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    INTERNATIONAL BUSINESS SCHOOLINTERNATIONAL BUSINESS SCHOOL

    UNIVERSITI TEKNOLOGI MALAYSIAUNIVERSITI TEKNOLOGI MALAYSIA

    LEGAL ASPECTS OF BUSINESS LAWLEGAL ASPECTS OF BUSINESS LAW

    MRB 1072MRB 1072

    MALAYSIAN LEGAL SYSTEMMALAYSIAN LEGAL SYSTEM

    ZAINAL ABIDIN PITZAINAL ABIDIN PITAdvocate & SolicitorAdvocate & Solicitor

    B.Sc, MBA (Finance), FCIS, LLB (Hons), CLP, CFPB.Sc, MBA (Finance), FCIS, LLB (Hons), CLP, [email protected]@pd.jaring.my

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    IntroductionIntroduction

    LegitimateLegitimate expectationsexpectations

    LegalLegal RightsRights

    RemediesRemedies

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    What is law?What is law?

    TheThe bodybody of of principles,principles, enactedenacted ororcustomary,customary, r ecognizedrecognized andand appliedapplied byby thetheStateState inin thethe administrationadministration ofof justicejustice..

    JusticeJustice refersrefers toto fairnessfairness or or rightfulnessrightfulness;;justice,justice, thereforetherefore isis anan abstractabstract ideaidea ofof rightrightandand wrong,wrong, ofof fairnessfairness andand equalityequality..

    TheThe primaryprimary aimaim of of lawlaw isis toto attainattain justicejustice ininsocietysociety..

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    Characteristics of LawCharacteristics of Law

    (i)(i) RegulatoryRegulatory regulatesregulates thethe conductconduct ofof thetheStateState andand thethe individualsindividuals livingliving inin itit..

    (ii)(ii)ReconciliatoryReconciliatory reconcilesreconciles disputesdisputes thatthatarisearise betweenbetween individualsindividuals andand StateState andandbetweenbetween thethe individualsindividuals themselvesthemselves..

    (iii)(iii)CompensationCompensation && PunishmentPunishment requiresrequirescompensationcompensation fromfrom andand imposesimposes punishmentpunishmentonon thosethose whowho breakbreak thethe lawlaw..

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    MeaningMeaning ofofStateState

    TheThe unitunit inin whichwhich aa particularparticular legallegal systemsystem isis

    administeredadministered likelike Malaysia,Malaysia, Singapore,Singapore, IndonesiaIndonesia etcetc..

    Organs of theStateOrgans of theState

    LegislativeLegislative(makes the law)(makes the law)

    [Parliament &[Parliament &

    State Assembly]State Assembly]

    ExecutiveExecutive(implements and(implements and

    enforces the law)enforces the law)

    [PM & theCabinet][PM & theCabinet]

    JudiciaryJudiciary

    (interprets laws(interprets laws& settle disputes )& settle disputes )

    [Courts][Courts]

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    Classification of LawClassification of LawLawLaw

    Public LawPublic Law(governs the relationship between(governs the relationship between

    theStateand individuals.theStateand individuals.

    International LawInternational Law(law that prevails(law that prevails

    between States)between States)

    Private LawPrivate Law(governs the relationship between the(governs the relationship between the

    Individuals themselves)Individuals themselves) basically tobasically to

    give compensation, enforce obligation.give compensation, enforce obligation.

    Constitutional LawConstitutional Law

    Administrative LawAdministrative Law

    Rights of individuals with the stateRights of individuals with the state

    Criminal LawCriminal Law

    1.1. Codifies various offences committed byCodifies various offences committed by

    individuals against theState.individuals against theState.

    2.2. To punish criminals / suppress crimesTo punish criminals / suppress crimes

    Law ofContractLaw ofContract--is based on agreementis based on agreement--Applied when there is a promiseApplied when there is a promisewhich is legally enforceable.which is legally enforceable.--if the promise/agreement isif the promise/agreement isbreached, action can be taken.breached, action can be taken.

    Law ofTortLaw ofTort--is based on obligation/duty imposedis based on obligation/duty imposedby lawbut not agreed between theby lawbut not agreed between theparties.parties.--the duty/obligation must not beathe duty/obligation must not beacrime(civil in nature).crime(civil in nature).

