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Question 1 : (Present your answer in the form of a Role Play)

Mr. Jual and Mr. Beli have come to an agreement on the sale to Mr. Beli of all that piece
of land held under Lot 146 HSD 234 Mukim of Jasin , Melaka together with a double
story terrace house erected on it described as 32, Jalan Jasin 3/1 Taman Jasin Indah 76260
Melaka. For the price of RM175,000/-They wish to formalise the oral agreement. Mr.
Jual who is your client comes to see you with Mr. Beli.
1. Parties wants you to act for them. Advise parties on the legal position with respect to
the Legal Profession Act and the Bar Councils Conveyancing Practice Rulings
A lawyer may only act for one party in one transaction, but may witness the execution of
any documents or instruments by any party. A sale and purchase is one transaction and a
loan is another separate transaction. Therefore, a lawyer can act for a seller, or buyer and
also a lender or borrower. The solicitor should also be concerned and should see the
consequences to any possible conflict of interest situation.Only the purchasers are
protected but not the vendor which may lead biassness. So the vendor and purchaser each
must appoint their own lawyer.
Therefore, looking at Mr Jual and Mr Belis position, as a solicitor may act only for the
vendor who is Mr Jual to formalise the agreement as well as protect the vendors interest.
2. If you are to act for the Purchaser explain to the Vendor what you can do for him if he
chooses not to be legally represented.
Ensure the terms and conditions of the sale are mutual between both parties. As the
purchasers lawyer, direct dealings with the vendor on the sale agreement is needed since
the vendor is not legally represented by any lawyers.
3. Advise the Purchaser on the process of the sale & purchase from the Purchasers
Explain reasons for the various searches, risks, effect of bankruptcy, taxes, stamp duty.

The important matters which is found in the SPA firstly are the parties, the property and
the payment and timeline. Upon signing the offer to purchase, which is to pay the earnest
deposit, which is a specific form of security deposit made in some major transactions
such as real estate dealings. Next upon signing the SPA, to pay the balance of deposit as
well as legal fees, will take another 14 days and after that, upon signing of banks letter of
offer which is to pay stamp duty, differential sum between the balance purchase price and
the loan sum if there is any. 3 months from the date of SPA is given to pay the balance
purchase price. Thus, another 14 days is required which it will then lead to delivering
keys to pay apportionment of outgoings. It can be further elaborated where all outgoings
and expenses payable in respect of the ownership which includes all quit rent and
maintenance charge in respect of the property shall be apportioned between the vendor
and purchaser at the date of payment of the full purchase price by the purchaser to the
purchasers solicitors.
The various reasons why stamp duty must be paid because is a tax levied on a variety of
written instruments specifies in the first schedule of stamp duty act 1949. Stamp duty will
be imposed to legal commercial and financial instruments. There are two types of stamp
duty, ad valorem duty and fixed duty. Advalorem duty is where the amount payable will
vary depending on type and value of the instruments, whereas fixed duty is imposed
without any relation to the consideration paid or amount stated in the instrument.
Not only that, conducting a land search or bankruptcy or insolvency and company
searches are vital to ensure that there will be no surprises such as a different registered
owner, conditions or restrictions on the title or that party is actually a bankrupt.
Based on the utility deposits, there must be an arrangement made with the purchaser to
obtain refund of the remaning deposits such as water, electricity bills.


Explain how the fraudulent transaction occurred and discuss what measures could have
been taken by solicitors to safeguard against fraudulent scams and protect the innocent
party and themselves from professional negligence.

Rajamani A/P Meyappa Chettiar v Eng Beng Development Sdn Bhd. & Ors.
Civil Appeal No. B-01 (W)-71-03/2015; CA (04 March 2016)

P was a registered lawful owner of land (MR 6527). Disputes happened when Ps name
had been replaced by the second respondents name, followed by the first respondents
name in the register document of title.
After discovering that and finding out that the original issue document of title was with P
at all times, P lodged a police report and entered a private caveat to protect Ps interest of
the land. P went to the High Court and filed a suit making a claim that the so called
transfer of the land was bad in law and void for breaches of the provisions stipulated in
the NLC.
It was discovered that the first defendant purchased the land from the second defendant
and was actually holding a replacement title of GM 9890.
The second defendant allegedly purchased the land from an imposter in India by the
name Bogus Rajamani for a consideration of 1.2 million.
However focusing more on the third and fourth defendants were a partner in an advocate
and solicitor which they had acted for Bogus Rajamani. The fifth and sixth defendants
were the pentadbir tanah daerah klang and pendaftar hak milik selangor.
In defense, they third and fourth defendant argued that they had complied with the normal
conveyancing practice in dealings with Bogus Rajamani.
It was held that, by allowing the appeal Abdul Rahman Sebli JCA delivered the judgment
by saying that the third and fourth defendants were negligent in failing to take all
necessary steps to verify the true identity and status of the imposter (Bogus Rajamani)
which produced an Indian Passport which did not match Rajamanis passport number.
It was also known to the fact that the third defendant was given notice to make futher
inquiries regarding to this matter but she chose not to do so. If only the third defendant
had carried out her duty as a reasonably competent solicitor would do, instead of just
accepting what was claimed by the vendor was correct with one eye, she would have
found out that Rajamani was an imposter and was not the real owner of the said land.
As a result, the third and fourth defendants had breached their duty of care towards the

Measures that the solicitors should take may be referred to Circular No 103/2016 issued
by the Malaysian Bar dated 28th April 2016. Which they had advised solicitors to adopt
good risk management and due diligence practices when handling conveyancing matters.
Firstly is to exercise extreme caution when dealing with so-called Agents or third parties.
Not only that, solicitors should also obtain copy of the agent or third partys credentials
(eg MyKad or real estate agent licence) in this case, passport numbers identification.
Last but not least, identify and verify the identity of the client, agent or third party and
developer or vendor. Perhaps, conduct additional independent checks on the third party
for example, the checking the validity passport number of the imposter.
(ii) Ngan Siong Hing v RHB Bank Bhd[2014] 2MLJ 449
This is an appeal case which happened between a partner and a legal firm. The legal firm
being the appellant and the bank as the respondent. The appellant made an appeal to the
trial judge which the Respondent who was the financier for the purchaser in a subsale
transaction based on two apartment units. Referring to the letter of instruction or retainer
dated 18th october 2000, the respondent appointed and gave instructions to the appellant
of Abbas & Ngan to prepare the loan security documents in respect of the facilities
granted to the borrower. After they have received the confirmation from the appellant
mentioning that their interest was adequately protected the bank released the loan sum
to the respondent for do their further transaction to the vendor.
Yet, when the borrower defaulted in repayment of the banks facilities, the bank found out
that the borrower had fictitious identity that the vendor was not the actual beneficial
owner of the properties and the solicitors who had witnessed the sale and purchase
agreement who was acting for the borrower turned out to be a bogus legal firm.
After that, the respondent filed a legal proceeding against appellant due to the damaged
suffered from the appellants breach of contractual obligation which includes failing to
carry out the necessary searches on the alleged vendor, proprietor and developer as well
as the borrower or puchaser. Not only that, that the solictors or appellant had alternatively
cause tort of negligence from failure to discharge the duty of care owed by the appellant
to the respondent. Appeal was allowed with cost.
Thus, measures which should be taken by the solicitors acting for the bank in loan
transaction firstly is to make a land search on the title, to know the validity of the land
whether is existed or not. Not only that, by obtaining the original SPA to verify as ensure
that all the important details are in line the the search results or not. Following, relevant
searches on the vendor, developer or parties involved is crucial to discover whether the
parties involved are a bankrupt or a person who he claimed to be.

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