Tutorial 4

Malaysian Land Law

Power of SA

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RECAP
1. What is the Torrens System, and how does it differ from traditional deeds-based systems?
2. Under the Federal Constitution, which level of government has primary legislative power over land
matters?
3. Why is the National Land Code 1965 applicable throughout Peninsular Malaysia even though land is a
State matter?
4. Who is the "State Authority" under the National Land Code?
5. Who is the land administrator?
6. What is a TOL? Explain its legal character and the extent of rights arising from it.
7. What is LAROW? Outline the statutory requirements for creating a public and private right of way.
8. Under what conditions can land be forfeited by the SA? What are the forfeiture procedures?
 In 2001, the State Authority awarded two brothers, Azlan and Badrul, separate parcels of land in Kuala Selangor under a
special rural recognition scheme. The award was made in honour of their late grandfather, a widely regarded “local hero”
who had played a significant role in protecting the village during severe floods in the 1980s. The decision to allocate the
lands to his grandsons was publicly announced in local newspapers and at a district ceremony. Azlan and Badrul have
always believed that the lands belong to them.

Azlan was granted a Temporary Occupation Licence (TOL) over Lot Rambutan for agricultural purposes. Over the years,
Azlan constructed three permanent single-storey houses on the land using his own savings. He lived in one house, sold
another to Mr Chan in 2015 for a substantial sum, and rented out the third. In 2024, following approval of a state
redevelopment project, Azlan received a notice requiring him to vacate Lot Rambutan within 30 days on the ground that
Tutorial the TOL had expired and would not be renewed. The notice also required demolition of all structures. No compensation
was offered.

Question Badrul was also granted a TOL over Lot Durian for agricultural use. For more than 20 years, he successfully operated a
durian orchard on the land. He also constructed a large bungalow where he lived with his wife. In recent years, he
expanded the business by operating a “Durian Tasting Experience” and café during fruiting season, attracting tourists. In
2023, Badrul passed away. Shortly thereafter, the Land Office informed his widow that the TOL had lapsed upon his death
and that she must vacate Lot Durian. She wishes to know whether she may continue residing in the bungalow and
operating the orchard. Around the same time, she received a notice alleging that the café and tasting business constituted
a breach of the agricultural use permitted under the TOL.

Separately, Mr Chan is the registered proprietor of Lot Papaya, an adjacent parcel of agricultural land which he purchased
in 2020. In 2022, he began developing an eco-homestay project there by constructing several wooden chalets and a small
café without applying for conversion of land use. In 2024, he received a Form 7A notice alleging breach of express
conditions. Shortly thereafter, he discovered that the Land Administrator had granted a Land Administrator’s Right of Way
(LAROW) across Lot Papaya to provide a neighbouring landowner with access to a newly constructed federal road. Mr
Chan was not served with a Form 2A notice nor invited to attend any enquiry. He further notes that the neighbour already
has an existing access route, although it is longer and less convenient.

Advise the parties of their respective rights and legal positions in relation to Lot Rambutan, Lot Durian and Lot Papaya
under the National Land Code 1965.
Issues
Part A: Lot Rambutan (Azlan) – Rights of TOL holders
Part B: Lot Durian (Badrul) - Rights of TOL holders, breach of TOL
conditions
Part C: Lot Papaya (Mr Chan) - Breach of express conditions,
forfeiture procedure, Land Administrator's Right of Way (LAROW)
 Issue 1: The Legal Nature of a TOL — No Proprietary Interest
• Azlan holds a Temporary Occupation Licence, not an alienated title.
• Under sections 65 to 69 of the NLC 1965, a TOL (Lesen Tumpang Sementara) is a permission

PART A: granted by the State Authority (SA) to occupy State Land for a specified purpose. It is
administered by the Land Administrator on behalf of the SA and expires at the end of the
calendar year in which it is granted.
AZLAN — • TOL is temporary permission to occupy State land, conferring no proprietary rights, and subject
to strict conditions imposed by the SA.

