Land Law Notes 3 - Land Law PDF

Preview

Summary

Land  Law  in  Malaysia1 HISTORY  & STRUCTURE  OF  THE  MALAYSIAN  LAND  SYSTEM1 QUESTIONSIn  the  following  competing  claims,  which  takes  priority?  What  is  the  case  law  p...

Description

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&1&

Land&Law&in&Malaysia& 1 HISTORY)&)STRUCTURE)OF)THE)MALAYSIAN)LAND)SYSTEM) 1.1

QUESTIONS)

& In&the&following&competing&claims,&which&takes&priority?&What&is&the&case&law&proving&this?& & E An&equitable&charge&which&is&created&prior&in&time&to&a®istered&charge?& E An&equitable&charge&which&is&created&prior&in&time&to&a&euitable&claim&for&a&contract&of&sale&(not& yet®istered)?& E An&equitable&mortgage&vs&a®istered&charge?&

1.2 SUBJECT)OVERVIEW) 1. 2. 3. 4. 5.

Torrens&system& Indefeasibility& Equity&in&land& Fixture& Dealings& a. Transfer& b. Lease/tenancy& c. Security&transaction& d. easement& 6. Restraint&on&dealings& a. Charge& b. Lien& c. Caveat& d. Prohibitory&order& 7. Miscellaneous& a. Competing&priorities&& b. Power&of&courts&& c. Compulsory&acquisition&(not&covered)&

1.3 GENERAL)LAW)IN)THE)PAST) 1.3.1 The)English)System) Two&types&of&property&in&land&granted&by&the&Crown:& 1. Freehold& 2. Leasehold& &

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&2&

A&record&of&leaseholds&was&kept&by&an&office&of&the&Crown,&but&freehold&titles&circulated&freely&without& any&form&of®istration.&& & Two&types&of&estates&in&land&were&recognized&in&the&English&system:& 1. The&legal&estate&–&ownership&of&land&in&fee&simple&absolute&or&for&a&term&of&years&absolute& 2. The&beneficial&(equitable)&estate&–&other&forms&of&interest&in&land,&e.g&life&interest&or&entailed& interest& 1.3.2 -

-

-

Purchaser)was)required)to)investigate)to)check)that)he)had)good)title.)This)process)was) tedious)and)had)many)disadvantages,)among)them:) Many)deeds,)one)title.&Over&time,&deeds&issued&upon&the&land&would&be&in&circulation&separate& from&the&title.&& TimeUconsuming)search)through)chain)of)title.)A&purchaser&of&land&would&have&to&engage&a& lawyer&to&examine&each&transaction&related&to&the&title&–&whether&a&conveyance,&mortgage,& entailment,&etc.&This&is&the&chain&of&title.& Searching&through&the&chain&of&title&involved&much&time&and&expensive&legal&fees.&& High°ree&of&diligence&required& Uncertainty)of)good)title.&In&order&to&find&out&if&a&vendor&had&good&title&to&sell&the&land,&a&person& would&have&to&discover&every&transfer&of&title&and&interest&created&in&the&title&from&the&time& when&the&land&was&first&converted&from&Crown&land&to&a&freehold.&A&purchaser&is&bound&by&any& legal&interest&created&in&the&title,&even&if&it&has&been&left&out&of&the&chain&of&title.& Lack)of)transparency)in)creation)of)interests,)which)resulted)in)protracted)legal)battles.& Equitable&title&was&obtained&through&a&transaction&with&a&bona&fide&purchaser,&whereas& registration&was&a&mere&formality.&The&concept&of&beneficial&ownership&in&land&meant&that&the& interest&in&land&could&be&split&between&a&legal&title&and&an&equitable&title.&The&principles& surrounding&recognition&of&equitable&interests&were&complex&and&opaque&to&the&layperson& purchaser.&It&was¬&clear&who&was&in&fact&the&true&owner&of&the&land,&and&many×&this&had& to&be&settled&by&the&court.&This&made&conveyancing&an&unnecessarily&complex&process.&&&

1.4 THE)TORRENS)SYSTEM) 1.4.1 How)Torrens)system)came)about)) Ulrich&Hubbe&–&German&lawyer&who&assisted&Torrens;&proposed&a&system&of®istration&based&on& German&system&in&merchant&shipping&and&land®istration.&& Torrens&fought&for&the&system&in&parliament;&introduced&it&into&Australia.& & 1.4.2 &

