LIA 2009 LAND LAW II

TUTORIAL
DEALINGS UNDER THE NATIONAL LAND CODE

1. Gan bought a piece of land in Bukit Semanggol from his best friend, Muthusamy, in
June 2005. A Deed of Sale and Irrevocable Power of Attorney was signed. Gan had
paid the full purchase price and subsequently entered into possession of the said land.
Muthusamy passed away last November. The land was later transmitted to his son,
Rama, under a distribution order. Rama came to know about Gan and served him with
an eviction notice. To Rama, the said agreement is insufficient to make the transfer
effective.

Gan seeks your advice. He believes that the Deed of Sale and Irrevocable Power of
Attorney is sufficient to prove his proprietorship and have the protection under the
National Land Code.

The main issue is whether the Gan had the proprietorship right over the land according to the
Deed of Sale and Irrevocable Power of Attorney?

According to the section 5 of National Land Code (“NLC”),’dealing’ means any transaction
with respect to alienated land effected under the powers conferred by Division IV, and any like
transaction effected under the provisions of any previous land law, but does not include any
caveat or prohibitory order. d

2. Assuming that Rama eventually agrees to transfer the land to Gan, will the following
affect the transfer registration? (each paragraph to be treated separately):

(a) The transfer instrument was not stamped;

- S. 301 & 294(1)(a)
(b) The parties signed Form 15A;
- S.206, 207
(c) The transfer instrument was not signed by Gan, but by his daughter, Eirene;
- S. 210(1)
(d) Gan has Parkinson’s disease. He cannot hand down his signature but instead
affix his thumbprint on the transfer instrument; and
- s.210(2)
(e) The transfer instrument was attested by a director of Gan’s company.
- S. 211(1), Fifth Schedule

3. Assuming Gan is currently undergoing a medical treatment in Singapore, who can

attest to his execution of the transfer instrument?
- Fifth Schedule number (6)
4. In 2019, Abdul transferred his land known as PTD 55453 Mukim Sedili to his children,
Zabidi and Zabedah. They agreed that Zabidi and Zabedah are to hold two-thirds and
one-third shares, respectively. However, upon registration of the transfer, the
document of title states that both of them have equal shares. Recently, Zabidi wanted
to transfer his share to Abu and noticed the error. Zabidi seeks your advice whether
such error can be corrected. His cousin told him that nothing could be done as the title
is indefeasible once it is registered.

1. The following parties seek your advice on effecting a transfer. In advising the parties,
you are required to explain the applicable law and the available alternatives (if any) to
ensure the transfer can be duly registered:

(a) Salina and her brother, Jo, own half a share each of a freehold land in Bukit Jelutong.
The area's land value has significantly increased recently due to the operation of the
MRT Line. Both think that now is the best time to sell the land as they are moving to
Sarawak. However, they are concerned about the existing lease over the land in favour of
Syarikat Berjaya.

(b) Roger intends to transfer a quarter share of his land to his brother, Jonathan.

(c) Naima inherited a piece of Malay Reserved Land in Gombak from her father. Recently,
she was persuaded by Syarikat J Construction to sell the land. She is keen to sell the
land but is unsure whether that can be done.

(d) Syarikat Tegar Bumi is the proprietor of a 60-hectare oil palm plantation in Kempas.
Last month, the company negotiated the sale of the land with Gembira Industries. The
parties want to know whether the execution of a Sale and Purchase Agreement alone is
sufficient for the transfer of proprietorship.
2. Critically discuss the case of He-Con Sdn Bhd v Bulyah Ishak & Anor [2020] 4 MLJ 662,
particularly on the bare trust doctrine in a vendor/purchaser of a land situation. Has the
Federal Court departed from its earlier decision in Borneo Housing Mortgage Finance
Bhd v Time Engineering Bhd [1996] 2 MLJ 12?

