the essential reasoning underlying the decision. the committee made a number of suggestions. Tribunal for England has various functions. The committee also envisages a supervisory role for the Lord Chancellor over the proper functioning of the tribunal. Other qualifications shall be decided by the Council on Tribunals. As regards appointment of the tribunals chairmen and members. As regards the qualifications of the tribunal personnel. This method of appointment would enhance the independence of the tribunal. The committee also made recommendation to set up a Council on Tribunals to keep the constitution and working of tribunals under constant review. The committee emphasized that the tribunals ought to be regarded as machinery provided for independent adjudication outside the department concerned. the advice of which would be sought wherever it is proposed to establish new type of tribunal and which would also keep under review the constitution and procedure of existing tribunals. the Franks Committee’s proposal that tribunal members be appointed by the Council on Tribunal has not been implemented. Can you still remember the supporting details? TRIBUNALS The characteristics Reasons for the emergence The strengths The weaknesses The adjudicatory bodies 13 . However the chairmen on tribunals should be appointed by the Lord Chancellor. b) To consider and report on such particular matters as may be referred to the Council with respect to other tribunals.Chapter Two: Tribunals Most of the proposals put forth by the Federal Constitution were implemented with some modifications by the Tribunals and Inquiries Act 1958. which is laid by them before Parliament. The Council on Tribunals consists of between 10-15 members appointed by the Lord Chancellor and the secretary of State. to report on their constitution and working. The Act leaves the power of appointing tribunal members to the concerned Minister. The council makes an annual report to the Lord Chancellor and the Secretary of the State. The council must be consulted before procedural rules are made for the tribunals. Here are the main ideas for this chapter. Thus. The functions of the council are: a) To keep under review the constitution and working of the tribunals specified in Schedule I to the Act and from time to time.