Fraudulent transfer of property without consent makes title defeasible; defendants must prove good faith to retain indefeasible title.

Leong Wai Hong JC:

Introduction

[1] This is another land fraud case.

[2] The typical modus operandi from the Latin modus operandi (literally "manner or method of working") of the fraudsters involves the following components

a) A vacant land. This is because if the land or house is occupied it will be difficult for the fraudster to pretend to be the owner as the buyer will view the property prior to purchase.

b) A computerised issue document of title ["IDT"] obtained from the land office either through a false statutory declaration that the existing IDT is lost or stolen, or obtained through an insider working at the land office.

c) A sale price that is below the market value taking advantage of human greed.

d) A fraudster seller who insists on receiving the deposit and/or balance sale price in cash.

e) A fraudster seller who requests the deposit and/or balance sale price to be paid to a third party and not to him.

f) A fraudster seller who uses a fake NRIC with the real owner's name and identity card number.

See:

i. Rajamani Meyappa Chettiar v. Eng Beng Development Sdn Bhd & Ors, [2015] 2 AMR 767 HC Lim Chong Fong J.

ii. Premier Consortium Sdn Bhd v. Ho May Leng & Ors HC Hadhariah Syed Ismail J.

iii. S Selvam Samikannu v. Messrs Krish & Kiew (a firm) HC Rozana Ali Yusoff JC.

iv. Pushpaleela R Selvarajah & Anor v. Rajamani Meyappa Chettiar And Other Appeals, 2019 MarsdenLR 2312 FC.

v. Yap Piat Eng @ Yap Lien Eng & Anor v. Yap Kok Sheng & Ors HC Darrly Goon Siew Chye J.

vi. Wong Ing Tong v. Yap Piat Eng @ Yap Lien Eng & Anor and other appeals, [2022] 4 CLJ 882 CA Hadhariah Syed Ismail JCA.

[3] Unless solicitors and the land office are alert as to the modus operandi of these fraudsters, land fraud cases will continue to occur. Owners of vacant land will continue to fear their lands sold without their knowledge and consent. Buyers will fear they are paying good money only to see their ownerships set aside with no hope of recovering their outlays.

[4] The Plaintiff in this judgment alleges that her vacant land in Damansara Heights ["Subject Land"] was transferred to the 3rd Defendant and then to the 7th and 8th Defendants through a land fraud.

[5] The Plaintiff filed a writ and Amended Statement of Claim [Enclosure 18] against:

a) The 1st Defendant / land office for negligence;

b) The 2nd Defendant / Government of Malaysia for vicarious liability;

c) The 3rd Defendant who is the first transferee of the Subject Land and the 4th to 5th Defendants who are directors of the 3rd Defendant for fraud.

d) The 6th Defendant / lawyer who falsely and purportedly attested the Plaintiff's execution of the transfer Form 14A in favour of the 3rd Defendant.

e) The 7th and 8th Defendants / buyers of the Subject Land for fraud and forgery and obtaining title through a void instrument; and

f) The 9th Defendant who had entered a lien-holders caveat on the Subject Land.

[6] In this Judgment, parties will be referred to as 1st Defendant or D1, 2nd Defendant or D2 etc.

[7] The 1st and 2nd Defendants deny there was negligence on the part of D1.

[8] The 3rd to 6th Defendants did not enter appearances. The Plaintiff has obtained Judgments in Default of Defence against them on 19 September 2022 with the consent of the 1st, 2nd, 7th to 9th Defendants without prejudice to the rights of the 7th to 9th Defendants. See encl 54.

[9] The 7th and 8th Defendants contend that they have indefeasibility title as they are bona fide purchasers in good faith and for valuable consideration. They invoked the protection under the proviso to s 340(3) of the National Land Code 1965. [" NLC "]

Court Pleadings

The Pleaded Case Of The Plaintiff

[10] The pleaded case of the Plaintiff in her Amended Statement of Claim is as follows.

The Subject Land

[11] The Plaintiff is the sole proprietor of the Subject L