Land Law II notes - For Revision Purposes Only

LAW 554: LAND LAW 2 CASES SUMMARY, BY AZRIN HAFIZ & DOMINIC J. OMOK,
FACULTY OF LAW,UiTM SHAH ALAM,MALAYSIA.
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LAW 554: LAND LAW 2 CASES SUMMARY

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JUAL JANJI
1. A Kanapathy Pillay v Joseph Chong:
Facts:
-- Appellant who was in need of money to prevent foreclosure action against his land agreed to sell it to Respondent.
- There was an option for the Appellant to repurchase the land at an enhanced price.
- Option was not exercised within the time period.
- The land was transferred to the Respondent who subsequently agreed to sell the land to the Developer.
- Appellant commenced action for recovery of the land.
Held:
- Trial Court: that the land had in fact been sold and had not been transferred on trust. (The claim was dismissed).
- Federal Court: “The option to purchase was only contractual and as the right was not exercised, the Appellant could not succeed in his claim.” - (Salleh Abbas FJ)

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2. Abdul Hamid B Saad v Aliyasak B Ismail:
Facts:
- In pursuant to jual janji agreement dated 27/4/66 (1st agreement) P transferred his land to D for a sum of RM2,770 on repayment within 3 years.
- Under 2nd agreement dated 27/1/72 D agreed to extend the time for repurchase for further 3 years in consideration of an increase sum of RM 3770.
- After 2nd 3 years period ended, P repeatedly asked D to transfer the said land to him but D refused.
- P brought an action.
- Issue: whether the agreements constitute jual janji or outright sale?
Held:
- High Court: held that the conduct of parties in entering into a second agreement after the expiry of the first agreement meant that time is no longer of essence and the transfer of the land to D was merely a conditional transfer and not an outright sale.
- Further, that D title to the said land was defeasible by virtue of Sec 340(4)(b) NLC and there was an obligation on D to retransfer the land to P as agreed in the two agreements.

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3. Ahmad B Omar v Hj Salleh B Sheikh Osman: - pdf
Facts:
- P agreed to sell a piece of land to D for a consideration of RM12,000.
- P execute the transfer of the land to D
- P agreed to repurchase the land within 3 years.
- Within the period of 3 years P attempted to pay the sum but D had been avoiding P.
Held:
- High Court: “this was a jual janji transaction and the court could give effect to equitable rights existing between the parties.
- Even if time is originally of the essence of the contract, it had been allowed to pass and the conduct of the parties clearly showed that it was no longer so.”
4. Halijah v Morad: Facts???
Held:
- Court tried to fuse equity into statutory & customary rules in order to arrive at the decision. It was held that Respondent took possession of property as a creditor not as a purchase as such she is not entitled to the land.

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5. Hatijah Rejab v Abdullah Saad:
Facts:
- The Borrower was having a financial difficulties and borrowed RM 20,000 from D with a condition that she has to pay in full the loan amount within 5 years from the date the agreement and D registered as new proprietor of the land. (in 1994)
- In 1996, D refused to accept the repayment of the loan and claimed that the transfer of title was made under a direct sale transaction and not a promissory sale agreement i.e jual janji transaction.
Held:
- High Court: held that the agreement reflected the intention of the parties to use the land as security under a jual janji transaction not a direct sale agreement (jual janji is not considered as security transaction)

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6. Hj Abd Rahman v Hassan:
Facts:
- In 1895 P (Hassan) borrowed money ($1180) from D (Mohd Eusop) and transfer his land to D. (D died-legal representative, Hj Abd Rahman)
- A written agreement was entered whereby P agreed to repay the sum within 6 months
- Upon full settlement D agreed to retransfer the land to P
- if not the transaction becomes jual putus
- P only repay the loan 18 years after the expiry of the agreed duration.
- D refused to retransfer the land.
- P commenced action to recover the land
- Issue : whether the collateral agreement is a contract or it was part of a security transaction?
Held:
- Lower Court: applied principles of equity “once a mortgage always a mortgage”. Borrower/ P has right to redeem the land
- Privy Council: “Having regard to Sec 4 of the Regulation of Titles Regulation, 1891, the agreement conferred upon the debtor no real right in the land but merely a contractual right….” (Lord Dunedin)
- It was NOT a security transaction or mortgage as the only form of mortgage in Malaysia is charge or lien. Since it was a contract, the claim was statute barred.
Lq1

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7. Ibrahim v Abdullah:
Facts:
- Federal Court: “the transactionamounted to no more than a contracton 1 hand by the App to sell the land to the Res and on the other hand by the Res to the App to resell the land to the App if the App was able to tender the agreed price within 3 years.
Held:
- As the App had failed to pay or to be able to pay the $1,000 there was no equity in his favour and the court could not granted specific performance.”
8. Ismail Bin Hj Embong v Lau Kong Han:
Facts:
- P and D entered into a jual janji transaction and when the period for repayment expired, D i.e the Lender extended the period provided he paid $40 monthly.
Held:
- High Court: “In this case the transaction were loan transaction in respect of the land and the house and in regard to the land it was a jual janji.
- Although the time for exercise of the option to repurchase had expired, time was not the essence of the contract. As even if time was originally of the essence of the contract, it had been allowed to pass and the conduct of the parties clearly showed that it was no longer so.” -(Ibrahim J)

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9. Nawab Din v Mohamed Sharif:
Facts:
- ???
Held:
- Followed Yaacob‟s decision where the judge treated jual janji transaction as being in the nature of a mortgage and the right to redeem was not affected by the stipulation as to time
10. Wong See Leng v Saraswathy Ammal:
Facts:
- Borrower failed to repay loan within agreed duration.
- Argued that there is a right to redeem.
Held:
- Court of Appeal: that jual janji is a contractual transaction, as such, once the stipulated time had expired, the court has no power to extend the time.
11. Yaacob B Lebai Yusoh v Hamisah Bt Saad:
Facts:
- On 28/10/44 P sold the land to D for a sum of $2,000 in Japanese currency.
- On 30/1/45 D entered into a written agreement to resell the land to P for $2,000 within 3 years commencing on 1/2/45.
- Agreement to become null and void if P failed to repurchase.
- P remained in possession of the land.
- Issue : whether the intention of the parties to treat the land as a security or a contract of sale?

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Held:
- Lower/trial Court: “agreement to resell was an option given by D to P to repurchase and that as it contained no promise by the P to repurchase the agreement,the agreement was without consideration and was therefore of no effect.”
- Court of Appeal: “that in the circumstances of the case there was evidence to show that the real intention of the whole transaction was to mortgage the landto secure the repayment of the sum of $2,000 and to give the App/P the right to redeem”
- That as the agreement was in nature of a mortgage the right to redeem remained, although the period within which it was specified the loan should be repaid had expired”
- That the App/P was therefore entitled to an order for the transfer of the land to him upon his paying the Res/D a sum equal to $2,000….”

