Tuesday, August 12, 2008

Court Case: Indefeasibility of Title under Malaysian National Land Code

Salam,

As promised this is my first post sharing knowledge with my readers regarding recent case I handle in court. Please be advice that this post is merely for the sake of knowledge sharing and discussion from my point of view. It may be not acceptable by my learned opponent's counsel submission in court and the case is pending judgment. So I reserve my opinion here subject further whether or not the court may accept my submission. I acted for plaintiff.

Brief fact of the case:-

  1. Plaintiff is Majlis Agama Islam dan Adat Melayu Perak
  2. Defendant is one individual whom rented plaintiff's one small portion of plaintiff's land somewhere in Ipoh.
  3. The land duly registered under plaintiff name.
  4. The land has a mosque built on it since 1912.
  5. Upon expiry of the tenancy agreement, the plaintiff demands vacant possession of the land to be return to them for reason that they want to extend the existing mosque building.
  6. The defendant refused to deliver vacant possession of the land to the plaintiff, claiming that the land was wrongly transferred under plaintiff's name due to misrepresentation during the Order of Small Estate (Distribution) proceeding held in 1998.
  7. In short, defendant claims that plaintiff is not the rightful owner of the land and thus the tenancy agreement was void ab initio.
  8. Defendant brought few witness in court supporting his allegations, and the witnesses showed few document and statutory declaration explaining how would the land should not be transfer to plaintiff's name, those document made and sworn by persons in India without the maker of the document attending in persona.
  9. According to the defendant, the land belongs to some other third party which not named in the current proceeding.

Legal issue brought by defendant:-

  1. Adverse possession of land title; namely whether the plaintiff land title is not indefeasible as provided under section 340(2) of Malaysian national Land Code, and if so rendering the tenancy agreement void.

Plaintiff submission:-

  1. Plaintiff claims is very straight forward and simple, i.e. the cause of action arise from the tenancy agreement legally entered between the plaintiff and the defendant.
  2. Upon expiry of the agreement, the defendant should deliver vacant possession of the land to plaintiff.
  3. Plaintiff is the registered owner of the land in dispute and under Malaysian National Land Code, no person should challenge the ownership of a registered owner except provided under the code.
  4. Section 340 of the Code reads as follows;

    Registration to confer indefeasible title or interest, expect in certain circumstances.

    (1) The title or interest of any person or body for the time being registered as proprietor of any land, or in whose name any lease, charge or easement is for the time being registered, shall, subject to the following provisions of this section, be indefeasible.

    (2) The title or interest of any such person or body shall not be indefeasible-

    (a) in any case of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy; or

    (b) where registration was obtained by forgery, or by means of an insufficient or void instrument; or

    (c) where the title or interest was unlawfully acquired by the person or body in the purported exercise of any power or authority conferred by any written law.

    (3) Where the title or interest of any person or body is defeasible by reason of any of the circumstances specified in sub-section (2)-

    (a) it shall be liable to be set aside in the hands of any person or body to whom it may subsequently be transferred; and

    (b) any interest subsequently granted thereout shall be liable to be set aside in the hands of any person or body in whom it is for the time being vested:

    Provided that nothing in this sub-section shall affect any title or interest acquired by any purchaser in good faith and for valuable consideration, or by any person or body claiming through or under such a purchaser.

    (4) Nothing in this section shall prejudice or prevent-

    (a) the exercise in respect of any land or interest of any power of forfeiture or sale conferred by this Act or any other written law for the time being in force, or any power of avoidance conferred by any such law; or

    (b) the determination of any title or interest by operation of law.

