Mrs Boonsom Boonyanit @ Sun Yok Eng was a Thai national.

She owned 2 parcels

of land in Tanjong Bungah, Penang. In 1988, a woman who claimed to be Mrs
Boonsoom Boonyanit made a statutory declaration that she had lost the original
titles to the two parcels of land. The Land Office issued her certified copies of the
titles. The forger/impostor then sold the land to Adorna Properties Sdn Bhd for
RM12 million.
After coming to know that Adorna Properties Sdn Bhd had become registered as
the proprietor, Mrs Boonsom Boonyanit brought an action against Adorna
Properties Sdn Bhd to have her land restored to her, but she failed in the High
Court on 25 April 1995. She appealed to the Court of Appeal, and succeeded on
17 March 1997. Adorna Properties appealed to the Federal Court. The threemember panel of the countrys highest court comprising of Eusoff Chin, Wan
Adnan Ismail and Abu Mansor Ali decided in favour of Adorna Properties Sdn Bhd.
That was then 22 December 2000

"Whether an acquirer of a registered charge or other interest or title under the

National Land Code 1965 by means of a forged instrument acquires an
immediate interest or title."

ISSUE : WHETHER ADORNA PROPERTIES A BONA FIDE PURCHASER FOR VAUABLE

CONSIDERATION WITHOUT NOTICE, ACQUIRED AN INDEFEASIBLE TITLE TO THE
LAND BY VIRTUE OF SECTION 340(3)

HIGH COURT : ADORNA WAS A BONA FIDE PURCHASER FOR VALUE AND THUS
CAME WITHIN THE PROVISO TO SECTION 340(3) , WITH THE RESULT THAT THEY
OBTAINED A GOOD TITLE TO THE LANDS NOTWITHSTANDIN THE FORGERY. THE
HC APPLIED IMMEDIATE INDEFEASIBLITY.

COURT OF APPEAL : THE COA HELD THAT THE WORDS ANY PURCHASER IN S340
OF THE CODE REFERES TO SUBSEQUENT AND NOT IIMEDIATE PURCHASER HENCE
CREATING A DEFERRED INDEFEASIBLITY. THE TITLE OF AN IMMEDIATE
PURCHASER IS DEFEASIBLE IF TAINETED BY ONE OR MORE OF THE ELEMENT IN S
340(2) BUT CREATES AN EXCEPTION IN FAVOUR OF A BONA FIDE PURCHASER
WHO TAKES HIS TITLE FROM SUCH A REGISTERED PROPRIETOR. ADORNAS
REGISTERED TITLE WAS DEFEASIBLE UNDER SECTION 340(2) AND THAT THE
PROVISO TO SECTION 340(3) HAD NO APPLICATION. THE COA APPLIED DEFERRED
INDEFEASIBLITY.
A -- B(IMMEDIATE PURCHASER) -C (SUBSEQUENT PURCHASER)
INDEFEASIBLE TITLE
TRANSFEROR -------FORGERY---- IMMEDIATE TRANSFEREE

DEFEREED INDEFEASIBILITY

Stautory protection is conferred on the subsequent transferee who is a bona fide

purchaser for value. Indefeasibility is postpone in favour of a transferee who
subsequently acquires the tile or interest.

TRANSFEROR ----FORGERY > IMMEDIATE TRANSFEREE (BONA FIDE PURCHASER

FOR VALUE) TITLE IS DEFEASIBLE-----SUBSEQUENT TRANSFEREE (BONA FIDE
PURCHASE FOR VALUE) INDEFEASIBLE TITLE.

SECTION 340(1)
THE PROPREITOR WHOSE IN FAVOUR OF REGISTRATION HAS BEEN EFFECTED
WILL OBTAIN AN INDEFEASIBLE TITLE TO OR INTEREST ON THE LAND.

SECTION 340(2)
HOWEVER THE TITLE OR INTEREST SO ACQUIRED IS LIABLE TO BE SET ASIDE
BASED ON SUBSEC 2, WHERE IT HAS BEEN OBTAINED IN FRAUD OR FORGERY. IN
THE CASE OF FRAUD, PROVIDES FOR THE TITLE OR THE INTEREST OBTAINED TO
BE DEFEASIBLE WHERE THE PROPRIETOR OR HIS AGENT IS A PARTY OR PRIVY TO
THE FRAUD. IN THE CASE OF FORGERY, PROVIDES FOR THE TITLE OR INTEREST
SO ACQUIRED BY THE PROPRIETOR OR TRANSSFEREE IMMEDIATELY TO THE
FORGERY TO BE DEFEASIBE AND LIABLE TO BE SET ASIDE. THIS IS SO
IRRESPECTIVE OF WHETHER THE SAID PROPRIETOR OR TRANSFEREE ACTED IN
GOOD FAITH IN ACQURING THE TITLE OR INTEREST. THIS IS BECAUSE THERE ARE
NO SIMILAR REUIREMENT AS IN THE CASE OF FRAUD THAT HE MUST ALSO BE
PARTY OR PRIVY TO THE FORGERY.

SECTION 340 AFFECT THE IMMEDIATE PROPRIETOR CHARGEE OR LEASSE EVEN IF

HE BE A PURCHASER FOR VALUR OR INNOCENT PURCHASER.

SECTION 340 (3)

WHERE THE TITLE OR INTEREST IS SUBSEQEUNTLY TRANSFERRED,THIS SECTION
PROVIDES THAT THE SUBSEQUENT PROPREITOR OR TRANSFEREE WILL SIMILARLY
OBTAIN A DEFEASBILE TITLE OR INTERST.
PROVISO TO SECTION 340(3)
HOW EVER WHERE THE SUBSEQUENT PROPRIETOR OR TRANSFERRE ACTS IN
GOOD FAIT AND GIVES VALUABLE CONSIDERATION FOR THE TITLE OR INTEREST
IN QUESTION, THE PROVISO CONFERS PROTECTION ON SUCH A SUBSEQUENT
PROPRIETOR OR TRANSFERRE SUCH THAT HIS TITLE OR INTEREST IS
INDEFEASIBLE. INDEFEASIBLE.