Malay reserved land

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Malay reserved land

  1. 1. LAND RESERVATION Rationale and importance of reserving land for a particular purpose or community 05/14/14 Ainul Jaria Maidin _2011 1
  2. 2. Purpose of Land Reservation • The act of reserving land for public purposes has been a prominent feature of a civilised nation for a long time. • Reason for reserving land is to ensure that it will be available when it is needed to meet the requirement of the public especially for purposes related to education, religion or other social activities such as a playfield to promote physical activities. 05/14/14 Ainul Jaria Maidin _2011 2
  3. 3. • Besides reserving land for certain public purposes, land can be reserved for certain class or group of people. • principally aimed at – protecting proprietary interests – prevent extinction of a particular race from their motherland by restricting sales of land to migrant communities who came in search of greener pastures or colonialist policies. 05/14/14 Ainul Jaria Maidin _2011 3
  4. 4. • Concept of reservation found in various communities: – US for American Indians – Australia for Aborigines – New Zealand for Maori – South Africa for Africans – Malaysia for Malays – malay reserved, adat perpatih customary land and adat naning customary land in malacca and the natives in sabah and sarawak. 05/14/14 Ainul Jaria Maidin _2011 4
  5. 5. MALAY RESERVATION Concept and Administration 05/14/14 Ainul Jaria Maidin _2011 5
  6. 6. Ideology of Malay Reservation • To protect Malay land from being sold to immigrant communities. • Malay Reservation Enactment 1913 tended to artificially protect Malays from economic dislocation that resulted from the influx of Chinese and Indian immigrants to the Malay Peninsular (Gordon Means, “Special Rights as a Strategy for Development: The Case of Malaysia”, in Comparative Politics 1972 5(1); Jomo Sundram. 05/14/14 Ainul Jaria Maidin _2011 6
  7. 7. MALAY RESERVATION ENACTMENT • passing of Enactment was due to development of colonial capitalist economy. • growth of capitalism enterprises under colonialism led to a rapid increase in immigrant population and a corresponding growth in rice consumption, which affected padi production in several ways. 05/14/14 Ainul Jaria Maidin _2011 7
  8. 8. • Increase in rice consumption was largely met by increasing imports of cheap rice from Thailand and Burma. • In 1890 rice imports constituted more than 35% of total imports; this exceeded the government revenue and amounted to 31 % of export receipts (JOMO 1988 p.16) • In order to minimise loss of foreign exchange and to curb the Malay peasants from diverting away from the traditional profession 05/14/14 Ainul Jaria Maidin _2011 8
  9. 9. • British colonialists introduced land reservation in favour of Malays with objective of protecting Malay land proprietary interests to prevent Malays from dealing with immigrants. • Rapid development in Malay States brought about influx of immigrants especially owing to British colonial policy • workforce to work in time mines, rubber plantations, construction and development of infrastructure 05/14/14 Ainul Jaria Maidin _2011 9
  10. 10. • Chinese immigrants were very keen to acquire land in Malay states and Malays were also willing to depart with land for monetary considerations. • Historians were of view that principle reason for introducing Malay Reservation by British is to prevent the prominence of Chinese community, which was growing strong with forming of secret societies (kongsi gelap) and gaining economic dominance compared to other immigrants. 05/14/14 Ainul Jaria Maidin _2011 10
  11. 11. • British felt that this could pose a threat to their administration as such, the need to prevent Chinese and other immigrant community from acquiring land the most valuable commodity created for Man. 05/14/14 Ainul Jaria Maidin _2011 11
  12. 12. Types of Reserved Lands in Malaysia • Malay Reserved Lands • Malacca Customary Lands • Customary Land in N9 • Native Lands in Sabah and Sarawak • Malay Agricultural Settlement Kampung Bahru, Federal Territory 05/14/14 Ainul Jaria Maidin _2011 12
  13. 13. Malay Reserved Law • Laws were introduced by British during pre- Merdeka period • Malaysian government also introduced post Merdeka law to safeguard Malay land ownership. • laws relating to Malay Reservation will need to be studied at two different periods, i.e. pre-merdeka and post merdeka period. 05/14/14 Ainul Jaria Maidin _2011 13
  14. 14. Pre Merdeka Laws • Federated Malay States Malay Reservations Enactment No. 15 of 1913 • Federated Malay States Malay Reservations Enactment No. 30 of 1933 Chapter 142 05/14/14 Ainul Jaria Maidin _2011 14
  15. 15. Post Merdeka Laws • Federated Malay States Malay Reservations Enactment No. 30 of 1933 Chapter 142 • Federal Constitution of Malaysia 1957 05/14/14 Ainul Jaria Maidin _2011 15
  16. 16. • Two sets of Enactment regulating Malay Reserved land. • Enactments aimed at specific object of preserving and protecting Malay land proprietary rights. • There is one single uniform law known as the Federated Malay States Malay Reservations Enactment 1933 (Cap 142), which is applicable to the States of Selangor, Perak, Negeri Sembilan, Pahang and the Federal Territory of Kuala Lumpur. 05/14/14 Ainul Jaria Maidin _2011 16
