Court system in Malaysia practicing judicial precedent

In 2010, Mr Justice Peter, a high court judge sitting alone, in deciding a case which has similar material facts to one decided by the Court of Appeal in 2009. Can he decline to be bound by this decision? Discuss.

What do you think are the strengths and weaknesses of case law as a source of law? Discuss.

On the 29th October 2010, Steven advertised in the NewFocus Paper, “Yamaha Piano latest model, excellent condition, RM 15,000, interested please call 016 1234567".

On the 1st November 2010, Tanny after seeing the piano, offered RM 10,000 to buy the piano. Steven said “I will not sell it below RM 14,000 and I will not sell it to anyone else before 7th November 2010."

Tanny went to Australia for a few days and came back to Malaysia on the 7th of November 2010. On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM 14,000. Steven received this letter on the 11th of November 2010.

Discuss the above issues and explain if Tanny’s letter of acceptance is valid.

Question 1 (a)


No, Mr Justice Peter cannot decline to be bound by the decision of Court of Appeal.

One of the reasons is because the court system in Malaysia is practicing a judicial precedent. Judicial precedent is a previous judicial decision or preceding that may adopted by the judges. (Glossary of Common Civil Litigation Terms, Retrieved November 9, 2010) The decisions that made by the previous judges in the same circumstances are binding upon future cases based on the hierarchy of the court (diagram 1). For instance, the Federal court decision automatically binds a Court of Appeal, High Court and subordinate courts. In this case, Mr Justice Peter is the High Court judge, so he is bound to the decision of the Court of Appeal. (Krishnan, 2009, pg 20)

Court of Appeal is the original precedent who setting a new precedent, judge merely making a new decision and new law or substantially modified interpretation of existing law. Since the precedent already existed in the year 2009, which means that Court of Appeal has already made the new decision in that year. (Krishnan, 2009, pg 20)

Meanwhile, Mr Justice Peter is bound to declaratory precedent. Declaratory precedent is actually explained that the judge merely applying an existing law. Mr Justice has to follow the previous decision made by the Court of Appeal since the case has identical facts.

Based on this case, it is considered as binding precedent. It is a precedent from the previous case which must be adopted even though the judges in later case disagree in the legal principle. Actually, binding precedent is also known as doctrine of stare decisis in English law. The principle of stare decisis includes obiter dictum and ratio decidendi. Ratio decidendi is defined as the legal reasoning upon which the decision in that case was based and it might be adopted by judges in future cases when facing with identical facts (Lee Mei Pheng, 2009, pg 29). Therefore, we can say that Mr Justice is using ratio decidendi as his reason of decision.

Besides, there are actually three exceptions to the principle that the Court of Appeal was bound to adopt earlier decision of its own as well as those of courts of co-ordinate jurisdiction. The exceptions are as follows: (Lee Mei Pheng, 2009, pg 33)

When there is a conflict of decisions, the court is entitled to decide which one to follow.

The decision though not expressly overruled, cannot, in the opinion of the court, stand with a decision of the Privy Council (final court of appeal of Malaysia).

The decision was given per incuriam in that it acted in ignorance of a decision of the Privy Council (final court of appeal of Malaysia) which would affect its decision had its attention been so drawn.

Refer to the case, it is found out that Mr Justice has no indication of these three exceptions above; therefore he is bound to take the decision of the Court of Appeal.

Superior Court

Diagram 1: Hierarchy of the Court System (Superior Court)

Question 1 (b)


Case law is a system whereby it requires the judges to adopt previous decision. Once a precedent has been decided, it remains binding until it is being overruled by a higher court in a later case. However, it is certainly that case law has its own strengths and weaknesses.

One of the strengths of case law is uniformity. It implies people are being treated equally in the eyes of law. Besides, There is certainty exist since the court is bound to adopt the decision if the problem has been solved before. It also offers advantage of time saving as there is an existing solution for most circumstances. Furthermore, legal cost to be incurred can be minimized as the case resolved quickly. Most importantly, it is to be practical in nature as decisions or solutions are made based on the real facts. The judge’s trait will not affect the outcome of a dispute in court because the judges will be bound to adopt the previous decisions. (Krishnan, 2009, pg.21 )

