Land Law 2000 Q5

modified 03.02.2010

Under the provision of section 256(3) of the NLC 1965, a court, when faced with an application for an Order for Sale of Charged Land, shall grant the order unless “satisfied of existence of cause to contrary”.

How have the court interpreted the said phrase of ‘existence of cause to the contrary’?

 (25 marks)

The leading authority in on section 256(3) is the case Low Lee Lian v Ban Hin Lee Bank Bhd. In the above case, the appellant executed a third party land charged in favour of the respondent bank as security for loan, for and on behalf of the borrower. When the borrower defaulted in the payment, the respondent bank applied for an order for sale of the charged land, which was subsequently granted by the court. The appellant appealed to the Supreme Court, and the issues before the said court was whether there was ‘existence of cause to contrary’ pursuant to section 256(3) of the NLC. The Supreme Court held that mere breach of terms of an agreement did not squarely fall within the scope of 256(3). However, the Court went further describe the following situation might be established within 256(3), namely : -

a)      Chargor able to bring his action within section 340(2);

b)      Chargor can demonstrate that the chargee has failed to meet the condition precedent for making the application for order for sale; and

c)      Chargor can defeat the application for order for sale by demonstrating that if it is granted would be contrary to some rule of law or equity.

In the case of UMBC v Syarikat Perumahan Luas, the first limb was considered. The chargee in this case applied for an order for sale and the chargor opposed the said application on issue that the registration of the charge was in breach of the s.120 of the Code which prohibits the charging of a land without the written sanction of the state authority and therefore, the court held that the chargee’s title is defeasible because the registration thereof was obtained by means of an insufficient or void instrument as per s.340(2)(b) and also because the Registrar of Titles, in registering the charge, had acted ultra vires of the power conferred upon him by s.340(2)(c).

There are numerous cases have been decided for non compliance to the condition precedents and in fact the court have recognised other relevant issues pertaining to the general rules and as well as the terms and condition of the agreement in dismissing an application for order for sale based on ‘existence of cause to contrary’ particularly in relation to the second limb of the above case. Be that as it may, the burden of proof is always upon the party who asserts cause to contrary i.e., the chargor (Malaysian Building Society Bhd v Univein).  In CCB v Meng Kuang Properties, the Plaintiff bank applied for an order for sale of a piece of land charged by the defendant. There was inconsistency in the amount claimed. The court held the application for order for sale would only be given, if the court satisfied no existence cause to contrary. Further, the court held that the chargee is not automatically entitled to the order for sale. The existence of cause to contrary in the above case resolves around the validity of the notice of demand and the statutory notice of form 16D which were sent to the chargee, did not disclose the actual sum owed. Thus, the court held the notices were defective.

Other issues that the court has decided to fall within the ambit cause to contrary in accordance with the 2^nd limb are such as failure to comply with the general rule of High Court pertaining to the service of the statutory notices and court proceeding rendered irregularity (OCBC Bank (M) v Astano Electric S/B), non compliance to the Order 83 of the High Court rule (Overseas Union Bank v L & H Properties) and wrong computation of interest and unconscionable enrichment (BCBB v Tengku Ngah Putra). In Perwira Affin Bank v Saad Abdullah it was held by the court that failure to comply to the terms of the charge annexure went to the root affecting the validity of the demand.

Further, the Court not only apply the law but also at times invoke the aid of equity when the justice requires so, in order to be satisfied to the existence of cause to contrary (Phileo Allied v Narendren Thambimuthu). In OCBC v An Kee Sin, the Plaintiff applied for order for sale upon default of the defendant in serving the various loan facilities. The Plaintiff agreed to the defendant’s proposal to reduce the facilities over the period of time and eventually free the third party charge. However, despite the fact a substantial sum have been paid into the account of the Plaintiff bank but the Plaintiff bank did not in any way reduce the debt owing, as agreed but gave further credit to the borrower. The court held that Plaintiff giving further credit to the borrower after agreeing with the borrower’s proposal as indicated satisfied the court that the grand of order for sale would be contrary to equity.

            Therefore, as discussed above are the situations the court have interpreted the existence of the cause to contrary.

Land Law - 2006 Q1

In Devi v Francis [1969] 2 MLJ 169, Chang Min Tat J, in response to an objection raised by the respondent to the application of English equitable rules relating to licenses by estoppel in the case, said inter alia :

The other [ground] is based on section 6 of the Civil Law Ordinance, 1956 which excludes the application of the law of England relating to tenure or conveyance or assurance of or succession to any immovable property or any estate right or interest therein. The answer  to this objection is that the land law of England is one thing and equity another matter and it is expressly provided in section 3(1) of the same Ordinance that the court shall apply the common law of England and the rules of equity and in section 3(2) that in the event of conflict the rules of equity shall prevail. (At p 172 of the report.)