  17. 17. UnFederated Malay States • former UnFederated Malay States states of Kelantan, Kedah, Johor, Trengganu and Perlis have their respective state Enactment. 05/14/14 Ainul Jaria Maidin _2011 17
  18. 18. Nature of Enactments • Provisions in the Enactment differs and this, to certain extent has defeated the objective of Malay reservation institution: – ambiguity in definition of Malay – loopholes in policy of disposal or dealing in Malay reserved land – inclusion of other races to hold Malay reservation land, even though Federal Constitution expressly prohibits non-Malay from dealing with Malay reservation land. 05/14/14 Ainul Jaria Maidin _2011 18
  19. 19. Perlis • Malay Reservations Enactment 1353 was modelled from 1913 Federated Malay States Enactment. • Wef - 17th Zul-Hijjah 1353/ 1935 (No.7 of 1353) 05/14/14 Ainul Jaria Maidin _2011 19
  20. 20. Kedah • Malay Reservations Enactment of was modelled from 1913 Federated Malay States Enactment. • Wef - 1931 (No.6 of 1349)   05/14/14 Ainul Jaria Maidin _2011 20
  21. 21. Penang • British claimed that there was no customary law in existence in Island of Penang when they took over. • Freeway to apply English common law. • Ong Cheng Neo v Yeap Cheah Neo (1897) 1 Ky. 326, 337 Privy Council – island was a deserted territory and there was no trace of any laws having been established; therefore the English law was applicable. 05/14/14 Ainul Jaria Maidin _2011 21
  22. 22. Penang …cont.. • No recognition was given to law of the natives of State, as there was only few Malay families found when British first occupied the state • Regina v. Willians (1858) 3 Ky. 16. • Therefore, Malay reservation law was not introduced in Penang. 05/14/14 Ainul Jaria Maidin _2011 22
  23. 23. Perak • Federated Malay States Malay Reservations Enactment 1933 • Perak was amongst earliest States to convert land into Malay Reservation.   05/14/14 Ainul Jaria Maidin _2011 23
  24. 24. Selangor • Federated Malay States Malay Reservations Enactment 1933 is applicable in Selangor. 05/14/14 Ainul Jaria Maidin _2011 24
  25. 25. Kuala Lumpur • Initially prior to Merdeka, British had declared 4 areas into Malay Reservation under the Malay Reservation Enactment 1913. • Sungai Pencala Malay Reservation, about 756 acres; • Segambut Malay Reservation about 710 acres. • Selayang Malay Reservation about 542.4 acres; • Gombak Malay Reservation about 3640 acres. • Kampung Baru Malay Agriculture Settlement. 05/14/14 Ainul Jaria Maidin _2011 25
  26. 26. Malacca • No Malay Reservations policy in Malacca being a member of Straits Settlement • British has maintained and protected customary rights of Malays – customary land – adat perpatih • National Land Code (Penang and Malacca Titles) Act 1963 governs customary land in Malacca. • Section 108 of Act - transfer, lease and transmission of customary land should only be made in favour of Malay domiciled in State. 05/14/14 Ainul Jaria Maidin _2011 26
  27. 27. Johor • Adopted Federated Malay States Malay Reservation Enactment 1933 in 1936 05/14/14 Ainul Jaria Maidin _2011 27
  28. 28. Pahang • Pahang a member of Federated Malay States applied uniform law of four States i.e. Federated Malay States Malay Reservations Enactment 1933.  05/14/14 Ainul Jaria Maidin _2011 28
  29. 29. Trengganu • Trengganu model - Federated Malay States Malay Reservations Enactment 1933. • Last state to introduce Malay Reservations Enactment in 1941. 05/14/14 Ainul Jaria Maidin _2011 29
  30. 30. Kelantan • Adopted 1913 FMS Enactment. • Wef - November 4th 1930. • Kelantan Malay Reservation Enactment 1930. • Almost all lands in Kelantan are declared as Malay reserve 05/14/14 Ainul Jaria Maidin _2011 30
  31. 31. Negri Sembilan • Federated Malay States Malay Reservations Enactment 1933 and Customary Tenure Enactment are applicable to Malays in the State. • FMS MRE is applicable in districts of Jelebu, Kuala Pilah, Rembau and Tampin. • (Federated Malay States Cap.215) 05/14/14 Ainul Jaria Maidin _2011 31
  32. 32. Who is a Malay • Definition of Malay varies from State to state • Analysis - depending on geographical location and interpretation accorded by Ruler in Council or State Authority. • definition of Malay is determined by State Enactments 05/14/14 Ainul Jaria Maidin _2011 32
  33. 33. 05/14/14 Ainul Jaria Maidin _2011 33
  34. 34. Perlis • s 2 “Malay” means a person belonging to any Malayan race or person of Arab descent who habitually speaks the Malay language or any Malayan language and professes the Muslim religion. • “Siamese” means a Siamese certified by Commissioner in writing to be a Siamese agriculturist permanently resident in State of Perlis. • Perlis being situated near border of Thailand, a Siamese has right to acquire MRL. • person of Arab descent who habitually speaks Malay language is considered Malay in Perlis. 05/14/14 Ainul Jaria Maidin _2011 34
  35. 35. Kedah • S.2 of Kedah Enactment provides “Malay” means a person professing the Muslim religion and habitually speaking the Malay language of whose parents one at least is a person of Malayan race or Arab descent. (Vide E 9/54 Kedah Laws 1559) • Siamese is included as natives and has right to acquire Malay reserve lands. 05/14/14 Ainul Jaria Maidin _2011 35
