INTRODUCTION

• s 205(1)
• Two modes of transfer:
 inter vivos; and
 operation of law: death and bankruptcy
• On registration of the transfer purchaser
obtains legal title to property – Jasbir
Kaur v Tharumber Singh [1979] 1 MLJ 224
TRANSFER INTER VIVOS
• What can be transferred?
• s 214(1) The following are capable of being
transferred:
(a) the whole land, but not part only, of any alienated
land;
Peter Lai v Collector of Stamp Duties [1973] 2 MLJ 33
(b) the whole, but not part only, of any undivided shares
in any alienated land;
(c) any lease (including sublease) of alienated land;
(d) any charge of alienated land; and
(e) any tenancy exempt from registration.
s 214A – Control of transfer of estate land
RESTRICTIONS
• Powers are subject to s 214(2):-
 prohibition or limitation imposed by NLC or
other written law
 Express restrictions in interest
 Express and implied provisions –leases,
charges and exempt tenancies.
 s 214(3)
 s 205(3)
METHODS OF TRANSFER
Must comply with formal requirements (ss
207-211) laid down in NLC relating to such
instrument: s 206(1)(a).
INSTRUMENT OF DEALING

• s 206(1)
• s 206(2)
• s 206(3)
• s 207
• s 208
• s 209
• s 210
• s 211
FORMALITY
• s 215(1), s 217(1), s 218(1) – Form 14A
• Form 14B: s 218(2)
• s 220(1)
• s 206(1)(b)
BRIEF PROCEDURE
• Form 14A (land and lease) and Form 14B
(charge)
• Execution, stamping and registration
• s 301
• ss 215(2), 217(2) and 219(2)
• s 292(4) and Bachan Singh v Mahinder Kaur
[1956] 1 MLJ 97
EFFECT
See:
• transfer of land: s 215(2)
• transfer of an undivided share in land: s 217(2)
• transfer of lease or charge: s 219(2)
 Read s 216(1) and s 217(3)
 See also s 340(1) on indefeasibility of title
 Bare trust concept: Ong Chat Pang & Anor v.
Valiappa Chettiar [1971] 1 MLJ 224, 229 FC, per
Gill FJ
EQUITY AND LAND LAW
 Equity Under the Land law.

• Nature of Legal Right to Land under

the Malaysian Torrens System.
• “It is registration that vests and divests title.”
(Justice Raja Azlan Shah in PJTV Denson’s case)
• “Under the Torrens system, the register is
everything” (Justice Ajaib Singh in Teh Bee v K.
Maruthamutu)
• S.340 NLC: Registration confers an
indefeasible title.
 Contracts v. Dealings
• Contracts relating to land can create many
types of land transactions, i.e. sale of land,
mortgage of land, lease of land.
• Under the Malaysian Torrens system, in order
that a land transaction can be recognised as a
legal right, it must be registered at the land
office.
• Registered land transactions are called
‘dealings’.
 Dealings under the NLC:
• Only 4 types of dealings can be registered
under the NLC: (s.205(1)):
• 1) Transfers
• 2) Charges
• 3) Leases
• 4) Easements
• Note: A lien is also a type of dealing but it is
protected by way of lodging a lien-
holder’s caveat.
 s.205(1) NLC:
• “The dealings capable of being effected
under this Act with respect to alienated
lands and interests therein shall be those
specified in
Parts 14 to 17, and NO OTHERS”

• The words , ‘no others’ means that land

transactions outside of the NLC are not
recognised under the statutory system.
 What could constitute ‘NO OTHERS’?

• Dealings that have been executed but not

registered.
• Executed contracts creating land
transactions.
• Quare: Does statutory non-
recognition strike the validity of the
contracts that created these land
transactions?
 s.206 NLC
• Sub-section 1 requires all dealings to be
registered.
• S.206(3):
• “Nothing in sub-section (1) shall effect the
contractual operation of any transaction
relating to alienated land or any interest
therein.”
 Significance of s.206(3) NLC?
• It saves ‘in personam’ claims between parties
to a land transaction that is not registered
under the NLC.
• It UPHOLDS contractual rights.
• It allows the court to enforce contractual
rights between the parties notwithstanding
the fact that the land transaction is not
recognised under the NLC.
 Nature of equitable rights to land
• Equitable rights are ‘in personam’ in nature.
• Thus, once parties sign a contract relating to land,
equitable rights to land are also created as parties
have ‘in personam’ claims against each other in
respect of obligations under the said contract.
• The court may exercise equitable jurisdiction to
enforce such contracts by granting a decree of
specific performance. The court may also grant a
host of other equitable remedies in respect of such
contract.
 Thus:
• Contractual rights gives rise
to equitable rights in land.
The view that equity has no place under the
Malaysian Torrens System.

