BUSINESS LAW

BUS 2033 EN. SAIFUNNIZAN SAM SEMESTER 6 (2010)

CHAPTER 1 INTRODUCTION TO LAW
‡ 1.1 Nature of Law ‡ What is law?
General rule of conduct. Define as a `body of rules which are enforced by the state. Consist of rules recognised & acted on by courts of justic e. John Austin `The Province of Jurisprudence Determined ``law as a command set by a superior being to an inferior being and enforced by sanctions (punishments) ± Superior-state, Inferior-individual & Sanctions-fine, imprisonment etc ± ± ± ±

± Defined in the Federal Constitution Art 60(2) & Sec2(1) Item 43(c) to include :- a) Written Law b) Common Law c) Any custom or usage having the force of law. ± Written law in Malaysia Federal Constitution being supreme law [Art 4(1) states that the Federal Constitution is the supreme law of the Federation and any law passed after Merdeka Day which is inconsistent with the Constitution shall be void].

± Even laws enacted by the Parliament which is inconsistent with the Federal Constitution is declared void.
‡ R. Rethana v. The Government of Malaysia & Anor. ± Plaintiff sought a declaration that an Act of Parliament namely S31 & S42 of Employees Social Security Act 1969 (SOCSO) were ultravires the Federal Constitution Art d8(1) that provided equal protection of the law for all. He alleged that the act precluded employees from suing the employer. ± Held : Court dismissed plaintiff claim as classification by SOCSO was fair & reasonable.

‡ Repco Holding Bhd v. Public Prosecutor
± Applicant was charged by Security Commission for infringing Security Indusctry Act 1983 & Security Commission Act 1993. Applicant claimed that the 2 Sections infringe Art 145 (3) of the Federal Constitution. ± Held : Court held that both Sections to be unconstitutional, null & void.

‡ Art 74 of the Federal Constitution provides that the Parliament may make laws with respect to any of the matters enumerated in the :± 1) Federal List (1st list of the 9th Schedule) ‡ External affairs ‡ National defence ‡ Internal security ‡ Etc. ± 2) Concurrent List (3rd list of the 9th Schedule) ‡ Social Welfare ‡ Scholarships ‡ Protection of wild animals ‡ Town planning ‡ Drainage & irrigations ‡ Etc.

‡ State legislature may make laws with respect to any of the matters enumerated in the State List.

± 1) State List
‡ ‡ ‡ ‡ Islamic law, Malay custom, Syariah court, Land Agriculture & forestry Etc

Mamat Bin Daud & Others v. Government of Malaysia
Fact : Petitioner charged to have acted as unauthorised Bilal,Khatib & Imam in Kuala Terengganu without being appointed. Respondent claimed law passed by Parliament on the basis of public order, internal security & criminal law according to Art II of the Federal Constitution. Held : Substance of law on the subject of religion where only States have legislative power under Art 74 & 77 of the Federal Constitution.

Ketua Pengarah Jabatan Alam Sekitar & Anor v. Kajing Tubek & Others
Fact : 3 of the natives (respondents) applied through High Court the Environmental Impact Assessment Order 1995 was invalid and before Ekran Bhd, that was awarded the Bakun Hydroelectric Project should comply with the Environmental Quality Act 1974. Held : Court held that since environment in question by reasons of List II & IIIA of Schedule 9 of the Federal Constitution lay wholly within the legislature of Sarawak, hence the state has exclusive rights to regulate .

Classification of law
Law

Public Law
Individual & the State

International Law
Law between states

Private Law
Individual inter se

Constitutional Law
Rights of individual in the states

Public International Law Private International Law

Contract Law
Rights arise from agreements

Criminal Law
Offences against states

Tort
Offences against individuals

Trust
Relationship between trustee & beneficiary

‡ Public Law relationship between individuals and states
± Constitutional Law ± Criminal Law rights of individual in the states actus reus (wrongful act) eg. To strangle. - mens rea (a guilty mind) eg. Intention to kill.

‡ International Law body of law which state bound to observed in relation to one another.
± Public International Law law prevails between states ± Private International Law rules that guide a judge when rules of more than one country affect a case.

‡ Private Law concerned matter that affect rights & duties of individual among themselves.

‡ Contracts based on agreement.
± 1) 2) 3) 4) 5) 6) 7) Elements : Offer Acceptance of offer Capacity to contract No mistake, misrepresentation or undue influence Object is lawful Intent for legal relation There must be a considerations.

‡ Torts based on obligation imposed by law a civil law
± Elements :- must be an act or omission done and damaged caused.

‡ Trust obligation between a trustee and beneficiary in relation to trust properties.

