MALAYSIAN LAND

ADMINISTRATION SYSTEM

Lecture 3
September 2019
Ainul Jaria Maidin

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 Outline of Lecture

A. Evolution of Malaysian Land Administration System

i. Historical Malay Customary Tenure
ii. Introduction of Torrens System
• Characteristics of Torrens System
• Application of Equity under Torrens System
National Land Code 1965

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 Malay Customary Tenure

Before coming of the British, early Malay inhabitants used land for
subsistence agriculture in two modes of cultivation:

‘HUMA/
LADANG’

‘SAWAH/
BENDANG’

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 OLD MALAY LAWS

99 Laws of Perak
Perak Digest
Malacca Digest

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 MALAY CUSTOMARY DEALINGS

‘Pulang belanja’ (Return of expenses)

‘Sewa’ (Leasing)
‘Gadai’ (Security transaction)
Carian laki-bini
Harta bawaan
Jual janji

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 Sahrip v Mitchell (1870)
“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 occupy all forest and
waste land subject to the payment to the
sovereign of 1/10 of the produce of the land
so taken.”

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 Judicial Recognition of Islamic Law

Tengku Jaafar & Anor. v Govt. of Pahang [1987]

Supreme Court (held) :
The land law applicable in the State of Pahang before 1889 was the Shariah
or Islamic law from the Shafie school.

•Ramah v Laton
•Muslim law is not foreign law but local law and the law of the land. The
court must take judicial notice of it and must propound the law.
•According to the court, the question regarding to harta syarikat or harta
sepencarian was not a question which related to foreign law, but was once
of the local law

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 Did land belong to the Sultan/Raja under Malay
custom?

‘Ampun kurnia/ cipta kurnia: grant • Maxwell’s Theory

of land by Sultan to some royal
favorites of local chiefs.

‘Sistem kerah’: duty of peasants to

render services to the Sultan.

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 Objection to Maxwell’s Theory

David Wong, “there is no tenurial relationship between the ruler

and his subjects.”
Powers of sultan and chiefs must be defined with reference to
localised communities (‘territorial possession’).

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 References:

Ainul Jaria et.al, Chap 1

David Wong, Chapter 2
Hunud Abia Kadouf; “The Traditional Malay Ruler and the Land:
Maxwell’s Theory Revisited”
[1997] 1 MLJ cxxi

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 Land Administration System
Coordinated system of land administration into which land tenure system
in Peninsular Malaysia has developed into at present was once merely an
administrative record maintained mainly for purposes of collection of
revenue by the state as landlord of the holdings of its tenantry.

With introduction of Torrens system in Malaysian states, the existing

system was integrated with a system of acquiring title by registration
which prescribes registration of dealings in land.

Suriyadi J. in Sime Bank v Mohd Hassan Bin Sulaiman [2000] 2 MLJ

p.160 at p.161:
“The National Land Code 1965 was made effective from 1st of January
1966 whereby thenceforth a uniform system of land tenure and dealing
existed throughout Peninsular Malaysia. Penang and Malacca were also
absorbed into the system by the promulgation of the National Land Code
(Penang and Malacca) Titles Act 1963.

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 History of the Torrens System in Malaysia

The old English land system was called the ‘Deeds

System’ – a system of recording land transactions in
the form of deeds and indentures.

KING
B C

Deed
A D
of Conveyance
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 Tracing Chain of Title
A prospective purchaser of land
must trace the chain of title by
doing RETROSPECTIVE
INVESTIGATION OF TITLE.
If there was fraud or forgery in the
execution of the deed, the transfer
between the parties will be invalid
and of no effect.
Will cause ‘break in the chain of
title’.

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 Defects of Deeds System?

1) Retrospective investigation of title is time

consuming.
2) Incurs costs and expenses.
3) Difficulty in reading old documents.
4) problems in records

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 General Law – Old Law
Under the traditional system of transferring land, the history of
the property must be examined to ensure that the seller can
convey good title to the purchaser
When property is sold, a deed is filed and recorded with the land
office
The deed contains:
• the names of the seller and the buyer
• the ownership relationship of the sellers and buyers, if more than
one seller or one buyer is involved (for example, joint tenants or
tenants in common)
• the legal description of the property being transferred.
This information is summarised from each deed and recorded in a
document called an abstract of title

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 General Law – Chain of Title

