The court upheld the indefeasibility of registered land titles, emphasizing that fraud must be proven to invalidate such titles and that parties must act promptly in reclaiming their rights.

A. Introduction

[1] This appeal concerns a piece of land held under Grant 35019, Lot 303, Section 87A, Bandar Kuala Lumpur, Daerah Kuala Lumpur with a postal address of no 3, Lorong Gurney, 54100 Kuala Lumpur (Land).

B. Background

[2] We shall refer to parties as they were in the High Court (HC).

[3] On 23 March 1973 the late Encik Nik Yusoff Bin Wan Omar (Deceased) acquired title to the Land and built a two-storey bungalow on the Land.

[4] The first plaintiff (1st Plaintiff) is the Deceased's wife while the second to fourth plaintiffs ("2nd Plaintiff" to "4th Plaintiff") are the children of the Deceased. This judgment shall refer to the 1st to 4th Plaintiffs collectively as the "Plaintiffs".

[5] Upon the Deceased's death, on 21 December 1993 the Deceased's title of the Land was transmitted to the Plaintiffs as follows:

(1) the 2nd to 4th Plaintiffs were registered as co-proprietors of the Land with each of the 2nd to 4th Plaintiffs holding % undivided share of the Land; and

(2) the 1st Plaintiff held ¼ undivided share of the Land on trust for the benefit of Puan Nik Rus Mazelin Bt. Yusoff (PW4). At the time of the above transmission of title of the Land, PW4 was a minor.

[6] Encik Rauf Bin Abdul Latiff (PW1) is the 4th Plaintiffs husband.

[7] The Deceased and his family stayed on the Land until 1979 when the Deceased passed on. After the Deceased's demise, the Plaintiffs and PW4 moved out from the Land and had never returned since then.

[8] In 2003 PW1 met the fourth defendant (4th Defendant), a director of Firewall Technologies (M) Sdn Bhd ("Firewall"). PW1 and the 4th Defendant discussed the prospect of a joint venture in an offshore business (Joint Venture Proposal). To finance the Joint Venture Proposal, the 4th Defendant informed PW1 as follows:

(1) Firewall had secured a US$15 million credit facility from OCBC Bank of Singapore (OCBC Credit Facility);

(2) the OCBC Credit Facility required Firewall to provide a "Bank Debt Instrument' up to 20% of the value of the OCBC Credit Facility (Bank Debt Instrument) as a pre-condition for the release of the OCBC Credit Facility; and

(3) the 4th Defendant had arranged for Royal Bank of Scotland to provide the Bank Debt Instrument of a value of US$1 million but the 4th Defendant could not pay the cost of about US$40,000.00 to obtain the Bank Debt Instrument [Cost (Bank Debt Instrument)].

[9] The 4th Defendant requested PW1 to provide the Cost (Bank Debt Instrument) and in consideration thereof, the 4th Defendant would sign an agreement with PW1 regarding the Joint Venture Proposal. PW1 agreed and provided the Cost (Bank Debt Instrument). Hence, the following two agreements were concluded:

(1) the 4th Defendant and PW1 entered into a Memorandum of Agreement on 20 November 2003; and

(2) a Joint Venture Agreement dated 20 November 2003 (JVA) was executed by Firewall and Emerald Graphics Sdn Bhd ("Emerald Graphics"). PW1 signed the JVA as Emerald Graphics' Managing Director.

[10] Sometime in April 2004, the 4th Defendant informed PW1 that OCBC Bank required Firewall to provide a "Safe Keeping Receipt' as an insurance to be taken against the Bank Debt Instrument. The premium of the Safe Keeping Receipt was US$60,000.00. According to the 4th Defendant:

(1) the second and third defendants ("2nd Defendant" and "3rd Defendant") were friends of the 4th Defendant;

(2) the 2nd and 3rd Defendants agreed to give to Firewall a friendly loan of US$60,000.00 [Friendly Loan (2nd and 3rd Defendants)] with the condition that the 2nd and 3rd Defendants were given security for the Friendly Loan (2nd and 3rd Defendants) in the form of physical possession of an original Issue Document of Title (IDT) of unencumb