1.2 Sources of Malaysian Law
Meaning of sources 1. Historical sources include religious beliefs, customs and opinion of jurists. 2. Legal sources legal rules that make up sources 3. Places where the law can be found statutes, law reports, textbooks. ± Malaysian law
‡ ‡ Written Unwritten

‡ Written Law
± Most important source. Include the followings :1. Federal & State Constitution 2. Legislation enacted by Parliament and State Assemblies (eg Acts of Parliament, Ordinances, etc) 3. Subsidiary legislation made by persons or bodies under powers conferred on them by Acts of Parliament or State Assemblies ( eg By-laws, Guidelines etc)

‡ Unwritten Law
± Simply a portion of Malaysia law which is not written ± Found in cases decided by courts, local customs, etc ± Comprises the followings :‡ 1. Principles of English law applicable to local circumstances ‡ 2. Judicial decisions of the superior courts, High Courts, Court of Appeal and the Federal Court. ‡ 3. Custom of local inhabitants which has been accepted as law by the courts. ‡ 4. Other sources Muslim law, Islamic banking, estate matters.

Sources of Law Written Law
1. Federal Constitution
‡ ‡ ‡ ‡ ‡ ‡ ‡ Malaysia a federation of 13 states with written constitution. Federal Constitution being the supreme law. Lay down powers of Federal & State Governments. Enshrines basic fundamental rights of individual. Rights can be changed by a 2/3 majority of the total number of members of the legislature. Normal laws can be changed with simple majority. Comprises:± ± ± ±
The name, States and territories of the Federation. Religion of the Federation Fundamental liberties Citizenship

2. State Constitutions
± ± ± State also possesses its own constitution regulating the government of the state. Contains provisions which are enumerated in the 8th Schedule of the Federal Constitution. Include matters concerning the Ruler, Executive Council, the Legislative Assembly, financial provisions, State employees and amendments of the Constitution.

3.

Legislation
± ± ± ± ± ± Refers to law enacted by a body constituted for this purpose. Parliament Federal level State Legislative Assemblies State level Ordinances law enacted between 1946-1957 Acts 1957 & beyond Enactments law made by State Legislative Assemblies (except Sarawak are called Ordinance)

± ± ± ±

Parliament enact laws pertaining to List I 9th Schedule State enact laws pertaining to List II 9th Schedule Concurrent list List III both authorities Other law not in these lists under state authority.

4. Subsidiary Legislation
± `any proclamation, rule, regulation, order, notification, bylaw or other instrument made under any Ordinance , Enactment or other lawful authority and having legislative effect (The Interpretation Act 1967) ± Deals with the details about the laws not covered by legislature where basic and main laws are legislated. ± The details are delegated to other bodies or authories such as YDA, ministers and local authorities.

± Subsidiary legislation in contravention to the parent Act is void. ± An exception however, is the proclamation of emergency under Art 150 of the Federal Constitution. Eng Keock Cheng v. Public Prosecutor
Facts : The appellant has been convicted for 2 offences under ISA 1960 and sentenced to death. He appeal on 2 grounds :1. High court has no authority absence of prelim inquiry nor jury both required under Criminal Procedure Code. 2. Procedure was ultra vires and invalid and infringe Art. 8 that declares all person equal before the law. Held : 1. Art 150 of the Federal Constitution Parliament has during emergency, power to legislate even inconsistent with the constitution. 2. Emergency Powers Act 1964, not under Parliament to enact and cannot be challenged 3. Appeal dismissed as appellant was rightly convicted.

cont..25/2/09

Unwritten law ‡ Comprised of :± ± ± 1. English law 2. Judicial decisions 3. Customs

/

1. English law
± ± ± form part of the laws in Malaysia. Can be found in English common law & rule of equity. Civil Law Act 1956 states that :i) Peninsula Malaysia S3(1)a, court shall apply common law of England & rules of equity as administered in England on 7/4/1956

± ii) Sabah & Sarawak S3(1)c ‡ common law - court shall apply common law of England as administered in England on 1/12/1951 ‡ Rules of equity - court shall apply Rules of equity of England as administered in England on 12/12/1949 ± Application of law of England in Malaysia only applies under 2 circumstances :‡ i) absence of local statutes on particular subject ‡ Ii) local law take precedence over English law

± Extent of application of common law of England in Malaysia was decided in :-

‡ SYKT BATU SINAR SDN BHD v. UMBC FINANCE BHD ± Fact : Ownership claim by UMBC over 2nd tractors whereby ownership was not endorsed on registration card & wanted to repossess tractors but plaintiff sued on the ground that defendant not entitle due to unendorsed name. ± Held : 1. All 2nd hand cars buyer in P. Malaysia are without ownership in registration card. 2. It has been in practice and English cases cannot be followed.

