LAND 2 SEM I 0708


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LAND 2 SEM I 0708

  1. 1. END-OF-SEMESTER EXAMINATION SEMESTER I, 2007/2008 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 : 7.11.2007 Duration : (15 minutes) Answering Time : 9.15 a.m. – 12.15 p.m. Section(s) : All Sections Duration (3 hours) Course Title : Land Law II Course Code : LAW 3111 This Question Paper Consists of 9 Printed Pages With 6 Questions. INSTRUCTIONS TO CANDIDATES DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO. Answer FOUR (4) Questions Only. REFERENCES ALLOWED National Land Code 1965 Compilation of Statutes on Land Law (Law Centre Series of Statutes) 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 QUESTION 1 (a) Discuss the concept and meaning of security dealings and explain the types of security dealing prescribed by the National Land Code 1965 (Act 56). Support your answer with the relevant statutory provisions and decided cases. (5 marks) (b) En. Segan, the Senior Manager of Merchantile Bank Malaysia Berhad (“Bank”) was approached by Messrs Kayan & Co. a trading company to approve an overdraft facility of RM 500,000. Messrs Kayan & Co. agreed to provide as security the parcel of alienated land held under P.T. No.2811, Lot No.2001, District of Kuala Pusu together with a factory premises erected thereon (“said property”). The market value of the said property is estimated to be RM 1 Million. Messrs Kayan & Co., proposed to the Bank to release the loan money to them relying upon the deposit of the original issue document of title to the said property rather than until after the registration of the legal charge. Mr. Segan agreed to the proposal and instructed the Bank’s lawyers to enter a lien-holder’s caveat pending the completion of the charge documentation. Mr. Segan released the loan to Messrs Kayan & Co. on the belief that the lawyers have entered the Lien-Holder’s caveat. The lawyers however, failed to enter the Lien-Holder’s caveat on the belief that the charge documentation will be registered soon. Meanwhile, Messrs Kayan & Co. entered into a hire-purchase agreement with Cycle Triangle Co. for purposes of purchasing some machines for their factory. However, Messrs Kayan & Co. defaulted in the repayment of the agreed monthly hire-purchase payments, Messrs
  3. 3. 3 Cycle & Carriage Co. obtained judgment in a civil action, and proceeded to obtain a prohibitory order to attach the land in order to sell the said property to recover the outstanding amount due under the hire-purchase agreement. En. Segan is very confused as to how Cycle & Triangle Co. can attach the land whereas they don not have any interest on the said property. Advise En. Segan as to the rights and priorities of the Bank. Support your answer with statutory provisions and decided cases. (10 marks) QUESTION 2 (a) Explain why is it necessary to restrain dealings and the nature and scope of caveats as a mechanism provided by the National Land Code 1965 to restrain dealings. (5 marks) (b) Pn. Ershah wanted to purchase the parcel of land together with a double storey detached house in Kuala Beruntung as a wedding gift for her only son for the total purchase price of RM 500,000.00. She paid a deposit of RM 350,000.00 to Haji Hassan who claims to be the representative of Haji Ahmad the registered proprietor of the land. Haji Ahmad is away performing Umrah and he has given a Power of Attorney to Haji Hassan to enable him to transfer the land to his sons in any event he does not return to Malaysia within six months.
  4. 4. 4 Pn. Ershah’s lawyer entered a private caveat on the property prior to paying the deposit. The property is charged to Beruntung Bank (“Bank”) to secure a loan of RM 300,000. Meanwhile, Haji Ahmad returned from Umrah after eight months and wanted to transfer the land to his new wife whom he married whilst he was in Mecca. He was shocked when he discovered the caveat entered by Pn. Ershah on his land. Haji Ahmad was very upset and wanted justification from Haji Hassan for selling his land without his knowledge. However, Haji Hassan who was excited to receive the amount of RM 350,000.00 left the town with his new wife and cannot be located. Haji Ahmad applied to remove the private caveat by writing to the Registrar of the Kuala Beruntung Land Office. The Registrar, in compliance with the statutory requirement served a Notice in Form 19C on Pn. Ershah. However, Pn. Ershah applied for and managed to obtain a court order for extending the Private Caveat. Meanwhile, the Registrar entered his caveat to protect the interest of Kuala Beruntung District Council since Haji Hassan had failed to pay the assessment fees amounting to RM 50,000.00 despite taking the money from Haji Ahmad for the payment. The Bank upon receipt of the Notification in Form 19A applied to the Registrar to remove the Registrar’s caveat. However, the Bank’s application was rejected by the Registrar. The Bank alleges that as a registered chargee they should be given the right to apply for removal of the caveat from the Registrar. Pn. Ershah is very disappointed with the events that had taken place and approached her lawyers for advice.
