TUTORIAL GUIDE

TUTORIAL 1 : CREATION AND TRANSFER OF INTEREST IN

MALAYSIA
Questions
1 Abu and Ali are twin brothers who live next to each other in a local village in the middle of
the city centre. They had inherited the land from their father.

Abu recently remarried. As a wedding present , Abu transferred his land to both him and his
new wife, Aishah. Six months ago, Ali received a penalty notice from the Inland Revenue
Board for an infringement of section 214(1)(4) (a)NLC when Ali transferred part of his land
to his wife.

Ali sold his land to a buyer name Arios.They had appointed Ali’s solicitor , Hashim from
Messrs Beef, Rendang & Associates as a stakeholder. Unhappy with Hashim,Ali appointed a
new solicitor, Malik from Messrs, Ayam, Masak, Merah & Associates. Malik has advised him
that Hashim has used part of monies for the sale and purchase to set off his fees. This
included the interest on the monies held in the client’s account.

Advise Abu and Ali.

2 Ishak owns a large piece of land in Kuah, Pahang. Ishak was getting on in age and wanted to
sell his land. The National Palm Oil Company bought the land from Ishak. The sale and
purchase agreement was signed and 50% of the purchase price was paid by The National
Palm Oil Company to Ishak’s solicitor, Messrs A,B & C as the appointed stakeholder on
28.8.2022. Two weeks ago, the Government of Malaysia obtained a judgment against Ishak
for unpaid income tax and registered a prohibitory order against Ishak’s title.

The National Palm Oil Company wants to remove the prohibitory order and proceed with
the sale of the Ishak’s land. Further, The National Palm Oil Company has recently found out
that their solicitor, Messrs X, Y and Z had not conducted a search or enquiry with the Land
Office to verify Ishak’s title over this land nor enter a private caveat upon the parties
entering into the Sale and Purchase Agreement.

Advise The National Palm Oil Company on their respective issues.

3. Lee, a foreign national entered into a Sale and Purchase Agreement for estate land with Lim.
Upon payment of full purchase price, Lee’s solicitor had tried to obtain the approval of the
Selangor state authorities. In the meantime, Lee’s solicitor submitted the Form 14A to the
Land Office for registration.

After a year, Lim has disputed the transfer of the estate land to Lee and seeking your advise
on the matter.
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 4.

i. Dahlia has a number of properties. Unfortunately, her business has failed, and
she owes her creditors over RM1 million. One of her creditors, Market Business
One has filed a petition to declare her a bankrupt for failure to pay her debts to
Market Business One. The Bankruptcy Order was obtained two weeks ago. The
Official Assignee intends to sell her properties to pay of her debts to her
creditors. Advise the Official Assignee.

ii. Ratner bought her house with a loan from Overmoon Bank in 2004. She
obtained loan for 90% of the value of her property of RM500,000.00. She lost
her job last year and has been unable to make payment of her loan. Overmoon
Bank wants to sell her house to pay off her debts to the Bank. Advise Overmoon
Bank.

iii. Carnation is a 90-year-old millionaire with 10 house. She lives with her oldest
son, Oak. All her houses are occupied either by her children or grandchildren.
She passed away in June of 2014 without leaving any will. Advise her children
and grandchildren with regards to her property.

4 Since the dissenting judgment by Lord Denning in Burt v Claude Cousins & Co Ltd and
another [1971] 2 QB 426 , the concept and responsibilities of a stakeholder has developed
over the years.

Discuss the pertinent development of this concept.

5 The recognition equitable principle of doctrine of bare trust is at odds with the landscape of
the Torrens system practised in Malaysia. Discuss.

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TUTORIAL 2 : LEASES AND TENANCIES IN MALAYSIA

Questions

1. Rahul both three plots of land (Lot Rose, Orchid and Sunflower) in 1965. In 1975, Rahul
entered into a lease agreement with Akshay for Lot Sunflower. The lease was for 50 years for
rent of RM10,000.00 per month. Rahul’s solicitor registered the lease with the land office.

