TOPIC 3

ESF0074/ESSF0074

2011, Oxford Fajar Sdn Bhd, Business Law, by Lee Mei Pheng and Ivan Jeron Detta.
Reconstructed by NOOR MAIZUDIN BIN MOHAMAD NOOR, Faculty of Business Administration, UMTECH, 2012.

Introduction

The main sources of Malaysian law:

Written law,
Unwritten law; and
Islamic law

Written Law

Written law means that it is written in black and white. It refers

to the laws embodied in the Federal and State Constitutions
and in a code or a statute, including subsidiary or delegated
legislation.

Written law is divided into:

Federal Constitution
State Constitution
Legislation
Subsidiary legislation

Written Law
Federal Constitution
The supreme law of the country. It applies to the whole of
Malaysia. It lays down the powers of the federal and state
government as well as the basic or fundamental rights of the
individual.
Art

159 and Art 161E contains provisions to allow the

Constitution to be amended with the condition of two thirds
majority in both houses of Parliament agreeing to the
amendment.

Written Law
Federal Constitution
The Federal Constitution comprises Articles which provide for
the following:
The Federation the Yang di-Pertuan Agong, Rulers, the
Executive, Federal Legislature, legislative procedure
The States Rulers and Yang di-Pertuan Negeri,
Legislative Assembly
Relations between the Federation and the States
Financial provision
Elections
The judiciary
Public services

Written Law
Federal Constitution
The Federal Constitution comprises Articles which provide for
the following:
Special powers against subversion, emergency powers
General and miscellaneous, e.g. National Language,
Federal Capital, Commonwealth reciprocity, amendment
of Constitution, etc.
Additional protection for States of Sabah and Sarawak
Temporary and transitional provisions
Saving for Rulers sovereignty

Written Law
State Constitution
Only

applies to the particular state. If there is a conflict between the

Federal Constitution and the State Constitution, then according to Art
4(1) of the Federal Constitution, the Federal Constitution will take
precedence.
The

State Constitution contains provisions which are enumerated in

the 8th Eighth Schedule to the Federal Constitution. Some of these
provisions include matters concerning the Ruler, the executive Council,
the Legislature, the Legislative Assembly, financial provisions, state
employees, and amendments to the Constitution. If such essential
provisions are missing, or if any provision is inconsistent with them,
Parliament may make provisions to give effect to them or to remove
any inconsistencies, as the case may be Article 71, Federal
Constitution.

Written Law
Legislation
Law is legislated by Parliament at the federal level and state
legislative assemblies at the state level. For a bill to become an
Act of Parliament, the Bill must be passed by both the Dewan
Rakyat and the Dewan Negara and finally obtain the Royal
Assent that is, the Yang Di-Pertuan Agongs seal or signature.
Legislation

made by Parliament after Independence in 1957 are

called Acts. Prior to that, they were called Ordinances. Laws
made by the state legislative assemblies (except in Sarawak)
are called Enactments. In Sarawak, the laws are called
Ordinances.

Written Law
Subsidiary Legislation (delegated legislation/subordinate
legislation)
Defined in Interpretation Act 1967 as any proclamation, rule,
regulation order, notification, by-laws or other instrument made
under any Act, Enactment or Ordinance or other lawful authority
and having legislative effect.
Parliament

and state legislative assemblies may delegate some

of their legislative powers to subordinate authorities. However,
delegated legislation made by such subordinate authorities is
normally confined to matters of detail as Parliament and state
legislative assemblies have neither the time nor the technical
expertise to enact laws on every detail.

Written Law
Subsidiary Legislation (delegated legislation/subordinate
legislation)
Subsidiary legislation cannot be made in contravention of the
parent Act or the Federal Constitution. If there is contravention,
then the subsidiary legislation is void.
If

there is a conflict between the (parent) legislation and

subsidiary legislation, then the legislation will always take
precedent.

Unwritten Law

Unwritten law does not mean that the law is literally unwritten.

It is a reference to that portion of Malaysian law which is not

enacted by the legislature (Parliament and State Assemblies)
and which is not found in the written Federal and State
Constitutions.

Unwritten law is made up of:

English Law
Judicial Precedents
Customs

Unwritten Law
English Law
English law forms part of the laws of Malaysia. English law can
be found, inter alia, in the English common law and rules of
equity. However, not all of Englands common law and rules of
equity form part of Malaysian law.
Section

3(1) of the Civil Law Act 1956 (Revised 1972) provides

that, in Peninsular Malaysia, the courts shall apply the common
law of England and the rules of equity as administered in England
on 7th April 1956. In Sabah and Sarawak, the courts shall 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 1st December 1951 and 12th December 1949
respectively.

Unwritten Law
English Law
However, this is subject to two conditions:
there must be no Malaysian law on this area, and
only English law that is suited to Malaysian circumstances

can be applied.

Unwritten Law
Judicial Precedents
Judicial precedent means that decision of the higher courts
automatically binds all lower courts. For example, a Federal
Court decision automatically binds the Court of Appeal, High
Court, Sessions Court, Magistrates Court and the Small Claims
Court.
Decisions

made by judges previously in similar situations are

binding upon future cases depending on the hierarchy of the
courts.

Unwritten Law
Judicial Precedents
The system of binding precedent is called the doctrine of stare
decisis (meaning stand by what has been decided) in English
law.
The

principle of stare decisis comprises:

Ratio decidendi which means reasons for the decisions

which is binding on the lower courts.
Obiter dictum which mean incidental remarks by a
judge which is persuasive only.

Unwritten Law
Customs
Customs

are another important source of unwritten law. Customs are

inherited from one generation to another generation. Every race has its
own customs. Customary law consists of customs and traditions of the
various races.
Malays

have the Adat Perpatih and the Adat Temenggong.

Adat Perpatih applies in Negeri Sembilan and Nanning in
Malacca. It applies the matrilineal system where property can
only be inherited by the female descendants of the deceased
owner.
Adat Temenggong applies to all other states. It applies the
patrilineal system where the property can only be inherited by the
male descendants of the deceased owner.

Unwritten Law
Customs
The Chinese and Hindus are governed by Chinese Customary
Law and Hindu Customary Law respectively.
For

the Natives in Sabah and Sarawak, Native Law which

relates to land and family matters is applicable.

Islamic Law

Only applies to Muslims and the court which applies is the

Syariah Court.

Today, besides family and estate matters, Islamic laws are

increasingly applied in banking and land laws.

The Yang Di-Pertuan Agong is the head of Islam in his home

state, Penang, Malacca, Sabah, Sarawak and Federal
Territories. The head of Islam of other States is the Sultan.

The End