TOPIC 1

MALAYSIAN LEGAL SYSTEM

Law 416 (Business Law)
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Malaysian Legal System

(1)

SOURCES OF LAW IN MALAYSIA

1.1
1.2
1.3
1.4
1.5
1.6
1.7

Federal and State constitution

Federal and State legislation
Subsidiary legislation
English Common law and equity
Customs
Judicial precedent
Islamic law law

(2)

LEGISLATIVE PROCESS IN MALAYSIA

(3)

ADMINISTRATION OF JUSTICE

3.1
3.2

Hierarchy of the courts

Jurisdiction of the Courts

1.

Sources of Malaysian Law

LEGAL SOURCES OF
MALAYSIAN LAW

WRITTEN
LAW
FEDERAL
CONSTITUTION

UNWRITTEN
LAW

STATE
CONSTITUTION

LEGISLATION
SUBSIDIARY
LEGISLATION

SHARIAH
LAW
ENGLISH
LAW

Common Law
Equity

CUSTOMS
(ADAT)
JUDICIAL
PRECEDENT
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SOURCES OF MALAYSIAN LAW

Written

law is the most important source of

law. It refers to the portion of the Malaysian law
which includes the following:
The

Federal Constitution
The State Constitution
Legislation
Subsidiary Legislation
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Unwritten law is simply that portion of the Malaysian law

which is not written.
i.e. law which is not being enacted by the Parliament or
State Assemblies and which is not found in the written
Federal and State Constitutions.
Unwritten law is found in cases decided by the courts,
local customs, etc. The unwritten law comprises the
following:

English Law
Customs
Judicial Precedents
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FEDERAL AND STATE CONSTITUTION

1.1

The Federal Constitution (FC)

Art

4- The supreme law of the land; any laws passed

after Merdeka Day which is inconsistent with this
Constitution shall to the extend of inconsistency, be
void.

The

FC enshrines the basic or the fundamental rights

of individuals. These rights written in the Constitution
can only be changed by a two-thirds majority of the
total number of members of the legislature. This is in
contrast to normal laws which can be amended by a
simple majority.
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FEDERAL AND STATE CONSTITUTION

The State Constitution

There

are also Constitutions of the 13

States comprising the Federation, which
forms part of written law in Malaysia.

Some

of these provisions include matters

concerning the Ruler, the Executive
Council, the Legislature, etc.
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1.2

FEDERAL AND STATE LEGISLATION

Legislation

refers to law enacted by a body constituted

for this purpose. In Malaysia, laws are legislated by
the Parliament at the Federal level and by various
State Legislative Assemblies at the state level.

Laws

that are enacted by the Parliament after 1946

but before Malaysias Independence in 1957 are
called Ordinance, but those made after 1957 are
called Acts. On the other hand, laws made by the
State Legislative Assemblies (except Sarawak) are
called Enactments. The laws in Sarawak are called
Ordinances.
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Legislation refers to law enacted by :

(a)
Parliament
(b)
State Legislative Assemblies
PARLIAMENT

STATES LEGISLATIVE
ASSEMBLIES

Enacts law at Federal level

Enacts law at State level

Within limits prescribed by Federal

Constitution

Within limits prescribed by State

Constitution

Law enacted before 31.08.1957 are

called Ordinance

Law enacted by State Assemblies are

called Enactment except Sarawak laws
are called Ordinance

Law enacted after 31.08.1957 are called

Acts

State Legislative Assembly can enact

law in matters listed in List II of the Nine
Schedule

Parliament can enact laws in matters

listed in list I of the Nine Schedule

LEGISLATIVE PROCESS IN
MALAYSIA
(How bill becomes law?)

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LEGISLATIVE PROCESS IN MALAYSIA

FIRST READING

SECOND READING

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.

Members debate the Bill.

If accepted, the Bill is
passed on for
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consideration by a
committee of the house.

OTHER HOUSES
ROYAL ASSENT

When the Bill has passed both

Houses in accordance with
Art. 68 (Fed. Consti.), it is
sent to the Yang Di-Pertuan
Agong for the Royal Assent.
The Bill then becomes a law
upon publication.

When a Bill has passed

one House, it is sent to
the other house, where
it follows a similar
pattern. If the second
house amends the Bill,
the Bill must be
returned to the first
house for its approval

A COMMITTEE OF
HOUSE
Considers the Bill in
detail and may amend
any part of it. The
Committee then submits
a report on the Bill to the
house. If the report is
approved, the Bill goes
on to a third reading in
the House.

