sources of law in malaysia assignment

Introduction to the Sources of Law in Malaysia

By Dr Sharifah Suhanah Syed Ahmad

Dr. Sharifah Suhanah Syed Ahmad is Associate Professor at the Faculty of Law, University of Malaya, Kuala Lumpur, Malaysia.

Published February 2012 READ THE UPDATE!

Table of contents

1. Introduction: Early Legal Systems

2. The Malacca Sultanate (1400-1511)

3. The British Era

             3.1 Introduction

             3.2 Legislation

             3.3 Case Law as a principal source of law

4. The Modern Era

              4.1 The Federal Constitution

               4.2 Acts of Parliament, State Enactments and Subsidiary Legislation

               4.3 Judicial Decisions

               4.4 The application of English common law and rules of equity – limitations under the Civil Law Act, 1956

5. The Position of Islamic Law

6. Conclusion

Prior to colonization by western powers, a form of rudimentary, tribal legal system was said to exist on the Peninsula. [ [1] ] Various aboriginal tribes had been in occupation of the Peninsula as well as Borneo long before foreign settlers arrived.  Although their laws were primitive and unwritten, their organizational abilities were adequate and served as a model for later Malay villages or kampongs .  For example, the head of the village or penghulu was an organizational social structure derived from the Negrito tribe. [ [2] ] The penghulu of any village or kampong usually had full civil and criminal powers over his flock.

Although the early peoples of the Malay Peninsula were varied, they shared a similar belief system, which enabled the easy absorption of the Hindu religion, which was to follow.  These early societies were characterized by animism and ancestor worship.  Nature and all natural elements were important, as being primarily agriculturalists; they relied heavily on a bonding with nature. [ [3] ]

Records regarding the existence of a large Hindu empire in the Malay Archipelago were derived from the Tang Dynasty (AD 618-906).  This empire encompassed lands across the Straits of Malacca and parts of Java, including a place north of Palembang in Sumatra called Melayu .  This was the kingdom of Srivijaya . Srivijayan society was known to be both highly civilized and cultured and the kingdom itself a centre of learning.  One of the most lasting legacies of this Hindu rule is the system of monarchy.  The concept of kingship is based on the Hindu concept of sakti , which literally translates into the king having powers, which are not of this realm. During the Malacca Sultanate, this concept evolved into the concept of daulat .  The concept of daulat differs from sakti in that the king is not regarded as one having supernatural powers, but the idea of kingship is rooted to those having particular or peculiar characteristics, which separates him from the rest of the ordinary populace.  Hence, this clothed the king, or raja with his right to rule.  The king’s power and rule over his subjects were absolute and it was not possible for any subject to question or go against his wishes or orders.  This concept survived well into and beyond the Malacca Sultanate.

Another lasting legacy of Hindu rule is the adat or customary laws they leave behind.  Prior to the arrival of the British in Malaya, the Malays and the natives of Sabah and Sarawak, followed their own customs and traditions or adat .  There are two main streams of adat – the adat perpateh and the adat temenggong .  Both forms of adat are believed to have originated from Sumatra, especially from the district of Minangkabau.  Early migrants from Minangkabau concentrated themselves in two districts of the Malay Peninsula - Naning in Malacca, and the State of Negeri Sembilan.  The adat temenggong is patrilineal while the adat perpateh is matrilineal.  The system of administration of the adat temenggong is autocratic, while that of the adat perpateh is democratic.  In the administration of civil and criminal law, both forms of adat admit opposing characteristics.  For example, in the adat temenggong criminal punishment is on the basis of an eye for an eye, while in the adat perpateh , the emphasis is not so much upon punishment for the offence but upon remedial measures to correct an injustice. [ [4] ]

The British colonial administration was brought into contact with elements of the Malay adat , particularly the adat perpateh , through disputes pertaining to property, in particular the issue of division of property between husband and wife upon divorce.  A substantial amount of case law grew around this issue of harta sepencarian , or jointly acquired property. [ [5] ] Subsequently, the British colonial administration enacted legislation to protect some instances of custom, particularly those pertaining to land.  An example of this is the Customary Tenure Enactment of Negeri Sembilan (Cap 215). [ [6] ] In Malacca, custom received legislative sanction through the Malacca Land Customary Rights Ordinance. [ [7] ]

The arrival of the British in North Borneo likewise transformed native customary law from being an incidence of an inherited oral tradition to a set of clearly defined, written rules operating within an established administrative and judicial framework.  This formalization of native customary law ensures its survival through written codes.  Some examples of this codification include the Sea Dayak (Iban) Fines 1952 and the Orang Ulu Customary Code of Fines 1957.  The customary laws of the Dayaks of the Third, Fourth and Fifth Divisions of Sarawak have been codified in the Tusun Tunggu , a code of customary law, most of it pertaining to land matters. [ [8] ]   In Sarawak, the Native Courts Ordinance 1955, which was later replaced by the Native Courts Ordinance 1992, established a system of native courts to hear and try cases involving native customary law.  In Sabah, native courts are established under the Native Courts Enactment, 1992.

