ROLE OF EQUITY AND THE APPLICATION OF ENGLISH

LAND LAW IN THE MALAYSIAN TORRENS SYSTEM

Teo Keang Sood*

Abstract

This paper looks at the applicability of English land law and general equitable
principles in the context of the Malaysian Torrens system. Notwithstanding section
6 of the Civil Law Act 1956 and some observations to the contrary in case law, it
is argued that relevant aspects of English land law may continue to apply. As for
general equitable principles, their application is supported by statutory provisions
and case law. This is subject to their application not being in conflict with the
principle of indefeasibility and the caveat system provided for in the Malaysian
Torrens statutes.

I. Introduction

The extent to which English land law and general equitable principles are
applicable in the Malaysian Torrens system is a vexed question. As a starting
point, s 3, which is found in “Part II (General)” of the Civil Law Act 1956,1
provides, inter alia, for the general reception of English common law, rules
of equity and statutes of general application in Malaysia in the circumstances
specified therein.2 However, s 6 of the same Act qualifies s 3 and categorically
prohibits the application of English land law and equitable principles relating
thereto. Section 6 reads as follows:

Nothing [in Part II (General)] 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

*
Professor, National University of Singapore.
1 Act 67 (Revised 1972).
2 Reception of the said common law, rules of equity and statutes of general application is
allowed so far only as the circumstances of the States of Malaysia and their respective
inhabitants permit and subject to such qualifications as local circumstances render necessary.
As provided in s (3)(1) of the Civil Law Act 1956, the cut-off date for reception in Peninsular
Malaysia is 7 April 1956. For Sabah and Sarawak, the cut-off dates are 1 December 1951
and 12 December 1949 respectively. English cases decided after the respective cut-off dates
will only be of persuasive authority and not binding as such on Malaysian courts. See also,
generally, Andrew Phang, Cheshire, Fifoot and Furmston’s Law of Contract – Singapore and
Malaysia Edition (2nd ed, Butterworths Asia, Singapore, 1998) at 37.

40
Role of Equity and the Application of English Land Law 41
in the Malaysian Torrens System

assurance of or succession to any immovable property or any

estate, right or interest therein.
As will be seen, case law does not take a uniform position on the application
of English land law and general equitable principles in the Malaysian Torrens
system. In addition, the lack of clarity in the pronouncements by the courts
exacerbates the problem.
In Tan Wee Choon v Ong Peck Seng,3 the High Court opined as follows: 4
[The] common law and equitable rights previously procurable
in this country are no longer available since the passing of ss
3(1) and 6 of the Civil Law Act, 1956 and the National Land
Code, 1965. … This intention to preclude the continued
importation of common law and equitable rights into this
country is further substantiated in s 6 of the Civil Law Act …

This view that rights arising out of common law or the rules of equity
which relate to land are no longer applicable in Malaysia was shared by the
High Court in the subsequent case of Oriental Bank v Chup Seng Restaurant
(Butterworth) Sdn Bhd.5
The question which arises, however, is whether the prohibition is absolute
and so applies even where there is a lacuna in a land matter and the application
of English land law and general equitable principles is not inconsistent with
the aims and objectives of the Malaysian Torrens system.
It is suggested below that the solution may be to evaluate whether the
application of English land law and general equitable principles in a particular
situation goes against the policy objectives of the Malaysian Torrens system.
If not, they should continue to apply.

II. Judicial Pronouncements on Prohibited Application

The policy objectives of the Malaysian Torrens system of land registration

embodied in the Peninsular Malaysia National Land Code 19656 and the
Sarawak Land Code (Cap 81)7 seek to provide for certainty and security
of title and interests in land. In Eng Mee Yong v Letchumanan,8 a case on

3 Tan Wee Choon v Ong Peck Seng [1986] 1 MLJ 322.

4 At 323-324.
5 Oriental Bank v Chup Seng Restaurant (Butterworth) Sdn Bhd [1990] 3 MLJ 493 at 495.
6 Peninsular Malaysia National Land Code 1965, Act 56.
7 The Sabah Land Ordinance (Cap 68) embodies a modified Torrens system of land registration
which does not confer indefeasibility of title or interests in land which is a feature of central
importance in the Torrens system of land registration. See the Sabah cases of Sia Hiong Tee
v Chong Su Kong [2015] 4 MLJ 188 at [29]-[31] and Sabindo Nusantara Sdn Bhd v Majlis
Perbandaran Tawau [2011] 8 MLJ 653 at [15].
8 Eng Mee Yong v Letchumanan [1979] 2 MLJ 212.
42 Canterbury Law Review [Vol 22, 2016]

appeal from Malaysia, Lord Diplock, in delivering the judgment of the Privy
Council, affirmed that:9
The Torrens system of land registration and conveyancing as
applied in Malaya by the National Land Code, has as one
of its principal objects to give certainty to title to land and
registrable interests in land.
On the prohibited application of English land law and equitable principles
related thereto, the Privy Council in United Malayan Banking Corporation
Bhd v Pemungut Hasil Tanah, Kota Tinggi10 exhorted as follows:11
The National Land Code 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 in so far as the Code
itself may expressly provide for this.
Indeed, as early as 1917, in Haji Abdul Rahman v Mohamed Hassan,12 Lord
Dunedin, in delivering the judgment of the Privy Council, had this to say of
the then Selangor Registration of Titles Regulation 1891 which was modelled
on the Torrens system of land registration:13
It seems to their Lordships that the learned judges … have
been too much swayed by the doctrines of English equity,
and not paid sufficient attention to the fact that they were
here dealing with a totally different land law, namely a system
of registration of title contained in a codifying enactment …
The essence of Lord Dunedin’s speech would appear to be that the system
of registration of title and land dealings contained in a codifying enactment
does not permit the application of the doctrines of equity relating to English
land tenure to land matters in Malaysia.
In a similar vein, on the applicability of the bare trust concept to a vendor/
purchaser situation in the Malaysian Torrens system, the Privy Council in
Chin Choy v Collector of Stamp Duties,14 in view of s 6 of the Civil Law Act
1956, had, by way of obiter, expressed reservation that:15

