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Equity in Malaysian Torrens System In Malaysia, our land administration had changes from time to time.

Before the arriving of English, our land system follows Islamic land systems and Malay customs. It has been proven from the judgment by Maxwell C.J in Sahrip v. Mitchell & Anor case: "It is well-known that by the old Malay law or custom of Malacca, while the Sovereign was the owner of the soil, every man had nevertheless the right to clear and occupy all forest and waste land subject to the payment to the Sovereign of one-tenth of the produce of the land so taken". From the judgment, we may see several concepts of land system which has the same basis with Islamic land law. The concept of ownership right whereas in Islam everything belongs to Allah and in the judgment the Sovereign is the owner of the land. After the coming of English colonization, Islamic land law had no longer being applied. It was replaced with two English land law systems. The Torrens system and the English deeds system had been introduced into our system. Our focus point on this discussion is the existence or inexistence of English deeds system or Equity in Malaysian Torrens system. The Torrens System was originated from South Australia, drafted by Sir Robert Torrens. The Torrens system ensures the indefeasibility of title or in other words a title which cannot be annulled or voided. This system helps to avoid uncertainty of title. The land title will usually be two copies. One copy being kept at the registry and another copy for the owner to keep by himself. Compare with English Deeds Syste, English Deeds System refer to the deed itself is registered. The deed does not reflect the ownership of the land. The owner of the land had to be traced down from the earliest owner granted by the crown. In simple word, Torrens System is about registration while English Deed System is about the chain of ownership or proprietorship. Furthermore, The Torrens System consisting two main principles which made it based entirely on registration, known as mirror principle and curtain principle. Mirror principle means that the title reflect the exact information of the land. Meanwhile, the curtain principle means that a person does not need to explore further than the title. They only need to rely on the title. These dual principles had from what has been said above as the indefeasibility of title. In Malaysian law, these principles were stated in Section 340(1) of National Land Code 1965.

In Torrens System, the land administration works almost flawlessly as all the transactions pertaining to the land will be recorded in the government office or registrar. The government would know if there is any suspicious activity or confusions to the land. Compare to English Deeds System, the system based on the principle nemo dat quod non habet (no one gives what he does not have). To transfer ownership they have to search the earliest owner. This may involve a very long chain of ownerships. It could be hundreds of years and this will cause the system to be slow and ineffective. Although we found that the Torrens System has many advantages, some critics from the academician had been up in the air pertaining to the indefeasibility of title. In review to the case of Adorna Properties Sdn Bhd v. Boonsom Boonyanit @ Sun Yok Eng case. The federal court in this case had made judgment in favor of Adorna Properties Sdn Bhd. The judges upheld the indefeasibility of title because it involves a bona fide purchaser. This had caused some worries and confusions as Section 340(2)(b) of National Land Code 1965 state the defeasibility of title because of forgery. Another major issue related to the Torrens System is on the squatters right. We can see it in the Sidek & Ors. v. The Government of Perak & Ors case. Raja Azlan Shah C.J in this case made the judgment that stated the squatters have no right either in law or in equity. It is considered as an offence to occupy a land illegally under Section 48 and Section 425 in National Land Code 1965 which parallel to the concept in Torrens System. The government needs to remind themselves first that these people have right as a Malaysian before the government had evicted them from the land. From the above discussion, we had explained about Torrens System and English Deeds System. We have also learned on the ups and downs of applying Torrens System. Now we were back to our main point. The Torrens System despite its imperfection had rejected the principle of equity but accepted the continuance of the transaction that has been established aforesaid. In the case of Barry v Heider, it writes the Torrens statutes.. have long.. been regarded as in the main conveyance enactments, and as giving greater certainty to titles to registered proprietors, but not in any way destroying the fundamental doctrines by which Court of Equity have enforced, as against registered proprietors, conscientious obligations entered into by them. Thus, under the general principle, a contract of land is valid prior to its registration. Is this contrary to our National Land Code? In Malaysia, it has been said that some exclusion has been made although this exclusion is limited.

In general, Section 206 provides that a proper method of the transaction must be registered and using the correct form as prescribed. However, Section 206(3) stated that a contract of land whether in compliance with the Code or not is considered as valid and subject to registration. This section has to be read together with section 206(1) and section 206(2) of the Code. Section 206(2) provides exceptions to lien and tenancies where no registration is required. Section 206(3) further emphasizes that nothing in section 206(1) would affect transaction for alienated land. Everything in National Land Code is all about the matters and effects of the transactions after registration but not prior to registration. Therefore, the essence of section 206(3) is very important. It is because when a party had entered into a land transaction, he had certain rights and every right need to be protected by the law. However, it is a completely different matter if the contract for the transaction of land itself is not a valid contract. Once the contract is establish, the party had the right to sue the other party in case of any unwanted things occurred. The right is only up to that point until registration is made. After registration, the owner of the land can sue anything regarding to the land. Eg; trespass. The recognition of equity in section 206(3), al so can be found with the principle of equitable estoppel. It is where in the section stated that where a party is estopped from denying the existence of contract or some facts to show the interest to enter into a contract. In case of a breach of contract, the aggrieved party would entitle some remedy which is suitable in the eyes of law. It is generally accepted that section 206(3) provide a platform for either party to sue. However, in recent development, it shows that court is extending the application of this section. It extending it scope to the breach of obligation. In the case Templeton & Ors v Low Yat Holdings Sdn Bhd & Anor, Edgar Joseph Jr J writes that section 206(3) provides a liberal application of equity. What it meant by liberal is not that it can be freely and unqualified applying equity but it must have some basic to do equity. Another important issue is that whether section 206(3) had defeated the concept of indefeasibility of title as introduced in the Torrens System. According to Judith, section 206(3) does not defeat the Torrens System because there is different right as to registered owner and unregistered owner. It is normal in every system to have provision which does not comply with the law. In conclusion, the principle of equity does not only exist in the Malaysian Torrens System but it is clearly stated in the code and has been widely applied by our court in making decision.