Bare trust is established when, pending registration, there is a valid contract for sale
of property in which the vendor becomes in equity a trustee for the purchaser of the
estate and the beneficial ownership passes to the purchaser. The issue of when the
beneficial ownership passes has differed according to previous cases.

3 things in determining when bare trust exists:

a. Full payment (Borneo Housing)
b. Execution of SPA - not very suitable for torrens system
c. When MOT is executed/signed

➔ He-Con Sdn Bhd v Bulyah Ishak & Anor

Facts:
● The Pfs are joint administrators of the estate of Nor Zainir bin Rahmat
(“the deceased”) who passed away on 26 June 2002.
● He-Con Sdn Bhd (the 1st Defendant”) is the registered owner of a
piece of land known as Lot 31, Jalan 19/1, Section 9, Bandar Shah
Alam held under title HS(D) 151345, PT 917, Mukim Bandar Shah
Alam, Daerah Petaling, Selangor (“the property”).
● The 1st Df entered into a Sale & Purchase agreement with the
deceased on 22 December 1997 whereby the deceased agreed to
purchase the property from the 1st Df.
● The 1st Df executed a power of attorney dated 26 April 2002 in favour
of the deceased (“the 1st PA”). The 2nd PA was also registered in
High Court
● The deceased then passed away on 26 June 2002 and the Pfs
applied to be joint administrators of the estate of the deceased.
● Though the title has been issued to the property, the developer of the
property did not agree to the direct transfer in favour of the 1st Pf.
Coupled with the fact that the 1st Pf could not afford the stamp duty of
the property, the property remains in the name of the 1st Df.
● Towards 2011, the 1st Pf discovered that the 1st Df has charged the
property in favour of the 4th Df who is a licensed financial institution
without consent of the Pfs. Pfs then lodged a police report and lodging
caveat over the property.
● The 4th Df also brought foreclosure action to auction the property due
to failure of the 1st Df to service monthly instalments. Order for sale
was obtained and the property was scheduled for auction on 8 April
2013. However, the Pfs has filed this action seeking, among others,
an injunction to stop the auction and declarations that the deceased is
the rightful owner of the property.
High court’s decision:
● The HC allowed the claim of the Pfs against the 1st Df on the ground
that the deceased is the beneficial owner of the property as he has
paid full purchase price for the property.
● The Df has therefore become bare trustee of the property.
● The HC however dismissed the Pf action against the 4th Df as he is a
subsequent purchaser who is bona fide and for valuable
consideration, therefore is protected under S.340(3) NLC.
CoA:
● The Pfs appealed against the dismissal of its claim against the 4th Df.
● The 1st Df, on the other hand, appealed against the HC decision in
allowing the Pfs claim.
● The CoA unanimously affirmed the HC’s position with regards to the
Pfs claim against the 1st Df and allowed the Pfs appeal against the
dismissal of claim against the 4th Df.
Appeal to FC by 1st Defendant:
●
Appeal to FC by 4th Defendant:
Federal Court
“...to be protected under the proviso to S.340(3) of NLC, merely
providing to be a bona fide purchaser of a property is not sufficient. One
must also be a subsequent purchaser…” [para 104]
- Case 2020 ni dia overrule case 1996 psl position vendor purchaser
bawah doctrine tu
Held: “Once that is established to be the case here, the 1st Df was rendered a
bare trustee. Once 1st Df is a bare trustee, it could not in law pass any
interest in the said property to the 4th Df by way of creating a security for the
change over it in favour of the 4th Df. It is void ab initio.
- [48] Learned counsel for the 1st Df cited Borneo Housing and urged
the court to agree with him that there is more that the purchaser would
have to show before rendering the vendor 1st Df, as a bare trustee for
the Pfs in this case.
- [50] The court reproduced in quote from Borneo Housing
“... the contractual events which result in the vendor becoming a bare
trustee of the land the subject matter of the agreement of sale and
purchase for the purchaser, is on completion, that is to say, upon
receipt by the vendor of the full purchase price, timeously paid and
when the vendor has given the purchaser a duly executed, valid and
registrable transfer of the land in due form, in favour of the
purchaser,for it is then that the vendor divests himself of his interest in
the land

He aldy invested himself from any rights.

