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2020 MarsdenLR 709
COURT OF APPEAL PUTRAJAYA
PENDAFTAR HAKMILIK NEGERI SELANGOR & ORS – Appellant
Versus
SHAIFULIZAM MOHD SALEH & ANOR AND ANOTHER APPEAL – Respondent
[Civil Appeal Nos: B-01(NCVC)(W)-394-10-2016 & B-01(NCVC)(W)-395-10-2016]
The court ruled negligence of the land office in property title conversion allowed fraudulent transfer, making the second defendant’s interest defeasible under National Land Code.
Headnote:(A) National Land Code – Sections 22, 90, 192, and 340(3) – Property dispute – Plaintiff claimed ownership of property fraudulently transferred by first defendant to the second defendant who held a charge over the property – High Court found negligence on part of land office in handling title conversion, leading to fraudulent transfer – Appeals involved negligence claims against land office and the validity of the second defendant's interest. (Paras 5, 14-15, 36, 66)
(B)
Negligence – Land office's failure to adhere to statutory procedures in title conversion and insufficient oversight allowed fraudulent transfer – Court ruled lack of compliance with the National Land Code constituted negligence. (Paras 36-66)
(C)
Second defendant’s interest – Courted losses incurred by second defendant due to negligence of the land office found valid for special damages, while the plaintiff's claim for damages was declined as his ownership was restored. (Paras 66-68)
(D)
Result:
Plaintiff's appeals allowed; land office liable for damages. (Paras 66-68)
[1] These two appeals emanated from the decision of the High Court at Shah Alam (High Court suit) dated 29 August 2016. In Civil Appeal No: B-01(NCVC)(W)-394-10-2016 (Appeal 394), the appellants were the 3rd to 13th defendants in the High Court suit; while the 1st respondent was the plaintiff and the 2nd respondent was the 2nd defendant in the High Court suit. In Civil Appeal No: B-01(NCVC)(W)-395-10-2016 (Appeal 395), the appellant was the plaintiff in the High Court suit while the 1st respondent was the 2nd defendant and the 2nd to 12th respondents were the 3rd to 13th defendants in the High Court suit.
[2] For ease of reference, parties will be referred to as they were in the High Court.
[3] The 2nd, 3rd and 5th defendants are the Selangor State Government agencies while the 6th to 13th defendants were their employees (cumulatively all will be referred to as the "land office").
[4] The subject matter in dispute here and below is a property held under qualified tittle HS(D) 143039, PT No: 18037 in the Mukim of Damansara, District of Petaling, State of Selangor (the said property). It was alleged by the plaintiff that the said property belonged to him and it had been fraudulently transferred to the name of a fraudster, the 1st defendant in the High Court suit. The 1st defendant had used the said property to register a charge in favour of the 2nd defendant. In the High Court suit, the 1st defendant was represented by Amanah Raya Berhad as he has since passed on and had no personal representative.
[5] After a full trial, the learned trial judge allowed the plaintiff's claim against the 1st defendant and declared that the 1st defendant's title-interest in the said property was defeasible and be set aside. The learned trial judge further dismissed the plaintiff's claim against the 2nd defendant and ordered the 2nd defendant to be at liberty to proceed with the auction to sell the said property. Any surplus, after the sale and the sums owed to the 2nd defendant, were to be paid to the plaintiff and any shortfall between the sale price and the sums received by the 2nd defendant was to be paid by the land office to the 2nd defendant. The learned trial judge made the order after finding that the plaintiff was the victim of the 1st defendant's fraud and that the 2nd defendant's charged interest was protected by the provision of s 340(3) of the National Land Code ( NLC ) and that the land office was negligent.
[6] Aggrieved with the decision that the 2nd defendant's charged interest was indefeasible, the plaintiff is now appealing before us. The land office is also aggrieved with the same and also the finding of negligence on their part. Hence, they appeal before us too.
Background Facts
[7] It was not disputed that the plaintiff was the original registered owner of the said property, having bought it from Guthrie's Property Development Holding Sdn Bhd on 23 April 2002. A qualified title was issued under his name on 24 May 2004 and he has been in possession of the said issue document of qualified title for the said property until now.
[8] However, according to the plaintiff, unknown to the plaintiff, the land office had converted the qualified title for the said property to a final title on 25 May 2005.
[9] On 16 November 2009, the plaintiff had purportedly entered into a sale and purchase agreement, to sell the said property to the 1st defendant. It was alleged by the plaintiff that the 1st defendant had fraudulently transferred the said property to himself; and that to facilitate the fraudulent transfer of the said property from the plaintiff to the 1st defendant, the 1st defendant used the issue document of final title for the said property he obtained from the Pejabat Daerah dan Tanah Petaling together with a number of forged documents to create the false impression that the plaintiff had sold the said property to him. The forged documents the 1st defendant used for this purpose were a forged sale and purchase agree