Any prospective purchaser required to undertake a title search (30

years in Victoria) of past transactions to establish a good root of title.
For true certainty of ownership every deed in the chain from the
Crown Grand (when land was first converted to freehold) would need
to be discovered
However deeds over a long period of time can be separated from the
title
An lawyer or a real estate title examiner inspects each entry to
determine that good title has been passed with each transaction.
Ever transaction in relation to the land – every mortgage, every
conveyance etc needed to be identified
This information collectively is a chain of title

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 General Law - Uncertainty

Required high degree of dilligence – a purchaser is bound by a legal

interest created by a deed even if it has been left out of the chain of
title
If any problems exist with the title, they must be remedied before the
purchaser may obtain good title
Onus is on the purchaser to discover if an interest in land is missing –
purchaser is often the least equipped to discover the truth
Under old system title, the interest of the true owner was never
transparent
When the Torrens system was proposed, there was violent opposition
from the legal profession?!
The Torrens system addresses the problem: When the owner sells the
property, the certificate alone is evidence of good title - eliminating
the need for a new examination of title.

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 Torrens System
The Torrens system is a system of ‘land registration’
A system whereby the title to land and interests in
land depends upon registration, and not upon the
instrument inter-partes.
Operates in every state and territory in Australia and
other Common Law countries such as Canada and
New Zealand
Sir Robert Torrens (3rd Premier of SA) is credited with
the creation of the of this simplified system of
transferring land
In December 1857 he passed the Real Property Act
1858 for the transfer of real property under the
system which became known as Torrens title.
Sir Robert Torrens

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 Dr juris Ulrich Hübbe?
German Lawyer who had conducted real property
transactions in Germany
Part of a group who assisted Torrens in formulating
the new title system
Torrens never acknowledged Hübbe’s assistance
He referred to the success of the system in
Merchant shipping and the many centuries of
success of land title registration in Germany
without referring to Hübbe or that the system was
modelled on it
Torrens fought it through parliament
Torrens visited Victoria and assisted in bringing in
the new system in that colony.

Ulrich Hübbe

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 Simplicity of Torrens System

Torrens’ speech to SA Parliament 1857 articulated basic principles of the

system:
• Each transfer of the fee simple was to be as a fresh grant from the Crown
• Registration alone would give validity to land transactions
• Titles Office would provide simple forms

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 The Torrens System
Property is transferred by registration of title instead of by deeds
A purchaser is merely required to undertake a search of one
record - the title as registered
The Torrens system did away with the complexity of the old
English land law which was based on medieval concepts and
made conveyancing cumbersome, time consuming and expensive
No document (eg a transfer or a mortgage) or other interest in
property (eg caveat) is effective unless and until it is recorded at
the centralised registry
Once the purchasers name is recorded on the title register the
purchaser becomes owner of the property to the exclusion of all
others, by the very fact of registration
Purchaser obtains ‘title by registration’

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 Unchallengeable

The owner of a property cannot have their title challenged or overturned

This concept is known as ‘indefeasibility’ of title. There are exceptions:
• if a dealing is registered fraudulently – this is a very complex area of law
• if any existing easement has been wrongly left off the title or misdescribed
by the Land Titles Office
• wrong boundary descriptions
• leases for less than 3 years do not have to be registered. - so, if “A” transfers
to “B” and no lease is shown on the title, “B” will take subject to any
tenancy, even though not shown, if it is for a term of less than 3 years
Purchaser can bring a claim against the Land Titles Office (compensation) if
they suffer a loss as a consequence of fraud or the omission of some legal
interest relating to the title

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 Residual influence from English System
Courts have applied the English system rules to the Torrens system
Common law and equity principles relating to property still apply
Problematic juxtaposition:
• Torrens system originated in Germany, a Civil law country and was meant to
operate in that system
• Australia is a Common Law country which inherited a system of feudal tenures
• Mismatch …

In Victoria, English general law rules apply as far as the Transfer of

Land Act 1958 does not otherwise provide
In practice, even where the Transfer of Land Act is explicit,
interpretation of the Act by the Court has been to ‘read down’
sections not directly compatible with the old rules.

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 Registered Title
‘Registered Title’ refers to land held under the Torrens system
administrated under the Transfer of Land Act 1958.
Each parcel of land has its own Certificate of Title numbered by
Volume and Folio
The Certificates of Title (original) are stored in the Register Book
which is maintained by the Registrar of Titles

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 Electronic Title
The Register Book is in the process of being computerised and automated.
Every property transaction in Victoria now involves conversion of paper
title (original held by the Registrar of Titles at the Land Titles Office) to
‘electronic’ title
Purchasers get to keep the paper title as a souvenir
Indefeasibility of title with guarantee from the State (compensation
payable) is a key aspect of the Torrens system
Fraud: Does electronic registration allow those committing fraud to
offend on a wider scale - question the security and stability of the
register?
Accuracy needs to be ensured
Provision needs to be made for the failings of technology
Already there are problems. The process of conversion will inevitably
create some errors. I have had personal experience of this!

