1. LEOW LAW TOONG (Suing in the capacity as Trustee of Chin Koong Tze Temple) 1. TAI SAN ENTERPRISES SDN. BHD. 2. CHAN HOR SAN 3. SOON LEE METAL SDN. BHD. 4. RHB BANK BERHAD 5. PENGARAH PEJABAT TANAH DAN GALIAN SELANGOR

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR CIVIL SUIT NO: WA-21NCVC- 42-04/2017 Between 1. LEOW LAW TOONG (Suing in the capacity as Trustee of Chin Koong Tze Temple) …PLAINTIFF And 1. TAI SAN ENTERPRISES SDN BHD 2. CHAN HOR SAN 3. SOON LEE METAL SDN BHD 4. RHB BANK BERHAD 5 PENGARAH PEJABAT TANAH DAN GALIAN SELANGOR …DEFENDANTS JUDGMENT A. INTRODUCTION [1] The Plaintiff claims against the Defendants for the following reliefs: [a] A declaration that the Plaintiff as the remaining sole trustee of Chin Koong Tze Temple, is the valid trustee of the land held under Geran Lot 1 1795, GM 60, Mukim Cheras, District of Hulu Langat Selangor bearing address at Batu 12, Jalan Sungai Besi – Cheras (the land). [b] A declaration that the transfer of the land from the Plaintiff to the 1st Defendant and subsequently to the 2nd and 3rd Defendants and the charge by the 4th Defendant are void ab initio. [c] An Order that the endorsement of the transfer on the Issue Document of Title of the land to the 1st, 2nd and 3rd Defendants and the Charge to the 4th Defendant are cancelled. [d] An Order that the 5th Defendant register the Plaintiff as the valid trustee of the land within 21 days from the date of the Order. [e] An Order that the damages be assessed against the 3rd Defendant and thereafter payable to the Plaintiff to account for the 3rd Defendant use of the land. [f] General damages. [g] Interest and Costs. B. BACKGROUND FACTS [2] The Title of the land was registered under the name of five (5) Trustees, of which the Plaintiff was one of them. The Trustees were appointed pursuant to a Deed of Trust dated 20.6.1967 and were appointed to hold the land on trust for the society for the purpose of building a temple on the land. The other four (4) Trustees were: [a] Lim Swee Leong who died on 6.11.1998 [b] Teh Swee Boon who died on 30.8.1978 [c] Teo Hong Tua who died on 18.10.1973 2 [d] Yong Seong Ying who died 23.10.1967 [3] The Plaintiff is the sole remaining trustee and at all the time kept the original title with him. The original title was produced at the trial on 15.12.2020. Sometime in April 2010, the Plaintiff notice a construction and demolition works being carried out on the land and he immediately warned the construction workers to stop work. The Plaintiff continued to visit the land and put a marking barrier to show that the land was privately owned. [4] Sometime in July 2010, the marking barrier were removed and construction resumed. The Plaintiff was informed by the workers that the owner of the land had allowed them to proceed with the construction work. The Plaintiff requested his lawyer to investigate the ownership of the land. On 30.8.2010, the Plaintiff was given a copy of the search report that stated the 3rd Defendant is the owner of the land and it was charged to 4th Defendant. [5] The search report also showed that prior to the 3rd Defendant ownership, the land was first transferred from the Trustees to the 1st Defendant on 12.3.2009 for a sum of RM2 million (1st Transfer). On 16.6.2009, the land was transferred from the 1st Defendant to the 2nd Defendant for a consideration of RM2.6 million (2nd Transfer). On 1.12.2009, the 2nd Defendant transferred the land to the 3rd Defendant for a sum of RM3,161,584.80 (3rd Transfer). The land was then charged by the 3rd Defendant to the 4th Defendant. 3 [6] On 24.10.2010, the Plaintiff lodged a police report about the fraudulent transfers. However, there has been no response or feedback from the police since the report was lodged. On 4.3.2011, the Plaintiff lodge a caveat on the land pending police investigation. Five (5) years later, on 4.3.2016, the Plaintiff did another search and found the 3rd Defendant was still the registered owner of the land and there is no change of the express conditions of the land. On 25.10.2016, the Malaysian Bar confirmed the solicitor who is in charge of the 1st transfer was not authorized to practice since 1.7.2004 and was struck off the rolls of Advocates and Solicitors since 23.7.2005. On 21.11.2016, the Plaintiff discovered that the Court Order dated 9.11.2016 issued under Kuala Lumpur High Court Civil Suit No. S-24-3201-2008 