LOT • In Teh Bee v K. Maruthamuthu [1977] 2 MLJ 7, the court affirmed that 'under the Torrens System,
the register is everything.' Azlan's name does not appear on any Register Document of Title
(RDT). His interest is exclusively personal and possessory. The SA retains dominion over Lot
RAMBUTAN Rambutan as State Land under section 40 NLC.
• A TOL is a personal, conditional, and temporary licence. It confers no proprietary right, no title,
and no indefeasibility under s.340 NLC. The Torrens system protects registered proprietors only.
• Papoo v Veeriah: “A TOL is a licence to occupy State Land and nothing more.”
Since the plots of land
are in Kuala Selangor
Issue 2: Construction of Permanent Houses on an Agricultural TOL
(State in Peninsular),
the NLC will apply to • Azlan's TOL was granted for agricultural purposes. He constructed three permanent single -
storey houses on the land. Under the NLC and standard TOL conditions, the erection of
the rights and permanent buildings and the cultivation of permanent crops are expressly restricted.
responsibilities on the • Section 44 and 45 NLC grant possessory rights to the TOL holder, but only to the extent of the
land. specified activities.
• The construction of permanent residential structures on an agricultural TOL is a breach of the
conditions of the licence. Under section 425 NLC, activities contrary to the specified activities of
a TOL constitute an offence.
 Issue 3: The Sale of the House to Mr Chan in 2015 and Lease Agreement?
• Under section 68 NLC, a TOL holder may not assign or transfer the TOL to any other
PART A: person. What about the transfer of buildings erected on the TOL land.

AZLAN — • Ang Toon Chew & Sons (M) Sdn Bhd v Personal Representatives of Mohd Taib b
Yusof (deceased) [1998]: a TOL holder is incapable of conducting a sale or
LOT assignment of the TOL under s.68 NLC.

• In Papoo v Veeriah [1965] 1 MLJ 75, the court held that a transfer of buildings
RAMBUTAN erected on TOL land (as distinct from the TOL itself) can be valid, but the person
acquiring those buildings does so at his own risk. This was confirmed in Cheo Lean
How v Fock Fong Looi [1985] 1 MLJ 289.
• The sale of the house to Mr Chan in 2015 was therefore valid as a transaction
concerning the building, but Mr Chan assumed all the risk.
• Under section 47 NLC, upon termination of the TOL, all buildings on the TOL land
become the property of the State Authority. Mr Chan therefore stands to lose the
house he purchased, without compensation, upon Azlan's TOL expiring in 2024. This
will be addressed further in Part C.
• Tindok Besar Estate v Tinjar Co (1979): Not wrong for TOL holder to grant tenancy
on the TOL land or in buildings built on TOL land – Valid tenancies can be created
 Issue 4: The Notice to Vacate

• The TOL expires at the end of the calendar year and may be renewed — but there is no legal obligation
on the SA to renew, confirmed in Teh Bee v K. Maruthamuthu [1977]. The SA's decision not to renew in

PART A: 2024, even after 23 years of occupation, is a lawful exercise of its discretion. However, the 30-day notice
period to vacate and demolish could be challenged if unreasonably short in the circumstances.

AZLAN — • Sidek bin Haji Muhammad & Ors v Government of the State of Perak [1982] 1 MLJ 313; Government of
Negeri Sembilan v Yap Chong Lan & Ors [1984] 2 MLJ 123 – no TOL = squatter simpliciters.

LOT • In Bohari bin Taib & Ors v Pengarah Tanah dan Galian Selangor [1991] 1 CLJ 397, COA held that
appellants who had received formal State approval and were promised titles after a TOL period were
not 'squatters simpliciter.’; Tekad Urus Sdn Bhd v Penduduk yang menduduki kawasan Desa Perwira
RAMBUTAN [2004] (COA), where positive encouragement and acquiescence by government agencies rendered the
occupiers more than mere squatters.

• Azlan received a formal TOL from the SA. Long-term occupation without interference and failure to
bring action by SA suggest acquiescence and positive encouragement (as indicated by Bohari and
Tekad Urus) – implied consent or acquiescence by the SA for his stay and reasonable use of the land.
However, it’s arguable whether his use of the land is reasonable, prima facie breach of s425 = breach of
licence conditions (occupation “without lawful authority” under s.425(1))
• Azlan’s Counter-Argument:
• Long-term State acquiescence neutralises strict reliance on s.425
• The SA’s failure to act over two decades = implied tolerance and positive encouragement
• Critically, neither Bohari nor Tekad Urus altered the fundamental legal framework: a TOL holder,
however formally authorised, acquires no proprietary interest. Azlan cannot invoke the Bohari principle
to prevent the SA from not renewing the TOL or to claim compensation.