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LIEN
1. Standard Chartered Bank v Yap Sing Yoke & Ors
2. Hong Leong Bank Bhd v Staghorn Sdn Bhd
3. Hong Leong Finance Bhd v Staghorn Sdn Bhd
4. Manickawasagam Chetty v T.J.C Gragor
5. Master Strike Sdn Bhd v Sterling Height Sdn Bhd
6. Merchantile Bank Bhd v The O. A. of the Property How Han Teh
7. Palaniappa Chetty v Dupire Brothers
8. Paramoo v Zeno Ltd
9. Perwira Habib Bank (M) Bhd v Loo & Sons Realty Sdn Bhd
10. Perwira Habib Bank (M) Bhd v Megat Najmuddin Bin Megat Khas
11. Peter P' Chient vs S.R.M.A.L. Ramasamy Chetty V.A.A.R. Muthiah Chetty
12. Sarojeanne @ Sulochana Leela d/o Duraisamy & Anor v Dr DM Thuraiappah
13. Sithambaram Chetty v Ramanathan Chetty
14. UJA Sdn Bhd v United Overseas Bank (M) Bhd
15. Zeno Ltd v Prefabricated Construction Co. (M) Ltd & Anor

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1. Standard Chartered Bank v Yap Sing Yoke & Ors
Facts:
- D1 created a charge in favour of P for purpose of securing a housing loan
- P‟s solicitors presented the charge for registration but was rejected ( no quit rent receipt enclosed) and the charge and IDT was returned to the solicitors.
- The solicitors failed to represent the charge for registration until 8 months later, D2 enter private caveat on the land.
- Subsequently D2 obtained judgment (for goods sold and delivered) and the land was sold off
Held:
- High Court: held that by virtue of the unregistered charge in favour of P, P had acquired a title in equity over the said land.
- as the IDT was at all time in the custody of the P, it had acquired a lien in equity over the land. In the result, P’s claim had priority over that of D2. (Lamin J)

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2. Hong Leong Bank Bhd v Staghorn Sdn Bhd
Facts:??? – refer to illustration
Held :
- “Subsection (1) of s 281 speaks of the registered proprietor depositing his issue document of title 'as security for a loan' but does not specify the borrower and neither does it restrict the loan to a loan to the registered proprietor.There is no reason for construing the loan to mean only a loan to the registered proprietor. The loan may be a loan to a third party.Where the loan is to a third party, it must follow that under

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subsection (2) the judgment obtained is a judgment against the third-party borrower”
- “Subsection (1) of s 281 is an enabling or empowering provision. It enables or empowers the registered proprietor to deposit his issue document of title with any person or body as security for a loan.It does not lay down the procedure for or the manner of depositing. It ought not to be construed as requiring that the registered proprietor himself must do the act of depositing. It is his will that is important. If he wills that the document of title be deposited with a person or body as security for a loan and it is so deposited, then it is he who has exercised his power under subsection (1).He wills the depositing if he instructs or authorizes it or consents to it, and the actual act of depositing may be done by someone else”
- “It was submitted on behalf of Hong Leong that the registered proprietors had consented to the deposit of the issue document of title with Hong Leong as security for the loan to Park Avenue” (Abdul Aziz Mohamad FCJ)
3. Hong Leong Finance Bhd v Staghorn Sdn Bhd
Facts:
- The Vendors (registered owner of the land) entered into S&P with D, whereby D paid deposit of 10% of purchase price.
- However the sale was completed by the associate company (Teck Lay Realty Sdn Bhd- TLR) which paid the full balance purchase price and received IDT to the land and MOT duly executed by the Vendors.
- To finance the balance purchase price, TLR secured a loan from BBMB.
- Instead of favouring BBMB with 1st legal charge over the land, IDT and duly executed MOT were handed over by TLR to P to secure 3rd party

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legal charge for facilities granted by P to another associate company of D, Park Avenue Homes Sdn Bhd („Park Avenue‟)
- BBMB was only protected its interest with private caveat.
- When P attempted to register the charge with the transfer from the Vendor to TLR, it was prevented by private caveat of BBMB. Thus P registered LHC over the land.
- Issue :Whether a beneficial owner, other than the registered proprietor could hand over the IDT for the creation of LHC
Held:
- Court: held that it is material in the creation of a LHC under Sec 281 NLC to have the registered proprietor to deposit IDT to the lender for it is the registered proprietor who intends to surrender his rights to the Lender to deal with the land in the event of default in repayment of the loan which he obtained from the lender. It does not extend to a beneficial owner who is yet to become a registered proprietor.
- Since the facility is only available to the registered proprietor, in the event of default in repayment of the loan, judgment must be obtained against the registered proprietor, as borrower.
- The wording in Sec 281(2) NLC of a „holder of any lien has obtained judgment for the amount due to him‟ is clear to this effect for there can be no one else other than the registered proprietor who is the borrower.

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4. Manickawasagam Chetty v T.J.C Gragor
Facts:
- Upon request made by the Collector of Land Revenue, the lien holder handed over the IDT to the Land Office for the purpose of partitioning the land on application made by the co-proprietor.
- The caveat remained on RDT.
- When the new IDT was issued, there was no endorsement of LHC and was returned to the Proprietor.
- The Proprietor contended that lien has been terminated.
-
Held :
- High Court: held that thelien holder has not lost his lien over the land by the fact that he was no longer in physical possession of the title since his caveat remained on the RDT
- “I find therefore that the Respondent has not lost his lien over the landoriginally comprised in the Grant 13272 or any part of it by virtue of the fact that he is no longer in physical possession of the title for part of that land” (Hereford J)
5. Master Strike Sdn Bhd v Sterling Height Sdn Bhd
Facts:
- App as purchaser and Res as vendor executed S&P relating for several pieces of land.
- App paid 10% of the purchase price (deposit) at the time of execution of S&P.
- App failed to pay the balance purchase price.
- Therefore Res terminated the agreement and forfeited the deposit.

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Held:
- Court of Appeal: held that the Res‟s refusal to consent for the creation of a LHC in favour of Maybank was justified. Clause 30 of the said agreement did not provide for the creation of a lien and by the omission in the said agreement for such a lien, it was not open to the App to request for the creation of the lien (dismissing the appeal)-they could not convert the sale agreement into loan agreement.
6. Merchantile Bank Bhd v The O. A. of the Property How Han Teh
Facts:
- In 1964 How Han Teh deposited IDT over the said land with the applicants for the purpose of securing a loan. He failed to repay the loan.
- On 28.4.1966 judgment was entered against him.
- A bankruptcy notice was issued and he committed an act of bankrupt. He was then adjudged a bankrupted and died.
- There is a contest of priority between the official assignee and the applicant over the land
Held:
- High Court: that at the time when the act of bankruptcy was committed the applicant had an equitable right to a lien ”in other words,although failure to lodge a caveat does not entitle the depositee with whom the IDT is deposited, to a lien under the code, he still possesses a right to it in equity. He can exercise that right by registering the caveat…at any time.” (Raja Azlan Shah J)
7. Palaniappa Chetty v Dupire Brother

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Facts:
- D borrowed $2,000 from App on a promissory note and deposited with App IDT to his land as security for the loan..
- App obtained judgment against D and applied for an Order for Sale of the land.
- Res being another creditor of D had attached the land.
Held:
- Court of Appeal (Earnshaw JC) held that the App was entitled to a lien.The existence of a contract of loan under which the lender was entitled to possession of the borrower‟s IDT as security gave rise to the presumption that the deposit by the borrower in such an instance was made with the intention of creating a lien.
- “The P has carefully complied with all the provision of section 80 and has become the holder of a lien. To use the words of the section a “lien” has been “created” in his favour.”
8. Paramoo v Zeno Ltd
Facts:
- P advanced money to D and they had agreed to create a charge.
- The charge was never registered.
- It was provided in clause 6 “the mortgagor further hereby deposit the title for the land concerned with the lender as security for principal and interest and the lender may lodge a caveat with the Collector of Land Revenue to create a lien”.
Held:

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- Federal Court: “the Land Code makes it quite clear that a charge is quite distinct from a lien. A lien under the Code is a statutory lien and it has an independent existence apart from a charge so that if a charge is avoided for non compliance with the law, the lien is not avoided also provided of course it complied with the law.
- It is clear therefore that the P‟s lien has priority over the D2‟s claim.” (dismissing the appeal)
Facts:
- Proprietor had entered into a conditional contract to sell the land (obtaining consent from State Authority (SA). Consent was not given
- However, Purchase paid the balance of the purchase money and was given IDT prior to obtaining of consent.
- The Purchaser deposited IDT with creditor who then entered LHC.
- On default, LH sought a declaration that LHC was valid and that it had the right to sell the land.
Held:
- Court of Appeal was firm that only the registered Proprietor had a right to deposit IDT for the purposes of creating a lien. As this had not happened here, the caveat was invalid and there was no right for the creditor to sell the land.
- “ditekankan oleh peguam bahawa sebelum seksyen 281 KTN, hanya tuan punya berdaftar boleh mendepositkan suratikatan hakmilik untuk mewujudkan suatu lien (kes Peter P‟Chient…)”(Ahmad Fairuz HMR affirmed)

