(1) Federal Court closes loophole on land fraud
Tan Yi Liang
PUTRAJAYA (Jan 21, 2010): The Federal Court has plugged a legal loophole in Malaysian land law which allowed unscrupulous individuals to transfer land titles to third parties with legal immunity.
In a landmark decision today, a five-man bench led by Chief Justice Tun Zaki Azmi unanimously decided to reverse the ruling in the Adorna Properties Sdn Bhd vs Boonsom Boonyanit case in 2000.
The other four on the panel were Court of Appeal President Tan Sri Alauddin Mohd Sheriff, Chief Judge of Malaya Tan Sri Arifin Zakaria and Federal Court judges Datuk Zulkefli Ahmad Makinudin and Datuk James Foong Cheng Yuen.
In deciding on the case of Tan Ying Hong v Tan Sian San & two others, the court ruled that transfers of property by fraudulent or forged documents were no longer legally valid under Section 340(2) of the National Land Code 1965.
This defeated the application of Section 340(3) of the National Land Code to Section 340(2) as was done in the Boonyanit case by the Federal Court sitting then.
Section 340(2) states that the title or interest of any such person or body shall not be indefeasible:
> 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
> where registration was obtained by forgery, or by means of an insufficient or void instrument; or
> 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.
Zaki said with the closing of the "blatant and obvious" error made by the Federal Court in the Boonyanit case, it would prevent further exploitation of the loophole created by the 2000 decision.
"It is quite well-known that some unscrupulous people had taken advantage (of this loophole) to transfer land to themselves. I hope the land authorities will be extra careful when they register transfers of land," said Zaki.
He added that he was "legally obligated" to correct the problem created for landowners by that decision.
The Federal Court also directed RHB to pay RM75,000 in legal costs to Ying Hong, who is still living in Kuantan, as it held that he had fought for the matter in his personal interest and did not bring the case to court as a public interest case.
The apex court decision, which follows on from a 2009 Court of Appeal decision, marks the end of Ying Hong's long legal battle.
In 1976, the Pahang government alienated and issued a land title for a nine-acre plot in Kuantan in Tan's name without his knowledge. However, in 1985, he received a letter from United Malayan Banking Corporation (UMBC, now RHB) which directed him to pay back RM300,000 for an outstanding loan paid by the bank to Cini Timber Industries.
Ying Hong later discovered that one Tan Sian San had forged his signature in 1977 to obtain a power of attorney acknowledging that Sian San was acting on behalf of Yin Hong.
In 1984, Sian San charged the land to UMBC as security for a loan to Cini Timber Industries, and subsequently disappeared, prompting Ying Hong to file a suit against the then-UMBC.
Ying Hong lost his case in the High Court in 2003, and subsequently in the Court of Appeal last year.
The Federal Court was asked on Oct 29 last year to determine a question of law arising from its decision which was delivered by then-Chief Justice, Tun Eusoff Chin in his four-page Boonyanit decision in 2000.
The Federal Court had ruled then that a person who acquires a title to land either through legal means or by a forged or fraudulent title, had a legal claim to the property.
The Boonyanit case began in 1998, when an impostor claiming to be Mrs Boonsom Boonyanit made a statutory declaration claiming that she had lost the original titles to two plots owned by the real Boonsom Boonyanit in Tanjung Bungah, Penang.
She was able to convince the Land Office to issue certified copies of the title, which were then sold to Adorna Properties for RM12 million, which prompted the suit when Boonyanit, a Thai national, discovered the sale.
She lost her case in the Penang High Court in 1995, but won in the Court of Appeal in 1997. She however lost in the Federal Court appeal which was brought by Adorna Properties in 2000.
The Federal Court also directed RHB to pay RM75,000 in legal costs to Tan, who is still living in Kuantan, as it held that he had fought for the matter in his personal interest and did not bring the case to court as a public interest case. -- theSun
(2) Adorna Error Righted
Extract from The Star (22/01/2010)
PUTRA JAYA: A decade old decision by the Federal Court has finally been corrected in a rare joint effort by the entire legal fraternity including the four highest ranking judges - leading to a landmark decision by the apex court.
