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236 SINGAPORE LAW REPORTS (REISSUE) [1993] 2 SLR(R)

United Overseas Finance Ltd

v
Yew Siew Kien

[1993] SGHC 135

High Court — Suit No 600 of 1989

Goh Joon Seng J
18 June 1993
Land — Registration of title — Land Titles Act (Cap 157, 1985 Rev Ed) — Mortgage
of real property — Mortgage created without registered proprietor’s knowledge or
consent — Mortgage created by forgery of registered proprietor’s signature — Forgery
perpetrated by solicitor acting as agent of finance company — Whether grounds for
rectification of Land Register existing — Whether finance company entitled to
maintain indefeasibility of title — Whether mortgage a nullity by reason of fraud —
Section 38 Land Titles Act (Cap 157, 1985 Rev Ed)

Facts
The defendant was the owner and registered proprietor of an apartment (“the
property”). One Wong, an advocate and solicitor, acted on the defendant’s
behalf in the conveyance. Wong, instead of releasing the subsidiary strata
certificate of title to the defendant, mortgaged the property to the plaintiff
finance company to secure a loan. The mortgage was executed without the
defendant’s knowledge or consent, and had been effected by Wong who forged
the defendant’s signature on the mortgage documents.
The forgery subsequently came to light and Wong was convicted for criminal
breach of trust in addition to being disciplined by the Law Society of Singapore.
The plaintiff later sued the defendant for repayment of the loan, a declaration
that the mortgage was valid and an order for delivery of vacant possession of the
property.
The defendant counterclaimed, seeking a declaration that the mortgage was a
nullity and for an order directing the Registrar of Titles to cancel the entry or
memorial of registration of the mortgage.

Held, dismissing the plaintiff’s claim and allowing the counterclaim:

Section 38(2)(a) of the Land Titles Act (Cap 157, 1985 Rev Ed) (“the Act”) stated
that a registered proprietor’s indefeasibility of title would be defeated by fraud or
forgery to which a registered proprietor or his agent was a party to, or in which
he or his agent had colluded. When Wong, who acted as the plaintiff’s solicitor
and agent forged the defendant’s signatures and attested his own signature in the
instrument of mortgage, that was a fraud or forgery within s 38(2)(a) of the Act.
The mortgage would thus be a nullity: at [18], [20] and [21].

Case(s) referred to
Australian Guarantee Corporation Ltd v De Jager [1984] VR 483 (folld)
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[1993] 2 SLR(R) United Overseas Finance Ltd v Yew Siew Kien 237

Legislation referred to
Land Titles Act (Cap 157, 1985 Rev Ed) s 38 (consd)
Transfer of Land Act 1958 (Vic) s 42

Benedict Vijayan Peter (with Chee Chuen Yee) (Ramdas & Wong) for the plaintiff;
S Balasubramaniam (S Bala & Associates) for the defendant.

18 June 1993 Judgment reserved.

Goh Joon Seng J:
1 The plaintiffs are a finance company. To promote their finance
business the plaintiffs had a standing arrangement with some solicitors,
including one John Andrew Wong, whereby the plaintiffs would instruct
them to act for the plaintiffs in mortgages in respect of loans applied for
through these solicitors. PW1, Peter Ong Khong Leng, the manager of the
plaintiffs’ Middle Road Branch said at p 3 of the notes of evidence:
We had prior dealings with JA Wong. We left with him a few [loan
application] forms at a time. I had known JA Wong since 1982. I had
previous business dealings with him. In those dealings JA Wong acted
for us as well as for the mortgagor. Occasionally he acted for us,
without acting for the mortgagor in the same transaction. In 1985, I
had known him for several years. He was previously the OC of Beach
Road, trained overseas. He was a superintendent before he resigned
from police service. With all these knowledge of his background I had
no reason to doubt his integrity.
2 The defendant is the owner and registered proprietor of an apartment
known as 127-B West Coast Park, Singapore. The apartment was purchased
for him by his father in or around November 1980. John Andrew Wong,
then practising as JA Wong & Co acted for the defendant on the
instructions of his father. At that time the defendant was 19 years old. After
the transfer in the defendant’s favour had been duly registered, the
subsidiary strata certificate of title (“SSCT”) was not released by John
Andrew Wong to the defendant’s father in spite of repeated requests.
3 On 17 September 1985 the plaintiffs received a loan application
through John Andrew Wong. It purported to be an application from the
defendant for a loan of $220,000 repayable over 20 years to be secured by a
mortgage of the apartment. The application was approved within two days
for $165,000 repayable by 180 monthly payments of $1,706 each. No
verification of the identity and personal particulars of the defendant was
done because the plaintiffs relied on the integrity of John Andrew Wong. It
transpired that some of the particulars were incorrect. The acceptance copy
of the letter of approval submitted through John Andrew Wong was also
purportedly signed by the defendant. Following the approval of the loan
application, the plaintiffs on 1 October 1985 instructed John Andrew Wong
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238 SINGAPORE LAW REPORTS (REISSUE) [1993] 2 SLR(R)

