A registered proprietor's rights under the Torrens System are paramount, and unregistered interests do not affect ownership unless proper procedures, including chargee consent, are followed.

Lee Swee Seng JCA:

MINORITY JUDGMENT OF THE COURT

[1]The core issue in this appeal is whether a successful bidder at an auction sale under the National Land Code 1965 (“NLC”) must recognise the interest of a person, even if it be a State corporation, not duly registered against the title to the land now duly registered in the successful bidder’s name.

[2]The issue would once again test the limits of a registered proprietor’s rights vis-a-vis a prior unregistered interest in the title. Does the Torrens System of Land Registration as we know it recognise such an unregistered interest against a subsequent registered proprietor who has no contract with the current occupier of the land whose structures and fixtures are on the land?

[3]The material facts necessary to once again answer the above questions are not substantially in dispute.

[4]The plaintiff bought the land in question held under HS(M) 20109, Lot PT 18903, Mukim Klang, Tempat Bukit Kemuning, Daerah Klang (“the Land”) at a public action conducted by the Land Administrator at the land office pursuant to an order for sale. What happened was that the chargee bank CIMB had proceeded with an order for sale after the proprietors had defaulted in their loans with the bank.

[5]The registered proprietors of the Land were Newacres Sdn Bhd and Bumi-Murni Sdn Bhd. They were the developers who were supposed to develop a housing estate which plans had been approved subject to them setting aside a piece of designated land identified as Lot PT 18909 and part of Lot 82, Seksyen 25, Shah Alam for use as a flood mitigation plain for flood prevention in the area where there had been constant flooding each time there was heavy rain.

[6]For some reasons the development was not proceeded with but the defendants proceeded to exact the requirement from the developers seeing that what they had developed continued to suffer from constant flooding whenever there was a heavy downpour.

[7]Instead of the flood mitigation pond being on the designated land it was finally built in 1996 on the current Land, the subject matter of this suit, with the result that there was a lake of about 14 acres in a slight oval shape with staff quarters, huts, storeroom, pumps and pipes and a Tenaga substation together with a fence round the lake to prevent trespassers from entering the lake area. These shall be collectively referred to “the Lake with its related Structures”.

[8]The construction was done by the defendants for apparently the developers had reneged from their promise to construct the flood mitigation pond and the defendants had to take over. The need was pressing as the residents there had constantly complained of the flooding that had caused them tremendous hardship.

At the High Court

[9]The plaintiff had prayed for an injunction to restrain the defendants from trespassing onto the Land and also for an order for removal of the structures erected by the defendant on the Land. It had also prayed for damages to be assessed for the trespass and that the defendants be made jointly and severally liable to pay.

[10]The defendants had counter claimed for a declaration that the Land belongs to the State and for an order that the defendants are entitled to damages and further that the plaintiff do bear the construction costs of the Lake and its related Structures and for exemplary damages.

[11]For completeness the first defendant is Jabatan Pengairan Dan Saliran Negeri Selangor and the second defendant is Pengarah Jabatan Pengairan dan Saliran Negeri Selangor. The third defendant is the Government of the State of Selangor Darul Ehsan (“the State”).

[12]The defendants’ argument which found favour with the learned Judicial Commissioner (“JC”) as the trial jud