SHARIFAH ZUBAIDAHLAW 3111-2013

MALAY RESERVATION LAND

Coverage:

1) Historical Rationale2) Legislating Malay Reservation Land3) Definition of ‘Malay’4) Revocation of MR Land5) Position of Non-Malays over MR Land6) Malay Company & Malay Holdings7) Powers of Ruler in Council over MR Land8) Prospects and Challenges

Historical Rationale

History:

When the British brought in immigrants from China and India to work in Malaya, vast tracks of land were allocated to the immigrants for commercial agriculture ( e.g. rubber, tea plantations) and tin mining.

Feeling dispossessed and outclassed in their own motherland, Malays sold their land in urban areas and moved to the villages.

British in Malaya

Chinese Miners and Yap Ah Loy

Indian plantation workers

Malays taking up loans from Indian Chettiars

The British also noted that the Malays were in the habit of taking up loans from chettiars and pledging their land as security.

They eventually lost their lands to these chettiars upon foreclosure for failure to pay off the loans.

Legislating Malay Reservation

Draft Malay Reservation Bill

“the object of the draft is to prevent the passing of Malay landholdings into the

possession of foreigners”

Malay Reservation Enactment 1913

The purpose of the Enactment was to provide for securing the Malays their interests in land.

Also to put the Malay temptation to sell their land ‘beyond their reach’.

Silent feature: rubber trees not to be planted on reservation land. – order directed to the District Officers.

Why? Malays wanted to plant rubber and then sell land at higher price.

Present Malay Reservation Enactments:

1) The FMS Malay Reservation Enactment 1933 (Cap. 142) for Selangor, Perak, Pahang, Negri 9 and KL.

2) Perlis MRE 1353H3) MRE of Kedah 19314) Johor MRE 19365) MRE of Trengganu 19416) Kelantan MRE 1930

Restrictions in the MRE

General Restriction on Dealings to non-Malays

See s.8 of FMS MRE:

“No Malay holding shall be transferred, charged, leased or otherwise disposed of to

any person not being a Malay”

‘Malay holding’?

s.2:

“any registered interest of a Malay as proprietor or co-proprietor in any alienated

land included in a Malay Reservation.”

Application of section 8:

“In order for s 8 to apply, the land in the Malay reservation must have, first of all, a Malay

registered proprietor or co-proprietors. If there has been no such Malay registered proprietor or co-proprietors in such a Malay reservation

land before, then there should be no prohibition in the transfer of such land to a

non-Malay.” James Foong, J. (HC)

Sykt Macey Bhd. v Nightingale Allied Services [1995] 1 CLJ 890

Other Restrictions (see)

Section 8 also prohibits charging of any Malay holding to a non-Malay.

Section 8 also prohibits leasing of Malay holding to a non-Malay.

Section 9 prohibits the execution of any instrument of dealing in respect of Malay holding by any person acting

under a power of attorney if that person is not a Malay.

Section 10 prohibits the creation of lien over a Malay holding even in favour of a Malay.

Section 11 states that no private caveat, trust caveat can be registered in a Malay holding if caveator not a Malay.

Definition of ‘Malay’

Definition of ‘Malay’

Article 160 Federal Constitution lays down 4 requirements:

Muslim

Speaks Bahasa Malaysia

Complies with Malay customs

Domiciled in Malaysia/Singapo

re

Definition of Malay in FC does not apply for MR land

Art. 89(6) Federal Constitution:‘In this Article “Malay reservation” means land

reserved for alienation to Malays or to natives of the State in which it lies; and “Malay”

includes any person who under the law of the State in which he is resident, is treated as a Malay for the purposes of the reservation of

land.’

Thus, depends on the MRE of each state to determine.

‘Malay’ in the respective MREs

2 categories:1) Natural person;2) CompanyA person must come within the definition of

‘Malay’ under the MRE.A company may be recognised as a “Malay”

depending either by declaration, recognition or characterisation. (See examples in FN 69 of p.441 of your textbook)

FMS MRE defines ‘Malay’:

3 characteristics:

Belong to a Malayan race

Habitually speaks the Malay

language or any Malayan language

Muslim

Kedah MRE defines “Malay” as:

“whose parents, with at least one of them being a person of Malayan race or Arab

descent.”

This definition does not apply to companies.(Sime Bank v Projek Kota Langkawi S/B

[1998])

Kelantan MRE 1930:

Similar definition to FMS MRE but adds “Majlis Ugama Islam and the Official Administrator” as a Malay.