to act for them in the mortgage. The instrument of mortgage prepared by

John Andrew Wong and purportedly executed by the defendant was
forwarded to the plaintiff on 2 December 1985 with request for release of
the loan. The loan was released on 6 December 1985 to John Andrew Wong
as solicitor for the plaintiffs by cheque drawn in favour of the firm of JA
Wong & Co. The address of all communications to or purportedly from the
defendant was c/o 101 Upper Cross Street #05-41, People’s Park Centre,
Singapore 0105 which was the office address of John Andrew Wong.
4 After the release of the loan of $165,000, 21 monthly payments were
made. The receipts for these payments were again addressed to the
defendant c/o John Andrew Wong’s office. The last payment was made on
or about 10 September 1987 for the September 1987 instalment and
overdue interest. It transpired that the signatures on the application for
loan, the acceptance letter for the loan and the instrument of mortgage were
forgeries perpetrated by John Andrew Wong who also attested the
signature on the instrument of mortgage. It also transpired that the
monthly payments too were made by John Andrew Wong through his Tat
Lee Bank account.
5 The forgery came to light when after the death of his father on 2 April
1986 the defendant could not locate the SSCT. He then called on John
Andrew Wong who eventually admitted in or around February 1987 that
the “SSCT had been mortgaged” by him. This led to the defendant making a
report to the Officer-in-Charge, Commercial Crime Division of the
Criminal Investigation Department on 2 November 1987. The report read:
Re: Complaint against my solicitor Mr Andrew JA Wong
In 1980, my deceased father instructed the firm of John Andrew Wong
to act in the purchase of a property at 127-B West Coast Park,
Singapore in my name. The property was paid for in full with no
instructions to my solicitor to obtain a loan or financing from any
finance company.
After the property was purchased, my father persistently asked Andrew
Wong for the title and Andrew Wong lied to my father that title has
not been issued and as soon as issued will be handed over. During the
last few months while sorting out my father’s estate matters, I became
increasingly impatient with Andrew Wong and pressed him to hand
over to me the title deeds. When I began to be unhappy and threatened
to ask another solicitor to take over the matter, Mr Andrew Wong
admitted to me that he had mortgaged the property (without my
consent or knowledge) to his client, United Overseas Finance Ltd. He
asked me to help him to give him time to redeem the property. I
immediately caused a search to be made and found that my property
was indeed mortgaged to United Overseas Finance Ltd without my
knowledge or participation. On obtaining copies of the mortgage
documents, I found my signature on the mortgage was also forged. I
therefore consulted members of my family and on 16 September 1987 I
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[1993] 2 SLR(R) United Overseas Finance Ltd v Yew Siew Kien 239