    --e.g. : negligence, trespass.e.g. : negligence, trespass.

    Law ofTrustLaw ofTrust--equitable obligationequitable obligationbinding a person tobinding a person todeal of property overdeal of property overwhich onehas controlwhich onehas control

    Sale of GoodsSale of Goods AgencyAgency Bills of ExchangeBills of Exchange HireHire--PurchasePurchase

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    Insurance Maritime Law

    Company Law

    Property Law

    Land Law

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    Sources ofMalaysian Law

    Malaysian Law

    Written Law Islamic Law Unwritten Law

    Federal

    ConstitutionArticle 4(1)

    State

    Constitution

    Legislation / Statutes

    -Acts of Parliaments

    -State Enactments

    -Subsidiary Legislations

    -Articles 73 & 74 Federal Constitution

    CustomsJudicial

    Decisions

    English Law

    Common

    LawEquity

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    Written LawWritten Law

    Federal ConstitutionFederal Constitution

    Supreme law of the country, the issue of constitutional supremacySupreme law of the country, the issue of constitutional supremacysee Art 4(1) FCwhich states: see Art 4(1) FCwhich states: This Constitution is the supreme lawThis Constitution is the supreme lawof the Federation and any law passed after Merdeka Day which isof the Federation and any law passed after Merdeka Day which isinconsistent with this Constitution shall, to the extent of theinconsistent with this Constitution shall, to the extent of theinconsistency, be void.inconsistency, be void.

    Follows the doctrine of constitutional supremacy as opposed toFollows the doctrine of constitutional supremacy as opposed toparliamentary supremacy (based on theWestminsterModel]parliamentary supremacy (based on theWestminsterModel]

    Lays down the powers of theFederal and StateLays down the powers of theFederal and State governmentsgovernments

    Enshrines thebasic fundamental rights of the individualEnshrines thebasic fundamental rights of the individual

    Establishes a constitutional monarchy and a federal system ofEstablishes a constitutional monarchy and a federal system ofgovernmentgovernment

    The powers and rights can only be changed ifapproved by twoThe powers and rights can only be changed ifapproved by two --third majority in the Parliament.third majority in the Parliament.

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    Written LawWritten Law

    StateConstitutionsStateConstitutions

    EachState possesses its own constitution, regulating theEachState possesses its own constitution, regulating thegovernment ofeach particular state in Malaysia.government ofeach particular state in Malaysia.

    If there is any inconsistency between Federal and StateIf there is any inconsistency between Federal and State

    constitutions, theFederal Constitution shall prevail (Article 75constitutions, theFederal Constitution shall prevail (Article 75Federal Constitution)Federal Constitution)

    Provides fora unicameral ora single chamber legislativebodyProvides fora unicameral ora single chamber legislativebody

    EnactmentsEnactments -- legislations passed by State Legislativelegislations passed by State Legislative

    AssembliesAssemblies

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    Written LawWritten Law

    Legislation / StatutesLegislation / Statutes

    In a federation, power is divided between the federalIn a federation, power is divided between the federalgovernment and the various state governmentsgovernment and the various state governments

    see Art 44 FC which states that the legislative authority of thesee Art 44 FC which states that the legislative authority of theFederation shall be vested in a Parliament, which shall consist of theFederation shall be vested in a Parliament, which shall consist of the

    YDEPA, Dewan Negara and Dewan RakyatYDEPA, Dewan Negara and Dewan Rakyat Art 73 FC: Parliament may make laws for thewhole orany partArt 73 FC: Parliament may make laws for thewhole orany part

    of theFederationof theFederation

    Art 74(1) FC : Parliament may make laws with respect to anyArt 74(1) FC : Parliament may make laws with respect to anymatter in theFederal List or theConcurrent List in the Ninthmatter in theFederal List or theConcurrent List in the NinthScheduleSchedule

    Art 74(2) FC : Legislature ofa state may make laws on mattersArt 74(2) FC : Legislature ofa state may make laws on mattersin theState List or theConcurrent List in the NinthSchedulein theState List or theConcurrent List in the NinthSchedule

