Chapter 01

1
An Introduction to
the Concept of
Law in Malaysia
OBJECTIVES
This chapter:
• defines the concept of law in
Malaysia in relation to the state
and the constitution
BUSINESS LAW (THIRD EDITION) All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2018 1–3
PREVIEW
 What is ‘Law’?
 Law in Relation to Justice
 Law and Ethics
 Rule of Law
 Law, the State and the Constitution
- Law in Malaysia
- What is a ‘State’?
 Classification of Law
- Public Law
- International Law
- Private Law

LAW
 is a means or device to regulate the economic and

social behaviour of society
 aims to preserve the economic and social welfare
of our society
 is needed to regulate and control the affairs of
society
 is a regulatory device providing the mechanism for
society to function through tools such as legislation
and case-law
 guarantees our freedom, enables free enterprise
and provides a means to settle disputes amicably
LAW (cont.)
 shapes commercial enterprise and is relevant to all

members of society as seen in corporate mergers,
privatization of governmental organizations, crimes
committed within the securities industry and
corporate fraud cases

WHAT IS ‘LAW’?
 It is a set of rules that regulates interactions that

people have with each other, and which sets
standards of conduct between individuals and
between individuals and the government and
which are enforceable through sanction.
 To the layman, law is understood as being a
general rule of conduct.
 The Oxford English Dictionary defines law as ‘the
body of enacted or customary rules recognized by
a community as binding’.
WHAT IS ‘LAW’? (cont.)
• Sir John Salmond in Jurisprudence defines law as:

• ‘the body of principles recognized and applied by
the State in the administration of justice…’
• John Austin in The Province of Jurisprudence
Determined, describes law as ‘a command set by
a superior being to an inferior being and enforced
by sanctions (punishments)’.

WHAT IS ‘LAW’? (cont.)
• the term ‘law’ is defined both by Article 160(2) of

the Federal Constitution 1957 and Item (43C) of
section 2(1) of the Interpretation and General
Clauses Ordinance 1948 to include:
(a) the written law
(b) common law insofar as it is in operation in the
Federation or any part thereof
(c) any custom or usage having the force of law in
the Federation or in any part

CASES
Danaharta Urus Sdn Bhd v Kekatong Sdn Bhd (Bar Council
Malaysia, Intervenor)
- meaning and application of “common law in so far as it is
in operation in the Federation or any part thereof”
Sri Inai (Pulau Pinang) Sdn Bhd v Yong Yit Swee;

Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd &
Anor
- development of common law in Malaysia
- section 3 of the Civil Law Act 1956 permits the reception
of the common law of England in the Federation subject to
the qualification that it may be lawfully modified in the future
by any written law
CASES (cont.)
S Kulasingam & Anor v Commissioner of Lands, Federal

Territory & Ors
- the legislature can by clear words exclude the principles of
natural justice in the absence of specific constitutional
guarantees
Ng Kim Moi (P) & Ors v Pentadbir Tanah Daerah, Seremban,

Negeri Sembilan Darul Khusus (Negeri Sembilan Township
Sdn Bhd & Anor, Proposed Intervenors)
- law does not just mean written law and, by virtue of the
definition of law stated in Article 160, it also includes common
law
CASES (cont.)
Director of Forest, Sarawak & Anor v TR Sandah ak Tabau &

Ors (suing on behalf of themselves and 22 other proprietors,
occupiers, holders and claimants of native customary rights
(NCR) land situated at Rumah Sandah and Rumah Lanjang,
Ulu Machan, Kanowit) and other appeals:
Superintendent of Lands and Surveys, Kota Samarahan
Division & Anor v Luking Anak Uding & Ors and other appeals:
Superintendent of Lands and Surveys Kuching v Jamilah bt
Abdul Hamid & Ors
- meaning and application of the phrase, “any custom or usage
having
the force of law” in the said Article 160

LAW IN RELATION TO
JUSTICE
Law aims to maintain justice in society.