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- Perwira Habib Bank (M) Bhd v Loo & Sons Realty Sdn Bhd (No. 2), COA ordered the return of IDT to the Proprietor
10. Perwira Habib Bank (M) Bhd v Megat Najmuddin Bin Megat Khas
Facts:
- P granted an overdraft facility to Borrower to be secured by 3rd party legal charge over the Property (whose registered owner was Loo & Sons Realty Sdn Bhd-the owner/chargor).
- In the meantime the chargor had entered into S&P Agreement to sell the property to Land Holding Sdn Bhd.
- The property was subjected to restriction in interest-SA approval/consent.
- One of the terms of the letter of offer, the utilization of overdraft may be allowed only after the execution of all security documents and presentation of charge for registration.
- It takes about 2 months to obtain the consent from SA, the borrower proposed to P the creation of LHC over the property and allowed the drawdown of the facility.
- D further advised P to withdraw LHC over the property and to relodge the same to enable the transfer of the property from the owner/chargor to Land Holdings SB. (D had been negligent in their advice to P)
Held:
- Court: held that sincethe borrower was not the owner of the subject property and since the request to create LHC came from the borrower and not the registered owner of the property,clearly the D were negligent in advising that LHC was sufficient security for both overdraft facilities (allowing P‟s claim for breach of contract and on negligence)

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11. Peter P‟Chient v Ramasamy Chetty
Facts:
- ????
Held:
- In the case, the IDT had been deposited with a creditor. That creditor then sought to use the IDT as security for a lien in his favour.
- However, this was not successful and the court affirmed that the right to use IDT for the purposes of creating a lien belonged only to the Proprietor.
12. Sarojeanne @ Sulochana Leela d/o Duraisamy & Anor v Dr DM Thuraiappah
Facts:
- P (a lawful widow & Son) were joint administrators of the estate of the deceased.
- Among the estate of the deceased was a property in Ampang.
- P‟s name have been endorsed on IDT (Ampang property) as representatives.
- UABB (the Bank) had granted D a credit facility, to be secured by 3rd party charge on Ampang property by P.
- Registration of charge was rejected as P‟s name were registered on IDT as representatives, not registered owners.
- Bank returned IDT to D.
- D refused to return to P and argued that he had a lien in respect of the loan given to P2.
- P denied receipt of any advance.
Held:

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- High Court: “Upon evidence adduced, the court found that P2 did not borrow any monies from D……,The court accepted the evidence of P1 that…..at the request of D, P lent the title to be used as security to enable D to borrow money from the Bank. Therefore, there was no Q of lien setting in because there was no borrowing of any money by P”
13. Sithambaram Chetty v Ramanathan Chetty
Facts:
- Loh Chin Thye, the Registered Proprietor of the land created a lien by depositing IDT in favour of D.
- D protected his interest by lodging a caveat.
- D then gave up IDT at the request of Loh Chin Thye and the same executed a charge over the land in favour of P. The registrar refused to register the charge because of the caveat.
- P applied to remove the caveat which was then removed from the RDT.
Held:
- Court: held that D lost his right as a lien holder the moment he parted with IDT and his caveat was removed from RDT.
- The Respondent/ D is no longer a secured creditor. The Respondent having elected to substitute for his lien a hold of attachment,he was no longer a secured creditor, and the charge took priority of the attachment.
14. UJA Sdn Bhd v United Overseas Bank (M) Bhd
Facts:

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- P is the RP of a piece of land deposited its IDT to the Lender as security for a loan granted to a borrower, Union Plastics Sdn Bhd.
- The borrower defaulted in the repayment of the loan. Subsequently, the lender obtained a judgment against the borrower and applied for an order for sale under section 281(2) against the P‟s land.
Held:
- Held: that since the judgment had been obtained and not been satisfied and all sums due under the lien had not been duly paid, the lender was entitled to the benefit of the lien. Section 281(1) did not specifically prohibit the creation of lien by RP to secure a loan granted to a 3rd party.
15. Zeno Ltd v Prefabricated Construction Co. (M) Ltd & Anor
Facts:
- D1 took a loan from P and executed a mortgage and gen charge.
- As a security D deposited with P IDT of land in Klang.The charge was never registered in the land office although it was registered with ROC.
- P lodged a caveat in respect of the said land and duly recorded in the RDT.
- D2 obtained judgment against D1 and obtained PO against the said land. Subsequently D2 obtained OFS against the land by public auction
Held:
- High Court: “in my view, since intention is always a matter of inference from all the relevant circumstances, once the IDT is deposited with the

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depositee that is evidence of intention to create a statutory lien for the purpose of the section.” (Raja Azlan Shah J)
- “the nature of P‟s interest in the land was a lien analogous to an equitable mortgage: and an equitable interest in land was capable of being caveated”
- “the caveat established priority and the onus was therefore on the holder of a subsequent equity to show facts which rendered it in equitable for the holder of a prior equity to insist as against him on that priority”

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CHARGE(1)
1. Mahadevan s/o Mahalingam v Manilai & Sons (M) Sdn Bhd
2. Malayan Banking Berhad v Zahari Bin Ahmad
3. Oriental Bank v Chup Seng Restaurant
4. Yee Sin Cheang v UMBC

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1. Mahadevan s/o Mahalingam v Manilai & Sons (M) Sdn Bhd
Fact:
- One Mr Ratnavale received a sum of money from the appellant on a security of a piece of land. It was the common intention of the appellant and Mr Ratnavale to have the said land charged to the appellant as temporary security.
- A charge was never registered.
Held:
- Federal Court: “There is, however, no provision in the …Code prohibiting the creation of equitable charges and liens. The Code is silent as to the effect of securities which do not conform to the Code‟s charge or lien. Therefore equitable charges and liens are permissible under our land law.We therefore think that the words “or other charge on land” in Section 21(1) of Limitation Act must be construed to include equitable charges and lien as well.”(Salleh Abbas CJ)
2. Malayan Banking Berhad v Zahari Bin Ahmad
Fact:
- D owed P certain amount of money based on a loan agreement cum assignment. D defaulted in repayment and P applied for an order for possession of the property and order that they are at liberty to sell.

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Held:
- High Court: “Clearly, the…Code does not prohibit the creation of equitable charges and based on a body of authorities, our land laws recognize equitable charges…Looking at the loan agreement and the deed of assignment in the present application,in my opinion these documents created an equitable charge both in form and substance.”(Mohamed Dzaiddin J)-order granted
3. Oriental Bank v Chup Seng Restaurant
Fact:
- Borrower deposit IDT to the lending Bank with discharge of existing charge and an instrument of charge duly executed in the bank favour
- Charge was not registered.
- Borrower defaulted. Bank applied OFS. Claiming that to be subrogated to the interest of the existing registered chargee which they had taken under an assignment.
Held:
- High Court (Dzaiddin J): refusing the application. Before the Bank can invoke its right under Section 256, it must be registered as charges.
- “that an equitable chargee does not have the same legal rights as those of a registered chargee. He cannot apply for an order for sale in the event of default by the chargor.
- It must , 1st and foremost, be recognised that the…Code ….adheres strictly to the principle of registration and recognises only parties who are registered under the Code…Thus, whilst the Federal Court on 1 hand, held that the Code….does not prohibit the creation of an equitable charge, the Code being a complete and comprehensive code of law