    Subsidiary LegislationsSubsidiary Legislationsany proclamation, rule, regulation, order, notification, byany proclamation, rule, regulation, order, notification, by--law orlaw orother instruments made under any Ordinance, enactment orother instruments made under any Ordinance, enactment or

    other lawful authority and having legislative effectother lawful authority and having legislative effect

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    Written LawWritten Law

    Legislation / StatutesLegislation / Statutes

    Federal List : matters considered essential and vital to theFederal List : matters considered essential and vital to thenation as awhole; covers external affairs, defense, internalnation as awhole; covers external affairs, defense, internalsecurity; criminal law, financeand trade, citizenshipsecurity; criminal law, financeand trade, citizenship

    State List : covers Islamic law personal and family law,State List : covers Islamic law personal and family law,procedures ofSyariah law, land matters local governmentprocedures ofSyariah law, land matters local government

    Concurrent List : covers social welfare, scholarships, townConcurrent List : covers social welfare, scholarships, townplanning, drainage & irrigation cultureplanning, drainage & irrigation culture

    Mamat bin Daud v Government of MalaysiaMamat bin Daud v Government of Malaysiaheld that Parliament has acted beyond its powers when enacting lawsheld that Parliament has acted beyond its powers when enacting laws

    and enforce the same on matters which relates to Islamic lawand enforce the same on matters which relates to Islamic law

    Repco Holdings v Public ProsecutorRepco Holdings v Public Prosecutor

    PP v Dato Yap Pemg

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    Written LawWritten Law

    Legislation / StatutesLegislation / Statutes

    Legislation refers to laws madeby abody whichhas theLegislation refers to laws madeby abody whichhas thepower to make law(e.g. Article 74 FC)power to make law(e.g. Article 74 FC)

    Act : federal law madeby Parliament (previously those madeAct : federal law madeby Parliament (previously those madebetween 1946 and 10September1959are called Ordinances)between 1946 and 10September1959are called Ordinances)

    Enactment : A state law madeby a state legislative AssemblyEnactment : A state law madeby a state legislative Assembly(with theexception ofSarawakwhere its laware still called(with theexception ofSarawakwhere its laware still called

    Ordinances)Ordinances)

    Ordinance : Law madeby the YDPA during proclamation ofOrdinance : Law madeby the YDPA during proclamation ofemergency when Parliament is not sitting concurrentlyemergency when Parliament is not sitting concurrently

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    -- Islamic LawIslamic Law

    basedbased onon AlAl--QuranQuran andand SunnahSunnah ofof thethe ProphetProphet (peace(peace bebe uponuponhim)him);; touchestouches onon everyevery aspectsaspects ofof lif elife (governs(governs thethe relationshiprelationshipbetweenbetween GodGod andand humanhuman beings,beings, betweenbetween humanhuman beingsbeingsthemselvesthemselves andand betweenbetween humanhuman beingsbeings andand thethe environment)environment)..

    ButBut thethe applicationapplication ofof IslamicIslamic LawLaw inin MalaysiaMalaysia isis onlyonly confinedconfined toto

    thethe personalpersonal lif elife ofof thethe MuslimsMuslims suchsuch asas marriage,marriage, divorce,divorce,successionsuccession etcetc.. andand administeredadministered inin thethe SyariahSyariah CourtsCourts

    ItIt isis notnot underunder thethejurisdictionjurisdiction ofof thethe FederalFederal GovernmentGovernment butbut itit isisthethe StateState GovernmentsGovernments whichwhich enactenact andand implementimplement thethe lawlaw..

    IfIf itit isis inconsistentinconsistent withwith thethe FederalFederal Constitution,Constitution, thethe latterlatter willwill

    prevailprevail.. CivilCivil courtscourts shallshall havehave nono jurisdictionsjurisdictions inin respectrespect of of anyany mattermatter

    withinwithin thethejurisdictionsjurisdictions ofof thethe SyariahSyariah courtscourts [see[see ArtArt 121121((11A)]A)]

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    UnwrittenUnwritten

    LawLaw

    English LawEnglish Law

    CustomsCustoms -- Malay adats of PerpatehMalay adats of Perpateh

    and Temenggong.and Temenggong.

