The court held that the defendant obtained an indefeasible title to the property, as the plaintiff failed to prove conspiracy to defraud, and the defendant conducted due diligence.

JUDGMENT

Quay Chew Soon J:

Introduction

[1] The dispute herein concerns the 1st floor ("property") of a 3-storey terrace shop lot ("said 3-storey shop lot") located at Taman Lugano, Pulau Pinang. The other two storeys of the said 3-storey shop lot, ie the ground floor and the 2nd floor, are not the subject matter of adjudication in the instant suit.

[2] The Plaintiff's ("P") action against the 1st Defendant ("D1") is premised on conspiracy to defraud. After a full trial, I dismissed P's claim. Here are the grounds of my judgment.

Background Facts

[3] The property was sold by a developer known as Lugano Corporation Sdn Bhd("developer") to one Yap Kim Et ("borrower") through a sale and purchase sgreement dated 24 August 1998 at a purchase price of RM168,000.00 .

[4] P provided a loan facility amounting to RM RM130,000.00 to the borrower1 OF 20 to finance the purchase of the property. As security for the loan facility, the borrower assigned his interest in the property to P through a deed of assignment and a power of attorney, both dated 10 August 1999.

[5] The developer executed a letter of undertaking dated 30 December 1998 in favour of P. Pursuant to the letter of undertaking, the developer agreed to deliver to P a duly executed registrable transfer, together with the strata title to the property upon issuance thereof. Further, the developer undertook to refund the loan amount in the event that the transfer cannot be registered or the construction project is abandoned.

[6] At para 10 of the Statement of Claim, P pleaded that "the development project was abandoned for a few years and Lugano [ie the developer] was not contactable by the Plaintiff during the said time". The housing development project was eventually completed. The certificate of fitness in respect of the property was issued by the Majlis Perbandaran Seberang Perai on 28 November 2016.

[7] Around 2013, D1 became aware that the property was available for sale. Being desirous of purchasing the property, D1 appointed solicitors to act for it in that regard. Before embarking on the purchase of the property, D1 conducted a land search on 4 February 2013. The said land search showed that the property is free from encumbrance.

[8] D1 then proceeded with the purchase of the property at a purchase price of RM250,000 by executing a sale and purchase agreement dated 18 March 2013 with the developer. Both sides were legally represented. On 28 March 2013, D1 lodged a private caveat on the property.

[9] Before the completion of the purchase of the property, D1 conducted a second land search on 27 November 2015. This second land search showed the same result as the first land search. To wit, that the property is free from encumbrance, save for the caveat lodged by D1.

[10] D1 was registered as the proprietor of the property on 2 March 2016. Since then, D1 has been and remains as the registered proprietor of the2 OF 20 property.

[11] Throughout the period of the transaction for the purchase of the property by D1 from the developer (ie from 2013 until 2016), there were no issues raised by P. Only on 12 March 2020, P then lodged a private caveat against the property.

Events Relating To The Title Of The Property

[12] The developer was the registered owner of the land known as Holding No 2547, Mukim 7, Seberang Perai Utara, Pulau Pinang (interim master title), after a transfer from the previous owner on 9 April 1996.

[13] On 3 May 1997, the developer applied for the subdivision of the land held under the interim master title Holding No 2547 for the purpose of housing development. The developer applied for 31 separate individual titles. The application for the subdivision of land was approved by the State Authority in 1997.

[14] On 3 July 2009, the interim master title Holding No 2547 was registered as Grant Mukim No 2972, Lot 2547, Mukim 7, Seberang Perai Utara, Pulau Pinang (final master title). This final master title was then cancelled and was subdivided into 31 separate interim individual titles.

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