A VENDOR S DUTY TO TRANSFER TORRENS REGISTERED LAND OR A STRATA PARCEL IN FAVOR OF HIS CORRESPONDING BONA FIDE PURCHASER FOR

VALUE
[2003] 3 MLJ xcvii; [2003] 3 MLJA 972003 3 MLJ xcvii; 2003 3 MLJA 97

SY Kok, LLB (Hons) (Sing) Advocate & Solicitor Kuala Lumpur [*97] [1.1.1 It goes without saying that in each and every sale and purchase of land, whether under the English common law pre-1925 system of unregistered conveyancing, or under the Torrens system of registered conveyancing, one of the main contractual duties of a vendor is to convey or, under Torrens land law, to transfer, the land concerned in favor of his purchaser upon settlement. 1 This interim gap, between the time that the sale and purchase is settled by the bona fide purchaser s act of payment of the full purchase price and the state s registration of the statutorily prescribed instrument of transfer of the land, or, as the case may be, the strata parcel, is coined by the author as the interim period . [*98] [1.1.2] In the old system of unregistered conveyancing in England, the execution of a deed of conveyance suffices to convey the unregistered land concerned in favor of a bona fide purchaser. Conveyance The vendor is then obliged to convey the property free from encumbrances, to execute a deed of conveyance and to hand over to the purchaser all the title deeds [ chain of title ] relating to the property. The expense of preparing the deed of conveyance falls upon the purchaser. Duty of the purchaser to complete the contract After the purchaser has investigated the abstract, it is his duty either to accept or to reject the title offered to him. If he takes the latter course, the parties are left to their remedies as specified above. If, however, the purchasers is satisfied with the title, then the contract must be completed in accordance with its terms. Completion of a contract means that the purchaser must at his own expense prepare a proper deed of conveyance which is effectual to pass the interest to be sold and which contains the 2 However, under the Torrens system of registered conveyancing, the mere execution of an instrument of transfer of the registered land is insufficient, an additional step has to be performed. This extra step takes the form of presenting the duly executed instrument of transfer, and the related issue document of title to the land, to [*99] the relevant land registry / office for registration by the state and having the same duly registered. It is not the parties who effectively transfer the land, but the State that does so, and, in certain cases, more fully than the party could. In short, a transferee seeking registration of a transfer seeks State affirmation of his position. Registration is not the act of a party: it is the act of the State. Application to register may be made by any party interested, and the death of either or both of the parties to a transfer is no necessary obstacle to registration: (1883) 9 VLR (Eq) 152. As between the transferor and the transferee it may in ordinary circumstances be the duty of the former to procure registration [see (1886) 12 VLR 748], but the latter may dispense with the obligation and produce the transfer for registration. 3 Registration, according to Hashim Yeop A Sani J, is the cornerstone of the Torrens system of registered conveyancing. 4 Registration,
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therefore, is central and most sacrosanct to the Torrens [*100] system. [1.1.3] Thus, one of the main differences between the old general law system of private conveyancing and the modern Torrens system of registration of titles to land and encumbrances over such registered land. So long as the certificate is unamended it is conclusive and of course when amended it is conclusive of the new particulars it contains. The Torrens system of registered title, of which the Act is a form, is not a system of registration of title but a system of title by registration. Because no person could confer a better title than he or she held, . (Emphasis added.)5 lies in the timing for the divesting and passing of ownership in the land concerned,... registration once effected must attract the consequences which the Act attaches to registration whether that was regular or otherwise. ... (Emphasis added.) Since the state was to guarantee the title of the person registered as proprietor of an estate or interest in land, there would be no need for a purchaser to investigate the history of the vendor s title, nor to determine whether it was defective when registered. In short, Torrens attempted to make titles in land independent by making the [Torrens] register conclusive and by barring retrospective investigation of title : Harrison, The Transformation of Torrens System into the Torrens System (1962) 4 UQLJ 125 at 129. Ideally this principle requires the register to reflect all facts bearing on the title of the proprietor, thereby relieving anyone searching title from the need to go behind the register. 6 either in favour of a transferee vis-a-vis registered land or an [*101encumbr] vis-a-vis a registered interest in such land which takes the form of a registered lease (including a sublease), a registered charge or easement. ... The cardinal principal of the statute is that the register is everything ... 7 [1.1.4] The weaknesses of the old English system of unregistered conveyancing, and the strengths of the Australian Torrens system of title to land by registration, are perhaps best summed up by Edwards J in Fels v Knowles, 8 when his Lordship, delivering the majority judgment (Stout CJ dissenting), commented (at pp 619-620): In the course of centuries of our English history there has grown up a complicated system of rules regulating dealings with and transfer of real property. The result was that every dealing necessitated a minute and careful inquiry into the preceding title, attended by great expense, and never resulting in absolute certainty of title. More especially the rules affecting the administration of trusts and the fact that notice, direct or constructive, of a breach of trust might result in grievous loss to wholly innocent persons were felt to bear very hardly, without sufficient compensating advantages. Impressed by this view of the matter, it occurred, now many years ago, to an ingenious gentleman in South Australia, Mr Torrens, that the Merchant Shipping Acts supplied a model from which a scheme of land registration could be devised, by which all trusts should be excluded from the register, and under which a person dealing honestly with the registered proprietor should not be called upon to look further than the register, and should be entirely unaffected by any breach of trust committed by the registered proprietor with whom he dealt. From this genesis sprang the system of land-registration which now prevails in all the [*102] Austral Colonies, and is now represented in this colony by The Land Transfer Act, 1885, and its amendments. The object of the Act was to contain within its four corners a complete system which any intelligent man could understand, and which would be carried into effect in practice without the intervention of persons skilled in the law. In this respect, the Act goes so far as to make provision for the licensing of unskilled persons, called landbrokers, to act
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for reward in the preparation of the instruments necessary to carry its provisions into effect. The cardinal principle of the statute is that the register is everything, and that, except in cases of actual fraud, on the part of the person dealing with the registered proprietor, such person, upon registration of the title under which he takes from the registered proprietor, has an indefeasible title against all the world. Nothing can be registered the registration of which is not expressly authorized by the statute. Everything which can be registered gives, in the absence of fraud, an indefeasible title to the estate or interest, or in the cases in which registration of a right is authorised, as in the case of easements or incorporeal rights, to the right registered. (Emphasis added.)

