GROUP 10

UMI NURUL FARAHIDAYAH BINTI ABD. KARIM (200389) PUTERI NUR AIN BINTI MEGAT HASNAN (200456)

[2007] 4 MLJ 393

Robert Lee @ Robert Seet & Anor V Wong Ah Yap & Anor

PARTIES IN THIS CASE

ROBERT LEE @ ROBERT SEET & ANOR APPELLANTS / DEFENDANTS The current executors of the estate. LEE CHIM GHIANG
The executor of the estate and the registered owner of the land. Passed away.

WONG AH YAP & ANOR RESPONDENTS / PLAINTIFFS The administrators

Purchased the MCL land from TAN TAI TIP

Not a person who qualified for an Malacca Customary Land (MCL) land to be sold and transferred to. Already passed away.

LI KHENG LIAT
The actual owner of the estate. Died in1903.

FACT OF THE CASE

The dispute arose concerning about the entitlement to the sum of RM 616,146 which was awarded as compensation for the acquisition of a piece of the land known as MCL 150 Lot 51 Mukim of Klebang Besar, Melaka.

 In 1935, when Tan Tai Tip (the deceased), purchased the MCL land from the executor; Lee Chim Giang. Under Section 3 of Malacca Lands Customary Rights Ordinance (the Ordinance), the transfer of any land subject to the Ordinance only can be valid if the transfer made either;
(a)To a Malay domiciled in Malacca, or (b)To a person issued with the certificate as qualified to hold such land

 Tan Tai Tip was not a Malay nor a person issued with the certificate by the Governor-inCouncil to hold or to own the MCL land.
Shortly, Tan Tai Tip that was known as the purchaser was not a qualified person for an MCL land to be sold and transferred to. This clarify for the reason why the land remained registered in the name of Lee Chim Giang who was the executor.

 Since the sale, Tan Tai Tip and his relatives had been in quiet and uninterrupted possession of the said land.
They had built dwelling houses and lived on the land. They also had paid all the rent and other dues. They also had been using the MCL Land for the planting of padi and vegetables and the rearing of cattle. They also had been in possession of the document of title of the land

 October 1981, the land was acquired by the State Director of Lands and Mines. The director gave notice that the MCL land was required for public purpose as it actually specifically for housing estate or housing area.

In 1982, an inquiry was held.

10 May 1982, the Collector of the Land Revenue, Malacca made the awards of compensation to four persons.

 The first person who got the compensation was Li Chim Giang as he considered as the land owner of the said MCL land. The amount of the compensation given to him was RM 616, 146.00 The second compensation is paid to Tan Yed Lim as he had put up a temporary building on the said property and paying a nominal rent to Tan Tai Tip. Tan Yed Lim actually was the owner of the house which situated on the said MCL land.

 The third person who got the compensation was Teo Seng. Teo Seng had rented about five acres of the said property or the land from Tan Tai Tip for planting padi and vegetables. He also occupied the said property on which he built a house which called semi-permanent house and he paying the nominal rent to Tan Tai Tip The last person who got the compensation was Tan Ngiap Heng. The fourth person who got the compensation is the son of Tan Tai Tip. The compensation made to these four of individuals were accordingly to their capacity as the persons who have interest towards the said MCL land.

Li Chim Giang

Tuan Tanah

$616,146

Tan Yed Lim

Tuan Rumah

$28,200

Teo Seng

Peladang & sebuah rumah

$55,100

Tan Ngiap Heng

Orang Pemelihara Lembu

$338,730

 However, the dispute only arise on the award made to the land owner who was Li Chim Giang, the executor for the deceased Li Keng Liat.

The administrator of Tan Tai Tip filed a suit in the High Court for declaration that Tan Tai Tip was the lawful owner and the beneficially entitle to the compensation. The High Court ruled in favour of the plaintiff.
However, the current executors of Li Keng Liat appealed to the Court of Appeal and the Court of Appeal dismissed the appeal of the Appellant. The last step taken by the Appellant was they made appeal to Federal Court.

