10 Land Law INTRODUCTION DECISIONS AND COMMENTS DEALINGS (a) Charges — form 16D or form 16E Overseas Union Finance Ltd v Lim Joo Chong (b) Leases — effect of non-registration (i) Ho Ying Chye v Teh Cheong Huat (ii), Woo Yew Chee v Yong Yong Hoo FC (c) Lien — a right to it in equity (i) Zeno Ltd v Prefabricated Construction Co (Malaya) Ltd & Anor (ii), Mercantile Bank Ltd v The Official Assignee of the Property of How Han Teh CAVEATS (a) Renewal/Revival Lim Kiat Moy v Hamzah (b) Right under a contract of sale caveatable Macon Engineers Sdn Bhd v Goh Hooi Yin FC (c) Removal Nanyang Development (1966) Sdn Bhd vy How Swee Poh INDEFEASIBILITY OF TITLE PJTV Denson (M) Sdn Bhd & Ors v Roxy (Malaysia) Sdn Bhd FC LAND USE AND PLANNING (a) Imposition of conditions on conversion Pengarah Tanah dan Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd FC (b) Need for imposition of category of land use Land Executive Committee of Federal Territory v Syarikat Harper Gilfillan Bhd FC (c) Breach of condition Collector of Land Revenue, Johor Bahru v South Malaysia Industries Bhd FC MALay RESERVATION LAND (a) Revocation Mohamed Isa & Ors v Abdul Karim & Ors LAND ACQUISITION (a) Potential development value Bukit Rajah Rubber Co Ltd v Collector of Land Revenue, Klang This Introduction and Comments to this Chapter are contributed by Mr Teo Keang Sood LLB (Malaya) LLM (Harvard) Advocate and Solicitor Lecturer, Faculty of Law University of Malaya 631LAND LAW (b) Extension of time to submit claim for compensation Highlands Malaya Plantations Ltd v Collector of Land Revenue, Klang SALE OF LAND (a) Equitable right to a legal title (i) Kersah La’usin v Sikin Menan (ii), Munah v Fatimah (iii), Chik binti Abdullah v Itam binti Saad FC (b) Squatter rights under the National Land Code Sidek bin Haji Muhamad & 461 Ors v The Government of the State of Perak & Ors FC INTRODUCTION In the area of land law, one can readily say that the judgments of His Royal Highness, Sultan Azlan Shah have undoubtedly thrown consider- able light on some of the more obscure and ambiguous aspects of land law. In Kersah La’usin v Sikin Menan'; Munah v Fatimah? and Chik binti Abdullah v Itam binti Saad’, His Royal Highness relied on the principle in Williams v Greatrex' to enable the equitable estate of the purchaser in each case to be clothed with a legal title through the equitable device of specific performance. This was so despite the failure on the part of the purchasers in not proceeding at once for specific performance. In Bukit Rajah Rubber Co Ltd v Collector of Land Revenue, Klang* Raja Azlan Shah (as he then was) emphasized the importance of valuing the land to be acquired not only with reference to its condition at the time of acquisition but also with reference to its potential development value. This would, amongst others, enable one to arrive at a fair market value of the land to be acquired. However, as was held in Khoo Peng Loong & Ors v Superintendent of Lands and Surveys, Third Division® and Collector of Land Revenue, Kuantan vy Noor Chahaya binte Abdul Majid" the land must not be valued by taking into consideration any advantage which would accrue by reason of the proposed use to which the acquired land would be put. Paragraph 3(e) of the First Schedule to the Land Acquisition Act, 1960 expressly prohibits any such advantage to be taken into account as the land is to be valued as though it has not already been built upon. His Royal Highness’ defence of the property rights of private individuals against the arbitrary exercise by a public authority such as *[1966] 2 MLJ 20. *{1968] 1 MLJ 4. s[1974] 1 MIJ 221. *{1957] 1 WLR 31. 5[1968] 1 MLj 176. °[1966] 2 MLJ 156. *{1979] 1 MLJ 180. 632INTRODUCTION the State Authority of its powers may be seen in the case of Pengarah Tanah dan Galian, Wilayah Persekutuan v Sri Lempah Enterprise Sdn Bhd.8 This case throws considerable light on the scope and extent of the State Authority’s power to impose such conditions which it deems fit in matters pertaining to land use and planning, The decision of Raja Azan Shah Ag CJ (as he then was) serves as a warning to the State Authority that the exercise of its discretion is not unfe:tered but is instead subject to scrutiny and control by the courts. Following from the decision of Raja Azlan Shah Ag CJ (as he then was), any condition which the State Authority secks to impose under section 124(5)(c) of the National Land Code,1965 in an application for conversion of land use, must be reasonably related to the permitted development of the land in question. The imposition of a condition requiring the surrender of a title in perpetuity in return for a leasehold title is, accordingly, an unreason- able and arbitrary exercise of the State Authority’s power to impose such conditions as it may think fit. With regard to caveats, the case of Macon Engineers Sdn Bhd v Goh Hooi Yin® is authority for the proposition that a purchaser of land under a contract of sale acquires a contractual right in respect of the land which is capable of being protected by the entry of a private caveat in respect of the said land. The proposition that a purchaser of land under acontract of sale, which has yet to be registered, acquires a right which rests in contract may be seen in the earlier decided cases of Loke Yew v Port Swettenham Rubber Co, Haji Abdul Rahman & Ors v Mohamed Hassan" and Bachan Singhy Mahinder Kaur & Ors."? Such a contractual right is caveatable under section $23(1) of the National Land Code, 1965, if, as was decided in Inter-Continental Mining Co Sdn Bhd v Societe Des Etains De Bayas Tudjuh"®, it represents a registrable interest in respect of which a right in equity founded on specific performance can be ordered. The test is, accordingly, not whether one would succeed in an action for specific performance. The position of unregistered leases under the National Land Code, 1965 is that they have effect in contract. This is in line with a series of decided cases such as Yong Tong Hong v Siew Soon Wah", Inter- Continental Mining Co Sdn Bhd v Societe des Etains de Bayas Tudjuh"® and Woo Yew Chee v Yong Yong Hoo' and section 206(3) of the National Land Code, 1965 itself. The case of Ho Ying Chyev Teh Cheong Huat”, decided prior to these cases and before the coming into force of the National Land Code, 1965, is accordingly no longer good authority. *{1979] 1 MLJ 135. °[1976] 2 MLJ 53 191913] AC 491 M[1917] AC 209. [1956] MLJ 37. 15{1974] 1 MLJ 145. (1973) 1 MIJ 133. [1974] MIJ 145. 1[1979] 1 MIJ 131. [1965] 2 ML 261. 633LAND LAW Under the National Land Code, 19 alienated land is generally subject to one of the three recognised categories of land use, namely, agriculture, building and industry, as is provided for under section (1) thereof. However, in respect of lands alienated before the commencement of the said Code, there is no necessity for a category of land use to be imposed in respect of such lands. This is so if, under section 52(5) of the said Code, the State Authority is of the opinion that the use of the land in question could be more appropriately controlled by the imposition of express conditions under section 120 of the said Code. The decision in Land Executive Committee of Federal Territory v Syarikat Harper Gilfillan Berhad'* may not, accordingly, be supported in the light of the relevant provision of the 1965 Code stated above. The reliance by Raja Azlan Shah Ag LP (as he then was) on the Federal Court case of Collector of Land Revenue, Federal Territory v Garden City Development Berhad" for the proposition that it is necessary for the stered proprietor to apply for the imposition of a category of land Iso cannot be supported in view of the fact that this holding of the Federal Court was overruled by the Privy Council on appeal. It is interesting to note that the express condition ‘fruit trees’ was endorsed. on the title to the land in question thus implying that the use of the land was to be regulated by the imposition of express condition under section 52(5) of the National Land Code, 1965 rather than by one of the three recognised categories of land use provided for under the National Land Code, 1965. Accordingly, the registered proprietor should instead be required to apply under section 124(1)(c) of the National Land Code, 1965 for the amendment of the existing express condition endorsed on the title to the land to one that is more appropriate. DECISIONS AND COMMENTS DEALINGS (a) Charges — form 16D or form 16E Overseas Union Finance Ltd v Lim Joo Chong [1971] 2 MUJ 124 High Court, Kuala Lumpur Cases referred to:~ (1) Tan Hood Keng v Arunasalam Chetty OS No 38 of 1909 (unreported). (2) Re Dyson’s Trade Mark (1891) 65 LT 488. (3) In re Fawsitt 30 Ch D 231. 18[1981] 1 MLJ 234. 19[1979] 1 MLJ 223. 