Professional Documents
Culture Documents
INDEFEASIBILITY
LXEB2112 LAND LAW I
REGISTRATION
Definition of dealings
ss 5 & 205 NLC
Definition of dealings
Registrable dealings:
1. Transfers
2. Leases
3. Charges
4. Easements
Definition of dealings
s 206(2) Non-registrable dealings:
1. Tenancy
2. Lien
Q: How are unregistrable dealings protected under the
Torrens system?
Requirements
ss 207-212, 293-294, 206(1) &(2) NLC:
Requirements
In the
prescribed
forms
Duly executed
Presented to
Registry or Land
Office
+ accompanying
documents
Requirements
Entry in
Presentation
Book
Registrar
determines
Fitness for
Registration
Registration
if Fit
Requirements
1. In the prescribed forms First Schedule (s 207)
2. Duly executed:
a. To contain the descriptions of the parties (s 208)
b. To contain the description of land (s 209)
c. To be executed by the parties or persons acting on a
valid POA (s 210)
Requirements
2 c. s 210 What is execution?
Natural person
Signing OR affixing thumbprint
Requirements
2 c. s 210 What is execution?
- Signing does not include making a mark, e.g.
Requirements
2 d. S 211- Every execution must be attested
Requirements
2 d. S 211- Every execution must be attested
Who may attest? See Fifth Schedule
Requirements
Requirements
See Tenth Schedule to the NLC
Para 11 Writing including signing shall be in permanent
black or blue-black ink
Requirements
Requirements
3. Presented to Registry or Land Office, s 292
Q: What may be presented & registered?
S 292(1)
Q: What is a certificate of sale under Part 16?
Requirements
4. To be accompanied with
a. Registration fees, s 293
b. The necessary documents, s 294
the original instrument shall be duly stamped, s 294(1)
(a)
Requirements
5. To be entered in Presentation Book, s 295
6. Registrar decides fitness for registration, ss 297-300
a. if an instrument satisfies all the requirements in s 301(a)(e)
b. Rent due paid before presentation, s 301A
c. May make enquiries, s 302 subject to limitations on
Registrars powers under s 303
Requirements
if the instrument is not fit for registration: s 298(2) NLC
Reject except solely of clerical error/formal defect
suspend registration for maximum 14 days
Requirements
if the instrument is fit for registration: s 304
S 304(1) the time & date of registration shall be the time
& date of the entry of an instrument in Presentation Book
How registration is effected, s 304(2)
Requirements
Mohammad bin Buyong v Pemungut Hasil Tanah, Gombak
& Ors
Where a prescribed memorial of the dealing is made on
RDT under the hand and seal of the registering
authority
Requirements
Island & Peninsular Development Bhd & Anor v Legal
Adviser, Kedah & Ors [1973] 2 MLJ 71
If an instrument is in order and fit, it is the Registrars
duty to register it
Effect of registration
s 340 NLC
Tan Ying Hong v Tan Sian San [2010] 2 MLJ 1 FC
Effect of registration
Registration = cornerstone of the Torrens system
Torrens system Title by registration only registration
of title
Effect of non-registration
s 206(3) NLC
INDEFEASIBILITY
INDEFEASIBILITY
S 340
SECTION 340
s 340(1) the general rule
S 340(2) exceptions to s 340(1)
S 340(3) the effect of the exceptions in s 340(2) to
subsequent purchaser & any interest subsequently
granted also defeasible
Proviso to s 340(3) title or interest of bona fide purchaser
not affected
SECTION 340
Q: Proviso to s 340(3) applicable to persons/bodies in s
340(2) or only those in s 340(3)?