The success of Srivijaya as a great trading nation was continued by the new kingdom of Malacca.  Founded by a runaway prince from Palembang, the significance of Malacca to the Malaysian legal system began with the coming of Islam to the Peninsula from about the beginning of the ninth century AD.  By the thirteenth century, trade in Southeast Asia was overtaken by Muslim traders from India.  Malacca was believed to have received Islam in the early fifteenth century.

As a result of the Islamisation of Malacca, and subsequently other states in the Peninsula, Islamic laws were introduced and in the early days, were applied alongside with the adat or customary law.  This period also saw what was possibly the first evidence of the emergence of written law, as the kingdom of Malacca produced two major legal digests, which formed the main source of written law in Malacca – the Hukum Kanun Melaka , and the Undang-Undang Laut Melaka .  The Hukum Kanun consists of 44 chapters, which touched upon matters such as the duties and responsibilities of the Ruler, prohibitions amongst members of society and penalties for civil and criminal wrongs and family law.  The Undang-Undang Laut consists of 25 chapters, which covered maritime matters, such as the duties and responsibilities of ships’ crew, laws pertaining to voyages and trade.  The law contained in the above written codes are said to be based on Islamic law of the Shafii School, together with elements of local custom. [ [9] ]   Adat , in particular the adat temenggong influenced the laws pertaining to crime and punishment.

The Malacca written codes were responsible for the growth of other written codes in other states of the Peninsula: Pahang Legal Digest 1595, the laws of Kedah 1605, the Laws of Johore 1789, and the 99 Laws of Perak, 1878.

In 1511, Malacca was overrun by the Portuguese, and in 1641, by the Dutch.  While much is known about the system of administration of both the Portuguese and the Dutch, [ [10] ] not much is known about the laws which were applied to the local inhabitants of Malacca.  It was recorded that the Dutch East India Company had decided on a standard regulation, which would apply in all its territories in the Indian Archipelago.  Consequently, law books containing a collection of the most-used regulations in Java were sent to Malacca.  These books were supposed to have guided the Court of Justice in Malacca. [ [11] ]   The question remains, as in the case of the Portuguese, whether the regulations contained in these books were applied to all inhabitants of Malacca, local as well as foreign, and it was not clear how the Dutch treated the issue of personal laws should these come into conflict with the laws contained in the books.  The issue is now academic as the arrival of the British firmly entrenched English law as the “law of the land” or lex loci of Malaysia.

3.1 Introduction

From the perspective of legal history, an argument could be made that the British colonisation of Malaysia left behind such a lasting legacy of laws and a legal system due to a difference of opinion on the issue of interpretation of the First Charter of Justice granted to Penang in 1807.  In the case of Regina v Willans, [ [12] ] the court would not accept Penang as an inhabited territory when it was ceded to the East India Company by the Sultan of Kedah.  This was despite the fact that evidence showed there were settlers on the island (four Malay families were found encamped upon it when it was first occupied by the British). [ [13] ] There was a state of “legal chaos”, where Malays followed Muslim law, and the Chinese and Indian settlers followed their own personal laws.  Due to the legal confusion, which existed in Penang, the presumption was that the Charter of 1807 was granted with the aim of providing a remedy, and that was that the law of England be administered in Penang. [ [14] ] Two principal sources of law emerged – legislation and case law.

3.2 Legislation

The Straits Settlements comprised of Penang, Singapore and Malacca and was a British colony under direct British administration.  The Charters of Justice (1807, 1826 and 1855) introduced and applied English law and established courts of justice.  The Straits Settlements was treated as part of the British Indian Empire and came under the legal, political and executive sovereignty of the Bengal Presidency. [ [15] ]   As a result, the laws introduced were based upon similar laws introduced and applied in India, for example, contract law which is based upon the  Indian Contracts Act, evidence, criminal law and criminal procedure.

The Straits Settlements ceased to be part of the Indian administration from April 1867 with the passing of the Government of the Straits Settlements Act 1866 (29 & 30 Victoria c 115), whereby the Legislative Council of the Straits Settlements was given legislative authority.  Ordinances began to be promulgated and published with the establishment of the Straits Settlements government gazette on1 April 1867. [ [16] ]

While the Straits Settlements were colonies under direct British rule, the rest of the states in Peninsula Malaysia were ruled by Sultans who were embroiled in various succession disputes in their respective states.  In the tin-rich state of Perak, succession disputes became intertwined with disputes between Chinese secret societies for possession of the rich tin deposits.  British intervention in these disputes consolidated British political power in the Malay states. Treaties were entered into, whereby, in return for British protection, it was agreed that the Sultan “receive and provide a suitable residence for a British officer, to be called a Resident, who shall be accredited to his court, and whose advice must be asked and acted upon all questions other than those touching upon Malay religion and custom.” [ [17] ]  With the signing of the Treaty of Federation 1895, four states – Perak, Selangor, Negeri Sembilan and Pahang became “Protected States” or more commonly known as the Federated Malay States (FMS).

