This is an actual question posed in the CLP (Certificate in Legal Practice) examination:
A, B and C would enjoy a snowball’s chance in hell of having their predicament resolved by a fresh graduate.
There is an urgent need for the reform of the CLP system if this is the calibre of questions posed. There is no conceivable manner in which a junior practitioner (much less a student) would be able to answer this question.
Proprietary estoppel
Setting my soapbox aside, there is a solution to the conundrum above. The answer lies in the doctrine of proprietary estoppel.
Proprietary estoppel is an equitable doctrine. It is a rare class which can give rise to a cause of action.
The seminal case on proprietary estoppel would be that of Cheng Hang Guan v Perumahan Farlim [1993] 3 MLJ 352. Here, Edgar Joseph J (retired FCJ) outlined that when 3 matters are proved to the satisfaction of the Court, proprietary estoppel would serve to bind a registered owner of land. They are:
There is encouragement/assurance made by the registered owner (Encouragement/assurance);
The occupier relied on that representation with the owner’s knowledge (Reliance);
The occupier suffers detriment (Detriment).
Utilising the example above, A, B and C must plead and demonstrate to the Court that the proprietor of the land has encouraged them to develop the land, they have relief on this encouragement and they have suffered detriment (in the form of making payments, etc.).
They would probably ask for further orders that the land be sub-divided and that their interests be provided-for. It would also be probable that A, B and C would have to name the Land Office (as a nominal Defendant) to effectuate any orders issued by the Court.
Refer also:
Holee Holdings (M) Sdn Bhd v Chai Him [1997] 4 MLJ 601
S & M Jewellery Trading v Fui Lian-Kwong Hing [2015] 5 MLJ 717
Rabiah bt Lip & Ors v Bukit Lenang Development [2008] 5 MLJ 128
Paramjothi a/p Perumal & Anor v Letchimy a/p Samboo [2019] 9 MLJ 263
The English position and 3 recent Malaysian decisions
The English Supreme Court in Guest v Guest [2022] UKSC 27 determined that the doctrine of proprietary estoppel is alive and well. The Court recognised the unconscionability inherent in allowing a person to renege on a promise that another has relied on (to their detriment).
Generally, the Court will either order that the promise be performed or the promisee be compensated monetarily for their loss.
The High Court in Vadivelu v Rajkumar [2024] MLJU 880 applied the doctrine of proprietary estoppel and ordered the registered owner to recognise the entitlement of the promisee (i.e., by having the same recorded on the title).
In contrast, the CA in Ng Kim Wan v Yap Chee Eng [Civil Appeal No.: W-02(NCVC)(W)-814-05/2022 (High Court decision at Ng Kim Wan v Yap Chee Eng [2022] MLJU 843), refused an appeal and affirmed the High Court’s decision that no constructive trust over land would exist.
On the facts, Ng Kim Wan alleged that he had bought a parcel of property from his friend (Yap Chee Eng). He claimed that he paid for this property by a set-off of monies owed. Ng further alleged that he had renovated the property. As a result, he claimed that he enjoyed a constructive trust.
The CA held (at paragraph 43) that:
Ng failed to prove the existence of an agreement for a sale and purchase of property;
There were defects in the pleadings;
Ng slept on his rights; and
There was dearth of evidence.
Both cases demonstrate how proprietary estoppel operates (or does not).
An interesting middle-ground
The High Court in Abdul Manan v Siti Zauyah [2024] MLJU 9 struck an interesting middle ground.
The dispute before Anand J concerned a parcel of land dating back to 1930.
Haji Mat Zain and Mr Abdullah purchased a parcel of land. It was only registered in Mr Abdullah’s name. Being old friends, they did not bother with the formalities of sub-division. Both built, flourished and died in their respective homes on the land.
With their passing, trouble began to brew. The descendants of Mr Abdullah sought to evict the descendants of Haji Mat Zain from the land. Their simple argument would be that they were the registered owners.
Having scrupulously considered the matter, Anand J concluded (paragraph 28 onwards) that there was insufficient evidence to substantiate a constructive trust (in favour of Haji Mat Zain’s descendants).
Nonetheless, in a flash of judicial creativity, Anand J determined that the estate of Mr Abdullah would only be entitled to vacant possession upon them firstly compensating the estate of Haji Mat Zain for the value of the house (as constructed by Haji Mat Zain). The valuer would be appointed by the Court (paragraphs 55-59). The Estate of Mr Abdullah would then have to pay this sum and only after this, would they be entitled to vacant possession.
This approach accords with common sense and provides the losing party with dignity. It cannot be denied that to have merely evicted the descendants of Haji Mat Zain from the premises (being the only home they have ever known) would be an affront to justice. The approach utilised by Anand J encourages comity and decency towards one’s fellow man.
The CLP question at hand
Back to A, B and C, they should rightfully immediately move the Court for relief under the banner of a proprietary estoppel. They should seek the necessary orders for relief and Vadivelu, supra would be an excellent starting point.
They might also consider an injunction to restrain any dealing with the land/funds received, until disposal of the trial.
As an aside, the CLP must reconsider this question (and those of its ilk). There is no conceivable manner in which it is reasonable or justified.
GAVIN JAYAPAL
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