LAW 1014

BUSINESS LAW
LECTURE 2:
MALAYSIAN LEGAL SYSTEM
DR. THAATCHAAYINI KANANATU
(email: thaatchaayinik@sunway.edu.my)
 Lecture Outline
• (1) Introduction: Major legal systems
• (2) Historical Background of the Malaysian Legal System
• (3) Parliament – Law making & Legislation
• (4) Judiciary - Statutory Interpretation & Judicial Precedent
• (5) Conclusion
 (1) Introduction –
Major legal systems
• A few systems in the world:-
• (a) Romano-Germanic System aka Civil Law System –
from the Roman civil law. Has Codes (body of rules). In
Europe and former colonies of Europe.
• (b) Common Law System aka English Legal System –
law based on case-law (judicial precedence). In UK and former
colonies of the UK e.g. Malaysia!
 (1) Introduction –
Major legal systems
• (c) Islamic Legal System – law is a part of Islamic
religion. Shari’a law has rules based on divine command
and revelation. In Malaysia, Shari’a law is only for Muslims
in relation to personal laws e.g. marriage, divorce, custody
of children, inheritance, etc.
 (2) Historical Background of
the Malaysian Legal System
• The Malaysian Legal System has everything to do with
historical events. So we will look at history from:-
• (a) Pre-colonial – before circa 18th century
• (b) British colonial period – 1800s – 1956
• (c) Post-colonial period – 1957 onwards
 (2)(a) Pre-colonial
• Early Malaya - Customs/ Adat (local cultural and social
practices in the Malay/Nusantara world in Southeast Asia).
• Rules of tradition particular to culture or locality passed
down from generation to generation.
• Includes religious (Islamic), spiritual and cultural rules in
everyday life, but also includes trade practices.
 (2)(a) Pre-colonial
• Customs or customary rules were interpreted by the village
chief/head and applied to solve disputes.
• There are no records of these ‘legal’ proceedings. Hence we are
unable to study the reasons considered for the decision (like we do in
the common law system).
• An example of a custom:
Adat Perpatih – a custom in selecting the next chief/king. In the state
of Negeri Sembilan it was a matrilineal system (mother to daughter).
 (2)(a) Pre-colonial
• Since 14th century, no legal court system, dispute
settlement by village chiefs and kings (sultans).
• 15th – 16th century – early introduction of codified laws,
Islamic laws, early development of a formal legal system
and administration of justice. E.g. Undang-Undang Laut
Melaka (Malacca shipping laws).
 (2)(b) Colonial era
(1800s – 1956)
• Portuguese colonization of Malacca – 1511 to 1641
• Dutch colonization of Malacca - 1641–1825
• Portuguese and Dutch legal practices applied during the period of colonization.
However no formal court system was established during this time.
• Some practices were assumed into the local system of laws.
• However even during colonization Islamic Laws were left untouched which applied
to Malay Muslims of the land.
 (2)(b) Colonial era
(1800s – 1956)
• British colonization of Malaysia – from 1786 to 1956.
• Established the courts - stable form of judicial
system.
• Emergence of courts, judges, lawyers, laws and
procedures.
• The Common Law legal system.
 (2)(b) Colonial era
(1800s – 1956)
• The biggest influence on Malaysian Law is English Law.
• Factors – Duration of occupation and establishment of system of laws
and government in the country as compared to other forms of
colonization.
• However Malaysian courts have also shown tendency to follow the
judgments of Australian and Indian Judges where Malaysian statute
and principle is similar, if not the same.
• Q: Why Indian judges?
 (2)(c) Post-colonial
(1957 onwards)
• Today the influence of English Law is fairly limited.
• Section 3 Civil Law Act 1956:
Application of U.K. common law, rules of equity and certain
statutes
• 3. (1) Save so far as other provision has been made or may hereafter be made
by any written law in force in Malaysia, the Court shall—(a) in Peninsular
Malaysia or any part thereof, apply the common law of England and the
rules of equity as administered in England on the 7 April 1956;
 (2)(c) Post-colonial
(1957 onwards)
• Section 5, Civil Law Act 1956: Application of English law in commercial matters
• 5. (1) In all questions or issues which arise or which have to be decided in the States of Peninsular
Malaysia other than Malacca and Penang with respect to the law of partnerships, corporations,
banks and banking, principals and agents, carriers by air, land and sea, marine insurance,
average, life and fire insurance, and with respect to mercantile law generally, the law to be
administered shall be the same as would be administered in England in the like case at the date of the
coming into force of this Act, if such question or issue had arisen or had to be decided in England,
unless in any case other provision is or shall be made by any written law.
• (2) In all questions or issues which arise or which have to be decided in the States of Malacca,
Penang, Sabah and Sarawak with respect to the law concerning any of the matters referred to in
subsection (1), the law to be administered shall be the same as would be administered in England in the
like case at the corresponding period, if such question or issue had arisen or had to be decided in
England, unless in any case other provision is or shall be made by any written law.
 (2)(c) Post-colonial
(1957 onwards)
• Federal Constitution 1957 and the basic constitutional framework in Malaysia
• A Constitutional Monarchy
• Executive/ Government
• Judiciary
• Bicameral Parliament – Dewan Rakyat and Dewan Negara
• Democracy (Rule of Law, Constitutional Supremacy and Separation of Powers)
• Islam – National Religion
• Malay Language – National Language
 (2)(c) Post-colonial
(1957 onwards)
• Federal Constitution 1957 and fundamental liberties
Article 5(3) – Article 5(4) – right Article 8 –
to be brought equality and
Right to Life before court
without delay equal treatment

