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CONSTRUCTION LAW

TABLE OF CONTENTS
1.0 INTRODUCTION TO LAW381.................................................................................1
2.0 FUNDAMENTAL OF CONSTRUCTION LAW..............................................................2
3.0 OVERVIEW OF THE MALAYSIAN LEGAL SYSTEM....................................................5
4.0 THE MALAYSIAN JUDICIAL SYSTEM........................................................................9
5.0 THE LAW OF CONTRACT I............................................................................... .....11
6.0 THE LAW OF CONTRACT II ..................................................................................17
7.0 THE LAW OF CONTRACT III..................................................................................25
8.0 THE LAW OF TORT I........................................................................................... ..30
9.0 THE LAW OF TORT II....................................................................................... .....36
10.0 THE LAW OF TORT III................................................................................. ........44
11.0LAND LAW I .................................................................................................. .....52
12.0 LAND LAW II ............................................................................................. ........58

1.0 INTRODUCTION TO LAW381

SYNOPSIS
• To introduce what is LAW381 all about
• To inform the expectations of the lecturer towards the whole semester
• To aware the students on the process of teaching and learning

PROPOSITION
• 10% - coursework and presentation
• 10% - 20% tutorial (every week)
• 10% - attendance and participation in class
• 60% - 70% - examination
• Passing marks 50%
• Percentage of failures 20% - 30%

REQUIREMENTS FOR LAW381
• General principle of Malaysian law by Lee Mei Pheng (Chapter 1 – 6)
• Contracts Act 1950 (Act 136)
• Law dictionary
• National Land Code 1965
• Past year examination papers
• Motivation and spirit to learn

ZULHABRI Ismail
Department of Building Page 1

CONSTRUCTION LAW

• Come early to my class – if you come later than me you are considered
‘late’
2.0 FUNDAMENTAL OF CONSTRUCTION LAW

SYNOPSIS
To provide an introduction and overview on construction law.

CONSTRUCTION LAW
“Construction law is neither a legal term of art not technical one. It is
used to cover the whole field of law which, in one way or another, affects
the construction industry...” Prof John Uff (2001).

“The term “construction law” is now universally understood to cover the
whole field of law which directly affects the construction industry
and the legal instruments through which it operates. But Construction law
extends…well beyond…Construction law is…inter-active subject in which
both lawyers and construction professionals…have an essential part to play.
Construction law…embraces all construction contracts…Prof John Uff (2002).

CATEGORIES OF LAW
Sources of Construction Law can be categorized into the following:-
• Written: Legal source of law refers to all that law that has been
reduced to, or is present in the written form (Harbans Singh, 2005).
• Unwritten: Constitutes that part of the local law that is not
recognised as “written law”.

Section 3 of the Interpretation Acts 1948 and 1967 (Act 388) defines “written
law” to mean:

The federal Constitution and the Constitutions of the States and
subsidiary legislation…; Acts of Parliament and subsidiary
legislation…; and Ordinances and Enactments (including any federal or
state law styling itself an Ordinance or Enactment) and subsidiary
legislation…; and any other legislative enactments or legislative
instruments (including Acts of Parliament of the United Kingdom of Great
Britain and Northern Ireland and Orders in Council and other subsidiary
legislation made thereunder) which are in force in Malaysia or any part
thereof.

WRITTEN LAW
Legislation - Acts of parliament / statutes
Example of Statutes/Acts Apply To Construction
1. Arbitration Act 2005.
2. Architects Act 1967 (Revised 1973) Act 117.
3. Companies Act 1965 (Revised 1973 – Reprint 1988) Act 125.

ZULHABRI Ismail
Department of Building Page 2

CONSTRUCTION LAW

4. Contracts Act 1950 (Revised 1974 – Reprint 1997) Act 563 &
(Amendment) 1976 Act 136.
5. Convention on the Recognition and Enforcement of Foreign Arbitral
Awards Act 1985 Act 320 Act A329.
6. Drainage Works Act 1954 (Revised 1988) Act 354.
7. Environment Quality Act 1974 Act 127.
8. Factories and Machinery Act 1967 (Revised 1974 – Reprint 1997) Act 139.
9. Fire Services Act 1988 Act 341.
10.Government Contracts Act 1949 (Revised 1973) Act 120.
11.Housing Developers (Control and Licensing) Act 1966 (Revised 1973 –
Reprint 1982) Act 118.
12.Limitation Act 1953 (Revised 1981) Act 254.
13.National Land Code 1965 Act 56/1965.
14.Occupational Safety and Health Act 1994 Act 514.
15.Sale of Goods Act 1957 (Revised 1989) Act 382.
16.Strata Titles Act 1985 Act 318.
17.Street, Drainage and Building Act 1974 Act 133.
18.Town and Country Planning Act 1976 Act 172.

Subsidiary / delegated legislation – may be made by minister,
specific body or person.
1. Uniform Building By Laws [UBBL] under section 133 of the Street,
Drainage and Building Act 1974 (Act 133).
2. Registration of Engineers Regulations 1990 under section 26 of the
Registration of Engineers Act 1967.

Why subsidiary / Delegated Legislation? – Due to time, technicality, subject
to modification, action in administrative.

ACT 254 LIMITATION ACT 1953 (REVISED - 1981)

Limitation of legal action can be seen under section 6 of the
Limitation Act as follows:-

Section 6. Limitation of actions of contract and tort and certain other
actions.
(1) Save as hereinafter provided the following actions shall not be brought
after the expiration of six years from the date on which the cause of action
accrued, that is to say -
(a) actions founded on a contract or on tort;
(b) actions to enforce a recognisance;
(c) actions to enforce an award;
(d) actions to recover any sum recoverable by virtue of any written law other
than a penalty or forfeiture or of a sum by way of penalty or forfeiture.
(2) An action for an account shall not be brought in respect of any matter
which arose more than six years before the commencement of the action.

ZULHABRI Ismail
Department of Building Page 3

Common law principles. Case laws. The principle of ‘fairness’. Implication / interpretation of terms. UNWRITTEN 1. Common law i. d. c. Statutes e. (1996) 3 CLJ 3651 (Court of Appeal). 6. 3. Local case law. Equitable principles i. Particular to the construction industry. 5. Doctrine of ‘Stare Decisis’ / judicial precedent. Trade custom / usage a. b. Use of Foreign Cases HOW TO READ CASE LAWS? Sia Siew Hong & Ors v Lim Gim Chian & Anor [1996] 3 AMR 3651. Judicial decisions 2. 4. Statutes of General Application. b. ZULHABRI Ismail Department of Building Page 4 . CONSTRUCTION LAW (3) An action upon any judgment shall not be brought after the expiration of twelve years from the date on which the judgment became enforceable and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due. Applicable English law a.

Purpose of law 3. Encourage the doing of what is right or just in a particular set of circumstances. CONSTRUCTION LAW 3. 3. 2. common law in so far it is in operation in the federation or any part thereof. Federal and State constitution 4. The Concept of Law in Malaysia 2. The written constitution in Malaysia – Federal Constitution. Sources of Malaysian Law 6. CONTENT 1. COMPOSITION OF LAW 1. PURPOSE OF LAW 1. b. and c. any custom or usage having the force of law in the federation or any part thereof. Judicial Precedent THE CONCEPT OF LAW IN MALAYSIA What is law? The term ‘law’ is defined as both by Article 160(2) of the Federal Constitution 1957 and Item (43C) of Section 2(1) of the Interpretation and General Clauses Ordinance 1948 to include: a. ZULHABRI Ismail Department of Building Page 5 . the written law. 2. To attain justice in society. Federal court – unwritten law.0 OVERVIEW OF THE MALAYSIAN LEGAL SYSTEM SYNOPSIS The purpose of this lecture is to discuss the overall principles underpinned the Malaysian law. The parliament – written law. Federal v State constitution 5. Composition of law 4.

2. to the extent of the inconsistency be void”. Ordinance • A federal laws that are enacted by parliament between the period of the Malayan Union (1946-10 September 1959). to the extent of the inconsistency. the federal law shall prevail and the State law sh all. CONSTRUCTION LAW Article 4(1) of the Federal Constitution – “This constitution is the supreme law of the Federation and any law passed after Merdeka Day which is inconsistent with this Constitution shall. be void. SOURCES OF MALAYSIAN LAW • Written law • Written • Legal source of law refers to all that law that has been reduced to. Acts A federal laws that post Malayan Union (September 1959). • The laws in Sarawak are called Ordinances. and 3. Held – Case dismissed on the grounds that it was fair and reasonable. ZULHABRI Ismail Department of Building Page 6 . WRITTEN LAW Section 3 of the Interpretation Acts 1948 and 1967 (Act 388) defines “written law” to mean: 1. Ordinances and Enactments (including any federal or state law styling itself an Ordinance or Enactment) and subsidiary legislation…. R. or is present in the written form (Harbans Singh.Ultra Vires. Any other legislative enactments or legislative instruments (including Acts of Parliament of the United Kingdom of Great Britain and Northern Ireland and Orders in Council and other subsidiary legislation made thereunder) which are in force in Malaysia or any part thereof. Rethana v The Government of Malaysia & Anor (1988) The plaintiff – s. Any inconsistency with the superior Act . Acts of Parliament and subsidiary legislation…. Inconsistency between federal laws v state laws “If any state law is inconsistent with a federal law. and 4. Article 75.” Federal Constitution.31 and 42 of the Employees’ Social Security Act 1969 (Socso) were ultra vires the Federal Constitution for not provided equal protection of the law to all persons. The federal Constitution and the Constitutions of the States and subsidiary legislation…. 2005).

The principle of “fairness”. The English Law has given highest priority and authoritative power to the binding judgement of the higher courts. b. c. Use of Foreign Cases JUDICIAL PRECEDENT Sources of law where past decisions of the judges create law for future judges to follow. Statutes of General Application. • A law made by the Legislature of a State. Particular to the construction industry. Doctrine of Judicial Precedent 1. b. 4. Implication / interpretation of terms. Applicable English law a. which is one of the primary sources of English law and Malaysian law. For the system of precedent to work. Case laws. Weekly Law Reports [WLR] c. so that the courts are bound to follow the same principles of law from the decision of an earlier courts of the same or higher level. Its create certainty of outcome for future case and scope for the common law to be modified and updated. Local case law. 3. • State laws – Ordinance & enactments. it must be selectively but accurately reported and accessible. Trade custom / usage a. Common law principles. CONSTRUCTION LAW Enactments • Laws made by the State Legislative Assemblies (except in Sarawak). Also known as case law. Butterworths’ All England Reports [All ER] d. For the English cases there are:- a. subsidiary/delegated legislation. 6. Judicial decisions 2. Statutes e. 3. Equitable principles i. doctrine of stare decisis. Legislation • Acts of Parliament – Statutes. • Legislation . 5. Doctrine of ‘Stare Decisis’ / judicial precedent. Building Law Reports [BLR] ZULHABRI Ismail Department of Building Page 7 . Common law i. 2. International Construction Law Review [ICLR] b.Acts of parliament • Statutes UNWRITTEN LAW 1. d.

Doctrine of stare decisis Two way operation: 1. For Malaysia there are a. Public Prosecutor v Datuk Tan Cheng Swee (1980) “It is however necessary to reaffirm the doctrine of stare decisis which the Federal Court accepts unreservedly and which it expects the High Court and other inferior courts in a common law system…to follow similarly…Clearly the principle of stare decisis requires more than lip-service”. which creates a precedent. • Obiter dicta refer to the reminder of the judgement.A. Judges in future cases do not have to follow it. Chang Min Tat F. Ratio decidendi and obiter dicta • Ration decidendi creates precedent. All Malaysia Reports [AMR] 5. It’s referred to speculation on what his decision would have been if the facts of the case had been different. Its main object is to enable members of the public to organise their affairs in accordance with law and for legal advisers to advise their client…and to avoid wasteful and unnecessary litigation…” Gopal Sri Ram J. Horizontal – bound by their own prior decisions and prior decisions of a court of the same level. CONSTRUCTION LAW 4. In a judgment.Cases should be treated in a similar fashion by the courts to ensure justice. Malaysia Law Journal [MLJ] b. review the arguments and explain the principles of law he is using to come to the decision. • It is only created when the facts of the second case are similar to the original case and the decision was made by a court which is higher to (or same level) in the later case. • Judicial Precedent ZULHABRI Ismail Department of Building Page 8 .C. Current law Journal [CLJ] c. the judge is likely to give a summary of the facts. Types of precedent and related principles Binding precedent • Is a judgement from previous case which must be followed even if the judge in the later case does not agree with the legal principle. Advantage of Judicial Precedent . Kumpulan Perangsang Selangor v Zaid Bin Haji Mohd Noh (1997) …“certainty through precedent”.J. 2. Vertical – bound by the prior decisions of a higher court.