  5. 5. 5 Advise the parties as to their rights. Support your answer with the relevant statutory provisions and decided cases. (10 marks) QUESTION 3 (a) Critically analyse the rights of the State Authority to acquire land belonging to private landowners. Support your answer with the relevant statutory provisions and decided cases. (5 marks) (b) Discuss the possible grounds for challenging land acquisition proceedings by the government. Support your answer with the relevant statutory provisions and decided cases. (10 marks)
  6. 6. 6 QUESTION 4 (a) Explain the needs to introduce specific laws on Strata Titles in Peninsular Malaysia. Support your answer with the relevant statutory provisions and decided cases. (5 marks) (b) Discuss the problems in applying for Strata Titles in Malaysia and what are your suggestions to overcome such problems. (5 marks) (c) Discuss the powers and responsibilities of the Management Corporation in administering high-rise buildings in Peninsular Malaysia. Support your answer with the relevant statutory provisions and decided cases. (5 marks) QUESTION 5 Syarikat Pembangunan Ekonomi Berhad (‘Purchaser’) entered into a sale and purchase agreement to buy a parcel of Malay Reserved land in the area of Kuala Sungai Pusu, Gombak approximately 2 acres from Haji Ahad (‘Vendor’) in August 1999. The Purchaser being a non-Malay company entered into the transaction with the condition that the balance purchase price will only be paid after the Vendor obtains a letter from the State Authority whereby recognizing the Purchaser as a company capable of dealing with Malay Reserved land (‘Authorisation Letter’). The Vendor claims to have contact with
  7. 7. 7 the relevant authorities and will be able to get the transfer of the land in favour of the Purchaser registered without any problems. The Purchaser relying on the Vendor’s representation paid up the balance purchase price to the Vendor even before the Authorisation Letter is obtained from the State Authority. The Vendor gave the Purchaser a duly executed and stamped Memorandum of Transfer in Form 14A together with the original Issue Document of Title. The Purchaser approached Kuala Pusu Bank Bhd. (‘Bank’) for a loan facility of RM1 Million to finance the development of the land into a commercial area comprising of mixed developments such as shops, light industry and offices. The Bank agreed to grant the loan and accepted the security of a lien over the Malay Reserved land on the understanding that they can create a lien over the land as security for the loan. The Purchaser defaulted in repaying the loan, and the Bank commenced foreclosure proceedings to recover the loan given to the Purchaser. However, the Bank was shocked to hear that their lien cannot be enforced since the land is Malay Reserved and the lien is void ab initio. Advise the Bank as to its rights in dealing with Malay Reserved lands and how it can overcome such problems in future. Support your answer with the relevant statutory provisions and decided cases. (15 marks)
  8. 8. 8 QUESTION 6 En. Syaaban is the registered proprietor of the land held vide Registry Title No. Lot 3838, situated in the Dehradun Valley. In October 2004, En Syaaban wanted to expand his orchard and bought his neighbouring land, Lot 6767. En. Syaaban obtained a loan from Bank Pinjaman Dusun Bhd. (‘Bank’) to finance the purchase of the land. He used Lot 3838 as a security for the loan. Unfortunately, a year later En. Syaaban’s business faced some problems and he is now in severe financial difficulties and unable to repay the loan to Bank Pinjaman Dusun Bhd. The Bank wants to obtain an order for sale from the land office at the Dehradun Valley and notified En. Syaaban of the intention to commence foreclosure proceedings. (i) Based on the above facts explain what are the remedies available to Bank Pinjaman Dusun Bhd. (4 marks) (ii) Explain what are the steps that must be taken by Bank Pinjaman Dusun Bhd. in order to obtain an order for sale by public auction. (3 marks) (iii) Explain what are the powers of a Land Administrator in conducting the proceedings to obtain an order for sale by public auction (4 marks)
  9. 9. 9 (iv) Assuming the Bank’s lawyers, failed to register the charge documents as prescribed by the National Land Code 1965 provisions, what is the position of the security? What is the remedy for the Bank? Support your answer with the relevant statutory provisions and decided cases. (4 marks)