With reference to the above decision and other relevant decisions of the courts as well as relevant statutory provisions, explain and discuss what in your opinion is the effect of section 6 of the Civil Law Act 1956.    (25 marks)

The Malaysian Torrens system as embodied and codified in the National Land Code 1965 is a system of registration of tiles which was designed to provide simplicity and certitude (Oh Hiam v Tham Kong) and is totally different land law system from that in England. Under the Torrens system, the register is everything (Teh Bee v Maruthamuthu). In safeguarding the Torrens systems, section 6 of the Civil Law Act 1956 (CLA) prohibits the reception of the law of England in relation to tenure, conveyancing, assurance or succession to any immovable property or any estate, rights or interest therein. Though the section was devised to met its purpose, the court in Wilkins v Kannamal held that the Torrens system is a system of conveyancing; it does not abrogate the rules of equity.

Section 3 of CLA allows the general reception of English equity in cases where there is lacuna in the local law and where the application of English equity is suitable to local circumstances.

In the case Devi v Francis, the appellant occupied that part of the respondent’s land on which stood a house owned by the appellant. The appellant had commenced occupation of the said house after the purchase of the same from the respondent’s mother and subsequently the purchase was incorporated in an agreement. The respondent gave notice and claimed possession of the ground on which the house was erected. The court applied the principles of equitable estoppel and rejected the contention by the counsel for the respondent that English equity was not applicable to land matters in Malaysia in view of the section 6 of CLO. Further, the Lordship held that the land law of England is one thing and equity another matter and it is expressly provided in section 3(1) of the same Ordinance that the court shall apply the common law of England and the rules of equity and in section 3(2).

In UMBC v PHT Kota Tinggi, the court dealing with the question whether English equitable rules relating to relief against forfeiture, had expressly stated that section 6 wide enough to cover the said principles of equity. The equitable rules were precluded by the section from being applied. However, the court went further to state that English equitable principles of general application are applicable to land matter in Malaysia so long as their application is not inconsistent with the stated aims and objectives of the Malaysian Torrens system as embodied in the express provisions of the National Land Code 1965. Therefore, section 6 even though clearly bar the application of equitable principles in relation to tenure and conveyancing but it does not have any effect to the applicability of English equitable principles of general application.

The effect section 6 also can be seen in the light of the claim in personam, where the Privy Council used its inherent power of jurisdiction held if a claim is made based on the equitable principles of general application on a right ad rem which is right in personam, section 6 does not abrogate the applicability. In Oh Hiam v Tham Kong, the parties entered in a contract of sale of certain pieces of land. The transfer was included with a land on which stood the house on the ground of common mistake. The High court set aside the sale and the transfer of the land. On appeal the Federal Court allow the appeal on the ground there was no mistake. When the matter reached the Privy Council, the issue was whether, the equitable remedy of rectification was available to the appellant notwithstanding the purchaser being the new registered owner of the fact his title was indefeasible under NLC. The Privy Council held equitable remedy of rectification was available to the appellant when the claim was based on right in personam.

Another situation where the Court had used a particular doctrine under English equitable principles of general application against the section 6 is the doctrine of bare trust. The application of the doctrine of bare trust had been clouded but Malaysian court had applied on numerous occasions without hesitation in land matters. Be that as it may, Lord Roskill in Chin Choy v Collector of Stamp Duties, had vehemently expressed that though the vendor became in equity, a trustee for the purchaser of an estate sold was a peculiarity of English land law nevertheless held that section 6 of the CLO prohibits the reception of any English law pertaining to land matters in Malaysia.  This obiter dicta, however had been rejected by the Federal Court in Borneo Housing Mortgage Finance v Time Engineering and affirmed that the doctrine of bare trustee applicable in a modified form in Malaysia.

It is pertinent to note that the High Court in Templeton v Law Yat Holding, while conforming that the Plaintiff was entitle for easement, held that the NLC [s 206(3)] shall not affect the contractual operation of any transaction relating to alienated land and further of the view that this subsection provides authority for the liberal application of equity whenever there is a basis for that. This is a clear indication that the Court never accepted the effect of section 6 as a whole but rather to halt any matters which has a direction relation to the land matters.

In Bhagwan Sigh Co. v Hock Hin Bros, the court dealt with a purchase of land whereby of one of the purchasers died after the execution of the transfer by the vendor which made the original transfer incapable of registration the sub-purchaser was entitled to an order directing the Registrar of Titles to register what he had bought. In holding that the antecedent contract was a binding contract, Thomson J. (as he then was) gave the order asked for and held that the English equitable principles in determining a question of priorities of caveats applicable and the Torrens system does not prevent the court from doing equity  where the rights of third parties have not been intervened.

