Chapter 2 Application of English Equitable Principles to Land Matters in Malaysia

● S6 Civil Law Act, exclude application of English equitable principles relating to

land tenure, conveyancing, assurance, succession to any immovable property or
any estate, right and interest.
● While s 3 CLA allow English Equitable principle to be applied when there’s a
lacuna in the local law and it suits the local circumstances.
● It was said that, s3 is general provision while s6 is a specific provision. Thus, s3
must be read subject to s6.

Court’s inherent jurisdiction to do equity

● UMBC v Kota Tinggi, court refuse to exercise its inherent jurisdiction to do

equity in the face of express provisions in the NLC which allowed for
forfeiture.
● But in Oh Hiam v Tham Kong, privy council held, the Torrens system did not
prevent the court from exercising its inherent jurisdiction to do equity in
personam and applied the equitable remedy of rectification to rectify the
register.

Equitable relief against forfeiture

● While in UMBC Bhd v PHT Kota Tinggi, equitable relief against forfeiture
would be excluded by s 6. Further the relevant provisions of the NLC evince an
intention that equitable relief against forfeiture should not be available to
proprietors of alienated land.

Irrevocable license

● Devi v Francis, its was held that, in a proper case where the facts so justify it,
the equitable principles of an irrevocable license which is coupled with a grant
applies.

Bare trust

● In Chin Choy, it was held by Privy Council that the applicability of bare trust is
part of English law and accordingly in Malaysia is prohibited by s6 of CLA 1956.
(English law = English Common law)
● However, the application of bare trust doctrine has been adopted by Malaysia’s
court but have been modified according to the local circumstances. This can be
 seen in in Borneo Housing Mortgage Finance Bhd, where the court said in order
for the bare trust to be existed,
1. Parties must sign the SPA
2. Sign MOT
3. a full payment on the purchase price must exist.

Equitable interest:

● S206(1) and s206(3) provides, dealing has not been registered shall not affect
the contractual operation of the transaction. Where the interest is not
registered, the person may have an equitable interest. This can be seen in:
- Equitable charges
Mahadevan v Manila & Sons, allow equitable charge even though charge not been
registered yet.
- Equitable leases (Tenancy for more than 3 years will be an equitable lease.)
Margaret Chua v How Swee Kiew, not registered but contract is enforceable,
remedy from contract, but specific performance cannot be granted
as another party had acquired in part of the land.
- Equitable easement
Templeton, it was held that s206(3) provided for the liberal application of equity
whenever there is a basis for it and found that there was an equitable
easement.
- Equitable lien
Where no lien holder’s caveat has been entered, lender may not have a lien under
NLC but may have a lien in equity.

Constructive notice

- Under Torrens system, the mechanism to give notice of one’s prior

unregistered interest is by entry of a caveat which amounts to actual notice.
However, courts have used the doctrine of notice to resolve issues of
competing claims unregistered interest in land.
- Vallipuram Sivaguru

Equitable concepts relating to morgages

● In Haji Abdul Rahman v Mohamed Hassan, equity of redemption of morgages

was held to be inapplicable in Malaysia. (Not applicable)
● In other words, the principle of “once a mortgage always a mortgage” cannot
apply in M’sia.
● In contrastingly, Eng Ah Mooi, it was held that both common law mortgages and
a charge under NLC are legal encumbrances on the proprietary right of an
owner.
● However, MUF v Tan Lay Soon, overruled Eng Ah Moi as having been decided
per incuriam (as the court did not refer to Haji Abdul Rahman) and thus, equity
of redemption of mortgages has no application in M’sia.