TOPIC 1

INTRODUCTION TO THE
MALAYSIAN LEGAL SYSTEM
BUSINESS LAW
(LAW 416)

NAIM AZIZI
nadzratun@uitm.edu.my
 COURSE CONTENT – TOPIC 1

(1) DEFINITION AND CLASSIFICATIONS OF LAW

(2) SOURCES OF LAW IN MALAYSIA
2.1 Federal and State constitution
2.2 Federal and State legislation
2.3 Subsidiary legislation
2.4 English Common law and equity
2.5 Customs
2.6 Judicial precedent
2.7 Islamic law
(3) LEGISLATIVE PROCESS IN MALAYSIA
(4) ADMINISTRATION OF JUSTICE
4.1 Hierarchy of the courts
4.2 Jurisdiction of the Courts
 DEFINITION OF LAW

 No specific definition of what is law.

 Oxford English Dictionary – law is the body of enacted or

customary rules recognized by community as binding.

 The body of official rules and regulations, generally found in

constitutions, legislation, judicial opinions, that is used to
govern a society and to control the behavior of its members-
law is a formal mechanism of social control.
 The purpose or function of law:
 to attain justice in the society
 what is right and what is wrong
 ensure peace and harmony in the society
 protect the citizen of the state from any harm, crime,
wrongful act of the others.
 CLASSIFICATION OF LAW

INTERNATIONAL LAW PRIVATE LAW

PUBLIC LAW Affects the right and
Consist of rules and principles
Law that governs dealing with the conduct of the obligation of individual,
the relationship State and international organization families, businesses.
between individual in their international relation with Intended to give
and the State each other and with private compensation to person
individual and transnational injured, to enable the
companies. property to be recovered
etc.
3 Categories
- Contracts
Constitutional Law Criminal Law -Torts
List down the Various offences -Trust
rights of individual committed by
in a State individuals against
Supremacy of the State
Parliament Obligations on
Rights of citizens. individual not to
commit
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 PRIMARY SOURCES OF LAW
1. WRITTEN LAW
 The most important source of law.
 What is written law ?
Referring to the law which is being enacted by the
Parliament and State Legislative Assemblies
and can be found in written Federal Constitution and
State Constitution.
 It refers to the law embodied in the:
a) Federal Constitution
b) State Constitution
c) Federal and State Legislation
d) Subsidiary and delegated legislation
a) FEDERAL CONSTITUTION
• Federal Constitution is the supreme law of the land
together with the State Constitutions comprising
the Federation.

• All the articles/provisions in the State constitution,

legislation and subsidiary legislation must be
consistent with the Federal Constitution. (Principle
of ultra vires)

• Can only be amended by a 2/3 majority in the

Parliament.

• Consists of powers of both Federal and State

Governments.

• Applies to all states in Malaysia.

b) STATE CONSTITUTION
• Each state in Malaysia has its own State
Constitution.
• It contains provisions pertaining to state matters
as provided in the 8th Schedule to the FC.
• The matters include Ruler and Executive Council
matters, land matters, forestry, and Islamic law.
c) FEDERAL AND STATE LEGISLATION

• Legislation refers to laws made by a person or

body which has power to make law. This
comprises the laws passed by the legislature i.e.
Parliament and the State Legislative
Assemblies.
• The laws passed by Parliament since 1957 (i.e.
after Malaya’s independence) are called ‘Acts’
while those passed by the State Legislative
Assemblies (except Sarawak) are called
‘Enactments’. The laws passed in Sarawak are
called ‘Ordinances’.
• The legislature is not supreme. It must enact
laws in accordance with the FC, otherwise
unenforceable.
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 Differences
Federal Legislation State Legislation
• Passed by the Parliament • Passed by the SLA
• Applicable to the whole • Applicable to that
country. particular state only.
• Laws enacted before • Laws enacted by SLAs are
Merdeka Day are called called Enactment except
Ordinance and laws Sarawak which are called
enacted after Merdeka Ordinance.
Day are called Acts. • May contain matters
• May contain matters listed in List II of the
listed in list I of the Ninth Schedule to the
Ninth Schedule to the FC.
FC.
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d) SUBSIDIARY OR DELEGATED LEGISLATION

• Subsidiary legislation is made by persons or

bodies under powers conferred on them by Acts
of Parliament or Enactments of State Assemblies.
• This refers to the rules, regulations, by-laws,
orders and other instruments made by an
authority other than Parliament and State
Assemblies.
• Also known as delegated or subordinate
legislation.
• Subsidiary legislation made in contravention of
either a parent Act or the Constitution is void.
• It deals with the details of everyday matters
which the legislature has neither time nor
expertise to enact laws.
Example:

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 EXAMPLES
Beauty Centre and Health Care Labour Law
(MBSA) 2013 (UUK Pusat Kecantikan Dan
Penjagaan Kesihatan (MBSA) 2013)

Muslim cemetery Labour Law (MBSA)2005 (UUK

Tanah Perkuburan Islam MBSA 2005)

Public Toilets Labour Law (MBSA) 2005 (UUK

Tandas Awam (MBSA) 2005)

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 Advantages & Disadvantages
Advantages Disadvantages
• Flexible as it can be • Bulk and frequent
made, amended, or changes.
modified easily and
speedily. • There may be abuse of
power.
• Save the time of the
legislature.
• The problem of lack of
technical expertise is
solved.
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 UNWRITTEN LAW

UNWRITTEN LAW

English Judicial
common Customary
law law Precedent Islamic law

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 2. UNWRITTEN LAW

• Does not mean that the law is literally

unwritten – but its refer to the law which
is not enacted by the legislature and not
found in the written Federal and State
Constitution.
a) ENGLISH COMMON LAW
• English law form part of the Malaysia law.
• It can be found in English common law and equity.
• Common law has been described as judge-made law, for
it is the law that has evolved through the years from the
decisions of judges.
• Principles of English law applicable to local
circumstances.
• There are 2 conditions to apply English law in Malaysia:

1. There is lacunae in the local statutes covering the same

matter;
2. The law suits local circumstances.
• However not all English common law and rules of
equity form part of Malaysia.

• There is cut off date stipulated in the Civil Law Act

1956.

• Section 3(1)(a) CLA

Peninsular Malaysia, the court shall apply the common
law of England and the rules of equity as administered
in England on 7th April 1956.
Case: Mokhtar v Arumugam [1959]
It was held that Malaysian courts are not bound to
follow the position of the law in England after the cut
off date ie 7th April 1956.
 Where there are existing statute in Malaysia that
govern particular matters of law, the common law and
rules of equity cannot be applied. Malaysian courts
must apply the existing statute.
Case: Karpal Singh v PP [1991]
• Section 3(1)(b)(c) CLA
In Sabah and Sarawak the court shall apply the
common law and rules of equity together with statute
of general application as administered or in force in
England on the 1st December 1951 and the 12th
December 1949.
 JUDICIAL PRECEDENT
Decisions of the higher courts in previous cases
must be followed by the lower courts in similar
cases/situations.

Judicial Precedent can be obtained from the

decision of the superior courts namely:
Federal Court
Court of Appeal
High Court

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• The doctrine of judicial precedent has two ways of
operation:

a) vertical
(a court is bound by the prior decisions of a higher
court)

b) horizontal
(some courts are bound by their own prior
decisions and prior decision of a court of the
same level, whether past or present, if any)
• DOCTRINE OF JUDICIAL PRECEDENT:

Decisions of Federal Court

FEDERAL binds all lower courts
COURT(FC)
COA is bound by the decision of FC.
COA’s decision is binding on all lower
COURT OF courts.
APPEAL(COA) COA is also bound by its own decision

HIGH
HC decision is binding on all
COURT(HC) subordinate courts

SUBORDINATE Bound by the decisions of the superior

COURTS(SC) courts.

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• Exception to the rule of binding precedent:

1). Superior court may ignore or overrule a precedent

laid down by a lower court, where the case is on
appeal.

2). If the decision made per incuriam (made in

ignorance of a statute or a binding precedent).

3). When they find that there are material differences

in facts between the case before them and the
case laying down the precedent.
Categories of Judicial Precedent

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C) CUSTOMARY LAW

• CL is the regular pattern of social behavior, accepted by a

given society as binding upon itself. It prescribes behavior
that has been found to be beneficial as a means of
generating harmonious interpersonal relations and to solve
conflict.
• Some of the customs of local inhabitants have been
accepted as law by the court .
 ISLAMIC/SYARIAH LAW

• Islamic/Syariah law is the sacred law of Islam as revealed

through the Prophet Muhammad (peace be upon him) in the
Quran and Sunnah.

• The totality of God commands that regulate the life of

Muslims in all its aspects, their duties towards Allah, their
relationship with one another and the environment.

• Islamic Law has become a major source of law in Malaysia.

However, the Islamic law applied in Malaysia has been
modified to adapt to the needs and temper of society.

• Islamic law only applies to Muslims.

