The relevant period to ascertain good faith is prior to and at the time of registration, requiring purchasers to demonstrate ordinary caution and investigation.

[1] This case again highlighted the difficulty in resolving the competing claims between an innocent landowner and a purchaser of a piece of land which was the subject matter of a fraudulent transaction under s 340(2) of the National Land Code ("Code").

[2] The High Court allowed the original owner's claim, thereby restoring the subject land to the original owner. The Court of Appeal affirmed the decision of the High Court.

[3] On 8 December 2016, leave to appeal was allowed to the appellant, the purchaser, on the following questions of law:

Question 1: Whether the relevant time for the determination of good faith of a subsequent purchaser for the purpose of s 340(3) of the National Land Code (" NLC ") is based on the circumstances at the time of entering into the transaction or at the time of registration by the land officer?

Question 2: Whether the principle of good faith for the purpose of s 340(3) of the NLC is that of the general common law principle of good faith or some other specific principle of good faith?

Question 3: Whether the test for determining good faith of a subsequent purchaser is that the absence of fraud, deceit or dishonesty; or is there an added imposition of taking ordinary precautions and investigations of a reasonable prudent purchaser?

Question 4: Whether mere knowledge of an adverse claim vitiates good faith of the subsequent purchaser who is not fraudulent, deceitful or dishonest? If yes, at which point in the transaction does such knowledge vitiate good faith: (i) entering into the transaction, (ii) presentation of memorandum of transfer at the Land Office, or (iii) registration of title by the land officer?

Question 5: Whether a finding that a sale and purchase agreement is void ab initio pursuant to s 24(b) of the Contracts Act 1950 renders the Form 14A under the NLC void, despite the Form 14A being a valid instrument duly registered in favour of the subsequent bona fide purchaser with the Land Office?

Question 6: Whether 'instrument' for the purposes of s 340(2)(b) of the NLC refers to documents presented to the Land Office for registration of title or does it also extend to a sale and purchase agreement?

[4] In this judgment, the parties will be referred to as they were in the High Court.

Background Facts

[5] The background facts leading to this appeal are these. The plaintiff (Pembangunan Orkid Desa Sdn Bhd) was the registered proprietor of a piece of land held under Grant No. 5309, Lot 2788 Mukim Petaling, Wilayah Persekutuan ("subject land").

[6] On or about 15 October 2004, an imposter company claiming to be Pembangunan Orkid Desa Sdn Bhd (but with a different company number, namely 9048-D instead of 31550-U) applied to the third defendant (Pendaftar Tanah dan Galian, Wilayah Persekutuan Kuala Lumpur) for a replacement issue document of title alleging that it had lost the original document of title of the subject land. The original document of title was at all material times in the possession of the plaintiff.

[7] The company number 9048-D in actual fact belonged to a company known as Pembangunan Bersatu Sdn Bhd.

[8] On 19 May 2005, the third defendant issued a replacement issue document of title described as Grant No. 9971, Lot No. 2788 Mukim of Petaling, Wilayah Persekutuan.

[9] On 23 January 2006, the imposter company entered into a sale and purchase agreement ("first SPA") to sell the subject land to Chai Sit Trading Sdn Bhd (the second defendant) for a sum of RM680,000. The sale was completed on or around 31 May 2006, after which the second defendant was registered as the owner of the subject land.

[10] On 25 August