• Justice is an abstract idea of right and wrong;
fairness and equality.
• The aim of a given law is to encourage the doing
of what is right or just in a particular set of
circumstances.
• Justice is what right-minded members of the
community (that is, those having the right spirit
within them) believe to be fair.
LAW IN RELATION TO
JUSTICE (cont.)
• Law attempts to represent what society believes

is right or fair.
• However, in its application to a particular set of
circumstances, a law may not always appear to
be just.

LAW AND ETHICS
Ethics is about what is right and what ought to be,

not simply accepting what is.
• The purpose of law is to govern the conduct of all
members of society, whilst ethics guides individuals in
ascertaining the soundness of rules, and their impact
upon relationships.
• Law and ethics, though of different concepts, are often
related.
• Businesses often use legal standards in carrying out
their activities and in decision-making, businesses also
adopt codes of ethics or conduct.
RULE OF LAW
• according to Dicey, the rule of law involves the

following three propositions:
1. No person must be punished except for a
breach of the law.
2. All persons are equal before the law
irrespective of status or position.
3. The rights or freedoms of citizens are
enforceable in the courts.

LAW, THE STATE AND THE
CONSTITUTION
• law in Malaysia, which consists of Peninsular

Malaysia, Sabah and Sarawak, is one political unit
but it is not governed by the same set of laws
• attempts are made to achieve uniformity in the law
throughout Malaysia but this is not possible in all
areas of the law
• 2 links uniting the two parts of Malaysia:
– the Parliament
– the Federal Court

WHAT IS A ‘STATE’?
• legal systems are administered almost entirely on

the basis of the political unit known as the State
• for international purposes, Malaysia is one state
• within Malaysia, however, there are thirteen states
• each state has a government and has rules which
lay down who shall govern and how
• Malaysia has a written constitution – Federal
Constitution – the supreme law of the Federation

WHAT IS A ‘STATE’? (cont.)
• Article 4(1) of the Federal Constitution:
4. Supreme Law of Federation.
(1) This Constitution is the supreme law of the Federation and any law
passed after Independence Day which is inconsistent with this
Constitution shall, to the extent of the inconsistency be void.
• laws enacted by Parliament which are inconsistent with the Federal
Constitution may be declared void by the courts
• see R Rethana v The Government of Malaysia & Anor c/f, Repco
Holdings Bhd v Public Prosecutor
R Rethana v The Government of Malaysia & Anor and Danarharta
Urus Sdn Bhd v Kekatong Sdn Bhd (Bar Council Malaysia,
Intervenor)
- both the plaintiffs sought declarations that an Act of Parliament was
void because of an alleged inconsistency with the Federal
Constitution.
Borhan bin Hj Daud & Ors v Abd Malek bin Hussin
- as the ISA is a special law made under Art 149 of the
Constitution, the arrest and detention of the respondent was
lawful. Article 149 provides that laws such as the ISA are valid
notwithstanding their inconsistencies with Art 5, 9, 10 and 13 of
the Constitution.
Kam Teck Soon v Timbalan Menteri Dalam Negeri Malaysia &

Ors and other appeals
- in conflict with Mohamad Ezam bin Mohd Noor v Ketua Polis
Negara & other appeals which held that the ISA was still
subject to the rights under Art 5(3) and 149 of the Constitution
and could not be used to remove such rights.

• The Federal Constitution confers legislative power to

the Federal Parliament and the State legislatures.
• Article 73:
73. Extent of Federal and State Laws
In exercising the legislative powers conferred on it by
this Constitution:
(a) Parliament may make laws for the whole or any
part of the Federation and laws having effect outside
as well as within the Federation
(b) The legislature of a State may make laws for the
whole or any part of that State
• parliament may make laws for the whole of

Malaysia
• Article 74:
Parliament may make laws with respect to any of the
matters enumerated in the Federal List or the
Concurrent List.
The Federal List:
1. External affairs
2. National defence
3. Internal security
4. Civil and criminal law and procedure and the

administration of justice
5. Federal citizenship and naturalization; aliens
6. The machinery of government
7. Finance
8. Trade, commerce and industry
9. Shipping, navigation and fisheries
10. Communications and transport
11. Federal works and power
12. Surveys, inquiries and research
13. Education
14. Medicine and health
15. Labour and social security
16. Welfare of the aborigines
17. Professional occupations
18. Holidays; standard of time
19. Unincorporated societies
20. Control of agricultural pests; etc.

