Gopal Sri Ram JCA:

The respondents are the children of Retnasamy Naina ("the deceased) by his second wife. The appellant was the 3rd defendant in the court below. There were three other defendants before the High Court but they are not appealing against the orders made by the learned judge. The 3rd defendant purchased the land held under EMR 6693 for Lot No 5079 in the Mukim of Kapar ("the subject land") from one Supia, the deceased's son by his first wife and the 1st defendant in the court below. The learned judge found that the subject land was trust property, that the 1st defendant had obtained the issue document of title from the 1st respondent, that the 1st defendant had no interest in the subject land and that the appellant was not a bona fide purchaser. He accordingly granted the respondents a declaration that the transfer to the appellant was null and void, set aside the transfer and made other consequential orders.

The learned judge's finding that since the 1st defendant had no interest in the land he was incapable of passing any to the appellant is, in my judgment a correct direction of law. It finds support from the decision of the Supreme Court in M & J Frozen Foods Sdn Bhd v. Siland Sdn Bhd [1994] 2 CLJ 14. There is a passage in the judgment of Wan Yahya SCJ in that case which is directly applicable to the present appeal:

A purchaser of land might fail to obtain a good title in two distinct ways. Firstly, if the title of the vendor is bad. Secondly, even if the vendor has a good title, there might be some invalidating defects in the conveyance or transaction in which the purchaser attempted to obtain the title. These transactions might be void or voidable for a variety of reasons. In the case of a defect in the vendor's title, the common law rule, is that no person can give a better title than he had - nemo dat quod non habet. There are, however, important exceptions to this rule, in particular the qualification made under the proviso to s. 340(3) of our National Land Code 1965 where a bona fide purchaser for value without notice of the defeasible nature of the vendor's title acquires an immediate indefeasible title. In the case where the vendor's title is good but the instrument which was used by a purchaser for registration is void or voidable, the effect on such registration will only confer on the person in whose name the land is registered, what is usually referred to as deferred indefeasibility, - see Gibbs v. Messer [1891] AC 248. Under this principle, the registration of the insufficient or void instrument can be set aside. (emphasis added.)

Applying the nemo dat rule, the 1st defendant had nothing and could therefore pass nothing to the appellant. The appellant may have obtained good title if he had been a bona fide purchaser of the subject land. But he was found - and in my view, correctly found - by the learned judge not to be a bona fide purchaser. So, as a matter of law, the learned judge was right in setting aside the transfer to the appellant.

I have used the expression "may" advisedly because, in my judgment, it is important to appreciate the circumstances to which the proviso to s. 340(3) of the National Land Code 1965 ("the Code") applies. For that purpose it is best that I set out the whole of s. 340. It reads as follows:

340(1) The title or interest of any person or body for the time being registered as proprietor of any land, or in whose name any lease, charge or easement is for the time being registered, shall, subject to the following provisions of this section, be indefeasible.

(2) The title or interest of any such person or body shall not be indefeasible:

(a) in any case of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy; or

(b) where registration was obtained by forgery, or by means of an insufficient or void instrument; or

(c) where the title or interest was unlawfully acquired by the person or body in the purporte