wrote to Mr Andrew Wong asking him to remedy the situation within

48 hours. From 16 September 1987 to now, Mr Wong has been talking
to me and my father’s friends trying to ask me to give him a chance to
slowly repay to the bank.
As I have been advised that what has been done is a criminal act that
must be reported to the police, I accordingly officially lodge a
complaint against John Andrew Wong and shall be grateful if you will
kindly take steps to assist me herein. In this regards, I enclose herewith
the following:
(a) photocopy of the Subsidiary Strata Certificate of Title
Volume 53 Folio 36;
(b) photocopy of the transfer document;
(c) photocopy of the mortgage document;
(d) photocopy of my letter dated 16 September 1987.
As there is a likelihood that Mr Wong may abscond, I trust your
authorities will take immediate steps to interview him on the facts
surrounding my case.
Yours faithfully
Sgd: Yew Siew Kien
6 A copy of the report was sent to the Law Society.
7 On the same day, the defendant through his solicitors S Rajagopal &
Co wrote to the plaintiffs as follows:
Re: A/c Yew Siew Kien
127-B West Coast Park, Singapore
We act for Mr Yew Siew Kien, owner of the above-captioned property.
Our client has instructed us that his said property has been mortgaged
by John Andrew Wong of M/s JA Wong & Co to you without his
consent, authorization and instructions. In the premises, our client say
that the mortgage of his property is bad in law and hereby give you
notice of the same. Kindly confirm that you shall take steps to
retransfer the property to our client within seven (7) days from the date
hereof failing which, we have our client’s instructions to apply to court
for a court order declaring that the mortgage is null and void in law
and requiring you to retransfer the same to our client.
Kindly note that for all intents and purposes, the firm of M/s JA Wong
& Co was acting as your agents and lawyers and our client had
absolutely no knowledge of the mortgage or any form of borrowing
secured by his property until recently. Needless to say our client has
made the necessary reports with the police and the Law Society of
Singapore.
8 The plaintiffs replied through their solicitors Ramdas & Wong as
follows:
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240 SINGAPORE LAW REPORTS (REISSUE) [1993] 2 SLR(R)

We act for United Overseas Finance Ltd who have handed us a copy of
your letter of 2 November 1987 with instructions to reply thereto.
As your client has lodged reports with both the police and the Law
Society of Singapore, we trust that you agree with us that our clients
should await the outcome of investigations before taking any further
steps in this matter.
Kindly keep us informed of any developments in the investigations.
Our clients are naturally concerned with your client’s allegations but
your client’s proposals would be premature at this state.
The question of whether M/s JA Wong & Co was our clients’ agent or
your client’s agent or the agent of both is a matter that can only be
resolved after investigation.
We trust that you will withhold the action contemplated in para 2 of
your letter for the moment as this would incur costs unnecessarily.

9 Pursuant to the complaint, the Law Society instituted disciplinary

proceedings against John Andrew Wong. One of the charges formulated in
the Law Society’s amended statement of the case against him read:
You, Mr John Andrew Wong, an advocate and solicitor are charged
that sometime in December September (sic) 1985 you did arrange or
caused to be arranged a loan with the United Overseas Finance Ltd
purportedly for one Yew Siew Kien by using the property belonging to
one (sic) the said Yew Siew Kien, as security without the instructions
and knowledge of the said Yew Siew Kien and dishonestly causing the
loan to be disbursed and thereafter causing the amount advanced in
the name of your firm Messrs JA Wong & Co (‘the firm’) to be paid
into the firm’s clients’ account and thereafter dishonestly drawing the
same from the firm’s clients’ account, not being moneys to which you
were entitled and crediting the same amount by a cash cheque into
your personal account with the POSB and have thereby contravened
the Solicitors’ Accounts Rules 1985 which conduct amounts to grossly
improper conduct within the meaning of s 83(2)(b) of the Legal
Profession Act (Cap 161).

10 At the hearing before the Disciplinary Committee the plaintiffs were

represented by Mr Benedict Peter who is also their counsel in these
proceedings. PW1 Peter Ong Khong Leng who testified for the plaintiffs in
these proceedings also testified at the hearing before the Disciplinary
Committee.
11 On 12 July 1991, the Disciplinary Committee found the charges
against John Andrew Wong proved after the hearing conducted in his
absence. In their report the Committee stated:
Although there was no direct evidence that the respondent had forged
the complainant’s signature on the loan application form, the form of
acceptance and the instrument of mortgage, it was clear that the
respondent had knowingly made use of these documents, which bore a
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[1993] 2 SLR(R) United Overseas Finance Ltd v Yew Siew Kien 241