  36. 36. Johor • “Malay” means a person belonging to the Malay or any Malaysian race who habitually speaks the Malay language and professes the Muslim religion and such expression shall be deemed to include the authorities, boards, bodies, societies, associations and companies described in the Second Schedule to this Enactment: • with a preamble that reads ‘An Enactment to prevent interests in land passing out of the hands of the Malay race.’ Johor Malay Reservation Enactment 1936 has employed the word ‘Malaysian’ instead of ‘Malayan.’ 05/14/14 Ainul Jaria Maidin _2011 36
  37. 37. Kelantan • s 3(i) provides “Malay” means a person belonging to any Malayan race who speaks any Malayan language and professes the Mohammedan religion, and shall include (a) the Majlis Ugama Islam (b) the Official Administrator when acting as administrator or trustee of the estate of a deceased Malay 05/14/14 Ainul Jaria Maidin _2011 37
  38. 38. Terengganu • “Malay” means a person belonging to any Malayan race who habitually speaks the Malay language or any Malayan language and professes the Moslem religion 05/14/14 Ainul Jaria Maidin _2011 38
  39. 39. Establishing of Malay Company • Malay company or • Requirements for a company to be able to deal with Malay Reserved land. • Malay Company defined only in FMS MRE s 2 and Trengganu MRE s 2. 05/14/14 Ainul Jaria Maidin _2011 39
  40. 40. A Malay Company • Requirements of Malay Company are: • (a) registered under Companies Act 1965 • (b) all members are Malays • (c) transfer of shares restricted by Articles of Association to Malays only • (d) objective of Company is to deal in Malay holding land. 05/14/14 Ainul Jaria Maidin _2011 40
  41. 41. Malay Company • Wan Ismail & Seng Liang Sdn. Bhd. v Musa bin Mat Jani & Anor [1990] CLJ 379 • dealing in favour of a company where, not all members are Malay is not a Malay company under FMS MRE s 2. • Any dealing conducted by company is contrary to FMS MRE s 7 and shall be declared as null and void by virtue of FMS MRE s 19. 05/14/14 Ainul Jaria Maidin _2011 41
  42. 42. • other States’ MRE have not included any provisions on requirements to establish Malay company • Reason - rigid requirements to establish a Malay company HOWEVER, Ruler-in- Council can declare or include any person, companies, corporations or bodies to be treated as ‘Malay’ for purposes of MRL • (Johor MRE s 2; Kedah MRE s 19; Kelantan MRE s 9A(1) Perlis MRE s 9(1) & 17A(i)). 05/14/14 Ainul Jaria Maidin _2011 42
  43. 43. Requirements to be fulfilled to be recognised as Malay Holding • By virtue of FMS MRE s 2(a) requirements of Malay holding are: • i. Either proprietor or co-proprietor shall be a Malay • ii. alienated land • iii. declared and gazette as Malay reservation; and • Iv. Inclusion of land under official Malay reservations list 05/14/14 Ainul Jaria Maidin _2011 43
  44. 44. Malay Holding • All requirements are mandatory to be fulfilled before a land can be declared as Malay holding. • Failure to comply with any one requirements, alienated land cannot be declared as Malay holding. • If proprietor is not Malay or none of co- proprietors are Malay the registering body is not empowered to make any memorial under MRE or inclusion of said land under Malay reservations list - FMS MRE s 6(vi) 05/14/14 Ainul Jaria Maidin _2011 44
  45. 45. • Syarikat Macey Berhad v. Nightingale Allied Services (Sued As A Firm) & 2 ORS. [1995] 1 CLJ 890 • in a Malay Holding there must be a Malay proprietor or co-proprietor. if all are non- Malays, land cannot be declared as Malay Holding • However, if one proprietor is Malay and others are non-Malays, then land can be declared as Malay Holding. 05/14/14 Ainul Jaria Maidin _2011 45
  46. 46. Endorsement on IDT • Requirement - Title must be endorsed with words ‘MALAY RESERVATION’ “TANAH RIZAB MELAYU” • Registered proprietor is required to submit to registering authority IDT to be inscribed with words ‘Malay Reservation.’ FMS MRE section 6(iv) 05/14/14 Ainul Jaria Maidin _2011 46
  47. 47. • No Malay holding can take effect until and unless registered against RDT. • However, despite land published in gazette as Malay reservation, State Authority cannot proceed to endorse it as Malay Holding if the proprietor or a co-proprietor is not a Malay • Syarikat Macey Berhad v. Nightingale Allied Services (Sued As A Firm) & 2 Ors James Foong J. ‘since, the land has never been registered in name of Malay proprietor or co-proprietor, the memorial so entered on the affected titles is therefore erroneous.’ 05/14/14 Ainul Jaria Maidin _2011 47
  48. 48. Duty of Registrar • The duty of Registrar is mandatory as he shall endorse or cause to endorse on every RDT and IDT pertaining to a Malay holding the words ‘Malay holding’ • No fee (services charges) can be imposed for making the memorial. 05/14/14 Ainul Jaria Maidin _2011 48
  49. 49. Failure to Endorse on Title and Implications • Non-endorsement of words ‘Malay reservation’ on IDT and RDT, could lead proprietor to abuse the law by charging or dealing with his land to non-Malay. • Problem of non-endorsement on the title was described as early as 1928 in the Commissioner of Lands Circular, where the committee provided solution to this problem 05/14/14 Ainul Jaria Maidin _2011 49
