Subsection (1) applies to the states of West Malaysia which corresponds to the former Federated and Unfederated Malay States, while Subsection (2) applies to the former Strait Settlement colonies of Penang and Malacca, and also the Borneo States of Sabah and Sarawak. The difference between the two subsection is not limited for absolute application, but there is also an important substantive difference in that under subsection (1) for the states of west Malaysia other than Penang and Malacca, the law to be administered in England in the like case ‘at the date of the coming into force of this Act’.
However, under subsection (2) for Penang, Malacca, Sabah and Sarawak, the law to be administered is the same as would be administered in England in the like cases ‘at the corresponding period’. Therefore there is a cut-off date for the application of English law in commercial matters to the States of West Malaysia other than Penang and Malacca. The cut-off date was 7 April1956 which was the date of the coming into force of the Civil Law Act 1956. For Penang, Malacca and East Malaysia there is no cut-off date.
It would appear, therefore, that statue has provided for the continuing reception of English law in mercantile matters for Penang, Malacca, Sabah and Sarawak, whereas for the other Malaysian States, there is no such continuous reception. However Malaysian judges seldom refer to the provisions and their implications when they make reference to or attempt to follow the common law. There is a tendency therefore, for Malaysian judges to use English precedents quite freely, regardless of whether the case in Malaysia took place in Penang, Malacca or the other states of West Malaysia.
The scope of section 5 as a whole is limited to the applicable law in cases of commercial matters or mercantile law generally. Some specific subjects under this broad heading have been itemized under section 5(1) that is, law of partnerships, corporation, banks and banking, principals and agents, carriers by air, land and sea, marine insurance, average, and life and fire insurance. Finally it is to be noted that unlike section 3(1), section (5) of the Civil Law Act refers to English law and not the common law of England and rules of equity are a part of equity.
No doubt, the common law and rules of equity are part of ‘English law’, but the term ‘English law’ encompasses more than just the common law and rules of equity and it would also include English statutory law. The application of English law can only be done if there is no other provision in any written law. As mentioned earlier the section 6 of the Civil Law Act 1956 is the part of the land law. None of English law will be applied to the land matters in Malaysia. This is because in Malaysia the National Land Code is the law that governs the land matters.