APPLICATION OF ENGLISH LAW IN MALAYSIA 3.1Introduction The application of English Law in Malaysia is restricted under the Civil law Act 1956. The common law of English and rules of equity is only applicable in Malaysia before the cut-off date and after the cut-off date, Malaysia court cannot receive the development of common law. The above stated is the strict sense of the limitation under Civil Law Act 1956. The application of the English law is had been set up in two provisions in the Civil law Act 1956. The main difference between the two provisions namely Section 3 and section 5 is that section provides the general application of the English law while the other provide the application of English law in commercial matter only. 3.2General Application of English Law According to Section 3 of the Civil Law Act, common law of England and rules of equity is applicable in the Peninsula Malaysia while in Sabah and Sarawak, the statutes of general application of English law is applicable in addition to the common law and rules of equity. However, the English can only be applied in Malaysia if the country and its local inhabitants permit and the local circumstances render necessary. It is good for us to note that there is quite a number of issues had been arise as to the interpretation of the phrase subject to such qualifications as local circumstances render necessary. There is no fixed definition about the phrase stated above and it is subjected to the court to determine the meaning. The application of English law in Malaysia is subject to the express provisions of this Act or any other written law in force in Malaysia or any part thereof. This means that is the English common law is conflicting with any other written law in Malaysia, then the law in Malaysia shall be applicable unless there is lacuna or gap in the provision and in the need of the English law to remedy it. If there is conflict between common law of England and rules of equity, the rules of equity shall prevail. There are three qualifications that need to be fulfilled before English law can be applied in Malaysia. Firstly, there is absence of the local legislation which is the lacuna or gap in the legislation. Secondly, cut-off dates need to be considered. Last but not least, English law must be permitted by local circumstances and inhabitants, subjected to qualifications necessitated by the local circumstances. Under s.3 of the Civil Law Act, the cut-off date for the Peninsula Malaysia in on 7 April 1956 while in Sabah, the cut-off date is on 1 December 1951 and for Sarawak the cut-off date is on 12 December 1949. English law needs to be modified in order to suit the local circumstances. In deciding the case Phileoallied Bank (M) Bhd v Bupinder Singh A/L Avatar Singh & Anor, Gopal Sri Ram JCA had emphasized that the court in Malaysia, while applying the rules of equity prevailing in England, modification is needed to suit the local circumstances as stated in the proviso of Section 3(1) of the Civil Law Act. 3.3Application of English Law in Commercial Matter
Section 5 of the Malaysian Civil law Act 1956 enables the application of English law in commercial matters. English law is to be applicable to the respect to the law of partnerships, corporations, banks and banking, principal and agents, carriers by air, land, and sea, marine insurance, average, life and fire insurance, and with the respect of 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 the coming in force of the Civil Law Act 1956 and 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 in any written law. For example, the Contracts Act 1950. If there is express provisions in the Contracts Act 1950, then English law is no longer applicable by the court in giving judgement. If the statutory provision is different from the common law position, English law is also inapplicable. A good example in given in Halsbury s Laws of Malaysia was that if in Malaysia, there is a local legislation about contract law, where a party rescinding a contract was entitled to damages but the provision in English law is not the same, then judge have to give the judgement according to the local legislation and not according to the English law. In Malaysia, the doctrine of restraint of trade is totally different from the common law and we cannot rely on the English common law in deciding cases pertaining with the doctrine of retrained of trade. This can be seen in the case Wriggles worth v Wilson Anthony where the plaintiff claim an injunction to restrain the defendant, an advocate and solicitor who is practicing within a radius of five miles from Kota Bharu, Kelantan. On 20 th September, 1962, the defendant entered into an agreement of service with the plaintiff s firm where the plaintiff agreed to discharge the defendant from the terms and obligations. However, clause 8 of the said agreement stated that the defendant cannot continue practicing as advocate and solicitor within 5 miles from Kota Bharu for two years starting from the date the agreement had been rescinded without the consent from the plaintiff. The defendant continued practicing his profession even though the plaintiff haven t given his consent. The issue is that