signature which purported to be, but was not, the signature of the
complainant to dishonestly procure a sum of $165,000 from UOF,
against the security of a mortgage of the property which the
complainant had not authorized and of which he was unaware at the
material time. The respondent caused these moneys to be paid into his
firm’s account, and then from his firm’s account into his personal
account at the POSB. The respondent acted dishonestly throughout the
transaction.
12 John Andrew Wong was eventually dealt with by the High Court
under the Legal Profession Act (Cap 161).
13 In the meantime pursuant to police investigation John Andrew Wong
was charged on 6 August 1992 with three counts of criminal breach of trust.
DAC 8951/92 related to this apartment and the charge read:
You, John Andrew Wong (NRIC No S1086272/H) are charged that
you, on or about 6 December 1985, in Singapore did commit criminal
breach of trust as an agent, in that you, being an advocate and solicitor
at the material time for one client Yew Chin Chee and in that capacity
entrusted with dominion over property, namely, title deed for a certain
property located at 127B West Coast Park valued at about $180,000 did
dishonestly convert the title deed for the said property to your own use
and you have thereby committed an offence punishable under s 409 of
the Penal Code (Cap 224).
14 John Andrew Wong pleaded guilty to the charge. He also admitted
the facts set out in the statement of facts at paras 5 to 9 which read as
follows:
5 Sometime in December 1985 the accused faced financial
difficulties. He then used the title deeds of the above-mentioned
property and also forged the signature of the complainant on a
mortgage application form in order to obtain a loan amounting to
$165,000 from the United Overseas Finance Ltd (‘UOF’) located at 190
Middle Road. The loan repayment was for 180 equal monthly
instalments of $1,706.
6 On 6 December 1985, UOF issued a cheque for $165,000 drawn
in favour of the accused’s firm, M/s JA Wong & Co. The accused
deposited this cheque into JA Wong & Co Clients’ Account No 02-
40126-7 maintained at Tat Lee Bank on the same day.
7 On 10 December 1985 the accused transferred this sum of
moneys by drawing a cash cheque to his personal POSB Account
No 726-01974-6.
8 These moneys were then distributed in the following manner:
(a) $43,000 was drawn vide POSB Cheque No 600110 to a
client of the accused named Mdm Fong Say Moy;
(b) $43,500 was drawn vide POSB Cheque No 600114 to a
client of the accused named Mdm Cho May Kah, and
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(c) the balance moneys amounting to $78,500 was used to

settle the accused’s bad debts.

9 Between 2 January 1986 to 19 September 1987, a total of 21 loan

instalment repayments, amounting to $34,261.81 had been paid by the
accused to UOF.

15 For this offence, John Andrew Wong was sentenced to 12 months’

imprisonment.

16 Notwithstanding such clear evidence of forgery by their own solicitor

John Andrew Wong, the plaintiffs chose to ignore the same and continued
with their claim in this suit against the defendant for repayment of the
balance of the loan with interest, a declaration that the mortgage was valid
and for an order for delivery of vacant possession of the apartment which is
now worth $450,000. The submission of counsel is unbelievable. This is
what he stated in his written submission:
It must be borne in mind that this is a defendant who has nothing to
lose and everything to gain. His own evidence is that he never paid for
the purchase of the property. It appears to have been a gift from his
father. In the event that his claim succeeds and the mortgage declared
null and void, the defendant gets the property clean of the mortgage —
a property which appears to have appreciated greatly in value from
$180,000 in 1980 when the property was transferred to him to the
present valuation of $450,000.

17 The defendant in denying the plaintiffs’ claim also counterclaimed for

a declaration that the mortgage is a nullity and for an order directing the
Registrar of Titles to cancel the entry or memorial of registration of the
mortgage; alternatively, for an order for damages against the plaintiffs to be
assessed.

