Equity under the Malaysian Law PDF

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CHAPTER 2:EQUITY AND THE MALAYSIAN LEGALSYSTEMQuestions attempted by:Zaimah Ameera Mohammad Ali (1511042)Nur Zulaikha binti Rohaizat (1510508)Nur Kamilah binti Che Ibrahim (1519454)As of: 9 thOctober 2017QUESTION 3Section 6 of the Civil Law Act 1956 prohibits anyelement of English rules of equity to...

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CHAPTER 2: EQUITY AND THE MALAYSIAN LEGAL SYSTEM Questions attempted by: Zaimah Ameera Mohammad Ali (1511042) Nur Zulaikha binti Rohaizat (1510508) Nur Kamilah binti Che Ibrahim (1519454)

As of: 9th

October 2017

QUESTION 3 Section 6 of the Civil Law Act 1956 prohibits any element of English rules of equity to the Malaysian land tenure. (a) In light of the said provision, explain and analyse the influence of equity to Malaysian land law and support your answer with relevant cases. (b) Decide whether reform is needed in this situation

(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES.

S. 6 CLA 1956- “Nothing in this Part shall be taken to introduce into Malaysia or any of the States comprise therein any part of law of England relating to the tenure or conveyance or assurance of or succession to any immoveable property or any estate, right or interest therein.”  Issue   Whether section 6 prohibits the application of equity in land matter in Malaysia?   If not prohibited, is equity accepted under Malaysian Land Law? 

(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES. 

First View: Equity is Prohibited  Equity has no place under the Malaysian Torrens System  Case: Datin Siti Hajar v Murugasu  the NLC leaves no room for doubt that the acquisition of easements by the common law of prescription is no longer applicable in Malaysia. Only provisions under NLC applicable.  Case: United Malayan Banking Corporation Bhd v Pemengut Hasil Tanah Kota Tinggi  Privy Council held that S.6 CLA prohibits application of English rules of equity relating to tenure, including rules relating relief against forfeiture.

(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES. 

First View: Equity is Prohibited (Cont.)  Case: Haji Abdul Rahman v Mohamed Hassan English equitable rule that “once a mortgage, always a mortgage” rejected by the court as any dealings outside of the statute is declared null and void Second View: Equity is Applicable under Malaysian Land Law  Malaysian courts have an inherent jurisdiction to do justice between parties, thus to achieve justice, court is allowed to apply equity in any circumstances including land transactions

(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES. Second View: Equity is Applicable under Malaysian Land Law (Cont.)  Case: Motor Emporium v Arumugam  S.206(3) of NLC in personam claims relating to unregistered dealings can still be enforced by the court  Case: Karuppiah Chettiar v Subramaniam  Case: Devi v Francis Chang Min Tat J reiterated land law in England is one thing and equity is another matter. Opinion of PC in UMBC case should be confined only to the issue of applying equitable rules on relief against forfeiture and not extended to others.

(B) DECIDE WHETHER REFORM IS NEEDED IN THIS SITUATION 

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Yes reformation of the law is necessary in order to avoid any confusion with regards to whether equity is applicable under the Malaysian Torrens System. S.6 CLA should be modified so that application of equity is not prohibited in Malaysian land law There should be a clearer provision to give a clearer stance on the position of equity under Malaysian land law Salleh Buang in his book Malaysian Torrens System:

“long line of authorities from early as pre-Code era until Mahadevan s/o Mahalingam, and beyond have established beyond doubt that equity is here to stay, existing side by side with the Torrens system, despite the court’s vehement insistence that “under the Torrens system the register is everything”.”

QUESTION 4 “The Torrens system is designed to provide simplicity and certitude in transfer of land which is amply achieved without depriving equity of the ability to exercise its jurisdiction in personam on grounds of conscience.” -Oh Hiam & Ors v Tham Kong [1980] 2 MLJ 159 at 164

Explain the above statement briefly and discuss, referring to decided cases, the principles that the courts have applied in respect of the following: a) Equitable Ownership b) Equitable Lease

EXPLAINING THE STATEMENT “The Torrens system is designed to provide simplicity and certitude in transfer of land which is amply achieved without depriving equity of the ability to exercise its jurisdiction in personam on grounds of conscience.” -Oh Hiam & Ors v Tham Kong [1980] 2 MLJ 159 at 164

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The deliberation and different views in applicability of equity side by side with the Malaysian Torrens System. The important point from the judgement is per underlined. Ambiguity in legal provision has been the tool utilized by judges who are in favour of equity to allow for its application.