3. Muthu was a successful businessman. He owned a house that stood on an acre of land
in Batu Pahat, Johor (“the land”). In 1975, Muthu decided to expand his business and
moved to Sarawak. He entrusted his nephew, Raju to look after the land. Raju had since
resided at the land. In 1985, Muthu offered to transfer the land to Raju with a
consideration of RM6,000. Both parties agreed that the amount shall be paid by sixty
monthly installments. Raju was given a photocopy of the land title.

Muthu died in 2015. In his will, he bequeathed all his properties to his only son, Kana.
However, Kana has no knowledge about the land in Batu Pahat, until Raju’s twin
daughters, Rani and Rina, visited him last Deepavali. Rani and Rina requested that the
land title be transferred into their names and showed Kana the photocopy of the land
title. Raju died in 2020 due to Covid19, and Rani and Rina are the only heirs.

Kana insisted on his right over the land. Through his solicitor, Kana served a notice of
eviction to Rani and Rina. Since the notice was not complied with, Kana initiated a civil
action against Rani and Rina for eviction from the land. Rani and Rina seek your legal
advice on their position. They wish to make a counterclaim for a declaration that the sale
and purchase of the land in 1985 was valid and an order for them to be allowed to be
registered as the proprietors of the land.

Advise Rani and Rina.

Section 205, 206

Section 214(1)(a) - the whole, but not a part only, of any alienated land.

Peter lai case

Section 215 :
(1) The transfer under this Act of any alienated land shall be effected by an instrument in Form
14A.

(2) The title of the transferor shall pass to and vest in the transferee upon the registration of any
such transfer, together also with the benefit of any registered interests then enjoyed with the
land.

(3) The transferee of any alienated land shall hold the same subject to-

(a) any lease, charge or other registered interest subsisting in respect thereof at the time the
transfer is registered;
(b) subject to sub-section (3) of section 213, any tenancy exempt from registration granted by
the transferor or any predecessor in title;
(c) all conditions and restrictions in interest then applicable thereto; and
(d) all other matters then appearing on, or referred to in, the register document of title

Peninsular Land Development v K Ahmad - The vendor becomes in equity a trustee for the
purchaser and the beneficial ownership passes to the plaintiff as soon as the purchase price has
been paid.

Karuppiah Chettiar v Subramaniam - a vendor is regarded as having divested himself of all

the beneficial interest in his land and vested it in the purchaser only at the time when the
memorandum of transfer is executed and the purchase money is paid in full.

Ong Chat Pang v Valliappa Chettiar - The point at which the vendor becomes constructively a
trustee for the purchaser is reached only when he has done all that is necessary
to divest himself of the legal estate by executing a valid transfer of the land in favour of the
purchaser... Where the purchase money had been paid and the purchaser has received the
instrument of transfer and the title deeds from the vendor but omits to complete registration, if
the vendor comes to seta@side the the purchaser is reached only when he has done all that
sale, it would be a good answer to say that he has no interest In the land because he
cannot retain the estate for a moment against the purchaser.

Temenggong Securities Ltd & Anor v Registrar of Titles - The vendors, after receipt of the
full purchase price and surrender of possession of the lands to the appellants [the purchasers]
are bare trustees for the appellants of the said land

Borneo Housing Mortgage Finance v Time Engineering - In our view, the contractual events
which result in the vendor becoming a bare trustee of the land, the subject matter of the
agreement of sale and purchase, for the purchaser, is on completion, that is to say, upon receipt
by the vendor of the full purchase price, timeously paid and when the vendor has given the
purchaser a duly executed, valid and registrable transfer of the land in due form in favour of the
purchaser, for it is then that the vendor divests himself of his interest in the land

