The registrar of titles has a duty to maintain accurate land records, and failure to comply with statutory requirements constitutes negligence.

Abdul Aziz Abdul Rahim JCA:

[1] Ulu Selangor Estate Sdn Bhd ("USESB"), a Malaysian registered company, was the original lawful and registered proprietor of two parcels of freehold land in Mukim Rasa, District Ulu Selangor in the State of Selangor. The two parcels of land were described as Geran 53020 Lot No 886 measuring approximately 242.061 acres and Geran 53021 Lot No 887 measuring approximately 559.064 acres (collectively referred to as "the said lands").

[2] USESB purportedly entered into a sale and purchase agreement with Magna Iron Sdn Bhd ("MISB") for the sale of the said lands. For the purpose of financing the purchase of the said lands, MISB took out a loan in the sum of RM19.7 million from the respondent, Bank Pertanian Malaysia Berhad. As security, the said lands were charged to the respondent under two charges (because of the two separate titles).

[3] The respondent used the services of a legal firm, Messrs Zulpadli & Edham, for the preparation and execution of the financing and charge documents for the said lands. The above two charges were sent by them to the appellant for registration together with the memorandum of transfer for the two lots of land.

[4] The two charges were accordingly registered by the appellant on the same day, ie 23 June 2008 under Perserahan No: 57242/2008 and Perserahan No: 57243/2008.

[5] Upon being advised by their solicitors that the charges have been successfully registered, the respondent released the loan sum of RM19.7 million to USESB through the solicitors of USESB.

[6] Pursuant to the presentation of the memorandum of transfer and the charges on 23 June 2008, a new computerised grant of title was issued by the land office on 2 August 2008 showing MISB as the new registered proprietor and that the lands were charged to the respondent.

[7] Meanwhile, the original and lawful registered proprietor of the land USESB (the genuine and legally registered proprietor - from hereon will be referred to as "the true registered owner") had entered into a sale and purchase agreement with a third party for the sale and purchase of five parcels of freehold land belonging to it and including the two lots charged to the respondent. It was discovered that the two lots have been transferred unlawfully to the MISB. The true registered owner and its shareholders/Directors then filed a civil suit at the Kuala Lumpur High Court in Suit No: S3-21-278-2008 ("Suit 278") against the appellant, MISB, the solicitors and several other defendants for, inter alia, a declaration that the memorandum of transfer registered on 23 June 2008 by way of Presentation No: 57242/2008 was illegal, null and void and of no effect and for the appellant to reinstate the true registered owner as the registered and lawful owner of the two lots of land.

[8] In Suit 278, the true registered owner claimed that the transfer of the two lots to MISB was done using fake land titles as the original issued documents of title ("IDT") of the two lots were still with the true registered owner. In the same suit also, it was raised that though the lands were designated as estate land, there was no approval and consent from the Estate Land Board under s 214A of the National Land Code (" NLC ") prior to registration of transfer thus rendering the transfer and charge registration illegal and void.

[9] On 30 October 2009, the Court allowed the claim by the true registered owner in Suit 278 and granted the declaration sought and ordered that the two lots be re-registered in the true registered owner's name in place of MISB. Apparently, the order was given without any objection by