  5. In simple, if a person has a land duly registered under his name. no other person can claim that the land belong to him. That's the consequences of the section.
  6. The exception to the section is as provided under sub section 2, i.e. this concept of the indefeasible title should not stand against registration involving; fraud or misrepresentation, forgery or insufficient or void instrument, or unlawfully acquired.
  7. The defendant invoked this sub section in supporting their defense.
  8. Plaintiff, on the other hand submit that;
    1. Despite the fact that there is a mosque on the land ever since 1912, the land was lawfully registered under their name by a competent jurisdiction order under Malaysian law of Small Estate (Distribution) Act.
    2. The order was given without any objection of any party including the third party as alleged by defendant.
    3. The defendant should not try to challenge the validity of the registration as the current court is not a proper forum to decide on the matter.
    4. Current issue is merely base on the tenancy agreement.
    5. What the defendant or the third party should do was that appealing against the distribution order at the High Court, in which the defendant or the third party fails to do so until to date.
    6. The plaintiff further rely on one decided case in court of Appeal Malaysia (AU MENG NAM & ANOR V. UNG YAK CHEW & ORS, COURT OF APPEAL, PUTRAJAYA [CIVIL APPEAL NO: J-01-82-2005] GOPAL SRI RAM JCA, RAUS SHARIF JCA, HASAN LAH JCA. 12 JULY 2007 JUDGMENT written by Gopal Sri Ram JCA – [2007] 4 CLJ 526) stating that even if the registration of the land title involve fraud or misrepresentation, until has been properly challenge and decided in a competent court of law, the registration stand tall above others.
    7. Moreover, defendant should not used this current forum to back maneuver on the issue of land title, what defendant or the third party should do is a 'frontal attack' at a specific proceeding.
    8. Should that is the case, the land registration should stand valid and that automatically render the tenancy agreement enforceable.

The case is pending decision; I love to update my blog readers on the outcome of the judgment.

Regards,

Kamarul Irzuan Bin Busu Piah, Advocate & Solicitor, High Court of Malaya, Malaysia.

7 comments:

  1. what is the consequences of force-possession of the land title...lets say after discharging it from the bank...son keeps it to prevent father from re-charging it...can the father as the rightful landowner sue the son?

    ReplyDelete
  2. Unless the son has a registered interest on the land, he cannot stop the father from re-charging the land to the bank. Legally, yes the father can take action against the son for depriving his rights and enjoyment of his property.

    ReplyDelete
  3. what is the name of the case?

    ReplyDelete
  4. my late grandfather had purchased land from somebody very long time ago. unfortunately there was no written agreement between them and the transaction was incomplete as the vendor return back to his hometown somewhere in Indonesia. I believe he already passed away.What should I do?

    ReplyDelete
  5. Anonymous,

    1.
    Nothing much can be done in your situation as there is no written agreement.

    2.
    However, you can start by tracing the family member of the deceased.


    Messrs. Irzuan

    ReplyDelete
  6. Kamarul I find the order of things well laid out but am unsure of certain aspects of the explanation you have provided above. Please assist and correct if my understanding of your explanations are therefore correct.

    A tenant under a lease is seeking to challenge the title of the owner of land on which he is tenant and that too at the expiry of a valid (registered?) lease?.

    Other issues should not arise unless in the first instance the tenant has standing to bring such a claim or challenge to the title of the landowner or am I wrong?

    I do not practice in the area of Malaysian property law but am in a different jurisdiction where the British common law prevails as it does in Malaysia with certain exceptions. Title where I am is based on the Torrens system.

    On my understanding and reading of the Malaysian land title system, title once registered gives the owner of a registered right an indefeasible title to all right title and interest as appears in the face of the record of the register. Where a challenge arises it has to be specific in the pleadings identifying the nature of the challenge and submitting together with the pleadings appropriately admissible evidence to support the challenge.

    As you have quite clearly articulated above, the exceptions to indefeasability of title are as provided under the act (outlined above). There will surely also be those exceptions not stated in the act which include an act of state such as resumption and forcible acquisition of land by the state under an enactment. But thats nt the point and I digress.

    Now what is the power or authority of a High Court declaration in a dispute over land where the declaration sought and obtained provides clearly and unequivocally that the purchaser of land at a mortgagees auction for valuable good consideration with notice is the lawful owner of that land. Can the previous owner now disentitled obtain an injunction from the Court of Appeal to prevent the new owner with indefeasible title from entering into occupation of that land?

    Havelock

    ReplyDelete
  7. Subject to the exceptions under the doctrine of indefeasability of title (under the Torrens system now being gradually adopted in Malaysia) the High Court declaration is valid in favour of the incoming purchaser at a mortgagees auction for value with notice. The exceptions are fraud etc as enumerated in the relevant statutes.

    Acker Bilk

    ReplyDelete