Tan Ong Ban v Teoh Kim Heng - The proviso to s 340(3) of the NLC does not apply to the
present case as the strata title is yet to be issued at the material date. This is premised on the
fact that s 340(1) of the NLC only speaks of registered title or interest. The principle of beneficial
ownership differentiate between the rights of a purchaser of a property who has fully settled the
purchase price with one who has not. This principle clothes a purchaser who has settled the full
purchase price with a distinct privilege equivalent to a legal owner, although he or she has yet to
be registered as the proprietor of the property. It is our finding that the plaintiff is not vested with
beneficial interest in the property as he had not paid the full purchase price of the property. The
plaintiff's right in the circumstances is purely contractual in nature as against the second
defendant.
1. “A charge under our National Land Code is the same as an English mortgage at
common law.” Do you agree with the above statement? Support your answer with at least
two decided cases.
Differences through cases:

Perwira Habib Bank Malaysia Bhd v Lum Choon Realty Sdn Bhd - The premise that a
charge under NLC is the same as an English mortgage at common law is patently
erroneous.
2. Critically discuss the position of an unregistered charge under Malaysian law.

1. The contractual operation under section 206(3) of NLC

Mahadevan s/o Mahalingam v Manilal & Sons (M) Sdn Bhd:

➢ Facts: The limitation period was an issue since the charge had not been registered –
Whether there’s any equitable charge?
➢ Held: The respondent’s action was not time barred as there was an equitable charge
here due to the joint venture business of buying and selling lands (contractual
operation).
➢ Equitable charge and lien are permissible under NLC. The court will look at the
intention and conduct of the parties at the time when the payments were made.

Malayan Banking Berhad v Zahari Bin Ahmad:

➢ Facts: D owed P a certain amount of money. Pursuant to the loan, a loan agreement
and a deed of assignment were executed on 16/3/1974. D defaulted on the repayment
of the loan.
➢ Held: NLC does not prohibit the creation of equitable charges and recognizes
equitable charges. The loan agreement and the deed of assignment created an
equitable charge both in form and substance.

Standard Chartered Bank v Yap Sin Yoke:

➢ Facts: The charge together with the IDT were returned to the P’s solicitors as an
official receipt for quit rent was not supplied to the Land Office. The returned documents
were kept by a clerk of the firm who did not bring them to the attention of the solicitors. It
was discovered that the documents had not been re-presented and when an attempt
was made to register the charge, the plaintiff discovered that it could not be done as
there was already a private caveat lodged.
➢ Held: By virtue of the unregistered charge dated 1/4/1985, P had acquired a title in
equity over the land. As the IDT was all the time in the custody of P, it had acquired a
lien in equity over the land. This equitable interest is not affected by the absence of
a caveat. P had the right to lodge a caveat and may do so at any time under the
provisions of NLC.

2. No indefeasibility interest
Tan See Hock v Development and Commercial Bank Bhd:
➢ Section 340(1) of NLC expressly confers indefeasible title or interest – It never
mentions such a privilege to be conferred on a chargee not registered nor does it
recognise an equitable charge to benefit it from being indefeasible.
➢ Section 340(1) of the NLC is clear and unambiguous and as the first defendant is not
the registered chargee, they cannot avail themselves of the indefeasibility of their
interest in the said land.
LEASE AND TENANCY

1. Critically discuss the test to distinguish a lease/ tenancy from a licence as decided in the case
of Innab Salil & Ors v Verve Suites Mont’ Kiara [2020] 12 MLJ 16.

- The dispute starts when the appellants use their apartment units for commercial
purposes, basically let out a short term rental (no agreement)
- Respondent is a management company under Strata Titles Act to maintain and manage
development (Verve suits)
-

2. Ali Kassim bought a shophouse unit at Sri Menanti, Negeri Sembilan and to finance the
purchase, the shophouse was charged to ABC Bank. At first he intended to run his business
there but due to some reasons, he had to move to Kota Bharu. As he did not want the premise
to be left unoccupied, he entered into an agreement with Ah Chong whereby Ali Kassim agreed
to allow Ah Chong to occupy and use of the shophouse for a period of ten (10) years
(unregistered lease became equitable lease, refer to s&m jewelry case or tan cheng toh) with a
monthly payment of RM2,500 (“the Agreement”).