[2.1.1] In addition to the contractual obligation to transfer the piece of registered land that forms the subject matter of a sale and purchase, if the subject matter takes the form of a housing accommodation (whether a landed property or a strata parcel) and if the selling party is constructing more than four units of such housing accommodation, then the Housing Developers [Development] (Control and Licensing) (Amendment) Act 2002, (hereinafter referred to as the 2002 Amendment Act ), 9 read with its related subsidiary legislation, known as the Housing Developers [Development] (Control and Licensing) (Amendment) Regulations 2002, 10 will become operative and regulate that particular housing [*103] accommodation transaction. 11 The relevant contractual provision in the renumbered cl 11 of the Sch G agreement stipulates as follows: Separate strata title and transfer of title The Vendor shall, at its own cost and expense, apply for subdivision of the said Building so as to obtain the issue document of a separate strata title to the said Parcel under the Strata Titles Act 1985. Upon the issue of the strata title to the said Parcel and subject to the payment of the purchase price by the Purchaser to the Vendor in accordance with cl 4(1) and the observance of all the terms and conditions herein provided, the Vendor shall, within twenty-one (21) days, execute a valid and registrable memorandum [instrument] of transfer of the said Parcel to the Purchaser, his heir or nominee or lawful assign, as the case may be. 12 Separate document of title/transfer of title Upon the execution of this Agreement the Vendor shall, at its own cost and expense and as expeditiously as possible, obtain the issue document of a separate document of title to the said Lot. Upon the issue of the separate document of title to the said Lot and subject to the payment of the purchase price by the Purchaser to the Vendor in accordance with cl 4(1) and the observance of all the terms and conditions herein provided, the Vendor shall within twenty-one (21) days (or as soon as practicable)*, execute a valid and registrable memorandum [instrument] of transfer of the said Property [the said Lot] to the Purchaser, his heir or nominee or lawful assign, as the case may be. [2.1.2] Clause 11, being one of the several terms and conditions of sale stipulated in the Sch G or, as appropriate, the Sch H , agreement, is not just a contractual provision but has, in addition, statutory backing. Any non-compliance with the compulsory usage of the statutorily prescribed [*104] agreement of sale will entail statutory punishment.

Penalties Any person who contravenes any of the provisions of these Regulations shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand ringgit or to a term of imprisonment not exceeding three years or both. Any breach of any condition in a licence or in any advertisement and sale permit shall be deemed to be a contravention of these Regulations. Any person who knowingly and willfully aids, abets, counsels, procures or commands the commission of an offence against any provision of these Regulations shall be liable to be punished with the punishment provided for the offence. 13 InChan Brothers Development Sdn Bhd v Tan Kon Seng, 14 Ramly Ali JC commented on the nature of the provisions that were required to be spelt out in a sale and purchase agreement that took the old form of a Sch E agreement, 15 the precursor of the 1989 Sch G agreement, in the following manner (at p 646B-D): Regulation 12(1) of 1982 Regulations provides that every contract of sale for the sale and purchase of a housing accommodation together with the subdivisional portion of land appurtenant thereto shall be in the form prescribed in Sch E. Regulation 12(2) further provides that no amendment to any such contract of sale shall be made except on the ground of hardship or necessity and with the prior approval of the controller. In other words, all provisions in the sale and purchase agreement are actually statutory requirements which must strictly be complied with. Clause 23, particularly is meant to be as an additional protection for house buyers without effecting or limiting their rights under the common law. (Emphasis added.) (a) Contractual as well as statutory provisions in the Sch G or Sch H agreement [2.1.3] The judicial statement made by Ramly Ali JC in KC Chan Brothers case, quoted in para [2.1.2] above, reiterates the principle of the local housing law that each and every contractual provision enshrined in a statutorily prescribed Sch G or Sch H agreement is, basically, a statutory requirement which must strictly be adhered to, not only by the vendor [*105] but, to some extent, by the purchaser as well. Should there be a breach of the vendor/developers statutory covenants that are enacted therein, that breach will entail: (i) (ii) (iii) (iv) a statutory punitive sanction,16 a purchaser s statutory and contractual right to self-help,17 and / or, as the case may be, a civil suit in a court of law or a claim filed to the House Buyers Tribunal for the recovery of damages or other relief. 18

[2.1.4] It must be borne in mind that cl 11 of the standardized agreement, 19 notwithstanding its legislative intonation, is but one of the contractual provisions that regulates the contractual relationship vis-a-vis a sale of housing accommodation transaction between a willing vendor/developer and his corresponding willing purchaser for value. Clause 11, which imposes on a vendor/developer the onus to apply for and obtain, from the appropriate authorities, a separate document of title in respect of the housing accommodation, is designed by the legislature to confer upon a purchaser an additional statutory protection. This principle of housing law, however, does not extend to an individual sale and purchase of an already constructed and completed housing accommodation, whether with or without a separate title. 20 Such a private sale transaction, therefore, lies outside the ambit of cl 11. Neither does cl 11 curb or wipe out the
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common law rights of a purchaser to sue his or her vendor/developer for any breach of a Sch G or Sch H contract. [2.1.5] But in what manner does that additional protection take its tangible form? In order to extract that particular tangible form, the author proposes to analyse the statutorily prescribed cl 11 from two angles; namely, [*106] from the vendor-developer s stand point, whilst the other, from the purchaser s view point. (b) Conditions precedent to be satisfied by a purchaser before the execution of an instrument of transfer by a vendor-developer and the delivery of the issue document of title to a purchaser. [2.2.1] In any sale and purchase of a piece of registered land with a completed building erected thereon or, as the case may be, a fully constructed strata parcel, with or without an accessory parcel, it goes without saying that an individual vendor wants to recoup his or her investment by accepting, from the purchaser, the full purchase price. Conversely, it hardly needs to be repeated that a purchaser would want the relevant Torrens registered title to be registered in his or her name or an appointed nominee free from encumbrances.21 Where the purchase is concluded by more than one purchaser (the purchasers being a husband and his wife, or siblings in a family or perhaps business partners), the vendor is obliged, at common law, to transfer the Torrens registered title or strata title in their favour as co-proprietors, each to hold an undivided equal share (either in the form of an undivided one-half, one-third, one-quarter, one-sixth or one-eight share and so forth) or in accordance with the unequal shares that may be specified by the copurchasers. That sums up an individual sale or sub-sale scenario which is outside the ambit of the housing legislation. [2.2.2] On the other hand, when the subject matter of the sale concerns a housing accommodation which is about to be erected, or is in the midst of construction, the housing laws in the Housing Developers [Development] (Control and Licensing) Act 1966 and its related 1989 principal Regulations and the 2002 amendment Regulations will come into play to regulate the sale transaction of such a housing accommodation. Clause 11 will not be less operative. However, looking at the provision in cl 11, it would appear that the duty of a vendor/developer to transfer the relevant title would only be triggered after a separate document of title has been issued by the State s Registrar of Titles and not any earlier.22 However, when the event of issuance of that Torrens land title does occur, it will chain [*107] react and trigger off the vendor/developers contractual and statutory burden to execute, within twenty-one (21) days from the date of receipt of such a title, a valid and registrable instrument of transfer 23 of the housing unit, or the strata parcel, in favour of its corresponding purchaser, his heir, nominee or lawful assign, as the case may be. [2.2.3] However, a vendor/developers contractual and statutorily imposed duty to execute a valid and registrable instrument of transfer. These statutory forms of transfer are the equivalent of the common law conveyance, but derive their efficacy in the conveyance of a legal estate not from execution, but from registration. The State registration is something more than non-interference with rights. It confers title. It sometimes confers a better title than the transferor possessed. It provides, as the Privy Council said in [1891] AC 248 at 254: ... . ... It is, therefore, quite different from a transaction dependent for its result merely on the agreement and acts of the parties themselves. . (Emphasis added.) 24 of a housing accommodation in favour of its corresponding bona fide purchaser for value, unlike a sale transaction which involves a completely erected
