NH Chan JCA:

I have had the advantage of reading the judgment in draft of my lord Mokhtar Sidin, JCA and I also agree that the appeal should be dismissed. The facts are as stated in his judgment. I shall state below the law on the application of the defeasibility provisions of s. 340(2)(a) and (b) of the National Land Code and the manner in which it is applied to the facts of the instant appeal.

The Law

Section 340(1) and (2) of the National Land Code reads:

340.(1) The title or interest of any person or body for the time being registered as proprietor of any land, or in whose name any lease, charge or easement is for the time being registered, shall, subject to the following provisions of this section, be indefeasible.

(2) The title or interest of any such person or body shall not be indefeasible -

(a) in any case of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy; or

(b) where registration was obtained by forgery, or by means of an insufficient or void instrument; or

(c) where the title or interest was unlawfully acquired by the person or body in the purported exercise of any power or authority conferred by any law.

It is plain that the words of sub-s. (2) are constructed in such a way as to make defeasible only the registered title or interest of the immediate acquirer of the land or of an interest in the land (such as a charge or a lease). The subsection makes defeasible the registered title of a proprietor who gets onto the register by any of the means specified in s. 340(2): see Boonsom Boonyanit V. Adorna Properties Sdn. Bhd. [1995] 4 CLJ 45. It also makes defeasible the registered interest of a chargee who gets onto the register by any of the methods specified in sub-s. (2): see Chiew Lip Seng v. Perwira Habib Bank (M) Bhd [1999] 5 CLJ Supp 12; [1999] 1 MLJ 310.

Defeasibility On The Ground Of Fraud Under Section 340(2)(a)

Under s. 340(2)(a), the registered title of the proprietor or the registered interest of the chargee or lessee becomes defeasible where the registration was obtained by fraud or misrepresentation, and such proprietor, chargee or lessee was a party to or have colluded in the fraud.

The word 'misrepresentation' in the context of sub-s. (2)(a), when read ejusdem generis can only mean fraudulent misrepresentation and not innocent misrepresentation (Datuk Jagindar Singh & Ors v. Tara Rajaratnam [1983] 2 MLJ 196, FC). In Loke Yew v. Port Swettenham Rubber Co. [1913] AC 491, PC and Haji Junus v. Chik [1964] MLJ 343, the fraud established was fraudulent misrepresentation. See Teo Keang Sood and Khaw Lake Tee: Land Law in Malaysia (2nd edn, 1995) at p. 168. See further Sihombing: The National Land Code, A Commentary (2nd edn, 1992) at pp. 811-814.

Fraud in s. 340(2)(a) means "actual fraud, ie, dishonesty of some sort, not what is called constructive or equitable fraud": see Assets Co. Ltd v. Mere Roihi & Ors [1905] AC 176, PC, at 210. In other words, 'fraud' under para. (a) of this subsection is common law 'fraud', sometimes called Derry v. Peek ([1889] 14 App. Cas. 337) 'fraud'. This is how Lord Lindley who delivered the judgment of the Board (Lord Macnaghten, Lord Davey, Lord Robertson, Lord Lindley and Sir Arthur Wilson) in Assets Co. Ltd v. Mere Roihi put it, at 210:

Pausing now to the question of fraud, their Lordships are unable to agree with the Court of Appeal. Sects. 46, 119, 129 and 130 of the Land Transfer Act, 1870, and the corresponding sections of the Act of 1885 (namely, ss. 55, 56, 189 and 190) appear to their Lordships to show that by fraud in these Acts is meant actual fraud, i.e., dishonesty of some sort, not what is called constructive or equitable fraud - an unfortunate expression and one very apt to mislead,

but often used, for want of a better term, to denote transactions having consequences in equity similar to those which flow from fraud. Further, it appears to their Lordships that the fraud which mus