THIRD READING
Debate takes place and
amendments may be put
to a note. The House then
either passes or defeats
the Bill.
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1.3

Subsidiary Legislation/Delegated Legislation

Interpretation

Act 1948 and 1967:

Subsidiary Legislation means any proclamation, rule,
regulation, order, notification,or other instrument made
under any Ordinance, enactment or other lawful
authority and having legislative effect

Subsidiary

Legislation is very important as legislation

by the Parliament and the State Legislatures is
insufficient to provide the laws required to govern
everyday matters. Subsidiary legislation deals with the
details about which legislature has neither the time nor
the technical knowledge to enact laws.
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1.4

ENGLISH COMMON LAW AND EQUITY

English law comprises of two parts:
(a)
(b)

Common Law
Equity

Sec 3(1) Civil Law Act 1956- in West Malaysia, the courts
shall apply the Common Law of England and the Rules of
Equity as administered in England on the 07.04.1956 (cut off
date)

In Sabah and Sarawak, the courts shall apply the English

Common law and Rules of Equity, together with statutes of
general application, as administered or force in England on
the 01.12.1951 and Sarawak 12.12.1949 respectively.

After the cut off date, English law does not become law in
Malaysia. Thus, Section 3 (1) connotes the strict application
of the English law in Malaysia before the cut of date.
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1.5

Customs(Adat)
CUSTOMS

MALAY

ADAT
PERPATIH

ADAT
TEMENGGUNG

CHINESE

CHINESE
CUSTOMARY
LAW

INDIAN

INDIAN
CUSTOMARY
LAW

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1.6

Judicial Precedents

Judicial Precedents are decisions made by a

previous judge in previous cases that have
similar situations.

Decisions of these courts were made, and still

are being made systematically by the use of
what is called the doctrine of binding judicial
precedent or the rule of stare decisis i.e. to
stand by cases already decided.
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Two categories of judicial precedents:

(i)

Binding
All decisions of higher courts bind the lower courts
The higher courts are bound by their own decision

(ii)

Persuasive
High Court Judges are not bound to follow the
decisions of another High Court Judges
Decisions from outside of the Malaysian Courts
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DOCTRINE OF JUDICIAL PRECEDENT:

FEDERAL
COURT(FC)

Decisions of Federal Court

binds all lower courts

COURT OF
APPEAL(COA)

COA is bound by the decision of FC.

COAs decision is binding on all lower
courts.
COA is also bound by its own decision

HIGH
COURT(HC)

HC decision is binding on all

subordinate courts

SUBORDINATE
COURTS(SC)

Bound by the decisions of the superior

courts.
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 Advantages

of the doctrine:
(i) the law evolved is more practical, being
the result of actual disputes rather than
hypothetical situations
(ii) there is a degree of certainty and
predictability in the law

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1.7 Shariah Law

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.
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 Article

11 of the Federal Constitution provides

that every person has the right to profess and
practise his religion.

The

FC sets out that Islamic law in Malaysia is

confined to the personal laws and within the
powers of the State.

It

can be said that the jurisdiction given by the

State and Shariah courts is limited.
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HIERARCHY OF COURT
Federal court
SPECIAL COURT

SUPERIOR
COURTS

Court of Appeal
High Court
(West Malaysia)

High Court
(Sabah & Sarawak)

Shariah Court

Shariah Court
Sessions Court

SUBORDINATE
COURTS

Magistrates court

Magistrates
Court for
Children

Sessions Court

Magistrates Court

Native Court

Magistrates
Court for
Children

Penghulu Court
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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 (FCt)

FCt

replaced the Supreme Court in mid1994 as the highest court.

FCt is the highest court in Malaysia.
Instituted by Article 121 of the Federal
Constitution.

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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 three judges or such

greater uneven number of judges as the President may in
any particular case determine i.e. three 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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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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High Court (HC)

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 Penghulus 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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Session Court

Civil cases

All suits where the amount in dispute or the subject matter

does not exceed RM250,000.
May entertain cases above RM250,000 if it concerns motor
vehicles accident, landlord and tenant.
May not entertain even if its below RM250,000 if it concerns;
divorce, bankruptcy, enforcement of trust, specific
performance, injunction. (determined by the High Court)

Criminal cases

All offences other than offences punishable with death. May

impose any sentence allowed except sentence of death.
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5. Magistrates Court (MC)

Familiar

to most urban people as it is

established in all major towns and sometimes
goes on circuit to regional areas.

This

court has the jurisdiction to hear civil cases

and criminal cases.

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Magistrates Court

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.
Civil - To try all litigations where the matter in dispute or subject matter does not
exceed RM25,000.

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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6. Magistrates Court for Children (MCC)

Established under the Child Act 2001 (Act 611).

The court has the jurisdiction to hear cases regarding offenders between
the age of 10 18 years.

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. Penghulus 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

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Penghulus Court
To try

civil disputes where the subjectmatter does not exceed RM50 in value
and in criminal cases, to impose a fine not
exceeding RM25.

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