Digest: T Bariam Singh v Pegawai Pentadbir Pesaka Malaysia (Administrator of Estate of Datuk Foo Say Lee) [1983] 1 MLJ

232 High Court, Kota Bharu (Mohamed Zahir J). Summary of the Fact: The plaintiff in this case sued the defendant for the repayment of $10,000 being a loan on a promissory note. The issue before the court was whether the defendant, Datuk Foo, in depositing a Malay Reservation land title with the plaintiff as security for a loan, rendered the contract of loan null and void. Holding: (1) What the law aims at is that the land should not fall into the hands of a non-Malay as clearly can be argued from s 7(i) of the Kelantan Land Malay Reservations Enactment 1930. It does not confine itself to the interest of the existing Malay proprietor. 'Any Malay' intended here is the general Malay and not any Malay in particular.If it is otherwise, then even a Malay chargee cannot levy execution on the land by sale as interest of the Malay proprietor is affected. (2) If acts are done in accordance with the Malay Reservations Enactment, then such acts are lawful (3) In the instant case, there was nothing illegal in the mere deposit of title by the defendant. The deposit of title was made during the life of the Land Enactment 1938 which was then in force. There is no provision in either the Malay Reservations Enactment or the Land Enactment which prohibits such deposit of title and such deposit of title was therefore not illegal (4) The plaintiff was therefore entitled to enter judgment against the defendant for the sum of $10,000 and interest.

Issue: Whether Malay Reservation Land Title as security for loan contract was null and void . Analysis and Opinion: The ratio decidendi in this case is the court referred to the clear wording of Section 12(i) where it is expressly provided that only dealings or disposals of reservation land contrary to Section 7 is prohibited which does not include the words charge. Section 7 conspicuously silent on charges and lien. The only prohibited dealings contained under Section 7 are transfer or transmission of interest, leases for more than one month and right given to lessee to renew the lease. Except from this section, there is no other provision in Malay Reservation Enactment prohibits the type of dealing. Furthermore, Section 10 of the enactment refers only to charges create before the introduction of the enactment itself. The court also said that it was not an intention of the legislature to include charges under dealings since the court opined that if the legislature intends to do so, then the legislature would have simply includes the word charges in Section 7(i). Therefore, a charge is not restricted to be created to non-Malays. The only qualification is that the purchaser must be a Malay. The court also said that the introduction of Section 9A as amendment to Section 9 does not affect such position since it was introduced with a purpose of enabling charges or liens to non-Malays such as banks, co-operative societies and other corporate bodies and to those authorized by the Ruler-in-Council under Schedule D of the Enactment to be enforceable and registrable. However, Section 104 of the Kelantan Land Enactment prohibits such registration unless the chargee is a native of Kelantan. It should be noted that the restriction in Kelantan in creation of charges lies in Section 104 of the Land Enactment not the Malay Reservations Enactment. In this case, the court is differed with the rule laid down in the case of Ho Giok Chay v Nik Aishah [1961] MLJ 49 where it was submitted that a charge of a Malay reservation land in Kelantan is an interest in land and therefore constitutes a breach of Section 7(i) of the Reservation Enactment. The court said that a charge cannot be an

interest in land since the chargee is not given any interest in the land as to enjoyment and use of it. The court referred to the definition of charge in Dictionary of English Law by Earl Jowitt, 2nd Edition as property signifies that it is security for the payment of debt or performance of an obligation. The court also referred to article wrote by Mr. Lim Kean Siew [1965] 2 MLJ page xvi where a charge is regarded as right over land but can not be an interest in the land. In addition, the objects and reason for the Malay Reservation Enactment clearly indicate that charges are permitted provided that the land charged is sold to the Malay where only Malay can bid at the auction. The court also criticized the reasons stated by Hepworth J. in his judgment in the case of Ho Giok Chay that (1) the chargee is given the right to enter such land to view and to inspect the state of repair of such buildings and improvements at all reasonable time and (2) in case of default of payment by the charger, the chargee has liberty to issue a summons to call the proprietor of the charged land before the court to show the reason why the land should not be sold by public auction and subsequently to compel the land to be sold. As to reason (1), Mohamed Zahir J is differed it on the ground that those rights did not confer any right or interest in the land charged in the charge. They are normally included in memorandum of charge or even in Land Code as an implied condition for the purpose of the chargee to see that his security is not diminished in value. In fact, the chargor himself must keep the property charged in good condition and repair. If otherwise, it would contribute to breach of the conditions where it diminish the value of the property charged as security for the money lent by the chargee. To counter the reason (2), the learned judge in this case ruled that the chargees action is permitted and envisaged by Section 9 of the Malay Reservation Enactment. As the case happened in Kelantan, therefore, the chargee can not sold the charged land except to Kelantan native Malay. The learned judge in the present case also ruled that if acts are accordance with the Malay Reservation Enactment that is in the words of Section 12(i) not contrary to the provisions of this Enactment, then such acts are lawful. What the law aims at is that the land should not fall into the hands of a non-Malay as clearly can be argued from Section 7(i) of the Enactment. Since there is no provision restricted charge to non-Malay 3

in this enactment, therefore, it is submitted that the act of charging the land to non-Malay is in accordance with the law. The court also indicate that the law does not prohibit charges to non-Malay from the wordings of Section 13A of the Malay Reservation Enactment in which the Ruler-in-Council can permits to alienate any State Reserved Land and to transfer or transmit the right or interest of any Malay in reservation land to non-Malay. This particular section clearly leaves out the word charge. The logical conclusion can be draw from here is that there is no necessity for obtaining approval from the Ruler-in-Council for a charge to non-Malay since it is permitted by law. Furthermore, the court also mentioned that in the absence of express provision in the Kelantan Malay Reservation Enactment prohibiting charges, therefore, the interpretation should be in favour of the freedom of the individual to create such charges. Based on this, the learned judge stressed that there is nothing unlawful for a Malay reservation land to be charged to a non-Malay under the Kelantan Malay Reservations Enactment. However, under Section 104 of Land Enactment, it is provided that the Registrar shall refuse to register any charge to non-native. In this matter, the court said that Section 104 merely about any charge in favour of non-native is to be unregistrable. It does not say that that charges are illegal. Moreover, Section 6 of Land Enactment also did not declare the illegality of the charges but only stresses that permit is subject to the approval of the Sultan in Council. The only declaration of illegality can be found in Section 12(i) of the Malay Reservations Enactment where the court point of view is that it does not include charges, lien as well as deposit of title. In my point of view, I agree with the rule laid down in this case although it might a bit controversial. Some people might say that it is sensitive issue to be discussed or even being agreed. But, the fact is that the charge of Malay Reservation Land to nonMalay does not effect to the position of the land itself as far as the object and purpose as well as the aim of the establishment Malay Reservation Enactment is concerned in which the land should not fall into the hands of non-Malay. The evidence is that the bidder and the purchaser of the charged land which considered as Malay Reservation Land must be Malay as defined by Article 160 of Federal Constitution in general or as intended by British when they enacted Malay Reservation Enactment to include all the inhabitants

of the Malay Peninsular and the Archipelago, including the Banjarees, Boyanese, Javanese, Bugis, Pattani etc. as mentioned by Muhammad Said Abd. Kadir al-Haj in his book, Undang- Undang Tanah Rizab Melayu- Siapakah Melayu? 2nd.edition. In sum, there is nothing to be scared in charging the Malay Reservation Land to non-Malay as long as we know our law very well. The problem is we always tied up by so call nationalism or even racism philosophy which cause we forgot the law being provided for us.