634DEALINGS (A) Sherwood v Deeley (1981) TLR 419. (3) Mary Michael v United Malayan Banking Corporation Bhd. [1971] 1 MLJ 172. RAJA AZLAN SHAH J: This is an application by way of summons-in- chambers for an order that the applicant/chargee may be at liberty to discontinue this action which they had started by way of originating summons (OS No 374/69). The undisputed facts of the case are as follows: The res- pondent/chargor borrowed a sum of $15,000 at an interest of 12% per annum from the applicant/chargee, the Overseas Union Finance Ltd, a licensed moneylender. Repayment of the loan was on demand but until demand the respondent/chargor is to pay the principal sum at a monthly instalment of $346.50. To secure the repayment of the loan the respondent/chargor charged his land at No 14-C, Jalan Raja Laut, Kuala Lumpur to the applicant/chargee. The charge was duly registered under presentation No 374 Vol CXCVI, Folio 142. A memorandum of agreement for the loan was drawn up pursuant to section 16 of the Moneylenders Ordinance, 1951 and signed by the parties on 21st January 1969. A memorandum of charge was also drawn up and signed by the parties on the same day. On 19th August 1969 the applicant/chargee delivered a statutory notice of default under Form 16D of the National Land Code to the respondent/chargor reminding him that he has failed to pay the total sum of $1,386 being the sum for four (4) monthly instalments and that if he fails to remedy the breach within the time stipulated they (the applicant/chargee) will proceed to apply for an order for sale. This notice was not complied with. On the 3rd December 1969 the applicant/chargee filed an application by originating summons for an order that the said land be sold by public auction under the National Land Code to satisfy the total sum due to the chargee at the date of the order with interest on the principal sum due at 12% per annum till the time of sale which is to be specified. In his affidavit dated 15th February 1970 the respondent/chargor opposed this application on. three grounds: (i) That the contract was unenforceable as the memorandum of agreement did not comply with section 16 of the Moneylenders Ordinance, 1951 in that the date of the loan was not correctly stated and the terms of the loan were not correctly set out. (ii) That the charge was void because being an executor-cum-trustee he did not have power either under the will or the Trustee Ordinance, 1949 to charge the land, (iii) The notice of default was in the wrong form and therefore not an effective notice. He contends that it should be in Form 16E under section 255 and not Form 16D under section 254, After receiving the respondent/chargor’s affidavit the appli- cant/chargee sought to discontinue the action on the ground that even if the court were to grant an order for sale they, the applicant would find difficulty in selling the property it being a residence and in an area where the value has fallen. Again this application was opposed by the respondent/chargor on the grounds that an ori: 635LAND LAW mons cannot be discontinued and that the applicant/chargee knowing that they could not get the order for sale now tries to get an illegal charge on the land by discontinuing the action. I shall first consider the application for discontinuance. The respondent/chargor contends that an originating summons cannot be discontinued. The rules for discontinuance are contained in Order 26 of the Rules of the Supreme Court, 1957. Under rule 1 of the Order a plain- tiff may discontinue an action by notice in writing before defence or aft defence before taking any other proceeding in the action. At any later stage, leave to discontinue must be obtained. In Mallal’s Supreme Court Practice at p 324 the learned author states that the Order does not apply to an originating summons. As authority he cites the unreported case of Tan Hood Keng v Arunasalam Chetty which followed Re Dyson’s Trade Mark. With due respect to the learned author I do not think this is the correct statement of the rule. ‘Action’ under O 71 rule 1 sub-rule (1) mea a civil proceeding commenced by writ or in such other manner as is prescribed by these Rules, but does not include a criminal proceeding Under Order 55 rule 5A the method of proceeding prescribed for a sale etc., is by originating summons. Therefore an originating summons taken as of course under O 55 r 5A isa civil proceeding commenced ‘in such... manner (other than a writ) as is prescribed by these Rules...’, and consequently as falling within the definition of an action. (Re Faw- sit), Since by definition an originating summons in this case can properly be called an action, Order 26 rule 1 can be invoked to discontinue it. As for the statement in Mallal’s Supreme Court Practice | think it should not be taken at face value. It is regrettable that the case of Tan Hood Keng v Arunasalam Chetty is not available for closer scrutiny. The only alternative would be to examine the case of Re Dyson’s Trade Mark. North said: ‘I do not see how the rule (of discontinuance) applies to a case of which there cannot be a defence’. What exactly the learned judge meant when he said this is quite obscure. On this point I would also like to refer to the Annual Practice 1963 at page 592 where under the heading Order not applicable is stated ‘This order does not apply to an originating notice of motion (Re Dyson’s Trade Mark) nor it would seem to any case in which there cannot be a defence’. In my view ‘defence’ here should not be construed to mean a formal statement of defence as required under a writ of summons; rather it should be taken to mean any kind of defence. A further point to note is the fact that Re Dyson’s Trade Mark is a case of originating notice of motion while the present is an originating summons. While an originating summons can be heard either in open court or in chambers, an originating notice of motion is always heard in open court. This could be a distinguishing factor justifying me in not following the case. But clearly before the rules of discontinuance can be invoked there must be a defence (by writ or otherwise). A borrower may defend a proceeding brought by a moneylender on the ground inter alia that the 636DEALINGS note or memorandum is inaccurate in a material particular. ‘Material particular’ means that the note or memorandum must contain all the terms of the contract and in particular state the date on which the loan is made, the principal, the interest per centum per annum, in accordance with the Moneylenders Ordinance 1951. (See Atkin’s Court Forms , 2nd Fd Vol 27 pp 202-203). In the present. case the respondent/chargor contends that the contract is unenforceable because the memorandum of agreement does not comply with the Moneylenders Ordinance, 1951, in that the date of the loan in the memorandum is wrong and that the memorandum does not contain full terms of the agreement. Since an originating summons is an action coupled with the fact that the respondent has a defence, the rules of discontinuance can be invoked in this case. However, it is at my discretion whether I should allow a discont- inuance. Guidelines to the exercise of discretion can be found in the Annual Practice 1963 at page 593 under the heading Before Judgment which reads: Leave may be refused to a plaintiff to discontinue the action, if the plaintiff is not wholly dominis itis or if the defendant has by the proceedings obtained an advantage of which it does not seem just to deprive him. If the applicant here is dominis itis then leave to discontinue may be granted. If he is not, then it is unlikely that I would grant him leave to discontinue. I do not think that the applicant is wholly dominis litis. He cannot dispose of the case as he thinks fit or allow it to be dismissed or let judgment go by default. The parties have come to a stage where the respondent/chargor has gained an upper hand by an advantage in that he could find flaws in the applicant/chargee’s allegations namely the wrong dates in the memorandum etc. and the fact that the reason for wanting a discontinuance is not a very strong one. The respondent/chargor is not to be deprived of these advantages which have made him a well-matched adversary in the arena. Having considered all these points I am of the opinion that the application to discontinue should be dismissed. Ishall now go on to the merits of the case and consider the application for an order for sale. The respondent/chargov’s first ground of oppo- sition to this application is that the contract is unenforceable because of non-compliance with the Moneylenders Ordinance, 1951. The relevant part of section 16(1) of the Ordinance reads: No contract for the repayment by a borrower ... of money lent to him ... and no security given by the borrower ... in respect of any such contract, shall be enforceable unless a note or memorandum in writing of the contract ... be delivered to the borrower ... sefore the money is lent. And section 16(3) reads: The note or memorandum aforesaid shall contain all the terms of the contract and in particular shall show separately and distinctly, (a) the date of the loan, (b) the principal and (c) the rate of interest per centum 637LAND LAW per annum payable in respect of such loan or, where the interest is not expressed in terms of a rate per centum per annum, the amount of such interest. In his affidavit the respondent/chargor said that the date of the loan in the memorandum was wrong. Clause 2 of the memorandum state: The said principal sum shall be advanced on the 18th day of January 1969 after the memorandum has been signed by the parties hereto and a copy thereof has been delivered to the borrower. In this case the memorandum of agreement was signed and delivered on 21st January 1969 and not the 18th as stated in the memorandum. The respondent/chargor maintains that on the 18th there was no mem- orandum and so the statement that the loan took place on the 18th was wrong. On the other hand if it was said that the loan took place on some other date then the date stated in the memorandum was wrong. Furthermore the memorandum did not really set out the terms of the loan. The memorandum states that payment of the loan was to be made on the 18th but in actual fact the payment was made in various amounts on different dates subsequent to the signing on the 21st. On the 21st $8,000 was paid by cheque, $150 was deducted for solicitor’s fees in execution of the charge, stamps and registration, $1,500 was deducted for service charge for the loan. The balance, a sum of $5,350 was paid on the 23rd by cheque. This would also constitute a non-compliance of section 16(3) in that the terms are not fully set out. Therefore the memorandum does not contain all the terms of and the real date of the loan. Is this non-compliance sufficient to render the contract unenfor- ceable? Meston on Moneylending 5th Edn at pp 94-95 states: .. failure to observe the requirements contained in [section 16(3) i.c., date, amount, interest etc] will not necessarily render the contract unenforceable for the moneylender may make some slight error or omission which constitutes a variation from the requirements of the section. If the error or omission is material then the contract will be unenforceable but not otherwise. The materiality of any such variation is it is submitted a question of law for the judge. If the error or omission is calculated to mislead or tends to mislead them it is material and unenforceable. In Sherwood v Deeley two different dates appeared in two different places as a result of an accidental slip. The