21. Newspapers; publications; publishers; printing and

printing presses
22. Censorship
23. Theatres; cinemas; public amusements
24. Federal housing and improvement trusts
25. Co-operative societies
26. Prevention and extinguishment of fire, including fire
services and fire brigades
Tan Sri Abdul Khalid Ibrahim v Bank Islam (M) Bhd -
considered Item 4 of the Federal List
The Concurrent List:

1. Social welfare, social services, protection of
women, children and young persons
2. Scholarships
3. Protection of wild animals and wild birds;
National Parks
4. Animal husbandry
5. Town and country planning
6. Vagrancy and itinerant hawkers

7. Public health, sanitation and prevention of diseases

8. Drainage and irrigation
9. Rehabilitation of mining land and land which has
suffered soil erosion
10. Fire safety measures and fire precautions in the
construction and maintenance of buildings
 matters enumerated in the Concurrent List may also
be the subject-matter of laws made by the state
legislatures
 the State Legislature may also make laws with
respect to any of the matters in the State List
The State List:

1. Islamic law and personal and family law of Muslims;
Malay customs; offences by Muslims; Syariah Courts
2. Land
3. Agriculture and forestry
4. Local government
5. Local services
6. State works and water

7. Machinery of the State Government

8. State holidays
9. Offences against State Law
10. Inquiries for State purposes
11. Indemnity
12. Turtles and riverine fishing

• see Mamat bin Daud & Ors v Government of

Malaysia, Ketua Pengarah Jabatan Alam
Sekitar & Anor v Kajing Tubek & Ors and other
appeals
• if any state law is inconsistent with a Federal
law, the Federal law shall prevail – Article 75,
Federal Constitution

• 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
• State legislatures have the power to make laws
with respect to any matter not enumerated in
any of the Lists set out in the Ninth Schedule
and which are not a matter in respect of which
Parliament has power to make laws

CLASSIFICATIONS OF LAW
Major legal systems:

• Civil law
• Common law
• Islamic
• Sino-Soviet
• Hindu
• Talmudic

CLASSIFICATIONS OF LAW
(cont.)
• in general, the legal systems of the world are classified
into 3 main types:
a) Civil law
b) Common law
c) Socialist law
• the Malaysian legal system is a common law system

• in Malaysia, law has been classified into 3 broad
divisions:
a) Public law
b) International law
c) Private law

PUBLIC LAW
• law which governs the relationship between

individuals and the state
• subdivided into two categories:
a) Constitutional law
b) Criminal law
• constitutional law lays down the rights of
individuals in the state
• criminal law codifies the various offences
committed by individuals against the State

CASES RELATING TO
CONSTITUTION
Ng Kim Moi (P) & Ors v Pentadbir Tanah Daerah, Seremban,

Negeri Sembilan Darul Khusus (Negeri Sembilan Township
Sdn Bhd & Anor, Proposed Internors)
S Kulasingham & Anor v Commissioner of Lands,

Federal Territory
Government of Malaysia & Anor v Selangor Pilot Association
Ong Ah Chuan v Public Prosecutor

INTERNATIONAL LAW
• body of law which is composed for its greater

part of the principles and rules of conduct which
states feel themselves bound to observe, and
consequently commonly do observe, in their
relations with each other
• subdivided into two categories:

– Public international law
• Law that prevails be

INTERNATIONAL LAW (cont.)
– Private international law (‘conflict of laws’)

• A part of municipal law
• Rules that guide a judge when the laws of more
than one country affect a case
• two main sources of international law that affect
businesses:
a) Customary Rules of International Law
b) Treaties and Conventions