• Although s.3(1) Civil Law Act ` 1956 allows

the application of English law and equitable
principles in Malaysia, s.6 prohibits the
application of English law to land matters.
 Section 6, Civil Law Act:
• “Nothing in this Part shall be taken to introduce into
Malaysia …any part of the law of England relating to
the tenure or conveyance or assurance or succession
to any immoveable property or any estate, right or
interest therein.”

• Issue: Does the above provision prohibit

the importation of equity into land
matters?
 Datin Siti Hajar v Murugasu [1970] 2
MLJ 153
• Obiter:
• “…the effect of s.6 seems to be to oust the
application of common-law and rules of equity
relating to land tenure, transfer or
transmission of immoveable property…”
 UMBC v Pemungut Hasil Tanah Kota
Tinggi [1984] 2 MLJ 87
• The appellant’s land had been forfeited by the State
Authority for non-payment of rent.
• Appellant tried to invoke the equitable relief against
forfeiture.
• Privy Council (held):
• S.6 Civil Law Act prohibits the application of English
rules of equity relating to tenure of which the
equitable rules relating to relief against forfeiture are
a part.
 UMBC v Pemungut Hasil Tanah Kota
Tinggi [1984] 2 MLJ 87
• Lord Keith of Kinkel:

• “The NLC is a complete and comprehensive code of

law governing the tenure of land in Malaysia and the
incidents of it, as well as other important matters
affecting land there, and there is no room for the
importation of any rules of English law in that field
except so far as the Code itself may expressly provide
for this.”
Hj. Abdul Rahman v Mohamed Hassan
[1917] AC 209
• Before the NLC, s.4(i) of the Selangor Registration of
Titles Regulation 1891 had declared ‘null and void’
any dealings outside of the statute.
• This resulted in the rejection of the rule of equity
‘once a mortgage, always a mortgage’ by the Privy
Council in the famous ‘jual-janji’ case of Hj. Abdul
Rahman v Mohamed Hassan [1917] AC 209
 The View Accepting Equity Into
Malaysian Land Law
1) The court has an inherent jurisdiction to do justice
between the parties and thus apply equity.
– (See: Motor Emporium v Arumugam [1933-34]
FMSLR
2) By virtue of section 206(3) NLC, the courts may
still enforce ‘in personam’ claims relating to
unregistered dealings.
(See: Karuppiah Chettiar v Subramaniam(1971) 2 MLJ
116)
 More on views accepting equity:
• 3)In some cases, courts have disagreed that
s.6 of the Civil Law Act prohibits the
application of equitable rules to land matters.
• (See: Devi v Francis [1969] 2 MLJ 169 where
Justice Chang Min Tat said:
• “The land law in England is one thing and
equity another mattter.”
 View that s.6 Civil Law Act does not
prohibit equity:
• The opinion of the Privy Council in UMBC’s
case should be confined only to its issue of
applying equitable rules on relief against
forfeiture. (See Templeton v Low Yat Holdings
S/B [1993] 1 MLJ 443
 More views favouring equity:
• 4) Recognition of the ‘trust’ concept in
Malaysia. The creation of a trust over
land
is recognised under the Trustee Act, 1949
and the NLC. The trust concept accepts the
concept of legal and equitable ownership
of land.
 Types of Equitable Land Transactions and
Concepts Recognised in Malaysia
• 1) Equitable Ownership
• Munah v Fatimah [1968] MLJ 54
• - 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.
• - Court recognised that the plaintiff was the
equitable owner of the land after signing the
contract and going into possession.
 Equitable Land Transactions and
Concepts
• 2) The ‘Bare-Trust’ Concept
• “The moment you have a valid contract for
sale, the vendor becomes in equity, a trustee
for the purchaser.”
• (Applied by the courts in Ong Chat Pang &
Anor. v Valliappa Chettiar[1971] MLJ 224 and
other cases. Confirmed by the Supreme Court
in Dr. Michael Atun Wee’s case [1994] 3 MLJ
594)
 More Equitable Land Transactions
• 3) Equitable Lease
• See: Margaret Chua v Ho Swee Kiew (1961) 27
MLJ 173
• The court held that an unregistered lease is
still good as an agreement for a lease.
• 4) Equitable Estoppel/ Proprietary Estoppel
• See: Devi v Francis , Perumahan Farlim’s
case,
Holee Holdings Case.
 Equitable Land Transactions
• 3) Equitable Security Transactions:
• A) Equitable charge: Mahadevan v Manilal
& Sons [1984] 1 MLJ 266, Federal Court held –
•“There is no provision in the NLC which
prohibits the creation of equitable charges.
Such a charge gives rise to an equitable right
in favour of the creditor.”
 Equitable Security Transactions
• B) Equitable Lien
• (See: Mercantile Bank v The Official Assignee
of How Han Teh [1969] 2 MLJ 196, Standard
Chartered Bank v Yap Sing Yoke [1989] 1 CLJ
530
• C) Jual Janji
• Yaacob b Lebai Jusoh v Hamisah [1950] MLJ
255- ‘time not of essence’
 SOLICITOR STAKEHOLDER
• The one who undertakes to hold the money paid over by
the purchaser pending the outcome of a future event
upon which he would pay it over to the vendor.
• They temporarily holds money or property while its
owner is still being determined. In case anything
happened, the money is secured with the stake holder.