9 At 214. And for that matter, the Sarawak Land Code (Cap 81) as well.
10 United Malayan Banking Corporation Bhd v Pemungut Hasil Tanah, Kota Tinggi [1984] 2
MLJ 87.
11 At 91.
12 Haji Abdul Rahman v Mohamed Hassan [1917] AC 209.
13 At 216.
14 Chin Choy v Collector of Stamp Duties [1981] 2 MLJ 47.
15 At 48 (emphasis added).
Role of Equity and the Application of English Land Law 43
in the Malaysian Torrens System

… the principle that once a valid contract for sale is concluded

the vendor becomes in equity a trustee for the purchaser of
the estate sold is a peculiarity of English land law.
These Privy Council cases would suggest that, given the prohibition
contained in s 6 of the Civil Law Act 1956 and that the National Land Code
1965 is a complete and comprehensive code of law governing the tenure of
land in the Malaysian Torrens system, to allow the application of English
land law and equitable principles related thereto would only serve to erode the
policy objectives of the Malaysian Torrens system as noted above.
In Eng Mee Yong, the Privy Council was troubled by the continued
application of the equitable doctrine of notice in place of the system of
caveats. Lord Diplock stated the rationale for having the system of caveats
in the National Land Code 1965 as follows: “The system of private caveats is
substituted for the equitable doctrine of notice in English land law …”16
This is an authoritative statement that the equitable doctrine of notice is
part of English land law. Constructive notice is an example of the equitable
doctrine of notice. Its application leads to insecurity and uncertainty of title
and interests acquired by an innocent third party purchaser in the mistaken
belief that the registered proprietor has an unencumbered title. Failure to
caveat would, thus, jeopardise one of the aims of the Malaysian Torrens
system, namely, to maintain the conclusiveness of the register and this would
in turn give rise to uncertainty and insecurity of title and interests in land
dealings. In addition, the application of the doctrine of constructive notice
would undermine the role which the system of caveats is designed to play in
this regard. In Holee Holdings (M) Sdn Bhd v Chai Him,17 the High Court
also expressed its concerns that acceptance of such an equitable doctrine
would rock the very foundation of the National Land Code 1965, given its
indefeasibility provisions and the caveat system provided therein.18 Hence,
the application of the equitable doctrine of notice should not be permitted as
it is inconsistent with the policy objectives of the Malaysian Torrens system.19
In United Malayan Banking Corporation Bhd, the registered proprietor
had failed to pay the rent due in respect of the land to the State Authority.
Prior to this, the land was mortgaged to UMBC bank. The State Authority
subsequently forfeited the land pursuant to the provisions of the National
Land Code 1965. Both the registered proprietor and the bank brought
proceedings in respect of the forfeiture. The issue was whether the English
rules of equity dealing with relief against forfeiture had any application to
forfeiture of alienated land duly brought about under the provisions of the

16 Eng Mee Yong v Letchumanan, above n 8, at 214 (emphasis added).

17 Holee Holdings (M) Sdn Bhd v Chai Him [1997] 4 MLJ 601.
18 At 645.
19 For Federal Court cases which have also criticised the application of the equitable doctrine of
notice to Malaysian land law matters, see Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 at 88; Tai
Lee Finance Co Sdn Bhd v Official Assignee and Co [1983] 1 MLJ 81 at 84 and the Court of
Appeal case of Ong Tin v The Seremban Motor Garage (1917) 1 FMSLR 308 at 314.
44 Canterbury Law Review [Vol 22, 2016]

National Land Code 1965. The Privy Council found that the forfeiture was
properly brought pursuant to the provisions of the National Land Code 1965.
Their Lordships rejected the contention that the English equitable rules as to
relief against forfeiture were not part of the law of England relating to the
tenure of immovable property. In their opinion, laws relating to the tenure
of land must, applying the ordinary and natural meaning of these words,
embrace all rules of law which govern the incidents of the tenure of land.
Among these incidents was the right, in appropriate circumstances, to the
grant of relief against forfeiture,20 the application of which was prohibited by
s 6 of the Civil Law Act 1956. In addition, s 3(1) of the same Act could not be
relied upon, given that the matter of forfeiture for non-payment of rent was
exhaustively dealt with by the National Land Code 1965 which is a complete
and comprehensive code of law governing the tenure of land in the Malaysian
Torrens system in this respect.
In Haji Abdul Rahman, the Privy Council similarly cautioned against
applying doctrines of English equity indiscriminately. Their Lordships took
the view that the phrase “equity of redemption” was inappropriate under the
then Torrens-modelled Selangor Registration of Titles Regulation 1891.21 The
concept of a conveyance in security amounting to a common law mortgage
was inapplicable in the circumstances as the 1891 Regulation recognised only
a Torrens mortgage. This is because, under the latter, there is no transfer of
the title to the land to the mortgagee who acquires only a registered interest
therein. The legal title to the land remains vested in the mortgagor (registered
proprietor). Upon default by the mortgagor, the mortgagee has a statutory
right to enforce his security by way of a sale of the land or to take possession
thereof. By contrast, in a common law mortgage, legal ownership is conveyed
to the mortgagee with the mortgagor having only a right in equity to redeem
the land upon repayment of the loan to the mortgagee.22 Thus, to speak of
the equity of redemption for a mortgage under the 1891 Regulation (and now
the National Land Code 1965) was clearly technically and legally incorrect.
That the bare trust concept is a peculiarity of English land law, as observed
by the Privy Council in Chin Choy,23 and, hence, incompatible with the
Malaysian Torrens system, was explained by the Federal Court in Macon
Engineers Sdn Bhd v Goh Hooi Yin.24 What passes under a contract for sale
is only the beneficial ownership which the purchaser has and which entitles
the land to be transferred to him. The beneficial ownership does not carry
with it any interest in land, whereas the legal or registered ownership, which
the vendor has, does. Thus, it is clear that a vendor under a contract of sale

