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Indefeasibility of title & interest

A. Introduction
Torrens system: Any dealing requires registering according to NLC
Sect 89: once registered, RDT is evidence that the person registered is proprietor of
land
Sect 340(1): once registered the right of proprietor or registered interest shall be
indefeasible
B. Types of indefeasibility
Immediate indefeasibility
Deferred indefeasibility
i.
Immediate indefeasible
Title: Total indefeasibility
Cannot be challenged by all means
ii.
Deferred indefeasible
Sect 340(1): title can shall indefeasible
Sect 340(2): title can be challenge
Sect 340(3): title cannot be challenge
Malaysia
Applicable: deferred indefeasibility
X applicable: immediate indefeasibility
Teh Bee v K Maruthamutu
Sect 340(1): title shall indefeasible once registered
Sect 340(2): title shall defeasible once within sect 340(2)

a)
b)
c)
d)
e)

C. Exception to indefensible
Sect 340(2):
The right can be challenge if:
Fraud
Misrepresentation
Forgery,
Void instrument
Unlawful acquire
Fraud
Elements

a) Actual fraud
Actual fraud-there must element of dishonestly
Constructive fraud: presumed a person committed a fraudulent act
APOO v Ellamah
The registered proprietor: though executed charge document
Instead he signed transfer document
Held: fraud. Right to revert to original proprietor
Datuk Jagindar Singh v Tara Ra Rajaratnam
A agreed to transfer the land to B as security
B assured the land shall not transferred to 3 rd party
B: transferred to 3rd party
3rd party transferred to developers

Held: fraud and misrepresentation. A entitled compensation only


Cannot revert back: because developers: bona fide purchaser
Tai Lee Finance v Official Assignee
A sell the house to 6Bs
6Bs name was not registered
Proprietor takes loan from C (immediate purchaser)
Proprietor failed to pay the loan
B applied for OFS
6Bs argued C applied OFS without having regard the rights of 6As
Held
Failed to make proper inquires: constructive fraud
However, CF is not within exception to indefeasibility title and right: sect 340(2)
Must be actual fraud, not CF
B is not committing any fraud under Sect 340(2)
b) A person must party or privy to the fraud
Person or agent of that person must involve in the fraud
Doshi v Yeoh Tiong Lay
Proprietor transfer to B by way of fraud done by solicitor
B transfer C using the same solicitor
Held:
C is not party or privy to the fraud
The act of solicitor cannot be attributed to the subsequent transferee
Abu Bakar Ismail v Ismail Husin
A (solicitor) co-operate with B to commit fraud
Induce C to sell the land with lower price to B
B enter into 3rd party charge with D
D appointed A to register the charge document
C wants to claim back the land and to set aside the charge
Held:
The fraudulent conduct made agent is within Sect 340(2)
The land is defensible. Can set aside
c) Intention to cheat
Must prove: there is mens rea for a person to commit fraud which caused a person
lose the right or interest of the land
Hajjah Aishah Lebai Itam v Yah Taib
Proprietor: illiterate
Was been induced to sign an instrument of transfer but told her it is charge
document
Held: defeasible. Can set aside
Misrepresentation
Definition: fraudulent or wrongful giving information
One of species of fraud
Datuk Jagindar Singh v Tara Ra Rajaratnam
A agreed to transfer the land to B as security
B assured the land shall not transferred to 3 rd party
B: transferred to 3rd party (MISREPRESENTATION)
3rd party transferred to developers

Held: fraud and misrepresentation. A entitled compensation only


Cannot revert back: because developers: bona fide purchaser
Forgery
Types of forgery
False signature
False document
False representation

i.
ii.
iii.

Ong Lock Choo v Quek Shin


Registered proprietor gives IDT to solicitor
The solicitor clerk forged the signature.
Solicitor another charge.
HELD: charge invalid
OCBC v Pendaftar Milik Negeri Johor
A enter into loan with B
Using the land as security
A failed to pay the loan
B applied OFS
C enter into caveat to prevent the sale
And argued never transfer the land to A
Evidence: show the transfer document is forgery
Held: A: interest can be set aside
: C: right to enter into caveat
Tan Ying Hong
A: registered proprietor
B: used forged POA
B: created 3rd party charge with C
A: received a notice of demand for payment of charge
A argued: never gives B a POA
Held: forgery. No need to prove that C is party or privy to the forgery
C is not BFP
Insufficient/void instrument
Void: instrument of dealing is defective as it is contrary to rule of law
Tan Hee Juan v The Boon Keat
A minor transfer the land to A and B.
Held: transfer invalid. A minor cannot enter into a contract.
Unlawful acquired of land by exercise power conferred under written law
Acquired law not accordance to any written law

M & J Frozen Food v Siland


A wants to buy the land in public auction
Unable to pay the balance within specific period
Applied at the court for extension of time
Extension of time: without consent from chargor
Held: land is defensible

D. Right of bona fide purchaser for value without notice

Sect 340(3) = registered proprietor or interest does not know the title is bad in law
Elements
a) Types of purchaser
b) Valuable consideration
c) In good faith
a) Types of purchaser
i.
Must be subsequent purchaser
ii.
Not immediate purchaser
iii.
There must change at least twice the name of registered proprietorin the RDT
Immediate purchaser
A= proprietor
Forgery done X
Caused the land to be transferred to B
B= immediate purchaser
Subsequent purchaser
A= proprietor
Forgery done X
Caused the land to be transferred to B
B transfer to C
C= subsequent purchaser
Datuk Jagindar Singh v Tara Ra Rajaratnam
A agreed to transfer the land to B as security
B assured the land shall not transferred to 3 rd party
B: transferred to 3rd party (MISREPRESENTATION)
3rd party transferred to developers
Held: fraud and misrepresentation. A entitled compensation only
Cannot revert back: because developers: bona fide purchaser
b) Valuable consideration
A purchaser must paid or gives valuable property in order to acquire the land
Chu Choon Moi v Ngan Siew Tin
The husband transferred property to her wife and without any consideration
Held: X bona fide purchaser
c) Act in good faith
A purchaser: X notice (constructive or actual) or knowledge about the land is bad in
law
Ah Meng Nam v Ung Yak Chiew
A buys the land from B with lower price
A complete the purchase of land without making any investigation
Held: not in good faith
E. Effect of defeasible
Sect 340(3):
Can set aside the land
Can revert back the land if there is no bona fide purchaser
If cannot revert back: awarded damages