BL Chapter 2

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Business Law Oxford Fajar Sdn. Bhd. (008974-T) 2010 Ch2: 1

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CHAPTER 2

Sources of Malaysian

Law


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This chapter:

provides basic knowledge on howMalaysian law evolved

identifies the sources of Malaysian law,

and explains where they can be found

OBJECTIVES


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PREVIEW

Meaning of Sources

Main Sources of Malaysian Law

- Written Law- Unwritten Law

- Islamic Law


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1. Historical sources

2. Legal sources

3. Places where the law can be found

Sources of Malaysian law:

1. Islamic law2. Written law

3. Unwritten law

MEANING OF SOURCES


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SOURCES OF MALAYSIAN LAW


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comprises of:

1. The Federal and State

2. Legislation enacted by Parliament and the State

Assemblies

3. Subsidiary legislation made by persons or bodies

under powers conferred on them

also referred to as statute law

law made by Parliament and any subordinate

bodies to whom Parliament has delegated

power to legislate

WRITTEN LAW


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where statute law and common law

conflict, statute law will prevail to the

extent of the conflict

when hearing cases, the courts are not

just performing an act of fact-finding; they

also interpret statutes

WRITTEN LAW (cont.)


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in interpreting statutes, courts are guided by:a) Interpretation Acts

b) Extrinsic materialsc) Common law rules of statutory interpretation

d) Precedent

courts interpret legislation to reflect the

apparent purpose or intention of thelegislators (a purposive construction)

WRITTEN LAW (cont.)


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inBirmingham vCorrective Services

Commission of New South Wales, 3 conditions:

1. It knows the mischief with which the Act was dealing2. It is satisfied that Parliament inadvertently

overlooked an eventuality which had to be dealt with

if the purpose of the Act was to be achieved

3. It can state with certainty the words that Parliamentwould have used to overcome the omission if its

attention had been drawn to the defect

WRITTEN LAW (cont.)


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if the words of the Act are clear, effect must be

given to them notwithstanding that the end result

may be absurd

courts use extrinsic (external) material in the

interpretation of statutes: some statutes set out their own definition or

interpretation common law rules of statutory interpretation and

precedent

WRITTEN LAW (cont.)


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3 main approaches to interpretation used by

the courts:

1. Literal or plain meaning approach2. Golden rule approach

3. Mischief approach

WRITTEN LAW (cont.)


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courts assume that the meaning andintention of the legislature is clearin thestatute to be interpreted

disadvantagewords can often have morethan one meaning, so the courts have to decidewhich approach should apply

the whole Act is read and understood before adetailed

examination of a section, or of particular wordsin a section, is begun

LITERAL OR PLAIN MEANING

APPROACH


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words and sections must be read in thecontext of the whole Act, rather than inisolation

seeFischer vBell

LITERAL OR PLAIN MEANING

APPROACH (cont.)


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takes the plain meaning of the words used

in the statute and adheres to that meaning

only a gloss of the literal or plain meaning rule

where the words in an Act are at variance with

the legislators intention or can lead to an

absurdity, injustice or repugnancy, the court will

attempt to choose a meaning that will avoidsuch a result

seeLee vKnapp

GOLDEN RULE APPROACH


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where the literal interpretation is notpossible, courts will:

1. Look at the law before the statute was passed

2. Look to the overall intention of the legislation asdiscovered from reading the Act as a whole

3. Ask: What mischief is it that this statute isintended to remedy? What was its socialpurpose?

where a statute provides a number of specificexamples, matters not stated are not covered

MISCHIEF APPROACH


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by going outside the text of the statute to

determine the Acts function, the mischief or

purpose approaches are significantly differentto the literal and golden rule approaches

see Smith vHughes

courts may also be assisted by maxims

MISCHIEF APPROACH (cont.)


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maxims are necessary to aid construction

because no drafter (of legislation) can define

words in such a manner that every possible

interpretation is covered and no definition can

be exclusive or perfectly describe a class of

people, things or acts

2 maxims commonly used by the courts are: noscitur a sociis

ejusdem generis

MISCHIEF APPROACH (cont.)


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meansit is known from its associates

used where a word is ambiguous or unclear

in a group of specific words. Its meaning islimited to the same class or types of things

as the specific words.

seePrior vSherwood

NOSCITUR A SOCIIS


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meansof the same kind, class, or nature

known asthe class rule

the broad, general word is limited to the same

class as the more specific words preceding it used to find a viable meaning for a broad

general word

written law in Malaysia:

1. The Federal Constitution2. State Constitutions

3. Legislation

4. Subsidiary legislation

EJUSDEM GENERIS


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supreme law of the country

applies to all States in the Federation

laying down the powers of the Federaland State Governments

enshrines the basic or fundamental rightsof the individual

THE FEDERAL CONSTITUTION


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each State possesses its own constitution

contain provisions which are enumerated

in the Eighth Schedule

Federal Constitution

some of these provisions include matters

concerning the Ruler

STATE CONSTITUTIONS


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the Executive Council, the Legislature, the

Legislative Assembly, financial provisions, State

employees, and amendment to the Constitution

if such essential provisions are missing, or if any

provision is inconsistent with them, Parliament

may make provision to give effect to them or to

remove any inconsistencies, as the case may be

Article 71, Federal Constitution

STATE CONSTITUTIONS (cont.)