for the 1st Transfer did not exist. The Plaintiff also discovered the 2nd Defendant died on 10.2.2010, just 3 months after the land was transferred to the 3rd Defendant. The 2nd Defendant does not have any heir and no letters of administration taken out for his estate. The 2nd Defendant was also not represented in court to answer the Plaintiff’s claim. [7] On 15.3.2018, a Judgment in Default of Appearance (JID) was entered against the 1st Defendant with damages to be assessed before the Registrar and interest at the rate of 5% per annum from 19.11.2008 until full settlement. [8] In opposing the claim, the 3rd Defendant filed a counter claim to remove the Private Caveat Presentation No 4382/2016 lodged by the Plaintiff on the basis that the Plaintiff did not have any caveatable interest on the land. 4 C. THE SUBMISSIONS [8] As Against the 1st Defendant. The Plaintiff submitted that the 1st Transfer was unauthorised and void for the following reasons: [a] The Originating Summons Suit No. S-24-3201-2008 and the Court Order dated 9.11.2016 issued under Kuala Lumpur High Court Civil does not exist and is a forgery. [b] The signature of the four (4) deceased trustees were forged and it was impossible for them to execute the Memorandum of Transfer to the 1st Defendant since they had died earlier. [c] The solicitor; Sazali bin Abd Wahab, who verified the four (4) deceased trustees’ signature on 12.12.2008 was struck off the roll of Advocate and Solicitor since 23.7.2005. [d] The transfer of the land to the 1st Defendant is against the public policy as it was made to a non-Chinese person which is not in accordance with the express condition of the land. [9] Therefore, the 1st Defendant did not acquire indefeasibility over the land because the registration was obtained by forgery and by means of an insufficient or void instrument under Section 340(2) of the National Land Code (NLC) and the 1st Transfer must be set aside. The Plaintiff submitted that since the allegation of fraud and forgery by the Plaintiff as against the 1st Defendant was not answered, there is no need for the Plaintiff to prove forgery and should be assumed to be true until and unless the 1st Defendant’s JID is set aside. 5 [10] As Against the 2nd Defendant. The Plaintiff submitted that the 2nd Transfer was void for the following reasons: [a] Since the land was sold immediately after it was transferred to the 1st Defendant, the 2nd Defendant was negligence in not investigating the genuineness of the 1st Transfer or the 1st Defendant’s claim to the Title. [b] Particulars of the 2nd Defendant’s negligence. [i] Failure to carry out a search on the legal proceeding. [ii] Failure to carry a search to verify the genuineness of the Court Order 19.11.2008. [iii] Failure to carry out a search on the Plaintiff and the four (4) deceased trustees. [iv] Failure to instruct his solicitor to carry out the searches as above mentioned. [11] The transfer of the land to the 2nd Defendant perpetuates the breach against the express condition of the land title that can only be owned by a Chinese person. The 2nd Defendant is not a bona fide purchaser for value without notice of the land. In addition, since the 1st Transfer was vitiated by forgery and fraud, it follows that the 2nd Transfer to the 2nd Defendant is also to be set aside under Section 340(3)(a) and (b) NLC. [12] The 2nd Defendant’s representative is not available to answer the Plaintiff’s allegations and has not provides any answer to the claim, then the 2nd Defendant would be in a similar position as the 1st Defendant in 6 that the Plaintiff’s allegations against the 2nd Defendant should be taken to be made out. [13] As Against the 3rd Defendant. The Plaintiff submitted that the 3rd Transfer was void for the following reasons: [a]` Since the land was sold immediately after it was transferred to the 2nd Defendant, the 3rd Defendant was not a bona fide purchaser for value without notice because, it was negligence in not investigating the genuineness of the 1st Defendant claim to title and the genuineness of the 1st and 2nd Transfer. [b] Particulars of the 3rd Defendant’s negligence. [i] Failure to carry out a search on the legal proceeding considering there were 2 rapid transfers of the land prior to the 3rd Transfer. [ii] Failure to carry a search to verify the genuineness of the Court Order 19.11.2008. [iii] Failure