20 United Malayan Banking Corporation Bhd v Pemungut Hasil Tanah, Kota Tinggi, above n 10,
at 91.
21 Haji Abdul Rahman v Mohamed Hassan, above n 12, at 216. The current Torrens statute
applicable in Selangor is the National Land Code 1965.
22 See also Malayan United Finance Bhd v Tay Lay Soon [1991] 1 MLJ 504 at 507-508.
23 Chin Choy v Collector of Stamp Duties, above n 14, at 48.
24 Macon Engineers Sdn Bhd v Goh Hooi Yin [1976] 2 MLJ 53.
Role of Equity and the Application of English Land Law 45
in the Malaysian Torrens System

does not part with his interest in land25 so long as registration has not been
effected in favour of the purchaser. The vendor’s interest in the land is capable
of being caveated to prevent further dealings with the land so as to protect
the purchaser’s right therein. Notwithstanding this material difference which
exists in English land law and the Malaysian Torrens system, subsequent
Malaysian cases26 have continued to apply the bare trust concept with
impunity. The Federal Court has also declared in a subsequent case that “…
it is too late now to question the applicability of the concept of the bare trust
in a vendor/purchaser situation in Malaysia…”.27 This indiscriminate (and
inconsistent) application of the bare trust concept leads to confusion and
uncertainty in the Malaysian Torrens system.
The Privy Council in Registrar of Titles, Johore v Temenggong Securities
Ltd also advised against:29
28

… the temptation to regard the distinction between

registered and unregistered interests in land under the
National Land Code as similar to the difference in English
law between legal estates and equitable interests in land …
for the analogy is not close and is liable to be misleading.
This is because, under the Malaysian Torrens system, a purchaser of land
under an agreement cannot have any registrable interest therein, unlike a
purchaser in English land law who has an equitable interest in the land where
the remedy of specific performance is available.30 In contrast, all a purchaser
has under the National Land Code 1965 is a right to the land against the
vendor personally, that is, a right in personam, which entitles him to sue
under the agreement for specific performance. The purchaser’s right will
only become one in rem, that is, good against the whole world, when he is
registered as proprietor. Registration of the transfer vests in the purchaser the
legal title to the land.31

25 At 57.
26 See, for example, Chua Hee Hung v QBE Supreme Insurance Bhd [1990] 1 MLJ 480; Hon Ho
Wah v United Malayan Banking Corp Bhd [1994] 2 MLJ 393; J Raju v Kwong Yik Bank Bhd
[1994] 2 MLJ 408; and M and J Frozen Food Sdn Bhd v Siland Sdn Bhd [1994] 1 MLJ 294.
27 Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd [1996] 2 MLJ 12 at 28.
28 Registrar of Titles, Johore v Temenggong Securities Ltd [1976] 2 MLJ 44.
29 At 45.
30 Lysaght v Edwards (1876) 2 Ch D 499 at 506. See also Harpum and others (eds) Megarry and
Wade: The Law of Real Property (8th ed, Sweet and Maxwell, London, 2012) at 15-052.
31 Bachan Singh v Mahinder Kaur [1956] 1 MLJ 97.
46 Canterbury Law Review [Vol 22, 2016]

III. Applicability of English Land Law and Equitable

Principles in Appropriate Circumstances

From the cases discussed above, it would appear that there is no room for
the application of English land law concepts and equitable principles relating
thereto where such application would fly in the face of the policy objectives
of the Malaysian Torrens system as embodied in the statutory provisions of
the relevant Malaysian Torrens statutes and s 6 of the Civil Law Act 1956.
The question, however, is whether there is any room for such importation
and, if so, the circumstances under which it will be permitted? The answer to
this question is explored below in relation to: easements, leases, proprietary
estoppel and beneficial interests in land.

A. Elements of an Easement
In Alfred Templeton v Low Yat Holdings Sdn Bhd,32 the plaintiffs had
obtained a mandatory injunction requiring the defendants to execute and
register an easement of way over the latter’s land so as to provide access
from the plaintiffs’ land to a public highway. When the defendants failed to
comply with the order, the plaintiffs applied to the High Court for further
orders.33 The High Court stated that, in making the order for the grant of an
easement of way in the earlier proceedings, it was satisfied that the common
law prerequisites for a right to arise as an easement had been fulfilled. As the
learned judge explained:34
[A]ll the four requirements for the creation of an easement of
way are satisfied and these are:
(1) there must be dominant and servient lands;
(2) the easement must accommodate the dominant land;
(3) the dominant and servient land-owners must be different
persons; and
(4) the right granted must be capable of forming the subject
matter of a grant.