  50. 50. • In cases of omission to inscribe the words “Malay Reservation” on the register document of title, a grant to land in a Malay Reservation which is sold, in execution of a decree, to non-Malay. • The Court, on a reference by the Registrar under s.238 Land Code, held mere notification in the Gazette of declaration of reservation does not amount to notice to a purchaser, and a bona fide purchaser of reservation land who is without notice of this restriction, takes free from the restriction. 05/14/14 Ainul Jaria Maidin _2011 50
  51. 51. • objective of inscription prescribed by FMS MRE s 12 is aimed at notifying public of the status. (mirror principle) • For purpose of inscription, duty is imposed upon Land Administrator for enforcing the production of IDT to land held by Malays within a declared area, immediately after declaration takes effect 05/14/14 Ainul Jaria Maidin _2011 51
  52. 52. • Asia Commercial Finance (M) Bhd. v Pemungut hasil Tanah & Anor. [1983]1 CLJ 86. • registered proprietor sold two pieces of land to Rohani who, while waiting for land to be transferred to her, applied to Asia Commercial to refinance the sales and purchase of land. • A private search was made on title and it did not disclose anything. • when the transfer, charge and lien-holder’s caveat was submitted for registration, the Land Officer rejected instruments presented for registration of dealing. 05/14/14 Ainul Jaria Maidin _2011 52
  53. 53. • Ground for rejection - land was gazetted as MRL in 1931 under MRE 1913, and it is subject to provisions of MRE 1933. • Finance company is not a body included and specified in Second Schedule in Enactment, therefore the finance company is barred from holding the land as a chargee. • The company argued that certificate of official search failed to disclose that land is MRL, therefore they are bona fide chargee for value within ambit of section 340 (3) NLC. 05/14/14 Ainul Jaria Maidin _2011 53
  54. 54. • Wan Hamzah J, held that one has to go beyond RDT in order to search as the official search is not conclusive evidence • This actually defeats the main principle of Torrens System, that RDT is everything. • It seems that the judge has erred in law by suggesting to conduct search beyond RDT. 05/14/14 Ainul Jaria Maidin _2011 54
  55. 55. • Badiaddin v First Malaysia Finance Berhad & Anor [1988] 2 CLJ 32; [1998] 2 CLJ 75 FC. The land was gazetted as ‘Malay Reservation’ and published in February 2nd 1917 but was only endorsed on the RDT on February 18th 1984, i.e. after 67 years. • To make matters worse the land was already charged to a non-Malay company in 1981. 05/14/14 Ainul Jaria Maidin _2011 55
  56. 56. • Upon discovery of this endorsement, company appealed to MB of Negeri Sembilan to revoke status of MRL as they are bona fide chargee. • State Authority agreed to insert company in FMS MRE 1933 s 17 Schedule 2, and gazetted on March 27th 1986. • Q – Status of charge? • HC & FC held that irrespective of late endorsement and that money has been released, land is still MRL, and it comes within ambit of MRE – making charge null and void 05/14/14 Ainul Jaria Maidin _2011 56
  57. 57. Reference to Ruler in Council 05/14/14 Ainul Jaria Maidin _2011 57
  58. 58. • All MRE Enactments inserted a section stipulating for Reference to Ruler in Council in event of doubt. • Situations for reference to Ruler in FMS MRE s 20. • a. definition of Malay • b. mode of operation of the Enactment • c. manner in which the provisions are construed or put into effect 05/14/14 Ainul Jaria Maidin _2011 58
  59. 59. Who is Ruler in Council • Hanisah v Tuan Mat [1970] 1 MLJ 213 to mean ‘His Highness acting in accordance with advice of the State Executive Council’. • Situations where reference to the Ruler in Council is necessary as provided in FMS MRE s 20. 05/14/14 Ainul Jaria Maidin _2011 59
  60. 60. • FMS MRE s 20 - in cases of doubt matter shall be referred through Menteri Besar to the Ruler of State Council. • Johor MRE - matter is referred through State Secretary to the Sultan in Council. • Kelantan MRE, s 18 - the matter may be referred to Sultan in Council without referring to the Menteri Besar. •   05/14/14 Ainul Jaria Maidin _2011 60
  61. 61. • Kedah MRE restated & reconfirmed right of Ruler in Council to declare ‘any person of any race or nationality be deemed to be recognised as “Malay”. • Shirlie Gordon in “Contradictions”, - Kedah provision was inserted later to allow European wife of Tunku to inherit his MRL upon his death. She was declared as a ‘Malay’ for purposes of MRE to inherit the land. 05/14/14 Ainul Jaria Maidin _2011 61
  62. 62. • Kelantan MRE s. 9A & 13A (i) – Included provision where Ruler-in-Council can alienate, transfer, transmit or charge Malay reserve land to anyone who is not a Malay – Schedule D of Kelantan MRE has approved for example Ban Hin Lee Bank Bhd, Chung Kiaw Bank Limited to acquire interest in MRL. 05/14/14 Ainul Jaria Maidin _2011 62
  63. 63. • Foo Say Lee v. Ooi Heng Wai [1969] 1 MLJ 47 • FC –agreement to transfer MRL subject to consent of Ruler in Council is not contrary to Kelantan MRE. • Reason - MRL can be transferred to a non-Malay subject to approval of Ruler in Council. 05/14/14 Ainul Jaria Maidin _2011 63