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[*108] house. Sub-regulation (1) shall not apply if at the time of execution of the contract of sale, the certificate of fitness for occupation for the housing accommodation has been issued and a certified true copy of which has been forwarded to the purchaser; ...25 or just a piece or several pieces of empty land, as was the instance in Oh Hiam v Tham Kong, 26 is strictly conditional upon certain conditions precedent having been first observed and performed by the purchaser concerned. [2.2.4] It is apparent from a reading of cl 11(2) of the 2002 standardized Sch G or H agreement, that the Malaysian Parliament, in its wisdom, does foresee the necessity to protect, to some extent, the vendor-developer from being short-changed by a recalcitrant purchaser who does not settle with the vendor-developer any outstanding monthly service and maintenance charges or other payments. Should a housing unit be transferred without the settlement of the outstanding charges and or other payments that are overdue, then there will only be a slim possibility, other than a civil action in a court of law, to recover such outstanding sums from the recalcitrant purchaser. Accordingly, the legislature saw fit to impose only a conditional onus on a vendordeveloper to transfer a housing unit if, and only if, the purchaser has paid the purchase price in full in accordance with cl 4(1) of the standardized agreement and has observed and complied with the other terms and conditions that are required to be observed and performed by the purchaser under the standardized contract. [2.2.5] These terms and conditions, or the conditions precedent, take the form of the various necessitated payments to be made by a purchaser to his vendor-developer, as detailed in cl 11(2) of the 2002 standardized Sch G or Sch H agreement. Such conditions precedent prior to a transfer include the following: [*109] (a) that the purchase price has been paid by the purchaser to his vendor-developer in accordance with cl 4(1) and the Schedule of Payment of Purchase Price; (b) the observation and performance of all the terms and conditions contained in the standardized Sch G or H agreement; including but not limited to: (i) the payment of an administrative fee not exceeding five hundred ringgit (RM500) or zero point five per centum (0.5%) of the re-sale or sub-sale price, whichever is the lower, See the 2002 insertion of reg 11A which amended the former provision contained in cl 12 of the Sch G or Sch H agreement. However, the English common law on assignment require only three basic elements: (a) the assignment shall be in writing; (b) it must be absolute and (c) notice in writing must be given to a third party concerned. Only a debt or a chose in action can be assigned, ownership in land cannot form the subject matter of an assignment. When an assignment situation is applied to a re-sale or a sub-sale of a housing accommodation situation, the sole purpose of the third element of notice is to place the vendor-developer (the third party to the assignment) on notice of the assignment so that when an individual qualified/strata title has been issued and the vendor-developer is obligated to transfer the same, that vendor-developer will, by virtue of the written notification of the assignment, transfer the housing accommodation in favour of the assignee who has been named in the assignment instead of in favour of the
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assignor (the original purchaser). But due to an incorrect understanding of the law on assignment, a fourth element in the form of consent has been recognized by the Malaysian judiciary in the concept of an assignment and, worst of all, has currently been given legislative recognition: see the new cl 12 added by the 2002 amendment; see also SY Kok s articles, A Review of Loan Agreements and Deeds of Assignment (Absolute) under the Malaysian Torrens System [1994] 2 CLJ xxxv) and A Review of the Court of Appeal Case of [2000] 1 MLJ lxv. 27 (ii) the payment of an adjustment sum of not more than two per centum (2%) of the total area of the subdivided plot of land to which a qualified title will be subsequently issued; but in the case of a strata parcel, only the purchaser is entitled to receive a compensated adjustment sum from the vendor-developer and not vice versa, Clause 13(4), being a new amendment that was added via the Housing Developers [Development] (Control and Licensing) (Amendment) Regulations 2002 stipulates as follows: Cl 13(4) The Vendor shall not be entitled to any adjustment of the purchase price if the area of the said Parcel as shown in the strata title exceeds the area shown in the Building Plan. [*110] (iii) the payment of a fair and justifiable proportion of the costs and expenses incurred for the maintenance of the infrastructure under cl 17(3), Clause 17 of the Sch G agreement and cl 17(3) of the Sch H agreement. (iv) the payment of all outgoings including quit rent, rates, taxes, assessment and other charges in respect of the unit of housing accommodation, Other than a couple of minor alteration to the former 1989 clause that governs the purchaser s liability to pay a portion of all outgoings as specified in that clause prior to the issuance of an individual qualified title in respect of his purchased unit of housing accommodation, the 2002 amendment has changed the commencement date of such liability of the purchaser from the previous date of the signing of the sale agreement to a later date as specified in the 2002 provision which is: ... as from the date he [purchaser] takes vacant possession of the said Building or from the date the said Property is transferred to the Purchaser, whichever is earlier and in the event separate document of title [qualified title] to the said Lot has not yet been issued and the said Property is not transferred to the Purchaser at the date he takes vacant possession of the said Building, ... Under the 2002 version of the Sch H agreement, a purchaser s onus to pay his share of the outgoing has been relocated in cl 22 therein. (v) the payment of monthly service charges to meet the costs and expenses for the daily maintenance and management of the common property and for the services provided by the vendor-developer prior to the establishment of a management corporation under the Strata Titles Act 1985, The 2002 amended version of cl 19 of the Sch H agreement which is not applicable to a sale of a housing accommodation that is covered by a Sch G agreement. The root strata concept provisional share units relates to a provisional block or blocks that are earmarked for future development and has nothing to do with the on-going development of a tower block or blocks comprising of units of housing accommodation which form the subject matter of the Sch H contracts: STA ss 19 and 36 The adjectival word provisional is, therefore, a misnomer. It is strange that cl 19 does not refer at all to the administration of the common property apart from the regular maintenance and management of the same, but it is the author s contention that the common property in a strata scheme cannot be maintain and managed without proper administration; as such, the administrative fees should also be included for apportionment in accordance with each
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strata parcel s share unit entitlement. However, the Singapore legislation is more explicit. Section 33(3) of the Land Titles (Strata) Act of Singapore stipulates as follows: In respect of any subdivided building or buildings comprised in a strata title plan, the management corporation concerned shall have the powers, duties and functions conferred or imposed on it by or under this Act, or by the by-laws and, subject to this Act, shall have the of the common property. (Emphasis added.) 31 [*111] (vi) the payment of a monthly contribution towards a sinking fund, for the explicit purposes as specified in cl 20 and no others, The three explicit purposes as stated in the 2002 added cl 20(1) of the Sch H agreement is a partial reproduction of s 46 of the Strata Titles Act 1985. and the quantum of the monthly contribution being ten per centum (10%) of the service charges as expressly stated in cl 20(2); and (vii) the payment of a fair and justifiable proportion of the insurance premium in respect of the low-rise or high-rise building in which the purchaser s strata parcel is situated.