These four basic characteristics of an easement, laid down in Re

Ellenborough Park,35 the locus classicus on the subject, were also referred to
with approval in the subsequent case of Qiristar Bricks Contractor Sdn Bhd v

32 Alfred Templeton v Low Yat Holdings Sdn Bhd [1989] 2 MLJ 202.
33 Templeton v Low Yat Holdings Sdn Bhd [1993] 1 MLJ 443.
34 At 458.
35 Re Ellenborough Park [1956] 1 Ch 131 at 140.
Role of Equity and the Application of English Land Law 47
in the Malaysian Torrens System

Loo Ngan Keong,36 where the High Court held that the plaintiffs had proved
all the necessary elements and established their claim for an easement.
In contrast, the provisions37 in the National Land Code 1965 on easements
do not clearly and comprehensively set out the prerequisites for a right to arise
as an easement. While it is clear that a legal easement under the National Land
Code 1965 can arise only if it is registered,38 this has to do with the methods
of acquisition of a right as an easement which is different from having to
first establish that a right has the essential characteristics of an easement.
Thus, recourse to English land law for the essential elements of an easement
is necessary as the National Land Code 1965 lacks clarity in this respect.

B. Elements of a Lease
Similarly, the National Land Code 1965 does not spell out some of the
essential elements of a lease, such as exclusive possession. The definition of a
lease in s 5 of the Code39 is not particularly helpful for this purpose. Again,
recourse must be had to English land law for the essential characteristics
of a lease.40 To constitute a lease, the occupier must be granted exclusive
possession for a fixed or certain periodic term in return for a payment.41 This
is subject to special circumstances which may negative any intention to create
a lease or tenancy.42
The Federal Court, in Woo Yew Chee v Yong Yong Hoo,43 laid down the
principle that whether a particular transaction amounts to a lease depends on
the intention test. The nature and quality of the occupancy must be looked at
to determine whether it is intended that the occupant should have an interest
in the premises occupied or whether he should have only a personal privilege.44
Having regard to the facts and evidence before it (such as the terms of the
relevant agreement), the Federal Court found that the intention of the parties
was to create a relationship of landlord and tenant. The intention test was

36 Qiristar Bricks Contractor Sdn Bhd v Loo Ngan Keong [2013] 10 MLJ 363 at [46].
37 National Land Code 1965, ss 282 and 283.
38 Section 284. Accordingly, the common law method of acquiring an easement by long use
is not recognised under the National Land Code 1965 as decided in Datin Siti Hajjah v
Murugasu [1970] 2 MLJ 153 and Cottage Home Sdn Bhd v Wong Kau @ Wong Kon Lin [2014]
3 MLJ 580. Cf the different position under the Sabah Land Ordinance (Cap 68) which is not
based on the Torrens system (see Wangsa Timber Industries Sdn Bhd v Adulfast Anthony Robert
[2001] 4 MLJ 438 and Tam Kam Cheong v Stephen Leong Kon Sang [1980] 1 MLJ 36.)
39 That is, “lease” means a registered lease or sub-lease of alienated land.
40 In this regard, see Street v Mountford [1985] AC 809.
41 At 818.
42 See, for example, Facchini v Bryson [1952] 1 TLR 1386 at 1389 (such as a family arrangement,
an act of friendship or generosity).
43 Woo Yew Chee v Yong Yong Hoo [1979] 1 MLJ 131.
44 At 133.
48 Canterbury Law Review [Vol 22, 2016]

also applied in the subsequent Federal Court case of Mohamed Mustafa v

Kandasami.45
It is to be noted that the above Malaysian Federal Court cases were
decided before the intention test was overruled by the House of Lords in
Street v Mountford.46 Subsequent Malaysian cases decided after Street v
Mountford have used the reformulated test laid down in that case.47 Although
the intention of the parties is an important consideration in determining the
relationship of landlord and tenant, as in all other contractual relationships,
in every case the intention must be sought not from the mere words of the
agreement but from its substance and from the conduct of the parties and
the surrounding circumstances. A material circumstance in the consideration
of the relationship of landlord and tenant is exclusive possession of the
property enjoyed by the occupier. Indeed, exclusive possession is an essential
requirement of a tenancy. Thus, the intention of the parties is judged entirely on
an objective basis and the primary consideration is exclusive possession. If it is
established that exclusive possession was given (with no special circumstances
present), the court will make a finding of a tenancy notwithstanding the
expressed intention that the arrangement only created a licence.
On the requirement of certainty of term, the Privy Council in Siew Soon
Wah v Yong Tong Hong,48 a case on appeal from Malaysia, relying, inter alia,
on the English case of Sevenoaks, Maidstone & Tunbridge Ry Co v London,
Chatham & Dover Ry Co,49 held that there was no such thing in law as a lease
in perpetuity.50 Thus, a lease which has no definite time of commencement or
period of duration is void for uncertainty. However, in the case before them,
their Lordships found that the agreement entered into between the landlords
and tenant was not so vague and uncertain as to be void for uncertainty. The
intention clearly was that the landlords should let the premises to the tenant
for as long a period as it was within their power to do so and that they should
not be able to eject the tenant so long as the latter paid the stipulated rent
and that the tenant should be entitled to occupy the property so long as he
wished and so long as he paid the rent. In the result, specific performance of
the agreement was granted in favour of the tenant.
These cases demonstrate that, in the absence of clarity in the Malaysian
case law and the National Land Code 1965, the existence of a lease in Malaysia
is still very much based on English land law principles.