  64. 64. • Kelantan Ruler not empowered to declare any person as Malay unlike Kedah MRE which gives a wide discretion to Ruler-in-Council to declare any person of any race or nationality as Malay (Kedah MRE s 19) • Kelantan MRE allows the person to acquire a right or interest over land. • Trengganu MRE does not declare bodies as Malays, it merely grants a right to them to hold MRL with consent of Sultan-in-Council. 05/14/14 Ainul Jaria Maidin _2011 64
  65. 65. Non-Malay to Non Malay • A non Malay proprietor of MRL has ABSOLUTE RIGHTS to transfer right or interest to non-Malay without prior consent from Ruler (Kelantan MRE s 3A(iii)). – Tan Hong Chit v. Lim Kim Wan [1964] MLJ 113 – Syarikat Macey Bhd. v Nightingale Allied Services (sued as a firm) & Ors. 05/14/14 Ainul Jaria Maidin _2011 65
  66. 66. 05/14/14 Ainul Jaria Maidin _2011 66
  67. 67. • Decision of Rulers is FINAL & CANNOT be questioned or revised by court (FMS MRE s 20). • What if abuse of MRL ??? 05/14/14 Ainul Jaria Maidin _2011 67
  68. 68. • Kelantan MRE s 13 - right of question exits until the decision has been certified under hand of State Secretary. • Hanisah v. Tuan Mat [1970] 1 MLJ 230 -Kelantan MRE s 13 merely states decision of Ruler in Council should not be revised or questioned by Court. does not in obstruct court to expound Acts of Parliaments. • Furthermore it is duty of Court and not Ruler or the legislators 05/14/14 Ainul Jaria Maidin _2011 68
  69. 69. • Zaleha bte Sahri v. Pendaftar Hak Milik Tanah Johor [1996] 2 CLJ 147 - court granted a declaratory order to revoke status of MRL by virtue of landowner not being a Malay without referring matter to Ruler-in-Council. • Johor MRE it is mandatory to refer to Ruler-in-Council in cases of mode of operation of Enactment, on definition of Malay and manner provisions to be construed or carried into effect. • 05/14/14 Ainul Jaria Maidin _2011 69
  70. 70. • Abdul Malik Ishak J. Decision was more in sympathy for the appellant rather than analysing the initial objective of the establishment of MRE. 05/14/14 Ainul Jaria Maidin _2011 70
  71. 71. • Asia Commercial Finance (M) Bhd. v Pemungut Hasil Tanah & Anor. (1983) CLJ 86 ; Zainal Abidin Bin Mohd. Taib v Malaysia National Insurance Sdn.Bhd.[1994] 3 CLJ 731 observations that decision of Ruler- in-Council shall be final and shall not be questioned or revised by any Court. 05/14/14 Ainul Jaria Maidin _2011 71
  72. 72. Disposal of MRL by State • Non-Malay person cannot apply for MRL from State Authority, • He may be able to acquire a share or interest in the MRL if he would make an application through a company or corporation that are specified in the Third Schedule. • FMS MRE s 7&20 - the Ruler-in-Council has discretionary powers to declare any company or corporation as Malay and this decision, as has been argued earlier, is final and cannot be questioned by the Court. 05/14/14 Ainul Jaria Maidin _2011 72
  73. 73. Ruler-in-Council’s discretion • Ruler-in-Council is given discretion to add, delete from or amend from time to time the list in Third Schedule • Zainal Abidin Bin Mohd.Taib v Malaysia National Insurance Sdn.Bhd.[1994] 3 CLJ 731 - decision of Ruler-in-Council is final and conclusive. It would only become official once it has been published in the gazette. 05/14/14 Ainul Jaria Maidin _2011 73
  74. 74. • Federal Territory - discretion to add, delete from and amend is granted to Yang di Pertuan Agung. • Negeri Sembilan - land alienated under section 7 would be deemed as Malay holding, notwithstanding the definition of Malay holding contained in FMS MRE s 2. 05/14/14 Ainul Jaria Maidin _2011 74
  75. 75. • State Authority can declare any land as a Malay holding irrespective of definition of Malay holding, found in s 2 of MRE. • On the other hand, this might not be true, as s 7 must be read together with ss 2(a) & 6 05/14/14 Ainul Jaria Maidin _2011 75
  76. 76. • Mohd Hishamudin Yunus J. in Sime Bank Bhd. v Projek Kota Langkawi Sdn Bhd, [1998] 4 MLJ 334 while delivering judgement of the case made a passing remark that he was very curious to know how the State Authority could have alienated a Malay Reservation land that has been declared as Malay reserve in 1933 to the defendants who are not Malay within the definition of Kedah MRE in 1993 • .   05/14/14 Ainul Jaria Maidin _2011 76
  77. 77. • Mohd Hishamudin Yunus J. in Sime Bank Bhd. v Projek Kota Langkawi Sdn Bhd, [1998] 4 MLJ 334 - Remarked that he was very curious to know how State Authority could have alienated MRL declared as MRL in 1933 to defendants who are not Malay within definition of Kedah MRE in 1993 05/14/14 Ainul Jaria Maidin _2011 77
  78. 78. Alteration & Revocation of MRL 05/14/14 Ainul Jaria Maidin _2011 78
  79. 79. • FMS MRE s 4(i) allows Menteri Besar, subject to approval of Ruler-in- Council to alter limits or boundaries of MRL subject to Article 89(1) • Land declared as MRL prior to Merdeka Day - Article 89(1) is mandatory to be followed. – require 2/3 majority in State Legislative Assembly 05/14/14 Ainul Jaria Maidin _2011 79
  80. 80. • Menteri Besar cannot alter status of MRL until he complies with Article 89(1). • Non-compliance would declare alteration as null and void. • If declaration made after Merdeka Day, State Authority can safely rely on provisions of Enactment without adhering to Article 89(1). 05/14/14 Ainul Jaria Maidin _2011 80
