Land Law II – Exceptions to Indefeasibility of Title

500 English vocabulary-style flashcards covering key terms, cases, principles, and statutory provisions relating to the exceptions to indefeasibility of title under Section 340(2) of Malaysia’s National Land Code as discussed in the lecture.

Section 340(2) National Land Code

Statutory provision listing circumstances in which a registered title or interest is not indefeasible.

Indefeasibility (Deferred)

Protection of a registered proprietor’s title subject to the exceptions in s.340(2) NLC.

Exception 1 to Indefeasibility

Actual fraud or misrepresentation involving the registered proprietor or the proprietor’s agent.

Exception 2 to Indefeasibility

Registration obtained by forgery.

Exception 3 to Indefeasibility

Registration obtained by an insufficient or void instrument.

Exception 4 to Indefeasibility

Title or interest unlawfully acquired in purported exercise of power under written law.

Actual Fraud

Dishonesty showing a wilful, conscious disregard of another’s rights; not constructive or equitable fraud.

Constructive Fraud

Fraud implied by law; not enough to defeat title under s.340(2)(a).

Privy to Fraud

A person who, knowing of the fraud, assists or benefits from it before registration.

Party to Fraud

A person who personally participates in the fraudulent conduct leading to registration.

Malaysia Land Properties v Waldorf & Windsor (2014)

Case confirming that only actual fraud defeats indefeasibility under s.340(2)(a).

Condition for Defeating Title – Fraud 1

Fraud must be actual, not constructive.

Condition for Defeating Title – Fraud 2

The person whose title is attacked must be party or privy to the fraud.

Waimiha Sawmilling v Waione (1923)

New Zealand case defining fraud as wilful dishonesty in Torrens context.

Assets Co v Mere Roihi (1905)

Privy Council case stating fraud in Torrens system means actual dishonesty.

Loi Hieng Chong v Kon Tek Shin (1983)

Malaysian case reiterating that cheating designed to deprive an owner amounts to fraud.

Apoo v Ellamah (1974)

Fraud found where a proprietor was tricked into signing a transfer instead of a charge.

Owe Then Kooi v Au Thiam Seng (1990)

Case where illiterate prisoner signed a transfer believing it was a trust; transfer was void for fraud.

Datuk Jaginder Singh v Tara Rajaratnam (1983)

Lawyer’s misrepresentation led to fraudulent transfer; damages awarded, subsequent BFPFV protected.

Koperasi Mahadaya v Koperasi PDRM (2012)

Transfer without full payment deemed wilful and fraudulent; title was defeasible.

CIMB Bank v Abdul Rafi (2012)

Fake lawyer discharged charge fraudulently; registration tainted, charge reinstated.

T. Sivam v Public Bank (2018)

Solicitor’s knowledge of fraud imputed to bank; charge declared defeasible.

Puspaleela v Rajamani (2019)

Fraudster with identical name obtained replacement title; resulting transfer void.

Fraud – Burden of Proof

Lies on the party alleging fraud; standard is balance of probabilities.

Vijayaletchimy v Annamalai (1990)

Case stressing need to plead particulars of fraud.

Adorna Properties v Boonsom Boonyanit (2001)

Initially lowered fraud burden; later overruled in Tan Ying Hong.

Hoo Kok Chong v Yong Tim (2004)

Reaffirmed balance-of-probabilities standard for fraud allegations.

Maysie Long v Rahimah (2023)

COA clarified two scenarios for challenging registered title based on actual fraud.

Scenario 1 (Maysie Long)

Fraud caused by registered proprietor; title defeasible under s.340(2)(a).

Scenario 2 (Maysie Long)

Fraud by third party; title defeasible if proprietor was party or privy to that fraud.

Constructive Notice & Fraud

Mere knowledge of unregistered interest is not fraud (Tai Lee Finance 1983).

Tai Lee Finance v Official Assignee (1983)

Chargee’s constructive notice not fraud; title remained indefeasible.

Chu Choon Moi v Ngan Sew Tin (1986)

Wife who assisted fraudulent transfer lacked bona fides; title defeated.

Abu Bakar Ismail v Ismail Husin (2007)

Bank’s agent’s fraud imputed to bank; charge cancelled.

Party or Privy Rule

Fraud must be connected to the holder whose title is impeached; innocent subsequent purchasers protected.

Defeasible Title

A registered title that can be set aside because an exception in s.340(2) applies.

BFPFV

Bona Fide Purchaser For Value; later transferees may gain protection under s.340(3) proviso.

Registrar’s Caveat

Entry placed by registrar to protect proprietor after forgery or fraud is reported.

Misrepresentation (S.340(2)(a))

Fraudulent misstatement inducing execution of an instrument; treated as fraud.

Misrepresentation Definition

A false statement of fact made knowingly, without belief in its truth, or recklessly, causing another to act.

Datuk Jaginder Singh – Misrepresentation

Security described as transfer; misrepresentation rendered title defeasible.

Annamalai v Nagappa (2002)

Illiterate proprietor misled about transfer intended only to secure a loan; instrument void.

Loke Yew v Port Swettenham (1913)

Proprietor misled to sign transfer; transferee’s denial of promise made title defeasible.

Forgery (S.340(2)(b))

Registration obtained through a forged signature or impersonation of proprietor; title voidable.

Forgery Type 1 – Title Deed

Falsifying the Register Document of Title or computerised entry.