    -- theadats of natives oftheadats of natives of

    Sabah & SarawakSabah & Sarawak

    Judicial DecisionsJudicial Decisions

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    EnglishEnglish LawLaw

    TwoTwo componentscomponents of of EnglishEnglish LawLaw commoncommon

    lawlaw && rulesrules ofofequityequity

    CommonCommon lawlaw waswas originallyoriginally thethe customscustoms ofof AngloAnglo--

    SaxonSaxon whichwhich laterlaterbecamebecame lawlaw throughthrough itsits r ecognitionrecognition

    andand applicationapplication byby thethe EnglishEnglish courtscourts

    EquityEquity thethe rulesrules whichwhich areare deviseddevised toto eliminateeliminateinjusticeinjustice causedcaused byby strictstrict applicationapplication ofof commoncommon lawlaw..

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    Introduction of English Law into Malaysia.Introduction of English Law into Malaysia.

    a.a. English Lawwas first introduced by the royal charters of justiceEnglish Lawwas first introduced by the royal charters of justicegranted for theStraits Settlements (1786granted for theStraits Settlements (1786-- Penang, 1824Penang, 1824 -- MalaccaandMalaccaand18191819-- Singapore) as law of general application.Singapore) as law of general application.

    b.b. ThisThis isis becausebecause thethe charterscharters establishedestablished thethe CourtsCourts ofof judicaturejudicatureexercisingexercising thethejurisdictionjurisdiction ofof inin allall civilcivil andand criminalcriminal mattersmatters..

    c.c. 18071807 TheThe FirstFirst CharterCharter ofof JusticeJustice waswas grantedgranted toto provideprovide forfor thethegovernmentgovernment andand administrationadministration ofof justicejustice inin PenangPenang..

    d.d. 18261826 thethe SecondSecond CharterCharter ofof JusticeJustice waswas grantedgranted extendingextending thetheapplicationapplication ofof EnglishEnglish lawlaw toto MalaccaMalacca andand SingaporeSingapore..

    e.e. TheTheC

    hartersC

    harters setset upup aa systemsystem ofof courtscourts andand judiciaryjudiciary.. HoweverHowever thethelawlaw mustmust bebe ofof generalgeneral applicationapplication toto suitsuit thethe locallocal customs,customs, religionsreligionsandand circumstancescircumstances ofof thethe placeplace..

    YeapYeap CheahCheah NeoNeo vv OngOng ChengCheng NeoNeoHeldHeld :: InIn thethe StraitsStraits Settlement,Settlement, EnglishEnglish lawlaw isis toto bebe consideredconsidered

    asas thethe governinggoverning lawlaw toto thethe extentextent thatthat itit isis applicableapplicable toto

    thethe circumstancescircumstances inin itsits applicationapplication..

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    ChoaChoa ChoonChoon NeoNeo vv SpottiswoodeSpottiswoode ((18691869))

    HeldHeld :: InIn thethe StraitsStraits Settlement,Settlement, EnglishEnglish lawlaw isis toto bebe appliedapplied generallygenerally andandsubjectsubject toto modificationmodification toto pr eventprevent thethe lawlaw fromfrom operatingoperating unjustlyunjustly andandoppressivelyoppressively onon thethe variousvarious alienalien racesraces inhabitinginhabiting thethe colonycolony..

    f.f. InIn thethe MalayMalay States,States, therethere isis nono blanketblanket introductionintroduction ofof EnglishEnglish lawlaw untiluntil19511951 whenwhen thethe FMSFMS CivilCivil LawLaw EnactmentEnactment 19371937 waswas extendedextended toto thethe UFMSUFMSviavia UFMSUFMS CivilCivil LawLaw OrdinanceOrdinance 19511951..

    g.g. ButBut EnglishEnglish lawlaw waswas alreadyalready introducedintroduced indirectlyindirectly beforebefore 19511951 byby wayway ofof ::

    11.. StatutesStatutes modelledmodelled onon thethe English,English, IndianIndian andand AustralianAustralianlegislationlegislation andand theythey werewere enactedenacted onon thethe adviceadvice ofof BritishBritishadministratorsadministrators

    22.. TheThejudgesjudges whowho werewere trainedtrained inin EnglishEnglish basedbased theirtheirdecisionsdecisions onon thethe EnglishEnglish lawlaw

    33.. TheThe practicepractice ofof EnglishEnglish lawlaw byby thethe lawyerslawyers

    h.h. InIn SabahSabah andand Sarawak,Sarawak, EnglishEnglish lawlaw waswas formallyformally andand directlydirectly introducedintroducedthroughthrough thethe NorthNorth BorneoBorneo ApplicationApplication ofof LawsLaws OrdinanceOrdinance 19511951 andand thetheSarawakSarawak ApplicationApplication ofof LawsLaws OrdinanceOrdinance 19461946..