Section 6 was enacted to prevent the importation of the English law land under section 3(1) to the land matters in Malaysia. However, in the interest of justice, the court had use the English equitable principles of general application in matters pertaining to land law and granted relieves to the affected parties where there was lacuna in the local law. Thus, it is my humble opinion that the effect of section 6 does not conclusively and/or wholly bar the application of the equitable principles in the Malaysian land law.

Family Law 2006 Q(1)(a)

modified 02.02.2011

Allen, aged 18 years, and Vera, aged 17 years are in love. They decided to get engaged, but did not inform their parents about the engagement as they believed that it was something special between the two of them. Allan gave Vera a very beautiful gold ring and a bouquet of roses for the engagement.

Four months later, Allan fell ill and has to be hospitalised. Vera visited him every day until Allan suggested that they get married. Vera agreed and proceeded to inform her parents and Allan’s parents about their decision. Allan’s parents did not object but Vera’s parents objected and advised Vera to break off the engagement. Vera is now very upset as she wishes to marry Allan in whatever possible way. She seeks your advise on her problem. Advise Vera.                                                                           (12 ½ marks)

            Allan and Vera was in love and Allan had presented a gold ring and a bouquet of roses as a sign of their engagement which was accepted by Vera, thus, there had been a good consideration between them for a valid engagement. The parties to the engagement should remain single. In spiers v Hunt, the defendant promised to marry the plaintiff upon death of his wife, however, after 8 years, the defendant refused to marry the plaintiff who eventually sued the defendant for breach of promise. The Court decided in favour of the defendant because the promise was illegal due to the incapacity of the defendant being a married man not a single person as required. Further, Allan and Vera should have attained the minimum age for engagement. Under s.11 of the Contract Act 1950, only a person of age of majority may enter into contract and s.4 of the Age of Majority Act 1971 provides that the age of majority in Malaysia is 18. Be that as it may, the High Court in Rajeswari v Balakrishnan held that a minor can validly enter into a contract of marriage. Thus, Vera being 17 does not invalidate her engagement per say.

            Can Vera lawful marry Allan? Section 10 of the Law Reform (Marriage & Divorce) Act 1976 (LRA) provides that Allan should be 18 years of age and Vera, the female party should be above the age of 16. Nevertheless, s.12 provides that those parties to the marriage who is below the age of 21 should bet a written consent from the respective parent. In the event, Vera’s parent had unreasonably withheld his or her consent, she can petition the High Court under s.12(2), whereby the High Court upon hearing, may grant a consent on behalf on the parent. In addition, Vera, since she is below the age of 18, she should get a licence from Chief Minister [s.21(2)].

            Allan and Vera both have freely consented to the marriage [s.22(6)] without any duress and that they should not be in prohibited relationship (s.11) and that if Allan and Vera are Hindu and wish to marry according to Hindu religious rite and tradition, then even if their relationship stands as uncle and niece will not be against the law of marry. Advised accordingly.

Family Law 2005 Q1(b)

Shanti and Mustafa lived together for five years and they have a daughter aged two. Mustafa has now left Shanti and is married to another woman. Mustafa wants to take Shanti’s daughter away from Shanti. Shanti wishes to know what are her rights of guardianship over her child and whether she can obtain maintenance for her child from Mustafa.

Advise Shanti.

The Guardianship Act 1961 cannot be applied for the illegitimate child (Re Balasingam & Parvaty). However, the s.24(d) of the Court of Judicature Act 1964 allows the Court to appoint guardian for an illegitimate child (Low Pak Huang v Tan Kok Keong). The nature mother i.e. Shanti of the illegitimate child is the person in whom the parental rights and duties will vest exclusively. Mustapa being the putative father cannot apply for guardianship as s.5 of the Guardianship Act 1961 only applies to lawful father and further he is being a Muslim the Act does not apply for him (Section 1(3) Guardianship of Infants Act 1961). The Common law stand is that the law place upon the mother of an illegitimate child an obligation which ought to in my opinion do bring with then corresponding rights. The Court of equity that the mother’s wish to be consulted, if she has not forfeited the right to consult by any misconduct. Shanti cannot convert the child into other religion upart from what had been practiced on the birth until the child attain the age of 18 (Tan Kong Meng v Zainon Md Zain).

Section 88(3) of LRA provides that where a child is below the age of seven should be placed with the mother for the good of the child unless it is otherwise proven wrong. In Shanta Kumari v Vijayan, the child was 20 months old when he was taken away by this father from his mother, who was at the time living with her own mother. The court held that an infant of tender age should remain with his mother for a period of nurture, and for a natural mother’s love, care and affection. Further, court of the view that should a change of custody takes place it might unsettle the mind of the child and it might develop a permanent emotional scar in the child (Masam v Salina Saropa & Anor). Therefore, Shanti would be successful in obtaining guardianship of the daughter. However, Mustapa would be conferred with right to access, to enable him to visit the child in a specific time (Foo Kok Soon v Leong Rosalina).