[2.2.6] The author s analysis on the various conditions precedent practically sums up the contractual as well as the statutory liabilities of a bona fide purchaser for value of a unit of housing accommodation. The system of private caveats is substituted for the equitable doctrine of notice in English land law.33 The vendor-developer s liabilities under the standardized Sch G or Sch H agreement concerns mainly the payments of the various sums listed in para [2.2.5] above. However, should a vendor-developer desire to waive and not to collect all or any of the minor payments as listed above, it may do so because the statutory provisions do not compel that vendor-developer to insist on full performance on the part of the purchaser vis-a-vis the clauses that have been analysed and highlighted aforesaid. An example of such a possible waiver lies in cl 17(3) 34 which, so far as the author is aware, has never been collected by a vendor-developer notwithstanding that it is entitled to collect under cl 17(3). [*112] [2.2.7] If a vendor-developer neglects, fails and / or refuses to perform its part of the bargain under cl 11 thereof, an aggrieved purchaser would be entitled to move a court of law and equity for the court s discretionary remedy to specifically perform that part of the contractual bargain. This remedy of specific performance is as between a defaulting vendor-developer and his aggrieved purchaser,35 but, as between that defaulting vendor-developer and the Controller of Housing, the breach could also be punished by a fine or a jail term or by both.36 (c) A purchaser s statutory duty/obligation to accept an instrument of transfer and the relevant issue document of title

[2.3.1] Conversely, a purchaser s statutory duty or obligation to accept an instrument of transfer of his unit of housing accommodation is implied under cl 11(2) of the standardized Sch G or Sch H agreement. Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by - any party thereto; ... 37 The purchaser s implied duty is enshrined, by legislation, in cl 11(2) and in the instrument of transfer itself. After all, an instrument of transfer in the statutorily prescribed Form 14A requires, in a pure sale and purchase of a housing accommodation situation, execution by both the transferor (vendor-developer) and its
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corresponding purchaser or the latter s heir, nominee or lawful assign, as the case may be. It would rather be pointless for the legislature to impose a mandatory onus on a vendor-developer to strictly perform, under compulsion of penal liability for its breach, the execution of an instrument of transfer after obtaining issuance of the relevant issue document of title when, at the tail-end of the conveyancing process, it will be confronted by a recalcitrant purchaser who could frustrate that process by not signing the instrument of transfer and taking delivery of the related issue document of title. That instrument of transfer takes two to tango. [*113] [2.3.2] To make matters worse, if the recalcitrant purchaser has obtained a loan to assist him in defraying a portion of the purchase price for his acquisition of a unit of housing accommodation and the vendor-developer has, pursuant thereto, given an undertaking to an end-financier to perfect the registration of the instrument of transfer in due time in order to trigger-off the progressive draw-downs of the loan by the end-financier in accordance with the 2002 amended Third Schedule of Payment of the Purchase Price, the vendor-developer is further obliged to that third party end-financier to honour and discharge its undertaking to perfect the transfer in order to facilitate the simultaneous registration of the instrument of transfer in favour of the purchaserborrower and the instrument of charge in favour of the end-financier. Most of the purchasers [of housing accommodations] require financial assistance initially in the form of housing loans to finance their purchases. The loans will take a variety of forms but basically, whilst the house or flat is still under construction and the purchase price is required to be paid only by progressive payments in accordance with the Third Schedule of Payment of the Purchase Price, the initial character of the loan will be that of a housing loan, pure and simple. 38

(a) Meaning of the equitable remedy of specific performance [3.1.1] The equitable remedy of specific performance has been described as an order of the court directing a party to a contract to perform his obligations thereunder according to its terms . 39 According to Pettit, it has been said 40 that it presupposes an executory as distinct from an executed agreement, something remaining to be done, such as the execution of a deed or a conveyance, in order to put the parties in the position relative to [*114] each other in which, by the preliminary agreement, they were intended to be placed. It is of some importance in this case to notice that distinction because, though as it said equitable relief, approximate to specific performance may be given in the second class [sic the class of agreements], yet the peculiar doctrines of the Court as to the specific performance of contracts do not necessarily apply to the other forms in which the Court grants specific relief . [see Fry 5th ed para 38, 43, 481.] 41 [3.1.2] This nature of a decree of specific performance, that presupposes an executory agreement that needs to be converted into an executed contract, pursuant to an ideal situation of achieving a completion status of a contract, is well explained by Pettit in the following manner: 42 In this passage Lord Selbourne was drawing a broad distinction between the class of executory agreements, such as agreements for the sale of land and marriage articles, and the principles applicable to specific performance of them on the one hand, and on the other a very different class of agreements which he described as ordinary agreements for work and labour to be performed, hiring, and service, and things of that sort , for which specific performance is not
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available. The strict and proper sense of the term specific performance apparently designates the first type of case where an executory agreement is to be followed by the execution of a more formal instrument. ... The basis of the jurisdiction to grant specific performance has always been the inadequacy of the common law remedy of damages for breach of contract. The court gives specific performance instead of damages, only when it can by that means do more perfect and complete justice. . 43 An alternative way of putting it is to say that the question is whether it is just in all circumstances for the plaintiff to be confined to his remedy in damages. 44 Thus the common law remedy may be regarded as inadequate and specific performances may be available in an appropriate case, where only nominal damages could be recovered by an action at law, though it is not clear why this should be so. Nominal damages are awarded because the plaintiff is regarded as having suffered no loss, and they should accordingly be regarded as adequate in principle. Hanbury and Martin 45 suggest the explanation may be that the remedy of damages is inadequate if it would lead to the unjust enrichment of the wrongdoer. (Emphasis added.) [*115] [3.1.3] The crux of the court s discretionary power when granting a remedy of specific performance appears to lie at the heart of the principle that contractual parties, whilst their agreements remain executory, that is, one party has performed or stands ready, able and willing to perform his part of the bargain whilst the other party has yet, and is unwilling, to perform his part. The court should then adjudge whether, by granting an order for specific performance, its judicial effect will, accordingly, achieve a more perfect and complete justice? 46 If that justice is achievable, then the contractual parties should be put in the envisaged position relative to each other in which by the preliminary agreement they were intended to be placed. Consequently, if that just position can only be achieved where the court interferes and orders the defaulting party to observe and perform the outstanding act that remains to be done, such as the formal execution of a deed, a conveyance or, under the Torrens system of titles and encumbrances by registration, a valid and registrable instrument of transfer or an instrument of charge, if applicable, then a decree of specific performance should be so ordered. 