• Conclusion: No proprietary interest (TOL holder only) but not a squatter simpliciter (Bohari). The 30-day
notice period to vacate and demolish could be challenged.
 Issue 1: Lapse of the TOL Upon Badrul's Death
• The fundamental principle governing Badrul's TOL is that a licence is personal to its
PART B: holder and dies with the holder.
• Under section 68 NLC, a TOL may not be assigned or transferred.
BADRUL AND • Papoo v Veeriah [1965] 1 MLJ 75: 'the licence is personal to the holder and dies with
HIS WIDOW the holder.’ Affirmed by the Federal Court in Paruvathy v Krishnan [1983] 2 MLJ 117,
where an instrument purporting to transfer TOL rights was held void because the
— LOT holder possessed only a personal right as a licensee — there was no proprietary
interest capable of being devised, bequeathed, or inherited.
DURIAN • Upon Badrul's death in 2023, the TOL lapsed automatically. The widow's position as
administratrix of his estate confers no authority to continue the TOL. A transfer of the
TOL by the widow acting in this capacity would contravene s.68 NLC.
• Under section 47 NLC, upon termination of a TOL, all buildings and structures on the
TOL land become the property of the State Authority. Since the TOL lapsed on
Badrul's death, the bungalow reverted to the SA.
• Applying the Papoo v Veeriah principle, a transfer of a building erected on TOL land
(not the TOL itself) can be valid if completed during the holder's lifetime, but the
transferee takes at his or her own risk. Even if Badrul had transferred the bungalow
to his wife before his death, she would hold it at her own risk — and upon the TOL's
lapse, the bungalow would still revert to the SA under s.47 NLC.
• Badrul's 20+ years of successful operation of the durian orchard creates a morally
compelling claim but produces no legal entitlement (Bohari and Tekad Urus).
 Issue 2: Breach of Agricultural Conditions
• Even had the TOL not lapsed, the operation of a café and tourist tasting
PART B: business would constitute a breach of the agricultural use conditions of the
TOL.
BADRUL AND • Under section 103 NLC, where a condition requires continuous performance,
HIS WIDOW breach arises as soon as the condition ceases to be complied with. A TOL for
'agricultural use' encompasses the cultivation of durian trees; it does not
— LOT extend to operating a tourist-facing café, charging admission for 'tasting
experiences,' and hosting visitors. This is commercial hospitality — not
DURIAN agriculture.
• Applying Collector of Revenue (JB) v South Malaysia Industries Bhd [1978] 2
MLJ 45, land designated for a specific use (factory) was held to be in breach
when occupied by a tenant storing industrial chemicals and fertilisers — even
though storage might be incidentally associated with industrial activity. The
analogy to Badrul is direct: a café and tourism business is not an incident of
agricultural land use. The LA's notice alleging breach is well-founded.
• Under section 425 NLC, activities contrary to the specified purpose of a TOL
may constitute a criminal offence. The widow's continued operation of the café
(if she remains on the land) would expose her to prosecution.
• However, could Bohari and Tekad Urus apply, similar to Azlan’s arguments?
Unlikely as the breach of condition was more recent.
 Issue 1: Mr Chan as Registered Proprietor of Lot Papaya – not TOL

• Lot Papaya is an alienated agricultural land and Mr Chan is the registered proprietor. Under section 340
NLC, a registered proprietor obtains indefeasible title upon registration. Lot Papaya is agricultural land.
Under section 52 NLC, the SA determines the category of land use upon alienation. S115(1): agricultural
PART C: MR •
land must be continuously cultivated,
Constructing holiday accommodation and operating a café on agricultural land is plainly outside the
CHAN — agricultural use category. Under section 103 NLC, where a condition requires continuous performance,
breach arises as soon as the condition ceases to be complied. Applying Collector of Revenue (JB) v
South Malaysia Industries Bhd [1978], use of land outside its designated category constitutes a breach.
LOT • Mandatory Forfeiture Procedure (ss.127–131 NLC)

PAPAYA • First formal step in breach of conditions forfeiture proceedings: Form 7A Notice - Notice to Remedy
Breach under section 128 NLC. Section 129 NLC provides for an enquiry before any forfeiture. If Mr
Chan remedies the breach within the notice period, the LA has no further cause of action.
• Che Minah bt Remeli v Pentadbir Tanah Daerah Besut & Anor [2002] 2 CLJ 721: where the LA gives a
notice to remedy, the notice must contain clear specifications of what action the proprietor must take to
remedy the breach. If the Form 7A Notice fails to specify with adequate particularity what Mr Chan must
do (e.g., demolish the chalets, cease café operations, apply for change of land use category within a
stated period), the notice may be challenged as procedurally defective.