English Commercial Law
‡ Difference with regard to Commercial Law to the application of English

‡ Civil Law Act 1956, S5(1), application of English Commercial Law in P. Malaysia as it stood on 7/4/1956 in the absence of local legislation. ‡ For Penang, Malacca, Sabah & Sarawak, S5(2) states that English Commercial Law shall apply in the corresponding period as it had been decided in England. Hence a continuous reception of English Commercial Law. ‡ However, due to incursion of new local statutes such as Company Act 1965, Partnership Act 1961, hence reliance towards English Commercial Law is lessen.

English Land Law
‡ Sec 6, Civil Law Act 1956,
``(6) Nothing in this part shall be taken to introduce into Malaysia or any of the States comprising therein any part of the law of England relating to the tenure or conveyance or assurance of or succession to any estate, right or interest therein UNITED MALAYAN BANKING CORP BHD & ANOR. V PEMUNGUT HASIL TANAH, KOTA TINGGI Fact : Johor State Authority alienated land to certain proprietor in consideration for certain conditions and annual rent. Rent was not paid and land was forfeited. UMBC appeal through Privy Council the decision made. Held : The National Land Code is a complete and comprehensive code of law and the English Law cannot be applied in this circumstances.

‡ In the event whereby there is conflict between Common Law and Equity, the Rules of Equity shall apply.

2. Judicial Decisions
‡ Malaysian law can be found in the judicial decisions of High Court, Court of Appeal and Federal Court. ‡ Also decisions from Supreme Court (1/1/87-23/6/94) and Federal Court and Judicial Committee of the Privy Council (form part of the judicial system until 31/12/86 but decisions still binding in present court)

‡ Judges make decisions based on precedents cases of similar situations. ‡ If a judge applies existing rule without extending it, his decisions is called a declaratory precedent. ‡ If the case is without precedent, his decisions is known as original precedent. ‡ These are called ``doctrine precedent (stare decisis) of binding judicial

Hierarchy of Precedents
‡ The general rule of hierarchy of precedents is based on the principle that decisions of higher court bind lower courts and some court are bound by their own decisions.

THE JUDICIAL SYSTEM
FEDERAL COURT

COURT OF APPEAL

HIGH COURT IN MALAYA

HIGH COURT IN SABAH & SWAK

SYARIAH COURT

NATIVE COURT & SYARIAH COURT

SESSIONS COURT

SESSIONS COURT

MAGISTRATES COURT

MAGISTRATES COURT

SMALL CLAIM COURT

SMALL CLAIM COURT

PENGHULU¶S COURT

‡ Prior to 1/1/87, the Privy council which sits in England was the final court of appeal of Malaysia. ‡ The decision was in the form of advice to the YDA who will to effect of it. ‡ Appeals on criminal and constitutional matters were abolished on 1/1/78. ‡ Between 1/1/78 1/1/87, appeal are limited to civil cases only. ‡ After 1/1/87, appeal cases was handled by Supreme Court until 23/6/94 where it was abolished on the 24/6/94. ‡ After that date, the Federal Court was set up as the highest court and the appeals from the High Court can be made through Court Of Appeal.

‡ Distinguishing precedents
± A judge may apply precedents in the following circumstances :1. Judges may ignore or overrule precedent laid down by lower court on appeal cases. 2.They may refuse precedent if the decision made in ignorance of statute or binding precedents 3. If the case is of material difference from precedent cases.

3. Customs
± Customs of local inhabitants in Malaysia are also source of law such as relating to marriage , divorce and inheritance have legal force in Malaysia. ± Adat applies to Malay, Hindu & Chinese customary law applies to both races. ± In Sabah & Sarawak native customary laws.

± In Peninsula Malaysia, 2 main varieties of Malay customary law : 1. The adat perpatih prevalent in Negeri Sembilan and Malacca and covered matters such as land tenure, election of lembaga,, undang and the Yang di Pertuan Besar. 2. The adat temenggong from Palembang Sumatra and adopta more patrilineal system . (In a patrilineal descent system (= agnatic descent), an individual is considered to belong to the same descent group as his or her father.)

4. Muslim Law
± The Federal Constitution provide that state have power to administer Muslim Law. ± The courts which enforce Muslim Law are the Syariah Court and applies only to Muslims.

Questions :1. 2. Describe the various sources of Malaysian law? Explain briefly what are the :2.1 Written 2.2 Unwritten law of Malaysia.

1.3 The legal System in Malaysia...26/2/09(11.00am)
‡ The Federal Constitution provides power to be exercised by the legislative, the executive and the judiciary. ‡ The judiciary has power to determine civil and criminal matters, interpret the Federal Constitution and even pronounce the legality of legislative and executive acts. ‡ The head of the judiciary is the Chief Justice .