SECTION 340
B (Buyer)
SECTION 340
X
A (Initial land owner)
B (Buyer)
SECTION 340
SECTION 340
C=Bona fide
Purchaser
Proviso to s 340(3)
X
X, impostor
R (Original land owner)
Indefeasibility
Immediate indefeasibility the RP loses
Deferred indefeasibility the buyer loses
No assurance fund under Malaysian Torrens system
Indefeasibility
A state guarantee is an integral part of a system of
registration of titles Sir Robert Torrens
Indefeasibility
Kobchai Sosothikul (representative of the estate
ofBoonsom Boonyanit@ Sun Yok Eng, deceased) v
Pengarah Tanah dan Galian, Pulau Pinang [2012] 3 MLJ
297
Action claiming damages against the State Director for
negligence. Elements of tort of negligence were
established. But the court held that Ps action was time
barred under s 2(a) of the Public Authorities Protection
Act 1948 (PAPA) as it was filed after the expiry of 36 mths
from the date on which cause of action accrued
S 340(2)
3 vitiating factors:
a) fraud or misrepresentation to which the RP or interest
holder or his agent was a party or privy
b) forgery OR by void or insufficient instrument
c) unlawful acquisition by purported exercise of power
or authority
S 340(2)(a) Fraud
1) fraud to which the RP or interest holder or his agent
was a party or privy
2) fraud to which the agent of the RP or interest holder
was a party or privy => even if the RP or interest holder
was unaware of the fraudulent act
S 340(2)(a) Fraud
Abu Bakar Ismail v Ismail Husin & Ors [2007] 3 CLJ 97 CA
Charge was defeasible as the solicitor, acting for the
chargee bank & thus the agent of the bank, had acted
fraudulently
S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
R1 (RP)
A obtained order for
Developer
2 charges
sale upon R1s default
S&P for
houses
R2-R7 before
charges
S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
Fraud means actual fraud, dishonesty of some sort to which
the RP is a party or privy, not what is called constructive or
equitable fraud
Fraud implies a wilful act, on the part of one, whereby another
is sought to be deprived, by unjustifiable means, of what he is
entitled
If the object of a transfer is to cheat a man of a known existing
right, that is fraudulent
S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
The mere fact that one might have found out fraud if he
had been more vigilant, and had made further inquiries
which he omitted to make, does not of itself prove fraud
on his part
But if ones suspicions were aroused and he abstained
from making inquiries for fear of learning the truth, fraud
may be established
S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
Whether fraud exists is a Q of fact, depending on the
circumstances of each case
The onus is one the person alleging fraud to prove fraud,
not on a balance of probabilities but beyond reasonable
doubt
S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
For a developer to charge land to secure loans for the
purposes of development is a common practice. It could
not be said that the designed object of the charge was to
defeat Rs beneficial interest
At the very most A had constructive notice of Rs prior
beneficial interests, but no evidence of fraud to which A
was a party. Fraud not proved beyond reasonable doubt.
S 340(2)(a) Fraud
Datuk Jagindar Singh & Ors v Tara Rajaratnam FC
Transferred to Suppiah (A)
R, RP of land in Kulai
S 340(2)(a) Fraud
Datuk Jagindar Singh & Ors v Tara Rajaratnam FC
As were not honest as all A1 & A2 wanted was to get R to
sign the transfer so that they could lay their hands on the
property
A3 (Arul) must have known what was going on. A3 claimed
to be a bona fide purchaser for value. But he colluded with
other As to get the property. The haste with which A2
transferred the property to A3 was part of a design to
deprive R of the property.
S 340(2)(a) Fraud
Knowing about an unregistered interest may amount to
fraud: Loke Yew v Port Swettenham Rubber Co Ltd
Cf Tueh Guat Choo v Cheah Ah Hoe & Anor
S 340(2)(a) Misrepresentation
Loke Yew v Port Sweettenham Rubber Co Ltd PC
=> Fraudulent misrepresentation, a species of fraud
Datuk Jagindar Singh & Ors v Tara Rajaratnam FC
Does not include innocent misrepresentation
S 340(2)(b) Forgery
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A (Initial RP)
B forged
S 340(2)(b) Forgery
X forged
A (Initial RP)
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B unaware of forgery
or not involved in forgery
S 340(2)(b) Forgery
Cf other jurisdictions implementing Torrens system e.g.
NZ & Australia registration obtained by forgery gives
indefeasible title or interest (immediate indefeasibility)
Sarawak Land Code practises immediate indefeasibility
S 340(2)(b) Forgery
R3
-UMBC
S 340(2)(b) Forgery
Tan Ying Hong
Q: Did UMBC obtained indefeasible interest?
S 340(2)(b) Forgery
Tan Ying Hong
The two charges were based on void instruments since the
charge instruments were not executed by A, but by R1
pursuant to a forged PA
A indefeasible, s 340(2)
B also indefeasible,
s 340(3)
!
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But
A indefeasible, s 340(2)
B also indefeasible,
s 340(3)
Im
equitys
darling
too!
A indefeasible, s 340(2)
Sorry, darling,
proviso to s 340(3)
is
for me, not for
you!
B also indefeasible,
s 340(3)
Proviso to s 340(3)
In good faith
& for valuable consideration
Proviso to s 340(3)
Datuk Jagindar Singh
In good faith
Must not be a party to fraud, deception, dishonesty
Proviso to s 340(3)
Lai Soong Cheong v Kien Loong
Pekan Nenas Indsutries Sdn Bhd v Chang Ching Chuen &
Ors
Negligence per se fraud
Proviso to s 340(3)
In good faith
Must not be a party to any vitiating factors under s 340(2)
Should have no knowledge of matters in s 340(2) when he
entered into the transaction
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Transfer of land to
Equity Nominess Sdn Bhd
(CMS & wife sole propreitors)
CMS
lender
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Doshi, previously the RP of a piece of land. He deposited
IDT and a blank transfer form executed by him with CMS
to secure a loan he obtained from the latter.
When Doshi failed to repay the loan within 3 months, CMS
transferred the land to Equitable Nominees Sdn Bhd
which subsequently sold the land to YTL.
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Assuming that the loan agreement was illegal and, thus
the transfer from CMS to equitable nominees was void,
and assuming that that transfer was also void because of
the falsity of the attestation clause (s 340(2)), the title
would thus be defeasible.
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
When it was later transferred to YTL, it was also liable to
be set aside under
s 340(3)(a).
