CHAPTER 2:

EQUITY AND THE MALAYSIAN LEGAL

SYSTEM

Questions attempted by:

Zaimah Ameera Mohammad Ali (1511042)

Nur Zulaikha binti Rohaizat (1510508)
Nur Kamilah binti Che Ibrahim (1519454)

As of:
9th October 2017
QUESTION 3
Section 6 of the Civil Law Act 1956 prohibits any
element of English rules of equity to the Malaysian
land tenure.

(a) In light of the said provision, explain and

analyse the influence of equity to Malaysian land
law and support your answer with relevant cases.

(b) Decide whether reform is needed in this

situation
(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND
ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND
LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES.

 S. 6 CLA 1956- “Nothing in this Part shall be taken to

introduce into Malaysia or any of the States
comprise therein any part of law of England relating
to the tenure or conveyance or assurance of or
succession to any immoveable property or any
estate, right or interest therein.”
 Issue

  Whether section 6 prohibits the application of

equity in land matter in Malaysia?
  If not prohibited, is equity accepted under
Malaysian Land Law?
(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND
ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND
LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES.

 First View: Equity is Prohibited

 Equity has no place under the Malaysian Torrens
System
 Case: Datin Siti Hajar v Murugasu  the NLC
leaves no room for doubt that the acquisition of
easements by the common law of prescription is no
longer applicable in Malaysia. Only provisions
under NLC applicable.
 Case: United Malayan Banking Corporation Bhd v
Pemengut Hasil Tanah Kota Tinggi  Privy
Council held that S.6 CLA prohibits application of
English rules of equity relating to tenure,
including rules relating relief against forfeiture.
(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND
ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND
LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES.

 First View: Equity is Prohibited (Cont.)

 Case: Haji Abdul Rahman v Mohamed
Hassan English equitable rule that “once a
mortgage, always a mortgage” rejected by the
court as any dealings outside of the statute is
declared null and void

Second View: Equity is Applicable under

Malaysian Land Law
 Malaysian courts have an inherent jurisdiction
to do justice between parties, thus to achieve
justice, court is allowed to apply equity in any
circumstances including land transactions
(A) IN LIGHT OF THE SAID PROVISION, EXPLAIN AND
ANALYSE THE INFLUENCE OF EQUITY TO MALAYSIAN LAND
LAW AND SUPPORT YOUR ANSWER WITH RELEVANT CASES.

Second View: Equity is Applicable under

Malaysian Land Law (Cont.)
 Case: Motor Emporium v Arumugam
 S.206(3) of NLC in personam claims relating
to unregistered dealings can still be enforced
by the court
 Case: Karuppiah Chettiar v Subramaniam
 Case: Devi v Francis Chang Min Tat J
reiterated land law in England is one thing
and equity is another matter. Opinion of PC in
UMBC case should be confined only to the
issue of applying equitable rules on relief
against forfeiture and not extended to others.
(B) DECIDE WHETHER REFORM IS NEEDED IN
THIS SITUATION
 Yes reformation of the law is necessary in order to
avoid any confusion with regards to whether equity is
applicable under the Malaysian Torrens System.
 S.6 CLA should be modified so that application of
equity is not prohibited in Malaysian land law
 There should be a clearer provision to give a clearer
stance on the position of equity under Malaysian land
law
 Salleh Buang in his book Malaysian Torrens System:
“long line of authorities from early as pre-Code era
until Mahadevan s/o Mahalingam, and beyond have
established beyond doubt that equity is here to stay,
existing side by side with the Torrens system,
despite the court’s vehement insistence that “under
the Torrens system the register is everything”.”
 QUESTION 4
“The Torrens system is designed to provide simplicity and certitude in
transfer of land which is amply achieved without depriving equity of
the ability to exercise its jurisdiction in personam on grounds of
conscience.”
-Oh Hiam & Ors v Tham Kong [1980] 2 MLJ 159 at 164

Explain the above statement briefly and discuss, referring to

decided cases, the principles that the courts have applied in
respect of the following:

a) Equitable Ownership
b) Equitable Lease
EXPLAINING THE STATEMENT
“The Torrens system is designed to provide simplicity
and certitude in transfer of land which is amply
achieved without depriving equity of the ability to
exercise its jurisdiction in personam on grounds of
conscience.”
-Oh Hiam & Ors v Tham Kong [1980] 2 MLJ 159 at 164

