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Bernama
PUTRAJAYA, Jan 21 (Bernama) -- Landowners can heave a sigh
relief as the Federal Court here on Thursday pronounced a landmark decision
protecting original landowners from losing their lands to forgers.
A Federal Court five-member bench led by Chief Justice Tun Zaki Azmi ruled that
the controversial 2001 ruling in the case of Adorna Properties vs Boonsoom
Boonyanit @ Sun Yok Eng, permitting fraudulent land transfer, was erroneous.
"I am legally obligated to restate the law since the error committed in Adorna
Properties is so obvious and blatant.
"It is quite a well-known fact that some unscrupulous people have been taking
advantage of this error by falsely transferring titles to themselves. I hope
that with this decision, the land authorities will be extra cautious when
registering transfers," Zaki said.
The other judges who presided with Zaki 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.
Today's decision was welcomed by the Attorney-General's Chambers and the Bar
Council.
The 2001 ruling had been strongly critised by landowners, the legal fraternity
and academicians because it opened an avenue for fraudsters to fraudently
acquire lands by forging documents, causing the principal registered landowners
to lose their land through scam.
The interpretation applied to the proviso in the National Land Code by the
previous Federal Court panel led by former chief justice Tun Eusoff Chin in the
2001 ruling protected subsequent innocent buyers of properties, where the titles
were forged, leaving the original owners with little recourse.
The effect of the Adorna Properties principle conferred immediate
indefeasibility of land title to a registered proprietor even if the instrument
of transfer was forged.
In a unanimous decision departing from the Adorna Properties principle, Arifin
said the previous Federal Court panel, in deciding on the Adorna Properties case
nine years ago, had misconstrued Section 340 (1), (2) and (3) of the National
Land Code, thereby making an erroneous conclusion.
He said the interpretation applied by the previous Federal Court panel had gone
against the clear intention of Parliament and that error needed to be remedied
in the interest of all registered proprietors.
The court was requested to revisit the Adorna Properties principle by counsel
representing parties in a land matter dispute involving a businessman, Tan Ying
Hong, and Cini Timber Industries Sdn Bhd and United Malayan Banking Corporation
Bhd.
In that case, Tan was the registered proprietor of a nine-acre plot of land in
Kuantan, Pahang.
However, a fraudster, who cannot be located now, forged a power of attorney from
Tan and got the land charged to United Malayan Banking (now RHB Bank Bhd) to
obtain loan facilities amounting to RM300,000 in favour of Cini Timber
Industries.
Cini Timber defaulted payment and the bank commenced foreclosure proceedings on
Tan, the registered land owner.
Tan then commenced legal proceedings to seek a declaration that the charges with
the bank were of no effect as they were created by a forged power of attorney
but his claim was dismissed by the High Court in 2003.
He brought the matter to the Federal Court after the Court of Appeal affirmed
the High Court's decision. Today, the Federal Court set aside the High Court
decision and allowed Tan's appeal.
It also ordered that Tan be paid RM75,000 in litigation costs for court
proceedings in the lower court and federal courts.
Meanwhile, outside the court, Head of the Civil Division in the Attorney-General
Chambers (AGC) See Mee Chun said today's decision had addressed the contentious
issue.
She said the AG's Chambers was also looking at other aspects including
amendments to the National Land Code to further protect registered owners.
Counsel Roger Tan, who held a watching brief for the Bar Council, said that
after nine years of waiting, many landowners could finally see some light that
their properties would be safer.
He hoped the lower courts would apply this new principle when adjudicating
similar court cases on land disputes.
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