The)Torrens)system)instituted)in)Australia)resolved)these)issues)by)requiring)all)land)titles)and) subsequent)interests)in)title)to)be)registered.)) In&the&Torrens&system,&a&person&obtains&real&property&by!registration&of&title.&& Every&grant&of&a&fee&simple&(i.e&alienation&of&land&by&the&government)&is&a&fresh&transaction& Registration&is¢rally&controlled&and&conclusive&for&ascertaining&the&nature&of&a&party’s& interest&in&the&land.&

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&3&

1.4.3 Strengths)of)the)Torrens)system) Two&objectives&of&Torrens&system:&& i. Simplicity&of&conveyancing& ii. Certainty&in&title& & “The& idea& that& the& register& should& show& not& merely& that& A& had& signed& a& deed& purporting& to& transfer& property& to& B,& but& the& further& fact& that& the& property& was& thereby& taken& out& of& A& and& vested& in& B& is& so& simple,& and& so& obvious,& that& it& is& astonishing&that&it&was¬&adopted&long&before&in&those&many&jurisdictions&where& Government& was& granting& land& on& unchallengeable& titles,& and& so& there& was& no& problem& of& initial& investigation.& To& remain& good& such& titles& only& had& to& be& maintained;& a& legally& effective& record& of& subsequent& dealing& was& all& that& was& needed.”1& -

-

The&Torrens&system&conserves&the&history&of&transactions&over&the&parcel&of&land,&so&that&it&is& easily&investigated& Caveat&system&operates&to&stop&a&bad&transaction&in&which&property&cannot&pass&due&to&a&prior& interest&in&the&land,&whereas&in&English&law&which&recognizes&equitable&interests&in&land,&there&is& uncertainty&of&title& No&qualified&titles&–&land&must&be&transferred&in&whole&to&one&person&or&in&undivided&shares&to& several&–&land&cannot&be&partially&transferred& Much&simpler&in&procedure&for&transfer&of&land&and&ensuring&title&for&purchaser&

& “"The&provision&for&lodging&a&caveat&is&for&the&very&purpose& of&enabling&parties&to& protect& interests& which,& owing& to& a& defect& in& the& instrument& or& wantof& form& or& otherwise,&they&cannot&protect&by&the&ordinary&process&of®istration.&A&caveat&is&a& temporary& impediment& to& registration& of& dealing& and& is& not& necessarily& a& blot& on& the&title.&The&whole&system&of&caveats&is&founded&on&the&principle&that&they&existfor& the&protection&of&alleged&as&well&as&proved&interests&and&of&interests&that&have¬& become& actual& interests& in& land.& The& caveator's& claim& is& neither& increased& nor& diminished& by& the& lodgment& of& caveat.& It& is& a& remedy& ancillary& to& such& other& proceedings&as&may&be&proper&for&disposing&of&the&question&in&dispute."2&

&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& 1 &S.&ROwton&Simpson.&Land!Law!and!Registration.&Chapter&5.&The&Torrens&System.&& SimpsonE1976ELLRECh5ETorrensESystem.pdf& & SimpsonE1976ELLRECh5ETorrensESystem.pdf& 2 &S.K.Das.&The!Torrens!System!in!Malaya.&P326& & 3 &https://hklandlaw.wordpress.com/2011/03/02/onceEthereEisEaEvalidEcontractEtheEsellerEisE 2 &S.K.Das.&The!Torrens!System!in!Malaya.&P326& constructiveE trusteeEofEtheEproperty/&&

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&4&

1.4.4 i.

The)Torrens)system)relies)on)three)principles:) Curtain&and&mirror&principles&–&one&does¬&need&to&go&behind&the&certificate&of&title,&as&all& information&is&considered&to&be&on&the&title;&ownership&need¬&be&proven&by&searching& through&the&chain&of&title.&S340(2)&&&340(3)&–&exceptions&to&indefeasibility&and&proviso&for& deferred&indefeasibility.&& ii. Conclusiveness&of®ister& iii. Indemnity&principle,&i.e&indefeasibility&of&title&–&protects&against&loss&caused&by&fraud&or&error& of&the®istrar&of&titles;&once&purchaser&is®istered&on&the&title,&purchaser&becomes&owner& to&the&exclusion&of&all&others;&title&cannot&be&challenged&–& indefeasibility&of&title.&&

