Topic

Evaluation of
Sources of
Malaysian Law

LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.

Provide the three major sources of Malaysian Law;

2.

Discuss the evolution of the sources of Malaysian Law;

3.

Analyse the legislation and the subsidiary of legislation;

4.

Assess the importance of statutory interpretation; and

5.

Summarise the impact of Islamic Law in Malaysia.

X INTRODUCTION
This unit introduces the sources of law in Malaysia. Sources of law have different
meanings. For the purpose of this study, the sources of law mean legal sources that
make up the law in Malaysia. There are three major sources of law in Malaysia, which
will be discussed in this topic. It is also important to understand the evolution and
historical aspect of these sources. This will encompass a discussion on the reception of
English Law in Malaysia and Common Law and Equity.
To enable you to have a clearer understanding of some legal concepts, Australian
and English cases have been cited as examples. It should also be noted that the
cases from these jurisdiction holds persuasive authority.

3.1

RECEPTION OF ENGLISH LAW IN

MALAYSIA

The British Colony was establish in 1786 in Penang, the spread to Singapore and
Melaka. This was known as the Straits Settlement.
Foreign influence in Malaysia can be seen way as far back as 1511. Portuguese
occupied Malacca from 1511-1641. The Sultan of Malacca fled first to Pahang and
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then to Johor and the Riau Archipelago. One of his sons became the first sultan of
Perak. The attack on both Johor and Aceh in Sumatra was unsuccessful therefore,
attacks were made on Malacca. Aceh and Johor also fought each other. The main
issue in these struggles was control of trade through the Strait of Malacca. Kedah,
Kelantan, Terengganu and north of Malacca, became nominal subjects of Siam.

Dutch Occupation in Southeast Asia

Figure 3.1: The chronology events of Dutch

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3.1.1

Strait Settlements Acts

The first territory to be acquired by the British was Penang. This was in 1786. It
is however, unclear how the British acquired Penang. There are various theories
on this matter. Therefore, it is important to determine the law of the territory.
The origins of the Malaysian Legal System can be traced back to England. As
early as 1608, the principle was established that English settlers took English law
with them when they entered a new territory. This was known as the Doctrine
of Reception (or the doctrine of terra nullius) and it has a history that can be
traced back to the time of the Roman Empire for it was the Romans they who
with them the law they knew and understood, rather than using the laws of the
countries they conquered.
It is worth looking at the explanation of the late Sir John Latham (formerly Chief
Justice of Australia). He explained the operation of the Doctrine of Reception in
the following words, and at the same time provided an insight into an eminent
jurists perception of current thinking of Aboriginal society at the time:

In other words, if Malaysia had been gained by conquest or ceded by treaty, the
existing laws in force in Malaysia at that time would have applied until
superseded by the laws of England.
However, as Malaysia was not considered by constitutional theory at the time to
be owned by any group or state and no recognised legal system was seen to exist,
the common law of England that was applicable to the conditions of colonisation
applied from the moment of colonisation. Francis Light reported that Penang was
uninhabited when he landed. This was further re-inforced in the cases like (R v
Williams) and (Fatimah v Logan).

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The Privy Council in the case of (Ong Cheng Neo v Yeap Cheah Neo) stated:
It is really immaterial to consider whether Prince of Wales Island, or as it is
called Penang, should be regarded as ceded or newly settled territory, for there is
no trace of any laws having been established there before it was acquired by the
East Indian company. In either view the Law of England must be taken to be the
governing law so far as it is applicable to the circumstances of the place, and
modified in its application by these circumstances.

