Malaysian legal systeM laW
434
leCtURe 3
(PaRt 2)
englisH laW anD CiVil laW
aCt 1956
Specific application of English law
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• s.5 CLA 1956 provides for the application of English
law in commercial matters. –
S.5 states:
(1) In all questions or issues which arise or which
have to be decided in the states of West
Malaysia other than Malacca and Penang with
respect to the law of partnerships, corporations,
banks and banking, principals and agents,
carriers by air, land and sea, marine Insurance,
average life and fire Insurance, and with respect
to mercantile law generally,
the law to be administered shall be the same as
would be administered in England in the like case
at the date of coming into force of this Act, if such
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question or issue had arisen or had to be decided
in England, unless in any case other provision is or
shall be made by any written law.
(2) In all questions or issues which arise or which have
to be decided in the state of Malacca, Penang,
Sabah and Sarawak with respect to the law
concerning any of the matters referred to in
subsection (1),
the law to be administered shall be the same as
would be administered in England in the like case
at the corresponding period, if such question or
issue had arisen or had to be decided in England,
unless in any case other provision is or shall be
made by any written law.
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• The different terminology used in s.5 ('the law to be
administered), compared to that in s.3(1)(which specifies
the relevant sources of English law) shows that s.5
introduces, the whole of English law including statutes.
• The difference in wording between subsections (1) and
(2) of section 5 means there is a difference in the extent
to which English law is applicable in commercial matters
in the former Malay States on the one hand, and Melaka,
Penang, Sabah and Sarawak on the other hand. s.5(1)
introduces into the former Malay States the law
administered in England on 7 April 1956 whereas s.5(2)
introduces the law existing in England on the same date
that the issue has to be decided in Melaka, Penang,
Sabah and Sarawak.
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• Thus, theoretically, in commercial matters, there is a
continuing reception of English law in these four states while
in the other states the reception stops at the cut-off date.
• However, in practice, the difference does not exist. In Zainal
Abidin v Century Hotel (1982) 1 MLJ 260, the Malaysian
courts, following developments in England, exercised
jurisdiction to grant Mareva injunctions (enabling the court to
freeze the asset of the defendant) and in Lian Keow v
Paramjothy (1982) 1 MLJ 217 to issue 'Anton Piller' orders
(requiring a defendant to permit a plaintiff or his
representative to enter the defendant's premises to inspect or
take away material evidence that the defendant might wish to
remove or destroy in order to frustrate the plaintiff's claim; or
to force a defendant to answer certain questions).
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• There are two conflicting approaches to the
interpretation of s.5, arising from two Privy Council
decisions.
• In Seng Djit Hin v Nagurdas Purshotumdas (1923) AC
444, the action was for damages for failure to deliver
goods, delivery having been prevented by a shortage of
ships owing to wartime requisitioning.
In issue was the application of the Defence of the Realm
(Amendment) Act No. 2 of 1915 and the Courts
(Emergency Powers) Act 1917, both English statutes. The
Privy Council held that the law to be administered was
not the 'mercantile law' but 'the law' as would be
administered in England in the like case.
• Such law meant the entirety of English law. The correct
approach is to determine if the issue concerned one of
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the enumerated categories and 'mercantile law generally'
in the first part of the section.
• If it does, then in accordance with the second part of the
section, the law to be administered shall be the same as
would be administered in England in the like case. In that
case, the issue concerned the law of sale, clearly part of
mercantile law. As the two statutes could be pleaded had
the issue arisen in England, they could be relied upon in
the Straits Settlements.
• Second approach to the interpretation of s.5
• In Shaik Sahied bin Abdullah Bajerai v Sockalingam
Chettiar (1933) 2 MLJ 81, the plaintiff sued for money
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allegedly due on a promissory note and a cheque. In
defence, the defendant relied upon the absence of a
written memorandum as required under the English
Moneylenders Acts 1900-1927. In dispute was whether
those statutes could be pleaded upon in the Straits
Settlements.
• The Privy Council held that the statutes were not part of
the mercantile law because they contain saving clauses
excluding from their scope the borrowing of money in
the course of ordinary commercial transactions. As the
statutes were not part of the mercantile law, an issue
raised under any of their provisions was not an issue
concerning mercantile law. Consequently, the statutes
did not apply in the Straits Settlements.
Conditions for application of s. 5
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1. Types of laws applicable:
- Principles of common law
- Rules of equity - English
statutes
2. Cut off dates:
- Malay states except Penang and Melaka –
7th April 1956.
- Penang, Melaka, Sabah and Sarawak –
continuous reception (no cut of dates)
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3. Absence of local legislation
- the phrase “…unless in any case other provision is or shall
be made by any written law.”
4. Suitability with local circumstances
- The 'local circumstances' proviso present in s.3(1) is
absent from s.5. In practice, however, s.5 seems to have
been interpreted as if that proviso exists.
In Sockalingam Chettiar’s case, the trial judge held that the
facts did not allow the application of Moneylenders Acts
1900-1927 in Singapore because they were peculiar to
England (the Acts were meant to regulate activities of
moneylenders in England), and not in general character, and
was unsuitable and impossible of the performance in the East.
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• Section 6 provides that English Law relating to
immovable property (land) is not applicable.
United Malayan Banking Corp Bhd & Anor v
Pemungut Hasil Tanah, Kota Tinggi (1984) 2 MLJ 87.
One of the questions to be decided was whether the
English equitable rule with regard to relief against
forfeiture could be applied to a forfeiture of alienated
land resulting from an action duly brought under the
local National Land Code. The Privy Council held that
since the National Land Code was a complete and
comprehensive code of law governing the land tenure
and other matters affecting land in Malaysia, there was
no room for the importation of any relevant rules of
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English law except in so far as the Code itself may
expressly provide for this.
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tHanK yOU
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