Overruling Referring to the situation of the court in later case states that the legal rule decided in an earlier case is wrong. HISTORICAL BACK GROUND ZULHABRI Ismail Department of Building Page 9 . • Normally comes from lower courts judgment. • In Trenberth v NWB (1980) Walton J said that the decision in Woollerton & Wilson v Costain (1970) was incorrect and cannot be relied upon. dissenting judgment or judgment of courts in other countries.0 THE MALAYSIAN JUDICIAL SYSTEM SYNOPSIS The purpose of this lecture is to discuss the legal principles underpinned the Malaysian courts. secondary sources. Distinguishing • Judge finds that the facts of the case he is deciding are different for him to draw distinction between the present case and the previous precedent. Judicial Precedent Reversing The higher court overturns the decision of a lower court on appeal in the same case. For instance. He is not bound by the previous case. CONSTRUCTION LAW Persuasive precedent • Not binding. obiter dicta. 4. Aldersons v Beetham (2003). In Murphy v Brentwood (1989) House of Lord overruled lower court decision in Dutton v Bognor (1972) and CA decision in Anns v Merton (1978) on Local Authority liability towards building defects. decision of the judicial committee of the Privy Council. The House of Lords uses its power under the practice statement to overrule a past decision of its own. in Pepper v Hart (1993) the HL overruled the earlier decision in Davis v Johnson (1979). In Beufort v Gilbert Ash (1999) House of Lord overruled the decision of the CA in Health Authority v Crouch on special power of Arbitrator. the CA may disagree with the legal ruling of the high court and come to a different view of law and reverse the decision made. Its may occur when a higher court overrules a decision made in an earlier case by a lower court. but the judge way considers it and decides that it is a correct principle to follow.

The Privy Council b. The High Court Malaya and the High Court Borneo. STRUCTURE OF THE COURT JUDGMENT Combination of the following:- 1. 3. Articles. Resulted in a change from the three-tiered system to a two-tiered system (Supreme Court and the two (2) High Courts). In 1994 the Court of Appeal was established. books and write up by the experts and academics. Prior to 1st January 1985 the superior courts system in Malaysia was the following:- a. 4. The Supreme Court c. the three- tiered system of the superior courts was restored.the abolishment of appeals to the Privy Council. Written law. As a consequence. 4. 3. The Supreme Court was renamed the Federal Court. Expert witnesses. 2. After 1985 . Unwritten law. 2. CONSTRUCTION LAW 1. HIRARCHY OF COURTS ZULHABRI Ismail Department of Building Page 10 .

We can safely make arrangements with other people if we know those agreements have the force of law. Unqualified acceptance 3. Intention to create legal relation 6. Firm offer / proposal 2. Lawful object & consideration 7. Physical / legal possibility 9. Free consent 5. SOURCES OF CONTRACT LAW Written Law • Legislation – Contracts Act 1950 (Act 136) – Civil Law Act 1956 (Act 67) – Sale of Goods Act 1957 (Act 382) – Specific Relief Act 1950 (137) – Insurance Act 1996 (Act 553) – Hire Purchase Act 1967 (Act 212) Unwritten • Judicial decisions i.Formality [written form?] ZULHABRI Ismail Department of Building Page 11 .0 THE LAW OF CONTRACT I SYNOPSIS The purpose of this lecture is to discuss the following:- 1. CONSTRUCTION LAW 5. case law & judicial precedent • Applicable English law – Common law – Equitable principles – Statutes • Customary law – Trade usage – construction norm example? ELEMENTS OF VALID & ENFORCEABLE CONTRACT 1.e. Legal capacity to contract 10. WHY CONTRACT LAW IS CRUCIAL? Contract law is important as it is a way of regulating relationships. The important of legally binding construction contracts. Certainty of terms 8. Consideration 4. The elements of valid and enforceable construction contracts 2.

for example. those parties must be in agreement. s. Through the agreement between the parties (consensual contract). and the contract exists once acceptance has taken place. 4. often implied. There must be a valuable consideration. CONSTRUCTION LAW Formation of Contract under the Contracts Act 1950.30]. TYPES OF CONTRACT Contractual relationships arise in three ways:- 1. may be in any form. Sri Kajang Rock Products Sdn Bhd v Mayban Finance Bhd (1992) VC George J stated that to constitute a valid contract. The terms of the contract must be sufficiently certain [s. ZULHABRI Ismail Department of Building Page 12 .e.2d]. by the other (a unilateral contract).10(1)]. • All terms must be brought to notice of offeree. The contract must be lawful [s.g. purchasing a house. there must be no duress involved [s.2]. A deed [specialty] is a contract “under seal”. Through one party performing some act in reliance upon a promise. Rules of offer • To one or a number of persons. 3. • The offer is a statement of intent by the offeror to be legally bound by the terms of the offer if it is accepted.4 (1)]. 2. 4. that there is consensus ad idem.11].14]. The parties must have legal capacity to contract [s. There must be a genuine consent by the parties. 5. There must be a valid offer and an unqualified acceptance [s. Separate and define parties thereto. and who thus can accept it is called the offeree. 2. there must be:- 1. • May specify conditions to be followed [s.10.7 (b)] i. except in the case of contract under seal [s. Consensual and unilateral contracts are called simple contracts. • Must be communicated [s. 6. 3. OFFER The nature of offers • A person making an offer is called an offeror. 2. And the promises of each party must be supported by consideration. Those parties must intend to create legal relations in the sense that the promises of each side are to be enforceable simply because they are contractual promises. Though the execution of a deed (previously called a specialty contract) containing the promise. 7. 5. • The person to whom the offer is made. 1. e. 4. There must be an intention to create legal relation. 3.

• If no time stated. he had not communicated that intention. ZULHABRI Ismail Department of Building Page 13 . • If counter offer made [s. Carlil v Carbolic Smoke Ball Co. Taylor v Laird (1856) Taylor gave up the captaincy of a ship and then worked his passage back to Britain as an ordinary crew member. The uncle had said “If I hear no more from you I shall consider the horse mine at £30. The court enforced her claim for £100 on the ground that the promise was an offer that could be accepted by anyone who used the smoke ball correctly and still got flu.15”. it was invalid. • Invitation to Treat is not an Offer. Yates v Pulleyn (1975) An option to purchase land was required to be exercised by notice in writing ‘sent by registered or recorded delivery post’.7]. The uncle tried to sue the auctioneer in tort but failed.6 (b)]. • Goods on display in a shop window. Felthouse v Bindley (an auctioneer) (1862) An uncle and nephew had negotiated over the sale of the nephew’s horse. not accepted within reasonable time. Ltd. Lapse of offer • If not accepted within the time stated [s. The ship owner had received no communication of Taylor’s offer to work in that capacity. the smoke ball. It was held that the uncle could not prove that the horse was his. Therefore.6]. Invitation to treat is not an offer • Goods displayed on shelves in a self-service shop. The nephew did not reply but wishing to sell the horse to his uncle. Thus. • Death before acceptance [s. no contract between the parties (uncle and nephew) and the property in the horse was not vested in the claimant. then the company would pay them £100. Mrs Carlil did get flu after using the smoke ball in the correct way. the leading silence does not amount to acceptance. When the option was sent by ordinary post only. CONSTRUCTION LAW • May be revoked (cancelled) or may lapse (due to time) [s. he told the defendant (an auctioneer) who was selling farm stock for him not to sell the horse but an auctioneer inadvertently sold it. (1893) The company advertised a patent medicine. The nephew had not actually accepted the offer to buy although the nephew intended to sell the horse to his uncle. His claim for wages failed.5 (1)]. with the promise that if a purchaser used it correctly and still got flu.

CONSTRUCTION LAW • Goods or services advertised in a newspaper or magazine. He was charged under the Restriction of Offensive Weapons Act 1959 for selling an “offensive/prohibited weapon”. • Can only be made by party to whom the offer was made. • Must be made within prescribed time – before lapsed. The contract of sale was not made when a customer selected goods from the shelves. not an acceptance of any offer by the council.7(b)]. revoked or rejected. It was decided that the shopkeeper displaying a flick knife in the window was not offering it for sale. 25s each”) was not an offer but an invitation to treat. he had not actually sold any.7(a)]. ACCEPTANCE Rules of acceptance • Must be communicated to offeror [s. Problems Associated with Offer and Acceptance Davies & Co. When there was a change of policy by the council. Fisher v Bell (1961) The defendant was a shop keeper. The court had to decide whether he was guilty of offering the knife for sale.5(2)]. There was. Ltd v William Old (1969) ZULHABRI Ismail Department of Building Page 14 . • Cannot be revoked without consent of the offeror [s. therefore supervision in the sense required by the Act at the appropriate time. Partridge v Crittenden (1968) A prosecution for “offering for sale” a wild bird under the Protection of Birds Act 1954 failed. but when the company’s employee at the cash desk accepted the offer to buy what had been chosen. Under the UK Pharmacy and Poisons Act 1933. It was merely invitation to treat.2(a)]. Gibson v Manchester City Council (1979) Gibson returned his completed application form when receiving an invitation to buy his house from the council. who had displayed a flick knife marked with a price in his shop window. The advertisement (“Bremblefinch cocks. The display of goods did not constitute an offer. a registered pharmacist was required to present at the sale of certain drugs and poisons and had authority to prevent customers from taking goods out of the shop if he thought fit. • Must be made in the method described [s. Gibson’s action for breach of contract failed. Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd (1953) Boot altered one of their shops to self-service. • Must be unconditional [s. bramblefinch hens. There was an allegation that the defendant infringed the Act. His completed application was an offer to buy.

BSC wanted a disclaimer of liability for any loss caused by late delivery. however. • Must have some value. The plaintiffs claimed for specific performance of the agreement. The work required four steel nodes that they asked BSC to manufacture. It was held that because there was a total disagreement over a major term. • Need not move from the promisee [s. exercisable only after the plaintiff showed no more interest in the land. Macon Works & Trading Sdn Bhd v Phang Hon Chin & Anor (1976) The defendants were owners of a piece of land. CONSTRUCTION LAW Shop fitters.10(1)]. • Essential in every simple contract [s. contracted with the architects in a building contract to sub-contract to the builders. did make and deliver three nodes. • Must not be illegal or unlawful [s. The shop fitters later sued for payment. present or past. the offer would lapse after the expiration of a reasonable ZULHABRI Ismail Department of Building Page 15 . The court held that the option was void for lack of consideration. following their successful tender. (1984) CBE were sub-contracted to build the steel framework of a bank in Saudi Arabia. the judge in the case found it impossible to recognise that a contract existed. issued an order for work to the shop fitters. The option was an open dated. but court not concerned as to its adequacy.64]. under instruction from the architects. VALID & ENFORCEABLE CONTRACT Consideration [s.2(d)]. • Part payment may discharge an obligation [s. He did order that BSC be paid for what they had supplied based on quantum meruit. OTHER ELEMENTS FOR FORMATION.26]. British Steel Corporation v Cleveland Bridge and Engineering Co. It was held that the shop fitter’s action failed. They did this on their own standard form that included a clause that they would not pay for work until they themselves had been paid [pay when paid].2(d)]. BSC. The parties were never able to agree on this and so no written agreement was ever made. The builders. The builders’ standard form / [pay when paid clause] was a counter-offer that the shop fitters had accepted by carrying on with the work. • May be future. Since no time was fixed. CBE refused to pay for the three nodes and claimed that BSC was in breach of contract for late delivery of the fourth. but the last was delayed because of a strike. The agreement to sell the land to the plaintiff was unsuccessful and subsequently an option was given to purchase the land to A.

Gutching v Lynn (1831) When a horse was purchased a promise to pay £5 more “if the horse is lucky” could not be an offer.28]. • In restraint of trade [s. when someone deposits money in the bank against possible claims.24] • In restraint of marriage [s. drunkards and mental incapacity. An offer lapses after a reasonable time not because this must be implied in the offer but because failure to accept within a reasonable time implies rejection by the offeree. CONSTRUCTION LAW time. the court is likely to hold that legal relations were contemplated. Ltd. It was too vague. sound mind and not barred by law.30] Terms that are certain or capable of being made certain. Capacity [s. • Void if made by minors.24] Void contract if object of agreement is: • Forbidden by the law. Certainty [s.11] Legal capacity • Must be age of majority. Legality [s.29].27]. • But not for family arrangements or concessions were made in the course of business negotiations such as where there was a subject to contract clause in the agreement. The uncertainty of this term ruled out a legally binding agreement. Gould v Gould (1969) A contractual intention was negative where a husband on leaving his wife undertook to pay her £15 per week “so long as I can manage it”. • Cases/common law shows seriousness of this element as one of the requirements of a valid contract. • Such that it involves injury to person or property. Carlil v Carbolic Smoke Ball Co. (1893) In this instance. • Immoral or opposed to public policy. • Such that it defeats any law. ZULHABRI Ismail Department of Building Page 16 . • Legality [s. • In restraint of legal proceedings [s. Intention to create legal relations • Contracts Act 1950 silent on the intention to create legal relations.