Administrative coordination was achieved by the Governor of the Straits Settlements who was concurrently designated the High Commissioner of the FMS.  Legislation was enacted by a Federal Council constituted in 1909 with the rulers as members.  This arrangement continued until the amalgamation of all States by the British Military Administration in 1946 to form the Malayan Union. [ [18] ]

The difference between the Unfederated Malay States (UMS – Kelantan, Kedah, Perlis, Terengganu and Johore) and the FMS is that these states maintained some autonomy over local issues, but control over foreign affairs and other important aspects of government were in the hands of the British.  These states were likewise administered by the Governor of the Straits Settlements who acted as High Commissioner of these states.

Legislation was enacted by the State Council of each State.  Laws passed by the UMS are recorded in the following sources: [ [19] ]

(a)            Enactments of Johore form 1907-1942, published annually by the Government Printing Office in Johore Bahru;

(b)            Government of Kedah Enactments, published in Alor Star from 1906 – 1928.  Between 1929 and 1938, ten further volumes entitled State of Kedah Enactments were published:

(c)             Enactments of the State of Kelantan, published annually from 1904-1941;

(d)            Enactments of Perlis, published annually by the Government Press, in Jawi and English, from 1909-1942;

(e)             Annual Volumes of Trengganu Enactments, 1904-1914.

Following the end of the Japanese occupation of Malaya (1942-1945), the British government mooted the idea of a Malayan Union comprising all the Malay states and Penang and Malacca.  However, this was vehemently opposed by the Malays, as a result of which it was disbanded in 1948 in exchange for a federal system.  The Malayan Union government press published the following laws:

(a)            the Malayan Union Government Gazette, published from 1 April 1946 – 31 January 1948;

(b)            Ordinances and Rules, 1946 – 1947;

(c)             Malayan Union and Federal Ordinances and State and Settlements Enactments passed during the year 1948.

The concept of federation established a central Federal Government while preserving the integrity of the individual states and their Rulers.  The Federation of Malaya Agreement 1957, which revoked the earlier Agreement of 1948, gave birth to the Federal Constitution and an independent Malaya on 31 August 1957.

Laws that were promulgated at Federal and State levels were published as part of the respective Federal and State Gazettes.  After 1957, Federal Legislation continued to be termed “Ordinances” due to constitutional provision, which provided for the Legislative Council established under the Federation of Malaya Agreement 1948 to continue functioning until 1959.  The Council was dissolved in 1959 by proclamation, and thereafter Federal Legislation came to be termed “Acts” with the first Parliament sitting on 11 September 1959.

The Malaysia Act 1963 created the State called Malaysia, which is made up of eleven states of the former Federation of Malaya, Sabah, Sarawak and Singapore.  In 1965, Singapore left Malaysia and became an independent State.

3.3 Case Law as a principal source of law

In addition to legislation introduced by the British colonial government, which was based on English law, English law was liberally applied by English judges.  However, in matters of personal law, such as marriage and divorce and inheritance, judges made decisions based on local customs. [ [20] ] However, in matters of trade and commerce the position was different.  This is because there is a dearth of local custom or established customary law pertaining to such matters, which could have formed the basis for the eventual development of “local” commercial law.

Secondly, it could be argued that it was acceptable to apply local customs or customary law to family-related matters because it would not have created much of an impact beyond the personal or family unit itself.  However, if by accepting a particular custom it would create an impact beyond the family unit, especially if it has economic or financial implications, such custom would not be acceptable as it would be contrary to “public policy”. [ [21] ]   Where custom was found to be unacceptable, the court would apply principles of English law to displace the custom.  In this way, some customs do “die” to be replaced with a principle of law, which was essentially alien to the people and their way of life.

In commercial matters or “mercantile law”, generally there is almost a wholesale application of English law.  It began through the work of English judges or an English-trained judiciary, [ [22] ] and was later formalized through legislation.  The Civil Law Enactment was passed in 1937 for the Federated Malay States, which provided for the reception of English Law.  In 1951, the Enactment was extended to the other Malay States and in 1956, the Civil Law Ordinance was enacted which introduced English law uniformly throughout the Federation of Malaya. [ [23] ]

The Sarawak Application of Laws Ordinance 1949 applied the common law of England, rules of equity and English statutes of general application to Sarawak, while in Sabah similar provision existed in the Sabah Application of Laws Ordinance 1951.

However, no part of the law of England relating to the tenure or conveyance or assurance of or succession to any immovable property is applicable in Malaysia. [ [24] ]

Malaysian legislation comprises of the following:

1.               The Federal Constitution

2.               Constitutions of each of the 13 States of Malaysia

3.               Federal Acts of Parliament

4.               State Enactments

5.               Subsidiary Legislation.

4.1 The Federal Constitution

Article 4(1) of the Federal Constitution declares the Constitution as the “supreme law of the Federation”, and any law passed after Merdeka Day, which is inconsistent with the Constitution, shall, to the extent of the inconsistency, be void.

What is the position of laws passed on or before Merdeka Day, which are inconsistent with the Federal Constitution?  The answer is found in Article 162(1) which provides that existing laws shall, until repealed by the authority having power to do so under this Constitution, continue in force on and after Merdeka Day with such modifications as may be made therein under this Article and subject to any amendments made by Federal or State law.

