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New Straits Times
by V. Anbalagan
PUTRAJAYA: Landowners who can prove that they lost their
property through fraud or forgery now stand a chance of getting them back.
The Federal Court in a landmark ruling yesterday affirmed a provision in the
National Land Code which protects the constitutional right of property owners.
The much awaited decision, a unanimous pronouncement by a five-man bench led by
Chief Justice Tun Zaki Azmi, has paved the way for the apex court to depart from
its controversial decision delivered on Dec 22, 2000, in the case of Adorna
Properties Sdn Bhd vs Boonsom Boonyanit.
In that case the apex court led by the then chief justice, Tun Eusoff Chin, held
that the person in whose name the title was registered was the rightful owner of
the property, even if the transfer was due to fraud or forgery.
Yesterday the court ruled that where property was transferred illegally, the
original owner is entitled to its return if he can prove that it was acquired
through fraud or forgery.
Such property must be returned even if the second purchaser had bought it in
good faith and for a valuable consideration.
Zaki, in his brief supplementary judgment, said any attempt to transfer
properties through illegal means must be defeated.
“I hope the land authorities will be more cautious in registering land titles or
any instrument in land dealings,” he said.
Tan Sri Arifin Zakaria, who delivered a written judgment, said the previous
three-man bench in the case of Adorna Properties misconstrued the law and came
to an erroneous conclusion.
“We have to rectify the legal position for the sake of property owners,” said
Arifin, who is the chief judge of Malaya.
The judges made the remarks in allowing an appeal involving a land transfer
dispute.
The history of the case can be traced to early 1970 when businessman Tan Ying
Hong, in the words of the High Court, “mysteriously” became the registered
proprietor of a nine-acre plot of land in Kuantan.
A conman who now cannot be located had forged a power of attorney from Tan and
got the land charged to United Malayan Banking Corporation (now RHB Bank Bhd) to
obtain overdraft and loan facilities amounting to RM300,000 in favour of Cini
Timber Industries Sdn Bhd.
Cini Timber defaulted payment and the bank started foreclosure proceedings
against Tan, the registered land owner.
Tan, represented by counsel T. Mura Raju and Bob S. Arumugam, filed an
application in the High Court in 1985 to seek a declaration that the charges
with the bank were of no effect as they were created by a forged power of
attorney.
The High Court in 2003 dismissed Tan’s application which was affirmed by the
Court of Appeal in 2008.
In May last year, Tan obtained leave to appeal and the legal question posed to
the Federal Court was whether an acquirer of a registered charge, title or other
interest by way of forgery obtains an immediate indefeasible interest or title.
This question of law paved the way for the apex court to review the Adorna
Properties case as the issue was similar.
Head of the civil division in the Attorney-General’s Chambers See Mee Chun told
reporters that the nine-year dilemma had been removed following yesterday’s
ruling.
“But some amendments to the land code are in the pipeline to give better
protection to property owners,” said See, who last year was invited to address
the court on grounds that the case was of public interest.
Bar Council representative Roger Tan said the gruelling wait was worthy because
many owners who lost their land could now “see some light”.
“We are glad that the apex court has affirmed the principle of deferred
indefeasibility as provided in the land code.” Meanwhile, Mura Raju said
following the court ruling, the two charges created through forgery were now
null and void.
“The title to the property, currently valued at RM1 million, will be reverted to
Tan (the appellant).”
The Adorna Properties case revolved around a plot of land in Tanjung Bungah,
Penang.
The registered proprietor was Boonsom Boonyanit, a Thai who lived in Thailand
but who visited Penang from time to time.
On June 11, 1989, Boonyanit’s son chanced upon an advertisement in a Thai
newspaper calling upon any heir of Boonyanit to communicate with a firm of
Penang solicitors.
Boonyanit ’s son became suspicious and got in touch with his mother’s solicitors
in Penang to investigate the matter.
The probe revealed that:
• An impostor, claiming to be Sun Yok Eng @ Boonsom Boonyanit,
had affirmed a statutory declaration on June 18, 1988, that she had lost the
original title to the land. The impostor then managed to obtain a certified copy
of the title from the Land Office.
• On April 6, 1989, the impostor affirmed a second statutory
declaration declaring that the names Mrs Boonsom Boonyanit and Sun Yok Eng @
Boonsom Boonyanit on the title to the land referred to one and the same person,
that is, Mrs Boonsom Boonyanit (the fraudulent) with a different Thai passport
number.
• With this declaration, the impostor managed to perfect the registration of the
memorandum of transfer in favour of Adorna.
The real Boonyanit then filed a suit for the return of the land. The High Court
ruled in favour of Adorna.
On appeal, the Court of Appeal ruled in favour of Boonyanit.
Adorna then appealed to the Federal Court which then held that Adorna had
obtained an indefeasible title notwithstanding the forgery because it was a bona
fide purchaser.
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