Section 93(1) of LRA provides that the court may at any time order a man to pay maintenance for the benefit of his child. There is no necessity for a divorce petition to be filed before section 93 could be invoked in favour of children (Saraswathy v Palakrishnan). It is a settled law that the father has a duty to maintain the standard of living the children had enjoyed in the past, that is, during the subsistence of the marriage and the plaintiff was said to be entitled to claim arrears of maintenance and also a mantle maintenance (Sivajothi a/p K Suppiah v Kunatharan).  This maintenance will be effective until the child attains the age of 18 years (s95 LRA).  Further, if Shanti’s child suffers disability, she can get continuance of the maintenance under s.95(b) of the LRA until ceasing of the disability or alternatively if the child is excel in studies until the child obtain her first university degree (Ching Seng Woah v Lim Shook Lin). Shanti also can claim an arrears of maintenance payment up to three (3) years [s.98 & s.86 of LRA], if any.

Family Law 2005 Q(1)(a)

modified 02.02.2011

Nathan and Mei are married and they have a child who is still a minor. One day, Mei meets Ali and begins to learn about Islam. A year later Mei converts to Islam and a few months after that Mei marries Ali. Mei wishes to know the legal position of her marriage with Nathan and how she can obtain maintenance for and guardianship of her child.

What is status of Mei’s marriage. According to s.51 of the LRA only the non converting party may apply for divorce. Thus, even though Mei has converted into Islam, she has no right under the LRA to apply for divorce. In Ng Siew Piau v Abd Wahib Abu Hassan, the court held that only the non-converting party may petition for a divorce and the converting party cannot seek a decree of divorce on the grounds of his/her conversion. Therefore until and unless Nathan applies for divorce, the civil marriage between them will stand valid.

It is a common law duty that a husband must maintenance his wife (Raquiza v Raquiza). Since Mei cannot apply for divorce, she cannot rely on The Law Of Reform (Marriage and Divorce) Act 1976 for maintenance as it is not applicable.  However, she can claim maintenance based on the Married Women and Children (Maintenance) Act 1950 (MWA), where s. 3(1) provides that the Court may order a man who has neglected/refused to support his wife to provide monthly allowance for the purpose of supporting, if the wife unable to support herself. Further, the earning capacity of the wife will be taken into consideration in awarding maintenance (Thevathasen v Thevathasen). The court also can order payment of arrears of maintenance for not more than 12 months (Amrick Lall) and such payment of alimony is not a property (Gangaharan).  However, in awarding the maintenance, the court will look into the issue who contributed to the divorce and to what extend. Nonetheless, s. 5(2) MWA provides that no wife shall be entitled to receive an allowance from her husband if she lives in adultery. Since Mei is the sole reason for the breakdown of the marriage and she had married Ali, she would be entitled for maintenance.

Can Mei claim maintenance for her child. It is a settled law that the father has a duty to maintain the standard of living of his child had enjoyed in the past and during the subsistence of the marriage (Sivajothi a/p K Suppiah v Kunatharan).  Section 3(2) MWA provides that the Court may order a man who has neglected/refused to support his child to provide monthly allowance for the purpose of supporting, if the child unable to support themselves. Child under MWA referred to legitimate and illegitimate child as well. Further, the maintenance for the child will be paid until the child attained the age of majority (Kulasingam v Rasammah) and the age of majority as provided in the Majority Age Act 1971 is 18.

Guardian is the person to take care of the child and ‘he’ is also responsible to maintain the child’s health, welfare and education (Foo Kok Soon v Leong Rosalina). Section 11 of the Guardianship of Infant Act, 1961, provides that a judge in exercising his power conferred under the Act, shall have regard to the welfare of the infant and also wishes of the parents. In Kanagalingam v Kanagarah, it was held that whilst it is incumbent upon the judge to consider the wishes of parent/s as the case may be, the paramount consideration shall be primarily be the welfare of the infant. Welfare of the child, weight more than other factors (Mahabir Prasad v Mahabir Prasad).

In deciding on the issues of guardianship, the court will consider factors such as the welfare, religion, moral, the circumstance of the house and the character of the parties. The court held that an infant of tender age should remain with his mother for a period of nurture, and for a natural mother’s love, care and affection. Further, it is the view of the court that should a change of custody takes place it might unsettle the mind of the child and it might develop a permanent emotional scar in the child (Masam v Salina Saropa & Anor). Therefore, Mei would be successful in obtaining guardianship of her child. However, Nathan would be conferred with right to access, to enable him to visit the child in a specified time (Foo Kok Soon v Leong Rosalina).

            Thus based on the above, Mei civil marriage with Nathan is still valid until Nathan get a divorce and she can obtain maintenance and guardianship for her child. However, maintenance for her will be refused by the court. Advised accordingly.

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