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governing land, on the other hand, clearly requires the charge to be registered in the prescribed form before a chargee can enforce his right of foreclosure under the Code”
4. Yee Sin Cheang v UMBC
Fact:
- A bank teller had made a mistake in a payment to a customer. The bank required his mother-in-law to deposit her IDT to support a loan to her.
- Not only had the mother-in-law not requested a loan, none had been supplied to her. No charge had been registered and she had not intended the deposit to be by way of lien.
- She later applied for the return of IDT.
Held:
- High Court:As there was no agreement to charge the land, or to create a lien thereon, the purported lender had no right to retain IDT as such a right belonged only to the holder of the security interest. (the Bank could not retain the IDT)
-

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WEEK 4 : CHARGE(2)
1. Co-operative Central Bank Ltd v Meng Kuang Properties Bhd
2. Jacob v Overseas Chinese Banking Corporation
3. Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd
4. Mary Michael v UMBC
5. Oriental Bank v Chup Seng (Butterworth) Restaurant
6. Overseas Chinese Banking Corporation Ltd v Lee Tan Hwa& Anor
7. Phuman Singh v Khoo Kwang Choon
8. Public Finance Bhd v Narayanasamy
9. Syarikat Kewangan Melayu Raya v Malayan Banking Bhd
10. United Malayan Banking Corp Bhd v Syarikat Perumahan Luas Sdn Bhd

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1. Co-operative Central Bank Ltd v Meng Kuang Properties Bhd:
Facts:
- Clause 5 of the charge annexure required the Bank to serve a notice before imposing default interest.
- The Bank had failed to do so and proceed with statutory notice in form 16D which included default interest.
- OFS was dismissed.
Held:
- The notice was held invalid and ineffectual on another ground. As the chargee demanded payment of default interest which could be demanded only if notice had been served, the absence of such prior notice could not be remedied by Form 16D.
- “…not a simple case of the said notices of demand containing an erroneous sum but it is a case where the said notices were demanding payment of something to which P bank had no right”

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2. Jacob v Overseas Chinese Banking Corporation:
Facts:
- The appellant charged his land to the Respondent to secure the repayment of an overdraft. On default of payment, the Respondent served Form 16D and applied for OFS
Held:
- Federal Court (Suffian LP) held that:
- Where there has been a breach of any obligation Form 16D may be used, regardless of the nature of the obligation, thus including that of payment of the principal sum on demand; and
- Where the principal sum is payable on demand then, either notice in Form 16D or Form 16E may be served.
- (The object of the legislature was to see that sufficient notice was given to the chargor before the chargee applied for OFS. Where there was a demand is for payment of principal sum and interest, Form 16E could be used as well as Form 16D and the demand may be made by either form)
- “I do not think it correct to say that if you demand principal and interest you must use Form 16D, but if you demand principal only, you must use Form 16E. In my view as neither section 254 nor section 255 uses the word „interest‟, interest may be claimed by either form.”

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3. Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd
Facts:
- The developer obtained bridging loan from the chargee to develop their land to be sold of the sub-purchaser. The loan to be disbursed progressively.
- The chargee releases the first progress payment. When the developer fails to pay interest on the first progress payment, the chargee called off the deal.
- The chargor requested the release of more money from the chargee including submitting Architect certificate to the chargee to inform of the progress development.
- The chargee apply for OFS to recover the 1st progress payment released to chargor.
Held:
- Privy Council: the judge decided that before granting OFS, the court will look at whether there is existence of cause to contrary, and laid down 2 ways:-
- There is existence of cause to contrary if the granting of OFS will be against the rule of law; orit will beagainst the rule of equity.
- “Section 256(3) of NLC is mandatory. The court shall order a sale unless it is satisfied of the existence of „cause to contrary‟. Granted that these words have been construed in Malaysia as justifying the withholding of an order where to make one would be contrary to some rule of law or equity, they clearly cannot extend to enabling the court to refuse relief simply because it feels sorry for the borrower or because it regards the lender as arrogant, boorish or unmannerly” (Lord Oliver of Aylmerton, p 460)

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4. Mary Michael v UMBC
Facts:
- The appellant charged his land to the Respondent as security an overdraft facility. On default of payment, the Respondent caused a notice in Form 16D to be served to the appellant demanding payment.
- The appellant contended that the notice in Form 16D is null and void.
Held:
- Federal Court (Azmi LP) held that:
- In this case although the principal sum was payable on demand, the chargee was seeking to the interest which had become due and payable. Therefore the notice in Form 16D was an appropriate notice.
- “it is to be observed that a notice in Form 16D applies to any charge, so that it can validly be used even in the case of a charge where the principal sum is payable on demand”
5. Oriental Bank v Chup Seng (Butterworth) Restaurant
Facts:
- Borrower deposit IDT to the lending Bank with discharge of existing charge and an instrument of charge duly executed in the bank favour
- Charge was not registered.
- Borrower defaulted. Bank applied OFS. Claiming that to be subrogated to the interest of the existing registered chargee which they had taken under an assignment.

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Held:
- High Court (Dzaiddin J): refusing the application. Before the Bank can invoke its right under Section 256, it must be registered as charges.
- “that an equitable chargee does not have the same legal rights as those of a registered chargee. He cannot apply for an order for sale in the event of default by the chargor.
- It must , 1st and foremost, be recognised that the…Code ….adheres strictly to the principle of registration and recognises only parties who are registered under the Code…Thus, whilst the Federal Court on 1 hand, held that the Code….does not prohibit the creation of an equitable charge, the Code being a complete and comprehensive code of law governing land, on the other hand, clearly requires the charge to be registered in the prescribed form before a chargee can enforce his right of foreclosure under the Code”

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6. Overseas Chinese Banking Corporation Ltd v Lee Tan Hwa& Anor
Facts:
- The land owner charged his land to the chargee to secure an overdraft facilities. When the chargor failed to make repayment of the loan, chargee apply for OFS.
- The intervener (bona fide purchaser) challenged the application on the ground that the chargee had knowledge that the land was prior than that sold to the intervener under Sale and Purchase Agreement.
-
Held:
- High Court:granting the order would be contrary to the rule of equity.
- (the interveners successfully prevented the chargee from selling the charged land on the basis that, 1 firm of solicitors had acted for all the parties, and the chargee were aware prior to the registration of the charge that the chargor retained only a limited interest in the land due to the sale of most of it to the interveners)
- “ under the circumstances, I hold that P knew through their solicitors that the interveners were purchasers of a portion of the land. The charge of the whole land to P could not be a valid charge since a substantial proportion of it was not absolutely owned by the 2 defendants. There is nothing to prevent P from proceeding against Ds or any party who was negligent in handling the charge transactions.” (Eusoff Chin J)

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7. Phuman Singh v Khoo Kwang Choon
Facts:
- A charge document is a document of debt and should be registered in court as required under Section 3 & 4 of the Money Lending Ordinance 1951 (revised in 1989 as Moneylender‟s Act 1951)
- A chargee (moneylender) created a charge without obtaining licence under Money lending Ordinance.
- When chargee applied for OFS, its validity was challenged.
Held:
- The Court decided that the fact that it was not registered was a „cause to contrary‟ within the meaning of section 256(3) NLC.
8. Public Finance Bhd v Narayanaswamy
Facts:
- The chargor subdivided his land and sold it off to sub-purchaser. He charged the same land for bridging finance in favour of the chargee. Who knew that the land had been fragmented, sold and some of the sub- purchaser had even gone into possession of their respective portion.
- The chargor defaulted in making repayment and the chargee applied for OFS.
- The sub-purchaser contended that when the charge was registered, the chargor disregard the unregistered interest of 3rd party.