contract was held not to be vitiated. The present case can be distinguished from the last mentioned case. In this case unlike the other it could not possibly have been an accidental slip for it appears repeatedly in both memoranda. It is therefore in my opinion a material error which tends to mislead. The burden is always on the person seeking to enforce the contract to show that the requirements of the section have been fulfilled. Here the applicant has not discharged this burden. They have not replied to the respondent/chargor’s affidavit which alleges that they have not complied with the Ordinance. The contract is by reason of this non-compliance unenforceable. Respondent/chargor’s second contention is that the charge is void as 638DEALINGS he had no power to charge the land. The power of an executor to deal with property which he obtained under a will is defined by will and, being also the trustee, by the Trustee Ordinance, 1949. After examin- ing the will I am satisfied that neither the will nor the Trustee Ordinance confers power upon the respondent/chargor to charge the said land. As such the charge is void. It is regretted that the respondent/chargor having obtained a loan of a very substantial amount now need not pay up. This is indeed a lesson to be learnt by moneylenders in future to be more careful when lending money on a security and also to be sure that the Moneylenders Ordinance has been fully complied with. The Moneylenders Ordinance is calculated to protect borrowers from unscrupulous moneylenders but careless moneylenders are also caught by it. Thirdly the respondent/chargor contends that the notice under Form 16D of the National Land Code is in the wrong form and as such the notice is defective. This point I need only deal with cursorily because the point has been dealt with fully in an earlier case of Mary Michael v United Malayan Banking Corporation Bhd®. Form 16D can be used for any charge, whereas Form 16Eis to be used specially where the principal sum is payable on demand. So that even where the principal sum is payable on demand Form 16D can still be used. And I quote relevant passages from the Federal Court in Mary Michael’s case. Per Azmi LP at page 172: It is to be observed that a notice in Form 16D applies to any charge so that it can validly be used even in the case of a charge where the principal sum is payable on demand, even though Form 16Eis specially designed for this, purpose. This would be particularly true of a charge where the principal sum bears interest and the chargor is in default of payment of interest as stipulated in the charge... whereas Form 16D can be used whether or not the principal sum is payable on demand, Form 16E can be used only if the principal sum is payable on demand. Per Ali at page 174: When a chargee issues a notice in Form 16D Ido not think it can possibly be objected to as was done in this case. A chargee entitled to ask for an order for sale under section 255 of the National Land Code to which Form 16E is applicable is not, I believe, precluded from proceeding under section 254 of the Code if he so chooses. ‘These passages are self-explanatory and I need elaborate no further. The consequence of this case would be that to be on the safe side Form 16D should always be used. For the sake of completeness I would like to consider whether this could have been properly a case under Form 16E though even if it is, a notice under Form 16D is not fatal to the case. For this purpose both the memoranda must be examined. Clause ‘ of the annexure to the memorandum of charge reads in part: . the repayment on demand of the sum of $15,000 (Dollars Fifteen 639LAND LAW ‘the principal sum’) together with per centum (12%) per annum... but. until such demand is made... the chargor shall pay the principal sum with thereon... by monthly instalments of dollars three hundred and x and cents fifty only ($346.50) Clause 4 of the memorandum of agreement reads in part: . and will agree to pay the said principal sum and the interest... by monthly instalments of $346.50 (dollars three hundred and forty-six and cents fifty only)... It is clear from these two clauses that the ment on demand is not only for the principal sum but of the interest as well. When the charges demanded payment of $1,386 it was for the principal sum plus interest for four monthly instalments. It is thus proper to use Form 16D. I therefore order the following: (i) That the application for order for sale be dismiss ‘That the applicant/chargee deliver up the note or memorandum to the spondent/chargor for cancellation. Gi) That within 14 days from today i.e., the date of the order the applicant/chargee deliver to the respondent/chargor’s solicitors the duplicate copy of the memorandum of the charge and all documents of title to the land. (iv) That within 14 days from today the applicant/chargee must execute a registrable memorandum of discharge, thereby discharging the Charge Present- ation No 574 Vol CXCVI Folio 142 against the whole of the land held under certificate of title No 25701 for Lot No 286 in the Town of Kuala Lumpur in the District of Kuala Lumpur and deliver the same to the respondent/chargor or his solicitors and failing that the senior assistant registrar of the High Court Kuala Lumpur be empowered to execute the memorandum of discharge for and on behalf of the applicant/chargee. -d with costs. (ii) Application dismissed. Ronald Yeo for the Applicant M Segaram for the Respondent. Notes (i) This case, in line with the Federal Court case of Jacob v Overseas Chinese Banking Corporation, Ipoh {1974] 2 MLJ 161 correctly held that a notice of default in Form 16D can be used for any charge, whereas a notice of default in Form 16E can only be used where the principal sum is payable on demand. It is also settled law that Form 16E can be used to recover also the interest which had become due and payable. (ii) The advantage of using Form 16E is that the chargee needs to wait only for a period of one month from the date the notice of default is served on the chargor before he can apply for an order for sale. Where Form 16D is used, there is a waiting period of two months 640DEALINGS before the chargee can apply for an order for sale of the land in question: see sections 254 and 255 of the National Land Code, 1965 respectively. (b) Leases — effect of non-registration (i) Ho Ying Chye v Teh Cheong Huat [1965] 2 MIJ 261 High Court, Kuala Lumpur Cases referred to:~ (1) Haji Abdul Rahman and others v Mahomed Hassan, [1917] AC 209; FMSLR 290, PC. (2) Margaret Chua v Ho Swee Kiew & Ors [1961] MIJ 173. (3) Doe d Price v Price (1832), 9 Bing 356. (4) Fox v Hunter-Paterson [1948] WN 399. Raja AZLAN SHAu J: In this case the plaintiff claims vacant possession from the defendant of the ground floor of premises known as No 5, Jalan Pasar Bharu, Kuala Lumpur (hereinafter referred to as the ‘said prem- ises’). It is agreed that the said premises was built in 1957 and is therefore outside the provisions of the Control of Rent Ordinance, 1956. In his statement of defence the defendant pleaded as follows: (The defendant contends and will contend that in view of the valuable consideration given to the previous owner it was agreed that his tenancy would not be disturbed. Gi) The defendant further contends and will contend that as he is a tenant under an unregistered agreement, he claims the protection of section 42(v) of the Land Code. The latter line of defence was abandoned in the course of the proceed- ings. However, there is an admission that the defendant is a monthly tenant of the plaintiff of the said premises at a rental of $150 per month and that the said tenancy was duly terminated by a notice to quit dated 20th December 1963 and served on the defendant the following day, which said notice expired on 31st January 1964 (paragraphs 2 and 3 of statement of defence). It is also admitted that in 1951 the Vui Shen Benevolent Association was the registered owner of the land on which the said premises stood. In 1957 the said association purported to grant a lease of the said premises to one Sze Hock Seng for a term of ten years at a rental of $150 per month with effect from Ist September 1957. The purported lease was not registered in the manner prescribed in section 116 of the Land Code and was therefore ineffectual to pass the interest in the said premises to the defendant under section 96 of the Land Code. 641LAND LAW The agreement (hereinafter referred to as the ‘said agreement’) recited that one Chin Tham Shin was the landlord of the said premises and one Sze Hock Seng was the tenant thereof. It went on: WIT rH that the Landlord hereby lets to the Tenant the ground floor of No 5 Jalan Pasar Bharu, Kuala Lumpur (hereinafter referred to as ‘the said ground floor’ for a period of ten (10) years from the Ist day of September 1957 at a rental of $150 (dollars one hundred and fifty only) per month payable in arrears on the last day of each month, the first of suich payments to be made on the last day of September 1957 and upon the following terms and conditions. here are various clauses inserted providing for non-interference from the landlord or those claiming under or in trust for him (clause 3); an undertaking to execute or cause to be executed a lease or sub-lease in favour of the defendant or his nominee upon the same terms and conditions (clause 4); a provision in favour of the tenant to transfer, assign, or sub-let (clause 5); provision for an option to extend the lease for another period of ten years (clause 6); a provision that the agree- ment shall be binding upon the parties hereto, their heirs, executors and assignees (clause 7). The defendant came into the picture some time in July 1958. This can be seen from the agreed bundle of documents produced by the defend- ant when on Ist July 1958 the defendant paid a sum of $300 as deposit in respect of rent for the said premises. From here it can be inferred that the said premises was assigned to the defendant. It was not registered and again this was ineffectual to pass the interest therein to the defendant. In consequence of the registration of the association being cancelled,the ownership of the said