(A) EQUITABLE OWNERSHIP

DEFINITION AND ILLUSTRATION   

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Ownership: the exclusive right to use, possess, and dispose property. Legal Ownership: ownership from a legal title to a property. Equitable Ownership: ownership which arises out of beneficial rights given by a contract or trust relationship. E.g.

Vendor

Purchaser Equitable Owner

Legal Owner Transfer of right through a sale and purchase agreement

Trustee

APPLICATION OF EQUITABLE OWNERSHIP IN MALAYSIA 

In Munah v Fatimah [1968] 1 MLJ 54 it was held that beneficiaries of an estate who had contracted to sell the land to the plaintiffs but failed to transfer the land legally to the plaintiff was ordered by the court to effect the transfer.

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The court recognised that the plaintiff was the equitable owner of the land after signing the contract and going into possession.

(B) EQUITABLE LEASE

EQUITABLE LEASE A lease is an interest in the land that gives exclusive possession to the tenant for a fixed period of time.  The most important aspect here is the grant of exclusive possession. Thus, the right of all others, including the landlord is excluded. If the person to whom the interest is given does not have the right of exclusive possession, then the interest may be a mere personal right to occupy; generally considered as licence. 

EQUITABLE LEASE An agreement for the grant of an interest in land on terms that correspond to a legal lease but do not comply with the necessary formal requirements of a legal lease. For example, if L purports to grant T a lease for seven years but the transaction is effected by simple written contract to grant a lease rather than by deed, the court may enforce the contract to grant the lease between the parties. This follows the principle that “equity looks upon that as done which ought to be done” (Walsh v Lonsdale (1820) 21 Ch D 9). - Oxford reference 

APPLICATION OF EQUITY 

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“But the NLC does not say that an unregistered lease is void for non-registration. 'In fact, it even provides for the recognition of the operation of contractual transactions in so far as land dealings are concerned' (Land Law in Malaysia, Cases and Commentary by Teo Keang Sood and Khaw Lake Tee, (2nd Ed) at p 232). Section 206(1)(b) of the NLC provides that 'no instrument effecting any such dealing shall operate to transfer the title to any alienated land or, as the case may be, to create, transfer or otherwise affect any interest therein, until it has been registered under part eighteen'. But s 206(3) of the NLC provides that 'nothing in sub-s (1) shall affect the contractual operation of any transaction relating to alienated land or any interest therein. Evidently, while s 206(1)(b) of the NLC provides for the right ad rem, s 206(3) provides for the right in personam. The NLC recognises the distinction.

APPLICATION OF EQUITY 

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In our view, s 206(3) of the Code contains an express provision which states that the provisions of the Code requiring a dealing to be effected in the statutorily prescribed manner shall not '... affect the contractual operation of any transaction relating to alienated land or any interest therein'. This provides statutory authority for the liberal application of equity whenever there is a basis for that …However, it is a condition precedent for the application of s 206(3) that there is in existence a transaction relating to alienated land or an interest therein which is valid and enforceable as a contract')…. Consequently, 'although the agreement was not a proper instrument for registration as a lease the authorities are clear that it may be treated as an agreement for a lease. The validity of contracts relating to alienated land or any interest therein is explicitly declared in s 206(3) of the National Land Code' (Yong Tong Hong v Siew Soon Wah & Ors [1971] 2 MLJ 105 per Ong CJ (Malaya), delivering the judgment of the court). An unregistered lease is certainly not void (see York House Pty Ltd v Federal Commissioner of Taxation (1930) 43 CLR 427, at p 435). S & M Jewellery Trading Sdn Bhd & Ors v Fui Lian-Kwong Hing Sdn Bhd FC 2015

Thank you....