47 (b) Reasons for a purchaser s non-acceptance of a transfer [3.1.4][emsp ]The failure on the part of a recalcitrant purchaser to accept, from his vendordeveloper, an instrument transfer in respect of his acquired housing accommodation is tantamount to a breach of cl 11 of the 2002 standardized Sch G or Sch H agreement. Consequently, a non-perfection of a housing or other loan security by a consequential nonexecution of an instrument of charge to secure the loan is a breach of the loan agreement. The most common reasons for a recalcitrant purchaser to [*116commit] breaches of such agreements include: (a) the avoidance of payment of ad valorem duties that an executed instrument of transfer or charge will attract. Where a person, having contracted for the purchase of any property but not having obtained a conveyance thereof, contracts to sell the whole, or any part thereof, to any other person or persons and the property is in consequence conveyed by the original seller to different persons in parts of parcels, the conveyance of each part of parcel sold to a sub-purchaser shall be chargeable with ad valorem duty in respect only of the consideration moving from the sub-purchaser thereof, without regard to the amount or value of the original consideration; and the conveyance of the residue, if any, of such property to the original purchaser shall be chargeable with ad valoram duty in the manner specified by s 12A and item 32(a) of the First Schedule. 48 (b) a purchaser might have died and the consequential grant of probate or letters of administration, has not been obtained; or (c) the on-going bickering about high or excessive quantum of the monthly service
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and maintenance charges and conversely, the poor quality or non-existence of services by the vendor-developer at ground zero. [3.1.5] Meanwhile, the vendor-developer is ready, willing and able to execute the requisite instrument of transfer and to deliver the same, together with the registered title deed, to the purchaser or, as the case may be, to the purchaser s end-financier. The latter event will also discharge the vendor-developer s written undertaking that has been given to the purchaser s endfinancier in exchange for the progressive draw-downs of the purchaser s loan. However, due to the recalcitrant purchaser s inaction, the position of a vendor-developer would lie in limbo, the vendor-developer would also incur unnecessary additional administrative expenses by keeping the qualified or strata title concerned in a safe place until such time when the defaulting purchaser condescends to perform his part of the bargain as envisaged by the Legislature in cl 11. Until such time, the vendor-developer, especially a strata scheme developer, cannot discharge the statutory duties imposed upon it by s 41 of the Strata Titles Act 1985, including the onus to convene the first annual general meeting of the management corporation of the stratified scheme. Under the circumstances, nothing in the conveyancing steps could proceed forward unless the court is willing to lend a helping hand to rectify the impasse that is caused solely by the defaulting purchaser and thus restore the contractual parties to the final position which the parties had originally intended to be [*117] placed in relation to each other by cl 11 via the granting of an order for specific performance. It is important to observe that according to the practice of conveyancing in New South Wales the preparation of the transfer, the payment of stamp duty, and the carriage of the instrument [of transfer] through the Stamp Office and the Land Titles Office admittedly fall to the task of the transferee at his own cost. I am much disposed to believe that this provision of law [on stamp duties] was passed in view of the practice of conveyancing, and that when it places the obligation on the transferee it gives legislative recognition to that practice as incidental to the acceptance of a transfer under the Real Property Act. There is no obligation on the transferor [to pay the stamp duty]. The State Acts place no burden on him. He is entitled to have the transferee s task performed by that party, and payment of the duty is part of that task. The State registration is something more than non-interference with rights. It confers title. It sometimes confers a better title than the transferor possessed. It provides, as the Privy Council said in (1891) AC 248 at 254, that , in bona fide and for value, from a registered proprietor, [instrument] [charge] on the Register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author s title . If presented by the transferee for registration, the stamp duty is not an obstacle to the disposal of the land by the Commonwealth. It is not a burden on any operation of the Commonwealth; it is, at the most, an obstacle to the transferee getting a certain kind of title from the State - it is a burden on the operations of the transferee. The operations of the Commonwealth are finished - so far as the law of conveyancing and the Real Property Act are concerned - as soon as the transfer, duly executed by the Commonwealth, is handed to the transferee. It seems that, under the Real Property Act, the transferor, as well as the transferee, is entitled, as between the transferor and the Registrar-General, to present the transfer and to demand registration. There may be some in which , for some reason or other, . In such cases the transferor would be entitled to call upon the transferee to pay the costs of registration, including the stamp duty. . In short, the Stamp Duties Act does not put any tax whatever on the transferor; it leaves undisturbed the rule that, as between transferor and transferee, and in the absence of express contract to the contrary, the transferee has the burden of registration (including duty).49 [*118]
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(c) The Sch G or Sch H agreement does not contain any specific performance provision [3.1.6] It may be argued that the Legislature has made no provision in the Sch G or Sch H agreement for a court of law and equity to interfere with the rights of the parties to such an agreement by ordering a decree of specific performance. The short answer to that argument is that there is no express provision anywhere in those statutorily prescribed agreements which would bar a court from granting such an order. In fact, the provisions in those prescribed agreements do not rule out the common law remedy to sue under the law of tort. For example, in KC Chan Brothers Development Sdn Bhd v Tan Kon Seng & Ors, 50 Ramly Ali JC observed on this point as follows (at 646C-D): Regulation 12(1) of 1982 Regulations provides that every contract of sale for the sale and purchase of a housing accommodation together with the subdivisional portion of land appurtenant thereto shall be in the form prescribed in Sch E. Regulation 12(2) further provides that no amendment to any such contract of sale shall be made except on the ground of hardship or necessity and with the prior approval of the controller. In other words, all provisions in the sale and purchase agreement are actually statutory requirements which must strictly be complied with cl 23, particularly is meant to be as an additional protection for house buyers without effecting or limiting their rights under the common law. 51 (Emphasis added.) [3.1.7] His Lordship, Ramly Ali JC then commented on the nature of those scheduled sale agreements by stating that (at 647I-648A and at 648D-E): By virtue of reg 12(1) of the 1982 Regulations, every contract of Sale for the sale and purchase of a housing accommodation shall be in the form prescribed in Sch E. Thus the sale and purchase agreements are not merely private contract between the developer and the house buyers, but are contracts in statutory form, containing statutory requirements which must be fully and strictly complied with ... (Emphasis added.) From this recital, it is clear that the approved building plan must be attached or annexed to the sale and purchase agreement and forms part of the agreement as Second Schedule. It is a mandatory requirement. RK Nathan J in dealing with reg 11(1) of the 1989 Regulations (which in effect is the same with reg 12(1) of the 1982 Regulations) in Chua Eng Hong & Anor v Palm Springs Development Sdn Bhd [2001] 6 MLJ 463 (HC) has made the same ruling ie that the sale and purchase agreement was in the statutory form and [*119must] be complied with and cannot be waived or modified except with the approval in writing from the controller. [4.1.1] In view of the judicial remarks made by Ramly Ali JC and RK Nathan J in the respective High Court cases of KC Chan Brothers Development and Chua Eng Hong, and highlighted in the preceding paragraph, the author submits that the statutory requirements in the Sch G or Sch H agreement, including the transfer provision in cl 11, must not only be complied with in the strictest manner by the vendor-developer, but must also likewise be observed and complied with by a purchaser. Since the courts have already opined that such contractual provisions have the backing of statutory law, a court of law and equity should not withdraw its support for the enforcement of such statutory provisions. A right to a prayer for specific performance should not be reserved to a purchaser only but ought to be made available also to a vendor-developer to