ISSUES

(1) When land under Malacca Lands Customary Rights Ordinance has been compulsorily acquired by the Government under the Land Acquisition Act 1960, does the prohibition in the Ordinance still apply to decide to whom the compensation shall be paid?

(2) Can the doctrine of fairness be used to override principles of law and the Ordinance in this case?

OPINION OF FEDERAL COURT JUDGES

1st ISSUE
When land under Malacca Lands Customary Rights Ordinance has been compulsorily acquired by the Government under the Land Acquisition Act 1960, does the prohibition in the Ordinance still apply to decide to whom the compensation shall be paid?

Who is the "tuan tanah"?

Whether there was a valid sale, the effects of ss. 3 and 29 of the Ordinance and whether property passes even under an illegal and unenforceable contract in this case.

Who is the "tuan tanah"?

The dispute that arose in this appeal only concern about the compensation that made to the Tuan tanah. So, the main issue is: who is the "tuan tanah"? The occupants have been compensated separately. So, the fact that the learned High Court Judge, having allowed the respondents to rest their case on exclusive possession instead of on the (alternative) ground which is even if the sale was illegal and void, Tan Tai Tips estate was entitled to compensation because the contract of sale had been fully performed, but the learned judge did not decide on it. So, it makes no difference. The compensation in question is for "tuan tanah" not for the occupiers who have been paid separately. This is the point that both the High Court and the Court of Appeal missed.

 Further since such a purchaser cannot acquire title under the Ordinance, there cannot be any other way by which such a purchaser can acquire it. To allow the purchaser to acquire title by any other method not in accordance with the Ordinance would defeat the purpose of the Ordinance. The Ordinance was enacted for the protection of certain classes of people. Cases on Malay reserve lands were also to the same effect. The fact that the land had been occupied by the others for a length of time did not extinguish the landholders title to the said lands.

Whether there was a valid sale, the effects of ss. 3 and 29 of the Ordinance and whether property passes even under an illegal and unenforceable contract in this case.

The federal judges in this case have no difficulty in accepting that there was a sale. But, the question is whether the sale is valid or void. Section 3 of the Ordinance provides: (1) No transfer of customary land shall be valid unless it is made to an individual qualified to become a customary land-holder. (2) The following persons shall be deemed to be qualified to become customary land-holders: a) any Malay domiciled in the State of Malacca; and b) any person holding a certificate from the Governor in Council of Malacca that he is qualified to hold customary land. Section 29 provides: No mortgage or sale of any interest in any customary land in Malacca shall be valid unless made in accordance with this Ordinance.

 The issue had in fact been decided by the Supreme Court in Pang Cheng Lim v. Bong Kim Teck & Ors. [1997] 4 CLJ 414. Delivering the judgment of the court, Wan Adnan Ismail FCJ (as he then was) said: We agree with the contention of the learned counsel for the plaintiff that as the said lands were subject to the said Ordinance the alleged purchase of the same by the first defendants mother was not valid as she had not obtained any certificate from the Governor-in-Council under section 3(2) of the Ordinance. She was not qualified to become a customary land-holder under section 3(1) of the Ordinance. She was therefore not competent to acquire any title at all to the said lands.

The court held, at p. 432 of the law report: If she could not acquire any title under the Ordinance, there could not be any other way by which she could acquire it. To allow her to acquire title by any other method not in accordance with the Ordinance would defeat the purpose of the Ordinance. The Ordinance was enacted for the protection of certain classes of people.

Haji Hamid bin Ariffin v. Ahmad bin Mahmud [1976] 2 MLJ 79

A Malay and a registered proprietor of Malay Reservation land sold the land to a Siamese lady. Subsequently, the Siamese lady who had since died also sold the land to the plaintiffs who are Malays. The land remained registered in Mahmuds name, who had since died. The plaintiffs as administrators of the Siamese ladys estate sued the administrator of Mahmuds estate for specific performance. The issue in the Federal Court was whether the first sale by Mahmud to the Siamese lady was void. HELD: By virtue of s.6(2) of the Kedah Malay Reservation Enactment (No. 63) the purported sale was void ab initio and it could not be enforced by the purchase nor could the purported purchase pass a good title to another even if he be Malay.