J.W. N. Kyshe in his article A Judicial History of the Straits Settlements, 1786
1890, Mal LR, 11 (1969) said that the early records of Penang showed no official
body of law existed for the first twenty odd years of British occupation. Sir
Francis Light was given the task of maintaining order. He was the
Superintendent, whereby the magistrate and second assistant assisted him on this
matter. This clearly implies that there was no separation of powers between the
judiciary and the executive. Since the British subjects were not under the
jurisdiction of the Superintendent, those arrested were sent to Bengal for trial.
This proved to be unfeasible as the evidence and the witnesses were located in
Penang. It was not until before his death in 1794, Francis Light received some
written regulations from Governor General, Lord Teighmouth.
As explained above, the Straits Settlements was the unification of a joint
administration for certain former British colonies in Southeast Asia. In 1826, the
three British East India Company territories (Singapore, Penang and Malacca)
were given a unified administration. This was known as the Straits Settlements.
In 1826, a new charter was introduced called the Second Charter of Justice. This
charter generally introduced English Law into the Strait settlements. However,
there are controversies as to the extent of English Law received. Sir Edward Rice,
the first recorder of Penang was of the view that the Charter of Justice still
allowed the locals to freely exercise their:

religions;

customs;

usages; and

habits.

Sir Ralph Rice the then third recorder of Penang was also of the view that English
law was only applicable in criminal matters. In civil matters however, they were
governed by their own laws and customs. In the case of Choa Choon Neoh v
Spottiswoode, however, Maxwell CJ expressed a contrary view:

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A Third Charter of Justice was introduced in to the Straits Settlements in 1855;

this was to remedy the deficiencies in the system. This charter repealed the
former charter in order to reorganise the Court of Judicature (explained below).
There were two divisions, one for Penang and the other for Melaka and
Singapore.
However, in 1858, the company was dissolved. Thus, the Indian Office had
jurisdiction over the territories. The Straits Settlements administered by the
Colonial Office in England became a crown colony in 1867. Ordinance V that was
passed in 1868 by the Legislative council abolished the court and replaced it with
the Supreme Court of the Straits Settlements. The new court had three
jurisdictions which were later reduced to two in 1873. In the same year the
Supreme Court was accorded an appellate jurisdiction. The Court of Appeal had
a composition of not less than three judges when it sat as a Full Court. The
divisional court had two judges in a sitting. After the reconstitution of the
Supreme Court, the divisions of the court were impliedly abolished by reducing
the number of judges to three. It was not only through the Charter that English
Law was introduced but also through legislation. They were as shown in Figure
3.2.

Figure 3.2: English law that were introduced through legislation

As mentioned above in 1867, after the transfer of settlement to the Colonial office,
the legislative council of the straits settlement was formed. This council was
given the authority to enact legislations for the settlements with effect from 4th
February 1867.

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Labuan

In 1912 Labuan was made a dependency of Singapore and was constituted a

fourth Settlement. In 1930, the Strait Settlements administration as a Presidency
was found to be far more expensive to have a separate administration and was
downgraded to a status of a Residency. This meant it was under the control of the
Governor of Bengal. In 1946 The Straits Settlement crown colony was dissolved.
In the same year Singapore with its dependencies became a separate crown
colony. Penang and Malacca were included in the Malayan Union. In 1948 the
Federation of Malaya was formed.

ACTIVITY 3.1
Based on your basic understanding of what you have learnt earlier,
describe what is Strait Settlement. Explain how was it established.

3.1.2

The Malay States

SELF-CHECK 3.1

In 1985 the Malay states were divided into two forms. What the two forms
are?

During nineteenth century, the Malay states consisted of Perak, Selangor, Pahang
and Negeri Sembilan. Before the intervention of British, the Malay states had its
own law. This was called the Malay Customary (adat) law which was modified
by the principles of Syariah law. The villages applied Islamic law and customary
law.
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The process of an Islamised Malay Adat law was arrested when British came. In
1895 the four Malay states was formed as the Federated Malay States. The other
five states which were made up of Johor, Kelantan, Terengganu, Kedah and Perlis
did not join the federation and was called the Unfederated Malay States.
The Malay states were not a colony like the Straits Settlements. These states were
in many ways independent and ruled by their sovereigns. The acceptance of this
can be seen in cases such as (Mighell v Sultan of Johor) and (Duff Development
Co v Government of Kelantan).