premises passed to the official assignee in May 1963. On 16th December 1963 the plaintiff bought the said premises and this was duly registered in accordance with the provision of registration under section 110 of the Land Code. On 20th December 1963 the plaintiff issued a notice to quit upon the defendant which expired on 31st January 1964. The defendant is still in pos- session. The plaintiff now claims vacant possession, double rent at $300 per month from Ist February 1964 to date of recovery of vacant possession, and costs. The said agreement was not in the form of Schedule XXII and therefore could not be and was not registered under section 116 of the Land Code. As such it was ineffectual to vest the interest in the said premises to the defendant under section 96 of the Land Code. It is therefore clear that il conferred no legal right in the said premises which remained after the transfer to the plaintiff duly registered as the unburdened property of the plaintiff. Be that as it may, in my opinion there is yet another problem to be solved, that is, whether there is a contract subsisting between the plaintiff and the defendant. In the case of Haji Abdul Rahman & Ors v Mahomed Hassan'” the transaction was one of conveyance in security and not of transfer with appended pactum de retrovendendo, and therefore was not caught within the provisions of the law requiring registration: see sections 4 642DEALINGS and 14 of the (Selangor) Registration of Titles Regulation, 1891. It was held that the agreement was valueless as a transfer or burdening instrument, but it was a good contract. Lord Dunedin in the course of his judgment said: But when that is said section 4 has no further application. It does not profess to prohibit and strike at contracts in reference to land, provided that such contracts cannot be construed as attempting to transfer transmit, mortgage. charge, or otherwise deal with the land itself. In other words, it is contracts or conveyances which, but for the section, might be held to create real rights in a party tothe contract or conveyance which alone are struck at. With regard to the agreement, his Lordship had this to say: It is an agreement on the part of the defendant to transfer to plaintiff the land upon a certain contingency happening — in other words, an executory agreement. It is in fact an agreement to do something in the way sanctioned by the law. It is not an attempt to transfer, but a conditional promise to transfer. There are other cases which have held that although the transfer of land or any interest therein would be ineffectual to pass the legal estate, the question arises as to whether there would be an enforceable contract. I think it would be sufficient if I would only refer to the Court of Appeal case of Margaret Chua v Ho Swee Kiew & Ors where some of the English and local authorities were neatly considered by Thomas CJ (as he then was). In the course of his judgment, his Lordship, agreeing with the learned trial judge, said: .. that although 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. And at page 176 his Lordship said: ‘There is, however, a written contract and in my view it is a binding contract. In that case the agreement was a binding contract dealing with the loan by the respondent to the appellant (registered proprietor) and obliging the latter to grant the former a lease of the land in question for 25 years. In the light of these authorities | must consider whether the contract under consideration is an enforceable contract. Defence counsel argued that this court has to look at the contract. He contended that in view of the valuable consideration given to the previous owner it was agreed that the defendant’s tenancy would not be disturbed. For my part, I think learned counsel is putting the cart before the horse. The proper question for this court at this point would be to consider whether on the proper construction of the said agreement it was an attempt to pass the interest in the said premises to the defendant. If that was so, it would still be caught by the provisions of the Land Code requiring registration. Reading the agreement as a whole, I would not hesitate to 643LAND LAW come to the conclusion that the said agreement was indeed an attempt to pass sich interest in the said premises to the defendant and is therefore not enforceable. The present case is with a difference and can be distinguished from the Privy Council case of Haji Abdul Rahman v Mahomed Hassan and the Court of Appeal case of Magaret Chua v Ho Swee Kiew & Ors. In both of these cases the agreements were held to be enforceable on the ground that they were not construed as attempts to pass the lands or interests therein but were mere conveyances for loans on the security of the lands. Accordingly, the agreement cannot be regarded as an agreement for a lease carrying with it an equitable interest in the said premises. That being the case, the final question to be asked is what kind of interest does the defendant possess, and how can such interest be determined? 1 would quote a passage from the 26th edition of Woodfall on Landlord and Tenant at page 308, paragraph 741, which I think bears some relevance for our present purpose. It states as follows: A legal estate of freehold cannot be created orally or by mere written agreement (not under seal): a person holding under such an agreement is, subject to any equitable right he may have, a tenant at will. Following the principle of law as stated in the above passage, I now hold that the defendant has merely a tenancy at will and such tenancy can be determined by a demand for possession. As was stated by Tindal CJ in Doe d price v Price® which case was referred to with approval by Bir kett J in Fox v Hunter-Paterson: anything which amounts to a demand for possession... is sufficient to indicate the determination of the landlord’s will, I would therefore hold that the notice to quit dated 20th December 1963 is a sufficient demand for possession so as to terminate the defendant’s tenancy. Alternatively, it may be observed that the defendant has admitted that he was a monthly tenant and therefore the plaintiff’s notice to quit dated 20th December 1963, terminating the tenancy on 31st January 1964, would be an adequate notice. There will therefore be judgment for the plaintiff as prayed and costs. Claim allowed. Cheng Tin Pin for the Plaintiff. M Edgar for the Defendant. Note This case is no longer authority for the proposition that an agreement for a purported lease, though not registered, cannot take effect as a contract. Section 206(3) of the National Land Code, 1965 clearly provides for the enforceability of the agreement as a contract. It is also to be noted that this case is not in line with the Federal Court decision in 644LAND LAW Yong Tong Hong v Siew Soon Wah [1971] 2 MIJ 105 (affirmed by the Privy Council [1973]1 MIJ 133. (ii) Woo Yew Chee v Yong Yong Hoo 11979] I MLJ 131 Federal Court, Kuala Lumpur Coram: Raja Azian Shah Ag CJ (Malaya), Wan Suleiman and Syed Othman EJ Cases referred to :~ (1) Rede v Farr 105 ER 1188, 1189. (2) Abouloff v Oppenheimer (1882) 10 QBD 295, 203. (3) Gallie v Lee [1969] 1 All ER 1062, 1081 (4) Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513. (5) Chin See Lian v Ng Wan Pit (1973] 1 MLJ 115. (6) Marchant v Charters {19771 3 All ER 918, 922. (7) Barnes v Barratt {1970} 2 QB 657,669. (8) Odhermaly Tan Cheng Lock and Estate and Trust Agencies (1927) Ltd & Anor (19531 MI 43. (9) Somma v Hazethurst (1978] NIJ 46: (10) Richard Evans & Co Lid v Astley [1911] AC 674, 687. (11) Haji Abdul Rahman v Mohamed Hassan [1917] AC 209. (12) Lin Nyuk Chan v Wong Sz Tsin [1964] MJ 20C. (13) Yong Tong Hong v Siew Soon Wah 1971] 2 MJ 105. (14) Inter-Continental Mining Co Sdn Bhd v Societe des Etains de Bayas Tudjuh (19741 1 ‘MLJ 145. (15) Parker v Taswell (1858) 2 De G & J 559,571 (16) Steadman v Steadman [1974] 2 All ER 977. (17) Lloyd v Cook [1929] 1 KB 103, 148, RAJA AZLAN SHAH Ag CJ (MALAya): 27 Birch Road, Seremban is an ordinary one-storey shop-house. It was built before 1948 and therefore subject to the Control of Rent Act. Prior to 1962 the appellant’s father was the tenant of the whole shop-house. He carried on the family business dealing in textile and cosmetics under the style of Kwong Fatt on the ground floor. The family lived on the first floor. In 1962 the appellant and the father jointly bought the said shop. They continued with the family business as before. On July 27, 1968 he entered into a written agreement with the respondent allowing the latter to occupy the front left one-half portion measuring 40 ft. in length and a middle portion measuring 5'/, ft by 18 ft, both on the ground floor, for a period of 10 years from September 15, 1968 at a monthly rent of $170 payable in advance. It was also agreed that the respondent should share with the appellant and his family the use of the kitchen, bathroom and toilet which were situated at the back of the ground floor. For a while all went well. The parties were on good terms. Although the key to the front door was always kept by the appellant, he was always ready and willing to open it for the respondent and his employees whenever required to do so. The respondent alleged that he was entitled 645under the terms of the agreeme: f keys, but that was denied by the appellant. He had or urned down. The issue seemed not to be important then. He was allowed under the terms of the agreement to build two cubicles and doors to the middle portion for the purpose of keeping, patent medicines and Chinese drugs and to fix a wash basin in one of the cubicles. Rents were paid and receipts were issued and that was so even after 1 Trouble started in April 1972 when the appellant installed a cup- board right across the common passage-way causing a partition of the ground floor, and thus obstructing the said passage-way. The respond- ent objected to the intrusion and on April 15, 1972 wrote a letter asking the appellant to remove it. Old matters were then brought up. The respondent pursued his request for a set of keys to the front door otherwise he said he would install his own lock. The appellant replied saying he put