The Agreement stated that it is a license to occupy agreement and referred to Ah Chong as a
licensee. However, Ah Chong is given exclusive right of possession and use over the
shophouse and the Agreement is not allowed to be terminated by either party for the first five
(5) years. In addition, Ali Kassim is not allowed to interfere with Ah Chong’s use of the
shophouse throughout the subsistence of the agreement. The Agreement also provided that it
binds Ali Kassim’s successor in title, heirs, executors and administrators. The Agreement
however did not state that the shophouse is charged to ABC Bank, neither was ABC Bank’s
consent sought nor obtained for the purpose of the Agreement.

When Ali Kassim went to Kota Bharu, Kelantan, he entered into a tenancy agreement with
Ranjit to rent a certain warehouse for three (3) years, with an option to renew a further 3 years,
for a monthly rent of RM10,000. A year later, Ali Kassim’s business suffered a downturn and he
could not afford to pay the rent. Despite not paying the rent for the whole of the next year, Ranjit
did not demand payment nor turned Ali Kassim out of the warehouse but continued to allow Ali
Kassim to use and occupy the warehouse.

Ali Kassim later decided to sell the shophouse unit in Negeri Sembilan to a cash rich widow,
Seri (bona fide purchaser, no knowledge of the lease, it binds the successor, refer to chen han
guan v perumahan farlim case, sufficient notice (1 month) and compensation should be
provided). Seri bought the shophouse with cash and redeemed it from ABC Bank. Seri found
that Ah Chong is in occupation of the shophouse and had done extensive renovations on it. Seri
subsequently issued an eviction notice to Ah Chong before the first three (3) years of the
Agreement was up.

Ah Chong however refused to vacate the shophouse as he insisted that the Agreement is also
binding on Seri as Ali Kassim’s successor in title. Ah Chong (insist dia tenancy at equity) also
insisted that he has the right
to continue the occupation of the shophouse because of the amount of money he spent on
renovating the shophouse without any objection from Ali Kassim before it was sold to Seri.

In the meantime, Ranjit demanded payment of the outstanding rent from Ali Kassim. But Ali
Kassim discovered that Ranjit is not the registered owner of the warehouse and the warehouse
is instead owned by the estate of Ranjit’s father, the late Mr. Siva. Apparently Ranjit is not the
administrator of Mr. Siva’s estate and that he had been secretly renting the warehouse to Ali
Kassim without the knowledge of Mr. Siva’s estate administrator’s. Ali Kassim now wants to
terminate the tenancy without paying for the outstanding rent.
Advise all parties.

Ali Kassim v ABC Bank (Charge)

- section 226 NLC - Where the land is subject to a charge, the written consent of the
chargee must be obtained before the lease or tenancy is granted.
-

Ali Kassim v Ah Chong (Lease)

- Section 5 NLC - "lease" means a registered lease or sub-lease of alienated land

- Section 221(2) NLC Every lease granted pursuant to this section shall be for a term
exceeding three years.
- Equity Corporation Sdn Bhd v Thye Sun Quarry Sdn Bhd [2002] 6 MLJ 74 - “Under the
National Land Code (NLC), lease of land should be for more than three years (see s 221
of the NLC). What a ‘lease’ is, is not defined. The common law definition of ‘lease’ as
given in Halsbury’s Laws of England (Vol 27(1)) at 60, inter alia, is as follows: An
instrument is usually construed as a lease if it contains words of present demise. Even
where the instrument is called an ‘agreement’ and contains a stipulation for the
subsequent granting of a formal lease, it may be construed as a lease if the essential
terms are fixed, especially if possession is to be taken under it and if the covenants
which would be inserted in the lease are to binding at once. The distinguishing
characteristic of a ‘lease’ is the grant of exclusive possession of the land to the tenant.”
- Section 221 (3) The maximum term for which any lease may be so granted shall be
(a) ninety-nine years if it relates to the whole of any alienated land;
- Form 15A – Lease (section 221(4))
-
Ali Kassim v Ranjit (tenancy)