18 In answer to the defendant’s counterclaim for the cancellation of the

entry or memorial of registration of the mortgage, the plaintiffs sought to
rely on the indefeasibility of their title arising from registration. In this
connection s 38 of the Land Titles Act (Cap 157, 1985 Rev Ed) (“the Act”)
provides:
(1) Notwithstanding the existence in any other person of any estate
or interest, whether derived by grant from the Crown or the State or
otherwise, which but for this Act might be held to be paramount or to
have priority, and notwithstanding any failure to observe the
procedural requirements of this Act, any person who becomes the
proprietor of registered land, whether or not he dealt with a proprietor,
and notwithstanding any lack of good faith on the part of the person
through whom he claims, holds that land free from all encumbrances,
liens, estates and interests whatsoever, except such as may be registered
or notified in the land-register, but subject to —
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[1993] 2 SLR(R) United Overseas Finance Ltd v Yew Siew Kien 243

(a) any subsisting exceptions, reservations, covenants, and

conditions, contained or implied in the Crown grant, State
grant, Crown lease or State lease thereof;
(b) any subsisting easement or public right of way which was
in existence at the date on which the land was brought under the
provisions of this Act and any statutory easement implied under
section 87;
(c) any statutory obligation as defined in section 125;
(d) the power to correct errors conferred on the Registrar by
section 142;
(e) the power to rectify the land-register conferred upon the
Court by section 143;
(f) the rights of any person in occupation of the land under a
tenancy when the proprietor became registered as such,
provided that the term of the tenancy when created did not
exceed 3 years and could not have been extended by exercise of
an option of renewal to exceed in the aggregate 3 years; and
(g) the power conferred on the Court to make a declaration in
respect of any transfer or an order to rectify the land-register and
the power conferred on the Registrar to suspend or cancel the
registration of the transfer and any relating instrument by
section 24 of the Residential Property Act in respect of any
residential property (the expressions ‘transfer’ and ‘residential
property’ being within the meaning of that Act).
(2) Nothing in this section shall be held to prejudice the rights and
remedies of any person —
(a) to have the registered title of a proprietor defeated on the
ground of fraud or forgery to which that proprietor or his agent
was a party, or in which he or his agent colluded;
(b) to enforce against a proprietor any contract to which that
proprietor was a party;
(c) to enforce against a proprietor who is a trustee the
provisions of the trust;
(d) to recover from a proprietor land acquired by him from a
person under a legal disability which was known to the
proprietor at the time of dealing; or
(e) to recover from a proprietor land which has been
unlawfully acquired by him in purported exercise of a statutory
power or authority.
(3) Nothing in this section confers on a proprietor claiming
otherwise than as a purchaser any better title than was held by his
immediate predecessor.
19 The defendant relies on s 38(2)(a) of the Act. Section 38 is in pari
materia with s 42 of the Transfer of Land Act 1958 of Victoria. In
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Australian Guarantee Corporation Ltd v De Jager [1984] VR 483, the

registered mortgagee Australian Guarantee Corporation Ltd (“AGC”)
claimed possession against the two mortgagors Mr and Mrs De Jager who
were the registered joint proprietors of Torrens title land. The instrument
of mortgage had been signed by the husband but the wife’s signature was a
forgery. AGC did not know that the wife’s signature was a forgery but its
employees were aware that her signature had not been duly attested and
despite knowing this, they caused the mortgage to be registered. It was held
that the actions of the employees of AGC, in allowing the instrument of
mortgage to go forward for registration knowing that it had not been signed
by an attesting witness who was present when one of the registered
proprietors had apparently signed the instrument, amounted to fraud
within the meaning of s 42 of the Land Transfer Act 1958. AGC’s title
therefore did not prevail as an encumbrance over Mrs De Jager’s interest as
a joint proprietor of the land. In his judgment, Tadgell J reviewed the
relevant authorities. At 494–499 this is what he said:
I come then, against the background of these facts, to the central
question of law with which I have to deal. It is whether AGC’s title to
the registered mortgage, prima facie indefeasible because of ss 41 and
42 of the Transfer of Land Act 1958, is tainted by fraud and is on that
account unavailing against Mrs De Jager as mortgagor.
Section 41, omitting some words not now relevant, provides that:
No … certificate of title under this Act shall be impeached or
defeasible by reason or on account of any informality or
irregularity in any application or instrument … and every …
certificate of title registered under this Act shall be received in all
courts as evidence of the particulars therein and of the entry
thereof in the Register Book, and shall be conclusive evidence
that the person named in such … certificate as the proprietor of
or having any estate or interest in … the land therein described
is seized (sic) or possessed of such estate or interest …
That is as much as I need to read of s 41.
Section 42(1), so far as it is now relevant, provides that:
… the registered proprietor of land shall, except in case of fraud,
hold such land subject to such encumbrances as are notified on
the Crown grant or certificate of title but absolutely free from all
other encumbrances whatsoever …
The essential issue is whether the facts as I have found them bring the
circumstances of registration of the mortgage within the exception ‘in
case of fraud’ in s 42(1).
An examination of the scope of the exception ought to begin with a
consideration of the celebrated decision of the Judicial Committee of
the Privy Council in Assets Co Ltd v Mere Roihi [1905] AC 176, at
p 210; [1904–7] All ER Rep 1599. Lord Lindley, speaking for the Board
in a well-known passage that has long been taken to apply to the
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[1993] 2 SLR(R) United Overseas Finance Ltd v Yew Siew Kien 245