45 Mohamed Mustafa v Kandasami [1979] 2 MLJ 109 at 118. On appeal to the Privy Council, no
comments were made with regard to the test adopted (see Kandasami v Mustafa [1983] 2 MLJ
85).
46 See Street v Mountford above n 40.
47 See the Court of Appeal case of Lim Cheang Hock v Tneh Poay Lan [2007] 4 MLJ 228 and Tan
Chee Lan v Dr Tan Yee Beng [1997] 4 MLJ 170.
48 Siew Soon Wah v Yong Tong Hong [1973] 1 MLJ 133.
49 Sevenoaks, Maidstone & Tunbridge Ry Co v London, Chatham & Dover Ry Co (1879) 11 ChD
625 at 635.
50 Siew Soon Wah v Yong Tong Hong, above n 48, at 134.
Role of Equity and the Application of English Land Law 49
in the Malaysian Torrens System

C. Doctrine of Proprietary Estoppel

This doctrine of proprietary estoppel has been applied in the Malaysian
Torrens system where it is appropriate to do so in the circumstances. It is a
branch of equitable estoppel.51 The courts will not allow a right in equity
arising out of the conduct and relationship of the parties giving rise to an
expectation in respect of property to be defeated where it would be inequitable
to do so.
In Devi v Francis,52 the High Court had this to say of the application of
proprietary estoppel in Malaysia:53
The answer to this objection [that English equity is not
applicable to land matters in Malaysia in view of s 6 of the
Civil Law Ordinance 1956] is that the land law of England
is one thing and equity another matter and it is expressly
provided in s 3(1) of the same Ordinance that the court shall
apply the common law of England and the rules of equity
and in s 3(2) that in the event of conflict the rules of equity
shall prevail.
In Devi, the tenant had bought a house with a tenancy of the ground and
had a clear expectation of a right to purchase the land. The High Court held
that equity would prevent the landlord from terminating the tenancy on a
month’s notice until and unless the land had been offered to the tenant to
purchase and she had refused.54
The application of proprietary estoppel finally became settled law in
Malaysia in the decision of the Federal Court in Yong Tong Hong v Siew Soon
Wah,55 which was subsequently affirmed by the Privy Council.56 The father
of the landlords agreed to let certain premises to the tenant in consideration
not only of rent but also of a lump sum payment. After the transfer of the
reversion to the landlords, they sought to eject the tenant. Apart from holding
that the lease was not void for uncertainty, the Privy Council went on to
hold that there arose in the tenant’s favour an equity or equitable estoppel
protecting his occupation because the tenant had paid the lump sum and rent
thereafter in accordance with his lease.57
The basis of the prevailing law on proprietary estoppel in Malaysia is
the approach adopted in Taylors Fashions Ltd v Liverpool Victoria Trustee
51 This equitable principle arose from the dissenting speech of Lord Kingsdown in Ramsden v
Dyson (1866) LR 1 HL 129 at 170 where a land owner whose conduct has raised an expectation
of his tenant of being allowed to stay on and thereby inducing him to spend money in respect
of the tenancy is prevented from taking any action contrary to that expectation.
52 Devi v Francis [1969] 2 MLJ 169.
53 At 172. See also Sinnadurai The Sale and Purchase of Real Property in Malaysia (Butterworths,
Singapore, 1984) at 210.
54 Devi v Francis, above n 52, at 173.
55 Yong Tong Hong v Siew Soon Wah [1971] 2 MLJ 105.
56 Siew Soon Wah v Yong Tong Hong, above n 48.
57 At 135.
50 Canterbury Law Review [Vol 22, 2016]

Co.58 Thus, the current approach in England is the law in force in Malaysia.
Subsequent cases have consistently applied this equitable principle whenever
the circumstances called for it.59
In Tg Choong Yuan Sdn Bhd v Yeap Geok Kee Sdn Bhd,60 the plaintiff,
a developer/contractor, was encouraged to build on the defendant’s land
at its own expense. The understanding between the parties was that the
plaintiff could remain on the land until both parties had jointly developed
the land. The plaintiff subsequently had possession of the buildings upon
completion and paid the defendant monthly rental for use of the land. In the
circumstances, the High Court held that the doctrine of proprietary estoppel
applied to protect the plaintiff’s equitable interest in the buildings. The
defendant’s claims for vacant possession, trespass and damages, accordingly,
had no merit.
Similarly, in Guindarajoo a/l Vegadason v Satgunasingam a/l Balasingam,61
proprietary estoppel operated in favour of the plaintiff. The plaintiff was
promised the property by his mother as long as he kept certain promises to
her, which he did. The plaintiff’s mother subsequently died intestate and the
property in question was transferred to the defendant on the basis that he
was her lawful heir. The High Court found that the plaintiff had kept his
promises right up to the time of his mother’s death and that there was an inter
vivos gift of the property by the mother during her lifetime to the plaintiff.
In the circumstances, it would be unjust and unconscionable to deny the
plaintiff his interest in the property.62 English authorities63 on proprietary
estoppel were appropriately referred to and applied.
In light of the discussion above, there is little doubt that the doctrine
of proprietary estoppel is now firmly entrenched in the Malaysian Torrens
system. As observed by the High Court in Bhagwan Singh & Co Sdn Bhd v
Hock Hin Bros Sdn Bhd:64
… it is too late now, to question the proposition that the
English doctrine of equitable estoppel applies and, that as a
result, equitable rights or interests in land may arise outside
the statutory system of registration of title.