Under Article 162(6), any court or tribunal applying the provision of any existing law which has not been modified on or after Merdeka Day may apply it with such modification as may be necessary to bring it into accord with the provisions of the Constitution. [ [25] ]

Malaysia is a federation with a strong central government at its core and 13 state governments.  Power is divided between the federal government and the various state governments in accordance with Part VI of the Federal Constitution, which addresses the issue of relations between the Federation and the States.

With regard to the legislative power of the Federation and the States, Article 74(1) provides that Parliament may make laws with respect to any of the matters enumerated under the Federal List [ [26] ] or the Concurrent List of the Ninth Schedule. Article 74(2) provides that the Legislature of a State may make laws with respect to any of the matters enumerated in the State List or the Concurrent List of the Ninth Schedule. [ [27] ] Article 75 provides that if any State law is inconsistent with a federal law, the federal law shall prevail and the State law shall, to the extent of the inconsistency, be void.

4.2 Acts of Parliament, State Enactments and Subsidiary Legislation

Malaysian legislation is published in the Gazette , and the format and mode of publication of the Gazette are stipulated under section 18 of the Interpretation Acts 1948 and 1967 (Act 388).  This section provides that the Federal Gazette shall be published in five parts:

(a)            Acts Supplement, published as and when necessary, which contains all Acts of Parliament and all Ordinances promulgated by the Yang diPertuan Agong.

(b)            Legislative Supplement A, published as and when necessary, which contains all Royal Proclamations, Orders, rules, regulations and by-laws.

(c)             Legislative Supplement B, which contains all subsidiary legislation other than that required to be published in Legislative Supplement A.

(d)            Bills Supplement, containing all Bills.

(e)             Matters required to be published in the Gazette or which the Government deems it necessary to publish for general information.

State laws, termed Enactments (or Ordinance in Sarawak) are published in the State Gazettes. Since 1969, all Federal Acts are issued under Laws of Malaysia series by virtue of the Revision of Laws Act 1968.  This Act empowers the Commissioner for Law Revision to revise as well as print such laws as the Commissioner deems fit.  All Acts of Parliament are now sequentially numbered, beginning with the Revision of Laws Act 1968 as “Act 1”.

In December 2009, the government established the Malaysian Law Reform Committee.  This Committee is tasked with conducting research into Malaysian laws to examine their relevance as well as their benefit to the community or the public.

4.3 Judicial Decisions

Federal Court

                                    High Court                                                                                                   High Court

Magistrates’ Courts

Prior to 1985, the Judicial Committee of the Privy Council (JCPC) constituted the highest Court of Appeal [ [28] ] .  Appeals to the Privy Council in criminal and constitutional cases were abolished in 1978.  In 1985, all civil appeals to the Privy Council were abolished.

The common law system relies heavily on case law or judicial opinions.  In such a system, it is crucial for the administration of justice that “like cases should be treated alike”; otherwise, the system becomes a fertile breeding ground for unfairness.  Stare decisis , which means to stand by decisions previously made, serves a useful purpose in this regard, as its application would ensure a measure of certainty in the law and it promotes a systematic and logical development of the common law.  However, a strict adherence to the doctrine could also cripple the development of the common law, particularly when faced with new situations, which never existed before.  Thus, although the Federal Court had expressed that the principle of stare decisis is a “cornerstone of our system of jurisprudence”, [ [29] ] it also recognised that there is a need for the Court to depart from precedence when a previous decision was wrong, uncertain, unjust, outmoded or obsolete under modern conditions. [ [30] ]   Similarly, the current Malaysian superior courts do not consider themselves bound by previous decisions of the Privy Council, even though they may be given on appeal from Malaysia. [ [31] ] 

Just like any other common law jurisdiction, as Malaysian law relies heavily on judicial decisions or case law, a good system of law reporting is essential.  Law reporting in Malaysia began in the latter part of the nineteenth century.  Early law reports record decisions of the Straits Settlements and Federated Malay States judiciary – Straits Settlements Law Reports, 1893-1931; Federated Malay States Law Reports, 1906-1941; Kyshe’s Reports, 1808-1890.  Currently, three major law-publishing houses vie with each other in the publication of law reports.  The Malayan Law Journal (MLJ) is published by Lexis-Nexis Malaysia, the Current Law Journal (CLJ) is published by CLJ, and Sweet and Maxwell publishes the All Malaysia Reports (AMR).  CLJ also publish the Industrial Law Report (ILR) and recently Lexis-Nexis Malaysia began publishing the Industrial Law Journal (ILJ). [ [32] ]