In 1980, Rahul built a house with an annexed unit on Lot Orchid. He moved in with his wife,
Anjali. As both Anjali and he wanted additional income, they both agreed to rent out the
annexed unit to Anjali’s uncle, Vijay. There was a verbal agreement between Vijay and Rahul,
that he would pay a monthly rent of RM1,000.00 per month indefinitely. Recently, he
requested Vijay to vacate the annexed unit. However, Vijay has refused stating that he has
right to continue leasing the annexed unit.

About two weeks ago, Rahul received a letter from Akshay’s solicitor , stating the following ;
a. That he is enforcing the “option to renew” in the lease agreement and is
extending the lease for a further 10 years ;
b. That Rahul owes him RM10,000.00 for all rates and taxes paid in the last 5 years ;
c. That Rahul owes him RM50,000.00 for all repairs undertaken on the property;
[role of lessee
d. That the rental for the property is to be reduced to RM5,000.00 as rental of the
property should be fixed in reference to the square feet of the building only.

Rahul has come to see you with the above issues that have arisen with his properties. Advise
him.

Rahul & Akshay – LOT SUNFLOWER

a)
In order for Akshay to raise the option to renew the lease as well as extend it for another
10 years from the original agreement of 50 years, certain elements must be satisfied to
consider the option to renew to be valid.

In Voo Min En v Leong Chung Fatt [1982], the option to renew is a privilege which must
be exercised strictly within the terms in which the option or the right is given otherwise the
option, or the right is lost. Since there was no written request by the lessee as required by
clause 2(3) of the lease, lease was not renewed. This principle was later affirmed by Zainal
Abidin v Century Hotel Sdn Bhd [1987] whereby, the option to renew must be stated in the
lease agreement. Here, the question provides that there is an existing clause in the original
agreement, hence it can be implied that the requirement is satisfied.
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 Furthermore, the case of Wisma Sime Darby Sdn Bhd v Wilson Parking (M) Sdn Bhd
[1996] opines that for the option to renew to be valid, the terms must be clear (duration,
rent). Here, the proposed duration is for a further 10 years. By virtue of s.221(3) of the NLC, it
provides that the max period of a tenancy is to be 99 years for the whole property. They
entered into the agreement for Lot Sunflower for 50 years in 1975 and it is implied that
Akshay raised the option to renew and extend the tenancy for another 10 years in 1980, thus,
the tenancy will be for 55 years.

Rahul & Vijay – Lease or License?

Issue – no definitive period
Siew Soon Wah v Yong Tong Hong [1973] – implying the max period
 Issue: the lease was stated to be ‘permanent’
 Here it was held that in this case there was no uncertainty as to the period of the
tenure as to the parties had expressly agreed on some form of permanent letting.
 The court qualified the duration of the tenancy according to section 222(3) NLC where
the maximum duration for a lease of a part of a building is 30 years. (They were staying
on the ground floor of the shop house
 If there is no definitive period, the court can look at the property and impose the
max lease duration.
Here, although the element of rent is satisfied, without a definite term it would still render
the lease to be invalid.
However, equity provides otherwise;
Tenancy coupled with Equity - Improvement on the land
 There is no written agreement. Or if there is, it is not clear
 Elements: (i)Arises due to expenditure, (ii)out of an expectation, (iii)encouraged by
the lessor.
 reliance extends to successors- in–title and a purchaser in notice.
 Result of Tenancy coupled with equity – Landlord cannot terminate the tenancy.
He/she must satisfy the tenant’s equity.
 Main consideration is expenditure

Inward v Baker – principle derived (based on Ramsden v Dyson) – starting point

 “… if the owner of land requires another or indeed allows another to expend money on
the land the expectation created or encouraged by the landlord that he will be able to
remain there, that raises an equity in the licence such as to entitle him to stay. He has
a licence coupled with equity that the equity arising from the expectation of land does
not fail…”
 Expenditure, expectation, encouragement
 Lays down the TENANCY COUPLED WITH EQUITY PRINCIPLE

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Ramsden v Dyson
 “a tenant who, notwithstanding his knowledge of the nature and extent of his interest
in the land, chose to expend money on the land in the hope of an extended term, could
not hope to enforce any claim, whether in law or equity unless such hope or
expectation had been created by the landlord.”

