Monday, January 4, 2010

EQUITY ISSUE

Non-abrogation theory of Australia on equity and the appropriateness of its acceptance in the local context

Basically, according to the section 6 of the Civil Law Act 1956, it was clearly stated that nothing in this part shall be taken to introduce into Malaysia or any of the states comprised therein any part of the 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. Therefore, it can be said that under this section, it was prohibit the application of English common law as well as the rules of equity into Malaysia. However, through the cases that have been decided by the courts no matter in Malaysia or even Australia, it seems to us that the English common law and rules of equity are applicable towards the land matters.

According to the case of Abigail v Lapin and Another [1934] A.C. 491, an appeal from the High court of Australia to the privy council whereby the judgment of Griffith C.J., speaking for the high court of Australia, in Butler v Fairclough (1917) 23C.L.R 78,91 stated that it is well settled that under the Australian system of registration of tittles to land the courts will recognize equitable estates and right except so far as they are precluded from doing so by the statues. This recognition is indeed the foundation of the scheme of caveat which enable such rights to be temporarily protected in anticipation of legal proceedings. In dealing with such equitable rights the court in general act upon the principles which are applicable to equitable interest in land which is not subject to the acts. Moreover, in the case of Crabb v Arun District Council [1976] 1 Ch 170, whereby in this case afford a prime example of how a landowner, though entitled as of strict right to exclude anyone from passing over its land was, nonetheless, and because of an equity raised against it, obliged to acknowledge that Crabb had a right of way. Therefore, Scarman L.J understanding of the legal position of the oral agreement and subsequently grant an easement to Crabb. Its undeniable that through the two Australian cases as mentioned, it was clearly to us that the English Common Law an rules of equity are applicable to the land matters. These two cases have been refer by the Malaysian case in the Bhagwan Singh & Co Sdn Bhd v Hock Hin Bros Sdn Bhd [1987] 1 MLJ 324. In this case, the judge said that the National Land Code is based on the Torrens system of Australia and therefore Australian cases would naturally be of considerable assistance.

Other than that, according to the one of the article by Yong Chiu Mei, Lecturer in faculty of Law, University Malaya “ The role of English equity in the peninsular Malaysian Torrens system of Land Law : A review of salient statutory provisions ( Part 11)”, the case of Bhagwan Singh & Co Sdn Bhd v Hock Hin Bros Sdn Bhd [1987] 1 MLJ 324 had cited as most recently case that stated the National Land Code is based on the Torrens system in Australia and therefore Australian cases would naturally be of considerable assistance. Under this circumstances, it seem to us that the mentioned case is not the most recent case in Malaysia posses that same opinion. Therefore, we may have a look toward the case of Rabiah Lip & Ors v Bukit Lenang Development Sdn Bhd & Other Appeals [2008] 3 CLJ 692 whereby in this case one of issue that before the court is whether section 206(3) of the National Land Code applicable to the case. Section 206(3) of the National Land Code denote the meaning whereby the parties have acquired an equitable interest over the dispute land. Despite, it was held by the court of appeal that the appellants had not succeeded in asserting an in personam equity to create the formation of a binding obligation coupled with a right to equitable relief in their attempt to elevate the equity into an equitable interest culminating in a proprietary relief against the land but Heliliah Mohd Yusof JCA in this case also agree that the National Land Code 1965 is based on the Torrens Acts in Australia and hence certain decisions in Australia are worthy of mention where it is observed that there is really no difference between proprietary or promissory estoppel. This aspect had been dealt with in Waltons Stores (Interstate) Ltd v Maher & Anor [1987-1988] 76 ALR 513. This Australian decision has made references to the English decision of Crabb v Arun District Council [1976] 1 Ch 170 where Lord Denning MR observed “ Equity comes in true form, to mitigate the rigours of strict law. Subsequently, the decision in Crabb case had been refer by the Malaysian case in Bhagwan Singh & Co Sdn Bhd v Hock Hin Bros Sdn Bhd [1987] 1 MLJ 324. Therefore, it can be said that the relationship between the Australian Torrens systems is very close with the Malaysia National Land Code and maybe we can said that these two countries Torrens system is, indeed, the same.

land law issue

A) On the execution of the contract the vendor becomes a trustee for the purchaser. He is not however a bare trustee for he has a personal and substantial interest to the extent of the unpaid purchase moneys. He is 'in progress towards' bare trusteeship and finally becomes such when the whole of the purchase moneys are paid and he is bound to convey: Wall v Bright (1820) 1 Jac & W 494; 37 ER 456 per Sir Thomas Plumer MR.




B) The purchaser may devise, alienate and charge his equitable interest so that it is plainly not a mere right in contract.