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law enacted by a body constituted for this purpose

legislated by Parliament at federal level and by thevarious State Legislative Assemblies at state level

laws that are enacted by Parliament after 1946 butbefore Malaysias Independence in 1957 Ordinances

those made after 1957Acts

laws made by the State Legislative Assemblies(except in Sarawak)Enactments

laws in SarawakOrdinances

LEGISLATION


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Interpretation Act 1967: any proclamation, rule,regulation, order, notification, by-law or otherinstrument made under any Ordinance, Enactment or

other lawful authority and having legislative effect deals with the details about which the legislature has

neither the time nor the technical knowledge to enact

if made in contravention of either a parent Act or the

Constitution is voidan exception to this rule is theproclamation of emergency under Art 150 of theFederal Constitution

see Eng Keock Cheng vPublic Prosecutor

SUBSIDIARY LEGISLATION


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portion of Malaysian law which is not

written

comprises:1. English law

2. Judicial decisions

3. Customs

UNWRITTEN LAW


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ENGLISH LAW

English common law and rules of equity

subject to 2 limitations:

1. It is applied only in the absence of local statuteson the particular subjects

2. Only that part of the English law that is suited to

local circumstances will be applied

3. For Peninsular MalaysiaEnglish common lawand the rules of equity are applicable as they

stood on 7 April 1956


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4. For Sabah and SarawakEnglish common law

and the rules of equity together with statutes of

general application, as they stood on 1

December 1951 and 12 December 1949respectively, apply

5. For commercial mattersin Peninsular Malaysia

(other than Penang and Malacca), principles of

English commercial law as it stood on 7 April1956 are applicable in the absence of local

legislation

ENGLISH LAW (cont.)


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6. For Penang, Malacca, Sabah and SarawakEnglish

commercial law at the date on which the matter has

to be decided is applicable in the absence of local

legislation

7. However, since there are so many local statutes

already passed which deal with commercial subjects,

there is no total reliance on English commercial law,

e.g.: Companies Act 1965 (Revised 1973)

Partnership Act 1961 (Revised 1974)

ENGLISH LAW (cont.)


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Banking and Financial Institutions Act 1989

Contracts Act 1950 (Revised 1974)

Insurance Act 1963 (Revised 1972)

Bills of Exchange Act 1949 (Revised 1978)

seeKon Thean Soong vTan Eng Nam

ENGLISH LAW (cont.)


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section 6 of the Civil Law Act 1956

seeUnited Malayan Banking Corporation Bhd &

Anor vPemungut Hasil Tanah, Kota Tinggi

Conf l ic t between Common Law and Equi ty

section 3(2) of the Civil Law Act 1956in the event

of conflict or variance between the common law and

the rules of equity with reference to the same matter,

the rules of equity shall prevail

ENGLISH LAND LAW


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Malaysian law can also be found in the judicial

decisions of the High Court, Court of Appeal

and the Federal Court, the then SupremeCourt and the Judicial Committee of the Privy

Council

decisions of these courts were made and still

are being made by the doctrine of binding

precedent

JUDICIAL DECISIONS


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is basically a judgment or decision of a court of lawcited as an authority for the legal principleembodied in its decision

may comprise: res judicatafinal order of the court binding the

immediate parties to the decision

ratio decidendithe reason for the decision

obiter dictum (sayings by the way)no binding power,although it can exercise an extremely strong influencein a lower court, and even in a court of equivalentstanding, depending on the court and the judge

PRECEDENT


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following a precedent means that a questionshould be resolved in a certain way today becausea similar question has been so decided before

this process of following an established procedureis called stare decisis which literally meanstostand by a decision

advantages of precedents:

promote consistency, coherence and certainty

promote efficiency and justice, ensuring equality andfairness

PRECEDENT (cont.)


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disadvantages of precedents: certain precedent may not be relevant in todays

circumstances but the judge may have to neverthelessfollow it

may also be slow in responding to community changesand it is cumbersome to change them as they mayrequire an Act of Parliament

in applying binding precedents, Malaysian law can

be found in the judicial decisions of the High Court,Court of Appeal and the Federal Court and the thenSupreme Court, Federal Court and the JudicialCommittee of the Privy Council

PRECEDENT (cont.)