Mr Chan's options are:

• Challenge the Form 7A Notice on grounds of insufficient specification of remedial action if the notice
fails to state clearly what is required;
• Apply for conversion of land use category under s.52 NLC from agricultural to building/commercial to
regularise the eco-homestay and café;
• Comply and remedy by demolishing non-compliant structures and ceasing non-agricultural operations
within the notice period.
 Issue 2: The LAROW
• The Land Administrator has granted a Land Administrator's Right of Way (LAROW) across Lot Papaya under
sections 387 to 396 NLC. The creation of a LAROW over the land of a registered proprietor requires compliance
with established procedural requirements, which include:

PART C: MR •
•
Service of a Form 2A notice on affected persons
Holding of an enquiry or investigation to consider the rights and interests of affected parties;

CHAN — • Thankam De Silva v Pentadbir Tanah Daerah Larut Matang Taiping [1995]: s.390 gives the LA wide discretionary
power, the LA must take into account all material facts including the rights and interests of landowners whose
land is affected. This necessarily presupposes that landowners are notified and given an opportunity to make
LOT representations.
• The failure to serve Form 2A and to hold an enquiry: a failure to comply with the statutory procedure.
PAPAYA • Mr Chan was not served a Form 2A notice and no enquiry was held. Pow Hing & Anor v Registrar of Titles
Malacca [1981] 1 MLJ 155 — where the Privy Council's direction in the NLC that failure to comply with the
requirement of endorsing notice on the RDT under s.97(2) was treated as most crucial — failure to observe
procedural requirements can render the resulting administrative action vulnerable to challenge.
• The courts have consistently applied a 'necessity, not mere convenience' test:
• Lye Thean Soo v Syarikat Warsaw [1990] 2 MLJ 353 & Si Rusa Inn [1987]: Must be an urgent necessity and
expedient — not merely for the enjoyment and convenience of the applicant.
• Liew Peck Lian & Ors v The Conservator of Forests [1961] & Mamat Yan v Land Administrator, Kota Bahru Land
Office & Anor [2004]: No alternative route
• OTF, the neighbouring landowner already has an existing access route to the newly constructed federal road —
it is merely 5 kilometres longer than the proposed route across Lot Papaya. Under the Lye Thean Soo / Si Rusa
Inn / Mamat Yan line of cases, the existence of an alternative route — even a less convenient one — negates the
requirement of urgent necessity. The test for a private LAROW is strict. A saving of 5 km in travel distance is a
matter of convenience, not necessity.
 Question 2

“Wide discretionary powers exercised by land authorities under the

National Land Code 1965 are essential for effective land administration,
but they raise serious concerns regarding fairness and legal certainty.”
Critically discuss this statement with particular reference to
Temporary Occupation Licences and the granting of Land
Essay Administrator’s Right of Way.
 I. Introduction
• Should the State be given such broad discretion over land matters?
• Such discretion enables efficient land administration but may affect certainty, transparency and
fairness.
• Whether the current balance is appropriate?
II. Temporary Occupation Licences
• Nature of TOL
• Why discretion is important – protect state land
• Strict approach where courts refuse estoppel (Sidek) vs flexible approach in Bohari & Tekad Urus
Essay cases
• Critical evaluation on fairness
III. LAROW as an illustration of discretion constrained by procedural fairness
• Purpose – allow landlocked land to have access
• Statutory Procedure / safeguards
• Public interest vs private interest
• Necessity vs convenience
• Potential unfairness: criteria, inconsistency, compensation
IV. Overall critical evaluation: has the NLC achieved the correct balance?
- The NLC rightly grants broad discretion because land administration requires flexibility and
responsiveness to public needs. However, discretion must be exercised within a framework that
promotes fairness, transparency and legal certainty.
- Reform?