A Mere Comfort to Those Relying on it: The Fate of Powers of Attorney in Sabah

Is there an equivalent of the Power of Attorney Act in Sabah? What is the procedure for registering a Power of Attorney (“PA”) in Sabah? These are common questions I receive from my Learned Friends outside the Land Below the Wind.

The Powers of Attorney Act 1949 is only applicable in West Malaysia. Thus, for Sabah, common law, based on contractual principal and agent relationship, are relied upon. In this regard, the Contracts Act 1950 (“CA 1950”) is applicable. More specifically, Part X on Agency of the CA 1950 is particularly relevant, and where applicable, Ss. 64(2) and 98 of the Sabah Land Ordinance. 

Lim Hock Leng J in Nur Azlin bt Razal @ Abd Razi v Kamunri bin Naho & Ors [2021] MLJU 784 (High Court) observes:

“[97] Considering that a power of attorney is but a form of a principal-agency relationship, the Malaysian Contracts Act 1950 which has an entire chapter on agency would apply to powers of attorney in Sabah, and, where applicable, sections 64(2) and 98 of the Sabah Land Ordinance.”

In short, if the solicitor is able to ensure that the prospective donor the effect of the PA, and of forming a rational judgment regarding the same, then a valid PA may be made.

Some have argued that a PA is a dealing under the Sabah Land Ordinance (“SLO”), and thus ought to be registered as a dealing in compliance with Sections 88 and 95 of the SLO. However, the High Court in Nur Azlin bt Razal @ Abd Razi v Kamunri bin Naho & Ors [2021] MLJU 784 held that the PA “(in a pure agency form) only enables the dealing but is by itself not a dealing/transaction.”

As for the registration of a PA, Sabah does not have a system of registration similar to the one found in West Malaysia. A PA may be registered at the Magistrates’ Court and the Lands and Surveys Department; however, the registration does not give legitimacy to the PA. 

Similarly, a PA may be registered or noted in the Central Land Office; however, it is nothing but a procedural step that the Lands and Surveys Department requires before they can process documents containing signatories executed pursuant to a PA. Again, this does not give legitimacy to the Power of Attorney.

Justice David Wong (as he then was) made this following observation in the High Court case of Lee Chee Kiang v Johnson Tan Teck Seng & Anor [2011] 8 MLJ 297

“Before I leave this area of discussion, I should comment on the legal effect of registration of power of attorney and it is this. Registration per se of a power of attorney at the magistrate's courts and lands and surveys department do not give legitimacy to it. Registration in the magistrate's court is nothing but a practice and provides nothing but comfort to the people relying on it. As for registration or notation in the Central Land Office, Kota Kinabalu, it is nothing but a procedural step which the lands and surveys department requires before they can process documents containing signatories executed pursuant to a power of attorney. As rightly pointed out by PW3, the lands and surveys department is only performing an administrative act when processing documents in their office and the registration and acceptance of the use of the power of attorney by the central land office, Kota Kinabalu does not give legitimacy to the power of attorney if challenged later.” 

A mere comfort to those relying on it, but lacking in legitimacy otherwise? Not very comforting, if you ask me. But that is the situation as it stands today.

“(R)eforms for the registration and regulation of powers of attorney to safeguard against misuse are perhaps necessary, if not overdue.” Rightly noted, Lim Hock Leng J (stated in Nur Azlin bt Razal @ Abd Razi v Kamunri bin Naho & Ors [2021] MLJU 784).