‡ The current Chief Justice Of The Federal Court, Malaysia The Right Honourable Tan Sri Dato' Seri Zaki bin Tun Azmi

FEDERAL COURT

SUPERIOR COURTS

COURT OF APPEAL

HIGH COURT IN MALAYA

HIGH COURT IN SABAH & SWAK

SYARIAH COURT

NATIVE COURT & SYARIAH COURT

SUBORDINATE COURTS

SESSIONS COURT

SESSIONS COURT

MAGISTRATES COURT

MAGISTRATES COURT

SMALL CLAIM COURT

SMALL CLAIM COURT

PENGHULU¶S COURT

Subordinate Courts in Peninsula Malaysia
± Consist of Penghulu s Courts, Magistrates Courts and Sessions Courts. ± Established under Sec2(2) of Subordinate Courts Act 1948.

Penghulu s Court
‡ Lowest level of subordinate courts in P. Malaysia. ‡ Presided by a penghulu or headman appointed by the State Government for a mukim.(district) ‡ Normally settle disputes informally.

‡ Empowered in minor civil cases involving debt settlement of not more than RM50 involving Asian races in Malay language. ‡ In criminal cases, minor cases involving fines not more than RM25. ‡ Appeal or re-tried can be made at Magistrate Court.

Magistrates Courts ‡ deals with minor civil and criminal cases.
‡ Presided over by a Magistrate. ‡ 1st class Magistrate - Jurisdiction to try cases for which max term of punishment not exceeding 10 years imprisonment or with fines only. ‡ In civil cases, sum disputes not exceeding RM25,000. ‡ 2nd class Magistrate - Jurisdiction to try cases for which max term of punishment not exceeding 12 months imprisonment or with fines only. ‡ In civil cases, sum disputes not exceeding RM3,000.

Juvenile Courts
‡ Deals with criminal cases for offenders below age of 18.
‡ Presided over by a 1st class Magistrate assisted by 2 advisors. ‡ function of advisors to advise with respect to any consideration affecting punishment or young offenders. ‡ If found guilty, the young offenders may be sent to approved institution for corrective education.

Sessions Courts
‡ The highest of the subordinate courts. ‡ Under the charge of Sessions Court Judge. ‡ Criminal jurisdiction other than punishable by death. ‡ In civil cases, sum disputes not exceeding RM100,000 ‡ Does not include jurisdictions on land matters, divorce, bankruptcy and trusts and have to apply through High Court to try cases of these nature.

Subordinate Courts
‡

in East Malaysia

Consist of Native Courts, Sessions Court and Magistrates Courts.

Native Courts
‡ ‡ ‡ ‡ ‡ Only in Sabah & Sarawak. Affecting native custom involving indigenous races in Sabah & Sarawak. Hear cases of civil and criminal matters including breach of native customs and law, land issues. In Sabah, Native Court is exercised under District Officer jurisdiction. In Sarawak, consist of District Native Court, Headman s Court and Chief s Court.

Superior Courts
‡

In Malaysia

Consist of High Court of Malaya, High Court of Sabah & Sarawak, Court of Appeal and Federal Court.

High Court
‡ ‡ 2 Chief Judges, one in P. Malaysia and one in Sabah & Sarawak. Any civil matters cannot be decided in subordinate courts are brought to High Court including cases, defendants, facts and land ownership is within Malaysia. It has power to remove cases from subordinate courts and request records of all proceedings in subordinate court.

‡

The Industrial Court
‡ ‡ ‡ Established to relieve the ordinary courts of some of their work and cater for specialized or technical matters. Falls under Industrial Relations Act 1967 deals in trade disputes concerning employees, employers and trade unions. Consist of a President appointed by the YDA and 2 panel members representing employees and employer. CHEEK HONG LEONG v. KYM INDUSTRIES SDN BHD Fact : The plaintiff was dismissed under constructive dismissal and was awarded reduced compensation. He appeal to High Court. Held : The matter cannot simply referred to High Court by agreement by both parties without weighing the merit or importance of the case.

The Court of Appeal
‡ ‡ ‡ ‡ Consist o f a President of Court of Appeal and up to 10 Court of Appeal Judges. For any case, at least 3 judges or greater uneven number to reside. Has jurisdiction to hear appeal cases involving criminal and civil cases subject to at least RM 250,000. Where the cases have been heard and decided upon, it has no power to re-open, re-hear and re-decide.

The Federal Court
‡ ‡ Highest court in Malaysia and consist of Chief Justice, President of Court of Appeal, the Chief Judge of Sabah & Sarawak. Has jurisdiction over criminal and civil appeal cases from Court of Appeal, hear disputes between Federal Government and States determine constitutional cases and give opinion on matters given by YDA.