The reason for the above was because these states were not British territories;
therefore English law could not be imposed through the doctrine of reception, but
through voluntary treaties.
The Statutory introduction of English law to the Federated Malay States was in
1937 and the Unfederated Malay states in 1951.
In the case of (Ong Cheng Neo v Yap Kwan Seng), the judicial commissioner
stated his opinion on the reception of English law.

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It cannot be denied however, that English law had a profound impact. The Civil
Law Enactment 1937 gave statutory authority for the introduction of English
common law and equity to the Federated Malay States. The state of the law before
the civil law enactments can be seen in the case of (Re the Will of Yap Kim Seng).

In 1948, the Unfederated Malay states became part of the Federation of Malaya in
1948 and the Civil law (Extension) Ordinance 1951 extended the application of
the Enhancement to these states. In 1956, these ordinances were repealed by the
Civil Law Ordinance 1956 which applied to all eleven states of the Federation.
The sections in the Civil Law Ordinance (CLO) 1956 which were relevant to the
application of English law are as exhibited in Figure 3.3.

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Figure 3.3: The sections in the CLO 1956 which were relevant to the application of English Law

3.1.3

Sabah and Sarawak (Borneo States)

There are two significant differences in the modern history of the Borneo states as
compared to peninsular Malaysia. They are shown in Figure 3.4.

Figure 3.4: Two significant differences in the modern history of the Borneo states

Although the Borneo states were British protectorates in 1888 (North Borneo as
Sabah was then known under the British north Borneo company and Sarawak
under the Brookes) the formal reception English law in Sarawak only took place
in 1928. This took place with Law of Sarawak Ordinance 1928. The ordinance
stated that the law of England subject to modifications by Orders of Rajah and so
far was applicable, having regards to native customs and local conditions.

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These provisions have been reproduced in the Civil Law Act 1956. (Revised
1972). Chinese customary laws were never administered as part of native custom.

However, Islamic law and Malay customary law were considered as native
custom and there were separate system of natives courts with limited
jurisdiction over civil and criminal matters. In 1978, Islamic law and Malay
customary law were administered by the Islamic council and Syariah court.

ACTIVITY 3.2
Do you believe that Malaysia should have been described as uninhabited
when the British colonised here? Explain your point of view from a legal
(rather than an emotional) perspective.

3.2

COMMON LAW AND EQUITY

SELF-CHECK 3.2

Based on your understanding in Topic 2, recall your understanding on

what is meant by common law.

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The Malaysian System traces some of its origins from England. The Malaysian
legal system is based on the common law and equity, Syariah law and customary
law traditions. However, the common law forms the basis of the national legal
system. This was received in Malay Peninsula (as Malaysia was then known)
when the British came to Penang in 1786. In order to appreciate the common law
system in Malaysia today, it is important to understand the historical origins of
English Law and the development of common law and equity.

3.2.1

Origins of English Law

The English Legal System had a diversity of sources these are included in Figure 3.5.

Figure 3.5: Sources of English Law

3.2.2

The Development of Common Law

The historical development of Common Law is divided into 3 stages these are
shown in Figure 3.6.

Figure 3.6: The tree stage of historical

development of common law

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(a)

Pre 1066: Anglo-Saxon Period

Prior to the Norman Conquest the legal system of England was not
unified. It was fragmented i.e. there were different systems of law applying
to different parts of England.
For example, the Northern and North-Eastern part of England applied
Dane Law due to the invasion and settlement of the Vikings in those
parts. The Midlands applied Mercian Law which was born out of the Saxon
invasion from Germany. South and West of England adopted Wessex Law.
An example of the diversity can be seen with regards to inheritance law can
be seen in Table 3.1.
Table 3.1: An Example Diversity with Regards to Inheritance Law
SYSTEM
Primogeniture
Gravelkind

Borough-English

FACT
The eldest son inherits his father's land. This law was applied in
most part of England.
All sons inherit equally. This was applied for example in Kent.
The youngest son inherits the land. This system was followed in
Bristol and Nottingham.