PRIVATE LAW (CIVIL LAW)
• matters that affect the rights and duties of

individuals amongst themselves
• intended to give compensation to persons
injured, to enable property to be recovered from
wrongdoers, and to enforce obligations
(contracts and trusts)
• covers:
– Contract
– Tort
– Trust
(cont.)
Contract
• based on agreement
• essential elements in a contract:
1. Offer
2. Acceptance
3. Capacity to contract
4. No mistake, misrepresentation or
undue influence
5. Object must be lawful
6. Intention to enter into legal relations
7. Consideration
(cont.)
Tort
• based on an obligation imposed by law
• a civil wrong
• the breach of a general duty which is imposed
by the law (and not agreed between the
parties)
• remediable by a civil action for unliquidated
damages

(cont.)
• any person whose legal right is infringed

may sue that wrongdoer
• essential elements of a tort:
– there must be an act or omission done
intentionally or negligently
– there must be damage caused by such
act or omission which is not remote

(cont.)
Trust
• an equitable obligation binding a person (a
trustee) to deal with property over which he
has control (trust property) for the benefit of
persons (beneficiaries or cestui que trust) of
whom he may himself be one and any one of
the beneficiaries may enforce the obligation

REVIEW
 Explanation and Definition of ‘Law’

 Law in Relation to Justice
 Law and Ethics
 Rule of Law
 Law, the State and the Constitution
- Law in Malaysia
- Concept of a ‘State’
 Classification of Law
- Public Law
- International Law
- Private Law

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BUSINESS LAW (THIRD EDITION) All Rights Reserved

BUSINESS LAW (THIRD EDITION) All Rights Reserved

 is a means or device to regulate the economic and

 shapes commercial enterprise and is relevant to all

BUSINESS LAW (THIRD EDITION) All Rights Reserved

 It is a set of rules that regulates interactions that

• Sir John Salmond in Jurisprudence defines law as:

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• the term ‘law’ is defined both by Article 160(2) of

BUSINESS LAW (THIRD EDITION) All Rights Reserved

Sri Inai (Pulau Pinang) Sdn Bhd v Yong Yit Swee;

S Kulasingam & Anor v Commissioner of Lands, Federal

Ng Kim Moi (P) & Ors v Pentadbir Tanah Daerah, Seremban,

Director of Forest, Sarawak & Anor v TR Sandah ak Tabau &

BUSINESS LAW (THIRD EDITION) All Rights Reserved

Law aims to maintain justice in society.

• Law attempts to represent what society believes

BUSINESS LAW (THIRD EDITION) All Rights Reserved

Ethics is about what is right and what ought to be,

• according to Dicey, the rule of law involves the

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• law in Malaysia, which consists of Peninsular

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• legal systems are administered almost entirely on

BUSINESS LAW (THIRD EDITION) All Rights Reserved

Kam Teck Soon v Timbalan Menteri Dalam Negeri Malaysia &

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• The Federal Constitution confers legislative power to

• parliament may make laws for the whole of

4. Civil and criminal law and procedure and the

BUSINESS LAW (THIRD EDITION) All Rights Reserved

21. Newspapers; publications; publishers; printing and

The Concurrent List:

BUSINESS LAW (THIRD EDITION) All Rights Reserved

7. Public health, sanitation and prevention of diseases

The State List:

BUSINESS LAW (THIRD EDITION) All Rights Reserved

7. Machinery of the State Government

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• see Mamat bin Daud & Ors v Government of

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• if any State law is inconsistent with a Federal

BUSINESS LAW (THIRD EDITION) All Rights Reserved

Major legal systems:

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• the Malaysian legal system is a common law system

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• law which governs the relationship between

BUSINESS LAW (THIRD EDITION) All Rights Reserved

Ng Kim Moi (P) & Ors v Pentadbir Tanah Daerah, Seremban,

S Kulasingham & Anor v Commissioner of Lands,

Government of Malaysia & Anor v Selangor Pilot Association

Ong Ah Chuan v Public Prosecutor

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• body of law which is composed for its greater

• subdivided into two categories:

BUSINESS LAW (THIRD EDITION) All Rights Reserved

– Private international law (‘conflict of laws’)

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• matters that affect the rights and duties of

BUSINESS LAW (THIRD EDITION) All Rights Reserved

• any person whose legal right is infringed

BUSINESS LAW (THIRD EDITION) All Rights Reserved