LAND 2 SEM I 0809


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LAND 2 SEM I 0809

  1. 1. END-OF-SEMESTER EXAMINATION SEMESTER I, 2008/2009 SESSION AHMAD IBRAHIM KULLIYYAH OF LAWS Programme : Bachelor of Laws Level of : Third Study Reading Time : 2.30 p.m. – 2.45 p.m. Date : 5.11.2008 Duration : (15 minutes) Answering Time : 2.45 p.m. – 5.45 p.m. Section(s) : All Sections Duration (3 hours) Course Title : Land Law II Course Code : LAW 3111 This Question Paper Consists of 8 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 (Act 56) 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 Mr.Salah, the Senior Banking Manager of Merchantile Bank Malaysia Bhd. (“Bank”) was approached by Land Investment Co. (“Developer”) a property development company to approve an overdraft facility of RM500,000.00. The Developer agreed to provide, as security, all the parcel of alienated land held under P.T.No.2811, Lot No.2001, District of Kuala Pusu together with an office premises erected thereon (“said property”). The market value of the said property is estimated to be RM 20 Million. The Developer proposed to the Bank to release the loan money to them relying on the deposit of the original issue document of title to the said property rather than until after the registration of the legal charge in order to raise money urgently. Mr. Salah agreed to the proposal and instructed for the release of the loan on the security of a lien after consulting with the Bank’s panel solicitors. He instructed his solicitors to enter a lien- holder’s caveat pending the completion of the charge documentation. The solicitors however, failed to enter the lien-holder’s caveat on the belief that the charge documentation will be registered soon. Meanwhile, the Developer entered into sale and purchase agreements with 200 purchasers. However, the Developer could not complete the housing development project as scheduled and defaulted in the repayment of the loan as agreed with the Bank. The 200 purchasers commenced civil action against the Developer for failure to deliver their houses as agreed. The Bank instructed the solicitors to commence foreclosure proceedings to recover the loan. The solicitors realised that they have not registered the charge documentation.
  3. 3. 3 Advise Mr. Salah on the remedies available to the Bank in the circumstances where the charge document is not registered. (15 marks) QUESTION 2 a. Despite, the guaranteed protection for private property rights by the Federal Constitution 1957, the introduction of the Land Acquisition Act 1960, appears to confer on the State Authority wide powers in acquiring land belonging to private landowners. The Land Acquisition Act 1960 appears to be violating the concept of inviolability of private propert rights that is expressly provided in the Federal Constitution of Malaysia 1957. Discuss with reference to decided cases, the rationale of the discretionary powers vested upon the State Authority by the Land Acquisition Act 1960 in acquiring private land and whether there are any possible grounds upon which a landowner can challenge such acquisition proceedings. (10 marks) b. Explain the manner of determining the market value of a land that has been acquired compulsorily. (5 marks)
  4. 4. 4 QUESTION 3 Mr. Conman is the registered proprietor of a piece of land with a mansion erected on it. On 13th April 2005, Mr.Conman deposited the issue document of title (IDT) to his land with Dollar & Sense Bank Berhad (“Bank”) as a security for an overdraft facility. The Bank however, neglected to enter a caveat against the land to protect its interest. On 11th May 2005, Mr. Conman entered into an agreement to sell the land to Hj. Boleh. Mr. Conman explained the absence of the IDT by saying that he had lost it. He told Hj. Boleh that he is in the process of applying for a new IDT. He, however, allowed Hj. Boleh to take possession of the land if Hj. Boleh pay 50% of the totl purchase price in advance. The parties agreed that the actual transfer would be effected upon the receipt of the IDT from the land office. Hj. Boleh paid the sum and took poseession of the land. Mr. Conman delayed in completing the memorandum of transfer in favour of Hj. Boleh despite repeated requests. Hj. Boleh sought his friend’s advise. His friend advised him to lodge a caveat to protect his claim on Mr. Conman’s land. However, he was shocked to find a Registrar’s Caveat entered on the title on an application by the Inland Revenue Department on the ground that Mr. Conman has failed to pay income tax to the Department for the past 5 years. The Registrar’s Caveat was entered on 6th July 2005.