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Held:
- Court:refused to grant OFS “the appellants‟ insistence that the interveners had no rights whatsoever except a right to damages against the Respondent for breach of contract- is so plainly unconscionable that we are not all surprised that the judge was driven to find fraud and collusion” (Ong CJ)
9. Syarikat Kewangan Melayu Raya v Malayan Banking Bhd
Facts:
- 1st loan (1965)-RM 400,000, 2nd Loan (1967)-RM 180,000. Both loans under one account with D. D issued notice under Form 16D in 1980 to demand for outstanding amount.
- LA granted OFS. Appellant appealed.
- Grounds of appeal:-
 Form 16D provides with a heading “Notice of default with respect to a charge” and it was inappropriate to issue a single notice in respect of the whole sum because it was secured not by a charge but by 2 charges;
 That there should have been 2 notices specifying how much was claimed under each charge.
Held:
- Federal Court (Mohamed Azmi FJ) dismissed the application.
- “whether such a notice of default is bad in law would depend on whether the chargor has been prejudiced ormisled by any defect in the notice so as to render the granting of the OFS unjust-depend on the circumstances of each particular case”

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- Appeal to Privy Council.
- PC dismissing the appeal: “the purpose of the notice is to specify the breach and the need to recover the same. It does not prejudiced the appellant since they perfectly knew the fact they are one account under two loans”

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10. United Malayan Banking Corp Bhd v Syarikat Perumahan Luas Sdn Bhd
Facts:
- The chargor apply to set aside an order for sale of certain land charged to UMBC on the ground that it was void (the charge was registered in breach of an express restriction in interest endorsed on IDT-without consent to charge.
Held:
- Allowed the application. Held “…the charge having been registered in breach of an explicit statutory prohibition imposed on the title to the charged land pursuant to the provision of the Code,the title or interest of the chargee is defeasible since registration thereof had been obtained by means of an insufficient or void instrument (s340(2)(b)) and also because the Registrar of Title, in registering the charge, had acted ultra vires the power conferred upon him: s340(2)(c)” (Edgar Joseph Jr)

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CHARGE(3)
1. BBMB v Esah Bt Hj Abdul Ghani
2. HSBC v Wan Mohd Bin Wan Ngah

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1. BBMB v Esah Bt Hj Abdul Ghani
Facts:
- App lent money to the principal debtor and as security took a charge over land belonging to the principal debtor and 2 others.
- Res was a guarantor for the loan.
- The principal debtor failed to pay the loan. App applied for OFS but did not proceed with it.
- Instead took a proceeding against Res as guarantor.
Held:
- Court held: the chargee can pursue all remedies available to him under the law when the borrower defaults. He can institute an action for the recovery of debts as well as foreclosure proceedings on the property. The 2 actions are not the same.

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2. HSBC v Wan Mohd Bin Wan Ngah
Fact:
- The chargor brought a house and to assist him the purchase of the house, he charged the house to the chargee.
- The chargor defaulted in making repayment to the chargee.
- Chargee applied for OFS. At the same time he also filed a civil action for recovery of debts against the chargor.
Held :
- High Court: LA is a competent tribunal under the law where the chargee could obtain a complete remedy. To allow the chargee to proceed with the civil suit in court for the recovery of debt must be treated as a case of abuse of the process of the court. (Lamin J)

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EASEMENT
1. Alfred Templeton & Ors v Low Yat Holdings Sdn Bhd & Anor
2. Datin Siti Hajar v Murugasu
3. EW Talalla v Ng Yee Fong & Anor
4. Tan Wee Choon v Ong Peck Seng & Anor

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1. Alfred Templeton & Ors v Low Yat Holdings Sdn Bhd & Anor
Fact:
- the Vendor in selling land had retained for the remaining land the benefit of a right of way.
- Later, the purchaser commenced building work on the purchased land which hindered access to the vendor‟s land which became landlocked as a result.
- In seeking to maintain the right of way the vendor claimed, inter alia, specific performance of the contractual right of way or a declaration that it was entitled to an equitable easement in respect of such a right.
- The grounds for the easement in equity were that the D company:
 had agreed in sale and purchase agreement that the land was sold subject to the right of way;
 knew that the vendor would not have sold unless the right had been agreed upon; and
 later orally agreed to grant such a right.
Held:
- Court granted relief to P on the basis of equity.The defendant company was ordered to execute and register an easement in statutory form.
- “…when…the defendant company has by its words and conduct led P to believe that they would be provided a right of way from their lots, which otherwise would be landlocked, it should not be allowed to go back on them when it would be unjust or inequitable for it to do so.”(Edgar Joseph J at p 245)

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2. Datin Siti Hajar v Murugasu
Fact:
- P is the Registered Proprietor of 2 pieces of land. One of the land has a road frontage with a public road which leads to town.
- D is the owner of the adjacent land
- Since 1964, D and the occupiers of the houses have been using the road as access to and from public road (constructed a metalled road across P‟s land as an approach road to link up with a public road).
- P allege that since 1964 D has built the road on her land without her consent and had been wrongfully trespassing on the said land.
Held:
- It was decided that the metalled road constructed by D was not easement even though P never objected to it. An easement could only be granted by an express grant as provided for under Section 284 NLC and that such grant could only be made with the agreement of the proprietor of the SL and affected by way of executing an instrument in Form 17A.
- (an injunction restraining D by himself or his servants or agent from entering or crossing P‟s land and damages was granted to P)

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3. EW Talalla v Ng Yee Fong & Anor
Fact:
- A part of the D‟s premises, a septic tank, had encroached upon by P‟s land for more than 20 years. P‟s sought an order for removal of the septic tank and D contended that as P had been aware of the encroachment for a long time, he must be taken to have acquiesced in the encroachment thereby creating an easement in favour of D‟s land.
Held:
- Court held:under the Code an easement must be created by express grant.
- Orders were made under which D had to cease the encroachment, the septic tank was to be removed and D were to refrain from again encroaching.
- “acquiescence on the part of P is not sufficient to create an easement. There must be an expressed grant of easement in accordance with the provision of the sections” (W Hamzah J)

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4. Tan Wee Choon v Ong Peck Seng & Anor
Fact:
- P had bought a piece of land over which there was a path used by D as access to their land.
- P fenced the land but the fence was removed by D.
- P then sought a declaration that he was entitled to the exclusive possession of the land, and an injunction restraining D from trespassing on the land.
Held:
- P succeeded.
- Court held that whatever the right claimed by D might be, it had not been registered as an easement and further it was unclear as to how it had been obtained.
- “ it is true that prior to 1965 rights of way could be acquired through easement, prescription, lost modern grant or by way of necessitybut these common law and equitable rights previously procurable in this country are no longer available since the passing of section 3(1) and 6 of the Civil Law Act 1956 and the …Code” (Wan Yahya J at p 323.)
-

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LAROW
1. Che Nik Bt Bakar v Pentadbir Tanah Kuala Krai
2. Liow Tow Thong v Pentadbir Tanah Alor Gajah
3. Lye Thean Soo v Syarikat Warsaw
4. Si Rusa Inn Sdn Bhd & Ors v Collector of Land Revenue, Port Dickson & Ors
5. Tong Tiong Lim v Pentadbir Tanah Daerah, Johor Bahru
6. Vadivelu Palanisamy V. M. Radhakrishnan

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1. Che Nik Bt Bakar v Pentadbir Tanah Kuala Krai
Fact:
- Since 1973, Great Eastern Mills Bhd ('GEM') had used the road known as 'Jalan Great Eastern' ('the road') which ran across the appellant's land.
- However, when the government granted the land to the appellant absolutely free of any right of way, she blocked the road, thus forcing GEM to enter into an agreement that GEM was to pay a monthly toll of RM500 for the use of the road.
- GEM therefore made an application to the land administrator for an order of a public right of way.
- The land administrator granted the order. The appellant appealed against the order.
- The appellant defended her objection to the public right of way based on the principle of inviolateness of land and argued that there was an alternative route available, namely a road reserve which was mapped on paper
Held:
- (Nik Hashim JC) in dismissing the appeal held that the land administrator was correct in making the public right of way on the appellant's land, and had exercised his discretion properly:-
- “The reserved road was not a road in the sense that it was practical and readily available for use by the public. Therefore, it was not reasonable to treat the road reserve as an alternative route”
- “ In the absence of an alternative route, there was thus an urgent public necessity for the land administrator to grant a public right of way across the appellant's land, even though it was against the principle of inviolateness of land. The private interest of the appellant