4.4 The application of English common law and rules of equity – limitations under the Civil Law Act, 1956

The direction under the Civil Law Act 1956 to apply the common law of England and rules of equity is limited, in West Malaysia, by the cut-off date of 7 April 1956. [ [33] ]   Strict compliance with this provision would mean that developments in the common law after 7 April 1956 cannot be received by Malaysian courts, and the only avenue would be for Parliament to enact laws which would incorporate latest developments, thereby keeping Malaysian law abreast of the changes.  Malaysian judges have, on many occasions, ignored this injunction and have received developments made by judges of the common law (particularly English judges) beyond 1956.   For example, in Saad Marwi v Chan Hwan Hua & Anor , [ [34] ] the Malaysian Court of Appeal decided that it was time for Malaysia to recognise the broader doctrine of inequality of bargaining power which was developed by English courts after 1956 and applied in other common law jurisdictions such as Australia, New Zealand, Canada and the United States.  However, in other cases, especially where policy considerations matter, the injunctive cut-off date of 7 April 1956 has been used by Malaysian courts to deny the importation of developments in the common law.  For example, in Majlis Perbandaran Ampang Jaya v Steven Phoa Cheng Loon & Ors , [ [35] ] the Malaysian Federal Court chose to follow old common law authorities which limited the claim for pure economic loss in cases of negligence, in particular severely limiting such claims against a local authority.  In this famous “Highland Towers” case, which saw hundreds of lives lost due to the collapse of a condominium block, the Federal Court came to the defence of local councils:

With limited resources and manpower, local councils would have to have their priorities.  In my view, the provision of basic necessities for the general public has priority over compensation for pure economic loss of some individuals who are clearly better off than the majority of the residents in the local council area. [ [36] ]

The reference in the Civil Law Act to “common law” would imply that it is limited to “judge-made” law, and not to statutory law.  What happens if the “common law” has been modified by statute?  In Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd , [ [37] ] the Federal Court noted that – “equitable set-off is included in the expression ‘rules of equity’ which the court is required to apply under the section.  But the legal set-off which is based on statute is in no way included in the expression ‘the common law of England’ which we are required to apply.”

Again, this has posed problems for Malaysian courts, particularly where there was an obvious lacuna, that is, where no provision existed at all in Malaysia on the particular issue.  For example, in Chan Ah Moi v Phang Wai Ann , [ [38] ] the court had relied on the British Domestic Violence and Matrimonial Proceedings Act 1976 and the cases decided thereon in England to support granting the wife relief from being molested, harassed, threatened, abused and assaulted by the husband.  Subsequently, in the case of Jayakumari v Suriya Narayanan , [ [39] ] it was pointed out that Chan Ah Moi might have been mistakenly decided.

Even where provision has been made by way of legislation, problems still arise with respect to the application of the common law and rules of equity.  The question is – can it be said that such legislation is so “complete and comprehensive” that it would oust the application of the common law and rules of equity?  Many cases on land law in Malaysia still apply the rules of equity as it has been argued that the National Land Code is not “complete and comprehensive” and that there is still room for the importation of English rules of equity in certain circumstances.

The Federal Constitution declares that the Constitution is the supreme law of the Federation [ [40] ] while Islam is the “religion of the Federation.” [ [41] ]   The secular basis of the Malaysian legal system was explained by the Supreme Court in the case of Che Omar bin Che Soh v Public Prosecutor , [ [42] ]  whereby, due to British colonisation, “the religion of Islam became separated into two separate aspects, the public aspect and the private aspect.”  The role of the religion of Islam in the public aspect was diminished, and it became “nothing more than a mere appendix to the ruler’s sovereignty.”  Thus, the role of Islam was limited only to the private aspect, that is, as the personal law of Muslims, which centers upon issues such as marriage, divorce, inheritance, maintenance, and the like.

Under the Federal Constitution, Islamic law is a matter falling within the State List, that is, it is a matter over which the State Legislature has jurisdiction and not Parliament [ [43] ] .  The Ninth Schedule of the Constitution identifies in some detail the specific subjects of Islamic law and personal and family law of persons professing the religion of Islam over which the State Legislature has jurisdiction.  This also includes Islamic criminal law [ [44] ] and the constitution, organization and procedure of Syariah courts [ [45] ] .  The position of Syariah courts is respected by the Constitution and its jurisdiction to decide matters within its “ exclusive jurisdiction” [ [46] ] protected under Article 121 (1A) which provides that the civil courts shall not have jurisdiction in respect of any matter within the jurisdiction of the Syariah courts.

The common law will continue to play a significant role in the modern Malaysian State although many new pieces of legislation have been enacted and many more are in the pipeline.  Many of these new written laws are based upon or adapted from similar legislation in other Commonwealth countries.  The role of judges in interpreting and giving the desired meaning to the written word is still important.

Parallel to the continued development of the common law would be the development of Islamic law.  As Malaysia develops its competitive potential in Islamic finance and the Islamic capital market, Islamic insurance and other areas of Islamic commercial undertakings, this will result in the mainstreaming of Islamic law principles, especially principles of Islamic commercial law.  However, this does not displace the common law, which forms the basis of “mercantile law” generally under the Malaysian legal system.

[ [1] ] Ahmad Ibrahim & Ahilemah Joned, The Malaysian Legal System (1995) Dewan Bahasa dan Pustaka, p 10.

[ [2] ] ibid.

[ [3] ] Hall, DGE, A History of South-East Asia,4th. Edn., MacMillan Asian Histories Series, chapter 1; Andaya & Andaya, A History of Malaysia, (1982) MacMillan Asian Histories Series, p.17.

[ [4] ] Abdul Rahman b Haji Mohammad, Dasar-Dasar Adat Perpateh (1964) Pustaka Aman K Lumpur.

