Chapter 1 Land law

Torren system

The Torrens System, introduced by Sir Robert Torrens through the Real Property Act
in South Australia in 1858, is a method of registering land titles that emphasizes the
conclusive nature of registration. This system is in contrast to the English Title Deed
System, where proving ownership relies on establishing a chain of deeds.

Let's break down the key features of the Torrens System and how it differs from the
English Title Deed System.

1. Conclusiveness of Registration:

Conclusive evidence that u can own the land.

This can be seen in the case of Teh Bee v K Maruthamuthu where the Court held
that under Torrens System registration is everything and it would be wrong to allow
an investigation as to the right of the person to appear upon the Registrar when he
holds the certificate of title

Mirror Principle: Under the Torrens System, what is recorded in official documents
(such as the Registrar Document of Title - RDT and Issue Document of Title - IDT)
reflects the true and accurate details of land ownership. These documents provide a
complete and accurate representation of ownership and serve as conclusive evidence
of ownership. For example, if the RDT and IDT state that John Smith is the owner of
a specific piece of land, then he is recognized as the owner without further
investigation.

Curtain Principle: This principle states that there is no need to look beyond the
documents, namely the RDT and IDT, to verify the information provided by the
landowner. Any details contained in these documents are considered final and
conclusive. Section 89 of the National Land Code (Revised 2020) (NLC) reinforces
this by stating that every registered document of title shall be conclusive evidence.
For example, if Alice holds a certificate of title, any challenge or investigation into
her ownership would go against the fundamental principles of the Torrens System, as
it is designed to provide conclusive registration. See the case of Creelman v Hudson
Bay Insurance Co. In this case, the court mentioned that if an investigation had been
taken against the person holding the certificate of title, such action will defeat the
purpose of National Land Code on the ground that NLC itself is a code that provide a
conclusive registration together with the mirror and curtain principle.

2. Indefeasibility of Title:

The Torrens System grants registered proprietors an indefeasible title. This means that
the title or interest of any person or body registered as the proprietor of a land, lease,
charge, or easement is immune from challenge or attack by adverse claims. This
principle is governed by Section 340(1) of the NLC. In cases of bona fide
registration, the registered proprietor enjoys an indefeasible title against the entire
world.

However, there are exceptions to indefeasibility. Section 340(2) of the NLC specifies
that the title or interest may not be indefeasible if the transferee is guilty of fraud,
forgery, misrepresentation, mistake, the use of a void instrument, or if the title was
unlawfully acquired. In such cases, the title can be challenged. For example, if
someone acquired a property through fraud, their title would not be considered
indefeasible.

See the case of Kesarmal v Valliappa Chettiar. In this case, the Court deemed the
wording of “shall not be indefeasible” to mean that the title or interest of a proprietor
is liable to be defeated. This can be illustrated by the case of Fels v Knowles where
the court held that except in cases of actual fraud on the part of the person dealing
with the registered proprietor, such person upon the registration of the title has an
indefeasible title against the entire world.

3. Emphasizes Importance of Registration:

Under the Torrens System, all dealings with land must be registered with the State
Authority using statutory forms. This is crucial for the validity of these transactions.
Section 206(1)(b) of the NLC emphasizes that no instrument affecting land dealings,
such as transfers, charges, or leases, can transfer the title of the land until it has been
registered. In other words, registration is a mandatory step in establishing and
transferring land ownership.

Comparison with the English Title Deed System:

The English Title Deed System, in contrast to the Torrens System, relies on a chain of
deeds or historical documents to establish ownership. In this system, the burden of
proof is on the landowner to trace and prove the history of ownership through a series
of deeds. If this chain cannot be proved, the landowner may lose their interests in the
land.

4. The fourth feature is that under Torrens System, adverse possession or adverse
claim is completely not allowed.
This means that adverse possession of land such as through illegal occupation will no
longer nullify the registered proprietorship on the land. This can be seen in S 48 of
NLC whereby it did emphasize that no adverse possession against the State land by
any unlawful means. S 341 of NLC also provides that adverse possession does not
extinguish any registered titles or interests. In the case of Sidek v The State of
Perak, the Federal Court held that the State land shall only be acquired through
formal application, therefore the squatter has no right of equity, if the land was
possessed illegally.
For your own understanding on what is adverse possession : Imagine a rural area
where there is an old, abandoned cottage surrounded by a large piece of land. The
cottage has been vacant for many years, and its owner, Mr. Johnson, has not visited or
maintained the property during this time. The cottage and the surrounding land are
Mr. Johnson's property. However, he has not visited the area for over 20 years and has
effectively abandoned it.

