The court affirmed the principle of indefeasible title under the National Land Code, ruling that encroachment constitutes trespass, and the developer owed no duty of care to subsequent property owners.

Lee Swee Seng JCA:

[1] The problem we are about to narrate is thankfully rare. A developer found itself in a bind after having built a house on a piece of land according to the pre-computational plans, layout and building plans approved by the local authority. The size of the land as stated in the first Sale and Purchase Agreement ("SPA") between the developer and the first purchasers was 340m² and is the corresponding Qualified Title. The first purchasers who subsequently became the registered proprietors of the land ("Previous Proprietors") sued the developer for damages arising from fact that the final title when issued showed that the land was less by 51m². The developer was quite certain that it was a typographical mistake of the Land Office that issued the final title.

[2] However at the trial the court decided that the final title is everything with the result that the developer was ordered to pay damages to the Previous Proprietors for the shortfall in the size of the land of 51m². The developer paid RM473,444.43 together with interest of RM193,839.82 to the Previous Proprietors under protest.

[3] There was however a problem brewing - part of the structure of the house and the store and shed to the house had encroached on State land; a problem that the Previous Proprietors were fully aware.

[4] It later transpired that the Land Office finally admitted its mistake and so issued a separate final title for the 51m² of land. Part of the kitchen to the house actually stands on this part of the land to which a new final title had been issued.

[5] By then the Previous Proprietors were not interested in the additional final title anymore for they had sold off the land and the house to the second purchasers, the current defendants.

[6] The developer alerted the defendants about this issue and though there were some initial discussions there was no resolution to the problem. The developer was left with no choice but to sue for who would want a title for a piece of land, and an odd-shaped one of 51m². More importantly part of the defendants' house in the kitchen, store and shed stands on the developer's land now!

[7] The second SPA stated that the Previous Proprietors had sold the land and house to the defendants with a land size of 289m². Clearly the title to that land of 289m² would not include the kitchen which stands on a separate title in the developer's name.

[8] The developer as plaintiff in the court below founded its cause of action on the tort of trespass and claimed as follows in its Statement of Claim (pp 33-34 of RR Jilid 1 encl 7):

(1) Loss of use of the plaintiff's land from 16 October 2015 until all the structures forming the Encroaching Part of the Property are being removed from the plaintiff's land to be assessed by the court;

(2) Interest at the rate of 5% per annum from the date of judgment until the date of full and final settlement;

(3) An order that the defendants are to remove all the structures form in the Encroaching Part of the Property within fourteen (14) days from the date of the judgment;

(4) An order that in the event the defendants fail to remove all the structures form in the Encroaching Part of the Property within fourteen (14) days from the date of the judgment, the plaintiff is entitled to forthwith, carry out the necessary actions to remove the structures forming the Encroaching Part of the Property at the sole cost and expense of the defendants;

(5) An order that the plaintiff shall be fully indemnified by the defendants of all cost and expenses incurred in removing all the structures forming the Encroaching Part of the Property;

(6) Alternatively, an order that the defendants are to purchase the plaintiff's land at RM667,284.25;

(7) Interest at the rate of 5% per annum on the sum of RM473,444,43 from the date of judgment until the date of full payment;

(8) An order that the defendants are to bear all the cost and expense to be incurred for the transfer of the plaintiff's land to the defendants;

(9)