Conveyancing Practice – written notes – Emily Law

Topic 1: Land Dealing & Conveyancing

Solicitor’s Duty / Authority to Act

 S. 84 LPA – prohibits a solicitor acting for a housing developer from acting for the
purchase as well.
 O. 7 Solicitors Remuneration Order – prohibits one solicitor from acting for more than
one party.
 Bar Council’s Conveyancing Practice Rulings:
 Rule 16 – vendor’s solicitor shall not charge any fees for the supply of SPA
 Rule 17 – solicitor shall not charge his client additional fees for the agreement as
the scale fee under Solicitors Remuneration Order includes the charge for it.

 Anti-Money Laundering, Anti-Terrorism Financing & Proceeds of Unlawful Activities

Act (AMLATAFA) – law firms = ‘reporting institution’ under the Act.
 S. 14(1) – a reporting institution shall report to the competent authority any transaction
exceeding the amount as specified / transaction involves proceeds of unlawful activity /
terrorism act.

 Bar Council Rulings 14.10:

1. A solicitor may hold money as stakeholder & shall pay the interest accrued to the
person who paid the money.
2. A solicitor is entitled to charge a fair & reasonable fee for acting a stakeholder.
3. A solicitor acting as stakeholder must strictly adhere to the terms. No money shall
be released / used except in accordance with the terms of stakeholding.

Pre-Contract Stage

1. Determine the identity of V & P:

 Conduct bankruptcy search/winding up search
 To show various evidences such as utilities bills, quit rent & assessment receipt

2. Determine the capacity of parties (whether can/cannot enter into a contract)

A. Authority of personal representative (is he an executor – appointed by

testator/administrator – appointed by court)
 S. 292(4) NLC – the death of a person does not affect the validity of contract. The
benefit/burden in the contract passes to deceased’s estate/personal representative.
 S. 60(3) Probate & Administration Act – executor may dispose of property of
deceased subject to restriction stated in the will.
 S. 60(4) – administrator may not dispose of property without permission of court.
 S. 60(6) – any disposition in contravention shall be voidable

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B. Whether the person intends to enter into contract is adjudged bankrupt

 S. 24(4) of Bankruptcy Act – When a debtor is adjudged a bankrupt, his property
shall vest in the Director General of Insolvency (DGI) & his property shall be
divisible among his creditors.
 S. 349(1) NLC – where the DGI claims any land/interest in land relating to
bankruptcy, he may apply to the Registrar for registration to the DGI. Registrar
shall endorse a memorial of the transmission on the RDT.
 S. 349(3) – no land shall vest in DGI under adjudication of bankruptcy until it is
registered under s. 349(1).
 Kwan Chiew Shen v Citibank – A bankrupt does not lose his capacity to contract
if it has not been transmitted to the DGI under the NLC. He can pass a good title
to purchaser or charge.
 Chua Tin Hong – if a bankrupt transfer his land to a person before any
transmission is registered by the DGI, the bankrupt’s interest notwithstanding his
bankruptcy will pass to that person.
 Hock Hua Bank Bhd v Choo Meng Chiong – A charge created by bankrupt before
any transmission was registered by OA will pass good title and interest to the
bank.
 Pegawai Harta Koh Liang Hee, Bankrap v. Koh Thong Chuan –Although OA had
not been vested with legal title of bankrupt’s property by transmission under
NLC, land may be vested in OA in equity - court declared that the transfer by
bankrupt is void and subsequent charges by the transferee were also void.
 S.50 (1) Bankruptcy Act – Where a creditor has issued execution against the goods
or lands of a debtor, he shall not be entitled to retain the benefit of the execution
unless he has completed the execution before the date of the receiving order &
before notice of the presentation of any bankruptcy petition, or of the commission
of any available act of bankruptcy by the debtor.

Winding up of a company:

 S. 223 of Companies Act – any disposition of company’s property made after

commencement of winding up by the court shall be void.
 S. 293(1) – any act relating to property done by a company being wound up shall
be void / voidable.

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Cases

 Rajamani v Eng Beng Development Sdn Bhd.

 Fact: P = registered proprietor of a land. His name has been replaced with the 2nd
defendant & subsequently the 1st defendant in the title deed, despite having
possession of the original title. P claimed that the “transfer” of her land was bad in
law and void.
 Held:
o P’s title, upon registration, had acquired indefeasibility under s. 340(1)
and such indefeasibility can only be defeated by any of the specified
statutory grounds under s. 340(2).
o Since the title in the P’s possession was validly issued & registered and
has never been rendered defeasible, the 1st defendant’s replacement title
in respect of the land has to be void.
o The general rule is that a solicitor owes a duty of care primarily to his
client but like all general rules, there are exceptions.
o Ross v Caunters held that the duty of care of a solicitor is not limited to his
client while Penn v Bristol & West Building Society demonstrates that
although a solicitor believes he is acting for someone as his client, if it is
found that he was not authorized to act, and his negligence leads to
damage and loss to that someone, he is liable to that person.

 Ngan Siong Hing v RHB Bank Bhd

 Fact: R (bank) was the financier for the purchaser in a sub-sale transaction &
appointed A as their solicitor. Upon A’s advice, the bank released the loan sum.
The bank discovered that the borrower had a fictitious identity; that the vendor
was never the beneficial owner of the properties; and that the solicitor who
witnessed the SPA & acting for the borrower was a bogus legal firm.
 Issue: whether the A (firm) is liable for failure to discharge the duty of care and
causes loss to the R (bank)
 Held:
o The test to determine whether a solicitor had failed to discharge the duty
of care is the “but for” test.
o Applying the test, the direct cause of the loss suffered by the bank was the
firm’s failure to comply with the specific instruction of the bank to carry
out searches on the developer & its solicitor.
o The firm is therefore liable.
o This case illustrates the importance for solicitor to conduct searches to
ensure the true identity of V/P.

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Conveyancing Practice – written notes – Emily Law