to carry out a search on the Plaintiff and the four (4) deceased trustees. [iv] Failure to instruct his solicitor to carry out the searches as above mentioned. [v] Failure to verify the genuineness of the 2nd Transfer. [vi] Failure to consider the express condition of the land. [14] The Plaintiff contended that the 3rd Defendant did not acquire the land without notice and only acquired a defeasible interest in the land. The land cannot be transferred to the 3rd Defendant because it is in breach of 7 the express condition of the Title, which only allows for the land be transferred to an “Orang Cina”. Thus, the Sale and Purchase Agreement (SPA) between the 2nd Defendant and the 3rd Defendant for the sale of the land is void for being in breach of the express condition of the Title. The registration of transfer of the land from the 2nd Defendant to the 3rd Defendant must be set aside. It is for the 3rd Defendant to prove they are a bona fide purchaser for valuable consideration and the period for Court’s consideration of the 3rd Defendant’s conduct is over a period prior to the entry into the sale and purchase transaction of the land, up to the point in time when the purchaser is registered as a proprietor on the Register of Titles. [15] The Plaintiff submits the 3rd Defendant had notice or should have been prompted to investigate for the following reasons: [i] The 3rd Defendant acted in haste in that the 3rd Transfer to the 3rd Defendant took place within nine 9 months of the land being transferred to the 1st Defendant. [ii] The 3rd Defendant did not investigate the preceding transactions despite notice of the earlier transfers that were undertaken as between the Plaintiff and the 1st Defendant and the 1st Defendant and the 2nd Defendant within the same year. The 3rd Defendant paid RM3,161,584.80 on or about September 2009 to purportedly purchase the property from the 2nd Defendant, which was purchased for RM2,600,000.00 on 16.6.2009, 3 months earlier. [iii] The 3rd and 4th Defendants had notice of the express condition because it was evident from the title and under Clause 6.1 of the Sale and Purchase Agreement between the 2nd and 3rd Defendant, the 3rd 8 Defendant’s solicitor would have made a search prior to the presentation of the transfer documents. So, the 3rd Defendant would have actual or constructive knowledge that they and the 4th Defendant did not meet the express conditions. The 3rd Defendant was aware of this provision in section 124(1) because they subsequently made an application to the 5th Defendant for a change of land use category for the title and although they made such an application, they did not apply to change the express condition on the Title. The point is that the 3rd Defendant could have and should have applied for section 124(1) to remove the express conditions prior to its transfer. [v] The 3rd Defendant proceeded with the registration despite knowing or being wilfully blind about the express condition prohibition. There was no discernible reason for the 3rd Defendant to hastily conclude the transaction with the 2nd Defendant. If the 3rd Defendant genuinely had no knowledge or inkling of the previous transactions, it would have taken its time and had the 2nd Defendant apply for the removal of the express condition. Further, if it were not for the 5th Defendant’s negligence, the 3rd Defendant should not have been registered as the owner given the express condition clearly stated on the Title. It is clear both 3rd and 4th Defendants are corporate entities and do not satisfy the condition of Orang Cina. The issue here is how the law treats agreements that are in breach of express condition of Title. The Plaintiff contends the position in law is when a transfer contravenes an express condition, that transaction is void. 9 [16] The 3rd Defendant’s reply. [a] The 3rd Defendant submitted that in the absence of any express provision in the statue that the condition of “Chinese person” means “natural person” and not “artificial legal person”. Section 3 of Interpretation Acts 1948 and 1967 (Consolidated and Revised 1989) defines that person included corporate body. The 3rd Defendant being a Chinese Company which is wholly owned by Chinese shareholders and operate by Chinese directors is entitled to own the land. Therefore the 3rd transfer to the 3rd Defendant did not breach the express term of the