up the partition because he had been losing stocks from his shop. He accused the respondent of committing breaches of the tenancy agreement, e.g., failing to pay rent punctually, committing acts of nuisance in allowing his employees to sleep on the premises and allowing them to practise karate at night. On June 5, 1972, the respondent demanded the return of $15,000 “tea-money’ which he said he paid the appellant as a condition of the tenancy agreement. He further accused the appellant with installing more cupboards on June 4, thus partitioning the shop further, and causing further inconvenience and annoyance. On June 15, 1972 the respondent filed the present suit claiming for the return of the said $15,000 and for an order that the appellant deliver to him a set of keys to the main door of the premises. The appellant counter-claimed for possession of the premises alleging breaches of the tenancy agreement. In an amended defence and counter-claim, he charged the respondent with installing separate electricity and water meters and a separate lock to the front door. His argument was based on three main grounds. First, it was said that the agreement was only a sharing arrangement under possessory licence of the sub-let portion, the kitchen, bathroom and toilet, plus the electricity and water meters, and as the respondent was never allowed exclusive occupation of any part of the said premises, the appellant throughout having the key to the main door, whereby he had dominion and control of the premises sub-let, the Control of Rent Act, 1966 had no applic- ation, Secondly, it was said that the said licence was void under section 222(4) of the National Land Code owing to non-registration and lack of identification. Thirdly, it was submitted that the Rent Act did not apply as the premises had become de-controlled when the appellant and his father purchased it in 1962. The learned judge held that the respondent had proved his claim against the appellant and ordered him to return the $15,000. His reasons were as follows: Thave come to the conclusion that the plaintiff has succeeded in proving his case against the defendant. The evidence adduced on behalf of the 646DEALINGS plaintiff had a ring of truth and I accepted it. In support of his testimony that he had given $15,000 as tea-money to the defendant the plaintiff produced three cheques. The first was dated July 26, 1968 a day before the tenancy agreement was signed. An endorsement on the reverse of this cheque is not wholly legible but two words could be made out — Woo Yew. The defendant’s name is Woo Yew Chee. | accepted the evidence of PW4 Loo Chin Loo who had introduced the plaintiff to the defendant. This witness had attended three or four meetings between the parties and the sum of tea-money was discussed and the amount fixed at $15,000. I have no reason to disbelieve any of the plaintiff's witnesses and accepted their evidence as true. On the other hand the evidence adduced on behalf of the defendant was in my view not altogether true and I did not accept the defendant’s denials that he had received the $15,000 as tea-money. In cross- examination he admitted that the plaintiéf had offered a cheque for $5,000 but he said that he had not accepted the money. He said he refused to accept it because the plaintiff had told him that the money was from an unknown source and he did not know for wkat purpose the plaintiff had offered the $5,000 and he refused to accept the cheque. This in my view rather tends to give credence to the evidence of the plaintiff that he had given a $5,000 cheque a day before the tenancy agreement was signed and the other cheques amounting to $15,000. The reasons given by the defendant as to why he had not accepted the $5,000 cheque do not appear to be sound and I believe that in all probability he did accept this cheque as well as the remaining sums totalling $15,000. ‘The learned judge also held that the intention of the parties was to set up a monthly tenancy and not a sharing arrangement or occupation by possessory licence. He added: The parties are described in the agreement as sub-tenant and chief tenant, the ‘tenancy ’ is for a term not exceeding 10 years and rent of the ‘demised premises’ is $170 per month. In his evidence in court the plaintiff made no mention of any sharing arrangements of occupation by possessory licence. “I entered into a tenancy agreement with him (plaintif) on July 27, 1968” is what he said about his relationship with the defendant in respect of the premises. The prayer for delivery of a set of keys was not pursued at the trial and therefore no order was made on it. The learned judge found no evidence to support the allegation that the respondent had committed breaches of some of the terms of the agreement. He therefore dismissed both the defence and the counter-claim. I agree. In the absence of solid evidence, it strains credulity to suggest that the respondent was at fault. In my opinion it was the appellant who was the author of the trouble in putting up the ‘Berlin Wall’. I do not think that this court should assist him who had shown prima facie to have trodden roughshod over the respondent’s rights. It is a universal principle of law that the court would not allow a party to take advantage of his own wrong: see Rede v Farr, This principle was in the early cases applied to grants of leasehold interest where a lessee sought to take advantage of his own breach of covenant by calling into operation a clause, which rendered the lease void in such an event. This principle has been extended to 647LAND LAW contracts generally: see Abouloff v Oppenheimer; Gallie v Lee”, However, I must express my disappointment that the two remaining questions raised by the appellant were not considered by the learned judge, viz, whether the purported licence was void because it did not comply with the provisions of the National Land Code and whether the premises became de-controlled when the appellant and his father purchased the whole of the shop-house in 19 Inow turn to the crux of the matter: was the transaction a licence or a tenancy? What is the test to be applied? It is now well known that the law will always look beyond the terminology of the agreement to the actual facts of the situation: see Addiscombe Garden Estates Ltd v Crabbe. The reason is because of the number of sham agreements purporting to create no more than mere licences which are designed to circumvent the protective provisions of the Control of Rent Act. It is no longer a question of words, but substance. It is no longer a question whether the occupation is permanent or temporary. All these are factors which may be relevant in arriving at a decision whether a particular transaction is a licence or a tenancy but none of them is conclusive. The ultimate test is the nature and quality of the occupancy: whether it is intended that the occupier should have a stake in the premises sub-let or whether he should have only a personal privilege. Mohamed Azmi J applied this test in Chin See Lian v Ng Wan Pit.® That seems to me to be the correct principle, and it is entirely in accordance with the view taken by Lord Denning MR in Marchant v Charters: It does not depend on whether he or she has exclusive possession or not. It does not depend on whether the room is furnished or not, It does not depend on whether the occupation is permanent or temporary. It does not depend on the label which the parties put on it, All these are factors which may influence the decision but none of them is conclusive. All the circumstances have to be worked out. Eventually the answer depends on the nature and quality of the occupancy. Was it intended that the occupier should have a stake in the room or did he have only permission for himself personally to occupy the room, whether under a contract or not, in which case he is a licensee? Applying this principle, I turn first to the agreement itself. The said agreement was executed at the office of an advocate and solicitor. The appellant was described as ‘the chief tenant’ and the respondent as ‘the subtenant’, although there was no clear evidence to show that appellant was such as that described in the document. There were various restrictions on the part of the sub-tenant notably clause 3(3) which expressly permitted the chief tenant to enter on the premises to inspect its condition; clause 3(4) which permitted the sub-ienant to assign, sub-let of part with possession of the demised premises with the written consent of the chief tenant; clause 3(5) which allowed any alteration or additions with written consent; clause 3(7) which restricted the sub- tenant to carry on the business of a Chinese druggist store only: clause 3(9) which prohibited against partitioning the demised premises so that the passage-way separating it from the landlord’s portion of the ground floor should remain free and accessible at all times to the parties, 648DEALINGS members of their families and invitees; clause 3(11) which restricted the use of the middle portion for storage purposes only and, perhaps most cogent of all, there was a term for termination of the tenancy upon breach of covenant, and for continuation of the tenancy on giving six months’ notice before expiry of the current tenancy. There was also a covenant for quiet and uninterrupted enjoyment. Those provisions seem to me to point to a tenancy. Looking at the indications in the terms of the agreement as a whole I find in fact that a relationship of landlord and tenant was intended. There were in this case some of those features present which in Addiscombe Garden Estates Ltd v Crabbe, ante, led the court to hold that the intention of the parties was to create a tenancy. In that case there was a clause expressly permitting the grantors to enter on the premises to inspect the plant which would have been unnecessary had they hada right to enter on the premises apart from the agreement. There was a covenant for quiet and uninterrupted enjoyment by the grantee, a covenant appropriate to a lease but not appropriate to a licence. There was also a term for re-entry upon breach of covenant, which is a term appropriate only toa tenancy. There