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that she might lose good income from the use of her road must give way to the higher interest of the public.”
2. Liow Tow Thong v Pentadbir Tanah Alor Gajah
Fact:
- 2nd to 4th Ds had two rights of way from their lands. One was through Lot 419 which belonged to P, while the other was through lands belonging to Ds and 3rd parties.
- The 2nd right of way was subsequently closed to Ds. Thus, Ds made an application to the land administrator under s 390 NLC for an order of a right of way over Lot 419.
- It was established that the right of way over Lot 419 was closer to the main road and more convenient.
- P appealed.
Held:
- Allowing the appeal. Augustine Paul JC held:
- “It is settled law that where there is an alternative right of way available, the land administrator must take that fact into consideration. The authorities indicate in crystalline terms that the grant of a right of a way, when another one already exists, though less convenient, is a wrongful exercise of discretion.
- Since the defendants only elected to proceed against the plaintiffs, it was manifestly patent that the creation of that right of way was anchored on convenience without a consideration of other relevant circumstances. This was a violation of s 390(3) of the NLC”

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3. Lye Thean Soo v Syarikat Warsaw
Fact:
- The respondents (Ps) a sand contractors, had been given entry to sand mining holdings through an access road over a piece of land which had been reserved for many years for future use as a road, although the land had been surrender to the Government, it had never taken it over.
- The respondents claimed that the appellants (Ds) had wrongfully and maliciously conspired and combined among themselves to injure their business by obstructing the access road and preventing their lorries and other vehicles transporting sand from going in and out of the holdings.
-
Held:
- The learned trial judge gave judgment for the respondents.
- The appellants appealed.
- (Supreme Court), dismissing the appeal: the path used by P had been used by the public for many years without interruption and that the Ds, owner of the land, had not taken steps to ensure LAROW had not being created. D therefore entitled to continue to use the access road.
- “Public Right of way may arise in two ways. There are either provided by the statute or they are created by dedication of the soil to the public use by the owner or acceptance by the public…”
- “In this case the path has been used by the public, particularly those living in the vicinity for many years, even before the third appellant acquired ownership of the land, without interruption. He had taken no steps to ensure that a public right of way was not so created. The path has been used and enjoyed by the public as a right for so many

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years openly and without interruption and must be known to the owner of the land.”
- ”The respondents were merely using the common law method of establishing a public right of way by proof of dedication. The learned judge was within his right to accept it and there is no reason to interfere with his decision.”
4. Si Rusa Inn Sdn Bhd & Ors v Collector of Land Revenue, Port Dickson & Ors
Fact:
- A private of way was granted over the App1‟s land to Res2 to enable him access to the seashore for swimming and allied activities.
- App2 & 3 were the registered lessee and chargee of the land.
- But there was an alternative route of all material time to the seashore via a public road to sea between 1-2km. (He wanted a shorter/ much shorter route to the sea)
-
Held:
- Appeal was allowed. The Collector shall act and exercise his discretion properly and reasonably in all cases, save in exceptional circumstances where such departure for such propriety or reasonableness can be made.
- His Lordship (Peh Swee Chin J) found the purpose of the grantee‟s application “one of pleasure, pure and simple. He wanted a shorter or much shorter route to the sea for swimming and allied activities”
- (Peh Swee Chin J) held: “the word „expedient‟ in section 390(3) has always been an enigmatic one, a word pregnant with so many or numerous possibilities so that standing by itself without other words associated immediately with it, it would leave the field wide open…

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- Does the word „expedient‟ confer a blanket authority on a Collector to do whatever he thinks fit, in other words, an unfettered discretion?...
- It is my view that when a Collector is satisfied that it is expedient, it is tantamount to this, that he should then act or exercise his discretion properly and reasonably, in all cases, save in exceptional circumstances where such departure from such propriety or reasonableness can be made.
- There must be something more than just mere inconvenience or inconvenience, some situation that partakes of gravity or urgent necessity to grant a Collector right of way. Further there were no exceptional circumstances here which made it for the said Collector, expedient to make an order which would be contrary to principle, the main one being violateness of land in this case .”
5. Tong Tiong Lim v Pentadbir Tanah Daerah, Johor Bahru
Fact
- The applicant and his family had been using a footpath over Lot 2775, Bandar Johor, Bahru Grant No 27822 ('the lot') by paying rent of RM100 a year.
- Subsequently, the lot was sold to the second respondent who thereafter stopped the access unless the applicant agreed to pay an increased rental and compensation of RM6,000.
- However, the applicant refused to accept the offer and applied for the land administrator's right of way under s 390 of MLC.
- An enquiry was held and an order was giving access to the applicant subject to certain terms (“the first order”).

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- The second respondent objected on the ground that the applicant had access through Lot 603 and, therefore, had no need for an access through the lot.
- As a result of her objection, a second assistant land administrator held another enquiry pursuant to s 395(1)(b) read with s 35 NLC on the ground that at the first enquiry, no evidence was disclosed regarding the availability of an access through Lot 603 and found that it was inexpedient for the first order to continue to exist and it should therefore be extinguished ('the second order').
- The applicant has applied, inter alia, to set aside the second order and for the first order to be validated
Held:
- Dismissing the application (Haidar J):
(1) Section 395(1)(b) of the NLC gives the power to the land administrator to hold an enquiry and thereafter order the right of way already made to be extinguished if satisfied that it is inexpedient for it to continue to exist. (2) It was clearly beyond dispute that at the first enquiry, the evidence of the availability of access through Lot 603 was not disclosed. However, the issue of such disclosure did not arise as the second respondent was at that time prepared to allow access through the lot subject to certain terms, but an agreement could not be reached. Therefore, the discretion to reopen the inquiry under s 34(1) read with s 34(2)(a) of the NLC was properly exercised.

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3) Although the second assistant land administrator failed to record briefly his reasons for reopening the enquiry as required under s 34(3), that requirement was only directory and not mandatory and did not vitiate the second order.
6. Vadivelu Palanisamy V. M. Radhakrishnan
Fact
- The respondent is the registered owner of Lot 2420, Mukim Sitiawan, Daerah Manjung and the applicant is the registered owner of Lot 3332, adjacent to Lot 2420.
- On 27 April 1993, an enquiry was conducted by the Land Administrator of that district under s. 390 NLC pursuant to the respondent's application for a right of way over the applicant's land.
- This enquiry was a continuation of an earlier enquiry held on 21 July 1992 where the lands involved were inspected by the Land Administrator resulting in a final order granting the respondent the right of way.
- The applicant appealed against the order of the Land Administrator under s. 418 of the NLC on the ground that there were two alternative access roads available to the respondent which the Land Administrator had failed to consider.
- In support, the applicant submitted a plan of the area "VP1" showing the two access roads, the north road which had been in existence since 1929 passable to light vehicles and the south road passable to heavy vehicles. He claimed that the respondent had knowledge of the existence of these roads when he purchased Lot 2420.

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Held:
- High Court: (Dato Abd Hamid Embong J): dismissed the appeal with costs
- "R11" does not show the existence of the north and south roads as alleged by the applicants but instead supports the respondent's assertion that the only access roads in existence are the gazetted road reserves. The north and south roads may exist but in the Court's view they are not access roads in the true sense but merely temporary lanes not passable to modern vehicles. These lanes can be used only for as long as the landowners through whose lands they pass allow them to be used.
- To hold that this right of way should not be created in favour of the respondent due to the alleged existence of the north and south access roads would not only be against the weight of the evidence in favour of its creation but also against public policy and the interest of the occupiers of the lands in the vicinity.
- The Court finds that the Land Administrator had meticulously investigated into the merit of this application and had satisfied himself, on an objective basis, that there was a case for the creation of this right of way. The Land Administrator had properly evaluated the facts as he found them before exercising his discretion and this Court finds no reason to differ from his finding and so confirms his order.