Malaysian Acceptance: MPRL Karuppan Chetty v Suah Thian [1916]/ Devi v Francis [1969]

**Devi v Francis [1969] – adopted inward v baker

 The tenant occupied a part of the registered proprietor’s land. She had a house on the
land that she had bought from the registered proprietor’s mother.
 In the initial agreement, the registered proprietor ‘s mother had sold the house for
RM1400 and the tenant was to pay ground rent of RM4 per month.
 Included in the tenancy agreement was Clause 4 **** if the land on the which the
house is sold – to sell it to the tenant. (expectation that the land would be sold to
them)
 The tenant had extended house and paid an increase in the rental. (expenditure)
 The land than was transferred to registered proprietor and he had notice of the sale
agreement and tenancy.
 He gave the tenant one’s month notice to vacate the land.

Held: Here the Federal Court held that from the facts of the case, the equitable principle of
irrevocable license applied, and that equity will prevent the registered proprietor from
terminating the tenancy on one’s month notice to quit. (Created a tenancy which could not
be terminated)

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2. Malcom owned several properties ( Property A, B, C and D ) across Kuala Lumpur which he
had bought as investment properties. Jack, a digital nomad had decided to stay in Kuala
Lumpur for a few months at the beginning of 2020. Malcom entered into License Agreement
with Jake to rent the Property A for RM1,500.00 a month. Jake was meant to stay in Property
A for only 3 months. However, due the pandemic, he could not leave Malaysia. He continued
to stay in the apartment but after six months as his work dried up, he stop paying the rent. He
is now refusing to vacate the property, insisting that he has a valid lease in the property.

Malcom had a 10-year lease agreement for Property B with Judy for rent of RM1,000.000
Property B was an old house. After three years of living on the property, Judy, complained to
Malcom that the roof was leaking. However, despite numerous reminders, Malcom had failed
to fix the roof for over 7 months. Judy has stopped paying the rent.

Malcom rented Property C to Joseph. The tenancy agreement stated that the Property was to
be rented for 2 years for a rent of RM1,200.00. In view of the pandemic, Malcom had decided
to sell the property. He sold the property to Michelle. Joseph informed Michelle that he would
like to enforce the option to renew and rent the property for another 2 years. Michelle has
issued a notice to quit to Joseph.

Malcom inherited Property D from his mother. His aunt, Amari built a house at the corner of
Property D, nearly 30 years ago. The house was built out of brick and mortar. Amari paid
Malcom’s mom a rent of RM500.00 a month. After he inherited Property D, Malcom continues
to receive rent from Amari. Malcom has served a bare notice to quit Amari to vacate the
house. Amari is disputing the notice to quit.

Advise Michelle and Malcom.

Property A – Malcom & Jack: whether lease is valid

Property B – Malcom & Judy: Role of Lessor

Based on the facts, it is presumed that the lease agreement between Malcom & Judy is legal,
given that the element of a definite period (10 years) and consideration (rent of RM1,000.000)
is certain. Here, the issue is with regards the role of a lessor;
 S232(1) (b) NLC - The repair of the roof, the main walls and rain and any common
passages and installations. (Exterior of the property: lessor’s obligation)
 S232(1) (c) NLC - Rent ceases to be payable until the property has been rendered fit
once again for occupation or use. (eg: leaky roof)
Here, as Malcom had failed to fix the roof for over 7 months;
 232(1) (c) (i) (ii) NLC - If the property remains unfit for occupation or use for six
months, the lessee, Judy has the discretion to terminate the lease by giving one
month’s notice in writing, if she so desires

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 Property C – Michelle & Joseph: notice to quit

The transfer of Property C from Malcom to Michelle is governed under;

 s222 (1) NLC – Lessee can transfer, assign lease or sublet the property – Require the
approval of lessor i.e. landlord.

Tenancy Exempt From Registration (< 3 years)

 S213 (3) NLC - Created for terms not exceeding three years pursuant to s223 NLC.
 Unregistered interest.

Tan Kiaw v Gan Chye Khoon [1983]

 Here the tenancy agreement only applied for 3 years. As such s225(2) NLC has no
application in the case.
 Here the Federal Court explained that s5 NLC refers to “lease” as a registered lease.
There is no definition of a tenancy in section 5 but “tenancy exempt from registration
is explained under s213(1) as tenancy for a term not exceeding 3 years.