1.4.5 Curtain)and)mirror)principle:)S340)NLC)–)indefeasibility)of)title ) See&chapter&on&indefeasibility&of&title.& S86&–&there&shall&be®ister&and&issue&documents&of&title& S89&–®ister&document&of&title&is&conclusive& S206(1)&–&all&dealings&in&land&are&effective&only&upon®istration& 1.4.6 Conclusiveness)of)Register:)S89)NLC)–)transfer)of)title)occurs)only)with)registration) The&Code&recognizes&a&single&estate,&the®istered&estate.&It&does¬&recognize&the&equitable&estate&as& in&the&English&system.& The®istered&proprietor&is&deemed&to&be&the&owner&of&the&land.&& Also,&to&create&a&valid&interest&in&land,&the&interest&must&be&properly®istered&following&the& requirements&in&S207E212.& See&chapter&on®istration&of&title&for&more&information.& && 1.4.6.1 Dr!Ti!Teow!Siew!&!Ors!v!Pendaftar!Geran?Geran!Tanah!Negeri!Selangor![1982]!1!MLJ!38! - The&effective&date&of&alienation&of&land&is&that&of®istration&of&title&to&the&land&and¬&that&of& approval&by&the&state&authority& - See&also&S78(3)&–&alienation&only&takes&effect&upon®istration& 1.4.6.2 Teh!Bee!v!Maruthamathu![1977]! - App&claimed&for&trespass&and&Resp&resisted&on&the&ground&that&App’s&title&was&void& - The&fact&that&the®ister&document&of&title&was&in&the&name&of&the&appellant&was&conclusive& evidence&that&the&title&to&the&land&was&vested&in&the&appellant& - When®istered,&a&title&becomes&indefeasible&and&remains&so&unless&declared&otherwise&by&the& court;&and&the&court&can&only&remove&the&title&if&it&is&challenged&under&the&narrow&exceptions& stated&in&S340.& & & The&concept&of&conclusiveness&of®ister,&and&the&curtain&and&mirror&principle,&are&captured&in&S389& read&with&S340,&and&is&one&of&the&key&features&of&the&Torrens&system.& & 1.4.6.3 Teoh!Heng!Seng!v!Teoh!Kiew!Seng![200]!I!MLK!707! - Proprietor&was&alleged&to&be&holding&the&property&as&trustee,&but&the&claim&failed&as&there&was& nothing&on&the&title&to&indicate&the&existence&of&a&trust&

Alissa&Rode& -

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&5&

What&is&memorialized&on&the&title&document&is&conclusive.&There&is&a&presumption&of&ownership& with&proprietorship&over&the&land&–&Pendakwa!Raya!v!Tan!Sri!Muhammad![1999]!2!MLJ!305!at! pg!320&

& & 1.4.7 &

The)position)of)a)trustee)under)the)Torrens)system)

1.4.8 &

The)importance)of)appointing)a)trustee)and)the)role)of)a)trustee)under)law)

1.4.9 1. 2. 3. &

The)position)of)a)buyer)under)law) S206(3)&Contractual&rights&–&the&Code&provides&contractual&rights&to&protect&buyers&of&land& S323&–&able&to&enter&private&caveat& Right&to&enforce&specific&performance&

1.4.10 4)Equitable)Remedies)available)in)contracts)involving)land)(S206(3)):)) • Specific&Performance& • Rectification&of&contract&–&Oh&Hiam&–&using&an&equitable&remedy&will¬&offend&S6&of&the&civil& law&act&(as&opposed&to&equitable&principles,&which&would)& • Injunction&& • Rescission&of&contract& 1.4.11 Equity)and)the)Torrens)system)in)Malaysia:) S6&CLA&1956&states&that&the&English&law&as&relating&to&immovable&property&and&any&interest&created&with& regards&to&such&property&is¬&applied&in&Malaysia.&&& & 1.4.11.1 UMBC!v!PHT!Kota!Tinggi!(1984)!–! Privcy!Council! Facts:&State&authorities&alienated&land&for&term&of&99&years;&a&number&of&charges&were&made;&the&annual& rent&was&due&and&fell&in&arrears;©&of¬ice&was&served;&due&to&default&in&payment,&the&collector& made&an&order&for&the&land&to&be&forfeit&to&state&authorities& Decision:&no&relief&for&order&to&set&aside&the¬ice&& The&NLC&is&a&comprehensive&code&of&law&governing&the&tenure&of&land&in&Malaysia.&Therefore,&there&is&no& room&for&importation&of&English&law,&except&where&expressly&provided&by&the&Code&itself.& &

1.5 SOURCES)OF)LAW) & National&Land&Code&1965& National&Land&Code&(Penang&and&Malacca&Titles)&Act&1963& Sarawak&Land&Code&(Cap&81)& Sabah&Land&Ordinance&(Cap&68)&

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&6&

All&practice&the&Torrens&system&except&Sabah.& & S206&NLC&states&the&rules&for®istration:& S206(1)&–&Compliance&with&S207E212;®istered&as&under&Part&Eighteen& S206(2)&–&exclusions:&tenancies&exempt&from®istration&(cf:&S213(2));&liens&(cf:&S281)&&& S206(3)&–&Registration&does¬&affect&contractual&obligations&

