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  1. 1. END-OF-SEMESTER EXAMINATION SEMESTER II, 2003/2004 SESSION AHMAD IBRAHIM KULLIYYAH OF LAWS Programme : Bachelor of Laws Level of : Third Study Reading Time : 9.00 a.m. – 9.15 a.m. Date : 2.3.2004 Duration : ( 15 minutes ) Answering Time : 9.15 a.m. – 12.15 p.m. Section(s) : All Sections Duration ( 3 hours ) Course Title : Equity & Trusts I Course Code : LAW 3710 This Question Paper Consists of 10 Printed Pages With 6 Questions. INSTRUCTIONS TO CANDIDATES DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO. Answer FOUR (4) questions only. Question ONE (1) from Part A is Compulsory and choose at least ONE question from Parts B and C. REFERENCE ALLOWED Specific Relief Act 1950 Any form of cheating or attempt to cheat is a serious offence which may lead to dismissal. Statutes should be free from any form of annotation. APPROVED BY
  2. 2. 2 PART A THIS QUESTION IS COMPULSORY QUESTION 1 a. Daniel agreed to buy from Razali 5 acres of land at Sungai Buaya , Kuantan with a purchase price of RM 5000 per acre. Daniel paid RM 10,000 upon the execution of the Sales and Purchase Agreement. However, a few months later, Razali changed his mind and refused to proceed with the Agreement. Therefore, he terminated the agreement and refunded the sum of RM 10,000 to Daniel. Daniel is unhappy over the incident as he has applied for a bank loan and has done all the necessary arrangements to develop the land. He is thinking of seeking specific performance or damages for breach of contract. Advise Daniel. (5 Marks) b. Discuss the role of equity in any one of the following circumstances: i. Registered jual janji, or ii. Lease, or iii. Lien, or iv. Tenancy, or v. Transfer
  3. 3. 3 Substantiate your answer with the relevant provisions from the National Land Code 1965 and cases. (5 Marks) c. Chose the proper injunction to be applied. Explain your reasons and the requirements that need to be fulfilled before your selected injunction is granted. The people of the Republic of ABC toppled their President last year. When the new government took over, they found out that the former President has embezzled approximately US $50,0000, while he was in power. The Republic now wishes to bring an action to recover the money. (5 Marks) d. Does it make any difference if a purchaser of the land only pays 10% as compared to a purchaser who has paid the full purchase price? How does equity resolve such cases. (2 Marks) e. ‘Equity looks at that as done which ought to be done.’ Explain the application of this maxim to the case of Mountney v. Treharne [2003] Ch. 135 (2 Marks) f. Define equity in Islam and support with the verse from the Al-Quran which allows the application of equity in Islam. (2 Marks)
  4. 4. 4 PART B QUESTION 2 a. Can specific performance be granted in the following case? Give reasons for your answer. David agrees to sell 3 acres of his land to Johan. However, before the execution of the contract, David sold the land to Sunyi Sepi Sdn. Bhd. at a higher price. Johan wishes to seek specific performance against Sunyi Sepi Sdn. Bhd. as David is also one of the directors of the company. (3 Marks) b. Will the Courts specifically enforce the following contracts? Give reasons for your answers. i. Bruce wants to enforce the agreement to marry his fiancée, Diana who wishes to marry someone else. (2 Marks) ii. Ali, a contractor, refuses to continue to build a house for Datin Ahdimah. (2 Marks) iii. An invitation to dinner. (2 Marks)
  5. 5. 5 c. Specific performance is an equitable relief and like all equitable relief, it is discretionary in nature. Explain. (4 Marks) QUESTION 3 a. Chose the proper injunction to be applied in the following situations. Explain your reasons and the requirements to be fulfilled before your selected injunction is granted. i. Adly and Aida enter into an Agency Agreement verbally whereby Aida agreed to sell electrical products produced by Adly’s company and commission will be paid to her. The commission was never paid and Aida wishes to bring an action against Adly. Particulars on the sales are not with Aida but in Adly’s possession. (4 Marks) ii. Philly and Emma are neighbours. Their houses are situated nearby each other. Philly decided to do some renovation to his house. Due to the construction which began end of last year, Emma discovered a lot of cracks on the wall of her house. She had informed Philly but her complaints were ignored. She approaches you and asks you to represent her. . (4 Marks)