Also wider in respect of speaking language, “who speaks any Malayan language”.

Section 9 of the Enactment prohibits the alienation of MR land to those who are not ‘natives of Kelantan’.

Thus, Malays from other states may not own MR land in Kelantan.

Ruler in Council in Kelantan has powers to determine who is a ‘Malay’ for purposes of

MR

See s.13.Also power to defeat the restriction in MRE:under s.13A, The Ruler in Council may also

approve the alienation of any MR land, the transfer and transmission of any MR land to any person not being a Malay, subject to conditions and restrictions.

Johor MRE

1) Belonging to a Malay or any Malaysian race.

2) Habitually speaks the Malay

language.3) Professes the

Muslim religion.‘Malaysian race’ – race

that is indigenous to the Malay Peninsular and archipelago. (Blacker)

Note:In 1989, by a PTG

circular under s.22 of the Johor MRE, an additional requirement was added: the ‘Malay’ must have Malaysian citizenship.

Zaleha bte Sahri v Pendaftar Hakmilik Johor [1996]

Zaleha , owner of MR land, was a Malaysian Malay.Married a Singaporean Malay and became a

Singaporean citizen.Due to additional requirement imposed in 1989 for

Malaysian citizenshipZaleha applied to the High Court for a declaration

to revoke the status of her MR land in Johor so that she could transmit the land to her husband and children.

HC allowed the application.Q: Can MR status be revoked by court order?

Common Characteristics in Definition of ‘Malay’ in all state enactments

Revocation of MR Land

MR land declared before Merdeka

MR land declared before Merdeka

MR land declared after Merdeka

MR land declared after Merdeka

Subject to stringent procedures under Art. 89(1) Fed. Consti.

Any excise, revocation, acquisition/alteration of size of MR land requires a new MR Enactment that goes thru’ the State Legislative assembly and Parliament.

Any alteration and revocation of MR land is done by the Mentri Besar with consent of Ruler in Council.

See s.4(i)(b) FMS MRE, 1933.

2 Categories of MR Land:

Mohd. Isa & Ors v Abdul Karim & Ors. [1970]

In this case the judge (Raja Azlan Shah, J.) held that the only way a MR land can be de-reserved is by way of revocation by the Mentri Besar under s.4(i)(b) MRE.

With respect, this is incorrect as in this case the MR land was declared in 1921, making it land subject to the stringent procedures under art. 89(1) Fed. Consti.

Forfeiture of MR Land

Under Article 89(1A) of the Fed. Consti., MR land declared prior to Merdeka may be forfeited by the State Authority where the owner of the MR land ceases to qualify to own the MR land. i.e. a company, due to changed shareholding, ceases to qualify as a ‘Malay’.

State Authority may forfeit the MR land without paying compensation to the land owner.

Declaration of New MR Land

Art. 89(2) Fed. Consti. states that any state land, which has not been developed or cultivated, may be declared as MR land in accordance with that law. (law relating to MR in such state).

Let’s look at what the FMS MRE says, (see s.5). Thus even alienated land may be declared as

MR land in the FMS states.Also in Johor and Terengganu.Note: Not applicable in Penang and Malacca.

Revocation and Replacement of MR land

Art. 89(3) FC: If MR land is revoked, then the State Authority has to replace it with any other state land.

3 conditions:i. It is similar in character.ii. Area not exceeding the area revoked.iii. Should be done immediately.

‘Similar in character’

Not defined. Guidelines:1) Same economic value relating to type of

cultivation.2) Location similar. E.g. access to road.3) Potential for development similar.4) Same type of soil.5) Same category of land use.

‘Immediately’

In V SP Suppiah Chettiar v KS Navaradnam [1972], the High Court held that

‘immediately’ means “allowing a reasonable time for doing it.”

The Position of Non-Malays over MR Land

No declaration of MR Land for Land of Non-Malays

Article 89(4) FC:The State Authority cannot declare any land

which is occupied or owned by non-Malays as Malay reservation.

Thus, if a non-Malay has any title or interest in land, the State Authority is barred from declaring the land as Malay reservation.

This is to protect the legitimate interests of non-Malays under Art. 8 and 153(7) of the Fed. Consti.

FMS MRE 1933

Prohibits a non-Malay from occupying MR land.

A non-Malay may however get an interest in MR land if he applies through a company specified in the 3rd Schedule.

The Ruler in Council has wide powers in declaring a company as a Malay company, irrespective of its members. (see s.7 & 20).

Johor MRE

Where a non-Malay has been occupying the land before its declaration as MR land, such non-Malay may continue to occupy and own such land and can enter into dealings with other non-Malays on such land.