land and is valid. [b] The 3rd Defendant did not misuse the land in contravene to the express usage of the land since it was merely use for storage purposes. Even though if the 3rd Defendant is in breach of the express category usage by storing scrap metal and lorries, the 3rd Defendant submitted that it is for the land administrators and or the relevant local authorities to take appropriate action and it shall not render the transfer of the ownership becomes invalid. [c] The 3rd Defendant submitted that the issue of setting aside the 1st Defendant’s title to the land did not arise as the land had been sold to the 2nd Defendant and then to the 3rd Defendant. The defeasible title of the 1st Defendant as the immediate purchaser had become indefeasible when it was subsequently passed to the 2nd Defendant and then to the 3rd Defendant. The Plaintiff’s right of recovery of the land has been gone beyond recall in such instances. The 3rd Defendant as a bone fide purchaser without notice and for valuable consideration, their title as a registered proprietor is protected by the principle of deferred indefeasibility and the 3rd Defendant could rely on the shield of indefeasibility under Section 340(3) NLC. 10 [d] The 3rd Defendant submitted its counter claim for a declaration order that the Plaintiff does not have any caveatable interest to lodge the Caveat or any caveat thereafter on the land. [17] As against to the 4th Defendant. The sole ground relied on by the Plaintiff to declare the 1st Charge void is because the Plaintiff alleges that the prior transfers of ownership of the Land are void and the 3rd transfer liable to be set aside because of section 340(3) NLC under the breach of express condition of Title. The Plaintiff submitted that the 4th Defendant has failed to come under the proviso of Section 340(3) as a bona fide purchaser for valuable consideration without notice because the absence of any wrongdoing alone is not sufficient for the chargee bank to justify that it has acted in good faith. The Plaintiff contends the 4th Defendant did not act in good faith because it failed to exercise a minimum reasonable of care and vigilance before granting the loan. It is more so when the 4th Defendant is a bank, which has access to more information and the obligation to conduct enquires, over and above that of an average purchaser. [18] The 4th Defendant’s reply [a] The 4th Defendant submitted that it is clearly in the position of a subsequent purchaser. Since there is no allegation that 4th Defendant was not acting in good faith and for valuable consideration, the 4th Defendant’s 1st Charge, being an interest acquired in good faith and for valuable consideration, is protected by the proviso to Section 340(3) NLC and is not void. The provision to Section 340(3) NLC protects any purchaser’ who acquired title or interest in good faith and for valuable consideration 11 and it is well-settled that a chargee like the 4th Defendant comes within the meaning of ‘purchaser’ under the proviso to Section 340(3) NLC. It is also well-settled that a chargee like 4th Defendant is a subsequent purchaser. The charge created by the owner chargor in favour of the chargee is a subsequent transaction that is protected by the proviso to Section 340(3) NLC as long as the chargee acquired his interest in good faith and for valuable consideration. [19] As to the 5th Defendant. The Plaintiff submitted that the 5th Defendant was negligence in carrying out its statutory duties. [20] Particulars of the 5th Defendant’s negligence: [a] Failure to ensure that the forms for the registration of the land complied with land office requirements. [b] Failure to ensure the transfer of the land to the 1st Defendant and the 3rd Defendant was made to a non-Chinese person, which is an express condition of the land Title and against the public policy. [21] The 5th Defendant owes a duty of care to all the registered proprietors of the land, which include to the Plaintiff. By failing to carry out the statutory duties imposed by the NLC, the 5th Defendant has breached its duty of care when the 5th Defendant registered the 1st transfer and the 3rd transfer and charge to the 4th Defendant despite the clear express conditions on the title as the 1st, 3rd and 4th Defendants are clearly not a naturalized person of Chinese descent. 