  81. 81. • No revocation or alteration of MRL is valid until it published in Gazette. • Mohamed Isa & Ors. v. Abdul Karim & Ors. [1970] 2 MLJ 180 - Raja Azlan Shah - MRL will only lose its character by way of an express revocation under States’ MRE 05/14/14 Ainul Jaria Maidin _2011 81
  82. 82. Lands Declared prior to Merdeka • Cannot be revoked or excised unless it follows stringent rules in Article 89(1) of Federal Constitution. • If revocation did not adhere to procedures in Federal Constitution, then it would be declared as nullity. • Procedure does not apply to MRL declared after Merdeka Day.   05/14/14 Ainul Jaria Maidin _2011 82
  83. 83. Restrictions & Prohibitions on Dealing 05/14/14 Ainul Jaria Maidin _2011 83
  84. 84. • Rationale of policy of reservation in law implies a right of exclusive control & ownership to a particular person or groups of persons identified by law as sole beneficiaries of policy of reservation.’ • Intrinsic & inherently consistent with purpose of reservation will be imposition of prohibition against dealing, such as transfer, charge or lease. • Restriction as to dealing by power of attorney, entry of caveat, bankruptcy, attachment, trusts 05/14/14 Ainul Jaria Maidin _2011 84
  85. 85. Transfer • FMS MRE s8 - no Malay holding can be transferred to Non-Malays • Idris Bin Haji Mohamed Amin v. Ng Ah Siew [1935] FMSLR 70, Ct – ‘intention of Enactment was to preclude Malays from parting with any rights or interest in reserved lands. 05/14/14 Ainul Jaria Maidin _2011 85
  86. 86. • Tan Hong Chit v. Lim Kin Wan(1964) 30 MLJ 113 - a non-Malay who has been occupying MRL prior to its declaration can transfer his land to other non- Malays without approval of Ruler in Council as he is not bound by MRE provisions 05/14/14 Ainul Jaria Maidin _2011 86
  87. 87. • Haji Hamid Bin Ariffin & Anor. v. Ahmad Bin Mahmud, [1976] 2 MLJ 79 - issue was could Malay proprietor sell his Malay reserve land to a Siamese under the Kedah MRE? • Secondly, presuming transaction is void and land is sold to a Malay purchaser, will it pass a good title to new purchaser? 05/14/14 Ainul Jaria Maidin _2011 87
  88. 88. nemo dat quod non habet • Federal Court - by virtue of Kedah MRE s 6, no MRL could be transferred from Malay to Siamese. • Secondly, by applying legal maxim, nemo dat quod non habet, (no one can give what he does not possess), no legal and good title can be passed from a void transaction or no subsequent dealing can be legalised from a void dealing. 05/14/14 Ainul Jaria Maidin _2011 88
  89. 89. •   • Foo Say Lee v. Ooi Heng Wai, [1969] 1 MLJ 47 FC - the purported agreement to transfer MRL, subject to consent of the Ruler in Council is not contrary to Kelantan MRE. • Reason - MRL may be transferred to non- Malay subject to Ruler’s consent. 05/14/14 Ainul Jaria Maidin _2011 89
  90. 90. • Privy Council in Mistry Amar Singh v. Serwano Wofunira Kulubya [1963] 3 W.L.R. 513 - ‘the purpose of said legislation is to protect Africans and to preserve African land for use by Africans.’ • In this case, respondent an African the registered proprietor of certain ‘mailo’ lands purported by agreements to lease lands to the appellant, an Indian.   05/14/14 Ainul Jaria Maidin _2011 90
  91. 91. • Section 2 of the Uganda Land Transfer Ordinance prohibits occupation by a non- African unless the consent in writing of the Governor has been given. In this case, the parties did not obtained the relevant consent, as a result both of them had contravened the law and committed punishable offences. • Privy Council held that as the respondent is a member of the protected class, and the said legislation was intended to be for the benefit of Africans as a class therefore the agreement so entered is void ab initio. 05/14/14 Ainul Jaria Maidin _2011 91
  92. 92. • The Court cited with approval the judgement of Lord Mansfield in Browning v. Morris (1778) Cowp. 790, where he said: “But, where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men; the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there, the parties are not in pari delicto; and in furtherance of those statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract.” 05/14/14 Ainul Jaria Maidin _2011 92
  93. 93. Charge MRL to Non-Malay • FMS MRE s 8(i) states that no MRL can be charged to non-Malay except to Government, Co-operative Societies registered under Co-operative Societies Act 1948 (FMS MRE s 17(1)(a) & to any person specified in Second Schedule of FMS MRE, 05/14/14 Ainul Jaria Maidin _2011 93
  94. 94. • Charge of MLR to non-Malay not permitted unless to a person specified in the Second Schedule of MRE. • This is due to the fact that the person in Second Schedule need not be a born Malay under MRE s 2. • Any person may apply to the State Authority to be declared as Malay for the purposes of the MRE and to be inserted in MRE Second Schedule. Therefore, a company can after registering the charge apply to the State Authority to be included in the Second Schedule. 05/14/14 Ainul Jaria Maidin _2011 94
  95. 95. • Zainal Abidin Bin Mohd. Taib v. Malaysia National Insurance Sdn. Bhd [1994] 3 CLJ 731 - a charge was created and registered on September 6th 1982 to the Defendant, a non- Malay company. • The defendant applied to the State Authority to be included in the Second Schedule as a recognised Chargor only after registration of the charge. 05/14/14 Ainul Jaria Maidin _2011 95