22 and 23) o Mistake of law will not affect on contract (implied) o Mistake of fact: renders Contract is void if the following exists:- • Mistake as to nature of the contract.0 THE LAW OF CONTRACT II SYNOPSIS The purpose of this lecture is to discuss the following:- 1. 2005).voidable contracts. Ltd. • Misrepresentation [s. Conditions and warranties.15].. Dunlop Pneumatic Tyre Co.18]. • Undue influence [s. Dunlop sought an injunction. Dew sold tyres on to Selfridge on these terms but Selfridge broke the agreement and sold tyres at discount prices. They did so on the express undertaking that they would not sale below certain fixed prices. CONSTRUCTION LAW Consent [s. • Mistake of intention of one party known to other. 3. • Existence of fact at root of contract. 2. Standard contracts and exemption clauses. NB – if any of the above exist.16]. Ltd. contract is voidable at the option of injured party. ZULHABRI Ismail Department of Building Page 17 . PRIVITY OF CONTRACT Definition “As a general rule. wholesalers. agreed to buy tyres from Dunlop. Privity of contract. (1914) In the contract Dew & Co. Vitiating factors . V Selfridge & Co. • Fraud [s. • Mutual mistake.17].21. • Mistake (s. contractual rights and liabilities affect only the parties to the contract and a person who is not party can neither sue nor be sued on the contract.10. 14] Genuine consent affected by [s.14]: • Coercion [s. They also undertook to obtain the same price-fixing agreements from their clients.” (Ainah. 4. 6.

he failed because he had given no consideration for the agreement himself. Adler v Dickson (1954). CONSTRUCTION LAW It was held that Dunlop application for injunction was failed for lack of Privity. Tweddale v Atkinson (1861) Fathers of a young couple who intended to marry agreed in writing each to settle a sum of money [£200] on the couple. Price v Easton (1833) Easton had agreed with a third party that if that third party did specified work for him he would pay £19 to Price. While the work was completed by the third party. for example. even if he aware of it: McGruther v Pitcher [1904]. Easton failed to pay Price who then sued. It was held that even though he was named in the agreement. Price’s claim was unsuccessful. Only binds the parties to a contract. the plaintiffs cannot sue the defendants who were the sub agents. but it cannot be conferred on a stranger to a contract as a right to enforce the contract in personam. Rajah J held that there was no privity of contract between the parties. under a trust. The young woman ‘s father died before giving over the money and the young man then sued the executors to the estate when they refused to hand over the money. The claim was based on the alleged breach by the defendants of their duties as collecting bankers.” Jus quaesitum tertio A contract cannot confer rights on a third party and only a party to a contract can sue on it. ZULHABRI Ismail Department of Building Page 18 . as. The Doctrine of Privity of Contract A contract cannot usually give rights or impose obligations on anyone who is not a party to the contract (Bone. Such a right may be conferred by way of property. Our law knows nothing of a jus quaesitum tertio arising by way of contract. But rights may be conferred on third parties by way of trust. AA Valibhoy & Sons v Habib Bank Ltd (1984) The plaintiffs brought an action against the defendants in their claim for damages for breach of contract. A person not a party to a contract cannot:- • Recover benefits under the contract even though the contract expressly confers that benefits: Tweddale v Atkinson (1861). • Have obligation imposed on him by the contact. 2001). if so intended. In the House of Lords Lord Haldane said:- “Only a person who is a party to a contract can sue on it. He had given no consideration for the arrangement and was not therefore a party to the contract.

“Of course. Moorcock (The) (1889) The defendants owned a wharf with a jetty on the Thames. someone had said to the parties. • Implied because of the prior conduct of the contracting parties. terms may be implied from the presumed intention of the parties and upon reason so that there will not be a failure of consideration – The Moorcock. Ltd. of course! Test. The ship became grounded at the jetty and broke up on a ridge of rock. • Implied to give sense and meaning to the agreement. By applying the “officious bystander” test or what is commonly known as the ‘Oh. • Implied to give business efficacy to a commercial contract. CONSTRUCTION LAW TERMS OF A CONTRACT Contents of a Contract Contents of a contract are made up of terms either expressed or expressly stated. it is too clear. • By statute. Ltd (1965) The Federal Court in Pasuma explained the process by which the courts may imply terms into a contract:- To give efficacy to the transaction. They made an agreement with the claimant for him to dock his ship and unload cargoes at the wharf. The Moorcock. Both parties were aware at the time of contracting that this could involve the vessel being at the jetty at low tide. and / or Implied Terms implied Terms implied by fact • Implied by custom or habit. Bowen LJ explained that:- ZULHABRI Ismail Department of Building Page 19 . That is. such and such will happen. • Implied by trade or professional custom. ‘What will happen in such a case? The parties would both have replied. The defendants argued that they had given no undertaking as to the safety of the ship. Hillas v Arcos Terms implied by law • By the court. The court held that there was an implied undertaking that the ship would not be damaged. We did not trouble to say that. That is.” – Reigate v Union Manufacturing Co. if at the time the contract was negotiated. [1918] and Shirlaw v Southern Foundries [1939] 2 KB 206. Pasuma Pharmacal Corporation v McAlister & Co.

The court allows the claimant who has suffered a breach of the term the fullest range of remedies. A condition is a term of a contract which is so important to the contract that a failure to perform the condition would render the contract meaningless and destroy its purpose and go to the root of a contract. while the option clause lacked specific detail. ZULHABRI Ismail Department of Building Page 20 . Section 12(2). CONSTRUCTION LAW “In business what the transactions such as this. Warranty “…is a stipulation collateral to the main purpose of the contract. Warranties are regarded as minor terms of the contract or those where in general the contract might continue despite their breach. It was therefore implicit in the original contract that the option be carried out in the same terms if the claimant wished to exercise it. Conditions and Warranties Conditions “A condition is a stipulation essential to the main purpose of the contract. what the law desires to effect by the implication is to give such business efficacy…as must have been intended at all events by both parties who are businessmen. the breach of which gives rise to a claim for damages but not a right to reject the goods and treat the contract as repudiated” Sale of Goods Act 1957 (Act 382). The House of Lords held that. The agreement was otherwise quite vague as to the type of timber. Despite this the contract was completed and the timber supplied. nevertheless it was un the same terms as the contract of sale that had been completed.” Hillas & Co Ltd v Arcos Ltd (1932) In a 1931 contract between the two parties for supply of standard-sized lengths of timber there was included an option clause allowing the claimants to buy a further 100. the terms of shipment and other features.000 lengths of timber but the defendants refused to deliver them. the breach of which gives rise to a right to treat the contract as repudiated” Sale of Goods Act 1957 (Act 382).000 during 1932. Their argument was that since the 1931 agreement was vague in many major aspects and was therefore no more than a basis for further negotiations. When a condition is unfulfilled the claimant / plaintiff will be able to:- • Sue for damages and • repudiate his obligations. Section 12(3). In 1932 the claimants then wanted the further 100.

The defendants had agreed to sell furnace to the plaintiff and had given an undertaking that the melting furnace would have a temperature not lower than 2600 °F. • IEM. Simply labelling of a term as a condition or warranty is not conclusive. As a result. DB/T (2000 Edition). s. There is no right to repudiate for breach of a warranty. s. though called a warranty in the contract [SGA.12(4)]. Associated Metal Smelters Ltd v Tham Cheow Toh (1971) The plaintiffs claimed damages for breach of warranty of a metal furnace. the remedy for a breach of warranty is merely an action for damages. CONSTRUCTION LAW Any other term in a contract that does not go to the root of the contract. IEM.CES 1/90. Other industries • Banking – standard formats of contracts • Insurance • Air travel Exclusion / exemption Clauses (disclaimer) Definition • A clause in a contract excluding or limiting the liability of one or other of the parties (disclaimer). • PWD FORM 203A (Rev. ZULHABRI Ismail Department of Building Page 21 . Residual category of terms dealing with obligations that are ancillary or secondary to the major purpose of the contract. 203N.CE 1/89. • CIDB Standard Form of Contract for Building Works 2000 Edition. PAM NSC 98. Conditions and Warranties? Whether a particular provision in a contract is a condition or a warranty depends on the intention of the parties and the construction of the contract [SGA.12(4)]. The furnace supplied by the defendants did not in fact reach the required temperature. Judgment was given for the plaintiffs STANDARD CONTRACTS AND EXCLUSION / EXEMPTION CLAUSES Standard Contracts Construction Industry • PAM Private Edition With or Without Quantities Edition 1998. 10/83). It was held that the failure on the part of the defendants to supply a furnace which would meet the required temperature constitute a breach of the condition of the contract entitling the plaintiffs to treat such breach as a breach of warranty. The stipulation may be a condition. Associated Metal Smelters Ltd v Tham Cheow Toh (1971).

22 and 23] Coercion [s. 2003). it renders the contract void or voidable at the option of the aggrieved party [voidable contracts] or the courts may choose not to enforce it [void contracts]. 20 ] • Fraud [s.17] • Misrepresentation [s. the role of the law is to provide a remedy to the party who may not wished to enter the contract given full knowledge of the vitiating factor at the time of formation. Voidable Contracts Act 1950 Section 10 of the Contracts Act provides “All agreements are contracts if they are made by the free consent of the parties competent to contract”. ordinary customer by a stronger party. • Although exemption / exclusion clauses are permissible. possible unknown to one or either party. • As a result. both the courts and parliament [UK] have been reluctant to allow these clauses to operate successfully where they have been imposed on a weaker party i. Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd (1959) It was held that “a fundamental breach of obligations of a contract cannot be allowed to pass unnoticed under the cloak of a general exemption clause”. Thornton v Shoe Lane Parking Ltd (1971).18] • Mistake [s. If a vitiating element is present. is based on misinformation or is of a type frowned on by the law. • The contract lacks the essential characteristic of voluntarines. Section 14 states that “Consent is said to be free when it is not caused by”:- • Coercion [s. such a person or corporation in business to supply goods or services. Turner (2003) provides:- • Factors present at the time of the formation of the contract. • Effects of vitiating factors: void or voidable.16.e.21. CONSTRUCTION LAW • Such clause must be expressly incorporated in the relationship between the parties from the outset.15] • Undue influence [s. VITIATING FACTORS Definition “Vitiate” means “to spoil or reduce the effect” (Oxford.15] ZULHABRI Ismail Department of Building Page 22 .

The court held that consent was not freely given and the agreement as voidable at the will or option of the party whose consent was so caused. Undue influence [s. or threatening to commit any act forbidden by the Panel Code…” “Coercion” in section 15 is limited to an unlawful act done “with the intention of causing the person to enter into an agreement” (Kanhaya Lal v National Bank of India Ltd (1913). Pao On v Lau Yin Long (1979) Lord Scarman concluded that “there is nothing contrary to principle in recognising economic duress as a factor which may render a contract voidable. Coercion Under common law. Lord Denning considered the issue of inequality bargaining strength and felt that coercion in such circumstances justified avoidance of the agreement. which vitiates consent. Lord Denning in Lloyds Bank Ltd v Bundy (1975) suggested two doctrines: Economic duress and inequality of bargaining power. Kesarmal s/o Letchman Das v Valippa Chettier (1954) A transfer executed under the orders of the Sultan.” D. 20 ] • Section 16 • Section 20 Equitable doctrine concerning contracts that have been following improper coercion and the innocent party can avoid the contract. Builders v Rees (1965) R forced the small firm of Builders [DCB] to accept a cheque of £300 in full satisfaction of the actual bill of £462 or take nothing. They had no choice in the circumstances but to accept. meaning the contract has resulted from “actual or threatened violence”.C.16. provided always that the basis of such recognition is that it must always amount to coercion of will. the principle is slightly differ. issued in the ominous presence of two Japanese officers during the Japanese Occupation of Malaya was invalid. Fraud [s. CONSTRUCTION LAW Defined as “committing.17] • Section 17 ZULHABRI Ismail Department of Building Page 23 . it is based on duress [including economic duress].