  6. 6. 6 iii. Mary instituted divorce proceedings against her husband. The divorce was granted and an application was made for the distribution of their jointly acquired property. Mary felt that her husband might have committed perjury about his assets in the course of the proceedings. What can Mary do in order to obtain the documents relating to her husband’s assets? (4 Marks) b. If there is a conflict between common law and equity in Malaysia, which prevails? Support your answer by citing the relevant provision. (1 Mark)
  7. 7. 7 PART C QUESTION 4 a. Amar negotiated to purchase a lot of land in Kelang. During the negotiations, Amar was briefed on the location of the land and its status. He was told that there was an old lady, Angamah, who is occupying one small corner of the land and the vendor wishes to reserve the land for her. Amar agreed. However, when the new title was issued, the Land Office did not exclude the portion belonging to Amar. Angamah got angry and wishes to sue Amar for fraud. Amar tried to explain to her that it was not his mistake. Now Amar wishes to rectify the error. Advise Amar. (7 Marks) b. Discuss briefly the position of rescission of a contract under common law and equity. (2 Marks) c. On 8 January 2003, Adham entered into a Sale and Purchase Agreement with Ong Thai Hong to purchase a piece of land in Penang. Clause 5 of the Sale and Purchase Agreement states that the Agreement shall be null and void if there is refusal by the State Government to release the subject property from compulsory acquisition.
  8. 8. 8 Following the execution of the Sale and Purchase Agreement, there was an exchange of correspondence between the parties. The correspondence dealt with the question whether the subject property had been released from acquisition by the Penang State Government. Mr. Ong took the position that no such release had taken place and that the Sale and Purchase Agreement has expired. However, Adham contended that the Sale and Purchase Agreement is still subsisting. Adham instituted proceedings claiming specific performance of the Sale and Purchase Agreement as there was no official refusal from the State Government. Advise him. (4 Marks) QUESTION 5 An equitable assignment is one that does not fully comply with the statutory requirements of s 4(3) of the Civil Law Act 1956. In Khaw Poh Chhuan v Ng Gaik Peng & Ors [1996] 1 MLJ 761, Peh Swee Chin FCJ said in the Federal Court at p 775 as follows: “ ... In any event, compliance with s 4(3) is not a pre-requisite to the validity of an assignment, which is to be determined in the usual ways. Even without complying with s 4(3), for example even without notice of the assignment to such debtors, for the sake of argument, the assignment would have been valid in equity in any event against the assignor.”
  9. 9. 9 And further down in the same page his Lordship continued: “... Section 4(3) has not made any alteration in the law of assignment; it has merely made it easier for the assignee in one aspect in that the assignee can sue in his own name without sometimes having to borrow the name of the assignor or if the assignor is uncooperative, to join the assignor as a co- defendant.” a. Discuss the difference between Legal assignment and Equitable assignment. (2 Marks) b. Define what is an assignment. (2 Marks) c. Cite an example of an assignment and explain it. (2 Marks) d. What are the essential requirements for an equitable assignment? (3 Marks) e. Why did the Privy Council in the case of Malayawata Steel Bhd. v. Govt. Of Malaysia [1975] 1 MLJ 24 reverse the judgement of the lower courts? (4 Marks)
  10. 10. 10 QUESTION 6 a. Define what is estoppel and support your answer with the relevant provision and case. (3 Marks) b. What are the differences between Estoppel by Representation and Promissory Estoppel? (3 Marks) c. What is Proprietary Estoppel? Explain and support your answer with cases. (3 Marks) d. What were the problems with the common law that paved the way for the birth of equity in England? Cite at least 2 main problems. (2 Marks) e. Who is a Chancellor and what were his responsibilities or duties before 1873 in England? (2 Marks)