58 Taylors Fashions Ltd v Liverpool Victoria Trustee Co [1981] 1 All ER 897 at 915.
59 See, for example, Mok Deng Chee v Yap See Hoi [1981] 2 MLJ 321; Cheng Hang Guan v
Perumahan Farlim (Penang) Sdn Bhd [1993] 3 MLJ 352 and Amar Singh a/l Sundar Singh v
Jivanjit Kaur d/o Sohan Singh [2010] 6 MLJ 771.
60 Tg Choong Yuan Sdn Bhd v Yeap Geok Kee Sdn Bhd [2011] 9 MLJ 551.
61 Guindarajoo a/l Vegadason v Satgunasingam a/l Balasingam [2010] 4 MLJ 842.
62 At [23].
63 Such as Thorner v Major [2009] 3 All ER 94; Wayling v Jones (1993) 69 P and CR 170;
Greasley v Cooke [1980] 1 WLR 1306 and Taylors Fashions Ltd v Liverpool Victoria Trustee Co,
above n 58.
64 Bhagwan Singh & Co Sdn Bhd v Hock Hin Bros Sdn Bhd [1987] 1 MLJ 324 at 327.
Role of Equity and the Application of English Land Law 51
in the Malaysian Torrens System

D. Creation of Beneficial Interests in Land

In Lian Keow Sdn Bhd (in liquidation) v Overseas Credit Finance (M) Sdn
Bhd,65 the then Supreme Court, in commenting on the circumstances and the
extent to which equitable principles are applicable vis-a-vis the National Land
Code 1965, observed that the Malaysian Torrens system does not prevent or
restrict the creation of beneficial interests in land by way of express, implied,
constructive or resulting trusts arising by operation of law by virtue of s 3
of the Civil Law Act 1956.66 This aligns with what the Privy Council had
similarly observed in Registrar of Titles, Johore v Temenggong Securities Ltd.67
Thus, in Takako Sakao v Ng Pek Yuan,68 the Court of Appeal held that
the appellant could recover her contributions to the purchase price of land
on the basis of a resulting trust.69 The appellant, a non-citizen, had acquired
an interest in the land concerned without getting the prior written approval
of the State Authority, thus contravening the National Land Code 1965.
There was no evidence that she was aware of any legal impediment. Neither
was there evidence of any illegal intent on her part when she agreed to the
commercial arrangement proposed by the first respondent.
Similarly, in Brett Andrew Macnamara v Kam Lee Kuan,70 there was a
trust deed which declared that the defendant spouse held the property
registered solely in her name in trust for her plaintiff husband, a non-citizen
who contributed the whole of the purchase price pending the approval of the
relevant authorities. The High Court held that the trust deed was valid and
did not contravene the then Foreign Investment Committee’s guidelines. The
High Court took the opportunity to comment on the application of equity in
the Malaysian Torrens system:71
… to introduce equity into the Torrens System and
[National Land Code 1965] entail uncertainties — whether
it be uncertainties as to the type of conduct deplored, or
uncertainties as to the status of one’s title — but to demand
too great a certainty in the law is to cry for the moon. The
existing approach provides the system with a degree of
flexibility necessary to meet the demands of a property-
owning community. There is sufficient latitude within
existing authorities to cater for this development …
65 Lian Keow Sdn Bhd (in liquidation) v Overseas Credit Finance (M) Sdn Bhd [1988] 2 MLJ 449.
66 At 463.
67 Registrar of Titles, Johore v Temenggong Securities Ltd, above n 28, at 45.
68 Takako Sakao v Ng Pek Yuan [2009] 4 MLJ 66.
69 A resulting trust was also held to have arisen in the recent Court of Appeal case of Zainab bte
Ibrahim v Limah bte Che Mat [2014] 6 MLJ 419. However, no resulting trust was found in
the following recent cases: the Court of Appeal case of Pathma d/o Naganather v Nivedita d/o
Naganather [2006] 1 MLJ 132 and Tan Sri William Cheng Heng Jem (suing as the President and
Deputy President of the Associated Chinese Chambers of Commerce and Industry of Malaysia, and
for and on its behalf ) v Tan Sri Ngan Ching Wen [2013] 8 MLJ 417.
70 Brett Andrew Macnamara v Kam Lee Kuan [2008] 2 MLJ 450.
71 At [31].
52 Canterbury Law Review [Vol 22, 2016]

IV. Malaysian Torrens System Does Not Oust Jurisdiction

of Equity

The discussion of the cases on the creation of beneficial interests in land

as well as on the doctrine of proprietary estoppel aptly reflects what the Privy
Council had perceptively observed on the role of equity in the Malaysian
Torrens system in Oh Hiam v Tham Kong,72 a case on appeal from Malaysia:73

The Torrens system is designed to provide simplicity and

certitude in transfers of land, which is amply achieved
without depriving equity of the ability to exercise its
jurisdiction in personam on grounds of conscience.