12

ensure that the parties will ultimately be placed in the position that they had originally intended to be placed in relation to each other. 52 [4.1.2][emsp ]Perhaps the last word on the right of an innocent vendor-developer to sue for specific performance of the agreement against a recalcitrant purchaser for the latter s failure to receive an instrument of transfer of a housing accommodation ought to be reserved for Cheshire and Burns where the co-authors wrote as follows (at 140): 53 The most effective remedy available to either party is to sue for specific performance, ie to demand that the contract be completed according to its terms. One of the general principles established by equity is that this relief should be given only where damages do not afford an adequate remedy. But the subject matter of a contract for the sale of land is of unique value, so that specific performance of the contract is available to a purchaser as a matter of course. Furthermore, even though a vendor could be adequately compensated by damages for the failure of a purchaser to complete, yet, in pursuance of the doctrine that remedies should be mutual, equity grants specific performance to a vendor as well as to a purchaser. [4.1.3] Thus, notwithstanding that an order for specific performance is discretionary, 54 that judicial discretion is not to be exercised in an arbitrary or capricious manner, but in accordance with rules that have been established by the eminent Lord Chancellors. 55 Thus, a decree of specific [*120perform] can, and should, be granted to an innocent vendor-developer, especially so when a contractual provision has been encapsulated with statutory content. n1 This conveyancing term is commonly used in Australia; it refers to an interim period when the purchase price or the balance thereof has been paid in full in accordance with the terms of the sale and purchase agreement but before the registration of an instrument of transfer has been effected.Under the Land Title Act 1994 of Queensland, but not under the Malaysian National Land Code 1965, a purchaser of registered land could put any third party who might, subsequently, be interested to deal with the land concerned, on due awareness of the former s purchase of the land by depositing a settlement notice with the Registrar of Titles. This point has been discussed by MacDonald, McCrimmon and Wallace, Real Property Law in Queensland (LBC Information Services, Sydney, 1998) at p 393.This author has contended that a bona fide purchaser for value who holds an executed and registrable instrument of transfer of registered alienated land, is in possession of a caveatable claim to a registered title to his vendor s land and, in order to prevent that preregistration claim from being defeated by a subsequent adverse claim to the same title by a rival claimant, a private caveat, as properly prescribed by the Torrens statute, should be entered by a prudent purchaser: see SY Kok s articles, Are Private Caveats Encumbrances? (1986) Jan Issue INSAF 14-38; A Sequel [1995] 1 CLJ xxxvii; and A Review of the Court of Appeal Case of Luggage Distributors (M) Sdn Bhd [1995] 2 MLJ cix. n2 The caveat provisions are designed by the legislature to protect a bona fide purchaser for value during the interim period before registration. As such, there is no necessity, as was done in Queensland, to provide for an additional settlement notice ; the argument of the increase of workload vis-a-vis the entries of caveats would apply with equal force to the lodgment of settlement notices and is, therefore, unacceptable to this author.Under the Malaysian conveyancing practice, the root phrase that has currency is payment of the balance of the purchase price which indicates that whatever the amount of the purchase price, it has been paid in full, within the time, and in accordance with the terms and manner of payment, as stipulated in
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the sale contract.For example, in Taylor v The Land Mortgage Bank of Victoria Ltd (1886) 12 VLR 748, one of the conditions of sale, as stated in 749, was that upon and at any time after payment of the whole of the purchase money the vendor will sign a proper transfer of the property to the purchaser, such transfer to be prepared by and at the expense of the purchaser . A similar contractual term is also evident within the context of the Malaysian conveyancing practice. For a sale of housing accommodation that is regulated by the Housing Developers [Development] (Control and Licensing) Act 1966 and the related Housing Developers [Development] (Control and Licensing) (Amendment) Regulations 2002 which came into effect on December 1 2002, see cl 10 of the prescribed Sch G agreement and cl 10 of Sch H agreement.When commenting on the respective duties of a vendor and a purchaser to complete a contract of sale of unregistered land in England, Cheshire and Burn s, Modern Law of Real Property (16th ed, Butterworths, London, 2000) had this to say (at 819):And at (838), the authors continued:Cont d next page n3 usual covenants for title by the vendor. He must also tender the price that he has agreed to pay. On the vendor s side completion involves the execution of the conveyance and the delivery of possession of the land to the purchaser: Williams, Vendor and Purchaser (4th edn), p 37; [1991] Conv 15, 81, 185 (DG Barnsley). See Edward Wong Finance Co Ltd v Johnson Stokes & Master [1984] AC 296, [1984] 2 WLR 1 where the Privy Council held a purchaser s solicitors liable for negligence in completing a sale on payment of the purchase price in exchange, not for the executed documents of title but for an undertaking by the vendors solicitor to forward to them certain documents within a specified period - completion Hong Kong style .See also Gray, Elements of Land Law (2nd ed, Butterworths, London, 1993) at 271, et seq; Megarry & Wade with Harpum, The Law of Real Property (6th ed, Sweet & Maxwell, London, 2000) at 154, et seq;3 In The Commonwealth v New South Wales (1918) 25 CLR, Isaacs and Rich JJ said (at 342):In The National Trustees, Executors and Agency Co of Australasia Ltd v Boyd (1926) 39 CLR 72, Isaacs J said (at 84):Tierney v HalfpennyTaylor v Land Mortgage Bank of Victoria LtdThus, from the above passage of Isaacs J, there is no hard and fast rule as to who should present an instrument of transfer of registered land for registration; it can either be the transferor or the transferee but a duty still remains with a vendor to give a good title at a sale of his registered land. n4Dr Ti Teow Siew v Pendaftar Geran-Geran Tanah Negeri Selangor [1982] 1 MLJ 38 at 39A (HC). n5The aphorism of Barwick CJ in Breskvar v Wall [1971] 126 CLR 376 is worth reproduction. The Lord Chief Justice of Australia, presiding over a full Bench of the High Court said (at 385):Cf an old general law title which was disparagingly described by Lord Westbury as difficult to read, impossible to understand, and disgusting to touch : reproduced in Whalan, The Torrens System in Australia (Law Book Co Ltd, Sydney, 1982) at 13 (n 1) therein and echoed by the High Court in Lim Theng Hoe v Commissioner of Land Titles, Penang [1987] 2 MLJ 89 at 90B-C (HC).The uncertainty that was caused by the old general law title was commented by Hinde, McMorland and Sim with Campbell and Grinlinton (ed), Land Law in New Zealand (Butterworths, Wellington, 1997) as follows (at [para 2.013]):the chain of title was only as strong as its weakest link n6 In the landmark case of Frazer v Walker [1967] 1 AC 569; [1967] NZLR 1069 (PC) which opted for the doctrine of immediate indefeasibility and thus settled the century-old issue between deferred indefeasibility under Gibbs v Messer [1891] AC 248 and immediate indefeasibility under Assets Co Ltd v Mere Roihi [1905] AC 176 (PC), Lord Wilberforce said (at 580A-B/107520-26):It is in fact the registration and not its antecedents which vests and divests titleThe decision of Lord Wilberforce is to be preferred so as to give certainty of a registered title or a registered interest (registered encumbrance) in land. This certainty of a Torrens title was commented upon by