Mary, a neighbor who lives nearby, notices the abandoned cottage and the vast,
overgrown land around it. She decides to clean up the area, remove debris, and make
the cottage habitable. She also starts to plant a garden and maintains the property
regularly. Mary's use of the property is open and notorious. She does not seek or
receive permission from Mr. Johnson, and her possession of the land is continuous for
more than 20 years. During these 20 years, Mary is the only one who uses and
maintains the property. There are no challenges or disputes with Mr. Johnson
regarding the land.The statutory period for adverse possession in this jurisdiction is 20
years, and Mary has maintained continuous, open, exclusive use of the property for
that duration.In this scenario, Mary's consistent, open, exclusive, and unchallenged
use of Mr. Johnson's abandoned property for the required statutory period could lead
to a claim of adverse possession

5. Application of English Equitable principles

While Section 6 of the Civil Law Act 1956 (CLA) explicitly states that English law
does not apply to land matters or immovable property matters. However, Section 3 of
the CLA allows for the general reception of English equity in certain situations.
English equity refers to a set of principles and rules developed in English law to
address issues of fairness and justice. In land matters, it may apply in cases where
there is a gap (lacuna) in local law, and the application of English equity is suitable to
local circumstances. The Case of Woo Yok Wan v Loo Pek Chee:

In the case of Woo Yok Wan v Loo Pek Chee, the court clarified that Section 6 of the
CLA does not exclude the application of English equitable principles. It distinguishes
between English principles relating to equitable interests in land and those relating to
tenure, conveyance, or succession to immovable property or any estate, right, or
interest therein. Therefore, the application of English equitable principles, particularly
concerning equitable interests in land, is not precluded by the local law.

Section 206(3) of the National Land Code (NLC):

Section 206(3) of the NLC addresses the contractual operation of unregistered land
transactions. It specifies that even if a land transaction is not registered, it does not
affect the legality of the contract between the parties.

Example:
Imagine you and your neighbor agree to sell a piece of land. You both sign a contract
outlining the terms of the sale, but you haven't completed the full registration process
with the land registry. If one party fails to uphold their end of the contract, the other
party can still go to court and use this section to enforce the terms of the agreement
and protect their rights, even though the land transfer isn't officially registered yet. It
ensures that the promises made in your contract are legally binding.

In the case of Karuppiah Chettiar v Subramaniam, the vendor had sold land to the
purchaser, and a transfer was executed but had not been registered. The court held that
the unregistered memorandum of transfer would confer an equitable title on the
purchaser based on Section 206(3) of the NLC.

English Title Deed system

In the English Title Deed System, land ownership is established through a chain of
historical deeds and documents, and the burden of proof lies with the landowner to
trace and prove their ownership. Here's an example to illustrate the system and why it
can be disadvantageous:

Example:
Suppose you own a piece of land in the English Title Deed System. To prove your
ownership, you need to show a series of deeds and documents that demonstrate your
right to the property. This chain might include deeds of purchase, inheritance, and
various other documents that have transferred the property over the years. The burden
is on you to provide a clear and unbroken chain of documents dating back to the
original owner.

Weakness

Firstly, title deeds are not a conclusive evidence. This means that if someone was able
to prove the same chain of title deed or even earlier, the original proprietor would be
losing all the interests on the land. In other words, under English Title Deeds System,
ownership is possible to be defeated by adverse claim.

Secondly, people will normally face difficulty in proving the ownership. This is
mainly because the ownership needs to be proved by showing the chain of title deed
document which detailing the land’s past and present ownership and mortgage
history.

Thirdly, it is a system where equitable interest could not take priority, particularly
when a purchaser took with actual notice of that interest.

Fourthly, the procedure of title deeds normally takes time and it costs the involved
parties very much due to its complexity and uncertainty of deed system, particularly at
the time when they want to prove the chain of title. In fact, the lawyer’s conveyancing
fees often exceeded the value of the land dealt with.

Applicability of English Doctrine of Equity

Sample question : explain whtr malaysia applys equitable principles in land

matters

Sample answers :

1st view

Regarding to this question, Malaysian Court had adopted two general approaches.
The first approach is that S 6 of CLA only prohibits the English common law and not
the rules of equity.
Cases for first approach

1) Devi v Francis [1969] 2 MLJ 169

In this case, one of the issues was whether the English equitable rules can be applied
as regards to licenses by estoppel. The argument is that the rules cannot be applied
with regards to S 6 of Civil Law Ordinance 1956.

In deciding the case, Chang Min Tat J applied the equitable estoppel rules and held
that the England land law is one thing and equity is another matter on the ground that
it is expressly being stated under S 3(1) of the Ordinance where the common law of
England as well as the rules of equity are applicable and in the event of conflict the
rules of equity shall prevail by virtue of S 3(2) of the Ordinance.

It should be noted that in this case, S 6 of the Ordinance only applied insofar as the
‘common law’ part of English land law was concerned and it did not apply to the
equity aspect of English land law.

