Fraudulent land transfers invalidate title claims, and good faith in property transactions necessitates rigorous due diligence by buyers.

Leong Wai Hong JC:

JudgmentIntroduction

[1]This is another land fraud case.

[2]The typical modus operandi from the Latin modus operandi (literally “manner or method of working”) of the fraudsters involves the following components -

a)A vacant land. This is because if the land or house is occupied it will be difficult for the fraudster to pretend to be the owner as the buyer will view the property prior to purchase.

b)A computerised issue document of title [“IDT”] obtained from the land office either through a false statutory declaration that the existing IDT is lost or stolen, or obtained through an insider working at the land office.

c)A sale price that is below the market value taking advantage of human greed.

d)A fraudster seller who insists on receiving the deposit and/or balance sale price in cash.

e)A fraudster seller who requests the deposit and/or balance sale price to be paid to a third party and not to him.

f)A fraudster seller who uses a fake NRIC with the real owner’s name and identity card number.

See -

i.Rajamani A/P Meyappa Chettiar V. Eng Beng Development Sdn Bhd & Ors

ii.Premier Consortium Sdn Bhd V. Ho May Leng & Ors [2015] 1 LNS 1243 HC Hadhariah Syed Ismail J.

iii.S Selvam A/L Samikannu V. Messrs Krish & Kiew (a firm)

iv.Pushpaleela A/P R Selvarajah & Anor V. Rajamani D/O Meyappa Chettiar And Other Appeals

v.Yap Piat Eng @ Yap Lien Eng & Anor V. Yap Kok Sheng & Ors

vi.Wong Ing Tong V. Yap Piat Eng @ Yap Lien Eng & Anor and other appeals

[3]Unless solicitors and the land office are alert as to the modus operandi of these fraudsters, land fraud cases will continue to occur. Owners of vacant land will continue to fear their lands sold without their knowledge and consent. Buyers will fear they are paying good money only to see their ownerships set aside with no hope of recovering their outlays.

[4]The Plaintiff in this judgment alleges that her vacant land in Damansara Heights [“Subject Land”] was transferred to the 3^rd Defendant and then to the 7^th and 8^th Defendants through a land fraud.

[5]The Plaintiff filed a writ and Amended Statement of Claim [Enclosure 18] against –

a)The 1^st Defendant / land office for negligence;

b)The 2^nd Defendant / Government of Malaysia for vicarious liability;

c)The 3^rd Defendant who is the first transferee of the Subject Land and the 4^th to 5^th Defendants who are directors of the 3^rd Defendant for fraud.

d)The 6^th Defendant / lawyer who falsely and purportedly attested the Plaintiff’s execution of the transfer Form 14A in favour of the 3^rd Defendant.

e)The 7^th and 8^th Defendants / buyers of the Subject Land for fraud and forgery and obtaining title through a void instrument; and

f)The 9^th Defendant who had entered a lien-holders caveat on the Subject Land.

[6]In this Judgment, parties will be referred to as 1^st Defendant or D1, 2^nd Defendant or D2 etc.

[7]The 1^st and 2^nd Defendants deny there was negligence on the part of D1.

[8]The 3^rd to 6^th Defendants did not enter appearances. The Plaintiff has obtained Judgments in Default of Defence against them on 19-09-2022 with the consent of the 1^st, 2^nd, 7^th to 9^th Defendants without prejudice to the rights of the 7^th to 9^th Defendants. See Enclosure 54.

[9]The 7^th and 8^th Defendants contend that they have indefeasibility title as they are bona fide purchasers in good faith and for valuable consideration. They invoked the protection under the proviso to Section 340(3) of the National Land Code 1965 . [“NLC”]

Court PleadingsThe pleaded case of the Plaintiff

[10]The pleaded case of the Plaintiff in her Amended Statement of