Geri Halliwell had already disclosed her intention to leave the band.24(a)) • Defeat any law (s. section 19(2) provides “A party to a contract. or misrepresentation. but this was not mentioned. insist that the contract shall be performed. 24). may.24(c)) • Involve injury to person & property (s. Mistake [s. whose consent was caused by fraud or misrepresentation. Characteristics of Void Contracts Void contracts under Contracts Act:- Unlawful contracts (s.24) • Forbidden by law (s. In fact.18] • Section 18 Spice Girls Ltd v Aprilia World Service BV (2000) The company agreed to a contract for the Spice Girls to make a video promoting its goods on the basis that there were five Spice Girls and logos and other material showed the five members of the band. • Contract having no validity. The Spice Girls had no reasonable grounds to believe that there would be five of them to perform the contract. • Incapable of confirmation. the agreement is a contract voidable at the option of the party whose consent was so caused”. if he thinks fit. CONSTRUCTION LAW Misrepresentation [s. • Not enforceable in law (s. Furthermore.2(g). Void Contracts Definition • The contract does not exist / nullity.21.24(d)) ZULHABRI Ismail Department of Building Page 24 .24(b)) • Fraudulent (s. 22 and 23] • Section 21 • Section 22 • Section 23 Contracts Act 1950 Section 19(1) states that “When consent to an agreement is caused by coercion. and that he shall be put in the position in which he would have been if the representations made had been true”. The court held that the company was awarded damages under section 2(1) of the Misrepresentation Act 1967. fraud.

0 THE LAW OF CONTRACT III SYNOPSIS This lecture will discuss the following legal area:- • Discharge from further performance under the contracts • Remedies DISCHARGE FROM FURTHER PERFORMANCE UNDER THE CONTRACTS Discharge of a Contract A contract once formed .imposes duties and obligations on the promisor and promisee which must be carried in fulfillment of their respective promises.27) • In restraint of trade (s.26) • In restraint of marriage (s.24(e)) Other void agreement under the Act:- • Without consideration unless…(s.28) • In restraint of legal proceedings (s. ZULHABRI Ismail Department of Building Page 25 .” In engineering contracts…Complete Performance. Ways for Discharge of a Contract • By performance • By breach • By consent or agreement between the parties. The parties can only be freed from their mutual obligations under the contract by the discharge of the contract.31) 7.29) • The meaning which is not certain or capable of being made certain (s.30) • An agreement by way of wager (s. where the contractor carries out the whole of the works in accordance with the contract documents and the employer pays the contract sum will discharge the contract. CONSTRUCTION LAW • Immoral & apposed public policy (s. and • Under the doctrine of frustration / impossibility • Operation of law Discharge of a Contract Vincent Powell-Smith (2000) stated that discharge of a contract refers to “the carrying out of an obligation imposed by contract or statute.

General principles • The rule of contract – Both parties to the contract must perform their promises and obligations strictly according to the terms of the contract. the work is complete save for some minor omissions or defects. • An intention not to go on with the contract: Repudiated / renounced the contract. his promise in its entirety. • If default – breach of contract. grant relief to the contractor who can show. the promisee may put an end to the contract. • A refusal to perform a contract before the performance is due: anticipatory breach. or offer to perform. Position under the Act Section 40 of the Contract Act 1950 states:- “When a party to a contract has refused to perform. Performance must be exact and precise and should be in accordance with what the parties had promised. however. The obligation. in such a case that he has achieved ‘substantial performance’. Whether or not performance is complete is a matter for the courts to decide in each case…the courts will. or disabled himself from performing. his acquiescence in its continuance”. by words or conduct. Thus. i.Partial Performance by one party may be sufficient evidence of his intention to be bound by the terms of a contract if he has not made formal acceptance. the respective parties returned to their original position and discharge from further performance. • A refusal to perform a contract when performance is due: discharge. unless he has signified. ZULHABRI Ismail Department of Building Page 26 . 2001). or term. may be expressed or implied at common law by statute or statutory instrument (Osborn Law Dictionary. the entire transaction should be aborted.e. CONSTRUCTION LAW Discharge by Performance Vincent Powell-Smith (2000) . their respective promises. Heyman v Darwins (1942) Repudiation for anticipatory breach was held to occur where a party intimates by words or conduct that he does not intend to honour his obligations when they fall due in future. Section 38(1) provides “The parties to a contract must either perform. unless the performance is dispensed with or excused…” Discharge by Breach Breach of contract Failure to fulfil a contractual obligation which entitles the innocent party to a remedy.

the party in default cannot terminate the contract which he himself had broken (Pheng 2005. Malaysian Rubber Development Corporation Bhd v Glove Seal Sdn Bhd (1994) Generally (in assessing damages in relation to breach under sale of goods). Hadley v Baxendale (1854) Where two parties have made a contract which one of them has broken.any remedies available. the damages which the other party ought to receive in respect of such breach of contract should be such may fairly and reasonably be considered either arising naturally. Breach of warranty : Claim for damages. he may be entitled to recover the sum paid. if there is no available market. or such as may reasonably be supposed to have been in the contemplation of both parties. .Section 65 “When a person at whose option a contract is voidable rescinds it. at the time they made the contract. if he has received any benefit…restore the benefit…” If the innocent party has rendered services or had supplied goods. from such breach of contract itself. loss or injury suffered through a breach of contract (Pheng 2005. NB: Refer to s. the other party thereto need not perform any promise therein contained in which he is promisor.Damages are granted as a compensation for the damages. On the other hand. If the innocent party has paid money under the contract. he may recover a reasonable sum for such services or goods rendered. the value of the goods should be determined at the time of breach. But.158). as the probable result of the breach of it. p. CONSTRUCTION LAW Effects of Breach . The party rescinding (cancel) a voidable contract shall. according to the usual course of things. Breach of Condition : It ‘goes to the root’ of the contract.158) Remedies for Breach Remedies available for breach of contract:- • Damages • Specific performance • Injunction • Quantum meruit Damages . the value is likely to be based upon the price at which the goods are eventually sold. p. continue with contract. The remedy depends on the term breached. as a general rule. ZULHABRI Ismail Department of Building Page 27 .74 of the Contract Act.

Discharge by Consent or Agreement between the Parties General Principles . buy or sell in the market if there is an available market or. Cease Contractual Relationship Cancellation by • Mutual waiver • Substituted agreement • Novation • Accord / agreement and satisfaction [remission] • Release [one side-must be under seal] Bilateral discharge is simple where the contract is executory – the waiving of rights is given by one party in return for the waiving of rights by the other. Ways of Discharged by Agreement • Bilateral discharge: Both parties are to gain a fresh and different benefit from the new agreement / contract.Eodem modo quo oritur. Discharge under the Doctrine of Frustration ZULHABRI Ismail Department of Building Page 28 . what is required is mutuality (Turner 2003. • Unilateral discharge: The benefit is probably only to be gained by one party. who is therefore trying to convince the other party to let him / her off the obligations arising under the original agreement i. The question of what is reasonable in every case is a question of fact and not law. Inevitably. act reasonably to mitigate the loss. i. odum modo dissolvitur (What has been created by agreement may be extinguished by agreement).e. p. lack of consideration. unless estoppel applies.156). End of Contract via Agreement If a contract is formed following an agreement then it seems almost pure logic to suggest that the contract can also be ended by agreement without necessarily having performed. as in accord and satisfied. CONSTRUCTION LAW The plaintiff is under a duty to take reasonable steps to mitigate its loss immediately upon the breach. Where form is an issue the discharge will need evidence in writing [estoppel]. if there is none.e. But where only one party wants to back out of the contract then that party will need to give some consideration.

Kerr & Co Ltd (1918). Consequences – the Act The contracts “becomes void” [section 57(2)]. • Frustration under the Act Under section 57(1) of the Contract Act 1950 “an agreement to do an act impossible in itself is void”. after the contract is made. Under section 57(2) “A contract to do an act which. Consequences – Common Law  The parties are freed from any further obligations under the contract from the point of frustration. a party is not absolved merely because performance becomes more expensive or difficult. However.” Goh Yew Chew & Anor v Soh Kian Tee (1970) There was an agreement to construct buildings. Restitution / restoration [section 66].  Still be bound by obligations arising before the frustrating event. becomes void when the act becomes impossible or unlawful. The contract was held impossible ab initio and the court ordered earnest money less deduction for reasonable expenses incurred to be refunded. or by reason of some event which the promisor could not prevent.  Money paid before frustration is recoverable. becomes impossible. Frustrating Events • Where the intervening event makes performance impossible. However. Note: Earnest money: A deposit of part payment of the purchase price on a sale to be consummated in the future. CONSTRUCTION LAW A contract is frustrated when there is a change in the circumstances which renders a contract legally or physically impossible of performance. unlawful. • Where the contract becomes commercially sterilised. ZULHABRI Ismail Department of Building Page 29 . unless the difficulty arises from some fundamental change of circumstances or supervening event (Davis Contractors Ltd v Fareham UDC (1956). The claim was made by the plaintiff for refund of earnest money. and Metropolitan Water Board v Dick. • Where performance of the contract becomes illegal. the construction deemed to be impossible due to encroachment of neighbour’s property. “…compensation…for any loss which the promisee sustains through the non- performance of the promise” [section 57(3)].

the Ministry ordered the work to cease. The contract had not been frustrated. Tanjong Tualang and other places. The plaintiffs argued that because of the shortage of labour. this lecture will discuss the legal principle of the law of torts and its relation to the construction industry. • General defences available in the law of tort. ZULHABRI Ismail Department of Building Page 30 . In 1916. Davis Contractors Ltd v Fareham UDC (1956) In 1964 contractor agreed to build houses for a fixed price in 8 months. On the invasion of Malaya by the Japanese forces. the contract had been brought to an end by frustration and thus claim a reasonable sum [quantum meruit] for the value of the work. the contract of employment between them and the plaintiff was discharged by frustration. • Differences between the law of tort and criminal law and the law of contract. What had happened was squarely within the risk assumed by the contractors. the contractor agreed to construct a reservoir in six years.0 THE LAW OF TORT I SYNOPSIS Generally. CONSTRUCTION LAW Metropolitan Water Board v Dick. Some of the defendant’s staffs were executed from Tronoh. The defendants contended that consequent on the Japanese occupation of Perak. Through no fault of either party. It was held that the invasion of Malaya by the Japanese frustrated the performance of the contract and therefore there was no breach of contract by the defendants. House of Lords held that the extension of time provision did not prevent frustration but a contract resumed after the war time interruption would be fundamentally different from what had been envisaged this development was sufficient to bring the contract to an end. Kerr & Co Ltd (1918) In 1914. there was a scarcity of skilled labour and the work took 22 months to complete and the building cost has risen considerably. 8. This section will be discussing the following: • The nature of the law of tort. The House of Lords held that the claim must fail.A. with a provision for extension of time for various delays. due to war. H. Berney v Tronoh Mines Ltd (1949) The plaintiff sued for breach of contract of service.

Perlanggaran hak-hak persendirian (keselamatan diri. 2. 4. CONSTRUCTION LAW INTRODUCTION “The law of tort is mostly to be found in the common law…Tort can be defined as a civil wrong independent of contract. 3.” (Prof. Where the elements of fault and damage exist. through the defendant’s fault. Perlanggaran sesuatu kewajipan yang berbangkit daripada sesuatu hak umum. milikan. the law determines who should bear the resulting financial loss. 2002. kecederaan). caused damage to the claimant of a type which is recognised as attracting liability. Perlanggaran sesuatu hak “in rem” (dihormati oleh semua orang) dan bukan “in persona” (hak keatas individu) yang mana semua ahli masyarakat tidak melakukan kerosakan kepada jiran-jiran mereka tanpa sebab yang dibenarkan oleh undang-undang. such duty is towards persons generally and its breach is redressed by an action for unliquidated damages. The practical consequences of the law of tort are concerned with the adjustment of losses.” Tort? Abdul Aziz and Abdul Rashid (2000) clarified what has been suggested by Basu (1977) in relation to the definition of tort as the following: 1. nama baik. AIMS There are two aims of the law of torts that also point towards the major remedies available. damages and injunctions. Aims ZULHABRI Ismail Department of Building Page 31 . p. or as breach of a legal duty owed to person generally. Compensation – the main outcome of a successful tort action is to compensate the victim of the wrong to the extent of the damage suffered.419) FUNCTIONS AND PURPOSE Winfield (1931) has said that : “Tortious liability arises from the breach of a duty primarily fixed by law.” The standard model for liability in tort in the modern day would be that the defendant’s act (or omission) has. John Uff. Michael Jones is “The law of torts is primarily concerned with providing a remedy to persons who have been harmed by the conduct of others. Pencabulan sesuatu kewajipan di bawah “common law”.

