Uitmlandlawiinotes 140926040530 Phpapp02

LAW 554: LAND LAW 2 CASES SUMMARY, BY AZRIN HAFIZ & DOMINIC J.
OMOK, SEPT 2014

FACULTY OF LAW,UiTM SHAH ALAM,MALAYSIA. -JAN 2015
LAW 554:
LAND LAW 2
CASES SUMMARY
LAW 554: LAND LAW 2 CASES SUMMARY, BY AZRIN HAFIZ & DOMINIC J. OMOK, SEPT 2014
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)
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.
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.
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)
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
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)
6
9. Nawab Din v Mohamed Sharif:

Facts:
-
???
Held:
-
Followed Yaacobs 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?
7
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.
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 C
hetty
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
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
Ps 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, Ps claim had priority over
that of D2. (Lamin J)
10
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
11
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
12
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.
13
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.

14
Held:
-
Court of Appeal: held that the Ress 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 caveatat any
time. (Raja Azlan Shah J)
7. Palaniappa Chetty v Dupire Brother
15
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 borrowers 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:
16
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 Ps lien has priority over the D2s 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 PChient)(Ahmad Fairuz
HMR affirmed)
17
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 Ps claim for breach of contract and on
negligence)
18
11. Peter PChient 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.
Ps 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 Ps 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:
19
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:
20
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 Ps 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
21
depositee that is evidence of intention to create a statutory lien for

the purpose of the section. (Raja Azlan Shah J)
-
the nature of Ps 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
22
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
23
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 Codes 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.
24
Held:
-
High Court: Clearly, theCode does not prohibit the creation of equitable
charges and based on a body of authorities, our land laws recognize
equitable chargesLooking 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 theCode .adheres

strictly to the principle of registration and recognises only parties who are
registered under the CodeThus, 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
25
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)
26
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
27
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
28
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.
29
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)
30
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.
31
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 theCode .adheres

strictly to the principle of registration and recognises only parties who are
registered under the CodeThus, 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
32
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)
33
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 Moneylenders 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 subpurchaser 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.
34
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
35
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
36
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)
37
CHARGE(3)
1. BBMB v Esah Bt Hj Abdul Ghani
2. HSBC v Wan Mohd Bin Wan Ngah
38
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.
39
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)
40
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
41
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 vendors 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.
whenthe 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)
42
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 Ps
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 Ps land and damages was granted to P)
43
3. EW Talalla v Ng Yee Fong & Anor

Fact:
-
A part of the Ds premises, a septic tank, had encroached upon by Ps

land for more than 20 years. Ps 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 Ds 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)
44
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.)
45
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
46
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
47
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
consideration
of
other
relevant
circumstances. This was a violation of s 390(3) of the NLC
48
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
49
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 App1s 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 grantees
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
50
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).
51
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.
52
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.
53
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.
54
INDEFEASIBILITY
1. Adorna
Properties
Sdn
Bhd
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
55
1. Adorna Properties Sdn Bhd v Boonsom Boonyanit[2001] 2CLJ 133

Fact:??? refer to illustrations
Boonsom Bonyanit claimed shes 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 vendors 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 vendors passport was a forgery.
56
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
57
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 plaintiffs 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
58
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
59
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)
Vendors 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)
60
consideration paid by D1 was below government valuation and also

the valuation done by D1s 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 Ds 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.)
61
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.
62
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 CJMs 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.
63
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
64
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 D1respondent 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 Pappellant 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 preexisting
equitable
title.
that N could not have obtained a decree for specific performance against
65
G so long as the issue document of title remained deposited with D1respondent 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)
66
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)
67
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.
68
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 Codethis note or
endorsement was clearly made in fraudem legisit was a fraud on
law, and so too was the Registrars Caveat enteredafter receipt of
the instruments presented for registration and once again evidently
exhibited
to
rectify
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.
69
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 Registrars 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 decisionin this case is the decision to
enter the caveat and not the decision to refuse the application for
cancellationtherefore, 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.
70
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 wouldnt 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
71
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.
72

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LAW 554: LAND LAW 2 CASES SUMMARY, BY AZRIN HAFIZ & DOMINIC J.

OMOK, SEPT 2014

There was an option for the Appellant to repurchase the land at an

Option was not exercised within the time period.

The land was transferred to the Respondent who subsequently agreed to

Appellant commenced action for recovery of the land.

2. Abdul Hamid B Saad v Aliyasak B Ismail:

In pursuant to jual janji agreement dated 27/4/66 (1st agreement) P

Issue: whether the agreements constitute jual janji or outright sale?

3. Ahmad B Omar v Hj Salleh B Sheikh Osman: - pdf

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.

Even if time is originally of the essence of the contract, it had been

4. Halijah v Morad: Facts???

5. Hatijah Rejab v Abdullah Saad:

The Borrower was having a financial difficulties and borrowed RM 20,000

6. Hj Abd Rahman v Hassan:

In 1895 P (Hassan) borrowed money ($1180) from D (Mohd Eusop) and

A written agreement was entered whereby P agreed to repay the sum

Upon full settlement D agreed to retransfer the land to P

if not the transaction becomes jual putus

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

Lower Court: applied principles of equity once a mortgage always a

Privy Council: Having regard to Sec 4 of the Regulation of Titles

It was NOT a security transaction or mortgage as the only form of

Federal Court: the transactionamounted to no more than a contracton

8. Ismail Bin Hj Embong v Lau Kong Han:

9. Nawab Din v Mohamed Sharif:

10. Wong See Leng v Saraswathy Ammal:

Borrower failed to repay loan within agreed duration.

Argued that there is a right to redeem.

Court of Appeal: that jual janji is a contractual transaction, as such, once

11. Yaacob B Lebai Yusoh v Hamisah Bt Saad:

On 28/10/44 P sold the land to D for a sum of $2,000 in Japanese

On 30/1/45 D entered into a written agreement to resell the land to P for

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

Lower/trial Court: agreement to resell was an option given by D to P to

That as the agreement was in nature of a mortgage the right to redeem

12. Sarojeanne @ Sulochana Leela d/o Duraisamy & Anor v Dr DM Thuraiappah

1. Standard Chartered Bank v Yap Sing Yoke & Ors

D1 created a charge in favour of P for purpose of securing a housing loan

Ps solicitors presented the charge for registration but was rejected ( no

Subsequently D2 obtained judgment (for goods sold and delivered) and

High Court: held that by virtue of the unregistered charge in favour of P, P

2. Hong Leong Bank Bhd v Staghorn Sdn Bhd

Subsection (1) of s 281 speaks of the registered proprietor depositing his

subsection (2) the judgment obtained is a judgment against the third-party

Subsection (1) of s 281 is an enabling or empowering provision. It

It was submitted on behalf of Hong Leong that the registered proprietors

3. Hong Leong Finance Bhd v Staghorn Sdn Bhd

legal charge for facilities granted by P to another associate company of D,

BBMB was only protected its interest with private caveat.

Issue :Whether a beneficial owner, other than the registered

4. Manickawasagam Chetty v T.J.C Gragor

The caveat remained on RDT.

The Proprietor contended that lien has been terminated.

5. Master Strike Sdn Bhd v Sterling Height Sdn Bhd

App failed to pay the balance purchase price.