  5. 5. 5 Advise the Bank and Hj. Boleh on the following matters: (i) Assume Hj. Boleh proceeded to enter a caveat against Mr. Conman’s land on his friend’s advice, what is the type of caveat that he can apply for and what is the effect of the caveat? (4 marks) (ii) What are the remedies available to the Bank? (3 marks) (iii) Whether the said Registrar’s Caveat was validly entered by the Registrar? (4 marks) (iv) Whether the Bank and Hj. Boleh can remove the said Registrar’s Caveat? (4 marks) QUESTION 4 The legal and institutional framework regulating the Malay Reserved Land Institution was initiated by early 1910 with the intention of ensuring protection of Malay land proprietary rights. This led to the passing of the FMS Malay Reservation Enactment of 1913 (“FMS MRE 1913”) was enacted to regulate the Malay reserved land. The FMS MRE 1913 was amended in 1933.
  6. 6. 6 Discuss the relevance of the FMS Malay Reserved Enactment 1933 (“FMS MRE 1933”) in regulating the changing needs of the Malay society in dealing with Malay reserved land after Independence. Support your answer with statutory provisions and decided cases. (15 marks) QUESTION 5 Sami is the registered proprietor of a piece of land numbered Lot 3838, held under Registry Title, situated in the Silicon Valley. In October 2004, Sami obtained a loan to expand his livestock business and bought his neighbour’s land, Lot 6767. He took a loan from Bank Agri Berhad (“Bank”) using Lot 3838 as collateral for securing the loan. Unfortunately, a year after Sami’s business could not survive as he lost all his livestock to an unidentified disease. He is now in severe financial difficulties and unable to repay the loan to the Bank. The Bank wants to obtain an order for sale from the land office at the Silicon Valley. The Bank served Sami a notice in Form 16D to communicate its intention to commence foreclosure proceedings. Advise Sami on the following matters: a. Briefly explain to the Bank the procedures for obtaining an order for sale. (5 marks)
  7. 7. 7 b. Advise Sami as to whether his cousin can help him settle the loan by buying the property from him through a private treaty. (5 marks) c. Advise the Bank on its rights to take possession of the charged property as a remedy (5 marks) QUESTION 6 Pn. Eton wanted to purchase the parcel of land together with a bungalow in Kuala Kelabit as a wedding gift for her only son for RM 500,000.00. She paid a deposit of RM 350,000.00 to Hj. Bakhil who claims to have Power of Attorney from Hj. Ahmad, the registered proprietor of the land. Hj. Ahmad is away performing Umrah and he has given a Power of Attorney to Hj Bakhil to enable him to transfer the land to his children in the event he does not return to Malaysia within six months. Pn. Eton’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 300,000.00. Meanwhile, Hj Ahmad returned from Umrah after one year 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. Eton. Hj. Ahmad was very upset and wanted justification from Hj. Bakhil for selling his land without his knowledge. Meanwhile Hj.
  8. 8. 8 Bakhil who was excited to receive the amount of RM 350,000.00 left the town with his young wife and cannot be located. Hj. Ahmad applied to remove the Private Caveat by writing to the Registrar of the Kuala Kelabit Land Office. The Registrar in compliance with the statutory requirement served a Notice in Form 19C on Pn. Eton. However, Pn. Eton managed to obtain a court order for extending the Private Caveat. The Bank upon receiving of the Notification in Form 19A applied to the Registrar to remove the Private Caveat pursuant to the provisions of section 326 of the National Land Code 1965. However, the Bank’s application was rejected by the Registrar. The Bank alleges that as a registered chargee they too have a right to seek for removal of the caveat. Meanwhile, the Registrar entered his caveat to protect the interest of Kuala Kelabit District Council since Hj. Bakhil had failed to pay the assessment amounting to RM 50,000.00 despite taking the money from Hj. Ahmad for the payment. Pn. Eton is very disappointed with the events that had taken place and approached her lawyers for advice. Advise the parties as to their rights. Support your answer with statutory provision and decided cases. (15 marks)