C) The extent of the equitable interest is measured by the amount of the purchase moneys paid. Thus to the extent of the payments the purchaser acquires a lien exactly as if the vendor had given a mortgage to secure them them: Rose v Watson (1864) 10 HL Cas 672; [11 ER 1187] per Lord Cranworth at p 684.


D) Where there is a clear and undisputed contract, the court will not permit the vendor to transfer the legal estate to a third person and the reason for this was explained by Turner LJ in Hadley v London Bank of Scotland 3 De GJ & S 63 at p 70; 46 ER 562 at p 564 as being because in equity the property was transferred to the purchaser.



E) The incidents of trusteeship exist only if and so far as a Court of Equity would in all the circumstances of the case grant specific performance of the contract'.
summary of the article: Wong, David, “Effect of unregistered purported lease under the
NLC” (1973) 1 M.L.J xxxvi-xliv



General view

There are some issues that I can divulge from this article. Generally speaking, the writer lucidly discussed about the early authorities, the 1911 Enactment (Federated Malay States), Selangor Registration of Titles Regulation 1891 and Federated Malay States Land Code of 1920. Nevertheless, he also touched about the issue of “departure from the past” (Federated Malays States Code of 1920) and “lease in possession under a void lease”. He also can see the magnitude of the problems in the issue of “purported lease as an agreement for a lease”, effect as agreement and also lessees’ alternative remedies.

Commentary

Selangor Registration of Titles Regulation 1891 (s.4) and the Registration of Titles Enactment 1911 had nullified any purported dealings outside the statutory system. Prior to these Regulations, there was no clear law governing the formalities of dealings with the land in Malay States. In some cases, English conveyance forms were used.
Woodward J.C, categorically observed that even if the sub-lessee had, as the alleged, spent money on the improvement of the land, no equitable relief would be extended to him, for he had brought hardships upon himself by “accepting as his title a worthless document contrary to the express provisions of the law”
The document in question could not be treated as a contract to assign an after-acquired property, while admitting that a contrary view might have been well founded in equity under English law. Moreover, it would appear that once, A for example, was tainted with entry under avoid lease, he was only the culprit to be blamed for his own foolishness and nothing would the law do even if merely to secure him his occupation of the land under a short periodic tenancy.
In the Federated Malay States (FMS), the 1911 Enactment remained in force until replaced by the FMS Land Code of 1926. Besides that, under English law, a tenant possession and paying rent under a lease which is void because of formal defect is treated as a yearly tenant who is entitled to a six-month notice quit.
Furthermore, it seems to have been a misconception of the early judges in failing to rely that a periodic tenancy arising by implication of law is founded on the conduct of the parties, like, possession, payment and acceptance of rent.
However, an unregistered purported lease should still be regarded as null and void even to the extent of denying the conduct of the parties there under any effect whatsoever (Harnam Singh vs. Ho Seng [1933] F.M.S.L.R.). If an instrument clearly purported to be a present demise but was void for being unregistered, it could not operate as a contract. Under English Law, where an agreement for a lease is capable of specific performance, the purported lease is regarded as having taken effect in equity as if the lease had been duly granted in the first place.


Conclusion


In such a case, the question as to whether a contract for land dealing could create an equitable interest in land is directly pertinent to the question whether or not a caveat may be lodged to protect a claim under the contract. Prior to the present NLC, local decisions were in consistent as to whether a claim under a contract for land dealing could be protected by a caveat (Tee Chin Fong vs. Ernest Jeff [1963] MLJ 118). In Sim Cho Phong vs. Jit Seng Tong Association [2000] MLJU 363 (other case that I refer than this article), it was held that, a lease for more than one year must be registered. If such a lease is not registered, it is void under the Sarawak Land Code. A lease can create an interest on that particular land. Actually, starting from this point, a lessee must register his interest under NLC in order to get any refuge or benefit, and if we look at deeply to the section 5 of the NLC, clearly stated as registered lease. Land ownership is protected by the NLC and guaranteed by the Federal Constitution. Under the NLC, if a person is registered as owner of a piece of land, his title (or interest) is “indefeasible.” (Other article that I refer: A primer on land ownership by Salleh Buang, 11/05/2002 NST)

Friday, January 1, 2010

CASE SUMMARY: PART 30

Zeno Ltd vs. Prefabricated Constructive Co (Malaya) Ltd & Anor [1967] 2 MLJ
●Land Law●
Raja Azlan Shah J held that, “intention to create a lien may be inferred from all the relevant circumstances of the case”


Zulkifli b Puasa vs. PP [1985] 1 MLJ 461
●Criminal Law●
“Sir Alan Huggins JA: It is, of course desirable that there should be a measure of consistency in the sentence passed upon different defendants for comparable offences and this court will not hesitate to interfere where that is necessary to maintain consistency”