On the other hand, it is firm and rigid in the sense that once a rule has been created, it is binding even if thought to be wrong until it is being overruled. There is an issue regarding complexity as hundreds of cases are being reported each year thus it will be difficult to track relevant precedent which should be adopted. It is also bulky because too many cases that no one could learn all of it; when there is too many precedents exist, the possibilities of the outcome would be relatively high. Moreover, the body of the case law may sometimes fail to grow quickly to meet the current societies’ norm. Case law may also be illogical due to its rigidity. Judges may choose any distinctions to avoid from following the rule, hence introducing an element of illogicality and artificiality into the law. Sometimes, it is difficult to express whether it is ratio decidendi or orbiter dictum, thus it crashes the certainty of the case law as a source of law. (Krishnan, 2009, pg.21)

Question 2


‘Steven advertised his piano in the NewFocus Paper in which his intention to sell it at RM15 000’. The intention of the parties is crucial in the determination of an advertisement whether to be regarded as an offer or an invitation to treat. An offer is defined in Section 2 (a) of Contracts Act, 1950: White v Bluett (1853) as a proposal which is made when one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence. On the other hand, an invitation to treat is defined as inviting public to make an offer: Majumder v Attorney General of Sarawak (1967). In this case, it is an invitation to treat because Steven himself was inviting whoever is interested to purchase the piano; in other words, he was asking people to make an offer. (Krishnan, 2009, pg 42-45)

On the 1st November 2010, Tanny went to see the piano and request to buy the piano for RM 10 000. Now, Tanny is an offeror because he is making an offer to Steven by stating his intention to purchase the piano for RM 10 000. An offer must be clear, precise, definite and complete: Gunthing v Lynn(1831). The offer is clear, definite and certain as it is the exactly piano which is identified and Tanny himself has stated the total price of RM 10,000. (Krishnan, 2009, pg 44)

Besides, there is evidence showing that Tanny is making an offer to Steven. According to Section 4 (1) of the Contracts Act, 1950, an offer must be communicated: Taylor v Laird. In this case, the offer is communicated between Steven and Tanny. Steven was actually being told by Tanny that the piano is only worth RM 10,000 which means that Steven was aware of the offer. Therefore, it proves communication existed between the both parties. (Krishnan, 2009, pg 44)

At the same time, when Steven said that he will not sell the piano below RM 14 000, he is actually attempting to make a counter offer. Counter-offer is defined as making a new offer and it operates as a rejection of the original offer: Hyde v Wrench. Steven was rejecting the original offer by expressing his intention to sell the piano for only prices that above RM 14 000. As a result, the original offer by Tanny has been modified. Now, Steven would likely to become the offeror by making a new proposal. As for Tanny, the previous offeror become the new offeree who has the right to accept or reject the new offer. (Krishnan, 2009, pg 49)

Based on the case, Steven also mentioned that he would not sell it to anyone before 7th of November 2010. Therefore, we assumed that Steven was actually intended to reserve the piano for Tanny. However, Tanny remained silent in compliance with Steven’s statement. Silence cannot be prescribed as a manner of acceptance, thus it could not be a valid acceptance. (Krishnan, 2009, pg 52)

On the 8th of November 2010, Tanny posted a letter to make an acceptance to the offer which is to buy the piano for RM 14,000. According to the postal rule, acceptance by post is deemed to take effect when the letter which is correctly addressed and stamped, is actually placed in the post box. Under Section 4(2) (a) of Contracts Act, 1950, once a properly stamped and properly addressed letter of acceptance is posted into the mail box, the contract is said to be a valid contract, even if the letter is lost: Adam v Lidsell. By the time Tanny placed his letter of acceptance to the post box, Steven is bound to the contract even though he has no knowledge of the acceptor’s action. (Krishnan, 2009, pg 53-54)

According to section 7(a) of Contracts Act, 1950, acceptance made must be absolute and unqualified. Besides, acceptance must be made in reliance upon the offer and it must correspond with all the terms of the offer. (Krishnan, 2009, pg 51)

However, the letter of acceptance posted by Tanny could not be a valid acceptance. Under Section 6 of Contracts Act 1950, a revocation incurred either by (i) communication of notice of revocation, (ii) lapse of time, (iii) mental disorder or death of either parties, (iv) failure of acceptor to fulfill a condition precedent to acceptance. In this case, Tanny posted the letter on 8th November 2010 but Steven’s offer was only valid until 7th November 2010. Therefore, the offer satisfies Section 6 of Contracts Act 1950 that it has actually been revoked due to lapse of time. (Krishnan, 2009, pg 49 & 55)

There is offer exists but the acceptance could not be valid. Therefore, no contract is being formed.