Article 10(1) freedom of

Article 11 – Article 12 – Right to
expression subject to section
114a Evidence Act 1950 Right to Religion Education
 (2)(c) Post-colonial
(1957 onwards)
• However fundamental liberties are limited by Art 149 and Art 150 of the
Federal Constitution.
• Art 149 – Parliament may make laws against subversion.
E.g. Sedition Act 1948
• Article 150 – Making Law in the event of emergency.
E.g. former Internal Security Act 1960
(3) Parliament – law making
(3) Parliament – law making
 (4) Judiciary
- Statutory Interpretation
• Why do we need to interpret legislation?
• Implied words or phrases.
• Broad words used.
• Ambiguous words.
• Unforeseeable developments.
• Errors
 (4) Judiciary
- Statutory Interpretation
1. Literal Rule
2. Golden Rule
3. The Mischief Rule
4. Purposive Approach
 (4) Judiciary
- Statutory Interpretation
1. Literal Rule:
Taking a strict view of the statute. The courts would give the words in
the statute even if it leads to absurdity.
 (4) Judiciary
- Statutory Interpretation
1. Literal Rule
2. Golden Rule: Courts may depart from the ordinary meaning where that
would lead to absurdity.
 (4) Judiciary
- Statutory Interpretation
1. Literal Rule
2. Golden Rule
3. The Mischief Rule: See Heydon’s Case – “the function of the judge is
to make such construction as shall suppress the mischief and advance
the remedy that Parliament had decided to cure that mischief.” (Trakic
et al, 2013).
= see also Smith v. Hughes[1960] – crime for prostitutes to solicit in the
streets…
 (4) Judiciary
- Statutory Interpretation
1. Literal Rule
2. Golden Rule
3. The Mischief Rule
4. Purposive Approach: to “promote the general legislative purpose
underlying the provisions.” (Lord Denning in Notham v. London
Borough of Barnet [1978].
In Malaysia, the Interpretation Acts 1948 and 1967 requires all courts
to apply the purposive approach.
 (4) Judiciary
- Judicial Precedent
• We still follow the system of precedent brought in by the
British.
• Ratio Decidendi – reason for the decision is binding on
future courts.
• Obiter Dicta – an opinion made by a judge in a case which
is not binding in future cases.
 (4) Judiciary
- Judicial Precedent
• The decision of the a higher court in the hierarchy of the courts
binds the lower court.
• Highest Court in the Civil System – Federal Court
• Second Highest – Court of Appeal
• Third Highest – High Court
• These courts are known as the Superior Courts.
 (4) Judiciary
- Judicial Precedent
• The Lower Courts include:
• The Sessions Court and
• Magistrates Court

• The Shari’ah Courts form a different but parallel system of court

to the civil courts on Islamic matters.
 (4) Judiciary
- Judicial Precedent
 (4) Judiciary
- Judicial Precedent
 (5) Conclusion
• Different types of legal systems in the world, but Malaysia follows the
Common Law System but also applies the Islamic laws for Muslims
pertaining to personal matters.
• The supreme law of the land is the Federal Constitution 1957. No law can
override the constitution.