  96. 96. • This was approved only in October 23rd 1991. Subsequently the State Authority by its letter dated July 21st 1992, agreed to have a retrospective approval, dating back to January 1st 1982 of declaring the non-Malay company as a Malay for the purposes of the charge under section 17 and Second Schedule of FMS MRE. Faiza Thambi Chik J. held that the charge is valid and the decision of the Ruler in Council is binding. 05/14/14 Ainul Jaria Maidin _2011 96
  97. 97. • Badiaddin v First Malaysia Finance Berhad Mustapha Hussain J. held that even though the declaration of MRL was entered only after the charge has been registered, the charge is still void as the land is a MRL. • This is despite the State Authority has approved to insert the Respondent in Schedule 2 of s 17 MRE, as a company qualified to hold a MRL. • Federal Court upheld the decision in 1998 and there was no attempt to distinguish this case with Zainal Abidin Bin Mohd. Taib v. Malaysia National Insurance Sdn. Bhd. 05/14/14 Ainul Jaria Maidin _2011 97
  98. 98. Confusion in Kelantan • Ho Giok Chay v. Nik Aishah (1961) 27 MLJ 49 Hepworth J. held after analysing s 7(i) and 9A held that a charge created in favour of a non-Malay by a Malay on a Malay reserve land was void ab initio. 05/14/14 Ainul Jaria Maidin _2011 98
  99. 99. • Whereas, in T. Bariam Singh v. Pegawai Pentadbir Pesaka Malaysia [1983] 1 MLJ 232, Mohamed Zahir J. held can create charge of MRL but in foreclosure proceedings the purchaser must be a Malay. And disagreed with the decision of Hepworth J. in Ho Giok Chay v. Nik Aishah. •   05/14/14 Ainul Jaria Maidin _2011 99
  100. 100. • Recently in, Dato’ Haji Nik Mahmud bin Daud v. Bank Islam Malaysia Bhd. [1998] 3 MLJ 393 the CA avoided to provide a solution to this conflicting judicial opinion however, went on to say that ‘a charge transfers or vests a right or interest to or in the land in the chargee, otherwise a charge would be valueless and of no effect, the essential element being that the chargee is entitled to reimburse himself out of the land, that is to compel payment of the amount due by sale of the land itself.’ 05/14/14 Ainul Jaria Maidin _2011 100
  101. 101. • In Sime Bank Bhd v. Projek Kota Langkawi Sdn Bhd 1998] 4 MLJ 334 a Malay or Siamese in the light of s 6(1) of Kedah MRE can create a charge of MRL in favour of a non-Malay. •   05/14/14 Ainul Jaria Maidin _2011 101
  102. 102. Lease • General prohibition in MRE s 8(i) against creation of leases of Malay reserve land to non-Malay. • However, Kelantan MRE s 7(iii) allows lease of Malay reserved lands situated within town areas to non-Malays, subject to the approval of His Highness the Sultan. The said lease should not exceed 3 years and non-renewable and any provision in the lease which allows for renewal shall be declared as null and void. 05/14/14 Ainul Jaria Maidin _2011 102
  103. 103. • In respect of Malay reserved lands outside the boundaries of town, monthly leases may be given to non-Malays and such lease may be terminated upon giving one month'’ notice, however, such leases does not require the consent of the Sultan. •  In Dato’ Haji Nik Mahmud bin Daud v. Bank Islam Malaysia Bhd,[1998] 3 MLJ 393, 400 Abdul Malek Ahmad JCA held that the Kelantan MRE allows the Malays to lease the Malay reserved lands to non- Malays. 05/14/14 Ainul Jaria Maidin _2011 103
  104. 104. Entry of Caveat • Non-Malays are allowed to enter a caveat on MRL. The State MRE provisions are silent on this issue. In RAP Nathan v Haji Abdul Rahman Bin Haji Yusoff & Ors, [1980] 1 MLJ 248 Syed Agil Barakbah J held that eventhough the plaintiff is not Malay he has a caveatable interest in the MRL. • In addition to those treated as Malays for the purposes of Malay reservation, that are normally found in the FMS MRE schedule can also enter caveat on a Malay holding. 05/14/14 Ainul Jaria Maidin _2011 104
  105. 105. Lien • In FMS MRE s 10, it is stated that no lien can be created on Malay holding. The provision is:   • “No lien by deposit of issue document of title for any Malay holding as security for a debt shall be capable of being created in favour of any person, and no caveat in support of any such lien by deposit shall be capable of registration in any land Office or Registry of Title.” 05/14/14 Ainul Jaria Maidin _2011 105
  106. 106. Exceptions • However, the FMS MRE provides an exception to the general rule by allowing the title of Malay holding land to be deposited to: • (i)    in favour of Menteri Besar; • (ii)  any such co-operative society registered under the Co-operative Societies Act 1948; • (iii)  any such person specified in the Second Schedule. 05/14/14 Ainul Jaria Maidin _2011 106
  107. 107. Granting of Power of Attorney • There is clear prohibition in FMS MRE s 9 on the creation of power of attorney in favour of a Non-Malay to act on behalf of a Malay proprietor to transfer, charge or lease of a MRL or Malay holding. Such memorandum shall be declared as void and shall not be capable of registration. The exception to this general rule is that a specific power of attorney could be created on Malay holding or MRL if it deals with cross transfer and alteration or variation of conditions. 05/14/14 Ainul Jaria Maidin _2011 107