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 FEATURES & PRINCIPLES OF TORRENS
SYSTEM

features Principles

1) Registration of titles and

1) Mirror Principle
interests to land.
2) Curtain Principle
2) Indefeasibility of title
conferred upon registration. 3) Assurance Principle
‘state guaranteed’ title.
3) Non-acceptance of equity.
4) Caveat system.
5)Mortgaging of land by
registered charge.

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 Mirror Principle
The register book is like a mirror of the land.
All details regarding the land are recorded in the Register
Book.
- name of the proprietor,
-survey plan of the land,
-category of land use,
-conditions and restrictions on the land, etc.
-- encumbrances on the land, etc.
Authority: s.340 NLC

Teh Bee v K . Maruthamuthu

“Under the Torrens system, the register is everything” per Ali
Ag. CJ.

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 Curtain Principle -s.89 NLC

An intended purchaser need only be satisfied with what

appears on the Register Book.
Need not go behind the Register - no retrospective
investigation of title needs to be done.

Creelman & Anor. v Hudson Bay Insurance Co. [1920]

To allow retrospective investigation would ‘defeat the purpose

and effect of registration’

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 Gibbs v Messer (1891)

“the object is to save persons dealing with the registered proprietors

from the trouble and expense of going behind the register in order to
investigate the history of their author’s title and to satisfy themselves
as to its validity.”

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 Assurance Principle

Under this principle, the State assures compensation

to those whose non-Torrens title is converted to a
Torrens title.
This principle was not adopted in Malaysia as other
than some limited cases in Penang & Malacca, the
majority of titles in Malay states could easily be
converted to Torrens title at District Office with no
loss occasioned to proprietor

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 English System in the Straits
Settlements
With the passing of the First and Second Charters of Justice, the Deeds
system was introduced for awhile in Penang and Malacca.
Later, several ordinances incorporated the Torrens system up to the
passing of the National Land Code (Penang and Malacca Titles) 1963.

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 Introduction of Torrens System in
Malaysia

In 1882, Sir F.A. Weld, Governor of Straits Settlements,

sent W.E. Maxwell, the then Commissioner of Lands of
the Straits Settlements to Australia to study the Torrens
system and its implementation.
After Sir Maxwell’s return, as a result of his
recommendations, several ordinances were passed to
incorporate the Torrens system in Straits Settlements.

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 Most commonwealth nations adopted
Torrens system

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Torrens title is a system of land title where a register of land
holdings maintained by the state guarantees an indefeasible title to
those included in the register.

Land ownership is transferred through registration of title instead of

using deeds. Its main purpose is to simplify land transactions and to
certify to the ownership of an absolute title to realty.

It has become pervasive around the countries strongly influenced by

Britain, especially those in the Commonwealth of Nations and has
spread to most countries.

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Characteristics of Torrens System
Torrens System
1. All land vests in the State
2. State has power to dispose
lands
3. All transactions by
registration
4. Dealings by registration
5. Indefeasibility of title
National Land Code 1965
1. S. 5 - Definition of ‘State
Land’
2. Division II (Part 4 & 5)
3. Statutory instruments
4. Division IV
5. Ss. 92, 176(2), 340(1) & (2)
37
 Characteristics of Torrens System
Torrens System National Land Code 1965

6. No possessory rights without 6. S. 48 - No adverse

registration possession

7. Methods of restraint of 7. Part 19 - Caveats and

dealings Prohibitory Order

8. S. 46 - Reversion to state

9. Rules of equity still apply

10. Non-exclusive system

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 Indefeasibility of Title

• The person whose name is registered in the document of title

acquires an ‘indefeasibility of title.’
• It means that the person’s title as the registered owner of the land
cannot be disputed.
• The onus is on the person who disputes the title of the registered
owner by showing that the registration is obtained by some unlawful
or illegal means.

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 Indefeasibility of Title

• Ownership is safe and guaranteed

• Article 13 - Federal Constitution.
• Adverse possession not recognised
• Section 48 NLC 1965
Hj. Sidek and 461 Ors. v. Government of Perak [1982] 1 MLJ 313
• Not absolute
• Sections 340(2)(a)(b)(c).

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 History of Torrens Statutes in FMS

1) General Land Regulations in each FMS state.