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Sackville and Neave, Property Law: Cases and Materials (6th ed, Butterworths, Sydney, 1999) in the following manner (at para [6.3.25]): n7 In Adorna Properties Sdn Bhd v Boonsom Boonyanit [2001] 1 MLJ 241 (FC), the doctrine of immediate indefeasibility which accord a defensive shield to registered titles and registered interests in registered alienated land from being attacked by adverse claims (other than the stated statutory exceptions to s 340 of the National Land Code 1965) was preferred by the Federal Court over the decision of the Court of Appeal in Boonsom Boonyanit v Adorna Properties Sdn Bhd [1997] 2 MLJ 62 (CA) notwithstanding that s 340 appears to be drafted in the format of deferred indefeasibility. See also an interesting commentary on the Malaysian deferred indefeasibility provision in Ahmad Moosdeen, On the Proviso in Section 340(3) of the National Land Code 1965 [2002] 2 MLJ lxvi.7 In Fels v Knowles (1906) 26 NZLR 604, Edwards J, when delivering the judgment of the Court of Appeal of New Zealand, had the occasion to observe a Torrens register in the following manner (at 620): n8 The theory on the reliability and dependability of the Torrens register without the necessity of going behind it to search for hidden equitable interests was also followed in Horne v Horne (1906) 26 NZLR 1208; Waimiha Sawmilling Co v Waione Timber Co [1926] AC 101 at 106 (PC); Teh Bee v Maruthamuthu [1977] 2 MLJ 7 at 12C (HC); Damodaran v Choe Kuan Him [1980] AC 497 at 502H503A; [1979] 2 MLJ 267 at 269D-E (PC); Dr Ti Teow Siew v Pendaftar Geran-Geran Tanah Negeri Selangor [1982] 1 MLJ 38 at 39 I (HC); and Wu Shu Chen (sole executrix of the estate of Goh Keng How, deceased) v Raja Zainal Abidin bin Raja Hussin [1997] 2 MLJ 487 at 491A (CA). n9 [Act A1142]. The date of coming into operation of the Amendment Act and its Regulations is December 1 2002. However, the 2002 Amendment Act and the accompanying Amendment Regulations of 2002 which sought, inter alia, to change the original title of the 1966 principal Act [Act 118 of 1966] and its related 1989 principal Regulations [PU(A) 58/1989] by substituting, in the respective titles of the principal Act 1966 and the principal Regulations 1989, the word Developers with a new word Development , had erroneously retained, in their wake, the term Developers that was intended to be replaced. n10 PU(A) 473/2002. n11 For an analysis of the root term housing accommodation which makes its debut in the definitive section of the Housing Development (Control and Licensing) Act 1966, see SY Kok, Law Governing the Housing Industry (Malayan Law Journal Sdn Bhd, Kuala Lumpur, 1998) Ch 4 at 47 et seq. n12 If the housing accommodation is a strata parcel, then Sch H agreement is apt and the renumbered cl 11 therein stipulates as follows:*Delete whichever is not applicable - as soon as practicable applies to lands in Penang & Malacca. n13 Regulation 13 of the 1989 principal Regulations, which deals with the imposition of penalties for any breach of the regulations, states as follows:The scope of this penalty provision concerns persons who flout any of the regulations that are designed to regulate the housing industry and the players that are involved in that industry. As such, the penalties should not cover any purchaser of a housing accommodation. n14 [2001] 6 MLJ 636 (HC).
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n15 Schedule E agreements existed under reg 12(1) of the former Housing Developers (Control and Licensing) Regulations 1982; repealed and replaced by the 1989 principal Regulations. n16 See the punitive provisions in reg 13 of the 1989 principal Regulations which have been quoted in (n 13) above. n17 The author is of the view that cl 26(2) of the Sch G agreement and cl 30(2) of the Sch H agreement are self-help provisions but do not exhaust the common law right of an aggrieved purchaser whose housing accommodation is affected by defects to sue the vendor-developer for damages at common law: City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1988] 1 MLJ 69 at 72 (PC); Teh Khem On v Yeoh & Wu Development Sdn Bhd [1995] 2 MLJ 663 (HC); and KC Chan Brothers Development Sdn Bhd v Tan Kon Seng [2001] 6 MLJ 636 (HC). n18 The catch phrase without effecting or limiting their rights under the common law that appears in the passage of Ramly Ali JC s judgment in KC Chan Brothers case and quoted in para [2.1.2] above, indicates that whatever rights or remedies that are provided in the Sch G or Sch H agreement are additional protection for aggrieved purchasers whose standardized contracts for the sale and purchase of housing accommodations have been breached by a defaulting vendordeveloper but without limiting nor nullifying their common law rights to sue that vendordeveloper for grievances (including damages for late delivery) that arise from the executed contracts: see the cases cited in (n 17) above. n19 Clause 11 of Sch G agreement has been quoted in para [2.1.1] above whilst cl 11 of Sch H agreement has appeared in (n 12) above. n20 See (n 24) below. n21 For a discussion on the meaning of the term encumbrance and the term registered interest in alienated land which is distinct from the Torrens concept of a registered title , see SY Kok, The Concept of Encumbrances under the Modified Malaysian Torrens System [1995] 2 MLJ cix. n22 Clause 11(1) imposes an additional statutory onus on a vendor-developer to apply, as expeditiously as possible, to the State Authority for a separate document of title for each of the purchasers units of housing accommodation. The application for the issuance of separate titles in respect of the housing accommodations needs to be done shortly after the contract has been made by the respective parties thereto. n23 It pains the author whenever he sees an instrument of transfer or an instrument of charge being referred to as a memorandum of transfer (MOT) or a memorandum of charge . The latter archaic terminology belonged to the long gone-bye era of the former Land Code 1926 (Cap 138) of the Federated Malay States which came into force on 1 January 1928. n24 In Francis, Torrens Title in Australasia (Butterworths, Sydney, 1972) the nature of an instrument of transfer of Torrens registered land was commented upon by that author who wrote as follows (at 249):Isaacs and Rich JJ, in a joint judgment in The Commonwealth v The State of New South Wales (1918) 25 CLR 325 said (at 341-342):Gibbs v Messerthat everyone who purchases, in bona fide and for value, from a registered proprietor and enters his deed of transfer or mortgage on the register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author s titleIt is not the parties who effectively transfer the land, but it is the State that does so, and in certain cases more fully than the party could. In short, a transferee seeking registration of a transfer seeks State affirmance of his positionFor a discussion on the effect of a forgery that was made in the name of a fictitious person, see Sackville & Neave, Property Law: Cases and Materials (6th ed, Butterworths, Sydney, 1999) Ch 6, in particular, para [6.3.38] et seq.For an insight on the