12 [22] The 5th Defendant failed to verify the instruments submitted for registration when the 5th Defendant accepted the MOT signed by four (4) Deceased Trustees and the Court Order which has been forged despite having knowledge of how a genuine court order looks like with the seal of the court. [23] The 5th Defendant failed to carry any investigation or make further enquires when the land search shows that the Property has been transferred 3 times to 2 different corporate entities and 1 individual in the span of 9 months with an increase of 58% in the value of the Property. This is a breach under Section 302 of NLC which confers on the Land Registrar the duty to make enquires and require the production of evidence as he may consider necessary or desirable for the purpose of determining the fitness of the instrument for registration. PW5 failed to make the necessary and relevant inquiries in respect of the transfers. The breach of the 5th Defendant’s duty of care caused loss to the Plaintiff because it resulted in the property being fraudulently transferred out of the Plaintiff’s ownership. Given the breaches of the duties above, the Plaintiff submits the 5th Defendant is not entitled to the protection given under Section 22 NLC. [24] PW5 did not act in good faith because he processed the registration despite it contravening the express condition of the title and accepted the Court order which was forged. He failed to exercise reasonable care or carried out the minimum amount of due diligence to even check properly. The 1st, 2nd, and 3rd Transfers of Property would not have happened if the 5th Defendant was not negligence in carrying out its statutory duties and 13 has acted ultra vires the NLC, particularly, Section 215, Section 297, and Section 298. As the result of the said transaction the Plaintiff suffered damages, losses and to incur an exorbitant amount of costs to commence this suit. [25] The 5th Defendant’s Reply [a] The 5th Defendant submitted that there is no negligence on their part or had contravene any statutory obligation when register the transfer of title for the 1st, 2nd and 3rd Proprietor. The 5th Defendant is not incumbent to investigate further in that the transferor and transferee are true in the Form 14A except to ensure and satisfied that the particulars of the transferor and the land transferred is in accordance and verified with the particulars kept in SPTB record. Furthermore, the Plaintiff did not possess any expertise to detect forgery or an act of fraud of other parties. To add further, the Plaintiff never at any time informed the Hulu Langat Land Office regarding the death of 4 other trustees and due to this absence of information, the ownership of the land cannot be updated and the four (4) deceased trustees’ names still reflected on the instrument of Title. The 5th Defendant has no knowledge thereto when accepting Form 14A at that material time and has acted within the standard and scope in accordance with the law when Form 14A was presented to the 5th Defendant for registration and subsequently has validly and properly registered the said title. The 5th Defendant submitted that since the Plaintiff did not plead mala fide, the 5th Defendant is protected under Section 22 NLC. Subsequently, the disposal of previous instrument of Title when there is a new registration instrument of Title is consistent with the provision of Section 343(7) and item 2, 14th Schedule NLC. 14 [b] As to the restriction imposed that the land can only be transferred to “Orang Cina”, the 5th Defendant submitted that is no specific provision applicable to the Chinese unlike to the Malay under Malay Reserved Land Enactment (Cap 142) as far as land is concerned where the Enactment prohibits the transfer of Malay Reserved land to non-Malay or corporation except as specified in 3rd Schedule of the Enactment. Since there is no specific provision, the NLC applies. In the absence of definition of person in the NLC, the Interpretation Act 1948 dan 1967 is referred to define person to include corporations. Thus, the 5th Defendant submitted that the directors and shareholder of the 3rd Defendant as stated in Form 24 and Form 49 are Chinese. On this score, the 5th Defendant is not prohibited by any laws to register the transfer of the land to 1st and 3rd Defendants, which are Chinese corporations, and therefore such transfer is proper and valid. D. ISSUES [26] The issues to be