was, further, a term against assignment, which is an element which may be taken into account when determining whether any particular agreement is a licence or a tenancy, because a tenancy involves an interest in land, and it is normally characteristic of that interest that it is assignable: see Barnes v Barratt”. Next it was said that this was a sharing arrangement only and nothing else. The respondent had no exclusive occupation of the portion sub-let because the key to the main door was always with the appellant, indicating that he had control and dominion of the premises sub-let. This contention is based on a false premise. Possession of keys of the premises is neither here nor there: see Odhermal v Tan Cheng Lock & Estate & Trust Agencies (1927) Ltd & Anor®, | think the respondent had exclusive possession. His evidence at the trial gives an indication: Q Could he (appellant) come and put his own goods in your (respondent’s) side? ‘A. No, that he could not. Q Could he use your portion for any purpose he wanted? A. He — he cannot. ‘That was not challenged. In any event exclusive possession is no longer a decisive test. That is an old law which is now gone. The nature and quality of the occupancy must be looked at with a view to determine its true character. In Somma v Hazelhursf® the court considered the terms of the agreement before it and concluded that whether or not an arrangement constitutes tenancy or licence is no longer a matter of exclusive possession, or even any of the traditional indicators of tenancy, but simply that of the intention of the parties. I think it is plain that in this case there was nothing in the evidence to negate and much which supported the view that there was a tenancy under the Control of Rent Act, 1966. It was then cogently submitted and contended that the learned judge 649LAND LAW erred in ordering the refund of the $15,000. Apart from vague and unreliable pieces of evidence, it was urged that the respondent had not proved that the appellant had cashed any of the alleged cheques given to him and further that the alleged signature of ‘Woo Yew’ on cheque Exhibit PIA was that of the appellant. In my opinion, the time-honoured question that I have to determine, and it is a question of law, is whether it was reasonably open to the learned judge on the evidence to find that the $15,000 tea-money was paid by the respondent to the appellant as a condition of the tenancy agreement. There can be least be no doubt that it was open to the learned judge to arrive at that finding, but the real difficulty is whether there was sufficient evidence to justify that finding. In a civil case one needs only circumstances raising a more probable inference in favour of what is alleged. An inference from an actual fact that is proved is just as much part of the evidence as the fact itself. Where direct proof is not available it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference; they must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is a mere matter of conjecture: see Richard Evans & Co Ltd v Astley“, By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood. It is to be noted that once the right principle has been applied the appellate court has said over and over again that this type of case becomes a matter of fact for the learned trial judge. I should think that applying these principles to the case before us, inferences sufficiently appeared from the circumstances to which the learned judge had referred that made it at least more probable than not that $15,000 tea~-money was demanded and received by the appellant. Next it was said in somewhat general terms that the agreement was void for lack of registration and identification. Section 222(4) of the National Land Code was cited in support of the latter proposition. The sub-section reads as follows: (4) Every such sub-lease shall be granted by an instrument in Form 15B; and in any case where the sub-lease relates to a part only of the land comprised in the grantor’s lease or sub-lease, there shall be attached to the instrument a plan and description sufficient to enable the part to be accurately; identified. What the argument boils down to is that just because the suh-lease did not comply with the provisions of section 222(4) of the National Land Code the said lease was void. I think that argument is without merit. We have heard that line of argument before. It was raised and answered in the following cases; in Haji Abdul Rahman v Mohamed Hassan” the Judicial Committee of the Privy Council held that an agreement, not in registrable form, to transfer back certain land upon a certain contin- gency happening, while useless as a transfer or burdening instrument, was good as a contract; in Lin Nyuk Chan v Wang Sz Tsin‘® this court held that failure to comply with the registration provisions of section 88 650DEALINGS of the Sabah Land Ordinance did not render the agreement for a lease invalid and unenforceable; in Yong Tong Hong v Siew Soon Wah this court held that a non-registration 30 year lease was treated as a specifically enforceable agreement for a lease; in Inter-Continental Mining Co Sdn Bhd v Societe des Estains de Bayas Tudjuh.“ this court again held that a purported sub-lease not in statutory form was good as an agreement for a sub-lease and specifically enforced it. In all these cases equity intervened and treated an imperfect lease as an agreement for a lease provided it is otherwise valid and enforceable. In the present case, by the doctrine of equitable intervention the purported sub-lease would be treated as an agreement for a sub-lease and since it had been partly executed by possession having been taken under it, the equitable remedy of specific performance would be peculiarly appropriate. The facts of the present case make it more analogous to such cases as Parker v Taswell where the uncertainty of a contract was urged but where performance had been partly carried out. Lord Chelmsford had this to say when decreeing specific performance: It must be borne in mind that this agreement nas been partly executed by possession having been taken under it; and there are many authorities to shew that in such a case the court will strain its power to enforce a complete performance... The agreement, moreover, is admitted to be suf- ficiently certain as to all substantial parts of it, and the only portions of it to which uncertainty is attributed are subordinate matters, No authority has been cited to shew that in such a case specific performance may not be decreed. Steadman v Steadman® is a modern authority for the proposition that a grant of specific performance based on an act of part perfor- mance must be referrable to an existing contract between the parties. Viscount Dilhorne and Lord Simon at pages 992, 999 accepted the statement in Fry on Specific Performance, 6th ed (1921) page 278: The true principle however of the operation of acts of part performance seems only to require that the acts in question be such as must be referred to some contract, and may he referred to the alleged one; that they prove the existence of some contract and are consistent with the contract alleged. It remains to deal with the argument as to the effect of the purchase of the premises in 1962 when there was no provision of decontrol under the Control of Rent Ordinance, 1956 but became law as from January 1, 1967 when the Control of Rent Act, 1966 came into force. It was contended that the appellant and his father, the latter having been the tenant of their predecessor in title, ceased to be a tenant and became the owner by merger or surrender by operation of law. As such, the premises became decontrolled. It was then argued that as there was no tenancy of a controlled premises, the Control of Rent Act, 1966 did not apply. Lloyd v Cook""?and a series of related cases were cited in support of the argument. I have come to the conclusion that these cases, however, turned on the interpretation of a statute basically different from our own and particularly on the effect to be given to the decontrol 651LAND LAW provision for which there is no counterpart in the Control of Rent Ordinance, 1956. In my view, the general principle for Rent Act protection has always been that the subject-matter of protection must be ‘premise: a separate human dwelling or partly for let or sub-let human dwelling and partly for business. Once this is accepted as the true principle, then when the premises was purchased in 1962, it did not cease to be controlled premises, and that character did not change with the coming into force of the Control of Rent Act, 1966, for the simple reason that the right of property cannot be taken away by a repealing statute, unless there is an express or implied intention to do ction 23 of the Control of Rent Act, 1966 envisages is that on so. What s the happening of a certain event, the landlord may apply to the Rent Tribunal for a certificate and upon service of a copy of such certificate, the premises concerned shall cease forthwith to be controlled premises, That requirement was not fulfilled in the present case and that is only possible after January 1,1977 because the said Act has no retrospective effect. For the above reasons I would dismiss the appeal with costs. Wan Suleiman and Syed Othman FJ concurred. Appeal dismissed. Atma Singh Gill for the Appellant. James Fonniah for the Respondent. Note The decision in this case on the point of the enforceaility of the unregistered sub-lease as a contract is consistent with section 206(3) of the National Land Code, 1965. This decision also finds support in earlier authorities such as Margaret Chua v Ho Swee Kiew & Ors [1961] MLJ 178 and the Privy Council case of Yong Tong Hong v Siew Soon Wah [1973] 1 MLJ 133. In support of the decision that equity will intervene to treat an imperfect lease as an agreement for a lease, his Lordship relied, inter alia, on the English authorities of Parker v Taswell (1858) 2 De G&J 559 and Steadman v Steadman [1974] 2 AIlER 977 and had this to say at pp 184-135 of the instant case: In all these cases equity intervened and treated an imperfect lease as an agreement for a lease provided it is otherwise valid and enforceable. In the present case, by the doctrine of equitable intervention the purported sub-lease would be treated as an agreement for sub-lease and since it had been partly executed by possession having been taken under it, the equitable remedy of specific performance would be peculiarly appropriate. 