Given the facts state that Joseph’s original tenancy is for a period of 2 years for RM1.2 mil.
Joseph may rely on equitable principles as s.316(1) provides;
- Tenant can endorse his claim on the register document of title to the land

To draw parallels with the case of Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor
[1995] – endorsing=protection (TER not a caveatable interest)
 Here they tried to exercise the option to renew for another two years (2+2 = 4 years,
would be a lease)
 Here the Court of Appeal held that although the exercise of the option for renewal
from being taken into account when determining the length of a tenancy for a fixed
period.
 A tenancy exempt from registration was not registerable and thus does not qualify as
caveatable interest.
 The only protection for the tenants is an endorsement of the tenancy on the register
document of title.

Property D – Malcom & Amari: Bare notice to quit

3. Has the House of Lord’s decision in Street v Mountford has had a minimal impact on the
recognition of leases in the Malaysian context.
Discuss.

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4. Identify the key legal issues in a landlord and tenant relationship and examine the adequacy of
the existing legal framework.

the relationship between the landlord and tenant may be evaluated from the perspective of
land law.
In Sen Loon Heng v Zabon@Zaitun bt Sulaiman [1996] 1 CLJ 775, the appellants were
purchasers and descendants of those renting a portion of the respondent's land. The
respondent had
allowed the appellants to build four houses on the land. The appellants had continued
paying monthly rentals to the respondent, and no written agreement existed regarding
the tenancy. Through a written notice, the respondent had requested the appellants to
deliver vacant possession of the land to its original position. The Federal Court, in this
case, followed the decision in Mok Deng Chee v Yap See Hoi & Ors [1981] 2 MLJ 321 that a
tenancy coupled with equity cannot be terminated by a bare notice to quit. Section 223
of the National Land Code (Revised 2020) (Act 828) provides that a tenancy may be
created either by a written document or by word of mouth for three years or less. There
is no requirement for a tenancy to be registered, known as tenancy exempt from
registration. For a tenancy to have a right recognized by the National Land Code (Revised
2020 (Act 828), under Section 328, an endorsement must be made on the issue document
of title.
In Than Kok Leong v Low Kim Hai [1983] 1 MLJ 187, the court had to consider whether or
not a tenancy exempts from registration that had not been endorsed on the registered
document of title was binding on a subsequent purchaser.

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TUTORIAL 3 : EASEMENTS and SHARING OWNERSHIP IN
MALAYSIA

Questions
1. Upon receiving a large inheritance, Lee decided to invest in several pieces of land. He bought
two other pieces of land (“Land Crocodile and Land Giraffe”). The sale of land Crocodile was
subject to a right way to owners of neighbouring holdings to and from their land on existing
road to the public highway. The right of way has been in existence for over 20 years. Lee
recently started construction work on Land Giraffe and found a bunker between Land Giraffe
and that of his neighbour’s Sam. Lee recently was advised that by his solicitors, Messrs Char,
Keow,Teow and Partners of the following :

1. That his neighbour Sam does not want to remove the bunker;
2. That the right of way on Land Crocodile has yet to be registered as an easement
and the neighbouring land owners are refusing access;

Advice Lee.

2. Chong has large piece of land in Bangang Lala, Selangor. His land is mineral rich and is next
to the Karal Highway. The land sits on a hill and he has decided to sell the bottom part of his
land to Ah Ming, Ah Leong and Ah Peck. There was Land Administrator’s Private Right of Way
that existed as there was not access way to the Karal Highway. However, there is now a
different access way from Chong’s land to the Karal highway. He wants to have access to the
highway. He also wants to park his wife’s and his’s car at the bottom of the hill. His only
source of water is from the well at the bottom of his land. He wants to continue to have
access to the water in the well through pipes from the well to his house.

Advise Chong.

3. Read the article “Title or and Interest “ Romesh Roy [1996] 1 MLJ xxxvii . Do you agree with
the author’s view that Lord Diplock was misdirected in Temenggong ? Discuss.

4. Critically analyse the decision of Templeton & Ors v Low Yat Holdings [1993] 1 MLJ 443 and
the impact on the law of easements in Malaysia.