[ [5] ] Temah v Haji Zakaria (1929) 7/1 JMBRAS 125; Re Haji Munap deceased (1929) 7/1 JMBRAS 127; Saepah v Abdul Wahab [1956] 3 MC 60; Jasin v Tiawan [1941] MLJ 247; Robert @ Kamarulzaman v Ummi Kalthom [1966] 1 MLJ 163 (HC): “Harta sepencarian is a matter of Malay adat and is applicable only to the case of a divorced spouse who claims against the other spouse during his or her lifetime.  This rule of law is local law which the court must take judicial notice of and it is the duty of the court to propound it.”

[ [6] ] The effect of this Enactment on custom is explained in the case of Re Haji Mansur bin Duseh, deceased [1940] MLJ 110 (HC): “The effect of the Customary Tenure Enactment … is to replace in whole or in part the unwritten law of custom by the written law of the Enactment. As regards land, in respect of which mukim registers have not been endorsed, it is open to the collector to hold an inquiry under section 4 of the Enactment and to decide whether or not land is occupied subject to the custom.”  If land is customary land, it cannot be transferred, charged, transmitted or otherwise dealt with except in accordance with the custom.

[ [7] ] The case of Dato Kamat v Sapian [1938] MLJ 111, decided that where customary land was held under the Malacca Land Customary Rights Ordinance, no lien or equitable charge could be created by deposit of the extract from the mukim register.  The customary landholder could only charge his interest in the  and in the manner provided by sections 21 to 29 of the Ordinance.

[ [8] ]   Some examples of case law include Injing v Tuah & Anor [1971] 1 MLJ 115; Abang v Saripah [1970] 1 MLJ 164; Nyalang v Superintendent of Lands & Surveys, 2nd Division Simanggang [1967] 23 MLJ 250; Galau & Ors v Penghulu Imang & Ors [1967] 1 MLJ 192.  These cases relate to temuda rights, which are rights created by felling old jungle and cultivating the land.

[ [9] ] Ahmad Ibrahim & Ahilemah Joned, op cit, p 14.

[ [10] ] ibid.

[ [11] ] Ahmad Ibrahim & Ahilemah Joned, op cit, p 15.

[ [12] ] (1858) 3 Ky 16.

[ [13] ] Ahmad Ibrahim & Ahilemah Joned, p 17.

[ [14] ] “Penang being, at the time when it became a British possession, without inhabitants to claim the right of being governed by any existing laws, and without tribunals to enforce any, it would be difficult to assert that the law of Quedah continued to be the territorial law after its cession … When an inhabited or conquered country is ceded, the new sovereign impliedly undertakes to administer the existing laws among its new subjects, until he changes them, but it does not follow that when the country is a desert, he is to be presumed to undertake that he will enforce the laws of the former sovereign when settlers shall afterwards arrive.” – per Recorder Maxwell in Reg v Willans, at p 20.

[ [15] ] Mercy Selvaratnam & Hulwana Mohd. Labib, “Basic Information for Legal Research in Malaysia”, in Doing Legal Research in Asian Countries, Institute of Developing Economies (IDE) Asian Law Series No 23, IDE Japan, March 2003.

[ [16] ] ibid.

[ [17] ] The Treaty of Pangkor, 1873.

[ [18] ] Mercy Selvaratnam & Hulwana Mohd Labib, op cit.

[ [19] ] ibid.

[ [20] ] There are examples of the application of Chinese customary law – Six Widows case [1908] 12 SSLR 120, which recognized polygamy amongst the Chinese; Cheang Thye Pin v Tan Ah Loy [1920] AC 369 (PC); the application of Hindu law relating to joint Hindu families and joint Hindu family property – The Estate of TMRM Vengadasalam Chettiar deceased, [1940] MLJ 155.

[ [21] ] For example, in cases of charitable trusts, English judges have applied the rule against perpetuities to invalidate gifts by Chinese for purposes of sinchew or ancestor worship – Choa Choon Neoh v Spottiswoode (1869) 1 Ky 216; Re Yap Kwan Seng [1924] 4 FMSLR 313.

[ [22] ] Chong Sz Wun v Andiappa Chetty (1908) 1 FMSLR 8; The Motor Emporium v Arumugam [1933] MLJ 276.

[ [23] ] Currently, The Civil Law Act 1956, sections 3(1) and 5.  English common law and the rules of equity apply “ so far as other provision has been made or may hereafter be made by any written law in force in Malaysia”, and further “ 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.” – s. 3(1)

[ [24] ] Civil Law Act 1956, section 6.  With respect to immovable property, the National Land Code 1965 applies.  This Code is based on the Australian Torrens system of registration of title.  In United Malayan Banking Corp.Bhd. v Pemungut Hasil Tanah Kota Tinggi, [1984] 2 MLJ 87, the Privy Council noted : “ The National Land Code is a complete and comprehensive code of law governing the tenure of land in malaysia and the incidents of it as well as other important matters affecting land there, and there is no room for the importation of any rule of English law in that field except in so far as the Code itself may expressly provide for this.” – Lord Keith of Kinkel, at p. 91.

[ [25] ] B Surinder Singh Kanda v The Government of the Federation of Malaya [1962] MLJ 169.

