QUESTION 2 (PART B)

In January 2010, Topek was granted temporary occupation licence over a piece of land
in Kuala Selangor. He planted some fruit trees and also built a wooden house on the
land.
In September 2010, Topek rented out a room to Shoib for RM 100.00 per month. In
August 2011, he entered into a sale and purchase agreement with Bee Sing to sell the
land for RM 60,000
Bee Sing paid Topek RM 10,000 as deposit for purchase of the land.
Answer the following questions separately;
a) Advice Bee Sing as to whether Topek could effectively sell the said land to him.
(5 marks)
b) Advice Topek as to whether he could write a will and bequeath the land to his
son, Deen.
(5 marks)
c) Assuming that in January 2013 when Topek applied for renewal of the licence
and the Land Administrator has refused to grant further renewal.
i. What is the position of the structure built on the land
(5 marks)
ii. Is the government obliged to compensate the licensee for any building that
is surrendered together with the land?
(5 marks)









Answer:
Question 2(a)
ISSUE?
The issue is whether Topek could effectively sell the land
to Bee Sing?
LAW
As a TOL is a licence, a TOL holder merely has
possessory rights and not proprietary rights over the land.
This is expressly provided in Section 68 of the National
Land Code.
AUTHORITY
It can be seen in the case of Hee Cheng v Krishnan,
Plaintiff claimed specific performance and alternatively,
damages for breach of an alleged contract to sell the
defendants rights in a TOL land and a house built on the
land. It was held that, the plaintiffs claim must fail as the
contract was an attempt to sell and purchase the plaintiffs
rights under the TOL which was prohibited by Rule 41 of
the Land Rules 1930. The contract was therefore unlawful
as it contravention the provision of law section 24 of the
Contracts Ordinance.


APPLICATION
Applying to this case, in August 2011 Topek had entered
into sale and purchase agreement with Bee Sing to sell
the land for RM60,000. Topek, as a licensee of the State
Authority land cannot sell the land as the land is clearly
granted by the State Authority under the temporary
occupation licence (TOL) where the land may not assign
or transfer to other person.
CONCLUSION
Therefore, it can be advised that in respect to the section
68 of National Land Code, Topek has no right to assign or
transfer the TOL of the land to other person.









Question 2(b)
ISSUE
The issue is whether Topek could write a will and bequeth
the land to his son?
LAW
In the light of section 68 of the National Land Code, a
Temporary Occupation Licence (TOL) land shall not be
capable of assignment and licence shall terminate on the
death of the person.
AUTHORITY
Case can be apply, Papoo v Veriah, the widow and
administratix of the deceased TOL holder made an
application to the court for an order to transfer her own
name as sole beneficiary the estate of the deceased which
consisted of a house built on the TOL land during his
lifetime. It was held that TOL is exactly what the name
implies. It is a licence to occupy and nothing more. The
licence is personal to the holder, it dies with the holder.
Thus, in the case of Fatimah v Moideen Kutty, the court
held that the TOL land is not capable to being inherit.



APPLICATION
Apply to the issue, whether Topek could write a will and
bequeth the land to his son. The state of the TOL land
before the grant of the license to Topek belongs to the
State Authority. This licene will be reverted back to the
State Authority upon the death of the licencee. Thus,
cannot be transferred or inherent upon the death of the
TOL holder and it was not valid as stated in the statue
given.
CONCLUSION
Therefore, Topek have no right to transfer by making will
and bequeth to his son as quoted by Good, judge who
made the observation that the licene is personal to the
holder, it dies with the holder.







Question 2(c)(i)
ISSUE
The issue is the position of the structure that has been
built by Topek on the TOL land after the rejection of the
Land administrator for the renewal of his TOL licence.
LAW
According to the National Land Code, the State Authority
has powers of disposal as well as rights in reversion with
regards to state land. Disposal method has been clearly
stated in the section 42 of the National Land Code (NLC).
This includes granting a temporary occupation licence
(TOL) to occupy land. Therefore, section 67 of NLC states
that TOL is issued for a term expiring no later than the
end of the calendar year in which it commences.
As the TOL only lasts until the end of the calendar year it
was issued, this restricts the type of activities that can be
carried out on the land. TOL land may not be used for the
planting of permanent crops nor for the erection of any
permanent building or other permanent structure.
However, expiry of TOL will revert the possessory right to
the land back to the state authority. The decision to renew
the TOL is entirely upon the discretion of the State
Authority.

APPLICATION
This can be gathered from the use of the word may in
section 67(3) of the NLC as well as the observation of
Justice Ajaib Singh in Teh Bee v K Maruthamutu.
Section 47 of the NLC provides the effect upon the
termination of any licence on state land, there shall vest in
the state authority all building on the land (by
whomsoever erected) other than any temporary
construction and capable of removal. Thus, if the TOL
holder or any other person builds a permanent building on
the land, upon the termination of the TOL or termination of
the licence, the said building becomes the property of the
State Authority and the TOL holder or owner of such
building may not claim any compensation from the State
Authority.








APPLICATION
Applying to the case of Topek, the failure of his TOL
licence renewal will result in the loosing of the ownership
of any permanent building erected on the land.
CONCLUSION
Therefore, it can be adviced that, as the NLC does not
clearly provides the meaning of permanent building when
it comes to the matter of TOL land, therefore he could
disassemble the wooden house by any chance as long as
the construction is capable to be removed from the land.
Thus, if he refused to do so then he may not claim any
compensation from the State Authority.









Question 2(c)(ii)
ISSUE
The issue is whether the government has obliged to any
compensation for any building which surrendered together
with the state land?
The mechanism of the Temporary Occupation Licence
(TOL) has been inbuilt in the National Land Code (NLC)
from section 65 to section 69. Section 65 empowers the
State Authority to permit the TOL of state land to any
person or body for the specific purpose or activity on the
land, without which, the person or body would be deemed
an unlawful occupier.
As the TOL only lasts until the end of the calendar year it
was issued, this restricts the type of activities that can be
carried out on the land. TOL land may not be used for the
planting of permanent crops nor for the erection of any
permanent building or other permanent structure.
However, expiry of TOL will revert the possessory right to
the land back to the State Authority. The decision to renew
the TOL is entirely upon the discretion of the State
Authority. This can be gathered from the use of the word
may in section 67(3) of the NLC as well as the
observation of Justice Ajaib Singh in Teh Bee v K
Maruthamutu.
Section 47 of the NLC provides that to the effect that,
upon the termination of any licence on state land, there
shall vest in the state authority all building on the land (by
whomsoever erected) other than any temporary
construction and capable of removal. Thus, if the TOL
holder or any other person builds a permanent building on
the land, upon the termination of the TOL or termination of
the licence, the said building becomes the property of the
State Authority and the TOL holder or owner of such
building may not claim any compensation from the State
Authority.

Therefore, if TOL holder chooses to erect a building on
TOL land which he occupies by virtue of that licence, he
takes the risk of losing what he has put into the land. No
claim for compensation may be made in respect of
improvements made to the TOL land in equity and the
TOL holder is taken to have made such expenditures upon
his own accord and risk. Thus, upon reversion of land to
the State Authority, all buildings on the land, except those
of temporary construction and capable of removal, shall
vest in the State Authority without payment of
compensation.