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    Application of English Law in MalaysiaApplication of English Law in Malaysia

    PeninsularMalaysia Sabah & Sarawak

    Limitations forapplying English

    Law(proviso to S.3(1) ofCLA)

    S.3(1) ofCLA 1956S.3(1) ofCLA 1956S.5 ofCLA 1956S.5 ofCLA 1956(Application of English commercial law(Application of English commercial law--law ofagency, banking, insurance, partnership,law ofagency, banking, insurance, partnership,sale of goods, hiresale of goods, hire--purchase, etcpurchase, etc

    Apply English commonApply English common

    law, equity and statuteslaw, equity and statutes

    of general application asof general application as

    administered on 1administered on 1stst DecDec

    1951(Sabah) & 121951(Sabah) & 12thth DecDec

    1949(Sarawak)1949(Sarawak)

    Apply English common lawandApply English common lawand

    Equity as it is administered inEquity as it is administered in

    England on 7England on 7ththApril 1956. ButApril 1956. But

    English statutes would not beEnglish statutes would not be

    applicable if there Is local statuteapplicable if there Is local statute

    on the same matteron the same matter

    PeninsularMalaysiaPeninsularMalaysia

    (except Penang &Malacca)(except Penang &Malacca)

    Sabah & Sarawak,Sabah & Sarawak,

    Penang &MalaccaPenang &Malacca

    S.5(1)S.5(1) English commercialEnglish commercial

    law is applied as it stood inlaw is applied as it stood in

    England on 7England on 7thth April 1956 in theApril 1956 in the

    absence of local legislation.absence of local legislation.

    S.5(2)S.5(2)--English commercial lawapplied isEnglish commercial lawapplied is

    as administered at the correspondingas administered at the corresponding

    period. It means continuous receptionperiod. It means continuous reception

    but it must be in theabsence of localbut it must be in theabsence of local

    statutes on the particular subjectsstatutes on the particular subjects

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    Section 3(1) of theCivil Law Act 1956 provides, in material parts, as follows:

    1) 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 1stday of December 1951;

    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, .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.

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    In short, Section 3(1) of theCivil Law Act 1956

    provides that in absence ofany written law, theCourts in Malaysia shall apply the common lawand

    rules ofequity existing in England on: -

    7 April 1956 in West Malaysia

    1 December1951 in Sabah; and 12 December1949 in Sarawak

    But theapplication ofSection 3(1) is subject to the

    following qualifications as stipulated in the proviso: -

    a) Absence of local legislation

    b) TheCutoff dates

    c) Local circumstances

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    Section 5 of theCivil Law Act 1956 provides as follows :

    1) In all questions or issues which arise orwhich have to be decided inthe States of West Malaysia other than Malacca and Penang withrespect to the law of partnerships, corporations, banks and banking,principals and agents, carriers by air, land and sea, marineinsurance, average, lif e and fir e insurance, and with respects tomercantile law generally, the law to be administered shall be thesame as would be administered in England in the like case at the

    date of the coming into force of this Act, if such question or issuehad arisen orhad to be decided in England, unless in any case otherprovision is or shall be made by any written law.

    2) In all questions or issues which arise orwhich have to be decided inthe States ofMalacca, Penang, Sabah and Sarawak with respect tothe law concerning any of the matters referred to in subsection (1),

    the law to be administered shall be the same as would beadministered in England, in the like case at the correspondingperiod, if such question or issue had arisen orhad to be decided inEngland, unless in any case other provision is or shall be made byany written law.