In Oh Hiam, the vendor and purchaser had entered into a contract for
the sale of rubber lands. However, neither the vendor nor the purchaser
knew when the contract was signed that a lot which was not rubber land
was included in the sale. The purchaser was duly registered as proprietor of
the said lot. In proceedings brought by the vendor, the Privy Council, in
exercising its jurisdiction in the enforcement of a claim in personam, restored
the order of the trial judge to rectify the register on the ground that the
particular lot of land had been included by mistake in the contract of sale.
The Privy Council was of the view that the principle of indefeasibility of title
enshrined in the Malaysian Torrens system, while operating effectively and
indeed necessarily for its effectiveness as between independent rival claimants
to a property, “in no way interfered with the ability of the court, exercising
its jurisdiction in personam, to insist upon proper conduct in accordance with
the conscience which all men should obey.”74
The Privy Council also gave the following instances of equity acting in
personam which do not go against the principle of indefeasibility of title,
namely; the court is not precluded from granting an order for specific
performance of a contract entered into by the registered proprietor, or for the
enforcement of a trust created by the registered proprietor. The latter cannot,
on grounds of equity or conscience, set up the principle of indefeasibility of
title to defeat such claims.75

72 Oh Hiam v Tham Kong [1980] 2 MLJ 159.

73 At 164.
74 At 165. For the position in Australia which is similar, see Heydon and others (eds) Meagher,
Gummow and Lehane’s Equity: Doctrines and Remedies (5th ed, LexisNexis Butterworths,
Australia, 2015) at 134-135: “With the introduction of the [Torrens system], which
fundamentally differs from the common law system, it was clear that there would be some
question as to the continued role of equity. However, none of the Torrens system legislation
was interpreted by the courts as entirely removing Torrens land from the operation of
equitable claims and interests.” In New Zealand, see Frazer v Walker [1967] AC 569 at 585
where the position is identical.
75 Oh Hiam v Tham Kong, above n 72, at 164.
Role of Equity and the Application of English Land Law 53
in the Malaysian Torrens System

The Court of Appeal in the later case of Takako Sakao, noted above, had
similarly observed that:76
… [the Malaysian Torrens system] does not exclude the
court’s jurisdiction to grant judicial relief in a claim in
personam founded in law or in equity [and that] the court
will certainly be at hand to render assistance to the appellant,
as equity will not suffer a wrong to be without remedy.
In Takako Sakao, a resulting trust was found in favour of the appellant to
enable her to recover her contributions to the purchase price of a property in
respect of which she had acquired an interest in contravention of the National
Land Code 1965.77
As can be seen, the Malaysian Torrens system does not abrogate the
principles of equity but alters the application of particular rules of equity in
so far as is necessary to achieve its special objects.78 In this way, the court is
entitled to exercise jurisdiction in personam to insist upon proper conduct in
accordance with equitable principles and norms not incompatible with the
Malaysian Torrens system.
However, as a general rule, there is no room for the application of equity
where third party rights have intervened. In regard to a transaction involving
only the immediate parties thereto, the High Court in Bhagwan Singh & Co
Sdn Bhd v Hock Hin Bros Sdn Bhd79 correctly observed that:80
… the Torrens system does not prevent the Court from doing
equity where the rights of third parties have not intervened:
Loke Yew v Port Swettenham Rubber Co [1913] AC 491.
In Holee Holdings (M) Sdn Bhd v Chai Him,81 the High Court cautioned
that the application of equity to bind a successor in title must be qualified by,
inter alia, the indefeasibility of title provisions82 in the National Land Code
1965. In that case, the plaintiff, which was the successful bidder at a judicial
sale, was registered as the proprietor of the land. The plaintiff served notices
to quit on the defendants, some of whom claimed that they were tenants with
equitable interests in the premises and that the plaintiff was bound by their
equity. The High Court held that the plaintiff as registered proprietor had
indefeasible title unless the exceptions to indefeasibility could be proved. In

76 Takako Sakao v Ng Pek Yuan, above n 68, at [24] and [27].

77 On appeal, the Federal Court ([2009] 6 MLJ 751) held that a constructive trust arose
instead. Nevertheless, the significance of the Court of Appeal decision (which aspect was not
disapproved of by the Federal Court) lies in reiterating the important role played by equity,
in appropriate cases, in granting relief in the face of the strict provisions of the National Land
Code 1965.
78 Wilkins v Kannammal [1951] MLJ 99 at 100.
79 Bhagwan Singh & Co Sdn Bhd v Hock Hin Bros Sdn Bhd, above n 64.
80 At 327.
81 Holee Holdings (M) Sdn Bhd v Chai Him, above n 17, at 653.
82 That is, section 340.
54 Canterbury Law Review [Vol 22, 2016]

addition, as the defendants did not caveat their interests, the plaintiff had no
notice of their interests so as to be bound by them. Given the circumstances,
the position of the plaintiff was unassailable.
It would be different, however, if the successor in title was a mere volunteer.
In Siew Soon Wah v Yong Tong Hong,83 the person to whom the land was
transferred was the son of the original landlord and the judgment of the court
did not show that any consideration was paid for the transfer. In the result,
the equity of the tenant was held to be binding on the successor in title of the
original landlord given that equity would not assist a volunteer.84
This would also be the position even if consideration was paid for the
transfer by the successor in title, but the circumstances are such that it would
be inequitable for the interest of, say, the tenant, to be defeated.85 The successor
in title may have paid for the transfer at a discount on the undertaking that he
will recognise the interest of the tenant. It would then be inequitable for him
to subsequently have the tenant evicted on becoming the registered proprietor.
In the result, the undertaking will be made binding on the successor in title
as registered proprietor in the way equity sees fit. This will be an instance
of equity exercising its jurisdiction in personam on grounds of conscience as
propounded in Oh Hiam and which does not unduly offend the principle of
indefeasibility of title provided in the National Land Code 1965.

