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2026 MarsdenLR 2414
HIGH COURT MALAYA JOHOR BAHRU
WONG MEE LING, J
YONG WEE CHONG – Appellant
Versus
TAN BOOI TIANG & ORS – Respondent
[Civil Case No: JA-22NCvC-98-07/2021]
The burden of proving a transaction is a sham or fraudulent rests entirely on the party asserting it. Without strict proof of fraud or illegality, the written agreement and the indefeasibility of a registered land title remain legally binding and enforceable.
Headnote:(A) Evidence Act 1950 - Sections 101, 102, 103 - Burden of proof - Legal burden of establishing a case lies on the party asserting existence of facts - The burden never shifts - Proving a transaction is a sham requires meeting a heavy burden - A mere allegation of fraud is insufficient; it must be specifically pleaded and strictly proven. (Paras 56, 57, 58, 66)
(B) National Land Code - Section 340 - Indefeasibility of title - In the absence of proven fraud by the registered proprietor, the title remains indefeasible - Subsequent conduct and post-contractual behavior may be used to interpret the original intent of an agreement, but they do not negate the validity of a written contract unless fraud or illegality is strictly established. (Paras 44, 45, 85)
(C) Contract Law - Non Est Factum - A person of ordinary education and competence is assumed to understand the contents and effects of documents they sign - Failure to inform oneself of the purport of a document before signing prevents denying liability under the document. (Para 50)
Facts of the case:
The plaintiff, as the registered proprietor of a property, entered into a sale and purchase agreement with the second defendant. Later, the plaintiff sought a declaration that the agreement was null and void, alleging it was a sham transaction disguised as a moneylending arrangement. The plaintiff claimed to have repaid part of a loan and alleged fraud, misrepresentation, and professional negligence against the defendants. The second defendant counterclaimed for vacant possession, asserting the agreement was a genuine sale. The plaintiff failed to serve the writ on two of the defendants and failed to provide evidence of the alleged loan relationship.
Findings of Court:
The court found that the plaintiff voluntarily signed the agreement and ancillary documents, confirmed receipt of the purchase price, and provided the original title. The plaintiff failed to prove that the transaction was a sham or that fraud occurred. The court determined that evidence of post-contractual payments to an unidentified party did not establish a loan agreement with the second defendant.
Issues: Whether the sale and purchase agreement was a sham loan transaction; whether fraud, misrepresentation, or unconscionability existed to set aside the transfer; whether the solicitor was liable for negligence; and whether the purchaser was entitled to vacant possession.
Ratio Decidendi: The plaintiff bore the heavy burden of proving fraud and an illegal underlying loan arrangement, which was not discharged due to lack of evidence and failure to call material witnesses. As the agreement was found to be a genuine sale, the registered proprietor is entitled to the enforcement of proprietary rights, including vacant possession, under the principle of indefeasibility of title.
Result: Plaintiff's claim dismissed. Second defendant's counterclaim for vacant possession and removal of caveat allowed with costs.
| Table of Content |
|---|
| 1. nature of claim, counterclaim, and summary of disposal. (Para 1 , 2 , 3 , 4) |
| 2. factual history of the transaction and litigation. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 3. summary of opposing contentions and positions. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32) |
| 4. identification of key issues for judicial determination. (Para 33 , 34 , 35) |
| 5. burden of proof on alleged loan vs. sale. (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59) |
| 6. standard for proving fraud and conspiracy. (Para 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67) |
| 7. professional negligence and the validity of spa execution. (Para 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83) |
| 8. indefeasibility of title and right to vacant possession. (Para 84 , 85 , 86 , 87 , 88 , 89 , 90 , 91 , 92 , 93 , 94) |
| 9. final ruling and court orders. (Para 95 , 96 , 97 , 98 , 99) |
JUDGMENT
Introduction
[1] This is the plaintiff's claim against the defendants jointly and/or severally for:
(i) a declaration that the Sales and Purchase Agreement dated 22 March 2018 is null and void;
(ii) an order that all documents relating to the transfer be returned to the Plaintiff and should the title be transferred, to be returned back to the Plaintiff;
(iii) an order to set aside any transfer of property into the name of the 2nd Defendant ("D2") as the transfer is invalid and conceived through fraudulent and unlawful means;
(iv) an order for the Land Administrator to re-transfer the property back to the Plaintiff as the transfer to the Defendants is invalid and conceived through fraudulent means;
(v) special damages;
(vi) exemplary damages for the 4th Defendant's ("D4") negligence in providing dishonest advice to the Plaintiff;
(vii) punitive damages;
(viii) a declaration that the SPA is invalid;
(ix) an order compelling re-transfer of the said property to the Plaintiff within 14 days, failing which the Land Administrator be authorised to execute the transfer of the same;
(x) interest at 5% per annum;
(xi) injunctive relief restraining disposal of the property pending disposal of the suit;
(xii) interim injunction restraining disposal of the property by the Defendants pending re-transfer back to the Plaintiff;
(xiii) costs on a solicitor-client basis to be paid by the Defendants to the Plaintiff; and
(xiv) such further relief as the court deems fit.
[2] D2 has filed a counterclaim seeking vacant possession of the said property to be given to D2, damages to be assessed and paid by the plaintiff to D2, any caveat entered onto the property by the Plaintiff to be removed, interest at 5% per annum, costs and such further relief as the court deems fit.
[3] After considering all cause papers and the written submissions of the parties, I dismissed the plaintiff's claim and allowed D2's counterclaim and awarded RM10,000.00 costs to be paid by the plaintiff to D2 and D4 within fourteen (14) days from the date of my decision.
[4] Below are the grounds of my decision.
Background
[5] The background facts in this application are gathered from the cause papers and submissions filed by the parties and stated in chronological order.
[6] The Plaintiff is the registered owner of the property held under HS(D) 5780, PTB 317, Bandar Jementah, Daerah Segamat, Johor ("the said Property").
[7] The 1st Defendant ("D1") is alleged to be a Maybank account holder.
[8] D2 is the purchaser of the said Property.
[9] The 3rd Defendant ("D3") is described by the Plaintiff as "Ah Tan", who is an unidentified agent of the D1 and/or D2.
[10] D4 is a legal firm that acted for D2 in the impugned transaction.
[11] Around March 2018, D4's firm was appointed by D2 to represent D2 in a Sale and Purchase Agreement ("SPA") to purchase the said Property.
[12] On 21 March 2018, D4's firm conducted a private land search to verify the ownership of the said Property and to ensure that the
