Private Law Theory

ABSTRACT
Part VI of the Malaysian Contracts Act 1950 (‘of certain relations resembling those created by contract’) embodies the old notion of quasi-contract or implied contract – what is now known under English Law and in other Common Law jurisdictions as restitution of unjust enrichment. The landmark decision of our Federal Court, in the case of Dream Property Sdn Bhd v Atlas Housing Sdn Bhd gave recognition to ‘unjust enrichment’ as a separate cause of action in Malaysia. However, the law of unjust enrichment in Malaysia is at its infancy and still developing. This paper focuses on two main questions that arise from that decision. Firstly, on the legal consequences of the court’s apparent adoption of the civil law ‘absence of basis’ approach to determine whether an enrichment is ‘unjust’, rather than the traditional ‘unjust factor’ approach under English Common Law, and how this might affect the future development of unjust enrichment as a separate cause of action in Malaysia. Secondly, on the larger question of what the law of unjust enrichment in Malaysia now is or should be – whether the correct approach is to develop unjust enrichment within an apparent ‘dual legal regime’ ie the statutory regime under the Contracts Act 1950 and the Common Law regime; or rather to use the Common Law by analogy to develop the contents (ie detailed rules and principles) of the Contracts Act 1950 (Part VI) in a principled approach that may require modern restatement for practical use today. Using the doctrinal and comparative methodology, it is the paper’s findings that the latter ‘unified’ approach is preferable as a way forward for Malaysian courts to develop our law of unjust enrichment and using the ‘unjust factor’ approach, for reasons outlined in this paper.

Siti Aliza Alias and Ida Madieha Abd Ghani Azmi, The Law of Restitution of Unjust Enrichment in Malaysia: A Search For Principle, post Dream Property, IIUM Law Journal, 32(1), 153-186. Published 31 May 2024.