• Toh Theam Hock v Kemajuan Perwira Management

Corp Sdn. Bhd
– word ‘stake’ is used to refer to any money to be disposed of
in accordance with what may happen in the future, and
whoever is in possession of that money is the stakeholder.
• Kuldip Singh & Anor v Lembaga Letrik Negara &
Anor
– if the stakeholder run away, then the loss should be on
the person who, under the terms of the contract, had a
claim to the money at that time.
- There, the client purchased a house and instructed
solicitor Brar to prepare a sale and purchase
agreement. The client had taken a loan. He appointed
the solicitor to whom the cheque for the loan had
been issued in order to redeem the house from the
chargee. However, the solicitor disappeared with the
loan sum and never redeemed the house. Wan
Hamzah J (later SCJ) held that the solicitor was the
agent of the client. Hence, the client was ordered to
bear the loss of the loan.
 Kuldip Singh & Anor v Lembaga Letrik
Negara &Anor
P planned to finance
P wanted to buy a
P instructed the the purchase partly
house from 2nd D. She
Brar to draw a S & P by means of loan
then took the 2nd D to
agreement. from their employer,
see her solicitor.
LLN (1st D).

Brar received the cheque as a

stakeholder until a specific events
occurred:
1.Signing of the transfer form by
the second D and P
2.The solicitor feeling certain that
the transfer could be registered
free fro encumbrances.
After June 14, 1976 Brar
disappeared. The 1st D Procedure: appoint a
has been making solicitor. P required
monthly deductions from to submit the name
the P’s salaries to of that solicitor to the
recover the loan of
1st D.
$46,000
• When no longer has stakeholder, the vendor
should bear the loss even if the solicitor is
appointed by purchasers.
• This is because by mutual consent parties made
the solicitor the stakeholder. Loss must be allowed
to remain where it falls.
Tat Suan Sim v Chang Fook Shen
– It is an inevitable necessary requirement in any agreement
of sale under Torrens system to appoint a stakeholder,
who, need not be the solicitor for the vendor. He needs to
hold the money which would be paid over by the purchaser
upon the execution of the relevant transfer until the
registration of the transfer. If the registration is not affected
or proceeded with, then his undertaking would be to return
the money to the contending purchaser to secure the
repayment of the loan.
The solicitor’s duty / stakeholder