But YTL was protected under the proviso to s 340(3),
being a purchaser in good faith & for valuable
consideration.
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
We must reiterate that the proviso to s 340(3) applies
exclusively to those situations which are covered by
sub-s (3) which is that s 340(3) will only take effect after
the immediate RP or holder in s 340(2) has transferred his
defeasible title or interest to someone else (see s 340(3)
(a)).
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Is there then any difference between the two sets of
situations in s 340(2) and s340(3)? The difference is this:
In s 340(2) where a registered title or interest is rendered
defeasible by reason of any of the circumstances set out in
s 340(2), that title or interest in the hands of the
immediate RP or holder of an interest (for example, any
charge or lease) is liable to be set aside. And any interest
granted by such immediate proprietor or holder is also
liable to be set aside
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
In effect, s 340(2)(a) and (b) affect the immediate
proprietor, chargee or lessee even if he be a purchaser for
value under sub-s (2)(a), or, an innocent purchaser for
value under sub-s (2)(b). It is important to be reminded
that there is no proviso to this subsection.
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
On the other hand, s 340(3) applies only to a situation
after the immediate RP or holder in s 340(2) has
transferred his defeasible title or interest to someone else.
The result will be virtually the same in s 340(3) as in
s340(2) but for one important difference. Under s 340(2)
the title or interest in the hands of the immediate RP or
holder of an interest in the land (such as a charge or a
lease) is liable to be set aside.
Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
But, in s 340(3) although the title or interest which is in
the hands of the subsequent purchaser is also liable to be
set aside, the subsequent purchaser has the benefit of
the protection of the proviso to sub-s (3) which the
immediate proprietor or holder in s 340(2) does not have.
SECTION 340
s 340(1) the general rule
S 340(2) exceptions to s 340(1)
S 340(3) the effect of the exceptions in s 340(2) to
subsequent purchaser & any interest subsequently
granted also defeasible
Proviso to s 340(3) title or interest of bona fide purchaser
(only subsequent purchaser!!) not affected
SECTION 340
A
registered himself
as RP
B
Subsequent
purchaser
SECTION 340
A
B
Subsequent
registered himself
Purchaser
as RP
s 340(1), As title indefeasible
S 340(3)
If s 340(2) applies,
Defeasible
Proviso to s 340(3)
As title defeasible
Unless B is
bona fide purchaser
S 340(3)
Also defeasible
Proviso to s 340(3)
Unless C is
Bona fide
purchaser
SECTION 340
Original RP
By virtue of fraud
E.g. forged instrument
Or pass off as vendors
s 340(2)
Defeasible
B is party or privy
to fraud
B= immediate p
Bona fide purchaser
inapplicable
Subsequent
purchaser
s 340(3)
Also defeasible
Proviso to s 340(3)
Unless C is
Bona fide
purchaser
SECTION 340
Original RP
By virtue of fraud
of X=agent of B
s 340(2)
Defeasible
Bs agent is party or
to fraud
B= immediate p
Bona fide purchaser
inapplicable
C
Subsequent
purchaser
privy
s 340(3)
Also defeasible
Proviso to s 340(3)
Unless C is
Bona fide
purchaser
SECTION 340
Original RP
B forged documents
s 340(2)
Defeasible
Subsequent
purchaser
s 340(3)
Bona fide purchaser Also defeasible
inapplicable
Proviso to s 340(3)
B=immediate purchaser
Unless C is
subsequent purchaser
Bona fide
purchaser
SECTION 340
Original RP
X forged documents
s 340(2)
Subsequent
Defeasible
purchaser
Bona fide purchaser s 340(3)
inapplicable
Also defeasible
B=immediate purchaser
Proviso to s 340(3)
subsequent purchaser
Unless C is
even if B unaware of Bona fide
forgery!
purchaser
Fraud/
Husin Misrepresenta
& Ors
tion, s 340(2)
FC
R1-R4 obtained title in land by fraud/misrepresentation
Order of distribution Administrator effected MOT in
favour of R1-R4
S 340(3)?
R1-R4 transferred the land to R5-R6
Proviso to
s 340(3)?
In the instant case, both the trial court and the Court of Appeal held that the fifth and sixth
respondents were bona fide purchasers. However, both courts failed to inquire whether the fifth or
sixth respondents were immediate or subsequent purchasers. Only a subsequent purchaser was
entitled to raise the shield of indefeasibility. An immediate purchaser of a title tainted by any one
of the vitiating elements acquired a title that was not indefeasible. Thus, even if the fifth and sixth
respondents were bona fide purchasers they could not by that fact alone have acquired a shield of
indefeasibility unless they had been bona fide subsequent purchasers. In the present case, the first
to fourth respondents, from whom the fifth and sixth respondents obtained title, were not
immediate purchasers but rather imposters of those entitled to the estate of the deceased.
Therefore, when the fraudulent title of the first to fourth respondents was set aside by the default
judgment, the defeasible title of the fifth and sixth respondents was also defeated (see para 43).
As immediate purchasers, the fifth and sixth respondents were not protected by the proviso to s
340(3) of the NLC (see para 44).