The document discusses the principles of equity and land law under Malaysia's Torrens system, emphasizing that only registered land transactions are recognized legally, while unregistered transactions can still enforce 'in personam' rights between parties. It outlines the significance of various sections of the National Land Code (NLC) and the implications of the Civil Law Act regarding the application of equitable principles in land matters. The document also examines judicial views on the acceptance of equitable rights in land law despite legislative restrictions.

1. EQUITY AND LAND LAW
2/25/2015 1EQUITY & LAND LAW

2. Equity Under the Land law.
• Nature of Legal Right to Land under the
Malaysian Torrens System.
• “It is registration that vests and divests title.”
(Justice Raja Azlan Shah in PJTV Denson’s case)
• “Under the Torrens system, the register is
everything” (Justice Ajaib Singh in Teh Bee v K.
Maruthamutu)
• S.340 NLC: Registration confers an
indefeasible title.
2/25/2015 2EQUITY & LAND LAW

3. Contracts v. Dealings
• Contracts relating to land can create many
types of land transactions, i.e. sale of land,
mortgage of land, lease of land.
• Under the Malaysian Torrens system, in order
that a land transaction can be recognised as a
legal right, it must be registered at the land
office.
• Registered land transactions are called
‘dealings’.
2/25/2015 3EQUITY & LAND LAW

4. Dealings under the NLC:
• Only 4 types of dealings can be registered
under the NLC: (s.205(1)):
• 1) Transfers
• 2) Charges
• 3) Leases
• 4) Easements
• Note: A lien is also a type of dealing but it is
protected by way of lodging a lien-
holder’s caveat.
2/25/2015 4EQUITY & LAND LAW

5. s.205(1) NLC:
• “The dealings capable of being effected under
this Act with respect to alienated lands and
interests therein shall be those specified in
Parts 14 to 17, and NO OTHERS”
• The words , ‘no others’ means that land
transactions outside of the NLC are not
recognised under the statutory system.
2/25/2015 5EQUITY & LAND LAW

6. What could constitute ‘NO OTHERS’?
• Dealings that have been executed but not
registered.
• Executed contracts creating land transactions.
• Quare: Does statutory non-recognition
strike the validity of the contracts
that created these land
transactions?
2/25/2015 6EQUITY & LAND LAW

7. s.206 NLC
• Sub-section 1 requires all dealings to be
registered.
• S.206(3):
• “Nothing in sub-section (1) shall effect the
contractual operation of any transaction
relating to alienated land or any interest
therein.”
2/25/2015 7EQUITY & LAND LAW

8. Significance of s.206(3) NLC?
• It saves ‘in personam’ claims between parties
to a land transaction that is not registered
under the NLC.
• It UPHOLDS contractual rights.
• It allows the court to enforce contractual
rights between the parties notwithstanding
the fact that the land transaction is not
recognised under the NLC.
2/25/2015 8EQUITY & LAND LAW

9. Nature of equitable rights to land
• Equitable rights are ‘in personam’ in nature.
• Thus, once parties sign a contract relating to land,
equitable rights to land are also created as parties
have ‘in personam’ claims against each other in
respect of obligations under the said contract.
• The court may exercise equitable jurisdiction to
enforce such contracts by granting a decree of
specific performance. The court may also grant a
host of other equitable remedies in respect of such
contract.
2/25/2015 9EQUITY & LAND LAW

10. Thus:
• Contractual rights gives rise to
equitable rights in land.
2/25/2015 10EQUITY & LAND LAW

11. The view that equity has no place under the
Malaysian Torrens System.
• Although s.3(1) Civil Law Act ` 1956 allows the
application of English law and equitable
principles in Malaysia, s.6 prohibits the
application of English law to land matters.
2/25/2015 11EQUITY & LAND LAW

12. Section 6, Civil Law Act:
• “Nothing in this Part shall be taken to introduce into
Malaysia …any part of the law of England relating to
the tenure or conveyance or assurance or succession
to any immoveable property or any estate, right or
interest therein.”
• Issue: Does the above provision prohibit
the importation of equity into land
matters?
2/25/2015 12EQUITY & LAND LAW

13. Datin Siti Hajar v Murugasu [1970] 2
MLJ 153
• Obiter:
• “…the effect of s.6 seems to be to oust the
application of common-law and rules of equity
relating to land tenure, transfer or
transmission of immoveable property…”
2/25/2015 13EQUITY & LAND LAW

14. UMBC v Pemungut Hasil Tanah Kota
Tinggi [1984] 2 MLJ 87
• The appellant’s land had been forfeited by the State
Authority for non-payment of rent.
• Appellant tried to invoke the equitable relief against
forfeiture.
• Privy Council (held):
• S.6 Civil Law Act prohibits the application of English
rules of equity relating to tenure of which the
equitable rules relating to relief against forfeiture are
a part.
2/25/2015 14EQUITY & LAND LAW