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decisions of these courts were made, and are still beingmade, systematically by the use of what is called thedoctrine of binding judicial precedent

in the case of a binding precedent (the ratio decidendi ofan earlier case decision), each court is bound by thedecisions of courts of the same level or higher than it, inthe same hierarchy of courts

if a judge applies an existing rule of law without extending

it, his decision may be called a declaratory precedent if the case before a judge is without precedent, then the

decision made by him may be called an originalprecedent

PRECEDENT (cont.)


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the functioning of the system of precedents is based on thehierarchy of decisions

although the Federal Court and the Judicial Committeeof the Privy Council do not form part of the present

judicial system, they were part of the judicial system until 31December 1986 and decisions made by them are still bindingon the present courts

the Supreme Court was part of the judicial system from 1January 1987 to 23 June 1994

the general rule regulating the hierarchy of precedents isbased on the principle that decisions of higher courts bindlower courts, and some courts are bound by their owndecisions

HIERARCHY OF PRECEDENTS


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was the final court of appeal of Malaysia prior to 1January 1987

its decision was in the form of an advice to the Yangdi-Pertuan Agong who was obliged to give effect to it

appeals to the Privy Council on criminal andconstitutional matters were abolished on 1 January1987

effective 1 January 1987, no more appeals could bemade to the Privy Council, and the highest court ofappeal was then the Supreme Court

JUDICIAL COMMITTEE OF THE

PRIVY COUNCIL


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abolished on 1 Jan 1987

in its stead, the Supreme Court was set up and

was the highest court until 23 June 1994

now it is the highest court

appeals from the High Court can be made to the

Court of Appeal the Supreme Court has, therefore, been abolished

since 24 June 1994

FEDERAL COURT


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decision is binding on all subordinate courts but theHigh Court judge is not bound to follow thedecision of another

however, he may do so as a matter of judicialcomity

Sessions Courts and the Magistrates Courts

are bound by precedents laid down by the superiorcourts but their own decisions are not binding onany court

HIGH COURT


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decisions of the Judicial Committee are bindingon all courts in Malaysia in the followingcircumstances:

1. If the law decided is given on appeal fromMalaysia

2. If the decision is given on appeal from anotherCommonwealth country and the law is inpari

materia or similar to that of the law in Malaysia

seeKhalid Panjang & Ors v Public Prosecutor

HIGH COURT (cont.)


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it is not in every case that judges apply earlierprecedents

a judge may not wish to apply precedents in thefollowing circumstances:

1. The precedent is laid down by a lower court,where thecase is on appeal

2. The earlier precedent is arrived at per incur iam(i.e.made in ignorance of a statute or a binding

precedent)3. There are material differences in facts between

the case before them and the case laying downthe precedent

DISTINGUISHING PRECEDENTS


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advantages in applying the system of bindingjudicial precedents:

1. The law evolved is a result of an actual disputerather than a hypothetical situation

2. It is more flexible when compared to statute lawenacted by Parliament

3. Case-law is richer in legal detail than statute law


(cont.)


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disadvantages in applying the system of bindingjudicial precedents:

1. There is a tendency to overlook some authoritiesinadvertentlytoo many cases

2. It is sometimes difficult to tell whether a particularstatement in a judgment is ratioor dicta. It is theratio decidendiof a case which makes the decisiona precedent for the future while an obiter dictumisnot binding as a precedent


(cont.)


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generally, customs relating to family law, i.e.marriage, divorce and inheritance, are given legalforce by the courts in Malaysia

adat applies to Malays prior to the enforcement of the Law Reform

(Marriage and Divorce) Act 1976, Hindu andChinese customary law applied to the Hindus and

Chinese respectively in Sabah and Sarawak, native customary laws

apply in land dealings over native customary landsand family matters

CUSTOMS


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in Peninsular Malaysia there are two main varieties ofMalay customary law: the adat perpatih and the adattemenggong

Adat Perpatih

prevalent among Malays in Negeri Sembilan and Naningin Malacca

effective in matters such as land tenure, lineage and theelection of lembaga, undang and the Yang di-PertuanBesar

noted for its matrilineal system

CUSTOMS (cont.)


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each State has the power to administer Islamic Law

the head of the Muslim religion in a state (except for

Penang,Malacca, Sabah, Sarawak and the Federal

Territories) is the Sultan

in Penang, Malacca, Sabah, Sarawak and the Federal

Territories, the Yang di-Pertua Negeri is the head

the courts enforcing Islamic lawthe Syariah Courts

Islamiclaw applies to Muslims only

in businesses, esp. areas of banking and finance,Islamic principles are increasingly relevant in lending

and investments

ISLAMIC LAW

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