 In the instant appeal, the alleged sale happened in 1935. "Purchase price" was paid, possession was given. Both parties had long died. No attempt whatsoever was made for Tan Tai Tip to be issued with a certificate of the Governor-in-Council. In the circumstance, Federal Court Judges unable to see how the learned trial judge could hold the sale to be conditional. On this point, the Court of Appeal is right when it says categorically: This is a case of an outright sale...

 It is not necessary to consider whether the provision of s 3 of the Ordinance allows a conditional sale. However, serious thought should be given to the issue, because, knowing what is happening on the ground, the Malacca Customary land, as well as the Malay reserve lands may be no more than a beautiful but empty package while the contents are enjoyed by people who are prohibited by law to own. In the other words the registered proprietor will be left with the liability to pay quit rent, and may be, in tort as the land owner.

 The compensation in question is for 'tuan tanah'. The basis of the claim by the plaintiffs is that Tan Tai Tip had purchased the land. The plaintiffs cannot remove themselves from the alleged purchase as the reason that gives them the right to the land which is now represented by the compensation money. To hold that the plaintiffs are entitled to the compensation is to recognize Tan Tai Tip's ownership right, if not in law, in equity, which in turn means recognizing the 'sale' as having passed the interest in the land to a purchaser. To say that, if the property passes even the sale is invalid and unenforceable, it will defeat completely the purpose of the creation of MCL and Malay reserve lands. So, Federal Court Judges were answering the first question in the affirmative. Meaning that, the court still applies the prohibition in the Malacca Lands Customary Rights Ordinance in order to decide to whom the compensation shall be paid.

Second Issue Can the doctrine of fairness be used to override principles of law and the Ordinance in this case?

 Regarding to this question posed to the Federal Court, the Court quite correctly issued a timely reminder to litigants that in adopting equitable rules one must have regard and are subjected to two conditions laid down in Section 3(1) of Civil Law Act that stated;
(a)Save so far as other provision has been made or may hereafter be made by or may hereafter be made by any written law in force in Malaysia. (b) Provided always that the said common law, rules of equity and statutes of general application shall be applied so far only as the circumstances of the State of Malaysia and their respective inhabitance permit and subject to such qualifications ad local circumstances render necessary.

 Under Section 3(1)(a) of Civil Law Act 1956, the section actually explained that before applying any English rules of equity, first thing that need to take into the consideration is whether there is in existence any written law in Malaysia that may be contravene in a particular cases. Even if there is no such law, its application is still subject to proviso to Section 3(1) of the Act that provided the said common law, rules of equity and statutes of general application shall be applied so far as the circumstances of the State of Malaysia and their respective inhabitants permit and subject to such qualifications as local circumstances render necessary. The Ordinance and the Malay Reserve Enactment are laws made with a definite objective.

 The Federal Court held that, equitable rules have been applied without considering the restrictions imposed by Statute which is Civil Law Act 1956. The application of the rules has, consciously or unconsciously been extended to situations beyond the original or earlier situations which will leads to greater injustice
By applying to the case, both the registered proprietor and purchaser had committed an illegal act by contravening the Ordinance. Equity should not be applied to defeat the purpose of a written law. The Federal Court held that what is fair and just can only be arrived at within the confines of the law.

JUDGEMENT

 In this case, land is subject to the Ordinance. The sale thereof to persons unqualified under the Ordinance is not valid. Such a purchaser does not become a landholder under the Ordinance and is not competent to acquire title to the said lands. The alleged purchase by Tan Tai Tip (also not Malay and not a certificated person) must be held to be invalid. So, Federal Court Judges were answering the first question in the affirmative.