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early methods of conveyance at common law, see Butt, Land Law (4th ed, Lawbook Co, Sydney, 2001) at para [1920] et seq. n25 Prior to the Housing Developers [Development] (Control and Licensing) (Amendment) Act 2002, the author had, on several occasions at seminars, opined that notwithstanding the gray area of the housing law on whether a standardized Sch G or H agreement should or should not be used in conjunction with a newly completed but unsold vendor-developer s unit of housing accommodation, there should be no such necessity. The law has, since 1 December 2002, expressly provided for such a conclusion. Regulation 11 of the principal Regulations of 1989, which deals with the compulsory usage of Sch G or H agreement, has been amended in 2002 by inserting the following new subregulation after sub-reg (1). It reads: n26 [1980] 2 MLJ 159 (PC). In this case, several pieces of land that were planted with rubber trees formed the subject matter of a sale transaction. By a unilateral mistake, the registered title to a family bungalow was wrongly included in the instrument of transfer. Under the circumstances, an equitable remedy of rectification of the contract of sale in favour of the vendor was granted by the Privy Council. n27 Phileo Allied Bank v Bupinder Singh and the Deed of Assignment by way of Charge only n31 control, management and administration n33 The Torrens concept of a bona fide purchaser for value of registered land and the common law concept of a bona fide purchaser for value without notice of unregistered land are two entirely different concepts because the common law doctrine of notice, which is peculiar to the English system of unregistered conveyancing, has no role to play in the Torrens system of registered conveyancing: in Eng Mee Yong v Letchumanan[1980] AC 331; [1979] 2 MLJ 212 (PC), Lord Diplock succinctly announced the non-application of the common law element of notice to the National Land Code 1965 in a one-line statement of the Malaysian land law which reads as follows:The unfortunate part is that Lord Diplock s one-line statement of the Malaysian law has been unnoticed or unappreciated by both the judiciary and the commentators on the Malaysian land law: see SY Kok s LLM. Thesis: Nature of Pre-registration Concepts within the Torrens System of Titles and Encumbrances by Registration [2003] and his criticisms on the lack of understanding by the judiciary on this point and the consequential recognition of pre-registration rights to a vendor s title as equitable interests , not only by the Malaysian courts but also by the Australian courts, in his Thesis and in Nature of Rights, Title and Interest under the Malaysian Torrens System: The Non-Application of English Equities and Equitable Interests in Malaysian Land Law [1983] 1 MLJ cxlix; Are Private Caveats Encumbrances (1986) Jan Issue INSAF 14 Equity in Malaysian Land Law [1996] April MSLJ 66; [1994] 3 MLJ ccxii. n34 See (n 28) above. n35 Under s 22(a) of the Specific Relief Act 1950 (Act 137), either party to a contract may move a court of law and equity for a discretionary decree of specific performance against the corresponding defaulting party.The general equitable maxims that he who comes to equity must come with clean hands and that he who seeks equity must do equity apply to a suit for specific performance: Meagher, Gummon and Lehane, Equity: Doctrines and Remedies (3rd ed, Butterworths, Sydney, 1992) at para [2023]. n36 The provision contained in cl 11 has been quoted verbatim in para [2.1.1] above. n37 See para [2.1.2] above The discretionary equitable remedy of specific performance is a
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double-edged sword; it is open to a purchaser as well as a vendor-developer via s 22(a) of the Specific Relief Act 1950 (Act 137) which stipulates as follows: n38 In SY Kok, Law Governing the Housing Industry (Malayan Law Journal Sdn Bhd, Kuala Lumpur, 1998) Ch 9, the author observed (at 172): n39 Pettit, Equity and the Law of Trusts (8th ed, Butterworths, London, 1997) at 610. n40 Per Lord Selborne LC in Wolverhampton and Walsall Rly Co v London and North Western Rly Co (1873) LR 16 Eq 433 at 439; approved by Lord Macnaghten in Tailby v Official Receiver (1888) 13 App Cas 523 at 547 (HL). For a review of New Zealand law, see Beck s article (1987) 6 Otago LR 420. Quoted by Pettit, Equity and the Law of Trusts (8th ed, Butterworths, London, 1989 at 610; see also Meagher, Gummon and Lehane, Equity: Doctrines and Remedies (3rd ed, Butterworths, Sydney, 1992) at para [2001]. n41 In Packenham Upper Fruit Co v Crosby (1924) 35 CLR 386, Isaacs and Rich JJ cited Lord Selborne s observations and said (at 394):executedexecutorySpecific Performance n42 Equity and the Law of Trusts (8th ed, Butterworths, London, 1997) at 610-11. See also Meagher, Gummon and Lehane, Equity: Doctrines and Remedies (3rd ed, Butterworths, Sydney, 1992) at para [2001]. n43 Per Lord Selborne LC in Wilson v Northampton and Banbury Junction Rly Co (1874) 9 Ch App 279 at 284; Chinn v Collins [1979] Ch 447, [1970] 2 All ER 529, CA; reversed without affecting this point [1981] AC 533, [1981] 1 All ER 189, HL. See generally, Reiter and Swan, Studies in Contract Law, pp123 (RJ Sharpe); (1987) 38 NILQ 244 (Elizabeth Macdonald). n44 CN Marine Inc v Stena Line A/B (No 2) [1982] 2 Lloyd s Rep 336 at 348, CA, per May LJ Jones and Goodhart, Specific Performance, 2nd ed, p 5, say:Specific performance should be decreed if it is the appropriate remedy. n45 Modern Equity, 14th ed, p 716. n46 Per Lord Selborne LC in Wilson v Northampton and Banbury Junction Rly Co (1874) 9 Ch App 279 at 284. n47 If a purchaser-borrower is reluctant to execute an instrument of charge in favour of his or her end-financier under the terms of a loan agreement and a deed of assignment absolute, the endfinancier, aggrieved by the default of its corresponding purchaser-borrower, is entitled to either: (a) invoke the power of attorney clause that is commonly provided in such a loan agreement and execute, as power of attorney for that recalcitrant purchaser-borrower, both the instruments of transfer and charge and perfect those instruments of dealing in respect of the housing accommodation by presenting them to the relevant land registry/office for registration: see (n 3) and (n 4) above; or (b) seek from a court of law and equity its discretionary power to grant a decree of specific performance vis-a-vis the execution of both the instruments of transfer and charge.However, the author hereby caution that should there be an on-going dispute between the recalcitrant purchaser-borrower and the vendor-developer over the quantum of the monthly maintenance and service charges, the proper course of legal action for the aggrieved end-financier to have the security documents perfected is to invoke the equitable jurisdiction of the court as a judicial arbiter and not to resort to self-help under the power of attorney clause as highlighted in the above paragraph. n48 The stamp provision that regulates the payment of ad valorem in respect of a sub-sale is
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regulated by the Stamp Act 1949. Section 20(4) provides as follows: n49 In The Commonwealth v The State of New South Wales (1918) 25 CLR 325, Barton J, one of the six judges sitting in the High Court of Australia, said (at 333 and 335-36):Isaacs and Rich JJ, at 341, jointly observed that:Gibbs v Messereveryone who purchasesand enters his deedof transfer or mortgageIn that same case, Higgins J observed (at 351-52):exceptional casesthe transferee fails to present the transfer for registration, and the transferor desiresto get the title out of his own name into the name of the transfereeThis is an obligation imposed by the relations of the parties in conveyancing practice n50 [2001] 6 MLJ 636 (HC). n51 His Lordship, Ramly Ali JC, then cited the authorities of City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1988] 1 MLJ 69 (PC) and Teh Khem On & Anor v Yeoh & Wu Development Sdn Bhd & Ors [1995] 2 MLJH 663 (HC) to support his view that the statutory provisions in those standardized sale agreements do not rule out nor limit purchasers rights under the common law. n52 Wilson v Northampton and Banbury Junction Rly Co (1874) 9 Ch App 279 at 284. See also (n 44) above. n53 Modern Law of Real Property (16th ed, Butterworths, London, 2000). See also Snell s Equity with John McGhee (ed) (30th ed, Sweet & Maxwell, London, 2000) Ch 40. n54 The discretionary decree of specific performance comes under procedural law and has to be distinguished from substantive land law: see SY Kok s published works on the subject and referred to in (n 32) above. n55 See Rossiter and Stone, The Chancellor s New Shoe (1988) 11 UNSWLJ 11; and Tooher, Muddying the Torrens Waters with the Chancellor s Foot (1993) 1 APLJ 1. LOAD-DATE: 11/06/2009

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