Since there was a diverse system of laws in England, how were these laws
enforced? There were several means of enforcement practiced, some of which
were set out as in Table 3.2.
ENFORCEMENT
Anglo-Saxon
System

FACT
This is also known as frankpledge. Here, all males over 12 years of
age belong to a 'tithing', which is group of 10 members. This
group is equally responsible for the actions of each member
therefore; if an individual member commits a wrong, the other
members must submit him to justice or themselves be killed as

outlaws.
Trial by Ordeal

Compurgation

An example of this system of enforcement is 'ducking' a person in

the river to see whether he floats or sinks. If he sinks, he is
innocent and if he floats he is guilty. This was an appeal to God or
the 'supernatural'.
This is a means of enforcement whereby a person is asked to
repeat an oath over and over again until he is able to say it
perfectly.
There was two separate levels of courts:
1. Central government (King's courts), also known as the

Witan.

Court System
2.

Courts run by local authorities for example, the sheriff

system. Local courts can further be divided into 3 types.

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The three types of local courts areas shown in Figure 3.7.

Figure 3.7: The tree types of local courts

The local courts played a more important role than the Witan since the King was
not powerful and therefore his courts were likewise not great.
(b)

Post 1066: 'After the Norman Conquest'

In 1066, William of Normandy (William the Conqueror) defeated the
Anglo-Saxon King at the Battle of Hastings, and became King of England.
He was a powerful King and could therefore easily transfer most of his
power to the Central government.

(c)

Henry II Onwards
Due to the hardship of going to Westminster for court cases, Henry II
developed the system known as 'Itinerant justices'.
The hardships faced in going to Westminster were:
(i)

the journey was long; and

(ii)

delay in hearing cases as local witnesses could not be found.

Due to the above hardships, people did not go to the royal courts. However the
local courts were also not popular because they were frequently corrupt, biased

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and unfair. To solve their problem, King Henry II introduced the system of
'itinerant justices'.
The system of 'itinerant justices' meant a system whereby the country was
divided into circuits and the itinerant (Royal) justices would go on their rounds to
decide cases.
The original justices who sat in these courts were untrained and therefore relied
on the information of locals to find out the facts and the particular local law. This
brought about the introduction of the Jury System.
Upon completing their circuits, the justices would return to Westminster. There
they would discuss all the different laws and customs of the people. They would
accept the good points and rejected the bad ones.
Later these justices went out again on their rounds, but later as time went by,
they applied the law they had decided at Westminster. This law later came to be
known as Common Law.
In order to be more uniform and certain, the judges developed the Doctrine of
Stare Decisis (stand by the decision). This doctrine states that judges are bound
by decisions of earlier judges.

ACTIVITY 3.3
Evaluate your understanding by answering the following simple
questions:
1.

Prior to Norman Conquest each part of England applied different

law. Name these parts and the laws applied.

2.

In inheritance law, there are Primogeniture, Gravelkind and Borough

English. Explain how these systems work.

3.

Give an example on how trial by order was practiced in England?

4.

Who had defeated the Anglo-Saxon king and became king of

England?

5.

What are changes made by William?

6.

What was the system developed by Henry II?

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3.3

THE DEVELOPMENT OF EQUITY

SELF-CHECK 3.3

Based on your reading, what do you understand by equity, is it similar to

other laws?
Equity as a source of law can be defined as follows:

Figure 3.8: Equity and common law as separate system

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Basically the defects of the Common Law system were as follows:

(a)

Inflexibility of the Writ System

For every civil wrong, there is a specific writ where, the injured party
would then apply for a writ, which was most suited to his claim. If the
wrong writ was obtained the injured party cannot get his case heard.
Furthermore where there is no writ, the court would not create one. Hence
the equitable maxim "Where there is a remedy there is a right".