[ [26] ] Federal List, includes external affairs, defence, internal security, civil and criminal law and procedure and the administration of justice, citizenship, finance, trade commerce and industry, shipping, communications and transport, education, medicine and health, labour and social security.

[ [27] ] State List, includes Islamic law and personal and family law of persons professing the religion of Islam; the constitution organization and procedure of Syariah courts, which shall have jurisdiction only over persons professing the religion of Islam and in respect only of matters in this paragraph; land including land tenure agriculture and forests, local government. Concurrent List, includes, social welfare, scholarships, protection of wild animals and birds, town and country planning, public health, drainage and irrigation, culture and sports, and housing.

[ [28] ] The appeal is not a direct appeal to the Privy Council but an appeal to the Yang diPertuan Agong.

[ [29] ] Co-operative Control Bank Ltd v Feyen Development Sdn Bhd [1997] 2 MLJ 829.

[ [30] ] Dalip Bhagwan Singh v PP [1998] 1 MLJ 1; Koperasi Rakyat v Harta Empat [2000] 2 AMR 2311.

[ [31] ] Arulpragasan v PP [1977] 1 MLJ 1; Syarikat Kenderaan Melayu Kelantan v Transport Workers’ Union [1995] 2 MLJ 317; Majlis Perbandaran Pulau Pinang v Syarikat Bekerja sama-sama Serbaguna Sungai Glugor [1999] 3 CLJ 73.

[ [32] ] Sweet and Maxwell also publish the All Malaysia Commercial Reports.  Both CLJ and Lexis-Nexis also publish reports from the Syariah courts – the Syariah Report or Laporan Syariah and the Shariah Law Report respectively.

[ [33] ] For Sabah and Sarawak, the Act also allows for the application of “statutes of general application”, as administered or in force in England on the 1st day of December 1951 (for Sabah), and the 12th day of December 1949 (for Sarawak).

[ [34] ] [2001] 3 CLJ 98.

[ [35] ] [2006] 3 MLJ 389.

[ [36] ] Abdul Hamid Mohamed FCJ, at p 423.

[ [37] ] [1985] 1 MLJ 157.

[ [38] ] [1995] 3 MLJ 130.

[ [39] ] [1996] 4 MLJ 421.

[ [40] ] Federal Constitution, Article 4(1)

[ [41] ] Federal Constitution, Article 3(1)

[ [42] ] [1988] 2 MLJ 55.

[ [43] ] Article 74, Ninth Schedule.

[ [44] ] Ninth Schedule : “..the creation and punishment of offences by persons professing the religion of Islam against precepts of that religion, except in regard to matters included in the Federal List;” For example, the Syariah Criminal Offences (Federal Territories) Act 1997 provides for offences such as wrongful worship, false doctrine, disrespect for Ramadhan, non-payment of zakat/fitrah, religious teaching without tauliah, close proximity or khalwat.

[ [45] ] Ninth Schedule – Syariah courts shall have jurisdiction only over persons professing the religion of Islam and in respect only of any of the matters included in this paragraph, but shall not have jurisdiction in respect of offences except in so far as conferred by federal law.

[ [46] ] Sukma Dharmawan v Ketua Pengarah Penjara [1999] 1 MLJ 266 (CA); [1999] 2 MLJ 241(FC); Latifah Mat Zin v Rosmawati Sharibun & Anor. [2007] 5 CLJ 253 : “ Clause (1A) of Article 121 was not introduced for the purpose of ousting the jurisdiction of the civil courts.  The question to be asked [ in cases where State makes law, which infringes on matters within the Federal List ] is : are such laws constitutional in the first place ?  And the constitutionality of such laws is a matter for the Federal Court to decide – Article 128.” – Abdul Hamid Mohamed FCJ, at p. 279.

Constitutional Law in Malaysia

Ali Mohamed, Ashgar Ali and Ahmad, Muhamad Hassan , eds. (2022) Constitutional Law in Malaysia. LexisNexis, Kuala Lumpur, Malaysia.. ISBN 978-967-270-163-7

The Constitutional Law in Malaysia comprises of 28 chapters and is an all-encompassing text of constitutional law on a wide range of important areas under the Federal Constitution. It covers topics such as constitution supremacy, fundamental human rights, federalism, citizenship, elections, roles and powers of the executive, legislature and the judiciary, public services and public servants, Attorney-General, special powers against subversion and emergency powers, constitutional interpretation, constitutional amendments. The important components of the Islamic constitution and the significant role of constitutions under international law are also featured in this book. The book provides a step-by-step guide on the subject with reference to the provisions of the Federal Constitution and the decided cases of the superior courts. Besides that, the chapters are written in a simple and comprehensive manner so the content could be easily read by all. The theoretical and practical application of the Malaysian Federal Constitution would be an excellent source of reference for undergraduate law students as well as non-legal communities.

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Malaysia – Statutory Assignment Vs Equitable Assignment.

December 4, 2023 by Rohin Pujari

This article attempts to provide a brief overview of the differences between statutory assignment and equitable assignment. The actual application of the general rules described here would be subject to the applicable distinct facts and circumstances.

What is Assignment?

An assignment is a transfer of rights or liabilities such as those that arise under an instrument, chose in action[1], or debt. An assignment can either be a statutory assignment or an equitable assignment.

