Registered land titles under the Torrens System are indefeasible and unregistered interests cannot defeat a registered proprietor's title; statutory compliance is necessary for valid land surrender.

Mohd Zawawi Salleh FCJ:

Introduction

[1] This appeal requires us to consider important questions that go to the heart of the land registration under the Torrens System. One of the central issues is whether a successful bidder at the auction sale under the National Land Code 1965 ("the NLC") must recognise the interest of a person or a body not registered against the title to the land now duly registered in the successful bidder's name. Put another way, the question is whether a promise by the Previous Owner to surrender the land to the State of Authority Selangor is binding on the appellant, a successful bidder at the auction under the NLC, who has not at any time consented to the fenced-off lake and its related structures for flood mitigation to be on the land now duly registered in his name.

[2] On 16 February 2021, this court granted leave to the appellant to appeal against the majority decision of the court of Appeal on the following two questions of law-

(i) "Assuming that Subject Land Lot 18903 was the agreed lot to be surrendered to Majlis Perbandaran Shah Alam (which is denied) whether the right of the appellant as the registered owner under ss 89 (conclusiveness of register documents of title) and 340 of the NLC (registration to confer indefeasible title) can be defeated by a promise to surrender the said property made by the Previous Owners; and

(ii) Assuming that Subject Land Lot 18903 was the agreed lot to be surrendered to Majlis Perbandaran Shah Alam (which is denied) whether there was a valid surrender of Subject Land Lot 18903 under ss 196(1)(c) read with 196(2)(a) of the NLC when the consent of the chargee had not been obtained."

Factual Background And Antecedent Proceedings

[3] The facts germane to this appeal may be stated as follows-

(a) The subject matter in dispute in this appeal is Lot PT 18903, HS(M) 20109, Mukim Klang, Tempat Bukit Kemuning, Daerah Klang measuring 17.49 acres ("the Land"). The Land was previously jointly owned by Newacres Sdn Bhd and Bumi-Murni Sdn Bhd ("the Previous Owners").

(b) On 25 March 2011, the Land was purchased by the appellant for RM3.66 million through a public auction conducted by the Klang Land Office. The said public auction was held on the application of the chargee, CIMB Bank Berhad ("CIMB"), after the Previous Owners defaulted in their loans with CIMB.

(c) Sometime in July 2011, the appellant engaged a licensed land surveyor to conduct a survey of the Land, and it revealed that there is a retention pond on the said land and other permanent structures (Tenaga Nasional Bhd's substation, staff quarters, huts and storeroom) built surrounding it, being 9.554 acres out of 17.49 acres.

(d) The appellant then wrote a letter dated 27 September 2013 to the 1st and 2nd respondents requesting for information and documents to justify the respondents' occupation of the Land. In response to the appellant's letter, the 1st respondent vide a letter dated 25 October 2013 explained that they were in the process of collecting the relevant documents and information with regards to the project and the retention pond, and that a meeting would be held once the relevant documents and information were obtained.

(e) Nonetheless, there is no indication that the retention pond and the structures were built on the Land neither did it indicate that the portion of the Land had been surrendered to the respondents by the Previous Owners when the appellant conducted a search prior to the judicial sale. On 4 May 2011 (after the public auction), the appellant carried out another land search with the same result. The appellant thereafter conducted two land searches on 30 November 2016 and 11 May 2017 and found that the respondents' interest was not registered in the register document of title and there was no record of any surrender of the Land to the State.

(f) By a letter dated 11 September 2014, the 1st respondent wrote to Klang Land Administrator to apply to enter a Registrar's Caveat on the Land and the