(b)

There was Much Bribery and Corruption at Common Law

It was difficult for a person with low social standing to succeed. This was
because persons of wealth and power could put pressure on the courts to
decide for their favour.

(c)

The Common Law Courts Lacked Jurisdiction to Hear Certain Cases

This includes a situation where foreign merchants were parties to a case
and the Common Law Courts lacked jurisdiction to hear disputes involving
foreigners. This further enhanced the disadvantages of the common law
system.

(d)

Inadequacy of the Common Law Remedies

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The Common Law remedy for breach of contract is damages which is

compensation in a monetary form. However there maybe situations where
this is not a sufficient remedy, for example, where the claimant is seeking
for a specific performance order compelling the guilty party to perform
his part of the contract.
(e)

The Failure of the Common Law to Recognise the Use (Trust)

An example of use is where a landowner conveys land to another person
(trustee) directing him to hold the land on a short term basis for the benefit
of other persons (landowners beneficiaries). The common law refused to
recognised the rights of the beneficiaries. Therefore equity came in to offer
these people a protection, as the common law failed to fulfill its function.
Any effective system must have:

Certainty :

This the common law had due to the doctrine of stare

decisis (precedent).

Flexibility :

This the common law lacked since it failed to take into

account the needs of changing society.

To fill in this lacuna (gap), equity evolved. There are various states in the
development of equity:
(i)

The aggrieved party petitioned to the King to receive relief. This was
done as the King was the fountain of justice.

(ii)

By the time of Edward Is reign, there were many petitions.

Therefore the Lord Chancellor took on this responsibility as "keeper of
the King's conscience". The Lord Chancellor gave remedies based on
his discretion. This was influenced by Cannon Law principles as most
of the Lord Chancellors were Bishops.

However each Lord Chancellor would decide in a different way; and

therefore the remedies given also varied. Seldon therefore commented as
follows: "Equity varies with the length of the Lord Chancellor's foot".
(iii) In the 16th and 17th Century the Lord Chancellors were no longer
clerics (Church office holders). Their position was taken by trained
judges. This showed an attempt to introduce some certainty in this area.
(iv) When two separate systems run side by side as common law and
equity did, conflict is inevitable and this was exactly what happened.
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The issue of which should prevail in the event of conflict arose. The
following case determined this issue.
(v)

C: Earl of Oxfords Case (1616) 1 rep. Ch.1 & App.

F: Equity had provided for an equitable common injunction'. However
the common law courts refused to recognise its jurisdiction.
H: Where equity and common law conflict, equity shall prevail. The
King was advised by the Attorney General, Sir Francis Bacon to decide
on the above point.

(vi) The Judicature Act 1873 1875 : S.25(2) of the Judicature Act 1873
states as follows: "Where there is any conflict between common law
and equity; equity will prevail".
This legislation therefore reinforced the Earl of Oxfords Case (1616). Further,
the Acts provided that both common law and equitable remedies can be
obtained in all courts. For the effect of the Acts see:

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The final issue to be considered is whether the two systems have been fused or
whether it is only their administration which has been fused.
There are 2 views on this issue and these are shown in Figure 3.9.

Figure 3.9: The two views on the issue of equity and common law

The majority of the writers prefer the second view by Sir George Jessel in Walsh
v. Lonsdale (1882) 21 Ch. Div. 9
Pursuant to the English Supreme Court of Judicature Acts 1873-1875, the Civil
Law Ordinance 1878 was passed. This empowered the Supreme court of Straits
Settlements to administer common law and equity concurrently, and in event of
conflict the latter will prevail. It also provided that considerable body of English
legislation to operate on a continuing basis in commercial matters.

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ACTIVITY 3.4
List down the defects of common law and what are the lacunas evolved by
the equity?