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    SECTION 6 OFCIVIL LAW ACT1956

    Section 6 ofCivil Law Act 1956 expressly excludes theapplication ofEnglish law in Malaysia concerning land tenure.Section 6 provides:

    Nothing in this part shall be taken into Malaysia orany of the Statescomprised therein any part of the law of England relating to the

    tenure or conveyance orassurance or succession to any immovableproperty orany estate, right or interest therein.

    The above provision has been elaborated in detail in the case ofUnited Malayan Banking Corporation v Pemungut HasilTanah KotaTinggi [1984], whereby it was held that the National Land Code is acomplete and comprehensive code of law governing the tenure ofland in Malaysia and the incidents of it, as well as other importantmatters affecting land there, and there is no room for theimportation ofany rules of English law in that field except in so f aras the code itself may expressly provide for this.

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    TheThe JudiciaryJudiciary

    ArticleArticle 121121((11)) FCFC providesprovides thatthat therethere shallshall bebe twotwoHighHigh courtscourts ofof coco--ordinateordinate jurisdictionjurisdiction andand suchsuchinferiorinferior courtscourts asas maymay bebe providedprovided byby FederalFederal lawlaw

    PPPP vv DatoDato YapYap PengPeng ((19871987))

    ArticleArticle 121121((11A)A) FCFC courtscourts inin ClausesClauses ((11)) shallshall havehavenono jurisdictionsjurisdictions inin respectrespect of of anyany mattermatter withinwithin thethe

    jurisdictionjurisdiction ofof thethe SyariahSyariah courtscourts

    ArticleArticle 121121((11B)B) FCFC therethere shallshall bebe aa courtcourt ofofwhichwhichshallshall bebe knownknown asas thethe CourtCourt ofof AppealAppeal

    ArticleArticle 121121((22)) FCFC FederalFederal CourtCourt toto hearhear appealsappealsfromfrom decisionsdecisions ofofCourtCourt ofofappeal,appeal, of of thethe HighHigh CourtCourt

    ororaajudgejudge thereofthereof

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    Hierarchy ofCourts inMalaysia

    Federal Court

    Court of Appeal

    HighCourt in Malaya

    Sessions Court

    MagistrateCourt

    HighCourt in Sabah & Sarawak

    Sessions Court

    MagistrateCourt

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    Note :

    Civil and criminal jurisdictions of theCourts

    Other InferiorCourts & Tribunals

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    JudicialJudicial DecisionsDecisions

    JudgeJudge makesmakes oror changeschanges thethe lawlaw byby applyingapplying oror extendingextending ananestablishedestablished principleprinciple ofof lawlaw toto newnew factsfacts oror decidingdeciding notnot toto applyapply itit inin aacertaincertain situationsituation

    ButBut thethe judgejudge mustmust bebe subjectsubject toto thethe doctrinedoctrine ofof judicialjudicial precedentprecedent(also(also knownknown asas thethe doctrinedoctrine ofofstarestare decisis)decisis)

    TheThe doctrinedoctrine meansmeans inin decidingdeciding aa casecase thethe courtcourt mustmust followfollow whatwhat hashasbeenbeen previouslypreviously decideddecided byby thethe superiorsuperior courtscourts inin similarsimilar situationssituations

    IfIf thethejudgejudge appliesapplies anan existingexisting rulerule ofof lawlaw butbut doesdoes notnot extendextend it,it, hishisdecisiondecision isis calledcalled declaratorydeclaratory precedentprecedent

    IfIf thethejudgejudge appliesapplies aa casecase beforebefore himhim whichwhich isis withoutwithout aa precedent,precedent, hishisdecisiondecision isis originaloriginal precedentprecedent

    ContentsContents ofof decisionsdecisions ratioratio decidendidecidendi (the(the bindingbinding part)part) refersrefers toto thethe decisiondecision itselfitselfandand thethe reasoningreasoning toto arrivearrive atat suchsuch decisiondecisionOrbiterOrbiter dictadicta (non(non--binding)binding) refersrefers toto thethe remarkremark mademade byby thethejudgejudge inin passingpassing andand elaboratingelaborating thethe decisiondecision..