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INDEFEASIBILITY
1. Adorna Properties Sdn Bhd v Boonsom Boonyanit[2001] 2CLJ 133
2. Au Meng Nam & Anor v Ung Yak Chew & Ors[2007] 4 CLJ 526
3. Puran Singh v Kehar Singh
4. Tan Ying Hong v Tan Sian San & Ors Judgment dated 21 Jan 2010

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1. Adorna Properties Sdn Bhd v Boonsom Boonyanit[2001] 2CLJ 133
Fact:??? – refer to illustrations
- Boonsom Bonyanit claimed she‟s the RP/ true owner of the properties and that she has never sold them to Adorna.
- The original IDT was at all times in her possession.
- She also claimed that the vendor‟s name, passport No. and signature on MOT was not her i.e. forgery/fraud
- She also tendered MOT signed in 1967 in her favour and certificate from Royal Thai Consulate General-show that vendor‟s passport was a forgery.

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Held:
- High Court: Refused to restored Mrs Boonsom Bonyanit as RP.
- COA: decided in favour of Mrs Boonsom Bonyanit
- Federal Court: Appeal was allowed .
- FCourt : Issues for consideration:
 whether the standard of proof for forgery was that of a balance of probabilities or beyond a reasonable doubt
 whether the defendant (appellant) had acquired an indefeasible title to the land by virtue of the proviso to s. 340(3) of NLC
- The standard of proof for forgery in a civil case is that of a balance of probabilities.
- By virtue of the proviso to s. 340(3) of the NLC, a purchaser in good faith and for valuable consideration is excluded from the application of the substantive provision of s. 340(3).This category of registered proprietors obtains immediate indefeasible title to the lands. Thus, on the facts of this case, even if the instrument of transfer was forged, the respondent nevertheless obtained an indefeasible title to the land. (Eusoff Chin CJ)
- “the word „any purchaser‟ reflect the intention of parliamentto provide immediate indefeasibility, not deferred indefeasibility to such innocent parties.”
- “The proviso says that any purchaser in good faith and for valuable consideration or any person or body claiming through or under him are excluded from the application of the substantive provision of sub-s (3). For this category of registered proprietors they obtained immediate

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indefeasibility notwithstanding that they acquired their titles under a forged document.”
2. Au Meng Nam & Anor v Ung Yak Chew & Ors[2007] 4 CLJ 526
Fact: - refer to illustration
-
Held:
- HC:dismissed plaintiff‟s claimapplying Fed Court case. Held that D1 is a BFP4V under sec 340(3) and acquired indefeasibility of title. Plaintiff appeal.
- COA:allowing the appeal
- COA :Gopal Sri Ram JCA: refuse to follow or apply the doctrine of stare decisis.
- Reason: Fed Crt in Adorna Properties did not establish new principle of the common law. Only involve interpretation of the section in the Act of

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Parliament i.e. Sec 340(3) therefore, a lower court do not need to follow it as it was decided per incuriam
- Gopal:
(a) Sec 340(3) “to whom it may subsequently be transferred” applies to subsequent acquirers of land taking from RP whose title are defeasible. Adorna is not a subsequent purchaser, it took its title from forger.
(b) Federal Court overlooked 2 authorities which held that NLC provided for deferred indefeasibility i.e. Muhammad Buyong v Pemungut Hasil Tanah Gombak & Ors and M& J Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor
(c) Adorna Properties equated purchasers and registered proprietors. Federal Court clearly overlooked the provisions of s 5 NLC that defined them separately and differently.
(d) the object and purpose of sec 340 NLC is to protect RP of land by affording them certainty of titles. This is a just result because it is unfair and unjust that the true owner of land should be deprived of it by the machinations of a rogue.
(e) when a court interprets a statute, particularly one which confers rights upon or grants protection to persons generally or a class, its duty is to derive a meaning that is fair or in accordance with the purpose of the particular Act of Parliament. An interpretation should not be placed which will produce an unsatisfactory or unfair result. There is a presumption that Parliament does not

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intend an unfair or unjust result.Adorna Properties interpreted s 340 NLC in a manner as to produce an unfair and unjust result.
(f) it is central to the doctrine of indefeasibility housed in s 340 NLC that IDT must itself be genuine. In Adorna Properties, the instrument of transfer and other documents were forged. But the title was genuine.In the present appeal, IDT used to effect the transaction itself was a forgery. Hence Adorna Properties was clearly distinguishable from the facts of the case.
(g) Vendor‟s had no title to pass. You cannot give what you do not have nemo dat quad non habet.
- Raus Sharif JCA:decided that Fed Court need to review Adorna Properties but refuse to go against doctrine of stare decisis
- held: had the learned judge taken into account relevant facts and consideration surrounding S&P, he would not have concluded that D1 was BFP under sec 340(3) NLC
- Raus Sharif JCA:
Reasons:
 D1 knew that at the time he bought the land the purchase price was below the market valueand he had taken advantage of it by completing the purchase of land
 D1 disregarded his obligation to investigate the alleged property and genuineness of the documents. BFP does not include a purchaser who is careless/negligent (failed to take ordinary precautions that ought to be taken)

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 consideration paid by D1 was below government valuation and also the valuation done by D1‟s valuer (government valuation RM 1.286M, Valuer RM 1.2M)
3. Puran Singh v Kehar Singh
Fact:
- P, the registered proprietor of 4 pieces of lands.
- P signed a POA to D giving power to deal with his land.
- There is a clause in POA that D can appoint a substitute attorney. It can be exercise once.
- D substituted the attorney to Fauja Singh (FS) but he did not signed it in his capacity as an attorney, instead signed it in the name of P.
- FS then appointed another substitute, Bahadur Singh (BS).
- BS executed an instrument to transfer the land to D.
- P challenged D‟s title over the land
Held:
- Court held: that the registration of the D had been effected by means of an "insufficient instrument". (the instrument executed by D in his capacity as attorney was in excess to the POA or was based on an invalid POA.)

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4. Tan Ying Hong v Tan Sian San & Ors (Judgment dated 21 Jan 2010)
Fact:- refer to illustration
- Issue: Whether an acquirer of a registered charge or other interest or title under the National Land Code 1965 by means of a forged instrument acquires an immediate indefeasible interest or title.”
Held:
- Federal Court decision : Appeal was allowed.
- Held: It is trite law that this Court may depart from its earlier decision if the former decision sought to be overruled is wrong, uncertain, unjust or outmoded or obsolete in the modern condition.

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- Reason: that the FC in Adorna Properties had misconstrued s 340 (1), (2) and (3) of the NLC and came to the erroneous conclusion that the proviso appearing in sub-s (3) equally applies to sub-s (2). By so doing the FC gave recognition to the concept of immediate indefeasibility under the NLC which we think is contrary to the provision of s 340 of the NLC.
- D3 (UMBC) is an immediate holder of the 2 charges. Therefore D3 could not take advantage of the proviso to sub-s (3) of s 340.
- The fact that D3 acquired the interest in Q in good faith for value is not in issue, because once it is satisfied that the charges arose from void instruments, it automatically follows that they are liable to be set aside at the instance of the RP. (Arifin Zakaria CJM)
- Zaki Tun Azmi CJ:
 “…I totally agree with the learned CJM‟s view that the error committed by the FC in Adorna Properties Sdn Bhd v Boonsom Boonyanit was to read the proviso to sub-s (3) as being a proviso to sub-s (2) as well. The error is very obvious because the proviso expressly refers to “this sub-section” which must in the context of that sub-section be read as proviso to sub-section (3) only.
 “I am legally obligated to restate the law since the error committed in Adorna Properties is so obvious and blatant. It is quite a well known fact that some unscrupulous people have been taking advantage of this error by falsely transferring titles to themselves. I hope with this decision, the Land Authorities will be extra cautious when registering transfers.”