• The duty not to commit a tort is imposed by law as opposed to being fixed by agreement / contract. film etc.g. Generally. including. malicious falsehood and deceit / dishonesty. better. Non actionable per se The plaintiff must establish that he has suffered actual damages due to the defendant's commission of the tort. CONSTRUCTION LAW Deterrence / prevention – the most satisfactory way of dealing with any wrong is to ensure that it does not happen again or.  Tort of negligence. land or goods.g.  Trespass or possibly trespass to the person. • It is based on conduct not agreement / contract.  Negligence.  Normally entitlement to compensation accurse as of right without the requirement to prove damage occurred. claims for psychiatric damages etc. even. INTERESTS PROTECTED BY THE LAW OF TORTS Below are the interests protected by the Law of Torts as stated by Turner (2003).e. injunction. to prevent it occurring at all i.  Possibly concepts as privacy. Liability • Liability in tort is independent of any contract. Personal security  Concerns the safety of the individual. the plaintiff must show that the defendant’s behaviour falls into a specified situation covered by law of tort:  Tort of trespass. and slander (in an oral form e.  Possibly defamation [damaging someone reputation i. defamation. Reputation – an extension of personal security i. newspaper.e.  Tort of nuisance. radio or TV)]. CATEGORIES OF TORT Actionable per se  Trespass and forcible injury. libel (publish in permanent form e.  Other developments in personal injury i. ZULHABRI Ismail Department of Building Page 32 .e. in order to succeed in an action in tort.e.

trespass. • Visitors v Construction Parties / Building owner. The law of contract does not prevent action in the law of tort BUT the obligations in tort CANNOT BE GREATER than those found in the contract. Parties with NO CONTRATUAL LINK • Client v Subcontractor(s) • Subsequent owner of a building v Construction Parties • Subsequent tenants v Construction Parties. the claim being for pure economic loss [Held by Peh Swee Chin J (as he then was) that] . nuisance. The learned Judge found the builder liable for breach of contract but dismissed the claim against the architect and the engineer with whom the plaintiffs had no contractual relationship. The plaintiffs claimed against the first defendant (“the builder”) in contract for defective works in the construction of the house purchased by the plaintiffs. PARTIES TO CLAIM IN TORT Outsiders i. Bhd.g. economic loss as a result from negligent misstatement and actual damages can be compensated. ZULHABRI Ismail Department of Building Page 33 . Parties WITH CONTRATUAL LINK • Client v Contractor / Builder. which is more readily associated with contract law thus unrecoverable under the law of tort [Teh Khew On & Anor v. & Ors. Economic interests – tort is much more concerned with remedying physical damage and personal injury than economic loss. Yeoh & Wu Development Sdn. • Builder / Contractor v Consultants.e. Bhd. (1995) 2 MLJ 663. However. persons. Teh Khew On & Anor v. Ryland v Fletcher and negligence. Yeoh & Wu Development Sdn. loss of profits and defective building. & Ors. They also claimed against the second defendant (“the architect”) and the third defendant (“the engineer”) for damages in negligence. who have no contractual involvement in the construction process. • Passer-by v Construction Parties. CONSTRUCTION LAW Property – concern with the property (real/land or personal but not “economic loss”) rights of the individual i. • Client v Consultants. (1995) 2 MLJ 663]. But not for a pure economic loss e.e.

• The plaintiff may sue for either breach of contract or negligence.8 THE SAME ACT CAN GIVE RISE TO LIABILITY IN CONTRACT AND IN TORT • A person who buys a defective tool that causes him to lose his fingers may sue the supplier for breach of contract. the plaintiff then brought another action in identical terms but alleging failure to build with proper materials. to complete the bungalow. There is one contract and one promise to be performed at one time. although no doubt the defendant may have failed to perform it in one or in many respects. or the manufacturer for the tort of negligence. which will be assessed at the date of hearing (Batty v Metropolitan Realisations [1978] QB 554). After recovering damages in this action. But not to sue the same party for the same reason for both contract and tort. or both. Conquer v Boot [1928] 2 KB 336 The defendant builder had contracted to build a bungalow for the plaintiff. the breach of each of which is a separate cause of action…here there is but one promise. held that “The contract is an entire contract. ZULHABRI Ismail Department of Building Page 34 . • Res judicata / issue estoppel means a matter which has been adjudicated on and the plaintiff may not bring a subsequent claim which involves re- opening a matter already decided nor may a plaintiff bring a claim which seeks some relief which was or should have been included in the claim already decided. There may of course be many promises in one contract. The plaintiff recovered for the anticipated loss even though it had not collapsed and apparently did not subsequently collapse. CONSTRUCTION LAW 8. Talbot J. It follows that any claim for damages whether in tort of for breach of contract. No claim for payment could have been made by the defendant unless and until he had finished the bungalow. Batty v Metropolitan Realisations [1978] QB 554 In Batty the court awarded damages in respect of a house which was deemed not fit for habitation because it had been built at the top of potential unstable slope. the contract does not prevent the plaintiff obtaining judgment also in tort. who brought an action for breach of contract to complete in a good and workmanlike manner.” General Principles Damages or relief arising from any cause of action must be claimed once and for all. • Where there is an existing contract between employer and contractor / builder or architect. must claim for all future anticipated loss. but he cannot recover damages twice over [Res judicata / issue estoppel].

However. it was for the benefit of the consumers and there was no liability. not merely bad weather [Nicholls v Marsland (1876)]. to be reassessed in the light of subsequent facts once a judgment becomes final.e. Volenti failed in the case because worker was given no proper warning of when the crane was in use and so was unaware of the danger. Not apply where the plaintiff is forced to accept the risk [Smith v Baker (1891) AC 325] for instance in sporting situation if physical harm is likely i. The Court doubted whether the Board had accumulated the gas for their own benefit. rugby [Simms v Leigh RFC [1969] 2 All ER 923. but there was no voluntary assumption of risk in the circumstances. once assessed. A gas main exploded without any negligence on the part of the Gas Board. The bullet ricocheted off a tree before it hit him. He was injured when a crane moved rocks over his head and some fell on him. there is no injury) This means no injury is done to one who voluntarily accepts a risk. C.e. D. ZULHABRI Ismail Department of Building Page 35 . they must he unforeseeable condition. 8. Smith v Baker (1891) AC 325. Common benefit Dunne v North Western Gas Board [1964] 2 QB 806. The plaintiff drilled rock in a quarry bottom. Not apply to the situation where the claimant only knew of the existence of the risk rather than understanding it i. [Stermer v Lawson (1977) 5 WWR 628]. CONSTRUCTION LAW Batty v Metropolitan Realisations [1978] QB 554. and football Condo v Basi [1985] 2 All ER 453]. This case showed that there is no mechanism whereby either plaintiff or defendant can ask for damages. Act of God In construction. Inevitable accident A defendant is never liable for a pure accident. He was aware of risk of stones falling. concerns with extreme weather conditions. Pure accident means one beyond the defendant’s control for instance [Stanley v Powell (1891) 1 QB 86] someone has killed during a grouse shoot. B.9 GENERAL DEFENCES Martin and Turner (2001) stated that general defences under the law of torts are the following:- A. Volenti non fit injuria (where there is consent. It was shown that the man was not shot directly.

nuisance and strict liability or Rylands v Fletcher liability. 9. • Necessity – to avoid worse damage. The court held that from time to time burst pipe were inevitable consequences of this duty and there could be no liability in the absence of negligence. ZULHABRI Ismail Department of Building Page 36 . CONSTRUCTION LAW Green v Chelsea Waterworks Co (1894) 70 LT 547.1 SYNOPSIS This lecture is continuation from the last lecture. Trespass to goods: This is an intentional and direct act of interference by a defendant with the goods in the plaintiff’s possession (Conversion).2 TRESPASS Occurs where there is direct interference with the person. students should remember what has been discussed earlier and make sense what will be discussed in this lecture. It is more usually dealt with under criminal law. H. usually by touching and/or removing the goods. G.0 THE LAW OF TORT II 9. E. It is actionable per se i. • The effect is to reduce the plaintiff’s damages where he has contributed to his/her own harm. • It is not necessary to show that the claimant owed a duty of care. causation must always be proved – the claimant act in fact helped cause the damages suffered. goods or land of another. there is no need to prove damage as a consequence of the tort [actionable]. Types of trespass to the person: assault and battery and false imprisonment. Contributory negligence – partly responsible by the plaintiff. The defendant were obliged by statute to provide a water supply. 9. Statutory authority [Green v Chelsea Waterworks Co (1894) 70 LT 547]. F. Fault of the plaintiff – the plaintiff responsible for the damage suffered. This lecture will encompass the legal principles of trespass. • Self defence – saving life. Others defences for action in torts • Act of stranger – no control over the third party. • However. Therefore. • Illegality – illegal act. merely that he failed to take care in all the circumstances.e.

solo cedit : whatever is affixed to the soil. ZULHABRI Ismail Department of Building Page 37 . even where no damages is caused. • Placing a ladder against the surrounding wall.3 TRESPASS TO LAND The slightest entry on to land is sufficient to constitute this tort.e. Unauthorised entry below the surface of the plaintiff’s land at any depths will also constitute a trespass. The latin phrase is Quicquid plantatur solo. This consists of direct interference with the plaintiff’s possession of land. The interest that is protected under this tort is to enable a person who as possession of land to be free from any physical interference. or remains on the land after permission to be there has been removed i. 9. The general rule is that the possessor of land also possesses the soil beneath and the column of air above the land [section 5 and 44(1) of the NLC. • Invasion of airspace. failure to be granted EOT. Trespass to land is committed when a trespasser makes a conscious decision to enter on to another’s land without permission or authority. CONSTRUCTION LAW Trespass to land: Trespass to land is of most concern to the construction industry. • Swinging a crane jib over the land. It is when a person enters land which somebody else possesses without permission or authority to be there. belongs to the soil. Who can sue? The plaintiff is anyone with lawful right and control over the use of land. Anchor Brewhouse Development Ltd v Berkley House Ltd (1987) The court granted injunctions to prevent over sailing by tower cranes. he must not violate any occupiers’ property rights. • Dumping soil onto the plaintiff’s land. Who can be sued? The defendant is the person whose activity constitutes a direct invasion of an interference with another person’s possession of land. • Throwing things onto the land. 1965]. or remains on the land after any permission or authority granted has been revoked or lapsed [Minister of Health v Bellotti (1944)]. • Overhead cables and signboards. Below are the acts constituted as trespass:- • Walking over another’s land. It is no defence that the trespasser intended no harm or did not know that he was trespassing.

Lord Bernstein of Leigh v Skyways & General Ltd [1977] QB 479 Here. Minimal Disturbance? As far as architects. For instance. even the slightest encroachment is actionable. engineers and building contractors are concerned. took photographs. and then tried to sell them to him. aerial photographers flew over the claimant’s land. it is trespass in the case of building operations to allow any soil disturbance. • Necessity. or anything to overhang or fall onto or be thrown over the land. however innocent the situation. The claimant’s rights over air space should only extend to a height “reasonably necessary for the enjoyment of the land”. It was held not to be a trespass. CONSTRUCTION LAW Thus tunneling through or digging into the subsoil below the plaintiff’s land is actionable if such activity is carried out without the owner’s consent. Westripp v Baldock [1938] 2 All ER 799 A ladder leaning against the claimant’s wall was a trespass. Remedies available if trespassing • Damages. Hickman v Maisey [1900] 1 QB 752 There was a trespass where the defendant used the highway to spy on the claimant’s race horses in training. the cutting and carrying away of a neighbour’s grass was held to amount to a trespass even though it was carried out by mistake. Basely v Clarkson (1681) 3 LEV 37 Here. ZULHABRI Ismail Department of Building Page 38 . Defences for legal action for trespassing • Under statutory authority. • Entry by license. Woolerton & Wilson v Richard Costain Ltd [1970] 1 WLR 411 In this case the defendant’s crane swung out over the claimant’s land and was sufficient to amount to a trespass. • Regaining possession of one’s own property. Contractor – a trespasser? A contractor is said to have a license to be upon the site of the works. He may become a trespasser if he remains on the land or leaves materials there after his work is finished or after his employment has been determined.

