In Malaysia, both the common law and rules of equity are found to be applicable in its legal

system. The clear example where the mentioning of the common law and equity that can be found
together is within Section 3 of Civil Law Act 1956 which state, save for some exception, both common
law of England and the rules of equity is applicable to Malaysia. Common law introduced the doctrine
of stare decisis, which translates to “to stand by things decided”. In application, it is a practice where
the decision of a higher court binds the lower court should the fact of the cases are similar. Meanwhile,
the Lord Chancellor had introduced equity to fix the defects of common law. It takes a different
approach where conscience is applied in providing judgment once merit of the case is heard.

In concerning whether Malaysians courts have fused or separate between common law and
equity, we must look at whether the courts apply doctrine of stare decisis or do courts decide cases
through conscience. In a glance, the Malaysians courts do practice the doctrine of stare decisis, as the
lower courts are bound by the decisions of a higher courts. However, it does not mean Malaysian
courts have remove conscience in deciding a case. To prove so, we must take a look at cases of
Malaysian courts.

In a 2018 High Court case which is Mat Jim bin Wahab v Nagasteel Equipment Sdn Bhd & Anor,
the court had cited the judgment of Raus Sharif PCA in Sabah Forest Industries Sdn Bhd v Industrial
Court Malaysia & Anor which stated that Section 30(5) of the Industrial Relations Act “…the Industrial
Court must act according to equity, good conscience and substantial merit…” which shows that
conscience is applied. The perception of common law is proven in the judgment that was said “This
Court is bound by the stare decisis principle and when a point or principle of law has been officially
decided and settled by the apex courts, notwithstanding any criticism towards such judgment, it will
no longer open to examination or to a new ruling by the courts which are bound to follow such
adjudication unless in exceptional cases.” This shows that equity and common law work hand-in-hand
in Malaysian courts.

Another case that was decided in 2018 which had a similar view was the Federal Court case
of Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd v Kesatuan Ke-bangsaan Pekerja-Pekerja
Bank & Anor where Balia Yusof JCA said “…. The industrial court, dealing with the matters referred to
it shall act according to equity and good conscience...” and shows that conscience, in extension equity
is applied. The case was supposed to follow the judgment of a previous decision; however, it was made
per incuriam. As such, the court was allowed to depart from the decision. This was shown when in
the judgment, it stated “… this case was clearly per incuriam in ignorance of those two earlier binding
decisions. In the present case, when faced with a situation where there were conflicting decisions, the
COA was entitled to depart from its decision … and in doing so, it did not breach the doctrine of stare
decision”. As such, we can say that the Industrial Courts in Malaysia applies both common law and
equity.

Although the previous two instances were Industrial Courts cases, it does not mean the
other courts in Malaysia do not apply both common law and equity. The Federal Court case of
Hassan bin Kadir & Ors. v. Mohamed Moidu Mohamed & Anor shows such example as well. In the
case, court had applied the creation of constructive trust, which is a creation equity. This was
emphasized in the judgment that stated “It is trite…registration of titles relating to alienated …does
not prevent the creation of beneficial interest in land whether under “express trust”, “constructive
trust” or “resulting trust” arising out of the operation of law. This is derived from the rules of equity
which is applicable in this country by virtue of the S.3 of the Civil Law Act 1956.” As such, due to its
stature of being the apex court, it binds that the courts below it too shall apply equity.

In Re Haji Khadir Abdullah, stare decisis is nothing more than judge made law, which requires
the decision of the apex court to be followed to ensure that there is certainty in the application of law
to achieve substantive justice. This principle of stare decisis cannot tie the hands of individual judges
of His Majesty in administering substantive justice when the decision of the apex court will perpetuate
fraud or reward fraud or the decision per se can be said to be abhorrent to notions of justice and fair
play. When an apex court decision is fatally flawed and will cause substantive injustice, then the stare
decisis principle cannot override the constitutional responsibility of a judge, for if he does so, it will be
in breach of his oath of his office. That exception must be of such a nature that judicial conscience of
the trial judge will not permit him to act in breach of his oath of office.

As such, it is in our opinion that while the two systems in Malaysia are fused to a certain
extent, it is not an absolute fusion, as it is fused into a single administration which is in an act itself.
The two systems are still separate to a certain degree, such as seen in the Civil Law Act 1956 where
the two systems are referred separately, and while judgments of courts are bound by stare decisis
except in exceptional circumstances, the remedies that are provided to the aggrieved party are one
coming from conscience and equity.