In Malaysia, an assignment complying with Section 4(3) of the Civil Law Act 1956 was described as a ‘statutory assignment’ and an assignment not complying with Section 4(3) of the Civil Law Act 1956 was a ‘non-statutory assignment’ i.e., an equitable assignment.[2] The conditions of a statutory assignment are as follows:[3]

(a) it must be absolute and did not purport to be by way of charge only;

(b) the assignment was in writing under the hand of the assignor; and

(c) express notice in writing thereof had been given to the debtor or trustee.

Meanwhile, an equitable assignment gives the assignee a right enforceable only in equity. The mode or form of assignment is absolutely immaterial provided the intention of the parties is clear.[4]

Rules that Govern Assignments

(a) Notice

Written notice is an essential part of a statutory assignment. Therefore, it is ineffective unless strictly accurate – accurate, for instance, as regards the date of the assignment and the amount due from the debtor.[5]

However, notice is not necessary to perfect an equitable assignment. Even without notice to the debtor the title to the assignee is complete, not only against the assignor personally, but also against the persons who stand in the same position as the assignor, as, for instance, his trustee in bankruptcy, a judgement creditor or a person claiming under a later assignment made without consideration.[6]

In regard to the form of notice, as mentioned earlier, a statutory assignment must comply with the form of notice required under Section 4(3) of the Civil Law Act 1956, whilst for an equitable assignment, no particular form is required to constitute a valid equitable assignment.

Additionally, it must be noted that although notice is not required for equitable assignments, an assignee must give notice to the debtor in order to get priority over other assignee(s). In this regard, the Federal Court in Public Finance Bhd v Scotch Leasing Sdn Bhd (In Receivership) (Perwira Habib Bank Malaysia, Intervener) [1996] 2 MLJ 369 explained in detail about the importance of notice:

“ We need to say a few words more about the great desirability of giving notice of assignment of a debt by an assignee to the debtor, even though absence of such notice does not affect the validity of the equitable assignment as between the assignor and the assignee. If notice is not given, the assignee must give credit for any payment made to the assignor by the debtor. This rule means that, by extension, even if the assignor assigns once more the debt to another person in fraud or otherwise on the earlier assignee, and that other person gives notice to the debtor; and if the debtor pays that other person or the second assignee, then the earlier assignee must still give credit to the debtor for his payment thus, for the debtor cannot be blamed for doing lawfully in ignorance of the title of the earlier assignee who has failed to give notice of the assignment to the debtor. Notice to debtor is for the protection of the assignee himself. It is this effect of what the debtor does lawfully as described that dims the view of the true role of the nemo dat rule in the resolution of disputed claims to a same debt. The money paid to the ‘second assignee’ can, of course, be recovered by the earlier assignee on the nemo dat principle. ”

(b)  An assignee takes subject to equities

For both statutory assignment and equitable assignment, the assignee takes ‘subject to equities’, that is, subject to all such defences as might have prevailed against the assignor.

The general rule, both at law and in equity, is that no person can acquire title to a chose in action…from one who has himself no title to it.[7] In other words, the assignee can be in a no better position than the assignor was prior to the assignment.[8]

(c)  Rights incapable of assignment

Some choses in action are not assignable, and not every right which arises under or out of a contract can be assigned.[9] An example of rights incapable of assignment is where the nature of the contract is intended to be personal, therefore, it will be meaningless if it is assigned to another person.

Effect of Assignment

A statutory assignment has the sole intended effect of facilitating an assignee to sue in his own name directly irrespective of whether the chose in action is an equitable chose in action or a legal chose in action.[10]

Meanwhile, the effect of an equitable assignment depends on whether the assignment is absolute or not. An absolute assignment of an equitable chose in action entitles the assignee to bring an action in his own name.[11] But a non-absolute assignment of an equitable chose in action does not entitle the assignee to sue in his own name but requires him to join the assignor as a party.[12]

For further information, please contact:

Nur Izzatie Azlan, Azmi & Associates

[email protected]

• ‘Chose in action’ is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession (Associated Tractors Sdn Bhd v Woo Sai Wa [1997] 5 MLJ 441 (High Court)).  
• MBF Factors Sdn Bhd v Tay Hing Ju (T/A New General Trading) [2002] 5 MLJ 536 (High Court).  
• Ibid.  
• Williams Brandt Sons & Co v Dunlop Rubber Co [1905] AC 454 (House of Lords).  
• Leong, A. P. B. (1998). Cheshire, Fifoot and Furmston’s Law of Contract (2nd ed.). Butterworths Asia, at page 861.  
• Guest, A. G. (1984). Anson’s law of contract, at page 400.  
• Meagher, R. P., Heydon, J. D., & Leeming, M. J. (2022). Meagher, Gummow and Lehane’s Equity Doctrine and Remedies (4th ed., p. 284). Butterworths LexisNexis.  
• Guest, A. G. (1984). Anson’s law of contract, at page 402.  
• Lim Chon Jet @ Lim Chon Jat & Ors v Wee Ai Hua & Anor [2022] 6 MLJ 243 (Court of Appeal).  

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