5. In the 1950s, Sulaiman had bought a piece of land in the Golden Triangle in Kuala Lumpur.
After all his daughters came of age in the 1980s, he had transferred the land to them. The
land was registered in the name of his daughters, Putih, Kuning, Ungu and Jambu.

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 Each of his daughter got married a year after each other. Sulaiman as a wedding present, built
a house for each of them on the land .Each daughter’s house was built on the four corners of
the land. In 1999, Ungu passed away. Her husband and family continued to live on the land
despite opposition from Putih and Kuning who want them to leave.

As the years passed by, there was rapid development all around their land. There were
condominiums and office buildings being built all around their home. Developers had
contacted Sulaiman’s daughters to buy the land. Putih and Kuning were eager to sell their
land. However, Jambu wanted to remain in her home, citing the convenience of being in the
centre of the city. Ungu’s husband and family were very unhappy with the decision of the two
sisters to sell the land. In view of the opposition, Putih and Kuning have applied to terminate
the co-proprietorship under s145 NLC without attempting to obtain the consent of Jambu and
Ungu’s family to partition the land. If the land was to be partition, Putih, Kuning, Jambu and
Ungu’s family will only obtain less than 2/5 hectare.

Advise Jambu and Ungu’s husband.

Advise Jambu and Ungu’s husband.

6. Discuss the implication of sharing ownership in Malaysia.

Students are to refer to the articles attached in their discussion

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TUTORIAL 4: SECURITY TRANSACTION AND MORTGAGES IN
MALAYSIA

Questions
1 Ramon and his wife wanted to buy their first home in the exclusive enclave of Peshar Park
City. Houses in the development range from RM1 million and above. After much discussion,
Ramon and his wife bought a double storey terrace house priced at RM1.5 million. They
approach Multiple Bank for a loan. After a month, Multiple Bank agreed to give them a loan
for RM1.3 million with a charge on their property. Clause 1 of the charge annexure called for
the repayment to be made within one year of the loan. But clause 2 of the charge annexure
further added that the chargor ‘ will on demand pay all sums which are now or shall from to
time being hereafter be due or owing by the chargor’. Clause 3 of the charge agreement will
have 14 days to pay all sums due.

In the first two years of buying his house, Ramon was able to pay his loan on a timely basis.
However, he lost his job in January and in February, Multiple Bank increased its Base Lending
Rate without notifying him. He could not upkeep his repayment of his loan.

He received a Notice of demand from Multiple Bank informing him that he had 7 days from
the date of the Notice of Default to repay the monies owing of RM1.4 million, principal
amount and outstanding interest. The Notice of Default was dated 11th of March 2023 and
was received by Ramon and his wife on 15th of March 2023. He and his wife were unable to
pay the monies owing.

In May 2023, Ramon and his wife was served by Multiple Bank with an application for Order
for Sale at the High Court of Kuala Lumpur. The application was allowed by the High Court.
Ramon and his wife have appealed against the Order for Sale and argued cause to the contrary
on the following grounds :

a. Multiple Bank had failed to issue a Letter of Demand;

b. Multiple Bank had failed to provide sufficient notice period :
c. Multiple Bank could only claim for the principal amount only and not interest;
d. Multiple Bank had failed to set out the reserve price of the property and provide a
valuation report of the property; and
e. The provisions of the National Land Code do not apply to Islamic Banking Facilities

Advise Multiple Bank.

2. A new development, Sime City Park was taking place in the southwest part of Kuala Lumpur. A
self-contained mini city with schools, hospital, shops, parks were being built. 300 houses were
being built in the development and were due to finish at the end of 2010.

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 The developer, Sime City Sdn Bhd, worked together with Prime Bank to offer loans to new
buyers of these houses. Alysa wanted to buy her first house in Sime City Park. She bought a 3-
storey townhouse for RM 800,000.00. Jasper Lim and his wife Winnie , bought a 2-storey link
house for RM 900,000.00

Prima Bank’s solicitor, Messrs Selva and Co. prepared the conveyancing documents for both
Alysa and Jasper Lim and his wife Winnie. When the development was completed, Alysa
moved into her new home. Jasper Lim and his Winnie moved into their new home two years
ago.