- Section 5 NLC "tenancy exempt from registration" has the meaning assigned thereto
by sub-section (1) of section 213
- • Section 213(1) NLC In this Act "tenancy exempt from registration" means -
(a) any tenancy or sub-tenancy for a term not exceeding three years granted
pursuant to section 223; and

(b) any tenancy or sub-tenancy for a term not exceeding one year granted
pursuant to the provisions of any previous land law.
- section 43(a) natural persons other than minors
- Section 223 NLC
- S116 Evidence Act 1950 -> The doctrine where a tenant may not question his
landlord's title and, conversely, that a landlord having by his offer of a tenancy induced
a tenant to enter into (or remain in) occupation and to pay rent, cannot deny the
validity of the tenancy by alleging his own want of title to create it.
- Wee Tiang Yap v Chan Chan Brothers [1986] 1 MLJ 47 -> “What all such persons are
precluded from denying is that the lessor had a title at the date of the lease and there
is no exception even for the case where the lease itself discloses the defect of title… I
would therefore decide this appeal in favour of the appellant on the simple ground
that the respondents are estopped from disputing the title of the plaintiff”
- SINGMA SAWMILL CO SDN BHD v ASIAN HOLDINGS (INDUSTRIALISED BUILDINGS) SDN
BHD [1980] 1 MLJ 21 -> “Now section 116 of the Evidence Act enacts that no tenant of
immovable property shall, during the continuance of the tenancy be permitted to deny
that the landlord of such tenant had, at the beginning of the tenancy, a title to such
immovable property. The words "during the continuance of the tenancy" are
important and make it clear that where there is no legal tenancy, the provisions of the
section are not applicable. That being so, where the contract of tenancy has come to
an end by effluxion of time, there is no legal contract of tenancy and therefore there
can be no question of the continuance of such tenancy. The tenant in consequence can
later challenge the status of the landlord, and he cannot be deemed to be estopped
from denying that the title of the landlord has come to an end. We are of the view that
the decision in Ban Seng v. Yap Pek Soo supra, is now no longer good law.”
- A tenancy may be created by orally or by written instrument in any form whatsoever;
no registration required- section 223(2), section 213(2) NLC

- Margaret Chua v Ho Swee Kiew & Ors [1961] MLJ 173 -> “Section 92(1) provides that
any lease for a term exceeding one year must be in the statutory form and must be
 presented for registration together with the issue document of title. The statutory
form is in the Malay language written in the Jawi script and bears no resemblance to
the agreement of 22nd December, 1951. The section also provides that no lease of
land which has been charged shall, if presented, be registered until the chargee has
signified in writing his consent to such a lease. On this it is clear, and the trial Judge so
held, that the agreement of 22nd December, 1951, was clearly incapable of
registration as a lease. It was, therefore, incapable of conferring upon the purported
lessees any real interest in the land and so as a lease it was a nullity. … [A]lthough the
agreement might be a nullity as a lease it could be, and indeed was, a good
enforceable agreement for a lease under which the appellant as registered proprietor
had undertaken the obligation to grant a lease”
- Cheong Lep Kee & anor v Tan Tin Kek [1968] 2 MLJ 126 -> “It is clear from the
authorities which I have discussed that in the present case the agreement under which
the defendant went into occupation of the premises at No 33 Newcome Road, Malacca
was void as a lease by reason of the provisions of section 5 of the Registration of
Deeds Ordinance (SS Cap 121). The result of his entry upon that void lease was the
same as would flow from an entry upon an agreement for a lease. Upon his entry the
legal relationship of landlord and tenant arose and he became a tenant at will. When
he paid the monthly rent reserved under the so-called lease the tenancy at will
changed into a tenancy from month to month upon the terms of the intended lease.”
- Tan Khien Toong & Ors v Hoong Bee & Co [1987] 1 MLJ 387 -> “It was common ground
that the agreement in writing dated March 31, 1962 was void as a lease on the ground
of non-registration. Applying the principle propounded in Lee Ah Low case to the facts
herein, we are of the opinion that since the respondents had entered into possession
under a void lease without any objection from the late Tan Kwan, the legal relationship
of landlord and tenant arose and the respondents became tenants at will. When the
respondents tendered and paid the rent monthly which was accepted by the landlord,
the tenancy at will was converted into a tenancy from month to month. It was subject
to this monthly tenancy that the shop premises must be deemed to have been
transmitted to the appellants, so that the respondents became a monthly tenant of
the appellants. This monthly tenancy, in my judgment, had been duly determined by
the notice to quit … As the plea of equitable estoppel also failed, I would allow the
appeal, set aside the judgments of the courts below and enter judgment in favour of
the appellants.”
-