• Islamic law is administered in every state in the
Federation by its respective Syariah Courts
system at state levels and in the Federal
Territories of Kuala Lumpur and Labuan.

• Sources of Islamic Law are divided into primary

and secondary sources.
• Primary Sources: Al-Quran & As-Sunnah
• Secondary Sources: Ijma’, Qiyas, Ijtihad etc.
• Ramah v. Laton (1927) 6 FMSLR 1278; Islamic law is
not foreign law but local law and the law of the land.

• Art 3 FC- Islam is the religion of the Federation, but

other religions may be practiced in peace and
harmony in any part of the Federation.
LAW MAKING PROCESS

HOW BILL BECOMES LAW?

 Law-making Process

• Before any law can be called as Act, they

are known as “Bill”.
• Legislative process in Malaysia consists of
Pre-Parliamentary Stage and
Parliamentary Stage, until the Bill
becomes law upon publication.

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 Legislative Process in Malaysia
• Government Proposal
• Meeting with relevant authorities
Pre- Parliamentary Stage • Drafting of Bill
• Cabinet Approval

First Reading • Minister introduced the Bill by reading title only

Second Reading • Debate on general principles of Bill followed by vote

• Detailed examination of the Bill and consideration of

Committee Stage amendments, followed by a report on the Bill to Dewan

Third Reading • Further debate and voting

Dewan Negara • Similar procedure with Dewan Rakyat

• YDP Agong affixes Public Seal within 30 days of

Royal Assent presentation.

Publication • Act comes into force 35

 FIRST READING
1 HOUSE
When a Bill is first
introduced in one of the
two houses, only the title
is actually read. After the
Bill is passed at this
stage, the text is printed
and distributed.
ROYAL ASSENT 5 one House, it is sent to
When the Bill has passed both
Houses in accordance with
Art. 68 FC,it is sent to the
Yang Di-Pertuan Agong for
the Royal Assent. The Bill then
becomes a law upon
publication.
SECOND READING A COMMITTEE OF
Members debate the Bill.
If accepted, the Bill is Considers the Bill in
passed on for detail and may amend any
consideration by a
2
part of it. The Committee
committee of the house. then submits a report on
the Bill to the house. If
the report is approved, the
OTHER HOUSES Bill goes on to a third
reading in the House.
When a Bill has passed
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the other house, where it
follows a similar THIRD READING
pattern. If the second 4 Debate takes place and
house amends the Bill, amendments may be put to
the Bill must be a note. The House then
returned to the first either passes or defeats the
house for its approval. Bill.
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ADMINISTRATION OF JUSTICE

HIERARCHY OF COURT

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38
 COURT SYSTEM

• Courts are divided into two categories:

(i) Superior Courts:
- Federal Court
- Court of Appeal
- High Court

(ii) Subordinate Courts:

- Sessions Court
- Magistrates’ Court
- Magistrates’ Court for Children
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1. FEDERAL COURT (FC)

• FC replaced the Supreme Court in mid-1994 as the

highest court in Malaysia.
• Instituted by Article 121 of the Federal Constitution.
• Consists of the Chief Justice, the President of the COA,
the Chief Judge of Malaya and Chief Judge of Sabah &
Sarawak, and 6 Federal Court judges.

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 With effect from January 2012, the quorum hearing
any application for leave to appeal, as well as the
substantive appeal in the Federal Court, the apex
court of Malaysia, shall be a minimum of 5 judges
instead of the usual 3.

 Has jurisdiction in matters:

◦ To hear civil and criminal appeals from the COA.
◦ To exercise exclusive original jurisdiction on those
matters conferred on it under Art. 128(1) & (2) of
the FC.
 Hear disputes between any State and the Federal
government.
 Determine the validity of any federal or state
legislation as being in excess of powers.
 2. COURT OF APPEAL (COA)

 The COA was established under Article 121 of the Federal

Constitution.

 On 24.06.1994, the COA was created to act as an intermediate

appeal chamber before proceeding straight to the FC.

 The composition of its judicial personnel is prescribed in Article

122A of the Constitution.

 Proceedings is heard and disposed of 3 judges or such greater

uneven number of judges as the President may in any particular
case determine i.e. 3 judges at any one time OR more (but must
be of uneven numbers i.e. 5, 7, 9,11) Decisions are made by
majority i.e. 2:1 (2 to 1), 3:2, 4:3, 5:4.

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• The Court of Appeal has also implemented several
initiatives to expedite the disposal of appeals.

• These include increasing the number of sittings,

setting up of a special panel hearing only
interlocutory appeals and another hearing only
appeals originating from the subordinate courts.