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    DoctrineDoctrine ofofStareStare DecisisDecisis

    HowHow thethe doctrinedoctrine worksworks ??(I)(I) thethe superiorsuperior courtscourts bindbind allall subordinatesubordinate courtscourts (vertically)(vertically)..

    (ii)(ii) HorizontallyHorizontally II..ee.. thethe courtcourt isis boundbound byby

    -- itsits ownown previousprevious decisionsdecisions

    -- thethe decisionsdecisions ofof itsits predecessorspredecessors

    -- thethe decisionsdecisions ofof thethe courtscourts ofof coco--ordinateordinatejurisdictionsjurisdictions

    ApplicationApplication ofof thethe doctrinedoctrine ofof judicialjudicial precedentprecedent inin MalaysiaMalaysia ::

    MahMah KahKah YewYew vv PPPP

    HeldHeld :: thethe doctrinedoctrine starestare decisisdecisis (judicial(judicial precedent)precedent) isis aa necessarynecessarydoctrinedoctrine inin ourour judicialjudicial systemsystem whichwhich waswas inheritedinherited fromfrom EnglandEngland.. SoSowhenwhen therethere isis alreadyalready aa courtscourts decisiondecision onon aa questionquestion ofof principleprinciple

    thethe courtcourt inin thethe subsequentsubsequent casescases mustmust bebe boundbound byby itit.. OtherwiseOtherwisetherethere wouldwould bebe nono finalityfinality inin thethe lawlaw..

    PPPP VV DatukDatukTanTan ChengCheng SweeSwee

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    DoctrineDoctrine ofofStareStare DecisisDecisis (cont)(cont) PriorPrior toto19851985 :: beforebefore abolishmentabolishment ofofappealsappeals toto thethe PrivyPrivy CouncilCouncil

    JCOPCJCOPC waswas thethe apexapex courtcourt inin thethe hierarchicalhierarchical structurestructure ofof courtscourts

    KhalidKhalid PanjangPanjang && OrsOrs vv PPPP (No(No.. 22))

    TheThe InstitutionInstitution ofof thethe SupremeSupreme CourtCourt 19851985

    AppealsAppeals toto JCOPCJCOPC abolishedabolished

    PostPost--19951995

    FederalFederal CourtCourt institutedinstituted asas thethe highesthighest courtcourt inin thethe landland andand thethe rere--instatementinstatement ofof thethe 33--tiertierappealappeal systemsystem

    DecisionsDecisions ofof thethe FederalFederal courtscourts nownow bindingbinding uponupon allall courtscourts lowerlower ininthethe hierarchyhierarchy..

    ArulpragasanArulpragasan A/LA/L SandarajuSandaraju vv PPPP ((19971997)) FCFC diddid notnot followfollow previouspreviousdecisiondecision ofof thethe PCPC

    FCFC declareddeclared thatthat thethe principleprinciple ofof starestare decisisdecisis aa cornerstonecornerstone ofof ouroursystemsystem ofof jurisprudencejurisprudence -- CCBCCB LtdLtd VV FeyenFeyen DevelopmentDevelopment SdnSdn BhdBhd 19971997

    DalipDalip BhagwanBhagwan SinghSingh vv PPPP 19981998 FCFC isis boundbound byby itsits ownown previouspreviousdecisions,decisions, powerpower toto departdepart fromfrom aa previousprevious decisiondecision toto bebe exercisedexercisedsparinglysparingly..

    LEGAL ASPECTS OF BUSINESS LAWMALAYSIAN LEGAL SYSTEM

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    Advantages and Disadvantages ofJudicial Precedent.

    Advantages ofJudicial precedent areas follows :

    Leads to an element of certainty in the law;

    Promotes stability in the judicial system;

    The law is able to growas the needs of society alter; and

    The law is flexible in that new rules arise out of concrete facts or

    situations i.e. more flexiblewhen compare to statute law

    Disadvantages of judicial precedent areas follows :

    Due to hierarchy ofbinding precedents being established, thelawbecomes rigid;

    To prevent rigidity, courts tend to bekeen to distinguish caseson the facts; and

    The development of the law through new precedents may besaid to be slowand irregular; it is costly to move up the courthierarchy.

    LEGAL ASPECTS OF BUSINESS LAWMALAYSIAN LEGAL SYSTEM