 The deliberation and different views in applicability of

equity side by side with the Malaysian Torrens System.
 The important point from the judgement is per underlined.
 Ambiguity in legal provision has been the tool utilized by
judges who are in favour of equity to allow for its
application.
(A) EQUITABLE OWNERSHIP
DEFINITION AND ILLUSTRATION
 Ownership: the exclusive right to use, possess, and dispose property.
 Legal Ownership: ownership from a legal title to a property.
 Equitable Ownership: ownership which arises out of beneficial rights
given by a contract or trust relationship.
 E.g.

Vendor Purchaser
Equitable Owner
Legal
Owner
Transfer of right through a sale
and purchase agreement
Trustee
APPLICATION OF EQUITABLE
OWNERSHIP IN MALAYSIA

 In Munah v Fatimah [1968] 1 MLJ 54 it was held

that beneficiaries of an estate who had
contracted to sell the land to the plaintiffs but
failed to transfer the land legally to the plaintiff
was ordered by the court to effect the
transfer.

 The court recognised that the plaintiff was the

equitable owner of the land after signing
the contract and going into possession.
(B) EQUITABLE LEASE
EQUITABLE LEASE
 A lease is an interest in the land that gives
exclusive possession to the tenant for a
fixed period of time.
 The most important aspect here is the grant of
exclusive possession. Thus, the right of all others,
including the landlord is excluded. If the person
to whom the interest is given does not have the
right of exclusive possession, then the interest
may be a mere personal right to occupy; generally
considered as licence.
EQUITABLE LEASE
 An agreement for the grant of an interest in
land on terms that correspond to a legal
lease but do not comply with the necessary
formal requirements of a legal lease. For
example, if L purports to grant T a lease for
seven years but the transaction is effected by
simple written contract to grant a lease rather
than by deed, the court may enforce the contract
to grant the lease between the parties. This
follows the principle that “equity looks
upon that as done which ought to be done”
(Walsh v Lonsdale (1820) 21 Ch D 9).
- Oxford reference
APPLICATION OF EQUITY
 “But the NLC does not say that an unregistered lease
is void for non-registration. 'In fact, it even provides for
the recognition of the operation of contractual transactions
in so far as land dealings are concerned' (Land Law in
Malaysia, Cases and Commentary by Teo Keang Sood and
Khaw Lake Tee, (2nd Ed) at p 232). Section 206(1)(b) of
the NLC provides that 'no instrument effecting any such
dealing shall operate to transfer the title to any alienated
land or, as the case may be, to create, transfer or otherwise
affect any interest therein, until it has been registered
under part eighteen'. But s 206(3) of the NLC provides
that 'nothing in sub-s (1) shall affect the contractual
operation of any transaction relating to alienated land or
any interest therein.
 Evidently, while s 206(1)(b) of the NLC provides for the
right ad rem, s 206(3) provides for the right in
personam. The NLC recognises the distinction.
 APPLICATION OF EQUITY
 In our view, s 206(3) of the Code contains an express
provision which states that the provisions of the Code
requiring a dealing to be effected in the statutorily
prescribed manner shall not '... affect the contractual
operation of any transaction relating to alienated land or any
interest therein'. This provides statutory authority for the
liberal application of equity whenever there is a basis for
that …However, it is a condition precedent for the application
of s 206(3) that there is in existence a transaction relating to
alienated land or an interest therein which is valid and
enforceable as a contract')…. Consequently, 'although the
agreement was not a proper instrument for registration as a lease
the authorities are clear that it may be treated as an agreement for a
lease. The validity of contracts relating to alienated land or any
interest therein is explicitly declared in s 206(3) of the National Land
Code' (Yong Tong Hong v Siew Soon Wah & Ors [1971] 2 MLJ 105
per Ong CJ (Malaya), delivering the judgment of the court). An
unregistered lease is certainly not void (see York House Pty Ltd
v Federal Commissioner of Taxation (1930) 43 CLR 427, at p 435).
 S & M Jewellery Trading Sdn Bhd & Ors v Fui Lian-Kwong
Hing Sdn Bhd
 FC 2015
Thank you.