15. UMBC v Pemungut Hasil Tanah Kota
Tinggi [1984] 2 MLJ 87
• Lord Keith of Kinkel:
• “The NLC is a complete and comprehensive code of
law governing the tenure of land in Malaysia and the
incidents of it, as well as other important matters
affecting land there, and there is no room for the
importation of any rules of English law in that field
except so far as the Code itself may expressly provide
for this.”
2/25/2015 15EQUITY & LAND LAW

16. Hj. Abdul Rahman v Mohamed Hassan
[1917] AC 209
• Before the NLC, s.4(i) of the Selangor Registration of
Titles Regulation 1891 had declared ‘null and void’
any dealings outside of the statute.
• This resulted in the rejection of the rule of equity
‘once a mortgage, always a mortgage’ by the Privy
Council in the famous ‘jual-janji’ case of Hj. Abdul
Rahman v Mohamed Hassan [1917] AC 209
2/25/2015 16EQUITY & LAND LAW

17. The View Accepting Equity Into
Malaysian Land Law
1) The court has an inherent jurisdiction to do justice
between the parties and thus apply equity.
– (See: Motor Emporium v Arumugam [1933-34] FMSLR
2) By virtue of section 206(3) NLC, the courts may
still enforce ‘in personam’ claims relating to
unregistered dealings.
(See: Karuppiah Chettiar v Subramaniam(1971) 2 MLJ
116)
2/25/2015 17EQUITY & LAND LAW

18. More on views accepting equity:
• 3) In some cases, courts have disagreed that
s.6 of the Civil Law Act prohibits the
application of equitable rules to land matters.
• (See: Devi v Francis [1969] 2 MLJ 169 where
Justice Chang Min Tat said:
• “The land law in England is one thing and
equity another mattter.”
2/25/2015 18EQUITY & LAND LAW

19. View that s.6 Civil Law Act does not
prohibit equity:
• The opinion of the Privy Council in UMBC’s
case should be confined only to its issue of
applying equitable rules on relief against
forfeiture. (See Templeton v Low Yat Holdings
S/B [1993] 1 MLJ 443
2/25/2015 19EQUITY & LAND LAW

20. More views favouring equity:
• 4) Recognition of the ‘trust’ concept in
Malaysia. The creation of a trust over land
is recognised under the Trustee Act, 1949
and the NLC. The trust concept accepts the
concept of legal and equitable ownership
of land.
2/25/2015 20EQUITY & LAND LAW

21. Types of Equitable Land Transactions and
Concepts Recognised in Malaysia
• 1) Equitable Ownership
• Munah v Fatimah [1968] MLJ 54
• - Beneficiaries of an estate who had contracted to
sell the land to the plaintiffs but failed to transfer the
land legally to the plaintiff was ordered by the court
to effect the transfer.
• - Court recognised that the plaintiff was the
equitable owner of the land after signing the
contract and going into possession.
2/25/2015 21EQUITY & LAND LAW

22. Equitable Land Transactions and
Concepts
• 2) The ‘Bare-Trust’ Concept
• “The moment you have a valid contract for
sale, the vendor becomes in equity, a trustee
for the purchaser.”
• (Applied by the courts in Ong Chat Pang &
Anor. v Valliappa Chettiar[1971] MLJ 224 and
other cases. Confirmed by the Supreme Court
in Dr. Michael Atun Wee’s case [1994] 3 MLJ
594)
2/25/2015 22EQUITY & LAND LAW

23. More Equitable Land Transactions
• 3) Equitable Lease
• See: Margaret Chua v Ho Swee Kiew (1961) 27
MLJ 173
• The court held that an unregistered lease is
still good as an agreement for a lease.
• 4) Equitable Estoppel/ Proprietary Estoppel
• See: Devi v Francis , Perumahan Farlim’s case,
Holee Holdings Case.
2/25/2015 23EQUITY & LAND LAW

24. Equitable Land Transactions
• 3) Equitable Security Transactions:
• A) Equitable charge: Mahadevan v Manilal &
Sons [1984] 1 MLJ 266, Federal Court held –
• “There is no provision in the NLC which
prohibits the creation of equitable charges.
Such a charge gives rise to an equitable right
in favour of the creditor.”
2/25/2015 24EQUITY & LAND LAW

25. Equitable Security Transactions
• B) Equitable Lien
• (See: Mercantile Bank v The Official Assignee
of How Han Teh [1969] 2 MLJ 196, Standard
Chartered Bank v Yap Sing Yoke [1989] 1 CLJ
530
• C) Jual Janji
• Yaacob b Lebai Jusoh v Hamisah [1950] MLJ
255- ‘time not of essence’
2/25/2015 25EQUITY & LAND LAW