FORFEITURE

Sharifah Zubaidah Aljunid 2011

What is forfeiture?

It is a power of the State Authority to take back alienated land from the registered proprietor due to either, non-payment of rent (s.100 NLC) or breach of conditions (s.127(1) NLC)

Forfeiture

Non-Payment of Rent
See ss. 93,94, 94(2) NLC  Procedure, see ss. 97-100 NLC.

Procedure for Forfeiture for Non-Payment of Rent:
    

1) LA serves Notice of Demand in Form 6A. 2) LA endorses a note of service of Form 6A on the RDT. 3) LA serves a copy of Form 6A on persons and bodies having interest in land. 4) If sum demanded not paid, order of forfeiture made under section 100 NLC. 5) Notification of forfeiture (Form 8A) published in the Gazette.

Breach of Conditions
Type of conditions – express (s.120) and Implied (s.114-117 NLC)  Nature of conditions – s.103:  a) conditions requiring continuous performance;  b) conditions subject to a fixed term.

When does a breach of condition arise?
See s.125 NLC and read p. 128 of your textbook.  What happens when a breach of condition occurs?  Section 127(1) – land is liable to forfeiture to the State Authority.

Forfeiture proceedings upon breach of conditions:
LA has a choice:  a) Impose a fine (s.127 (1A), or  b) Ask proprietor to remedy the breach (s.128); or  c) Hold enquiry to forfeit the land. (s.129)

Processes for breach of condition:

FORFEIT REMEDY BREACH FINE

OR:
Notice to remedy breach
• If not complied with, then, go to FORFEITURE – s.129

FORFEITURE

• Hold enquiry under section 129.

What is the effect of Forfeiture?
See s.131 NLC  (a) land reverts to the State Authority;  (b) all buildings on land vests in the State Authority without compensation;  (c) any item of land revenue due is extinguished.

Can a registered proprietor whose land has been forfeited ask for compensation?
No – s.131 states ‘no compensation’.  See: Pemungut Hasil Tanah Kota Tinggi v UMBC [1981] 2 MLJ 264 as to the rationale why compensation cannot be given in cases of forfeiture.  (p.90 of your textbook).

Can the registered proprietor appeal against forfeiture?
Yes, under section 134 NLC. (See)  Who can appeal?  Appeal to whom?  When to appeal? Any limitation period?  Cross refer to s.418

Grounds of Appeal?
See section 134(2) NLC  1. Order of forfeiture made contrary to NLC;  2. There was a failure on the part of the Land Administrator to comply with the requirements of any provision of the NLC;

Pow Hing & Anor. v Registrar of Titles, Malacca [1981] 1 MLJ 155
On 19/9/1978 –n F.6A was served on the proprietor. No endorsement of this fact was made on the RDT as required by s. 97(2).  The proprietor did not pay the rent due.  On 3/1/1979 – the proprietor sold the land to a 3rd party.  21/6/1979 – the land was declared forfeited.

Pow Hing (cont.)
  

Issue: Whether forfeiture was valid?\ Held: (Justice Abdoolcader) ‘A note of the service of the notice of demand on the registered proprietor in F.6A is required by s. 97(2) to be endorsed by the Collector on the RDT. This requirement is clearly to give notice to all and sundry with existing and prospective interests in the land that a forfeiture may be imminent…”

Decision of Pow Hing:

After considering the effects of section 100 and 134, it was held that conformance with the provisions of section 97(2) is mandatory and hence, non-compliance rendered the forfeiture invalid.

CLR JB v South Malaysia Industries
Forfeiture proceedings began by a notice to remedy the breach.  Breach: using land to store industrial chemicals and fertilizers when the land was only for light industrial purposes only.  Proprietor challenged Land Administrator in court saying proceedings were illegal.

Held:
Forfeiture proceedings held to be valid.  (see case at p.129 of textbook)

Can a forfeiture order be annuled?

See s.133.

Can a proprietor appeal against forfeiture by invoking equity?

No, see PHT Kota Tinggi v UMBC where the appellant invoked the equitable relief against forfeiture and this was dismissed by the Privy Council.

That’s All on Forfeiture!

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