Similarly, in Kedah and Perlis MRE.It is only where the MR land comes into the

hands of a Malay owner that the restrictions on transfers and dealings will apply.

Tan Hong Chit v Lim Kin Wan (1964)

Federal Court held that there are 2 ways where non-Malays can acquire MR land:

1) Approval of Ruler in Council.2) Where such non-Malay has occupied the

land before its declaration as MR land.

Through approval of Ruler in Council

Through approval of Ruler in Council

Occupied land b4 declaration as MR land.

Occupied land b4 declaration as MR land.

Subsequent dealings with non-Malays will require approval of Ruler in Council.

Subsequent dealings with non-Malays do not require approval of Ruler in Council.

Provisions of MR land not applicable to such proprietor.

(Sykt Macey Bhd. V Nightingale Allied Services [1995])

Non-Malays Who Own MR land

‘Malay Company’ and ‘Malay Holdings’

‘Malay’ Company

Under FMS MRE and Trengganu MRE.Requirements:1) Registered u-Companies Act.2) All members are Malay.3) Restriction on transfer of shares to

Malays only in Articles of Association.4) One of the objects of the company is to

deal with Malay holding land.

Wan Ismail & Seng Liang S/B v Musa b. Mat Jani & Anor. [1990]

Held:Any dealings in favour of a company where not all members are Malay is contrary to s.7 of the FMS MRE and shall be declared null

and void.

Malay Holding

S.2(a) FMS MRE 1933 and s.2(d) Trengganu MRE define a Malay holding as:

1) Either the proprietor or co-proprietor are Malay;

2) Alienated land;3) Such land has been declared and

gazetted as MR land; and4) Such land has been included in the

official MR list.

Powers of Ruler in Council over MR Lands

Reference to Ruler in Council

Where in doubt as to the MR law in the state, reference should be made to the Ruler in Council. (see s.20 FMS MRE)

Doubts may arise as regards:

-who is a “Malay’ in such state.

- The mode of operation of the MRE.

- Interpretation and enforcement of the MRE.

Who is the ‘Ruler in Council’?

Hanisah v Tuan Mat [1970]:

“Ruler in Council means His Highness acting in accordance with the advise of the State

Executive Council.”

Can a question on MR land be referred DIRECTLY to the Ruler?

FMS MRE: Must refer the matter

THROUGH the Mentri Besar. (s. 20)

Johor MRE – must refer the matter THROUGH the State Secretary. (s. 22)

Other states MRE do not contain provision for reference to be made THROUGH the MB or other officers.

Can the Ruler in Council declare a person as a ‘Malay’?

Only under Kedah MRE (see s. 19)

See also s. 13 of Kelantan MRE.

Foo Say Lee v Ooi Heng Wai [1969]

Fed. Ct. held:The purported agreement to transfer the MR

land to a non-Malay, was subject to the consent of the Ruler in Council, and was therefore not contrary to the Kelantan MRE.

Decision of Ruler in Council final

Asia Commercial Finance (M) Bhd v PHT & Anor. [1983] CLJ 86

Zainal Abidin bn Mohd. Taib v Malaysia National Insurance Sdn.Bhd. [1994] 3 CLJ 731

Challenges & Prospects for MR Lands

Some Problems Identified:

1. Ignorance of the purpose of MR lands.2. Complacency by owners of MR lands.3. Remoteness and low fertility of MR lands.4. Unfavourable location of MR lands.5. The effectiveness of restrictions on MR

lands.6. the State Authority’s powers of disposal

MR land typically in areas difficult to develop

From the statistics of MR land in Peninsular Malaysia (see p.446 of textbook), it can be seen that MR land has mostly been declared in remote areas and not in states with town centres like KL, Penang, Malacca etc.

Thus, no infrastructure and limited accessability and difficult to develop.

British prohibited mining lands from being declared MR land and rubber trees not to be planted in MR land.

Thus, decline in value of MR land.

Further Reading on MR Land:

Bashiran Begum Mobarak Ali, Nor Asiah Mohamad; “The Red-Ink Grants”: The Malays and the Land (2007) 15 IIUM Law Journal 273.

Bashiran Begum Mobarak Ali, “The Federal Constitution – A Shield for the Protection of Malay Reservation Policy” (2008) The Law Review p.53.

Bashiran Begum, Ainul Jaria Maidin, “Who is a Malay: Defining ‘Malayness’ from the Legislative Perspective” [2008] 5 CLJ i.