Chapter Two: Tribunals

CHAPTER 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

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e) It will have a permanent existence. The tribunal is established

specifically to deal with a particular type of case, or with a number of
closely related types of case.

2.2

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. For this
purpose, in every democratic country there exists a well-regulated, hierarchical
judicial system. But the fact remains that, in modern times, the courts have lost
their monopoly of the adjudicatory function and have come to share it with
administrative bodies. 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, 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, as in case of growth of subsidiary legislation is an expansion in
the functions and responsibilities of the administration. It is undertaking vast
socio-economics activities. To finance these activities, the tax base is being
expanded and many disputes between the tax-payers and the tax assessors arise
as regards tax liability. This results in the proliferation of tax-assessing
authorities. Law are being enacted to modify existing inter-personal rights and
obligations, one create news ones. Many socio-economic laws are being enacted.
New laws occasion disputes between one individual and another individual and a
government agency, and machinery is needed to adjudicate upon them.

Proliferation= huge number, large amount

Enacted= passed, endorsed
Dispute= argument, quarrel, clash, disagreement

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If all these disputes were to be left to the traditional judicial system it will
be overloaded with work. 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. Therefore the
system of administrative tribunals has positively contributed to the preservation
of our ordinary judicial system.
The court procedure is tardy, formal, rigid and expensive. It is not best
suited always to adjudication of disputes being generated by modern legislation,
most of which consist of small claims against the administration. Tribunal has its
own advantages over the court of law.

2.3

STRENGTHS OF TRIBUNAL
2.3.1 Expedition

Normally cases handled by tribunal is a minor case and therefore tribunal

can settle the case in a short period of time, as it is not tied with the technical
hearing procedure as adopted by the court of law.

2.3.2 Informal
In many cases, 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.

2.3.3 Expertise
Then there is a question of expertise. Members of tribunal are generally
expert in their field and fit for specific hearing such as tax assessment and urban
development. A judge is a generalist while adjudication of newly generated
controversies needs some expertise in various other disciplines. 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.

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2.3.4 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. Such
independence is essential because in many cases, an administration is a party to
the dispute. The concept of autonomy is important to give credibility to decisions
by an adjudicatory body.
2.3.5 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.
Thus, in short, cheapness, accessibility, expedition, expertise, freedom
from technicality and flexible of approach are some of the reasons leading to the
adjudicatory system outside the courts.

2.4

WEAKNESSES OF TRIBUNAL SYSTEM

While the tribunal system is a modern necessity, some of the danger

inherent therein ought not to be ignored. As the Franks Committee suggested,
preference should be given to the ordinary courts of law rather than to a tribunal
unless there are demonstrably special reasons, which make a tribunal more
appropriate.
a) A tribunal is not as good as a court in deciding disputes. Generally, a
tribunal is not as independent as a court (in other words, a court is
more independent). It has some links with the administration such as
the government itself. So, at times, this may put its objectivity to test
when the government itself is the party to dispute before it, as in
many cases it is.
b) The tribunal members may not be legally trained, may not have much
knowledge of law and may find interpretation of the parent statute a
difficult exercise. 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.

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c) Informality of procedure in a tribunal may

degenerate into complete lack of procedure resulting
in whimsical decisions which is not based on law,
facts or evidence.
d) The tribunals often do not give reasons for their
decisions; 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.

2.5

ADJUDICATORY BODIES IN MALAYSIA

2.5.1 Special Commissioners Of Income Tax

It is set-up under Chapter II of the Income Tax Act 1967, read with
Schedule 5 thereto. 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. The chairman is a person having judicial or legal qualifications or
experience. The Special Commissioners are appointed by the YDPA out of the
list of names put up by the Minister of Finance.

A taxpayer is obligated to submit his income tax return to the DirectorGeneral of Inland Revenue. If the assessee does not agree with the assessment,
he can file an appeal, within 30 days of the notice of assessment, to the Special
Commissioners of Income Tax. The Special Commissioners do not hear the
appeal immediately as soon as it is filed. First, there will be a review undertaken
by the Director-General. 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. 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.

Whimsical= odd, peculiar, eccentric

Presides= heads, leads
Obligated= required

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. Alternatively, the assessee
may himself ask the Director-General to forward the appeal to the Special
Commissioner.
The Commissioners have power to summon witnesses and examine them
on oath. They can summon any person to produce documentary evidence under
his control. Cross-examination of witnesses is permissible. Special
Commissioners have power to admit or reject any evidence whether admissible
or inadmissible.
Parties may attend the hearing before the Special Commissioners either
personally or through their representatives, advocates or accountants. The
Commissioners may also call expert witnesses to give evidence before them in
respect of any hearing. 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
obligated to hold the hearing in open court even though the assessee may object
to that. The Minister of Finance has power to make rules of procedure to be
followed by the Commissioners. It has been judicially emphasized that the
Special Commissioners have to follow natural justice in their proceedings. The
onus of proving that the assessment appealed against is excessive or incorrect is
on the appellant.
There is no statutory obligation on the Special Commissioners to give
reasons for their decisions. The only obligation on them is that when they state a
case to the High Court, they are bound to add the grounds to their decision to the
case stated. In practice, however, the Commissioners give a reasoned decision in
all cases.