4. For private individual affected by public nuisance to sue in tort. • It is a crime as well a tort.g. The person responsible is liable to a criminal prosecution. Liability in negligence is based on the defendant's conduct and may be imposed in respect of wide range of interests damaged by that conduct. 9. • Private nuisance. Section 8 (1) of the Government Proceedings Ordinance 1956 (GPO). • Polluting a public water supply.2 CLASSIFICATION OF NUISANCE • Public nuisance. The reason to avoid multiplicity of actions [res judicata / issues estoppel]. bear in mind that TO CAUSE SUCH NUISANCE IS A CRIME AND IT IS NOT ACTIONABLE BY THE PUBLIC GENERALLY.4 NUISANCE Concerned with the protection of the reasonable use and enjoyment of land. • Does not have to be an interference with the use and enjoyment of land and not based on proprietary rights [private nuisance].4. • Also developed as a crime. • Dust caused by quarrying operations. ZULHABRI Ismail Department of Building Page 39 . 9. where a builder’s skip obstructs the highway and the access to private property. 9.4. • Statutory nuisance. 9. in which respect it will commonly be prosecuted by the Attorney General. • Selling food unfit for human consumption. • If a person suffers special damage from the nuisance (in excess of that suffered by the general public) that person may bring an action in tort.4 EXAMPLES OF PUBLIC NUISANCE • Obstructing the highway. 9. However. which is considered to be a sufficient deterrent and punishment. • Ejection.3 PUBLIC NUISANCE • Consists of generating harm to the public at large. CONSTRUCTION LAW • Injunction to prevent continuance.4. he must show that he suffered special and particular harm over and above that suffered by the public at large e.1 The Different Between Negligence and Nuisance Negligence is not limited to the protection of any particular interest.

fumes. sewage/dirt/mess and keeping animals. a branch from a tree on the defendant’s land fell on to a bus. • Not actionable per se. As a result. making it actionable public nuisance. It was sufficient that a representative class was affected. The interference may result the following :- • Damage to persons’ enjoyment of an easement (right of light. right of way. Noble v Harrison [1926] 2 KB 332 Here. right of support from adjoining land etc). • The person suffering the harm is the owner or occupier. the nuisance complained of was the noise and vibrations caused by quarrying. PRIVATE NUISANCE • Is a civil wrong. • It is committed when one person unlawfully interferes with the use or enjoyment of another person’s land. he must show that he suffered special and particular harm over and above that suffered by the public at large e. noise. The defendant’s argument that too few people were affected failed. dust. The defendant was not liable because the defect in the tree was latent and probably beyond his control. where a builder’s skip obstructs the highway and the access to private property. Tate & Lyle Industries Ltd v Greater London Council [1983] 1 All ER 1159 The House of Lords characterised an interference with navigation rights in the River Thames as physical damage. Rose v Miles (1815) 4 M & S 101 The defendant’s barge blocked a navigable river. Attorney-General v PYA Quarries Ltd [1957] 2 QB 169 Here. • It aims to balance the right of individuals to use their own land as they wish with that of their neighbours who do not wish to be unreasonably disturbed. • Interference will be unlawful only if it is unreasonable and substantial.g. CONSTRUCTION LAW For private individual affected by public nuisance to sue in tort. • Damage of property such as by flooding or vibrations. • Private nuisance ZULHABRI Ismail Department of Building Page 40 . • Actual damage must be proved. The defendant was liable for the cost. • An annoyance such as smells. the claimant was forced to empty his barge and pay for alternative transport. encroaching tree roots.

If the occupier is not responsible for the nuisance. Leakey n National Trust [1980] QB 485 ZULHABRI Ismail Department of Building Page 41 . Malone v Laskey [1907] 2 KB 141 Here.3 Who Can Be Sued In Private Nuisance? The person primarily liable for the nuisance is he who creates it. The lease specifically prohibited the creation of nuisances by tenants Sedleigh Denfield v O’Callaghan [1940] AC 880 Here. The court held that the defendant was liable for nuisance even though he is not the occupier of neighbouring land. so that when it led to flooding on the claimant’s land he was liable. This will cover an owner-occupier and where appropriate.4. Southport Corporation v Esso Petroleum Co Ltd [1953] 3 WLR 773 The defendant’s oil tanker beached in the estuary and leaked oil that subsequently drifted to local beaches. He knew about it but failed to deal with it. Tetley v Chitty [1986] 1 All ER 663 Here.2 Who Can Sue In Private Nuisance The only person who can sue for nuisance is the occupier of the land. the wife of the householder was unable to sue in respect of personal injury sustained when vibrations from machinery caused the cistern to fall on her in the lavatory / toilet. Smith v Scott [1973] Ch 314 A local authority was not liable for letting a flat to a “problem family”. a landlord was liable in nuisance by permitting go-kart racing on his premises. the strangers had blocked a culvert pipe on the defendant’s land. any tenant in occupation. A person may incur liability simply because the nuisance exists on the land he occupies.4. CONSTRUCTION LAW The underlying principle:- THE NUISANCE MUST NORMALLY BE OF A CONTINOUS NATURE BEFORE IT BECOMES ACTIONABLE! 9. the tenant will be primary be liable. 9. Where premises are leased. he must take reasonable steps to abate it otherwise he may well be liable. Khorasandjian v Bush [1993] 3 WLR 476 The right to sue was granted to an occupier’s family where they had suffered harassing telephone calls.

following heavy rain. In carrying out the works. the council was liable in nuisance for failing to deal with gypsies who camped out on council land and then interfered with the claimant’s business. but the employer may also be liable. The local authority may serve an abatement notice on the person creating the nuisance or.4. It allows local authorities to proceed quickly where antisocial conduct amounting to a nuisance is taking place. washing down vehicles and the like. The defendants were liable because they were aware of the possibility of it happening and did nothing to prevent it. 9.5 Statutory nuisance Certain nuisance is prohibited by statute. a large natural earth mound on a hillside slipped and damaged the claimant’ cottage. Andrea v Selfridge & Co Ltd (1958) In Selfridge. the contractors are under a duty to take proper precautions to see that nuisance are reduced to a minimum. Page Motors Ltd v Epsom & Ewell Borough Council (1982) 80 LGR 337 Here. in some case.4. a contractor will be liable for interference with adjoining land caused the construction operations. on the owner of the property from which the nuisance originates. advise the local community what operations are going to be undertaken. using dust-sheets.4. for instance the Environmental Protection Act.6 Remedies For Nuisance • Damages • Injunction ZULHABRI Ismail Department of Building Page 42 . dust or other reasons. 9. CONSTRUCTION LAW Here. the duty to minimise inconvenience requires the use of reasonable skill and care and the taking of steps and precautions – to be judged as a matter of common sense and degree. Such steps include: restricting hours of noisy work. In short. debris nettings. restricting noisy working to particular hours. it was held that so long as building operations are reasonably carried on and all proper and reasonable steps are taken to ensure that no undue inconvenience is cause to neighbours whether from noise. or the nuisance is likely to re- occur. the defendant will not be liable.4 Private Nuisance in Construction In construction. 9. If an abatement notice is not complied with. the offender can be taken before the courts which may make a nuisance order and/or impose a fine.

The Court found in favour of Fletcher and ordered Rylands to pay for all the property damage to the mine. hired contractors to create a reservoir on his land to act as a water supply to the mill. The large volumes of water were not naturally present in that form. Lord Cairns identified that storage of water in these quantities did amount to a non natural use of land.5 NUISANCE RELATING TO LAND Rylands v Fletcher (1868) LR 1 Exch 265. The Court agreed that Rylands had a duty in maintaining the reservoir and of being liable for all harm caused by it with broad scope of liability. • Of a thing likely to cause mischief if it escapes. • Which must involve a non natural use of land. the contractor was held liable.4. Rylands in construction Hoare v McAlpine (1923) Where a contractor drove a large number of piles into soil and. When the reservoir was filled. Finally . • The thing must actually escape. without proof of negligence. • Prescription – not in Malaysia but an easement does [prescription : a grant arising from long usage].7 Defences For Nuisance • Volenti non fit injuria • Statutory authority • Contributory negligence. Unknown to the contractors. in the event. 9. Ingredients under the rule of Rylands v Fletcher (1868) • A bringing on to land – the thing must not normally be there. LR 3 HL 330 The defendant. a mill owner. Such a large volume or water could quite obviously do damage if it escaped. All elements of the modern tort were present. the water did escape through the mineshafts causing considerable damage to the claimant. The appellant's land was situated on higher ground that ZULHABRI Ismail Department of Building Page 43 . The contractors carelessly failed to block off disused mineshafts that they came across during their excavations. due to the vibrations produced. but were brought on to the land. Yat Yuen Hong Co Ltd v Sheridanlea & Anor (1963) The appellants were developing their land which was adjacent to the respondent’s land. CONSTRUCTION LAW 9. these shafts were connected to other mine works on adjoining land. water flooded the neighbouring mines. caused damaged to an old house belonging to the plaintiff.

• In Rylands. • The escape was due to an act of God which was not reasonably foreseeable and so no provision for such an event was made.2 The Claimants for Action under the Rule of Rylands • Owners or occupiers of land thing escaped to.5. even natural user may give rise to liability. Some earth fell onto the respondent’s land and damaged the respondent’s nursery. 9.4 Differences between Rylands v and Nuisance [Hj Salleh Buang] • Rylands is a tort of strict liability. • The people in control of circumstances escape happened from. 10. • A single escape is sufficient under Rylands. • Some nuisances. whilst nuisance is not.5.3 Defences for Actions under Rylands • The escape was the fault of the plaintiff. the defendant is strictly liable for his independent contractor. • The mischievous thing was brought on to the defendant’s land with the plaintiff’s consent [volenti]. The court held that the appellant used his land for a non-natural use and was therefore liable under the rule in Rylands. liability under nuisance would require a state of affairs which have continued for some length of time. 9.1 SYNOPSIS ZULHABRI Ismail Department of Building Page 44 . in nuisance the position is less clear. • Liability in Rylands depends on “non-natural use” of land. 9. • The defendant collected the mischievous thing under statutory authority – such as to excuse bodies such as the water board from strict liability under the rule in the event of leak from any of their reservoirs. regardless where the damage occurs. such as noise or obstruction of light are not covered under Rylands.1 The Defendants for Action under the Rule of Rylands • Owners or occupiers of land thing escaped from. • People who suffered damages as result of escape. in nuisance.5. • The escape was caused by the wrongful act of a third party – an independent and unforeseeable stranger. • May or may not a proprietary interest in land. 9.5. CONSTRUCTION LAW the respondent’s land.0 THE LAW OF TORT III 10.express or implied by conduct or common benefit.

2. Donoghue v Stevenson [1932] AC 562 Donoghue established the principle that a duty of care arises whenever a person can reasonably foresee that his acts or omissions would injure or cause damage to another. 10. so she could not sue in contract.2 Duty of care However careless the defendant is. Negligence can be described as the breach of a legal duty to take care which results in damage to the plaintiff. • The plaintiff suffered damage as a consequence. he is not legally liable in the tort of negligence unless he owed the plaintiff a legal duty of care. This known as the “neighbour principle”. and therefore loss must be proved by the plaintiff as a result of a breach of duty of care committed by the defendant. If the duty is broken and a neighbour can show that the breach caused that person a loss. Lord Atkin’s judgment contained five critical elements: 1) Lack of privity of contract did not prevent the claimant from claiming. CONSTRUCTION LAW This lecture will be discussing other ingredients of tort law: • Negligence • Vicarious liability • Occupier liability 10. It is not actionable per se. it is failure on the part of the defendant to take reasonable care so that no harm comes to the plaintiff in the particular circumstances.2 NEGLIGENCE This is the general legal duty to take care not to injure or to cause loss to other people (neighbours). Facts The claimant claimed to suffer shock and gastroenteritis after drinking ginger beer from an opaque bottle out of which a decomposing snail had fallen when the dregs were poured.1 How to Establish Negligence? A plaintiff must prove that:- • The defendant owed him a duty of care.2. Negligence is not merely careless conduct. • The duty was broken by the defendant. ZULHABRI Ismail Department of Building Page 45 . a right of action in negligence exists. 10. She claimed £500 from the manufacturer for his negligence and was successful. A friend had brought her the drink.

the manufacturer was liable to the girl in negligence. Who..  there is proximate relationship between the parties. Caparo Industries v Dickman [1990] 1 All ER 568 Latest development relating to duty of care set out by Bingham LJ. 778 Facts The defendants excavated a trench in the street. They took precautions for the protection of passer-by which were sufficient for normal sighted person. Three stage test in imposing liability:-  Foresight of harm. Haley v London Electricity Board [1965] A. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 In this case. However. a breach of that duty by falling below the appropriate standard of care. b. The moral behind Donoghue A manufacturer would owe a duty of care to the ultimate consumer. CONSTRUCTION LAW 2) Negligence was accepted as a separate tort in its own right. In Donoghue The method of determining the existence of a duty of care – the so-called “neighbour principle”. and  that is just and reasonable to impose a duty. It was held that a duty of care arises whenever a party reasonably relies upon another to provide information or advice and the person providing the information knows or ought to know that the inquirer is relying on him. in law.persons who are so closely and directly affected by my act that I ought reasonably to have them in my contemplation as being affected so when I am directing my mind to the acts or omissions in question”. 3) Negligence would be proved by satisfying a three-part test: a. the House of Lords recognised another duty situation. c. is my neighbour?. irrespective of the lack of any contractual agreement between them. a negligent misstatement can give rise to an action in negligence for damages. Damage caused by the defendant’s breach of duty that was not too remote a consequence of the breach. the plaintiff. ZULHABRI Ismail Department of Building Page 46 . the existence of a duty of care owed to the claimant by the defendant. In such a situation. suffered injury because the precautions taken by the defendants were inadequate for him. As Lord Atkin put it: “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Since the plaintiff had suffered as a result of the manufacturer’s alleged lack of care in ensuring that the product was fit for consumption.. who was blind. then.C.