652DEALINGS (c) Lien — a right to it in equity (i) Zeno Ltd v Prefabricated Construction Co (Malaya) Ltd & Anor [1967] 2 MLf 104 High Court, Kuala Lumpur See under Company Law at page 350 above. Notes (i) The decision was upheld on appeal to the Federal Court. See Paramoo v Zeno Ltd [1968] 2 MIJ 230. (ii) One of the prerequisites for the creation of a statutory lien is that there must be an intention to create a lien, This is usually evidenced by the deposit of the document of title with the lender. This point was emphasized in the instant case. The failure to enter a lien- holder’s caveat under the 1965 Cede does not prevent the existence of a right to a lien in equity. (iii) Where the right to a lien in equity arises first in point of time as compared to that of unsecured creditors such as a judgment creditor, the former has priority over he claim of the latter. (See Paramoo v Zeno Ltd [1968] 2 MLJ 230). (ii) Mercantile Bank Ltd v The Official Assignee of The Property of How Han Teh 11969] 2 MLJ 196 High Court, Kuala Lumpur See under Commercial Law at page 302 above. Notes Apart from the requirement that for a statutory lien to arise under the National Land Code, 1965 there must be an intention to create a lien: see Zeno Ltd v Prefabricated Construction Co (Malaya) Ltd, supra, there are also the further formal requirements provided for under section 281 of the National Land Code, 1965 that the borrower must deposit the issue document of title with the lender as security for a loan and that a lien-holder’s caveat must be entered in respect of the land in 653,LAND LAW question under the relevant provisions of the said Code. The instant case illustrates the principle that provided the: s an intention to so create a atutory lien under the National Land Code, 1965 which is evidenced by the deposit of the issue document of title to the land with the lender, the failure to so apply for the entry of a lien-holder’s caveat in respect of the land will not prejudice the claim of the lender to a right toa lien in equity. The rationale underlying the Court’s de that section 206(3) of the National Land Code, 1965, which recognises both equitable and contractual interests in land, entitles the court to do justice between the parties by giving effect to equitable rights by way of contract. Such a right in equity will, all other things being equal, prevail over any subsequent competing equities in the absence of any conduct on the part of the claimant of the prior equity which would justify the postponement of his prior equity to that of a claimant later in point of time: see the Australian High Court case of Butler v Fairclough’ and the Australian case of Abigail v Lapin? which went on appeal to the Privy Council. For a local case in this respect: see Vallipuram Sivaguru v Palaniappa Chetty* Such a priority would be preserved as where, in the instant case, the lender did not part with possession of the documents of title to the land in question. sion in this respect is CAVEATS: (a) Renewal/Revival Lim Kiat Moy v Hamzah [1966] 2 MLJ 175. High Court, Kuala Lumpur Cases referred to:- (1) Chow E Wha v Registrar of Title & Ors (1948-49] MLJ Supp 119. (2) Direct United States Cable Co v Anglo-American Telegraph Co (1876-77), LR 2 App Cas 412. RAJA AZLAN SHAH J: This is an application to extend the life of a private caveat registered with the Collector of Land Revenue, Ulu Langat, in the State of Selangor, on 30th December, 1965, until such time as the applicant’s claim in Kuala Lumpur High Court Civil Suit No 203 of 1966 is heard and finally disposed of. 1(1917) 23 CLR 78 *{1934] AC 491 8[1937] ML 59 654CAVEATS The facts are in a small compass. The respondent is the registered proprietor of land held under M.C. 718 for lot No 82 in the Mukim of Cheras in the District of Ulu Langat, hereinafter referred to as the said land. By an agreement dated 13th December,1963, entered into be- tween the respondent and the applicant the said land was sub-leased to the said applicant and a memorandum of transfer was duly registered in the Land Office. On 30th December, 1965, the applicant lodged a caveat against the said land. On 21st March, 1966, the Collector served upon the applicant a notice of intended remcval of the said caveat under the provisions of section $26 of the National Land Code. On 6th April, 1966, the said notice was served on the applicant. On 8th April, 1966, the applicant made the present application. On 20th April, 1966, the collector wrote to the applicant’s solicitor acknowledging their letter dated 15th April, 1966, and in paragraph 2 thereof he stated as follows: “In reply I wish to inform you that your claim which you have presented to the High Court on behalf of Lim Kit Moy (f) concerning the above matter has been noted, and this office will not cancel this caveat until a decision has been received from the High Court”. On 29th April, 1966, the collector entered a memorial on the register removing the said caveat. The present application came before me in chambers this morning the 2nd May, 1966. In other words, a court order not to remove the said caveat has not been granted and served on the collector on the 21st April, 1966, or even to the present day. This case brings into review the provisions of section 326. of the National Land Code. That section enacts that any person whose land is bound by a private caveat may apply to the Registrar (in the present case the collector) for its removal and the collector shall serve upon the caveator a notice of intended removal in Form 19C and subject to sub- section (2) remove the caveat at the expiry of the period of one month specified in that notice. In the instant case the caveat lapses at the expiry of one month specified in the notice, i.e., 21st April 1966, However, the section is what I may say controlled by sub-section (2), that is the court may on the application of the caveatee from time to time extend the said period of one month and the collector on being duly served with a court order shall not remove the caveat until the expiry of the said period as thereby-extended. That section is not analogous to section 171 of the repealed Land Code (Cap 138) for the latter section expressly states that the proper registering authority shall remove a caveat at the expiry of the 21 days after notice on the caveator unless he shall have been previously served with # court order extending the time as provided for by section 172. That means the court order extending the time must be served upon the proper registering authority during the life of the caveat. The case of Chow E Whav Registrar of Titles & Ors'” is authority for the proposition. There is therefore a manifest distinction between the two sections and that case cannot accordingly be invoked into a consideration of the instant case on the ground that sub-section (2) of section 326 of the National Land Code is wide and does not specify the time limit for service of the court order on the collector. The question 655LAND LAW therefore arises whether sub-section(2) enacts that the court order must be served on the collector before the caveat becomes spent. In interpreting the section the duty of the court is to construe it according to the intention expressed in the section itself. Lord Black- burn pointed this out long ago in the case of Direct United States Cable Company v Anglo-American Telegraph Company:” The tribunal that has to construe an Act of a Legislature, or indeed any other document, has to determine the intention ase: d by the words used, And in order to understand those words it al to inquire what is the subject-matter with respect to which they are used, and the object in view. The object of sub-section (2) is to extend the duration of the caveat and the sub-section must therefore be construed so as to give effect to that general purpose. To my mind the word ‘extend? is used in the common intercourse of mankind and the popular meaning attributed to it is that it enlarges or gives further duration to any existing right rather than re~ vest an expired right. To construe it otherwise seems to me not only to place a strained contsruction on the words of the sub-section but also to introduce a term which is unreasonable in two respects: firstly, it would not be an ‘extension’ but a ‘re-creation’, and predicating the purpose of the section to be to benefit a caveator by the extension of his rights, is adopting a very different idea from recreating an expired right; secondly, it would be inconsistent with the general tenor of the phrase “he Registrar on being duly served with any order of the court under this sub-section shall not remove the caveat until the expiry of the said period as thereby extended’ for that would imply that only when there exists a caveat can the Registrar be said ‘not to remove’ the same. The word ‘extend’ is too strong for me to grapple with; and if the court were to get rid of its operation, a great public injury would be effected by calling back a right that by lapse of time had become extinct. In my view the language of the section is wholly prospective. I would therefore dismiss the application with costs. Under Order 54 rule 22A of the Rules of the Supreme court | certify that I require no further argument on the matter. Application dismissed. AK Sen for the Applicant. FC Arulanandom for the Respondent. Hamzah Dato’ Haji Abu Samah (Legal Advicer, Selangor) for the collector of Land Revenue. Notes (i) Subsequent to this decision, the notice of intended removal of a private caveat in Form 19C in the First Schedule to the National Land Code, 1965 was amended by PU(A) 184 of 1984 to provide for the said period of one month under section 326(1)(b) of the 1965 Code to commence from the date of service of the aforesaid notice on the caveator. To this extent, the case is no longer good authority. 