2) Registration of Titles Enactment 1911 (FMS)

3) Land Code 1926 (Repealed 1928- Cap.138)

4) National Land Code 1965

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 Federal Constitution & NLC 1965

Under Federal Constitution, land matters fall under State list - State Legislative
Assembly may legislate on land matters.

National Land Code was however passed by Federal Parliament?

Why

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Article 76(4) Federal Constitution allows Parliament to
make laws in respect of land matters ‘FOR THE PURPOSE
ONLY OF ENSURING UNIFORMITY OF LAW AND POLICY’.

Such law would straightaway be considered a federal law

applicable to all states without the need for State
Legislative Assembly adopting it first.
NLC was enacted under this provision.
Refer the Preamble to NLC

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 East Union (Malaya) SB. v Govt of State of
Johor & Govt. of Malaysia [1981] 1 MLJ 151
Concerned a challenge on the power of Parliament to
enact section 100 of the NLC providing the State
Authority with the power to forfeit land for non-payment
of rent.
Federal Court held that section 100 was not ultra-vires
the constitution as Parliament had power to enact the
NLC based on ARTICLE 76(4) Federal Constitution.

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 Background of NLC 1965

• States in Peninsular Malaysia, adopted a

• The National Land Code (NLC) was enacted system based on the principle that
under Article (74) of the Federal Constitution private rights in land could derive only
1957 on 18th September 1965. from express grant by the State or
• NLC was drafted based on the Land Code secondarily from State registration of
(FMS Cap 138) - the law applicable to Negeri subsequent statutory dealings.
Sembilan, Pahang, Perak and Selangor
before 1st January 1966.
• The States of Penang and Malacca had a
• NLC came into force on 1st January 1966 system peculiar to the pre-war Straits
(vide L.N. 474/1965) in all States of Settlement (modelled on the English laws
Peninsular Malaysia. of property and conveyancing) whereby
• Purpose of NLC is to establish a uniform privately-executed deeds were the basis
system of land tenure and dealings of title to land.
throughout the eleven States of Peninsular
Malaysia.
• Before 1st January 1966, all eleven States
had two different systems of land tenure.
Suriyadi J. in Sime Bank v Mohd Hassan Bin Sulaiman
[2000] 2 MLJ p.160 at p.161:
“The National Land Code 1965 was made effective from
1st of January 1966 whereby thenceforth a uniform
system of land tenure and dealing existed throughout
Peninsular Malaysia. Penang and Malacca were also
absorbed into the system by the promulgation of the
National Land Code (Penang and Malacca) Titles Act 1963.
Previous Land Law
• Before the coming into effect of National Land Code 1965 (Act 56) All
States in Peninsular Malaysia used their respective State land laws.
• Pahang, Negeri Sembilan, Selangor dan Perak – Land Code (Cap 138)
• Penang and Malacca – Land Ordinance (Cap 113)
• Johor – Land Enactment (No.1)
• Kedah – Land Enactment (No.56)
• Kelantan – Land Enactment 1938
• Perlis – Land Enactment 1356
• Terengganu – Land Enactment 1357
 Position of Malay Customary Tenure
after NLC?

S. 4(2)(a) - The personal law preserved by section

4(2) of NLC is that of the Malays…reflects early adat
tenure as observed by the Malays before and after
the coming of Islam. (Sihombing)

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 Malay Customary Tenure Lands

1) Malacca Customary lands (mostly preserved as Malay

Reserved Land (MRE).
2) Lands in FMS and UFMS held under Malay custom (lands
mostly preserved as Malay Reserved Land (MRE).
3) Land in Negeri Sembilan held under Adat Perpatih
(Customary Tenure Enactment)
4) Land in Malacca held under Adat Naning
5) Malay Holding in Trengganu
6) Malay Agricultural Settlement in Kg Baru

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 Application of Principles of Equity
PRINCIPLES OF Equity CANNOT BE APPLIED
S. 6 Civil Law Act 1956:
“Nothing in this Part shall be taken
to introduce into Malaysia or any
of the States comprised therein
any part of the law of England
relating to tenure and conveyance
or assurance or succession to any
immoveable property or any right
or interest therein.”
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PRINCIPLES OF Equity can be applied
Wilkins & Ors. v Kannamal & Anor.
[1951] MLJ 99
“The Torrens law is a system of
conveyancing; it does not abrogate
the principles of equity; it alters
the application of particular rules
of equity but only so far as
necessary to achieve its own
special objects.”
(COA Kuala Lumpur- per Taylor, J.)
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 LAND ADMINISTRATION
REGULATED BY
NATIONAL LAND CODE 1965