2) Woo Yok Wan v Loo Pek Chee [1975] 1 MLJ 156

The defendant, a registered proprietor of land, entered into a tenancy agreement with
the plaintiff. Later, the premises closed down and the defendant noticed the plaintiff
to vacate from the premise. The plaintiff lodged a private caveat, and asked for
specific performance of the tenancy agreement. The defendant then applied to have
the caveat removed.

The Court held that S 6 of the CLA does not exclude the English equitable principle
where in this case the lease which was void at law due to failure of complying with
the legal formalities shall be treated as an agreement for a lease and equity may be
enforced. The application of English principles relating to equitable interest in land is
not precluded, what is being precluded is the English law relating to tenure or
conveyance or assurance of or succession to any immovable property or any estate,
right or interest therein.

3) Alfred Templeton v Low Yat Holdings Sdn. Bhd. [1989] 2 MLJ 202

The plaintiffs by a mandatory injunction asked the defendants to execute and register
an easement of way over the land in order to provide access for the plaintiff’s land to
the public highway. Nevertheless, the defendant failed to do so.

The court held that S 6 of CLA does not preclude the application of English equitable
principles to determine the status of the vendor and purchaser pending registration
because the said principle has not yet been covered in any written law of Malaysia
thus, in many cases the equitable principles are being applied.

All in all, it can be concluded that the first approach does not expressly exclude the
application of English equitable principles, rather it only excludes the application of
English land tenure and land law.
The second approach is that S 6 of CLA prohibits both English common law and rules
of equity.

Cases for second approach

1) Datin Siti Hajar v Murugasu [1970] 2 MLJ 153

The defendant built a road over the plaintiff’s land, claiming that he had a right of
way thereon. The plaintiff sued the defendant for trespass and damages.
Issue arose was whether the defendant had the right of easement of way over the land
by the common law doctrines of prescription and lost modern grant.

Syed Agil Barakbah J, after referring to S 3 and 6 of the Civil Law Ordinance 1956,
held that S 6 of the CLA had excluded the application of English law, both common
law and equity, to any land matters since 7 April 1956. Not only that, after the
enforcement of the NLC, the new Code constituted ‘other provisions' as in S 3 of the
CLA. Hence, the NLC was a complete and comprehensive Code with regard to the
acquisition of rights of way.

2) T Damodaran v Choe Kuan Him [1979] 2 MLJ 267

In this case, the main issue arose was whether a lis pendens could be entered on a
register document of title to land.

Lord Diplock opined that the original common law doctrine of lis penden and the
English Land Charges Act 1925, had no any application in Malaysia on the ground
that S 6 of Civil Law Ordinance expressly excluded from the general reception of
English common law and rules of equity as part of the law of Malaysia.

3) Chin Choy v Collector of Stamp Duties [1981] 2 MLJ 67

This case was relating to the ad valorem stamp duty on the transfer of property.
The issue was to determine effect of a contract of sale of land in order to ascertain the
time of passing of the beneficial interest in the land for purposes of stamp duty
assessment for the transfer.

Lord Roskill held under English law, normally when a valid contract for sale is
concluded the vendor becomes a trustee for the purchaser of the estate sold under the
rules of equity. However, since S 6 of the Civil Law Ordinance 1956 had expressly
excluded the English common law as well as the rules of equity under the Federation
of Malaya, then they shall not be applied in Malaysia anymore.

Conclusion

There are 2 views on this however it has to be noted that S 206(3) of NLC provides
that nothing in subsection (1) shall affect the contractual operation of any transaction
relating to alienated land or any interest therein. In simple words, it points out that
despite that the dealing of land is not being registered, it shall not affect the legality of
the contract.
Thus, some might suggest that S 206(3) of NLC in fact is a form of equitable
principle under the NLC since equitable right are in personam in nature. Nevertheless,
such section can only be invoked provided that the parties had sign a contract
regarding to the land,

In Karuppiah Chettiar v Subramaniam [1971] 2 MLJ 116, the vendor sold the land to
the purchaser and transfer was executed but yet to be registered. The court held that
the unregistered memorandum of transfer would confer an equitable title on the
purchaser based on S 206(3) of NLC as the transaction was a contract of sale and
purchase, which was followed by the execution of a memorandum of transfer which
complied with the relevant requirements of the NLC.

Nevertheless, there are three main conditions in applying the equitable principles
under S 206(3) of NLC. The first condition is that S 206(3) of NLC shall only be
applied when there is a valid and enforceable contract as can be seen in the case of
Kimlin Housing Development Sdn. Bhd. v Bank Bumiputra (M) Sdn. Bhd. The
second condition can be seen in the case of Kwong Hing Realty Sdn. Bhd. v Malaysia
Building Society Bhd where S 206(3) of NLC shall only applies to a contract
underlying a “dealing” within the meaning of S. 206(1) of NLC. The third condition is
that S 206(3) of NLC shall only apply the equity liberally, if the rights of a 3rd party
had not been intervened as under the case of Alfred Templeton v Low Yat Holdings
Sdn Bhd.