656CAVEATS (ii) His Lordship correctly pointed out that a caveat once extinguished or removed by the Collector under section 326(1)(b) of the 1965 Code cannot be extended by the Court under section 326(2) of the said Code. (ii) Subsequent cases which relied on Lim Kiat Moy v Hamzah, supra, in this respect are Tan Teo Muah & Ors y Alkhared & Khoo Holdings Sdn Bhd|1981] 2 MIJ 284 and Hong Keow Tee & Anorv Alkhared & Khoo Holdings Sdn Bhd [1982] 2 MLJ 42. (b) Right under a contract of sale caveatable Macon Engineers Sdn Bhd v Goh Hooi Yin [1976] 2 MLJ 53 Federal Court, Penang Coram: Gill CJ (Malaya), Ali and Raja Azlan Shah EJ) Cases referred to:- (1) Chin Cheng Hong v Hameed & Ors [1954] MLJ 169. (2) Temenggong Securities Limited & Anor v Registrar of Titles, Johore & Ors (1974] 2 MI 45. (3) Butler v Fairclough (1917) 23 CLR 78, 79 (4) Abigail v Lapin [1934] AC 491, (3) In re Registration of Caveat (1908) Innes 114. (6) Tee Chin Yong v Ernest Jeff (1963] MIJ 118. (7) Sellamah d/o Marimuthu v Registrar of Titles, Perak, Perak Civil Appeal No 16 of 1959 (unreported). (8) Official Assignee v Madam Chan Kam Lin, Selangcr Originating Summons No 140 of 1954 (unreported). (9) Bachan Singh v Mahinder Kaur [1956] MIJ 97. (10) Lysaght v Edwards [1876] 2 Ch D 499. (11) Haji Abdul Rahman & Anor v Mahomed Hassan [1917] AC 209; 1 FMSLR 290, PC. (12) Nanyang Development (1966) Sdn Bhd v How Swee Poh [1970] 1 MLJ 145. (18) Jit Kaur v Parl Singh [1974] 2 MLJ 199 at p 201. Raja AZLAN SHAH FJ: As I see it, the central question in this appeal is whether the private caveat should be removed. That presupposes a caveatable interest in favour of the respondent. In my view, the respondent had a contractual right under a contract of dealing in land which is a right of action against the vendor personally. That is a caveatable interest. There is statutory support for this view vide section 323(1)(a) of the National Land Code which appears wide enough to include any person claiming any right to title or interest in land. This section is enacted in wider terms as compared with the corresponding, provisions of previous legislation: see section 166 of the Land Code, 1926, How can the respondent’s caveatable interest be removed and what 657LAND LAW are the principles governing it? It is no longer in doubt that the entr a caveat casts a dark shadow on the property. It paralyses the dealings in it, Noone can buy the property under such a cloud. That is the reason for the appellants’ application to remove the said caveat. If the caveat is entered when it ought not to be, the court can order its removal. The party aggrieved is entitled to compensation for wrongful entry of a private caveat (section 329). In some cases it would not be right to remove a caveat. For instance, if the caveator had a substantial point in his favour and it would not be right and proper to remove it. In that case it would not be appropriate to grant a relief under the summary sions which are envisaged under section 327 of the National Land the caveator must ultimately succeed, but that he has a prima facie case, and that his claim is not baseless or frivolous. In such circumstances the court will not summarily remove the caveat but will extend it until the hearing of the action. The burden of proof rests on the caveator as the person asserting the claim. In Nanyang Development (1966) Sdn Bhd v How Swee Poh (a non-unanimous decision) this court had occasion to say that it is for the caveator in an application under section 327 to satisfy the court that it is just for the caveat to remain. I think that decision is in accordance with principle and authority. In the present case the respondent claims that he has an interest in the said land. He has filed a claim against the registered proprietors for specific performance, damages and lien over the said property. Whether he has good grounds for his alleged claim is surely worthy of argument and consideration. I cannot say that his claim is so baseless or frivolous that he should be deprived of his chance to have that tried in an action. And it would be a denial of that chance if the caveat were summarily removed, for once the appellants registered the transfer, the caveator’s right, if he has any, is destroyed. I further take the view that a caveat based on a document which prima facie is valid will not be removed on a summary application where the facts are involved and seriously disputed. Similar premonitory hint is detectable in SK Das on the Torrens System in Malaya (pages 347-348) which was adopted in Jit Kaur v Parl Singh: In dealing with applications for the extension of the operation of or for the removal of caveats against dealings with land it has always been the desire of the court to allow the parties the fullest opportunity to litigate any matter that may be in dispute between them. The court is loth to prevent parties litigating any right that they think they may possess: In re Caveat of Lewis (1903) 28 NZLR SC 581. Where there is a conflict of testimony the caveat will not be discharged. For the above reasons I will dismiss the appeal with costs. Appeal dismissed. Raja Abdul Aziz for the Appellants. Lee Kok Liang for the Respondents. 6538CAVEATS Notes (i) This case, in line with earlier decided cases such as Chin Cheng Hong v Hameed & Ors [1954] MLJ 169, is authority for the proposition that a person who has entered into an agreement to purchase land has a right to a registrable interest therein, which right can be protected by the entry of a private caveat. Under section 323(1)(a) of the National Land Code, 1965, a private caveat may be entered at the instance of any person or body claiming infer alia any right to a title to or any registrable interest in any alienated land. (ii) As can be seen from the cases of Inter-Continental Mining Co Sdn Bhd v Societe Des Etains De Bayas Tudjuh [1974] 1 MLJ 145 and United Malayan Banking Corporation Bhd v Development and Commercial Bank Ltd [1983] 1 MLJ 165, one of the criterion for determining whether there is a caveatable interest under section 323(1) of the 1965 Code is whether there is a right in equity founded on specific performance of a registrable interest in the land and not whether one would succeed in an action for specific performance. (iii) On the question whether the caveat cught to remain, the Court correctly held that it should remain.As was observed by the Privy Council in the subsequent case of Eng Mee Yong & Ors v V Letchumanan [1979] 2 MLJ 212 the caveator is entitled to have his caveat remain on the land if he can satisfy the court on the evidence presented to it that his claim to an interest in the land does raise a serious question to be tried and that on a balance of convenience it would be better to maintain the sfafus quo until the trial of the action so as to prevent the caveatee from disposing the land to a third party . (c) Removal Nanyang Development (1966) Sdn Bhd v How Swee Poh [1969] I MLJ 232 High Court, Kuala Lumpur Cases referred to :- (1) Lim Kiat Moy v Hamzah [1966] 2 MIJ 175. (2) In re Meister, Lucius and Bruning [1914] WN 390. RAJA AZLAN SHAH J: The applicant is the registered proprietor of 19 659LAND LAW pieces of land (hereinafter referred to as the ‘said lands’). On or about the 10th January 1969 the respondent presented a Caveat, Presentation No 287, Vol XLI Folio 113 (hereinafter referred to as ‘the Caveat’) against the said lands, The applicant applies by way of originating motion to remove the said caveat pursuant to section 327(1) of the National Land Code, 1965. Mr Eugene Lye for the respondent raised a preliminary objection. First, he says that the originating motion is irregular and misconceived. He contends that the provisions of the National Land Code are silent as to the procedure to be adopted in removing a caveat. He says that in such a case the procedure specified in the FMS Land Code (Cap 138) must be followed, that is, by way of originating summons. He cites sections 441 and 447(1) of the National Land Code and the case of Lim Kiat Moy The second limb of this argument is centred on the sections provi- sions of 6 and of the Code. He says that the present application under section 327(1) of the National Land Code is pre- mature. It is his contention that the preliminary step stipulated by section 326 should first be taken before embarking on the present application under section 327(1). Mr Wong Soon Foh, on behalf of the applicants contends that it is not irregular to initiate proceedings by way of originating motion. He relies on a passage in 1963 Annual Practice on page 1268: Where a statute provides for an application to the court without specify ing the form in which it is to be made, and the rules do not expressly provide for any special procedure, such application may usually be made by originating motion. He answers Mr Eugene Lye’s second limb by saying that any person in the position of the applicants has an option to initiate proceedings either in pursuance of section 326 or 327 of the National Land Code. I agree with the proposition that in such a case as the present where an Act of Parliament does not expressly specify in what form an application may be made to the court, as a matter of procedure it may be made in any form in which the court can be moved. There is no question that the court can be moved by originating motion. The passage relied on by Mr Wong Soon Foh is taken from the judgment of Warrington J in Inre Meister, Lucius and Bruning,® in which the learned judge held that in Chancery cases the procedure usually adopted, where an Act of Parliament is silent as to the form an application might be made to the court, is by originating motion: In Lim Kiat Moy v Hamzah, supra, | did not make a ruling that an application to remove a caveat must be by originating motion. No doubt that case was proceeded by originating summons but the validity of the procedure was never considered. It cannot therefore be said that that case creates a precedent on procedure. It is not in doubt that the FMS Land Code (Cap 138) made no provision whatever for the necessary procedure to present a caveat. Part 19 of the National Land Code has remedied these omissions. Besides 660