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2026 MarsdenLR 607
HIGH COURT MALAYA SHAH ALAM
FAIZAH JAMALUDIN, J
ORIENT DEVELOPMENT SDN BHD – Appellant
Versus
MUSTHAFA KAMAL ALBAKRI HASSAN & ANOTHER CASE – Respondent
[Civil Suit No: BA-22NCvC-401-08/2018 & BA-21 NCvC-3-01/2019]
Important Points
Subject
Land Law - Fraudulent Misrepresentation
Act Referred
Evidence Act 1950: S.101
Contracts Act 1950: S.14, S.17, S.18, S.19, S.65, S.66
National Land Code: S.89, S.340(1)
Headnote
(B) National Land Code - Sections 89 and 340 - Conclusiveness of Register - While the register is generally conclusive evidence of title, the formal appearance of a land title cannot alter the underlying reality of an acquisition history of which a party has actual knowledge (Paras 50, 52).
(C) Land Acquisition Act 1960 - Sections 23 and 66 - Statutory Duty - The requirement for the registering authority to make a memorial on the register document of title upon receipt of a notice of acquisition is a mandatory statutory directive (Paras 115, 117) - Failure to endorse such acquisition on a continuation title constitutes negligence and a breach of statutory duty (Paras 125, 127).
(D) Law of Torts - Causation - A statutory breach by land authorities that creates a misleading landscape in the register is not the direct legal cause of transactional loss if the immediate operative cause of the loss was a party's fraudulent misrepresentation (Paras 132, 135, 137).
Facts of the case:
A purchaser entered into a sale and purchase agreement for a parcel of land. The vendor represented and warranted that he was the lawful owner and that the land was free from government acquisition. In reality, the parent land had been compulsorily acquired, and the vendor had personally attended the acquisition hearing and received compensation. The land authorities had failed to endorse the acquisition on the continuation title, which made the title appear clean during official searches. The purchaser, relying on the clean title and the vendor's warranties, paid the purchase price and incurred other transaction costs.
Findings of Court:
The court found that the vendor committed fraudulent misrepresentation by concealing the acquisition history. The purchaser relied on these representations and suffered loss. The land authorities were found to be negligent and in breach of their statutory duty for failing to update the register. However, the authorities' breach was not the direct legal cause of the loss; the vendor's fraud was the operative cause.
Issues: Whether the vendor's representations were fraudulent; whether the purchaser's reliance on the clean title and warranties was justified; whether the land authorities' failure to endorse the acquisition was a breach of statutory duty; and whether such breach caused the purchaser's loss.
Ratio Decidendi: A vendor's actual knowledge of a compulsory acquisition overrides the conclusiveness of the land register; such knowledge renders warranties of a clean title fraudulent. While the failure of land authorities to update a title is a breach of mandatory statutory duty, it is a background factual condition rather than the direct legal cause of loss when the transaction was induced by the vendor's own fraudulent assertions.
Result: Judgment for the plaintiff against the vendor for the refund of the purchase price and consequential losses. The claim for compensatory loss against the land authorities was dismissed, although a refund for quit rent was ordered.
JUDGMENT
A. Introduction
[1] These consolidated actions ("Suit 401" and "Suit 3") by the plaintiff against the Defendants concern a parcel of land held under Pajakan Mukim 10140, Lot 58741, Mukim Petaling, Daerah Petaling, Tempat Batu 14, Jalan Puchong, Negeri Selangor, measuring approximately 0.2078 Hectares ("the Subject Land" or "Lot 58741").
[2] The true identity and provenance of the Subject Land (Lot 58741) lie at the centre of the questions of title, fraud, inducement, statutory duty, causation and relief which arise in these actions.
[3] the plaintiff in both actions is Orient Development Sdn Bhd ("the plaintiff").
[4] The defendant in Suit 401 and the 3rd Party in Suit 3 is Musthafa Kamal AIBakri Bin Hassan ("Musthafa"). He is the person who sold, or purported to sell, the Subject Land (Lot 58741) to the plaintiff pursuant to a sale and purchase agreement dated 3 October 2013 ("SPA") for the sum of RM2,500,000.00. Musthafa had represented to the plaintiff that he was the lawful owner and person entitled to pass good title of the Subject Land. Suit 401 is the plaintiff's claim against Musthafa in fraudulent misrepresentation, deceit, rescission and restitution.
[5] The defendants in Suit 3 are the Pentadbir Tanah Daerah Petaling ("the Land Administrator") and Pengarah Tanah dan Galian Negeri Selangor ("the PTG Selangor") (collectively referred to as "the Land Authorities"). Suit 3 is the plaintiff's claim against the Land Authorities founded on negligence and breach of statutory duty under the Land Acquisition Act 1960 ("LAA").
B. The Genesis Of Lot 58741 (The Subject Land)
[6] In order to understand the material facts and the parties' arguments in these consolidated proceedings, it is necessary to first understand the genesis of the Subject Land.
[7] The Subject Land did not exist as an original standalone land from the outset. It came into being only after the parent land was partially acquired for the Lebuhraya Damansara-Puchong highway project ("the LDP Highway ").
Lot 7474
[8] The parent land was held under Geran Lease Mukim LM 732 No Lot 7474, Batu 14, Jalan Puchong, Mukim Petaling, Daerah Petaling ("Lot 7474") for an area of 2.137 acres (approximately 0.8648 hectares). Lot 7474 was originally held in the name of Hassan bin Haji Salleh, who is Musthafa's father. It was transferred from Hassan to Musthafa on 12 July 1988.
Compulsory Acquisition Of Part Lot 7474
[9] Lot 7474 was compulsorily acquired twice. The first acquisition took place in 1983 for an area of 1.23 acres (approximately 0.498 hectares) of the land. At the time of the first acquisition, the registered owner was Musthafa's father, Hassan bin Haji Salleh.
[10] The second acquisition of Lot 7474 took place in 1997. Part of Lot 7474 was compulsorily acquired for the construction of the LDP Highway. At the time of the second acquisition, Musthafa was the registered owner of the land.
[11] The second acquisition of the land was gazetted on 26 September 1996. The Government had proposed to acquire 0.0906 hectares of the land only in the second acquisition. The same proposed area to be acquired was printed in "A. Butir-Butir Tanah no 5" of the Land Administrator's "Catatan Siasatan /Perbicaraan" of the hearing before the Land Administrator for the second land acquisition on 3 December 1996. Item a 5 states "Luas diambil: 0.0906 hektar".
[12] The Land Administrator's contemporaneous notes show that Musthafa had attended the land acquisition hearing in relation to the second acquisition, and noted that Musthafa told him that the balance lot of approximately 8,000 feet at the south is not economical anymore. The Land Administrator wrote in item no 16 of his notes "Baki lot lebih kurang 8,000 kaki di sebelah Selatan tidak ekonomikal lagi'. And in item no 23 (Perintah) he ordered that 0.1876 hectares of Lot 7474 be acquired (not the gazetted 0.0906 hectares) and that compensation in the sum of RM302,900.00 be paid to Musthafa.
[13] In the Notice of Award and