determined are as follows: [a] Whether the 3rd Defendant title or interest is indefeasible under Section 340 National Land Code 1965 (NLC) [b] Whether the transfer of the said land to the 3rd Defendant is in breached of the two (2) express conditions. [c] The validity of the charge by the 4th Defendant. [d] Whether the 5th Defendant was negligent in the transfer of the said land. 15 [27] The cardinal principle is that the register is everything, until and unless that title or interest is challenged or set aside on any of the grounds set out under section 340(2) NLC. The registered proprietor has an indefeasible title and defeats all prior and subsequent unregistered claims. Section 89 NLC emphasised that the register is all important and conclusive evidence that the title is vested in the person or body for the time being named as the proprietor and that the land is subject to such conditions, restrictions in interest and other provisions as specified in the title. [28] Section 340(3) of the NLC provides for deferred indefeasibility, and not immediate indefeasibility. It is now well settled that subsequent purchaser in good faith is entitled to raise the shield of indefeasibility and a registered interest of a subsequent purchaser can only be liable to be set aside if the interest is acquired not in good faith Thus, a subsequent purchaser in good faith and for valuable consideration enjoys immunity from adverse claim to his title. The Federal Court in Pushpaleela R Selvarajah & Anor v Rajamani Meyappa Chettiar & Other [2019] 3 CLJ 441 at para 127 said that “… as between the competing claims of the original owner and the subsequent purchaser in good faith and for valuable consideration, the latter would be entitled to ownership of the subject land. Indefeasibility is conferred on the current registered proprietor, and not a former registered proprietor. This is a statutory protection accorded to a subsequent acquirer of interest”. 16 [29] Earlier the Federal Court in Low Huat Cheng & Anor v Rozdenil Toni & Anor [2017] 3 CLJ 257 held that “[3] As immediate purchasers of a title tainted by a forged Power of Attorney, the third and fourth defendants acquired a title that was not defeasible and liable to be set aside before the fifth defendant, the subsequent purchaser became the holder of the registered title on 11 August 2010. However, by the time the plaintiff as the true original proprietor commenced the present action on 9 August 2012, the defeasible title of the third and fourth defendants as bona fide immediate purchasers had become indefeasible, as it had been passed to the fifth defendant, a bona fide subsequent purchaser…” [30] In Tan Ying Hong v Tan Sian San & Ors [2010] 2 CLJ 269, the Federal Court held that: “[20] Indefeasibility can be immediate or deferred. The distinction between the two is well explained in para 404 of The National Land Code, A Commentary (Vol 2) by Judith Sihombing which reads: There are two types of indefeasibility; immediate and deferred. The factor which distinguishes the two is the common law effect given to the instrument even after registration; in addition; in a regime of deferred indefeasibility, the role of registered volunteer might be more relevant than under an immediate indefeasibility system. If, after registration has occurred, the system then ignores the substance, form and probity of the instrument used to support the registration, the system is likely that of immediate indefeasibility. Thus, registration has cured any defect in the instrument being 17 registered. If the instrument, despite registration, still has the power to affect the registered interest or estate, the system will probably be that of deferred indefeasibility. [21] In short, immediate indefeasibility means that the immediate registered title or interest of the proprietor or transferee immediately to the vitiating circumstances will be conferred statutory protection despite the existence of any vitiating circumstances. In the case of deferred indefeasibility, the indefeasibility only comes to be attached to the title or interest upon a subsequent transfer. Thus, the difference between immediate and deferred indefeasibility hinges on the effect of registration vis a vis the title or interest.” [31] Coming back to the case before me, it should be noted that the Plaintiff has entered a Judgment in Default of