Victorian Transfer of Land Act 1958 and therefore bears repetition

here, said this:

Passing now to the question of fraud, their Lordships are unable

to agree with the Court of Appeal. Sections 46, 119, 129 and 130
of the Land Transfer Act 1870 and the corresponding sections of
the Act of 1885 [and his Lordship identifies them] appear to
their Lordships to shew that by fraud in these Acts is meant
actual fraud, ie dishonesty of some sort, not what is called
constructive or equitable fraud — an unfortunate expression and
one very apt to mislead, but often used, for want of a better term,
to denote transactions having consequences in equity similar to
those which flow from fraud. Further, it appears to their
Lordships that the fraud which must be proved in order to
invalidate the title of a registered purchaser for value, whether he
buys from a prior registered owner or from a person claiming
under a title certified under the Native Land Acts, must be
brought home to the person whose registered title is impeached
or to his agents. Fraud by persons from whom he claims does
not affect him unless knowledge of it is brought home to him or
his agents. The mere fact that he might have found out fraud if
he had been more vigilant and had made further enquiries which
he omitted to make, does not of itself prove fraud on his part.
But if it be shewn that his suspicions were aroused, and that he
abstained from making enquiries for fear of learning the truth,
the case is very different, and fraud may be properly ascribed to
him. A person who presents for registration a document which
is forged or has been fraudulently or improperly obtained is not
guilty of fraud if he honestly believes it to be a genuine
document which can be properly acted upon.
This view has been consistently followed in this court and in the High
Court: Wicks v Bennett (1921) 30 CLR 80, at p 91; Stuart v Kingston
(1923) 32 CLR 309, at p 329. There are many more available
illustrations of the principle. In the case of Schultz v Corwill Properties
Pty Ltd (1969) 90 WN (NSW) (Pt 1) 529, Street J, sitting in the Equity
Division of the Supreme Court of New South Wales, had to consider
the application of s 42 of the Real Property Act of New South Wales
(which is equivalent to s 42 of our Transfer of Land Act 1958) to the
case of a registered mortgage the mortgagor’s signature on which had
been forged by the mortgagee’s solicitor. At p 537 of the report his
Honour, having cited the passage from the Assets Co case which I have
just read, said:
It may be recognized at the outset that the fact that the mortgage
was a forgery, and hence at common law a nullity, introduces
some difficulties in the way of applying to it accepted rules
relating to fraudulent dealings, particularly rules affecting the
relationship of principal and agent. For the purposes of s 42,
however, a forgery is to be regarded as a fraud. At p 211 of their
judgment in Assets Co Ltd v Mere Roihi, their Lordships said:
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246 SINGAPORE LAW REPORTS (REISSUE) [1993] 2 SLR(R)