described the standard as follows: “The test is the standard of the ordinary skilled man exercising and professing to have that special skill. In Bolam v Friern Hospital [1957] 1 WLR 582. A man need not possess the highest expert skill. It was alleged that the cricket club ZULHABRI Ismail Department of Building Page 47 . or  By doing something which a reasonable man would not do. CONSTRUCTION LAW Held It was held that the number of blind persons walking about the street alone was sufficient to require the defendants to have them in contemplation and to take precautions appropriate to their condition. the court will take into account:- • The likelihood of injury occurring. [1957] 2 ALL ER. The judge said that the reasonable man is the man in “in the street” or the “man on top of the Clapham omnibus”. • The practicability of taking precautions. In deciding whether a particular act breaches the standards of the reasonable man. In other words. The likelihood of injury occurring Bolton v Stone (1951) The plaintiff was hit and injured by a cricket ball hit out of the ground by a batsman during an ordinary game cricket. Townsends (Builders) v Cinema News Property Management [1959] 1 All ER 7 The contractor had been liable to the employer for certain breaches of statute (installation of toilets in contravention of a by-law). • The social usefulness of the defendant’s act and the harm caused. the plaintiff complaining of a breach of duty must prove that there was such a breach and damage is caused by the breach of that duty. it is well established law that it is sufficient if he exercise the ordinary skill of an ordinary competent man exercising that particular art”. 10. since the architect had led the contractor to rely on him and ensure compliance with the by-laws. the basic question is whether the defendant’s conduct fell below the standard of care with is expected of the reasonable man. the contractor was entitled to recover from the architect the damages that he had to pay the employer. • The seriousness of the injury that is being risked. The CA held that. The reasonable man is expected to know the law and regulate his conduct by it. The test to determine duty of care exist and breach of that duty:-  By not doing something which a reasonable man would do in circumstances where a duty to act is owed.3 Breach of duty of care As. you can see in the earlier slides.2. In Bolam McNair J.

It was held that the risk they took in an attempt to save life was held not to be breach of the duty of care which they owed to the plaintiff. Although the employers did everything they could to get rid of the effects of the flood. The fire authorities had used the lorry because they were rushing to the scene of an accident to attempt to save someone trapped under a heavy vehicle. It was held that the company had not been negligent because the risk of injury on that slippery floor was not sufficient to justify the closure. Seriousness of the injury Paris v Stepney (1951) The plaintiff. Precautions Latimer v AEC (1952) A flood has caused a factory floor to be greased-covered. CONSTRUCTION LAW was negligent in not providing a fence sufficiently high to prevent such accidents. D. In its defence.3 TYPES OF LOSS 1. P who had only one good eye. Usefulness of the defendant’s act and the harm caused Watt v Hertfordshire CC (1954) A fireman was injured by heavy equipment incorrectly secured on the back of a lorry. The plaintiff argued that the factory ought to have been closed because of the flood. was negligent in not providing goggles. It was held by the House of Lords that the D was negligent. It was alleged that the employer. 10. There was only a small risk that the ball would be hit so far or cause injury if it did. the plaintiff slipped and injured himself. brought evidence that it was customary practice at that time for employers not to provide eye protection.3. It was held that the cricket club was not negligent. It owed a higher standard of care to the plaintiff because of the increased seriousness of the injury risked. Physical damage 2.1 Physical damage ZULHABRI Ismail Department of Building Page 48 . Economic loss 10. was blinded during the course of his employment. D.

3 Economic loss: Consequential damage to property Economic loss consequential to damage to property is recoverable in negligence [Spartan Steel]. 10. P was not able to recover for the loss of profit on melts which could not take place because of the power failure (pure economic loss). ZULHABRI Ismail Department of Building Page 49 . • The plaintiff relied on the defendant’s skill and judgment.3. At the time the electricity failed. Spartan Steel & Alloys v Martins Construction (1973) D’s employees negligently cut the electric cable under a road. • The defendant knew.3. There may be liability for financial loss arising from negligent misstatement. 10. In cases where the plaintiff suffered physical injury as result of the negligence of the defendant. The duty of care could exist on the following:- • There was a ‘special relationship’ based on an assumption of responsibility between the parties. the courts have generally recognised the existence of a duty of care. CONSTRUCTION LAW Damage caused to persons or property [Donoghue]. the court established the principle of for claiming loss in the absence of physical damage to other property and without contract. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 In Hedley. It was held that P was able to recover for  Damage to the materials in the furnace (direct physical loss) and  For the loss of profit on that melt (consequential economic loss- economic loss was the direct consequences of physical damage to the melt). or ought reasonably to have known that the plaintiff was likely to rely upon his statement (inferred assumption of responsibility) and • It was reasonable in the circumstances for the plaintiff to so rely on the defendant’s statement.2 Economic loss: Negligent misstatement Financial damage only [Hedley Byrne]. liability may arise where the negligent misstatement causes economic loss (purely financial). In Hedley Byrne. the P was melting material in furnace and the melt was ruined.

CONSTRUCTION LAW

Conclusion from Spartan Steel
Pure economic loss therefore means loss which is not injury to the person or
damage to the plaintiff’s property. As a general rule, no duty of care is owed
[in tort] where a plaintiff suffers only pure economic loss i.e. cost of repair
works is considered pure economic loss such as defective buildings therefore
not actionable in court.

10.4 NEGLIGENCE IN TORT & CONTRACT
It can be said that the term negligence refers to a breach of duty of care,
whether owed in tort or in contract.

10.4.1 Negligence in contract
The term negligence is also found in the contract of breach of contract, for
instance, the architect may be negligent in designing a building or in his
supervision, the quantity surveyor may be negligent in preparing estimates
of costs, and the contractor may be negligent in carrying out the works.

Sutcliffe v Thackrah [1974] AC 727
In Sutcliffe the architect over-valued a series of certificates and the
employer duly paid the contractor. The contractor then went into liquidation /
winding up before the job was completed. As the result the employer could
not recover the money that had been overpaid.
It was held that the architect / contract was not acting in a “quasi-judicial”
capacity and had no immunity form liability. The architect was liable to
compensate the employer for the money lost.

10.5 CONTRIBUTORY NEGLIGENCE
At common law, if the plaintiff’s injuries have been caused partly by the
negligence of the defendant and partly by his own negligence, then, the
plaintiff can recover nothing.
It is clear that this rule is a harsh one and hardship is caused especially
where the plaintiff’s negligence was not the major cause of the accident.

Section 12 of the Civil Law Act 1956 (Revised 1972) provides to the effect
that in a case of contributory negligence, the damages recoverable by the
plaintiff are to be reduced “to such extent as the court thinks just and
equitable having regard to the claimant’s share in the responsibility for the
damage”.

Jones v Livoc Quarries Ltd [1952] 2 QB 608
The plaintiff/claimant was employed in a quarry and, in disobedience of his
employer’s express instructions, rode on the rear towbar of a ‘traxavator’.
The driver was unaware of the plaintiff/claimant and, when another vehicle
collided and with it the plaintiff/claimant was injured.

His damages was reduced by 5%. Lord Denning stated that:

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CONSTRUCTION LAW

‘A person is guilty of contributory negligence if he ought reasonably to have
foreseen that, if he did not act as a reasonable, prudent man, he might be
hurt himself; and in his reckonings he must take into account the possibility
of others being careless’.

10.6 VICARIOUS LIABILITY
Is not an individual tort as nuisance or negligence. It means of imposing
liability for a tort on to a party other than the tortfeaser, the party causing
the tort.

Mersey Docks & Harbour Board v Coggins and Griffiths (Liverpool) Ltd [1947]
AC 1
A crane driver negligently damaged goods in the course of his work. The
Harbour Board hired him out to stevedores to act as their servant. The
Harbour Board was still liable for his negligence since he would not accept
control from the stevedores.

10.6.1 Vicarious Liability in Construction
The government / employer who refuse to allow the architect / contract
administrator to certify claim until the treasury has approved the payment of
a claim or V.O may be vicarious liable.

10.7 OCCUPIER’S LIABILITY
10.7.1 Liability of an occupier of premises
Occupier’s liability is the liability of an occupier of premises for any damage
suffered by visitors to the premises.

In Wheat v Lacon & Co Ltd, Lord Denning said that an “occupier” is a person
who has a sufficient degree of control over premises to put him under a duty
of care towards those who come lawfully upon the premises.

10.7.2 Duties of an occupier
At common law, the duties of an occupier are cast in a descending scale to
four different kinds of persons:-
1. One who has entered the premises in pursuance of a contract with him.
2. “Invitee” – a person who, without any contract, entered the premises
on business of interest.
3. “Licensee” – a person who entered with the occupier’s express or
implied permission to enter but no common interest, e.g. guest staying
for the night, salesman and policeman with search warrant.
4. Trespasser, who had no permission. A trespasser enters the premises
entirely at his own risk. But the occupier has duty not to inflict damage
intentionally on a trespasser whom he knows to be there. To do so
would constitute trespass to the person.

10.7.3 Occupier’s liability in construction

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CONSTRUCTION LAW

A contractor as “occupier” of the construction site owes a duty of care to
those who enter the site.

10.8 DEFENCES AND REMEDIES
Defences
• Volenti non fit injuria
• Contributory negligence
• Exclusion of liability
• Statutory authority
• Limitation of action

Remedies
Two main remedies in tort:-
• Damages
• Injunction

11.0LAND LAW I

11.1 SYNOPSIS

Generally, the purpose of this lecture is to discuss the general principles of
land law. In particular, this lecture will cover the following:-

• Torrens system

• The definition of land

• Fixture and chattel

11.2OVERVIEW

Construction cannot be separated from “land”. Construction is
synonymous with land development. Any land development project is
subject to various land related laws and regulations. The land
development in Malaysia is highly regulated by legislations administered by
the relevant authorities. Anyone that involves in land development projects
must have some amount of knowledge of the relevant legislations and the
authorities.

11.3 INTRODUCTION

The land law of Malaysia are contained in four main pieces of legislation.

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2 The National Land Code (Penang and Malacce Titles) Act 1963. The onus is on the person who disputes the title of the registered owner by showing that the registration is obtained by some unlawful or illegal means. Definition of land Under section 5 of the National Land Code. The system was formulated to combat the problems of uncertainty. b) the earth below the surface land all substances therein. belongs to the soil. solo cedit” meaning whatever is affixed to the soil. The basic principle underlying the Torrens system is that all dealings in land must be registered in order to be effective [section 206]. which depends on proof of an unbroken chain of title back to a good root of title. whether for not requiring the periodical application of labour to their production. 3 The Sarawak Land Code.’ It means that the person’s title as the registered owner of the land cannot be disputed. Torrens title is a system of land title where a register of land holdings maintained by the state guarantees indefeasible title to those included in the register. The latin phrase” Quicquid plantatur solo. CONSTRUCTION LAW 1 The National Land Code 1965 (Act 56 of 1965). “land” includes:- a) the surface of the earth and all substances forming that surface.5 LAND The general rule is that the possessor of land also possesses the soil beneath and the column of air above the land [section 5 and 44(1) of the NLC. ZULHABRI Ismail Department of Building Page 53 . d) all things attached to the earth or permanently fastened to any things attached to the earth. and e) all land covered by water. and whether on or below the surface.4 TORRENS SYSTEM Invented by an Australian. complexity and cost associated with old system title. Sir Robert Torrens. The person whose name is registered in the document of title acquires an ‘indefeasibility of title. c) all vegetation and other natural products. and the Sabah Land Ordinance. whether on or below the surface. 11. 1965]. 11.

e. Strengthened and rebutted by a consideration of the purpose or object of the annexation. • Purpose or object of annexation tests.6 FIXTURE Fixture is a real property and form part of land. An objective test. Raises a prima facie findings of facts by looking at the degree to which an article is affixed to the land. b. CONSTRUCTION LAW 11. An objective test. For the better enjoyment of the land [fixture] f. The English law in Holland v Hodgson (1872) provides two tests for establishing whether an item is a fixture or a chattel:- • The degree of annexation. An article attached to the land by its own weight is not to be considered part of the land [chattel]. An article attached to the land by its own weight [chattel]. The purpose of annexation a. d. The inquiry is directed at the intention of the person who affixes the item. An article which is affixed to land [fixture]. c. d. An article which is affixed to land even slightly gives rise to a rebuttable presumption that it is part of the land [fixture]. c. For the more complete enjoyment [chattel]. b. ii. ZULHABRI Ismail Department of Building Page 54 . The prima facie findings of facts established by the degree of annexation test i. The degree of annexation a.