Seri v Ah Chong
- Than Kok Leong v Low Kim Hai [1983] 1 MLJ 187 -> under section 213(3) National Land
Code, this oral agreement is not binding on the Plaintiff. …One other material point
raised in the Defence is that of knowledge or notice of such a tenancy being granted to
the Defendant…In answer to that, my view is that the law governing this particular
case is the National Land Code 1965 and section 213(3) does seem to me to impliedly
exclude this question of knowledge or notice actual or constructive, because it says
that "unless, prior to the date on which the dealing referred to, the tenancy had
become protected by an endorsement on the register document of title“
-
CAVEAT

Faisal and Farid are twin brothers. They are both the co-proprietors with undivided equal
shares of a piece of land in Sungai Buloh worth RM 100 million (“the Land”). In July 2018,
F&J Resources Sdn Bhd, a company which Faisal is the majority shareholder, entered
into a loan agreement with Kesatuan Ladang for a sum of RM30 million to expand its
business. To secure the loan, a 3rd party charge over Faisal’s undivided share in the
Land was created. The said charge was duly executed. However, the registration of the
charge was rejected by the Registrar of Titles. This was because the original quit rent
receipt for the year of 2018 had not been presented together with the charge document.
The returned documents were kept in a drawer by a clerk of the legal firm that handled
the loan documentation and the related process. The said clerk subsequently forgot to
inform the solicitors concerned about the return of the said documents. Since February
2020, F&J Resources Sdn Bhd started to default in making the loan repayments.
Kesatuan Ladang just recently discovered that the 3rd party charge had never been
registered. Kesatuan Ladang is currently in possession of the Land’s issue document of
title. Based on the above facts:

b. Assume that the instrument in (a) above was subsequently presented before the
Registrar of Titles for its entry on 14th June 2020. When the Registrar wanted to enter his
endorsement, he found that:

i. a private caveat that binds the whole Land was entered by JGH Holdings Bhd
on 4 th August 2019. Initially, JGH Holdings Bhd and Farid had entered a
jointventure agreement in July 2018 (“JV agreement”). Pursuant to Clause 8 of the
JV agreement, JGH Holdings Bhd was granted the physical possession of a
certain part of the Land to be developed by them and the exclusive right to
manage the development (“the project”). Clause 10 of the JV agreement further
conferred the right on JGH Holdings Bhd to enter a private caveat on the Land.In
the following year, Farid experienced serious financial problems. The parties
agreed to terminate the JV agreement. To mitigate their losses, the parties agreed
that Farid could sell and transfer the whole of his undivided share in the Land to
JGH Holdings Bhd for a sum minus the costs spent on the project. The sale and
purchase agreement between Farid and JGH Holdings Bhd was executed on 3rd
August 2019 and a deposit of RM5 million paid by JGH Holdings Bhd to Farid on
the same day.