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• An Act to amend and consolidate the laws relating to land and land tenure, the
registration of title to land and of dealings therewith and the collection of revenue
therefrom within the States of Johore, Kedah, Kelantan, Malacca, Negeri Sembilan,
Pahang, Penang, Perak, Perlis, Selangor, Terengganu and the Federal Territory of Kuala
Lumpur, and for purposes connected therewith.
• Enacted by Dewan Rakyat
• Passed 10 August 1965
• Enacted by Dewan Negara
• Passed 16 August 1965
• Royal assent 18 September 1965
• Effective 1 January 1966
• Legislative history
• Introduced in the Dewan Rakyat - National Land Code Bill 1965 by Abdul Rahman Ya'kub,
Minister of Lands and Mines
• First reading 26 May 1965
• Second reading 9 August 1965
• Third reading 10 August 1965

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 Savings – S 4 NLC
• (1) Nothing in this Act shall affect the past operation of, or anything done under, any previous
land law or, so far as they relate to land, the provisions of any other law passed before the
commencement of this Act: Provided that any right, liberty, privilege, obligation or liability
existing at the commencement of this Act by virtue of any such law shall, except as
hereinafter expressly provided, be subject to the provisions of this Act. (2) Except in so far as
it is expressly provided to the contrary, nothing in this Act shall affect the provisions of-
• (a) any law for the time being in force relating to customary tenure;
• (b) any law for the time being in force relating to Malay reservations or Malay holdings;
• (c) any law for the time being in force relating to mining;
• (d) any law for the time being in force relating to sultanate lands;
• (e) any law for the time being in force relating to wakaf or bait-ul-mal;
• (f) the Trengganu Settlement Enactment, 1356;
• (g) the Padi Cultivators (Control of Rent and Security of Tenure) Ordinance, 1955;
• (h) the Kelantan Land Settlement Ordinance, 1955;
• (i) the Land (Group Settlement Areas) Act, 1960;
• (j) (ia) the Perlis Land Settlement Enactment 1966; or
• (k) any law for the time being in force relating to exemptions from the payment of land
revenue;

• and, in the absence of express provision to the contrary, if any provision of this Act is
inconsistent with any provision of any such law, the latter provision shall prevail, and the
former provision shall, to the extent of the inconsistency, be void.

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 Registration & Powers of Disposal of Land by
Indefeasibility of State Authority State Authority
Title & interests

Restraint on
Dealings Definition of Land

Classification
LAND Categorisation of
ADMINISTRATION Land Use
Dealings LAW – under NLC

Power to impose
Restrictions
Right to Forfeit in interest
Land
Land Development
Subdivision
Partition, Amalgamation 56
 CONCEPT OF LAND OWNERSHIP

Concept of land ownership under NLC 1965

- Federal Constitution
- Land within boundary of State belongs to State –S 40 NLC1965
Concept of land ownership in Islam - - Al-Maidah (5): 120

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 RIGHTS & POWERS OF STATE AUTHORITY

NLC 1965 sec. 40- Adverse Possession (Squatters)

Administrative Powers
-Classification
-Categorisation
-- Limitations and Restriction in Interest
-Creation of LAROW
-Power to restrict landowners rights to deal with land
-- power to dispose land
-- right to forfeiture of land

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POWERS OF DISPOSAL- NLC 1965 -Sec. 42

ALIENATION OTHER THAN ALIENATION

Sec 76
Types of Title-Qualified Title
Final Title- Registry
- Land Office Title
Subdivision, Partition and
Amalgamation
Land Reservation
Lease of reserve land
T.O.L.
Permit for removal of rock
material. Etc.
Permit to use Air-space

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 RIGHTS OF STATE AUTHORITY
vs RIGHTS OF OWNER
Owner’s right: Sec 44(1)(a) – airspace
- stratum/ spatium
- support
Rights to restrict the extent and nature of enjoyment of land
Right of forfeiture
Right of Compulsory Acquisition

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 STATE AUTHORITY’S RIGHTS

Rights of Forfeiture Land Acquisition

-Failure to pay rent What is land acquisition?
-Breach of conditions Purposes of acquisition
-express Assessment of Acquisition
- implied Challenging the acquisition

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 DEALINGS & CREATION UNDER NLC 1965

Registration of Dealings Transfers

-Procedures and Formalities Charges
-Duties of Registrar Liens
Leases
-Powers of Registrar to
correct errors Tenancies
Easements
-Effect of Registration
- Indefeasibility of Title
Exception to Indefeasibility

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