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CAVEAT
1. Vallipuram Sivaguru v PCRM Palaniappa Chetty Official Administrator as Administrator of the Estate of Gan Inn, Deceased
2. Zeno Ltd v Fabricated Construction
3. Eu Finance Bhd v Siland Sdn Bhd (M & J Frozen Food Sdn Bhd, Intervener)
4. Pow Hing & Anor v Registrar of Titles, Malacca
5. Public Bank Bhd v Pengarah Tanah & Galian & Anor
6. Seet Soh Ngoh v Vebtakeswara Sdn Bhd
7. Perwira Habib Bank (M) Bhd v Loo & Sons Realty Sdn Bhd ( 7 cases with same name – pls analyse

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1. Vallipuram Sivaguru v PCRM Palaniappa Chetty Official Administrator as Administrator of the Estate of Gan Inn, Deceased
Fact:
- In 1931 G (Gan Inn) deposited his issue document of title to land with D1- respondent as security for a loan.
- in 1932 sold the same land to Nagappa Eliathamby (N) explaining the absence of the issue document of title by a false statement that it was lost.
- On account of the absence of the issue document of title N could not obtain registration of the transfer on sale and in consequence lodged a caveat against the land under section 166 of the Land Code.
- G died in 1932, shortly after executing the transfer in favour of N, and in 1933 D1-respondent lodged a caveat under section 134 of the Land Code claiming a lien by deposit with him of the issue document of title.
- At the end of 1933, N executed a transfer of this land in favour of P- appellant and N died in June, 1934.
- In August, 1934, this land was transmitted to the D2-respondent as administrator of G's estate.
Held:
- Held: that D1-respondent had acquired, by the deposit with him of the issue document of title, the right to a lien over the land by registering at any time a caveat under section 134 of the Land Code (Cap. 138).
- That as between D1-respondent and P-appellant the former had the prior equity and that his delay in presenting his caveat for registration was not an omission which operated and enured to forfeit and take away his pre- existing equitable title. that N could not have obtained a decree for specific performance against

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G so long as the issue document of title remained deposited with D1- respondent and therefore P-appellant could not obtain a decree directing D2-respondent to transfer the land to him unencumbered by the lien.
- “But in fact there is no evidence that Nagappa Eliathamby ever search the register and found it clear. Even if he had done so, he would still have to be on guard owing to the absence of IDT. He should have known if the title had been deposited as security for a debt. The depositee could at any time register a caveat and obtain a registered lien. NE took the risk of paying his money without obtaining IDT and P who did the same cannot blame D1” (Terrell Ag. C.J, p. 58)

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2. Zeno Ltd v Fabricated Construction
Fact:
- D1 executed a mortgage and general charge and as security D deposited with P IDT of his land.
- A charge was never registered. P lodged a caveat over RDT and it was duly endorsed.
- D2 obtained a judgment against D1 and obtained a Prohibitory Order against the same land.
- Issue: whether a lien holder who had a possession of IDT and who had entered a caveat had priority over a judgment creditor who had subsequently obtained a prohibitory order.
Held:
- Court held: that P had priority over the land.
- “in my view the caveat establishes priority and the onus is therefore on the holder of the subsequent equity to show facts which render it inequitable for the holder of the prior equity to insist as against him on that priority. Although priority in time is the ordinary test, the final analysis where evidence discloses some act or omission on the part of the holder a prior equity the rule that „who has a better equity‟ applies.” (Raja Azlan Shah J p. 107)

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3. Eu Finance Bhd v Siland Sdn Bhd (M & J Frozen Food Sdn Bhd, Intervener)
Fact:
- Charged land was sold to the intervener under court order pursuant to section 256.
- However, the purchaser failed to settle on the due date.
- Registrar of HC extended the time for settlement.
- Caveator caveated the land protesting at the extension.
- Purchaser then sought removal of the caveat.
Held:
- The Court granted the application because the caveator, as RP, could not caveat its own land if it was merely relying on its status as proprietor.

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4. Pow Hing & Anor v Registrar of Titles, Malacca
Fact:
- A discharge of the existing charge and a transfer were presented for registration.
- The transferee then executed a transfer to 3rd party and the transfer together with charge to a 4th party were presented for registration.
- No communication was received from the Registrar.
- The title was searched but no evidence of any application for entry of dealings or caveat to prevent the transfers proceeding.
- A further search was made and it appeared from an undated and unsigned note that there were arrears of land rent.
- All instruments were rejected by the Registrar.
- The Collector then purported to forfeit the land.
- RP objected but Registrar entered RC to protect the interest of the state.
Held:
- Federal Court found that theforfeiture was invalid.
- “ it was clearly an attempt to regularise the position ex post facto and no less than a manoeuvre for the obfuscation of the failure to comply with the essential requirement of the Code…this note or endorsement was clearly made in fraudem legis…it was a fraud on law, and so too was the Registrar‟s Caveat entered…after receipt of the instruments presented for registration and once again evidently exhibited to rectify a hopeless situation retrospectively.” (Abdoolcader J at 157)
- In the circumstances the caveat could not remain. It would seem that SA was seeking to tie up the title until the forfeiture had been finalized.

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Obviously SA had failed to act timeously in forfeiting the land, and so used the RC not so much to protect an interest which needed protection, but to cover up the failure by ensuring that the title remain in the name of defaulter.
5. Public Bank Bhd v Pengarah Tanah & Galian & Anor
Fact:
- P, registered chargee and later RC was entered at the request of the Inland Revenue Department.
- (20.10.88) P was advised of the entry of the caveat.
- (27.12.88) He unsuccessfully requested the Registrar to remove the caveat.
- (29.1.89) P filed an appeal against the Registrar‟s decision under section 418.
Held:
- Dismissing the appeal. Mohtar Abdullah JC said thatP was not the proprietor of the land and could only apply to the court under section 418 against the decision to enter the caveat. However, here theaction was time-barredfor:
- “ By virtue of section 418, the time limited for appeal against the order of the Registrar is 3 months from the date of communication of the decision of the Registrar. The decision…in this case is the decision to enter the caveat and not the decision to refuse the application for cancellation…therefore, for the purpose of computation of time under section 418, it is crystal clear that time runs from the day of communication of the decision of the registrar to enter the caveat i.e.

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20.10.88. the plaintiff appeal under section 418 was entered on 29.1.89.” (p. 510-511)
6. Seet Soh Ngoh v Vebtakeswara Sdn Bhd
Fact:
- P purchaser a piece of land from D.
- D also contracted to build a house on the said land.
- P was to make payment progressively. And P paid progressively.
- D wanted to terminate the agreement, he alleged that P would‟nt be able to settled the whole purchase price.
- P institute a proceeding for specific performance and for order that Registrar to enter RC to prohibit the registration of any transfer to 3rd party.
- Registrar was joined in as D2.
Held:
- Court order the Registrar to enter RC to prevent fraud and improper dealing in respect of the land.
- “ Section 320(1)(a) empowers the Registrar to enter his caveat for the prevention of fraud and improper dealing and if such a possible dealing is brought to the notice of the court and if the registrar is before the court, I see no reason why the court cannot in such a case order him to do so”

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Fact:
- Proprietor had entered into a conditional contract to sell the land (obtaining consent from State Authority (SA). Consent was not given
- However, Purchaser paid the balance of the purchase money and was given IDT prior to obtaining of consent.
- The Purchaser deposited IDT with creditor who then entered LHC.
- On default, LH sought a declaration that LHC was valid and that it had the right to sell the land.
Held:
- Court of Appeal was firm that only the registered Proprietor had a right to deposit IDT for the purposes of creating a lien. As this had not happened here, the caveat was invalid and there was no right for the creditor to sell the land.
- Perwira Habib Bank (M) Bhd v Loo & Sons Realty Sdn Bhd (No. 2), COA ordered the return of IDT to the Proprietor and that the caveat to be removed.
*UPDATE CASES ACCORDINGLY.

Land Law II notes - For Revision Purposes Only

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