Ordinarily, 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 High Court has power to confirm, discharge or

Deem= think, believe, consider

Onus= responsibility
Object= protest, oppose

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amend the order of assessment or remit the case to the Special Commissioners
with its opinion. On the whole, while the decisions of the Special
Commissioners are subject to judicial review, the scope of such review is rather
limited.

2.5.2 Industrial Court

Provisions for setting up an Industrial Court in Malaysia are made in Part

VII of the Industrial Relation Act. The President of the court is appointed by the
YDPA. There are 3 panels of members; a panel of independent persons, a panel
of persons representing employers and a panel of persons representing workmen.
All these persons are appointed by the Minister after consulting such
organization representing employers and workmen respectively as he may thinks
fit. All these appointments are notified in the Gazette. To decide a trade dispute,
the court is constituted of the President along with 3 members, selected by the
Minister.
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. A party may be represented before the court by any
official of a trade union or, with permission of the President, or by a legal
practitioner. The President is to regulate the courts procedure subject to the Act
and any regulations, which may be made for the purpose. The Industrial Court is
bound to follow natural justice in its proceedings. The court can take evidence
on oath. Decisions are made by a majority of votes and the President has a
casting vote in case of equality votes. 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.

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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. The fundamental basis of the decision of the Industrial
Court is quicker solution of industrial disputes to achieve industrial peace.

2.5.3 PUBLIC INQUIRIES

Another instrument used in modern administrative process is that of

holding inquiries. Inquiries differ from tribunal, for while evidence may be
tendered and received by both, a tribunal makes a decision by itself, but in an
inquiry, the inquiry officer does not make any decision; he reports his findings to
some higher administrative authority which takes a decision as to the action to be
taken thereof.
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.

The purpose of the inquiry is:

a) To get the truth.
b) Enables the decision-maker to be better informed about the state of
affairs before making a decision..
c) To democratize the administrative process by way of giving opportunity
to the public to express their objections to any proposed government
measure.

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Chapter Two: Tribunals

Provisions exist in the Companies Act for government to appoint

inspectors to conduct investigation into the affairs of companies. (Section 193210) The inspector may require the production of all books and documents
pertaining to the affairs of the companies being investigated; he can examine on
oath any officer or agent of the company. Failure to comply with the inspectors
directive is punishable as contempt of court. It is necessary that inspectors follow
natural justice while conducting the investigation.

General statutory provisions exist for appointment of inquiry commissions.

In Malaysia, the Commission is issued by the YDPA. 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, to

examine witnesses on oath, 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. The commission may hold the inquiry in camera
or in public. Any person who is implicated in any way in an inquiry has a right of
being represented by an advocate before the commission. Any other person may
be so represented with the permission of the commission. 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.

Contempt= disrespect
Procure= obtain, get
Given before= presented in front of
Compel= force
Implicated= connected with
Suit= proceedings or legal action brought against somebody

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Chapter Two: Tribunals

THE FRANKS COMMITTEE

Reference has already been made to the appointment of the Franks

Committee in Britain in 1955. 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.
The most significant aspect of the committees report is its approach to
the critical question of relationship between the tribunals and the administration.
The committee emphasized that the tribunals ought to be regarded as machinery
provided for independent adjudication outside the department concerned.
The committee further emphasized 3 basic characteristics in the tribunal
procedure ie openness, fairness and impartiality. The concept of openness
requires the publicity of proceedings and knowledge of the essential reasoning
underlying the decision. The concept of fairness requires the adoption of a clear
procedure which enables parties to know their rights, to present their case fully
and to know the case which they have to meet. Impartiality demands the freedom
of the tribunals from the influence of department concerned with the subjectmatter of their decisions.
To achieve these objectives, the committee made a number of
suggestions. As regards appointment of the tribunals chairmen and members, 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.
This method of appointment would enhance the independence of the tribunal. As
regards the qualifications of the tribunal personnel, the committee felt that
tribunal chairmen should have legal qualifications. Other qualifications shall
be decided by the Council on Tribunals.
The committee also made recommendation to set up a Council on
Tribunals to keep the constitution and working of tribunals under constant
review. Tribunal for England has various functions, procedure and constitution.
Therefore, there should be a standing committee, 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. It
should be an advisory body. The committee also envisages a supervisory role
for the Lord Chancellor over the proper functioning of the tribunal.

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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,
The Council on Tribunals consists of between 10-15 members appointed by the
Lord Chancellor and the secretary of State. 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, to report on
their constitution and working.
b) To consider and report on such particular matters as may be referred
to the Council with respect to other tribunals. The council must be
consulted before procedural rules are made for the tribunals. The
council makes an annual report to the Lord Chancellor and the
Secretary of the State, which is laid by them before Parliament.
The Act leaves the power of appointing tribunal members to the
concerned Minister. Thus, the Franks Committees proposal that tribunal
members be appointed by the Council on Tribunal has not been implemented.
However the chairmen on tribunals should be appointed by the Lord Chancellor.

Here are the main ideas for this chapter. Can you still remember the
supporting details?

TRIBUNALS
The characteristics
Reasons for the emergence
The strengths
The weaknesses
The adjudicatory bodies

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