CASE SUMMARY: PART 29

Western Fish Products Ltd vs. Penwith District Council & Anor [1981] 2 All ER 204
●Land Law●
“In any event an estoppel could not be raised to prevent a statutory body exercising its statutory discretion or performing its statutory duty”


Wheat vs. Lacon & Co Ltd [1966] 1 All ER 582, HL
●Law of Torts●
“Whenever a person has a sufficient degree of control over premises that he ought to realize that any failure on his part to use care may result in injury to a person coming lawfully, then he is an ‘occupier’ and the person coming lawfully there is ‘visitor’”


Wheeler vs. New Merton Board Mills Ltd [1933] 2 KB 669
●Law of Torts●
“Volenti non fit injuria was no defence to an action by an employee against his employer for breach of the employer’s statutory duties”


Wilde vs. Waters 16 CB 637
●Land Law●
“An article which is affixed to the land even slightly is to be considered part of the land, unless the circumstances are such as to show that it was intended all along to continue as a chattel, the onus lying on those who contend that it is a chattel”


Wilkins vs. Kannamal [1951] 17 MLJ 99
●Land Law●
“The Torrens law is a system of conveyance, it does not abrogate the principles of equity, and it alters the application of particular rules of equity but only as far as is necessary to achieve its own special objects”


Winthrop Investments Ltd vs. Winns & Ors [1979] 4 ACLRI
●Company Law●
“Main or fundamental or basic object was to improve the general financial position of the company”
Winn vs. Bull [1877] 7 Ch D 29
●Contract Law●
“It is settled that the formula ‘subject to contract’ gives rise to a strong presumption of the necessity of a further formal contract, ‘formal’ be it noted, is not to be understood in the common parlance as being just a ‘mere formality’ of no importance. The principle is clear; it requires cogent evidence to displace this strong presumption”


Woo Yok Wan vs. Loo Pek Chee [1975] 1 MLJ 156
●Land Law●
Ajaib Singh J, “in my opinion the provisions of section 6 of the Civil Law Act 1956, do not exclude the English equitable principle that a lease is void at law for not having complied with legal formalities can be treated as an agreement for a lease which may be enforced in equity. What is precluded by section 6 is the English Law relating to tenure or conveyance or assurance of or succession to any immovable property or any estate, rights or interest therein but the section does not in any way preclude the application of the English principles relating to equitable interest in land”


Wycomble Marsh Garages Ltd. vs. Fowler [1972] 1 W.L.R 1156
●Consumer Law●
“Allowing the appeal, that the mischief which prompted the passing of the Trade Description Act 1968 was that goods might be provided by sale or otherwise with a misleading trade description attached to them”


Zdrojkowski vs. Pacholczak [1959] NSW 382
●Land Law●
“The principle relating to the indefeasibility of the title to the land under Real Property Act an the one hand and the right to rectify documents, which erroneously state the interest to which parties were entitled on the other do not conflict in any way”

CASE SUMMARY: PART 28

Vavallari vs. Premier Refrigeration Co Ltd [1952] 85 CLR 20
●Contract Law●
“While the due course of completion of a contract for the sale of land is a matter of some complexity, involving the doing of a number of things by both parties, it is very well-settled that an informal or ‘open’ contract not dealing expressly with any of these matters of detail, may be made and be binding. In such a case law and equity fill in the details, so to speak, providing by way of implication for whether is necessary to effectuate due performance”


Verama vs. Arumugam [1982] 1 MLJ 107
●Land Law●
“But one must always realize that in interpreting land laws in this country, one should always bear in mind that land laws are governed by the National Land Code which does not allow the law to be tempered by equity.”


Vijayan vs. PP [1975] 2 MLJ 8
●Criminal Law●
“In every case it depends on the effect of the provocative act on the ordinary man, that is, an ordinary reasonable man belongings to the same class of society as the accused”


Waimiha Sawmilling Co vs. Waione Timber Co [1926] AC 101
●Land Law●
“Fraud is: 'if the designed object of a transfer is to cheat a man of a known existing right' or that there is a 'deliberate dishonest trick causing an interest not to be registered so as to fraudulently keep the register clear. But 'dishonesty must not be assumed solely by reason of knowledge of an unregistered interest”



Walker vs. Hirsch [1884] 27 CH.D 460

●Law of Partnership●
“The agreement is not that he shall share profits and losses; the agreement is, that he is to be paid a salary and in addition one-eighth of the net profits and to bear one-eighth of the losses thereof, as shown by the books when balanced. The truth is that this agreement is a complicated one and it cannot be considered as a partnership”