  108. 108. • In pre-Merdeka case of Gan Khor v Soan Bin Pelita [1935] FMSLR 39 the Judge had avoided to discuss the issue whether the power of attorney created in favour of the non-Malay was valid or not under the 1913 MRE. However, FMS MRE 1913 s 8(ii) speaks that the power of attorney between Malay and non-Malay is revocable. 05/14/14 Ainul Jaria Maidin _2011 108
  109. 109. • in Idris Bin Haji Mohamed Amin v. Ng Ah Siew [1935] FMSLR 70 at p77, the Appeal Court held that as the power of attorney relates to a right and interest in land, therefore it is in contrary with the spirit of the MRE and cannot be enforced. 05/14/14 Ainul Jaria Maidin _2011 109
  110. 110. • In the subsequent case of Sakinah v. Kua Teong How [1940] FMSLR 246, Howes J. approved the above case that the power of attorney purported to give the chargee a right or interest on the land, and as such was contrary to the provision of s 8(i) of 1913 MRE. 05/14/14 Ainul Jaria Maidin _2011 110
  111. 111. Bankruptcy • No Malay holding shall vest in the Official Assignee upon the registered proprietor being declared bankrupt according to FMS MRE s.12, unless, the registered proprietor is declared bankrupt prior to the coming into force of the MRE. 05/14/14 Ainul Jaria Maidin _2011 111
  112. 112. Attachment in Execution • “No Malay holding shall be attached in execution of a decree or order of any Court unless the suit or proceeding in which such decree or order was made was instituted before the commencement of this Enactment.” 05/14/14 Ainul Jaria Maidin _2011 112
  113. 113. • However, in pre-Merdeka case, The Official Administrator v. Haji Abdul Majid bin Shakabudin [1938] FMSLR 75, 76, the court held that there is nothing to prohibit the administrator from selling the MRL and using the purchase money to pay off the creditors whatever their race are. The only prohibition is that the land could only be sold to Malay. 05/14/14 Ainul Jaria Maidin _2011 113
  114. 114. Restriction as to Creation of Trusts • Generally, no trusts could be created or enforced by Non-Malay on Malay holding or MRL. By applying the literal interpretation, one can safely assume that the provision does not mention either expressly of impliedly any prohibitions against the appointment of non-Malay trustee. 05/14/14 Ainul Jaria Maidin _2011 114
  115. 115. Grants of Probate and Letters of Administration • There is clear prohibition that no grant of probate or of letters of administration shall operate to vest and Malay holding or Malay reservation in any executor or administrator who is not Malay. See FMS MRE s 15. •   05/14/14 Ainul Jaria Maidin _2011 115
  116. 116. Consequence of Contravention of MRE • i. Avoidance of Dealing • ii. Risk Forfeiture by the State 05/14/14 Ainul Jaria Maidin _2011 116
  117. 117. • in Idris Bin Haji Mohamed Amin v. Ng Ah Siew [1935] FMSLR 70 said that ‘the obvious intention of the Enactment was to secure for Malays only land comprised in Malay reservations.’ 05/14/14 Ainul Jaria Maidin _2011 117
  118. 118. • Therefore, in the FMS MRE s 8(i) it is provided that dealings that infringe the laws shall not be capable of registration. Furthermore, those dealings that are contrary to the MRE, shall be declared as null and void in almost all the FMS MRE s 19(i) In addition, no action for breach of contract shall lie in respect any dealing or disposal or any attempt to deal in or dispose of any Malay holding contrary to the provisions of the FMS MRE 19(ii) In addition, any rent paid in pursuance of the contrary dealing would not be recoverable in the Court see FMS MRE 19(ii). 05/14/14 Ainul Jaria Maidin _2011 118
  119. 119. Risk Forfeiture by the State • “If at any time it shall appear to the satisfaction of the Ruler-in-Council that any Malay or Siamese has attempted to vest in any person any Reservation land held by him under any document of title, contrary to the provisions of MRE S 6, the Ruler-in-Council may, by order in writing, signed by the Menteri Besar, direct all interest of such Malay or Siamese as the case may be, 05/14/14 Ainul Jaria Maidin _2011 119
  120. 120. • in such land shall be forfeited and upon the registration of such written order in the manner prescribed in Enactment No.56 (Land) such land shall vest in the Sultan absolutely; provided that one month’s notice to show cause against such forfeiture shall have been served upon such Malay or Siamese, as the case may be, and cause shall not have been shown to the satisfaction of the Ruler-in-Council within the period prescribed in the notice. 05/14/14 Ainul Jaria Maidin _2011 120
  121. 121. • Before Ruler-in-Council can forfeit the MRL, he must make sure that: • a. The Malays or Siamese has attempted to vest the Reserve land to Non-Malay or to all those Malay companies, which have not been declared as Malay. • b. It is a MRL held under document of title. • c. The dealing is contrary to the MRE • d. Order shall be in writing, signed by the Menteri Besar; 05/14/14 Ainul Jaria Maidin _2011 121
  122. 122. • e. Follow procedures prescribed in NLC • f. One month notice to be given to proprietor to show cause why the said land could not be forfeited. • g. The Ruler-in-Council unsatisfied with the reason given. • h. Forfeiture takes effect. CHAPTER 142.docx 05/14/14 Ainul Jaria Maidin _2011 122

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