The court held that. the respondent applied for an order to seize and sell the machinery by virtue of his bill of sale. the ordinary English law of fixtures applies in this country. It is well settled by that law that prima facie machinery affixed to earth becomes a fixture and part of the land. ZULHABRI Ismail Department of Building Page 55 . the earth excavated. The tanks are buried two feet below ground level and covered with concrete. The Shell Company of the Federation of Malaya Ltd v Commissioner of the Federal Capital of Kuala Lumpur (1964) The appellants are the owner of holdings under which are constructed tanks for the storage of petrol. it nevertheless accrued to the land and became part of the chargee’s security. The purpose of annexation is to be inferred not merely from the motive or intention. CONSTRUCTION LAW g. all pipes connections unbolted and the tank with its concrete sinker weights then raised with blocks and tackle. To remove them. included the value attributable to the underground storage tanks. GCH executed a bill of sale assigning to the respondents certain machinery in one of GCH’s factories which was charged. The respondent. Goh Chong Hin & Anor v The Consolidated Malay Rubber Estates Ltd In April 1921 Goh Chong Hin (GCH) executed a charge in favour a money lender (chargee) secured by a few pieces of rubber estate land. Even if the machinery was set up after the date of the charge. On June 1921. in determining the annual value of the holdings. the money lender (chargee) took possession of the rubber estate. the appellants contended that the tanks did not fall within the definition of “building” and as such could not be or form part of “a holding” and were not rateable. The basic rule • Fixture pass with land but chattels do not. chattels may be removed but fixtures must be left for the new owner. the concrete has to be taken up. The chargee in possession opposed the application. On December 1923. On appeal. the concrete manhole boxes removed. On October 1923. • On the sale of land.

Registration of land Charged land which was not registered cannot be foreclosed. charge or easement is for the time being registered. thus rateable. The tanks themselves consisted of pre-cast bottom. shall. Sime Bank Bhd v Mohd Hassan Sulaiman (2000). It was held that the underground tanks are land within the definition of “land” in the NLC 1965 as they are rateable. The appellant contended that the tanks were not rateable since they were neither “land” nor “building”.” However. Teh Bee v K. side and roof steel plates which were assembled and riveted on site to form the bulk storage tanks. Socfin Co Ltd v Chairman. Under the Torrens system. Klang Town Council (1964) The respondent in determining the annual value of the appellant’s holdings for rating took into account the bulk storage tanks standing thereon. The storage tanks enhanced the value of the holdings on which they stood and as they were not machinery used for industrial purposes under NLC. The storage tanks were annexed to the land for its better use and enjoyment and formed part of it and were accordingly rateable. be indefeasible. Section 340(1) states that “The title or interest of any person or body for the time being registered as proprietor of any land. There are specific circumstances wherein a registered title or interest may be set aside or defeated. indefeasibility is not absolute. or in whose name any lease. the register is everything and it would be wrong to allow an investigation as to the right of the person to appear upon the register when he holds the certificate of title. Maruthamuthu (1977) The fact that the register document of title was in the name of the appellant was conclusive evidence that the title to the land was vested in the appellant. ZULHABRI Ismail Department of Building Page 56 . The platform foundation rested on prepared ground. The storage tanks were used for storing palm oil and there were vertical cylinders resting on pre-cast concrete pillars which stood freely on a reinforced concrete platform foundation. being structures connected with platforms and pillars and was accordingly rateable. subject to the following provisions of this section. CONSTRUCTION LAW The respondent contended that the tanks had become part of the land as fixtures and as such were within the definition of “holding” and therefore rateable. It was held that the storage tanks were buildings. The effects of registration are defeasibility.

340(2) would mean “fraudulent misrepresentation” and is a species of fraud (Loke Yew v Port Swettenham Rubber Co. any other act fitted to deceive. Datuk Jaginder Singh & Ors v Tara Rajarathnam (1883)). the active concealment of a fact by one having knowledge or belief of the fact. of that which is not true by one who does not believe it to be true. and 5. Misrepresentation Misrepresentation within the context of S. 4. Forgery In Chew Lip Seng v Perwira Habib Bank (M) Bhd. According to Pheng (2005) instances of fraudulent misrepresentation include the following:- 1.340 of the NLC “must be actual fraud and mere knowledge of the existence of an unregistered interest shall not of itself be imputed as fraud within the meaning envisaged by section S. any such act or omission as the law specially declares to be fraudulent. the plaintiff granted a declaration that the charge of the property of the defendant bank was not executed by him and that the signature on the charge document was forgery.” In Assets Co v Mere Roihi (1905) it was held that “fraud” means actual and not constructive or equitable fraud on the part of the person whose title or interest is being impeached. and insufficient or void instruments. The suggestion as to a fact. 2. ZULHABRI Ismail Department of Building Page 57 . the court held that fraud under S.340. forgery. misrepresentation. CONSTRUCTION LAW Under section 340 below are the exceptions to indefeasibility: fraud. It must involve dishonesty of some sort which was committed prior to or at the time registeration. 3. Fraud In Tai Lee Finance Co Sdn Bhd v Official Assignee (1983). Ltd (1983). a promise made without any intention of performing it. The high court also ordered for the charge to be cancelled and the title of the deed of the property returned to the plaintiff.

 Restraint of Dealing. Types of alienation are the following:- A. “Alienate” means to dispose of State land in perpetuity or for a term of years. NLC1965]. and otherwise in accordance with the provision of section 76 [section 5.  Condition of land. 3. Freehold land ZULHABRI Ismail Department of Building Page 58 .11.  Dealings. The laws prohibiting such dealings are S. Transactions made in contravention of Malay Reservation Enactments. Transactions made in contravention of the Moneylenders Ordinance 1951. 2. 12. Contracts Act 1950. CONSTRUCTION LAW Insufficient or void instruments According to Pheng (2005). or the voluntary resignation of an estate by one person. examples of instruments which are void due to prohibition imposed by law:- 1.1 SYNOPSIS The purpose of this lecture is to discuss and make aware on the following area :-  Alienation of land. in consideration of the payment of rent.0 LAND LAW II 12. Dealing effected in favour of or minors. The case of Tan Hee Juan v Teh Boon Keat (1934) is authority for the principle that an instrument of dealing effected in favour of or my minors is void.  Form of title. and its acceptance by another. 12.2 ALIENATION OF LAND Definition A transferring of property. NLC 1965 and S.43(1)(a).

 No security.  Minimum 3 years cannot exceed 99 years [section 76 of the NLC]. Leasehold Land  State land is dispose by the state authority to an individual and successors for a term of years as originally granted. The land vests in such individual and his successors in title for an indefinite period. Leasehold land C.  After 99 years to be reverted back to the state government [section 76 of the NLC].  Special circumstances and appropriate to do so. tenancies agreement. Temporary licence [TOL] Freehold Land When state Land is disposed of by the state authority to an individual in perpetuity. It is perceived as better market value and best security.  To be used for public purposes. Tenancies D. ZULHABRI Ismail Department of Building Page 59 .e.  Not to be taken as security for loans by the financial institution.cannot exceed 3 years and renewable. Tenancies  Subject to payment/quit rent. State authority will alienate in perpetuity only where [section 76 of the NLC] :-  The Federal Government requires the State Authority to them or public authority. CONSTRUCTION LAW B.  Periodical .  Good security.  Not to be registered [not a title] and may be created by word of mouth or in writing i.

12.4 DEALINGS Transfers ZULHABRI Ismail Department of Building Page 60 . whereby qualified title [hak milik sementara] for the purpose to enable land to be alienated and to enable titles to be issued in the of sub- division. Industry The land designated for a prescribed land use cannot be used for any other purpose unless there is a conversion of land use. Agriculture b. 12. CONSTRUCTION LAW Others  Temporary occupation license. partition or amalgamation lands in advance of the completion of a survey. Condition of Land Use All alienated lands are subject to conditions limiting them to one of the following categories of land use:- a. Breach of condition of land use shall result in the land being liable for forfeiture by the state.3 FORM OF TITLE Final title and Qualified Title Final form of title under which lands are alienated after they have been surveyed.  Squatter rights (adverse possession). Building.  Unconverted land such as Malay reservation. and c.

any charge.  The registration of charge confers upon the chargee a legal interest in the land. Land is most sought after security by lenders whether they are :-  Chettiers [Goh Chong Hin & Anor v The Consolidated Malay Rubber Estates Ltd ]  Finance companies.  The chargee has the power of take possession/foreclosure upon default of repayment of the debt. evidenced by a written agreement or conduct.  Charges do not involve the transfer of the land to the chargee. of any alienated land.  The parties must have intended to create a lease and not a license. Leases The characteristics of leases:-  The lessee is given the right to exclusive possession of the demised premises. CONSTRUCTION LAW Section 214 of the NLC provides that the whole. undivided share in alienated land. but not part only. and tenancies shall be capable of transfer. Charges Land is the most tangible form of security and its supply is inelastic.  Lease must be granted for a definite period or for a period which is capable of being ascertained.  Ho Giok Chay v Nik Aishah (1961) It was held that charge is an interest in land especially in view of the fact that it renders the land liable as a security which the chargee could enforce by way of the sale of the land in the event of default by the chargor. ZULHABRI Ismail Department of Building Page 61 .  Bankers.

There must be a dominant and a servient tenement. ZULHABRI Ismail Department of Building Page 62 . Essential characteristics According to Salleh Buang (2001) [Re Ellenborough Park (1955)] the essential characteristics of an easement are the following:- 1. and 4. over or upon the servient land. and (b) any right that something should not be so done. The right must be capable of forming the subject matter of a grant. Dominant and servient owners must be different persons. Easements  Right granted by a proprietor of the servient land to the proprietor of the dominant land for the beneficial enjoyment of the dominant’s land (Section 282 of the NLC). Section 283(1) of the NLC states that he rights capable of being granted as easements are:- (a) any right to do something in. An easement must “accommodate” the dominant tenement.  In Paramoo v Zeno Ltd (1968) is was held that the intention to create lien may be gathered from the fact that the issue document of title to the land is deposited with the lender as a security for the loan and for no other purposes. 2. 3. The rights do not include to take anything from the servient land or right to the exclusive possession.  An easement under the NLC can only arise by way of express grant under Section 284 of the NLC. CONSTRUCTION LAW Liens  Method of taking security when the borrowing is short term.

12. • The land cannot be registered if caveat is applied. means "warning" (or more literally.  A registered proprietor of land is not entitled to enter a private caveat in respect of his own land. ZULHABRI Ismail Department of Building Page 63 .5 RESTRAINTS OF DEALINGS Two kinds of restraints of dealings: Caveats and prohibitory order. Types of Caveat  Private Caveats  Trust Caveats  Lien-holder Caveats  Registrar’s Caveats Private Caveats  Applicable to any person claiming title to the land or registereable interest to claim such registered interest. CONSTRUCTION LAW 12. "let him beware"). • The NLC permits a person who claims he is entitled to a caveatable interest to lodge a caveat against the land to protect his interest.1 CAVEATS • The Latin cavere.5.  Effect is to prohibit only  Valid for 6 years Trust Caveats  Means of protecting the interests of beneficiaries under a trust.

mental disorder or unsoundness mind.  A lien-holder’s caveat may be withdrawn by the caveator. 3. REFERENCES ZULHABRI Ismail Department of Building Page 64 . Registrar's Caveat Entered by Registrar for the reasons of the following:- 1.  Life span for 6 months. indorsement or entry.2 PROHIBITORY ORDER  For persons who do not have any caveatable interest under the NLC. For the prevention of fraud or improper dealing. Lien-Holder's Caveats  May only lodge by a person with whom the document of title has been deposited as security for a loan.  May be cancelled by the Registrar or court upon proof of the satisfaction of all sums due under the lien. By reason of error in register or issue document of title. For protecting the interests of the federation or the state authority or any person under disability of minority.  The effects are that they prohibit the registration. 2. 12.5.  For judgment creditors. they may obtain a prohibitory order for the purpose of imposing restraint on dealings over land owned by the judgment debtors. CONSTRUCTION LAW  Not form of security accepted by lenders.

Penerbit Fajar Bakti Sdb Bhd. National Land Code (Act 56 of 1965) & Regulations. Smith & Keenans (2001). CONSTRUCTION LAW Lee Mei Pheng (2005). General Principles of Malaysian Law. English Law. Dewan Bahasa dan Pustaka. International Law Book Services. The Malaysian Torrens System. Pearson Education Limited. Salleh Buang (2001). ZULHABRI Ismail Department of Building Page 65 .