“forgery is more than fraud, and gives rise to considerations

peculiar to itself”. But the greater includes the lesser. It follows,
therefore, that for the purpose of s 42, a forgery is a fraud just as
is an act falling within the ordinary meaning of that word.
It was common ground that I should proceed on that basis. Assuming,
however, that the signature of Mrs De Jager on the mortgage was a
forgery, the evidence does not establish that it was a forgery done by a
servant or agent of AGC. Another question that arises on the pleadings
is whether the fraud associated with the mortgage, but not necessarily
confined to the forgery itself, can be, in the words of the Privy Council
in the Assets Co case, ‘brought home to’ the person whose registered
title is impeached, or his agents. As the Privy Council said in that case,
fraud by person from whom the registered proprietor claims ‘does not
affect him unless knowledge of it is brought home to him or his agents’.
After referring to that same extract from the Board’s opinion in the
Assets Co case, Street J in Schultz’s case, at (90 WN (NSW)) p 537, said
that it encompassed two alternative situations. The first, he said, fraud
on the part of the person whose title is impeached, or his agents
‘involves the application of the ordinary principles governing
responsibility of a principal for the fraud of his agent. If the fraud in
question is the immediate act of the person whose title is impeached,
then the position is not open to doubt. If, however, the fraud is that of
an agent for the person whose title is impeached, the principle of
respondeat superior, with all its limitations and qualifications, is
applicable. The matter is to be tested by investigating whether or not
the principal is, in the particular circumstances under consideration
liable to the person who has been defrauded for the acts of his agent’.
…
The present case has the added feature, which in my opinion is
important, that Mrs De Jager, whom AGC sought to make a mortgagor
of her land in its favour, had never dealt with AGC. She, of course, was
not a party to the lease, the obligations under which the mortgage was
intended to secure. She had received no consideration from AGC and
never stood to receive any. So far as appears, AGC knew nothing of her
and had no possible means of knowing whether she approved or not of
submitting to an encumbrance of the kind AGC required unless it
could be satisfied that she signed the mortgage or unless, of course, she
was asked about it. In the circumstances of this case, AGC had no basis
for assuming that she had signed. Even the statutory declaration was of
little or no real value in that respect, for the reasons I have indicated.
AGC could, no doubt, have found out the true position easily enough
but nothing was done with a view to doing so.
In considering whether fraud, in terms of s 42, has been established
one is, of course, not enquiring whether there was fraud in a vacuum
but whether there was fraud in the context of particular circumstances:
cf Butler v Fairclough (1917) 23 CLR 78, at p 97 in the judgment of
Isaacs J, citing Smith v Essery and Brown (1891) 9 NZLR 449 at p 465.
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[1993] 2 SLR(R) United Overseas Finance Ltd v Yew Siew Kien 247

It is sometimes said that there are no degrees of fraud. Nevertheless, in

concluding here that the conduct of AGC, through its employee or
employees, was dishonest vis-à-vis Mrs De Jager, I regard the feature to
which I have last referred, namely, the fact that AGC had no
contractual or other relationship with Mrs De Jager, as making a plain
case plainer. AGC had the means of confirming or denying what
should have been, to a company in its position, a suspicion of
irregularity, whereas she was, in effect, an entirely innocent and
ignorant third party. In a contest between them, one may fairly
conclude that AGC was in a position of one who, in Lord Lindley’s
words, ‘abstained from making enquiries for fear of learning the truth’.
For the reasons I have given, I hold that AGC’s title as registered
mortgagee should not prevail as an encumbrance on Mrs De Jager’s
title as a joint proprietor of the subject land. AGC’s title to the
mortgage does not prevail against her because she has established the
exception provided for by s 42 of the Transfer of Land Act 1958 that
this was a case of fraud.
20 Applying AGC v De Jager, when John Andrew Wong acting as
solicitor for and therefore as agent of the plaintiffs forged the defendant’s
signatures and attested his own signature in the instrument of mortgage,
that must be fraud or forgery within s 38(2)(a) of the Act.
21 Accordingly the plaintiffs’ claim is dismissed with costs. The
defendant’s counterclaim for a declaration that the mortgage is a nullity is
granted. The Registrar of Titles is accordingly directed to rectify the Land
Register relating thereto. The defendant is also awarded costs on his
counterclaim.

Headnoted by Charlene Tay Mei Woon.