Draft S&P agreement

• need to state particulars of the party and the
description of land
• includes the encumbrances existing in respect of
the land and provision on how the vendor
proposes to discharge them
Final S&P agreement
• where deposit is paid and balance on or
before the completion date
• complete and executed instrument of
transfer in Form 14A for registration- s215
Neogh Soo Oh v G Rethinasamy

• standard of care required for is that of the

reasonably competent solicitor
• should make a search or enquiry at land office to
know the fact that the land has been acquired by
gvt
• he may be required to go behind the register if
there is necessity for it
• making further enquiry with the relevant registering
authority such as LA regarding the thing not stated
on the document of title
Tan Suan Sim v Chang Fook Shen

• role of stakeholder to hold purchase money or that

loan until transfer or other instrument of dealing
has been registered, where upon the balance of the
purchase money would be released to the vendor
Stakeholder in Malaysia
 Cases on Stakeholder
• OCBC Bank (M) v Lee Lee Fah & Ors
• HELD: Purchasers had done everything under agreement
to obtain title and no duty on the part of purchasers to
ensure vendors did receive the money from stakeholder.

• Tok Theam Hock v Kemajuan Perwira Management Corporation

Sdn Bhd
HELD: a solicitor-stakeholder was entitled to keep any interest
earned on the stake money, he was not accountable to any of the
parties for the interest earned. The money held by the stakeholder
did not belong to any specific client until the happening of any
event and hence the money could not be considered to be ‘client
money’ within the meaning of the Solicitors’ Accounts Rules.
 The concept of Bare Trust
The English Position

The Pf
AGREEMEN

The vendor:
(purchaser) bare or
SALE

: equitable constructive
owner trustees
T
 Position of Bare Trust in Malaysia
4 circumstances where the doctrine can be applied:
(1)existence of a valid contract
(2)the purchaser has carried out and fulfilled all obligations under
contract (full payment is paid)
(3) the vendor must have the title of the land
(4)vendor has no duty to perform other than those of executing the
transfer and perfecting the transfer document

Cases where the doctrine applied:

• Temenggung Securities Ltd v Register of Titles Johor & Ors
Full payment and surrender of the possession, the vendor becomes
the bare trustee with the beneficial ownership pass
•Ong Chat Pang v Valiappa Chettiar
When the vendor has done all that is necessarily to direct himself of
the legal estate by executing a valid transfer of the land=> bare trustee
 Borneo Housing Mortgage Finance
Bhd. v Time Engineering Bhd. [1996]
2 MLJ 12
• P want to seek a declaration that a charge is
void due to the charger has no chargeable interest
over the landafter the land has sold to P.

• Concept of bare trust is applied in Malaysia

• When a bare trust concept arises?
• When the subject matter of the agreement
is on completion, upon receipt by the
vendor the full purchase price and the
vendor has given the purchaser a duly
executed, valid and registrable transfer of
the land in due form.
• Bare trust concept end when the transfer
has been completed, ie it has been
registered
• In this case, the bare trust concept did not
apply to the parties, as when the charge was
created, the full purchase price has not yet
paid, so the vendor is not a bare trustee at
that time
Wong Siew Choong Sdn. Bhd. v
Anvest Corporation Sdn. Bhd. [2002]
3 CLJ 409

Followed Borneo Housing where because

the vendor has not yet given the
purchaser a duly executed, valid and
registrable transfer of the land in due
form, so not yet become a bare trustee
 Cases where it rejected the doctrine
• Macon Engineering Sdn Bhd v Goh Hooi Yin and uphold by the
court in Chin Choy & Ors v Collector of Stamp Duties.
• Court held that the true relationship of the vendor and purchaser
in a sale and purchase transaction is contractual in nature as the
Code only recognizes only one estate, the registered estate of a
person.

• NLC only recognizes contractual right which is provides in the

S206(3) of NLC, a right to ensure the purchaser under the contract
is not deprived of his right to the property because of non-
registration.
Differences between the common law and Malaysian position of bare
trust.
Q: When does the vendor becomes a bare trustee?

COMMON LAW MALAYSIA

Then moment when there is a receipt
The moment when there is
upon full purchase price, timeously paid
a valid contract for sale
and when the vendor has given the
purchaser a duly executed, valid and
•Lysaght v Edwards registrable transfer of the land.

•Ong Chat Pang v Valliappa Chettiar