Walsh vs. Lonsdale [1882] 21 Ch D 9
●EQUITY●
“The defendant landlord agreed in writing, but not by deed, to grant a seven years lease of a mill to the plaintiff at a rent payable quarterly in arrears but with a year’s rent payable in advance if demanded. The plaintiff took possession and paid rent quarterly but not in advance. Defendant than demanded the year’s rent in advance. Plaintiff refused and defendant put in a distress, but his action failed. At Common Law the plaintiff was not obliged to pay rent in advance because of the lack of the deed but equity could ‘look on that as done which ought to be done’ and hold that the agreement for a lease was as good as a lease and so the plaintiff was liable to pay rent in advance, the equity rules having prevailed”


Wangsa Timber Industries Sdn Bhd vs. Adulfast Anthony Robert [2001] 4 MLJ 438
●Land Law●
“Section 6 of Civil Law Act did not prohibit the application of English law on easements because an easement was not a right or an interests in land but was only a right annexed or appurtenant to the land”





Walton vs. The Queen [1978] 1 All ER 542
●Criminal Law●
“The case makes clear that on an issue of diminished responsibility the jury are entitled and indeed bound to consider not only the medical evidence on the whole facts and circumstances of the case”


Warner vs. Metropolitan Police Commissioner [1969] AC 256
●Criminal Law●
“If we go to the extreme length of requiring the prosecution to prove that ‘possession’ implies a full knowledge of the name and nature of the drug concerned, the efficacy of the Act is seriously impaired, since many drug pedlars may in truth be unaware of this. I think that the term ‘possession’ is satisfied by knowledge only of the existence of the thing itself and not its qualities, and that ignorance or mistake as to its qualities is not an excuse”


Weerakoon vs. Ranhamy [1921] 23 NLR 33
●Criminal Law●
“Ignorance is not the same as mistake. Mistake, to my mind implies a positive and conscious conception which is in fact a misconception. As I understand the matter, therefore, the English doctrine, ‘ignorance or mistake’ covers both ignorance and mistake, our own formula only include mistake”

CASE SUMMARY: PART 27

Tinn vs. Hoffman [1873] 29 LT 271
●Contract Law●
“When a contract is made between two parties, there is a promise by one, in consideration of the promise made by the other, there are two assenting minds, the parties agreeing in opinion and one having promised in consideration of the promise of the other-there is an exchanged of promises”


Trendtex Trading Corp. vs. Central Bank of Nigeria [1977] QB 529
●Public International Law●
“Applied the theory of restrictive immunity on the ground that international law had changed in the intervening years from one to the other”





Tulk vs. Moxhay [1848] 2 Ph 774
●Contract Law●
“The covenant would be enforced in equity against all subsequent purchaser with notice of it. A court of equity, being a court of conscience, could not permit a subsequent purchaser to disregard a contractual obligation affecting the land of which he had notice at the time of his purchase. The injunction was granted”


United Australia Ltd vs. Barclays Bank Ltd [1941] AC 1
●Law of Torts●
“If a man is entitled to one of two inconsistent rights it is fitting that when with full knowledge he has done unequivocal act showing that he has chosen the one he cannot afterwards pursue the other, which after the first choice is by reason of the inconsistency no longer his to choose”


United Dominions Corp Ltd vs. Brian Proprietary Ltd & Ors [1985] 60 ALR 741
●Law of Partnership●
“A fiduciary relationship can arise and fiduciary duties can exist between parties who had not reached and who may never reach agreement upon the consensual terms which are to govern the arrangement between them”


United Malayan Banking Corp Bhd vs. Pemungut Hasil Tanah Kota Tinggi [1984] 2 MLJ 84
●Land Law●
Lord Keith said that, “the National Land Code is complete and comprehensive code governing land tenure in Malaysia and there is no room for the importation of any rule of English Law.”


United Scientific Holdings Ltd vs. Burnley Borough Counsil [1997] 2 WLR 806
●EQUITY●
“The innate conservatism of English lawyer may have made them to recognize that by the SCJA 1873, the two systems of subjective and adjectival law formerly administered by Courts of Law and Courts of Chancery were fused”


Uren vs. John Fairfax & Sons Pty Ltd [1967] 117 CLR 118
●Law of Torts●
“It seems to me that, a man defamed does not get compensation for his damaged reputation. He gets damages because he was injured in his reputation that is simply because he was publicly defamed”


US vs. Holmes [1842] 26 Fed Cas 360
●Criminal Law●
“Homicide is sometimes justifiable, and the law defines the occasions in which it is so. The transaction must, therefore, be justified to the law”


US vs. Yunis [1988] 681 F.Supp 869
●Public International Law●
“US court: both air piracy and hostage taking were susceptible to the jurisdiction of any state, even if the act was committed by an alien abroad”


Varatharaju vs. PP [1960] 26 MLJ 158
●Criminal Law●
“The offence of abetment corresponds as nearly as one word can be said to correspond to another to the offence which is known in England of being an ‘accessory before the act’. It has reference to ‘accessories after the act’”