whether advocate and solicitor can be restrained from exercising his lawful profession. In this case, Hashim J held that:... this case should be decided on the interpretation of section 28 of the Contracts (Malay State) Ordinance, 1950... I do not think the English cases are applicable as the Contracts (Malay States) Ordinance, 1950, is not based on the English law of contract. Section 28 is quite clear. In my opinion, any agreement to restrain the defendant from exercising his lawful profession is void. Besides that, the common law principle is not applicable in the contract law in Malay States relating to cases in which involved the release of the joint guarantor without consent of the other. This can been seen in Song Bok Yoong v Ho Kim Poui a magistrate s civil appeal case, where Macintyre J held that: Counsel relied on English authorities for the proposition that the release of a joint guarantor without the consent of the other would release him from his obligation under the bond. This common law principle is not applicable to contracts in this country. In this country the law relating to contracts is contained in the Contracts (Malay States) Ordinance, 1950 in which some of the provisions are at variance with the principles of common law-as for instance, section 45 which declares that the release of one joint promisor by the promise does not discharge the other joint promisor. This obviously shows that if there
is clear provisions in local legislation in our country, the judges need to decide the case based on the local legislation but not the common law principle. When there is absence of the clear provisions in the Contracts Act 1950, English common law is applicable by the virtue of section 5 of the Civil Law Act 1956. This can be seen in the case JM Wotherspoon & Co Ltd v Henry Agency House where there is a doubt about the position of the defendants firm. It is not sure whether the defendant firm in Kuala Lumpur was an agent del credere of the plaintiff in London or not. In deciding the case, Suffian J held that as the Contracts ( Malay States ) Ordinance No.14 of 1950 is silent on this subject (the del credere agency), by virtue of section 5 (1) of the Civil Law Ordinance No.5 of 1956 the law applicable in England is applicable in the Federation. The issue of del credere agency in contract is also raised in Royal Insurance Group v David, where the judge, Gill AG LP had given his judgement based on the Wotherspoon s case judgement given by the Suffian J in allowing the application of English Law by the virtue of s.5 of Civil Law Act 1956. 3.3Non-application of English Land Law Section 6 of the Civil Law Act 1956 had excluded the application of English land law into the federation. Section 6 had stated that nothing in this Part shall be taken to introduce in Malaysia or any of the States comprised therein any part of the law of England relating to the tenure or conveyance or assurance of or succession to any immovable property or any estate, right or interest therein. English land law cannot be applied in Malaysia because Malaysia already have National Land Code, 1956. We can refer to the case Datin Siti Hajar v Murugesu. In this case, the defendant had built an approach road over the plaintiff s land claiming that he had a right way thereon. The plaintiff sued the defendant trespass and damages. The issue of the case is that whether the English common law is still applicable. It was held that There is clear intention in section 4 of the National Land code, 1956 that rights, liberties, privileges, obligations and liabilities arising under the Land code, 1926 and existing at the time of the commencement of the code shall be governed by the new code and therefore the proceedings in the case are governed by the National Land Code because the express provision in Part 17 of the National Land Code relating to easements, the English common law as to easements had ceased to apply in West Malaysia. Syed Agil Barakbah J stated that:...it is clear that the ordinance allows the reception of the English common law, rules of equity and statutes subject to the conditions already mentioned. However, the effect of section 6 seems to oust the application of the common law and rules of equity relating to land tenure, transfer or transmission of immovable property, or any estate, right or interest therein... In Phileoallied Bank (M) Bhd v Bupinder Signh A/L Avatar Singh & Anor, a case related to Land Law, Gopal Sri Ram JCA had cited the case Lian Keow Sdn Bhd ( In Liquidation) & Anor v Overseas Credit Finance (M) Sdn Bhd & Ors in giving his judgement. In that case, it has been stated that the approach that have to be adopted in applying the rules of equity to the Land Law in our country. Syed Agil Barakbah SCJ held that:...the Torrens system does not prevent or restrict the creation of beneficial interest in land by the way of express, implied or resulting trust arising by operation of law in Malaysia by virtue of