 It is true that the courts, through its decisions try to arrive at 'fair and just' results. But it can only do so within the confines of the law, not through some general and vague sense of fairness and justice. Our British colonial masters saw it necessary to make laws to protect the ownership of a class of persons over some areas of land. Laws were thus enacted as a matter of policy. These laws are preserved by the Constitution. If at all these laws need to be amended or repealed, this should, as a matter of policy, be done by the legislature, not by the courts through their decisions. This court thus answered the second question in the negative.

COMMENT AND ANALYSIS

Comments and Analysis of the Case

(1) Federal Court made a good judgment on the issue of who was the real owner of the MCL land as the occupants who were the Respondent have been compensated separately. Thus, the fact that the learned High Court Judge having allowed the respondents to rest their case on exclusive possession instead on the ground that even if the sale was illegal and void, the Appellant still entitled to compensation because the contract of the sale had been fully executed, but did not decide on it, makes no difference. The High Court and the Court of Appeal have missed this essential point. Federal Court made good decision as the High Court and Court of Appeal did not specifically consider about the true owner of the land under Malacca Customary Rights Ordinance.

(2) We agreed with the judgment made by Federal Court in ignoring the application of the rule of equity in this case.

The first reason for the Court take as consideration for ignoring the rule can be seen under Section 3 of Civil Law Act 1956. Under this Section, it clearly stated that the common law can only be applied if there is lacuna in our Malaysian statutes. Rule of equity is under common law thus it falls under Section 3(1) of Civil Law Act 1956 before being applied. Even there is no such law, the application of such rules is subject to the proviso that the rules only can be applied so far as the circumstances permit or render necessary. In this case, the Court can refer to Ordinance and Malay Reserve Enactment in order to make decision. As to it, the equity cannot overrule the law because according to maxim of equity, equity actually must work side by side with the law.

 The second reason for the ignorance of the rule of equity under this case is because both parties in this case did illegal act as they entered into illegal transaction to purchase and sell the MCL land.
According to this case, Tan Tai Tip who was the deceased purchased the land from the executor but he did not fulfill the requirement under Section 3 of the Malacca Lands Customary Law Ordinance as he was not Malay domiciled in Malacca and he also did not hold the certificate that qualify him to hold such land. At the same time, the executor (the deceased) still sale the land to Tan Tai Tip. In this case, the Court had to deal with acts of person who contravene to the written law and the rule of equity cannot be used as person who seek for equity must come with clean hand. Hence, both parties did the transaction of the land illegally that actually did not fulfill the maxim under rule of equity itself.

(3) The Ordinance; Malacca Lands Customary Right Ordinance 1886 already replaced by National Land Code (Penang and Malacca Titles) Act 1963. Based on our opinion, if the case happen in recent time and the court may take into consideration to use the Act rather than the Ordinance, the Court actually has right not to compensate both parties. The State Authority also has power to forfeit the MLC land as both parties failed to follow the provision due to the illegal transaction that both have been made.

(4) Although the Court gave judgment in favour of the Appellant, the Court still needs to give adequate remedy to the Respondent. This is because the Respondent already possessed the land for more than 40 years. If the Court did not gives sufficient remedy to the Respondent, it will make them suffer loss and detriment as they possessed the land, build houses, planting padi, vegetables and rearing the cattle. As a result, Respondent will suffer substantial damages when the judge gave of the land to the Appellant.

(5) What we can see is whatever happened and when the dispute arise regarding to the land which stated under land reservation value, the original owner will get the benefit as the ownership will still remain on him.

In short, if the dispute arise under customary land, the judgment of the court will most probably be in favour of the registered proprietor. It is clear that the Torrens System applied in Malaysia will only protect the registered interest.
Thus, if a person has knowledge about the advantage on the right that he hold under this type of land, there is possibility for the owner to misuse the power in order to get benefit. This is because the registered owner of the land knows that whenever the dispute arise between him and disqualify purchaser, the judgment will still be on his side.

THANK YOU FOR YOUR CO-OPERATION=)