1.6 EQUITABLE)RELIEFS) & Does&Malaysia&follow&the&equitable&principles?&Should&equitable&principles&be&used&in&a&system&where& property&is&transferred&based&on®istration&of&title?& & S3&Civil&Law&Act& S6&Civil&Law&Act& 1.6.1 &

Diversity)of)views)on)euity)and)the)Torrens)system)

1.6.1.1 Wilkins!v!Kannamal![1951]! “the&Torrens&system&is&a&system&of&conveyance,&it&does¬&abrogate&the&principles&of&euity,&and&it&alters& the&application&of&particular&rules&of&euity&but&only&as&far&as&is&necessary&to&achieve&its&own&special& objects.”&–&similar&remark&made&in&Lian!Keow!in!Liuidation!v!Overseas!Credit!Finance&[1988]& 1.6.1.2 Verama!v!Arumugam![1982]! “lands&laws&are&governed&by&the&NLC&which&does¬&allow&the&law&to&be&tempered&by&euity.”& 1.6.1.3 UMBC!v!PHT!Kota!Tinggi! The&NLC&is&a&comprehensive&code&governing&land&tenure&in&Malaysia&and&there&is&no&room&for&the& importation&of&English&law.&& 1.6.1.4 Chin!Cheng!Hong!v!Hameed!–!conclusiveness!of!register;!! - Jan&1948:&1st&resp&sold&land&to&App.&Land&was&actually&owned&by&the&1st&to&4th&Resps,&in&a& partnership&arrangement.& - May&1948:&2nd&and&3rd&Resps&entered&a&caveat& - App&request&for&specific&performance&denied&at&trial;&app&appealed&to&be&recognized&as&bona&fide& purchaser&for&value&as&he&had&no¬ice&of&the&other&Resps&equitable&claims&on&the&property& Held:&The&agreement&was&a&nonEregistrable&instrument&and&did¬&create&an&interest&in&the&land& The&contractual&right&of&the&App&could¬&override&the®istrable&interest&of&the&Resps.&App&could&only& obtain&damages&for&breach&of&contract.&& “…such&instruments&do¬&create&an&estate&or&interest,&legal&or&equitable,&in&the& land,&but&create&a&contractual&right,&a&personal&right&of&action;&it&passes&no&actual& interest&in&the&land&that&can&be&called&an&equitable&estate&in&the&ordinary&sense,&but& an&equitable&interest&of&a&contractual&nature&under&the&instrument&consisting&of&a&

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&7&

right&to&be®istered&as&the&owner&of&the&interest&purported&to&be&conferred&by&the& instrument.”& 1.6.2

Equitable)relief)against)forfeiture)

1.6.2.1 UMBC!v!PHT!Kota!Tinggi! National&Land&Code&is&comprehensive&on&treatment&of&land.&No&equity&is&allowed&except&where&stated&in& the&act.&& & 1.6.3 Equity)of)redemption)&)Equitable)mortgage) Equity&of&redemption&was&historically&the&right&to&redeem&the&land&that&has&been&charged,&even&though& the&period&for&paying&up&the&charge&is&long&past&due.&This&right&was&a&recognized&form&of&interest&in&the& land&in&English&law.&In&its&modern&form&(after&Law&Of&Property&Act&1925),&it&is&the&right&to&redeem&the& land&during&the&term&of&the&mortgage.& 1.6.3.1 Malayan!United!Finance!v!Tay!Lay!Soon! Facts:&& - Registered&proprietor&had&charged&land&for&a&loan&of&RM1.5mil,&failed&to&repay& - Resp&had&entered&into&SPA&with&proprietor,&and&entered&two&caveats,&and&sued&for&specific& performance.& - App&(chargee)&wished&to&foreclose,&but&Resp&had&lodged&two&private&caveats&against&the&land& after&the&charge.&App&brought&action&for&removal&of&caveats&under&S327&NLC.& - Chargee&claimed&they&had&indefeasible&right&of&charge&as&the&charge&had&been®istered&five& years&prior&to&the&caveat,&and&priority&of&charge&allowing&them&to&& - Resp&claimed&he&had&a&statutory&or&equitable&right&of&redemption&of&a&charge& Issue:& - Indefeasibility/priority&of&charge&over&caveat& - Equitable&right&of&redemption&vs&discharge&of&charge& Authorities:& - S249(1)&&&S266(1)&–&right&of&chargor&to&tender&payment& - S327&–&aggrieved&party&may&remove&caveat&through&court& - S326(1)&remove&caveat&through&Reg& Held:& - &“It&is&the&chargor&or&the&borrower&who&has&the&right&to&discharge&the&charge&and&the&right&to& tender&payment&before&the&judicial&sale&is&specifically&and&exclusively&granted&to&the&chargor.& Since&the&right&or&interests&in&the&charged&land&remains&with&the®istered&owner&he&has& nothing&to&redeem.&To&speak&of&the&equity&of&redemption&or&the&like&of&it&in&the&situation&under& the&National&Land&Code&is&clearly&technically&and&legally&incorrect.”& - “In&Malaysia&it&[equity&of&redemption]&does¬&exist&at&all…”&& - “Under&the&National&Land&Code&the&interest&in&the&land&subject&to&a&charge&does¬&vest&in&the& chargee&but,&upon®istration&of&a&charge,&it&renders&the&land&subject&to&the&charge&liable&as&a& security&only&in&accordance&with&the&provisions&of&the&charge,&express&or&implied&(s&243).&Under&s& 244(1),&the&chargee&is&entitled&to&the&custody&of&the&issue&document&of&title&so&long&the&liability& stays&under&the&charge.&There&is&no&statutory&provision&for&the&discharge&of&the&charge&by&the&