s.3 of Civil Law Act 1956. It does not abrogate the principles of equity but alters the application of particular rules of equity in so far as is necessary to achieve its special objects. In this way, the court is entitled to exercise jurisdiction in person to insist upon proper conduct in accordance with equitable principles and norm... The concept of the English legal mortgage is not recognized in the law of immovable property. However, the courts in Malaysia had always recognise the equitable mortgage created by the deposit of title deeds and the equitable interests in land. The authority on this point is Mahadevan & Anor v Manilaal & Sons (M) Sdn Bhd. The Federal Court judges held that: Our land law does not recognise a mortgage id it means a mortgage in the sense if English land law... But our land law certainly recognises a mortgage in the sense of Torrens system, referred to by text written as Torrens Mortgage... For the purpose of avoiding confusion, our National Land Code drops the word mortgage and uses the word charge in place of Torrens mortgage. Thus when section 21(1) of our Limitation Act speaks of a mortgage it must mean a charge as understood and provided for in Part Sixteen of our National Land Code... In the case of Malayan Banking Berhad v Zahari Bin Ahmad, the defendant owed the plaintiff a certain amount of money by signing a loan agreement. The defendant failed to repay the loan and the plaintiff applied to the court for an order in order to get a write of possession of the property and an order so that they can sell the property. Besides that, they wanted the money earned from the selling of the property be paid to them in satisfaction of the principal sum and the interest due and owing them. In giving judgement, the judge had referred to the Mahadevan s case. It was held by Mohamed Dzaiddin J that: Clearly, the National Land Code does not prohibit the creation of equitable charges and based on a body of authorities, our land laws recognize equitable charges. In a nutshell, the land law in Malaysia do recognizes mortgages but not in the English land law sense. In Malaysia, mortgage must be mentioned as charges so that it would not be confused with the mortgages in the English Land law. 3.4 Application of the 1989 Salvage Convention into Malaysian law In Malaysia, section 403 of the Merchant Shipping Ordinance 1952 is related to the salvage and shipping. In section 403, it was stated that provisions empowering the High Court to decide upon all claims relating to salvage and provision relating to the duty and authority of the receiver of wrecks over vessels in distress, the detention of property liable for salvage by the receiver of wrecks, the apportionment of salvage by the receiver of wrecks or as the case may be, by the High Court. In simple meaning, the High Court have jurisdiction in deciding the case which involves the claiming of the salvage and wreck no matter the wreck or salvage was found in the high sea or not and whether the wreckage was found on land or on sea or partly on both. Since Malaysia still haven t assent to the International Convention on Salvage 1989, the common law of salvage will be applied unless Malaysia have agreed to incorporate the provisions of the International Convention on Salvage 1989, with contractual binding, into the salvage service. In Malaysia, common law had become the only basis for the court to interpret the salvage law other than the provisions provided in the Merchant Shipping Ordinance
1952. English common law is used to guide the Malaysian Court in the Salvage law through the application of the English Law as per stated in the Civil Law Act 1956. 3.5Carriage of Goods by Sea World Trade Organisation (WTO) had released its latest figure on world trade in 2010 on 7 April 2011. For the ranking for 2010, Malaysia had been ranked 23th in the world s leading exporter and 26 in the list of world s leading importers for the merchandise trades. Malaysia used maritime transport to export goods mostly. So, in order to protect the national interest, the government have to give protection to the maritime by ensuring the safety and security of the Malaysian Maritime Zone. Malaysian Maritime Enforcement Agency had been established for the protection of the safety of the maritime. There is no local legislation in our country that can be used to govern the charter parties. Nevertheless, section 5 of the Civil Law Act had stated:...all questions or issue which arise or which have to be decided...with respect to the law of...carriers by air, land, sea, marine insurance, average... the law should be administered in the like case at the date of the coming in force of this Act, if such questions 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. Accordingly, Malaysian court had been following the English common law in deciding cases that is relevant to the maritime area. Nonetheless, there is still exception to the application of English law in maritime matter in Malaysia. Although it is very rare, the application of English law in that matter will contradict with the contractual principles which had been stated in the Contracts Act 1950. In addition, most of the charter party contracts are international contracts that need to be referred to London or New York for arbitration. International contracts need to be referred to London or New York is because in most of the time, the other parties involved are foreigners.