In the last year, the Base Lending Rate had increased and the economy was shaken, Alsya lost
her job. Jasper Lim found that his business was not doing well. Alsya and Jasper could not
upkeep their repayment. Prima Bank had instructed their lawyers, Messrs Selvi and Co. to
start foreclosure proceedings to recover loan. Messrs Selvi and Co realised that Messrs Selva
and Co had registered a Form 16B instead of Form 16A for Alysa loan. In addition, the
Form16B was registered as 3rd party charge instead of a 1st party charge. Further, the charge
on Jasper Lim’s property had not been registered. Messrs Selva and Co had also failed to enter
a caveat on Jasper’s Lim’s property.

Advice Prime Bank.

3. Lam bought his first home, Green House in 2000. He obtained a loan from Bank Kancil for the
principal sum of RM 250,000.00 at an interest rate of 4%. Bank Kancil, through their solicitor’s Messrs
Chee Chong Fun charged the property.
Lam passed away in 2005. Since than his estate has failed to settle the loan. In 2015, Lam’s daughter
received a Notice of Demand for the monies owing to Bank Kancil. Unable to pay the monies owing,
Bank Kancil subsequently obtained an Order for Sale on the Green House.
Advise Lam’s daughter.

4. Khalid bought defaulted on his repayment on his loan. Bank Musang obtained an Order for Sale
on his property, Dua Lipas. Khalid has instructed his solicitor to set aside the Order for Sale. In the mean
time Khalid has obtained purchaser for Dua Lipas through a private treaty sale.
Advise Khalid.

5. Malaysian charge and English mortgage, two different interest. Discuss.

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TUTORIAL 5: RESTRAIN OF DEALINGS
1. Sian Low had inherited Property A from his late father. He wanted to open a restaurant and had
applied for a short- term loan of RM100,000.00 from Durian Bank. Sian Low had deposited the
title for Property A as security for the short-term loan. Durian Bank through their solicitor had
entered a lien-holder’s caveat on Property A.

In the early days of the business, Sian Low restaurant was very successful. Due to the success of
his business, Sian Low bought Property B and applied for loan with Cempadak Bank. Cempadak
Bank registered a charge on Property B. Due to the pandemic, he had to close his restaurant. He
defaulted on the loan repayment with Cempadak Bank. Cempadak Bank obtained an Order for
Sale on Property B.

Sian Low entered into a Sale and Purchase Agreement with Lee- Lee for Property B. Lee Lee’s
solicitor entered a private caveat on Property B. As a result of the Private Caveat entered by Lee-
Lee, Cempadak Bank has been unable to auction off Property B pursuant to the Order for Sale.

Sian Low’s solicitor has filed for an application for the removal of the lien- holder’s caveat on
Property A, alleging that Durian Bank does not have a right to enter the lien- holder caveat.
Further, they have alleged that even if Durian Bank had a right to enter the lien-holder’s caveat,
they had failed to obtain State Authority’s consent to enter the lien holder’s caveat.

Advise Durian Bank and Cempadak Bank.

2. Shazlan , a farmer, bought Property Kuning and Jingga. He obtained a business loan from Ciku
Bank for RM1,000,000.00. For many years, he had a very successful banana plantation.
However, in 2020, due to COVID 19 Pandemic, he suffered huge losses and had to close the
banana plantation.

He was unable to pay the business loan and Ciku Bank obtained a judgment in default against
him for damages of RM1,500,000.00. Ciku Bank through their solicitor obtained a Prohibitory
Order on Property Kuning on the 31st of October 2020 and subsequently sold Property Kuning
on the 2nd of November 2020.

Shazlan, owed the Inland Revenue Board of Malaysia over RM500,000.0 in unpaid taxes. He
recently found out that the Inland Revenue Board of Malaysia entered a Registrar’s Caveat on
Property Jingga. As a result, Shazlan is unable to sell the Property Jingga.

Shazlan seeks your legal advice.

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3. To the untrained eye, there are insignificant differences between a Registrar’s Caveat and
Private Caveat. However, these differences are far less insignificant than made out to be.
Analyze.

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