CHARGE

LAND LAW

05.08.07

Jamaludin Yaakob

LAND LAW_DEALINGS_CHARGE

CONTENT

Statutory provisions Definition Creation of Charge Effect of Registered Charge

Rights of Parties Defaults and Remedies Sale by Receiver Chargors Relief & Third Parties Cause to the contrary Powers of Land Administrator

Unregistered Equitable Charge

Matters of Charge

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Statutory Provisions Part Sixteen: Chapters 1 6

Chapter 1 Creation of Charge & General Provisions (sections 241 248) Chapter 2 Implied Provisions (sections 249 252) Chapter 3 Remedies of Chargees Sale (sections 253 - 269 Chapter 4 Remedies of Chargees - Possession (sections 270 - 277) Chapter 5 Discharge of Charge (sections 278 280)

Chapter 6 Liens (section 281)

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Definition of Charge Dictionary Law Dictionary A financial responsibility or obligation An encumbrance, e.g. on land, which secures payment of money; Fixed charge is a charge on specific property; Floating charge is created by a company to secure debentures. Section 5 Page 128

NLC 1965

Salleh Buang

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Creation of Charge

Formality Registration section 242 Form 16A

Sime Bank Berhad v. Mohd Hassan Bin Sulaiman [2000] 1 AMR 1021

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Effect of Registered Charge

PHB v. BBMB [1988] 3 MLJ 54

Borneo Housing Mortgage Finance v. Time Engineering Bhd. [1996] 1 AMR 1539

OCBC v. Lee Lee Fah & Five Ors. [1999] 4 AMR 4476

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Unregistered Equitable Charge

Mahadevan s/o Mahakingam v. Manilal & Sons (M)

Sdn. Bhd. [1984] 1 MLJ 266

Borneo Housing Mortgage Finance v. Time Engineering

Bhd. [1996] 1 AMR 1539

OCBC v. Lee Lee Fah & Five Ors. [1999] 4 AMR 4476

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Matters of Charge

Section 241

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Rights of Parties

Express Implied Chapter 1 (sections 249 252) Chargor Chargee

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Implied Duties of Chargor Section 249 Section 249(1) Compliance with provisions in loan agreement Compliance with additional agreement Section 249(2) a) Pay all rents and rates as they fall due b) Observe conditions express and implied Section 250 a) Keep building in repair

b) Insured premises
c) Grant chargee permission to enter for inspection and maintenance

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LAND LAW_DEALINGS_CHARGE

Implied Duties of Chargor Section 250 a) Keep building in repair

b) Insured premises
c) Grant chargee permission to enter for inspection and maintenance Read together with section 233 Lease building lessee under similar duty to keep building under repair.

S. 252

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LAND LAW_DEALINGS_CHARGE

Implied Duties of Chargee Section 250 Section 250(d) chargor fails to comply with duties, chargee may:

a) Take legal action for breach; and

b) Claim cost incurred Section 251 Chargee will not unnecessary withhold consent for chargor to lease the charged land

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LAND LAW_DEALINGS_CHARGE

Remedies for Default

SALE Chapter 3 Sections 253 - 269 Statutory Instruments Possession Chapter 4 Sections 270 - 273 Section 254

Form 16D Notice of default

Form 16E - Demand for Payment of Principal Sum

V.A.M. Hussain v. B.P. Malaysia

Jamaludin Yaakob

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LAND LAW_DEALINGS_CHARGE

Remedies_Sale

Land Office Title (section 260) Tan Teng Pan v. Wong Fook Shang [1973] x MLJ 31 Gurpal Singh v. Kananyer [1976] 2 MLJ 34 Registry Title (section 256) Form 16F Certificate of Sale Lim Beng v. A.V.A. Palaniappa Chetty (1916) 1 FMSLR

264

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LAND LAW_DEALINGS_CHARGE

Remedies_Possession Chapter 4 (sections 270 277) Section 270 Registry Title only

Other Limitations
Undivided share Not occupied by chargor

Section 271 Two or more charges First Chargee may take possession.
Actual or Constructive Possession

Section 272 Procedure

Form 16J Form 16K
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LAND LAW_DEALINGS_CHARGE

Remedies_Possession Effects of taking possession Woon Foon Hoh v. Muthiah Chetty [1934] MLJ 121

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LAND LAW_DEALINGS_CHARGE

Cause to the Contrary

Section 256(3) Lau Lee Lian v. Ban Hin Lee Bank [1997] 1 AMR 1036 (SC) Keng Soon Finance v. M.K. Retnam Sdn. Bhd. [1996] 3 AMR 3021 Perwira Affin Bank v. Saad Bin Abdullah [1999] 4 AMR 4142 Arab-Malaysian Finance v. Chan Sai Mee [2001] 2 AMR 1743 Diamond Peak v. United Merchant Finance [2003] 2 AMR 637 Aseam Credit v. Eminent Avenue [2003] 1 AMR 122
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