It is now no longer legal for anyone to buy a piece of land from another person who got hold of the property through fraudulent means.
Chief Judge of Malaya Tan Sri Arifin Zakaria, one of the five-man Bench presiding over the case, said it was "highly regrettable that it had some time before this contentious issue was put to rest".
The Bench ruled yesterday that the decision in the contentious Adorna Properties case was wrong. In that case, the then Chief Justice Tun Eusoffe Chin had ruled that the person whose property was "stolen" via forged documents could not take legal action against the third party who bought the land from the "thief".
http://thinkproperty.com.my/realestate/images/stories/Image/adarna.jpg
(3) A 10-year legal wrong finally righted — Business Times Singapore
JAN 22 — Ten years ago, Malaysia’s apex court made a decision that many considered bizarre and introduced much uncertainty into investors’ decisions.
In the case of Adorna Properties vs Boonsom Boonyanit, a buyer who had bought a piece of land without knowing it had been fraudulently transferred was allowed to keep it, thus depriving the person who had been defrauded of his rights. Thus, for 10 years, the registered (and therefore rightful) owner of a property who suddenly discovers that his title has been fraudulently transferred to someone else had no legal recourse to reclaim his property. That decision, which had been made by a three-man panel headed by then Chief Justice Tun Eusoff Chin, had set a binding precedent for disputes over land ownership.
Happily, all that changed yesterday when the current Federal Court, now with different judges, reversed what it called the “blatant and obvious” mistake of the Adorna ruling. This time, a five-man bench led by current Chief Justice Tun Zaki Azmi unanimously ruled that the rightful owner of a property title can set aside the second man’s claim even after the title has been transferred to the latter. It was based on Section 340(2) of the National Land Code 1965, which states unequivocally that a title would not be defensible if it had been subject to fraud in any way. What the Federal Court did yesterday was to right a decade-old wrong. CJ Zaki noted that it is “quite well known that some unscrupulous people had taken advantage (of the mistaken Adorna ruling) to transfer land to themselves”.
The Federal Court’s ruling followed submissions last October for Pahang landowner Tan Yin Hong, who was appealing against a Court of Appeal decision in 2009. Tan’s case dates back to 1976, when the Pahang state government mysteriously issued a land title for a 3.6-hectare piece of land in Kuantan in his name and without his knowledge. Land matters come under the ambit of state governments in Malaysia. In 1985, Tan received a letter from RHB Bank telling him to pay back RM300,000 as an outstanding loan given by the bank to a timber company. Upon investigation, Tan found out that a person named Tan Sian San had in 1977 forged his signature and obtained power of attorney to represent Tan. In 1984, Tan Sian San charged the land to RHB as security for a loan to Cini Timber Industries, and subsequently disappeared. Tan sued the bank. In 2003, the High Court dismissed his application and the Court of Appeal upheld that decision.
But yesterday, the Federal Court decided the bank’s charges against Tan were invalid because of the forgery. And, in doing so, it threw the Adorna decision onto the scrapheap of history. It will go a long way in reassuring both Malaysians and foreigners interested in buying land in the country — either for residential or for industrial purposes — that their rights will be protected.
* This article is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.
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written by AuntyG, January 22, 2010
Pity its too late to redress the blatant and obvious mistake of the Adorna ruling. EUSOFF CHIN OWES BOONSOM BOONYANIT BIG TIME !!
written by PH Chin, January 22, 2010
Kudos to the Federal Court judges !
Thank God that justice prevailed in these cases albeit years of delay.
written by Tan, January 22, 2010
The Court is the last avenue for distress parties to seek justice. If the decision so made cast the doubt of the distress parties on its fairness, then it makes a mockery of the whole legal process.
written by onenight4, January 22, 2010
This Eusoff Chin after meeting a close lawyer friend of his in Singapore airport accidentally on their flight to New Zealand to spend holiday together fishing trout in a river stream, forget everything on the ethic of law after retunring from the holiday.
written by NoCowSense, January 22, 2010
This case brings into question the integrity of the judges headed by Eusoff Chin. A lot of questions need to be answered.
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