3.3.1

The Reception of Common Law in Malaysia

It was through The Royal Charters of Justice, common law was introduced to the
Straits Settlements. Through Administrative Arrangements, the application of the
common law was extended to the Malay States. It was initially introduced indirectly
by legislation. On specific matters, it was based on British Indian models. In 1937, the
formalisation of the common law was done by a series of enabling legislation. In the
Borneo States, the common law was received in the same manner.
Unfortunately, The Malay Adat was replaced by the Common Law as the basic
law of the land. The customary traditions of Malaysia were accommodated by
the British as it was British policy to apply the common law in situations where
the religions, manners and customs of the local people allowed. This was to
prevent common law to operate in an unfair and oppressive manner.
In 1963 Malaysia was formed and the application of English law was authorised
by three separate statutes:

Figure 3.10: The three separate statutes

After Malaysia was formed the CLO 1956 was extended to East Malaysia by the
Civil Law Ordinance (Extension) Order 1971. This was with effect from 1 April
1972. The Civil Law Act 1956 (Act 67) (Revised 1972) (CLA 1956) incorporates all
the three earlier statutes and is the statutory authority application of English Law
in Malaysia. The application of English law can be seen in three sections:

Section 3;

Section 5; and

Section 6.
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3.3.1

The Call for a Malaysian Common Law

The call for a Malaysian Common Law is not something new. The repeal of S3
has been advocated by numerous academicians and judges. S3(1) states that:
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 West Malaysia or any part thereof, apply the common law of England
and the Rules of Equity as administered in England on the 7th day of April,
1956;

(b)

in Sabah, apply the common law of England and the rules of equity,
together with statutes of general application, as administered or in force in
England on the 1st day of December, 1951; and

(c)

in Sarawak, apply the common law of England and the rules of equity,
together with statutes of general application, as administered or in force in
England on the 12th day of December, 1949, subject however to sub-section
3(ii).

Provided always that the said common law, rules of equity and statutes of
general application shall be applied so far only as the circumstances of the States
of Malaysia and their respective inhabitants permit and subject to such
qualifications as local circumstances render necessary.
The interpretation of this section means that the courts in Malaysia shall apply
the common law rules and rules of equity existing in England on the above dates,
in absence of written law.
Malaysian cases seem to suggests that English statutes do not apply to West
Malaysia but it applicable in Sabah and Sarawak due to the wording in the above
section (b) and (c).
K.C. Vohrah J in the case of Pushpah v Malaysian Co-operative Insurance Society
was more categorical.
Case: Pushpah v Malaysian Co-operative Insurance Society [1995] 2 MLJ 667
Facts: The Plaintiff sought to invoke an English statutory provision to revoke a
nomination by her deceased husband in his life insurance policy made before
their marriage.
Held: The learned judge dismissed the application on the primary ground that
the S3(a) Civil Law Act 1956 allow in West Malaysia the application of 'the

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common law of England and the rules of equity and not the additional item,
"statutes of general application", (which is included for Sabah and Sarawak)'.
When does common law and rules of equity (in Sabah and Sarawak) and English
Statutes apply under S3(1) CLA 1956?
It will apply subject to the following qualifications:
(a)

Absence of local legislation;

(b)

Cut-off dates; and

(c)

Local circumstances.

ACTIVITY 3.5
Using your understanding of what you learnt, explain the historical
development of Common law.

EXERCISE 3.1
What are the major sources of Malaysian Law?

We have examined the reception of English Law in Malaysia.

The discussion was focused on the Straits Settlement, the Malay states and
Sabah and Sarawak.

In addition to that, we have also discussed the development of common law

and equity from England.

The common law and equity are both laws made by the courts. There was,
however, a vast difference between them in the past.

As well as discussion on the development of common law and equity from

England as mentioned, we have also analyse the reception of common law
and equity in Malaysia.

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