V. Section 206(3) of the National Land Code 1965

Section 206(3) of the National Land Code 1965 provides that non-
compliance with the provisions of the Code requiring dealings to be effected
in the statutorily prescribed manner shall not “affect the contractual operation
of any transaction relating to alienated land or any interest therein”.
In Templeton v Low Yat Holdings Sdn Bhd,86 noted above, the High Court
was of the view that “[section 206(3)] provides statutory authority for the
liberal application of equity whenever there is a basis for that …”87
Accordingly, this provision provided statutory authority for the High
Court to order the defendants to specifically perform their part of the
contract by executing and presenting the relevant form for the registration
of an easement.88
Thus, in appropriate circumstances, s 206(3) may be relied upon to hold
that an equitable interest has been created by the particular agreement in

83 Siew Soon Wah v Yong Tong Hong, above n 48.

84 See also the Federal Court decision in Yong Tong Hong v Siew Soon Wah, above n 55, at 108.
85 See, for example, the fact situation in Devi v Francis, above n 52.
86 Templeton v Low Yat Holdings Sdn Bhd, above n 33.
87 At 459.
88 See also Qiristar Bricks Contractor Sdn Bhd v Loo Ngan Keong, above n 36. For a recent case
where a claim for an equitable easement failed, see the Court of Appeal case of Cottage Home
Sdn Bhd v Wong Kau @ Wong Kon Lin, above n 38.
Role of Equity and the Application of English Land Law 55
in the Malaysian Torrens System

question such that it confers a right in equity to have the agreement specifically
enforced by the grant of the appropriate legal interest in question. The High
Court had earlier opined, in Mercantile Bank Ltd v The Official Assignee of the
Property of How Han Teh that:89
… independent of our land legislation our courts have always
recognised equitable and contractual interests in land. See
Loke Yew v Port Swettenham Rubber Co [1913] AC 491; Innes
202 SC. See also s 206(3) of the National Land Code.
Similarly, the Federal Court in Inter-Continental Mining Co Sdn Bhd v
Societe Des Etains De Bayas Tudjuh90 held that, even though the agreement
between the parties was in substance a sublease of mining land though not
in statutory form, it was effective as an agreement to enter into a sublease to
which s 206(3) of the National Land Code 1965 applied, and equity would
specifically enforce it.91 In the latest Federal Court case of S & M Jewellery
Trading Sdn Bhd v Fui Lian-Kwong Hing Sdn Bhd,92 the respondent, as the
registered lessee, sublet certain floors of a building to the first appellant for a
term of 25 years. The latter subsequently discovered that the respondent had
not registered the sublease. One of the issues for consideration was whether the
unregistered sublease was an equitable sublease. Given that the first appellant
had expended substantial sums towards renovation of the demised premises
and sublet the demised premises, all with the consent of the respondent,
the Federal Court was of the view that the unregistered sublease could be
treated as a sublease in equity which was enforceable by a decree of specific
performance.93
The National Land Code 1965 only regulates the rights and obligations of
the parties concerned from the stage of registration onwards. In the absence
of any provisions therein, expressly or impliedly, prohibiting the application
of equitable principles, recourse may also be had to s 206(3) to govern
the relationship of the parties in respect of the dealings between them in
appropriate circumstances.

89 Mercantile Bank Ltd v The Official Assignee of the Property of How Han Teh [1969] 2 MLJ 196.
at 198. See also Margaret Chua v Ho Swee Kiew [1961] MLJ 173 at 175 and Yong Tong Hong v
Siew Soon Wah [1971] 2 MLJ 105 at 108.
90 Inter-Continental Mining Co Sdn Bhd v Societe Des Etains De Bayas Tudjuh [1974] 1 MLJ 145.
91 At 148.
92 S & M Jewellery Trading Sdn Bhd v Fui Lian-Kwong Hing Sdn Bhd [2015] 5 MLJ 717. See also
the Court of Appeal case of Pembinaan Eastern Aluminium Sdn Bhd v Narita Shipping and
Transport Sdn Bhd [2014] 4 MLJ 534.
93 At [31] and [51].
56 Canterbury Law Review [Vol 22, 2016]

VI. Conclusion

As a general rule, English land law and equitable principles relating thereto
have no application in the Malaysian Torrens system in light of s 6 of the Civil
Law Act 1956 and the relevant Torrens statutes in Malaysia. Examples of such
non-application include a common law mortgage, the equitable doctrine of
notice, and equitable relief against forfeiture, all of which are part of English
land law. As for the concept of a bare trust which was ruled a peculiarity of
English land law by the Privy Council in Chin Choy, its continued application
in the Malaysian Torrens system, although an anomaly, may be explained on
the basis that it was not definitively dealt with by the Privy Council which
merely expressed reservation as to its application by way of obiter. Accordingly,
it is plausible to argue that Chin Choy is not authority for the proposition that
the bare trust concept is not applicable under the Malaysian Torrens system.
However, it is clear that certain aspects of English land law do continue to
apply to fill the gaps where, for instance, the essential elements of an interest
in land recognised in the Malaysian Torrens system, such as an easement or a
lease, have not been comprehensively provided for under the relevant Torrens
statute. In these instances, recourse to English case law is necessary.
As for equitable principles of general application, s 3 of the Civil Law Act
1956 provides for their continued application in appropriate circumstances.
In addition, s 206(3) of the National Land Code 1965 provides statutory
authority for the liberal application of equity in appropriate circumstances.
However, their application must not offend the principle of indefeasibility of
title and the system of caveats provided for in the Malaysian Torrens system.
Notwithstanding that the Malaysian Torrens statutes are a complete and
comprehensive code of law governing the tenure of land in Malaysia and its
incidents, equitable principles of general application and relevant aspects of
English land law may continue to apply provided they are not in conflict with
and do not offend the policy objectives of the Malaysian Torrens system. To
contend otherwise is to take an extreme view.