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

&&&&&&&&&8&

chargor&but&his&right&and&that&of&a&borrower&to&do&so&is&embodied&in&the&provisions&of&the&charge& itself.”& &

& NB:&Eng&Ah&Mooi’s&case&(which&discussed&the&equity&of&redemption&and&allowed&it)¬&followed.&&

1.6.4 Doctrine)of)Constructive)notice) 1.6.5 Doctrine)of)Irrevocable)licence) A&licence&to&occupy&is&generally&revocable,&but&may&become&irrevocable&if&the&occupier&has&invested& substantially&in&modifying&the&property&with&the&knowledge&of&the&landlord.&& & In&the&Torrens&system,&tenancy&is&nonEregistrable,&as&provided&in&S??.&& 1.6.5.1 Devi!v!Francis! The&appellant&occupied&that&part&of&the&respondent's&land&on&which&stood&a&house&owned&by&the& appellant.&The&appellant&had&commenced&occupation&of&the&said&house&after&the&purchase&of&the&same& from&the&respondent's&mother&the&terms&of&which&purchase&were&incorporated&in&an&agreement&of&sale& in&writing&between&them.&The&respondent&subsequently&gave&one&month's¬ice&and&claimed& possession&of&the&ground&on&which&the&house&was&erected&alleging&that&the&tenancy&was&of&the&ground& on&which&the&house&was&erected,&terminable&by&one&month's¬ice.&The&appellant&in&his&defence&relied& entirely&on&the&agreement&and&contended&that&in&view&of&clause&4&of&the&agreement&the&tenancy&had¬& been&determined&and&that&the&"appellant&was&entitled&to&occupy&the&land&and&house&by&law&and&by&the& said&agreement".& Held:& 1) Contractual&obligations&apply&–&the&Resp&was&prevented&from&evicting&the&tenant& 2) In&the&alternative,&the&doctrine&of&irrevocable&licence&was&discussed.&& Note:!However,!do!not!use!this!case!to!say!that!irrevocable!licence!was!introduced!into!Malaysia.!! 1.6.6

Equitable)Remedy)of)Rectification)

1.6.6.1 Oh!Hiam!v!Tham!Kong! Facts:&Pf&sold&rubber&lands&to&the&Df,&and&there&was&a&mistake&in&that&a&certain&lot&of&land&was¬&meant& to&be&sold.&&The&Df&had&already&become&the®istered&proprietor&when&the&mistake&was&discovered.&& Issue:&Whether&the&equitable&remedy&of&rectification&was&available&in&a&sale&of&land&under&the&NLC,&as& S42&provides&for&indefeasibility&of&title.& Held:&& - Torrens&system&designed&to&provide&certitude&in&transfers&of&land& - Can&be&achieved&without&depriving&equity&of&the&ability&to&exercise&jurisdiction&in&personam.& Examples&of&equity&acting&in&personam,&all&of&which&the&court&is&competent&to&order,&are:& o Injunctions&against&sale& o Order&for&specific&performance& o Order&for&execution&of&a&trust& - Therefore&the&court&may&order&the&Df&to&defeat&his&own&title&as&equity&in&personam&may&still&act& on&transactions&over&land&

Alissa&Rode&

&

&

&

B.Juris&–&Land&Law&Notes&

&

&

&&&&

Gill,&J:&Apart&from&authority&their&Lordships&would¬&expect&t...