Forgery Type 2 – Instrument

Falsifying forms such as Form 14A, 16A, 16N, stamp certificates, court orders.

Forgery Type 3 – Impersonation

Forger pretends to be proprietor and signs instruments in that name.

Uptown Properties v PTG WP (2012)

Name wrongly keyed as ‘Uptown’; new owner exploited mistake; registration void.

Poh Yang Hong v Ng Lai Yin (2013)

Database falsified; presentation rejected; attempted registration invalid.

Shayo (M) v Nurlieda (2013)

Wrongly created replacement title, followed by POA & transfer; void for forgery.

Tirai Kristal v PTG KL (2013)

Falsified land database led to invalid registration.

Low Huat Cheng v Rozdenil Toni (2017)

Administrator’s signature forged; purchasers’ titles defeasible.

Lee Choon Hei v Public Bank (2017)

Form 16N forged; bank’s discharge invalid.

CIMB v AmBank (2017)

Forged discharge form despite unpaid loan; discharge set aside.

Maybank v Tho Siew Wah (2017)

Form 14A signature and stamp certificate forged; transfer void.

Kamarulzaman Omar v Yakub Husin (2014)

Impostor beneficiaries arranged fraudulent sale; buyers’ titles defeated.

Tan Ying Hong v Tan Sian San (2010)

Federal Court overruled Adorna; immediate interests arising from void instruments are defeasible.

Liputan Simfoni v Pembangunan Orkid Desa (2019)

Impostor company obtained replacement title, sold land; registration set aside.

Pujaan Pertama v Yap Lee Chuan (2023)

Forgery/impersonation case confirming indefeasibility exceptions.

Selangor Registrar v Shaifulizam (2020)

Appeal concerning impostor-related forgery; court voided transfer.

Insufficient Instrument

Instrument that fails to comply with statutory requirements; registration vulnerable.

Void Instrument

Instrument legally null (e.g., signed by a minor or forged POA); cannot confer indefeasible title.

Tan Hee Juan v Boon Keat (1934)

Minor’s transfer void; registration defeasible.

Champion Score v Mohd Sobri (2025)

Developer as bare trustee could not validly create charge; charge declared void.

Invalid Power of Attorney

Forged, expired, or non-compliant POA; renders dealings void.

Puran Singh v Kehar Singh (1939)

Forged POA used to sell land; transaction void.

State Tailor v Nallapan (2005)

Case illustrating defects arising from invalid POA.

Mohammad Buyong v PHT Gombak (1982)

Land office rejected transfer without original title; alleged POA found false.

Low Poh Lim v PTG Selangor (2015)

Forger’s POA led to transfer; held void ab initio.

Dealings Against Existing Law

Transactions prohibited by statute (e.g., bankrupt’s transfer) are void.

Abdullah Ab Rahman v Siti Aminah (2018)

Bankrupt’s transfer violative of Bankruptcy Act; fraudulent conveyance.

Seizure Under AMLATFA 2001

While a seizure order is in force, any dealings are null and void.

Lau Yong Ying v Bank of Punjab (2018)

Seized property auctioned; registration void because seizure remained.

Unlawfully Acquired Title

Title obtained in breach of statutory procedures or ultra vires actions.

M&J Frozen Food v Siland (1994)

Sheriff issued certificate of sale after court cancelled extension; purchaser’s title void.

Ultra Vires Certificate of Sale

Certificate issued outside statutory power; cannot confer indefeasible title.

Registrar Document of Title (RDT)

Computerised register showing ownership of land.

Issue Document of Title (IDT)

Physical certificate delivered to proprietor evidencing title.

Replacement Title

New IDT issued when original lost; vulnerable to fraud if improperly obtained.

Form 14A

Statutory instrument for transfer of land under NLC.

Form 16N

Instrument for discharge of charge under NLC.

Office Copy of Power of Attorney

Certified copy lodged with Land Office; original must exist for validity.

Registrar’s Power to Cancel Registration

Registrar may remove void or fraudulent entries upon order of court or statutory authority.

Section 417 NLC

Provision allowing court to order rectification of the register.

Section 418 NLC

Right of appeal against land administrator’s decision refusing registration.

Section 340(3) NLC

Protects subsequent purchasers in good faith for value, unless they are immediate transferees from fraud or forgery.

Immediate Purchaser

Person who gains interest directly from the fraud or void instrument; not protected by s.340(3) proviso.

Remote Purchaser

Later transferee for value without notice; may gain protection under proviso.

Fraudulent Misrepresentation

False statement made knowingly to induce signing of land instrument.

Equitable Fraud

Unconscionable conduct falling short of actual dishonesty; not enough under s.340.

Registrar’s Refusal to Register

Power exercised when instrument is void, insufficient, or land is under caveat.

Section 310 NLC

Requires presentation of instrument to registry for registration.

Section 303 NLC

Defines ‘presentation’ and effect of time priority.

Time Priority Rule

Instrument presented earlier has priority once registered, subject to exceptions.

Police Report for Forgery

Recommended first step when proprietor discovers forged dealing.

Computerisation Exercise

Conversion of manual titles to electronic RDT system; potential source of clerical errors.

Clerical Error in RDT

Mistake keyed into database; if exploited, can lead to void registration.

Willful Blindness

Deliberate refusal to inquire; may evidence actual fraud depending on facts.

Balance of Probabilities

Civil standard of proof required to establish fraud under s.340.

Burden of Pleading Fraud

Plaintiff must specify facts constituting fraud in statement of claim.