• The number of panels sitting in a month was

increased from 12 to 20.

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Court of Appeal

• Section 50 and 67 of the Courts of Judicature Act 1964

• The court can hear both Civil and Criminal appeal cases.

• Civil Appeal Cases

– Has jurisdiction to hear and determine civil appeals for
cases where the amount or value of the subject
matter of the claim is more than RM 250,000.
– If the amount is less than RM250,000 the parties must
get the permission from the Court of Appeal.
• Criminal Appeal Cases
– Has jurisdiction to hear and determine any appeal
against the decision of the High Court.

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3. HIGH COURT (HC)

• Established under Article 121(1) of the Federal Constitution.

• There are 2 High Courts of co-ordinate jurisdiction in Malaysia:

(i) High Court for West Malaysia
(ii) High Court in Sabah and Sarawak

• Each of the two High Courts is headed by a Chief Judge.

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• Sections 22, 23 and 24 of Courts of Judicature Act 1964 lay
down the criminal and civil jurisdiction of the High Court.
• Deals with offences punishable with death.

• The general jurisdictional rule in relation to criminal

matters is reflected in Section 22(1)(a) of the Courts of
Judicature Act 1964.

• Has unlimited jurisdiction to try all civil proceedings within

the local jurisdiction of the court.

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4. SESSIONS COURT (SC)

• A SC is under the charge of a SC judge.

• Under Section 54 of the Subordinate Courts Act, the

SC assumes a limited supervisory role over the
Magistrates’ and Penghulu’s courts.

• The purpose for such action is to ensure the

correctness, legality or propriety of the decision
recorded or arrived at, and the regularity of the
proceedings.
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SESSIONS COURT:
 Criminal Jurisdiction – all offences other than offences
punishable with death.
 May pass sentence allowed by law other than the
death sentence.

 Civil Jurisdiction– try all actions and suits of a civil

nature where the amount in dispute or value of the
subject-matter does not exceed RM1,000,000.
5. MAGISTRATES’ COURT (MC)

 For the Federal Territory, magistrates are appointed

by Yang di-Pertuan Agong on the recommendation of the
Chief Judge.

 In each of the States, magistrates are appointed by the

State Authority on the recommendation of the
respective Chief Judges.(Section 78 of the Subordinate
Courts Act 1948).

 This court has the jurisdiction to hear civil cases and

criminal cases.

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 This court has the jurisdiction to hear civil cases and criminal
cases. There are two (2) types of classes of magistrate i.e. First
Class and Second Class
 First Class Court:
◦ Criminal – To try all offences punishable with up to 10 years
imprisonment or with fine only and offences related to
punishment for robbery and house breaking by night. (Sec
85 Subordinate Courts Act)
◦ Civil - To try all litigations where the matter in dispute or
subject matter does not exceed RM 25,000.
 Second Class Court:
◦ Civil - Performs minor function i.e. granting bail, mentioning
cases.
◦ Criminal – Only to deal with cases where the maximum
punishment imposed is no more than 12 months
imprisonment or which is punishable with a fine only.

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Subordinate Courts (Amendment) Act 2010

• Sessions Court and Magistrates’ Court will have jurisdiction

over civil claims of up to Ringgit Malaysia One (1) million and
Ringgit Malaysia 100,000.00 respectively.

• The Sessions Court is also conferred with the power to grant

injunction, declaration, specific performance, rescission of
contract.

• However, only selected Sessions Court judges with adequate

training and experience will be tasked with hearing such
applications.

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6. MAGISTRATES’ COURT FOR CHILDREN (MCC)

• Established under the Child Act 2001 (Act 611).

• Section 2 of the Act defines “Child” as a person under the age of eighteen
years, and for the purposes of criminal proceedings, means a person who has
attained the age of ten.

• It can try all offences except those punishable by death and it is presided by a
First Class Magistrate and 2 advisors.

• The philosophy of creating a special court is that children need care and
attention and offenders should be treated differently from adult ones and
with compassion.

• When a juvenile is found guilty, they are sent to ‘corrective’ school i.e. Henry
Gurney School, Melaka.

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7. PENGHULU’S COURT

• At the lowest level of the court hierarchy in West

Malaysia.
• Presided by a Penghulu or Headman appointed by
the state government for a mukim which is an
administrative district.
• Jurisdiction- To try civil disputes where the subject-
matter does not exceed RM50 in value and in
criminal cases, to impose a fine not exceeding RM25.

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Next: LAW OF CONTRACT

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