Appearance with damages to be accessed against the 1st Defendant on 15.3.2018. The Plaintiff in his evidence testified that at any material time, the original title was in his possession and denied signing the transfer form. The evidence also shows that the Memorandum of Transfer was executed on 2008 to the 1st Defendant after all the trustees except the Plaintiff have passed away. The transfer was executed by a Solicitor who was not authorised to practice since 2004 and was struck off from the roll of Advocates and Solicitors on 23.7.2005. Moreover, the Court Order dated 9.11.2016 was forged since the OS under the registration No. S-24-3201-2008 in Kuala Lumpur High Court Civil Suit did not exist. At this juncture, the evidences are overwhelming to derive that the transfer was obtained by forgery and by means of insufficient or void instrument under Section 340(2) National 18 Land Code 1965 (NLC) by the 1st Defendant and therefore the title was defeasible. [32] Following from the 1st transfer, the defeasible title continues to be defeasible and will only become indefeasible when the title is acquired by the 2nd Defendant, a subsequent purchaser, in good faith and for valuable consideration. In general proposition is that, Section 340 NLC applies. It means that the 2nd Defendant, enjoys the indefeasibility of title in respect of the same. The only way for the Plaintiff to challenge the indefeasibility if the Plaintiff can show that the 2nd Defendant falls under the exception of indefeasibility under sub-section (2) of s. 340 NLC. [33] It was brought to my attention that the 2nd Defendant died intestate on 10.2.2010 which is 3 months after the property was transferred to 3 rd Defendant. By Order dated 12.5.2017 pursuant to Order 15 Rules of Court 2012, the Court has exempted the presence of the 2nd Defendant’s Representative or Estate in the proceeding. Although the 2nd Defendant is a subsequent purchaser, he must show that the land acquired by him was in good faith and for valuable consideration. However, there is no evidence before me to arrive to a finding that the 2nd Defendant who is the subsequent purchaser obtained the title from the 1st Defendant in good faith and for valuable consideration. Thus, with such absence, this would render the title to remain in status quo as defeasible. However, as to the claim of negligence, I, on the balance of probability, find that the Plaintiff has failed to prove negligence on the part of 2nd Defendant. Therefore, the Plaintiff’s claim against the 2nd Defendant is dismissed with no order as to cost. 19 [34] Subsequently the title was transferred by the 2nd Defendant to the 3rd Defendant who is also a subsequent purchaser. On this score, whether the 3rd Defendant can raise the shield of indefeasibility. The testimony by DW3 through his solicitor had conducted a land search on the register before purchasing the land to ensure that it was free from encumbrances and transferable under 3rd Defendant’s name. The 3rd Defendant did not have any nexus or relationship with the Plaintiff or with the 1st and 2nd Defendant. The 3rd Defendant only knew the 2nd Defendant through a middle man. The 3rd Defendant bought the said land with a purchase price of RM3,615,84.80 as per fair market value guided by the valuation report made by the 4th Defendant. As to date, the 3rd Defendant is still serving the monthly instalment to repay the loan to the 4th Defendant. [35] On the basis of the law and guided by the decisions of the Federal Court in cases of Tan Ying Hong v Tan Sian San & Ors [2010] 2 CLJ 269, Low Huat Cheng & Anor v Rozdenil Toni & Anor [2017] 3 CLJ 257, Pushpaleela R Selvarajah & Anor v Rajamani Meyappa Chettiar & Other [2019] 3 CLJ 441 and Kamarulzaman bin Omar v Yakub bin Husin [2014] 2 MLJ 768 and CIMB Bank Bhd v AmBank (M) Bhd [2017] 5 MLJ 142 and evidences presented before me, I am satisfied that the 3rd Defendant is a bona fide subsequent purchaser without notice with valuable consideration and the 3rd Defendant’s title to the said land becomes indefeasible and remain intact. [36] The next issue is whether the transfer of the said land to the 3rd Defendant is in breach of the two (2) express conditions namely the said land cannot be transferred and registered except to a Chinese person and 20 the land use other than agriculture is prohibited. According to DW5 who is the Land Administrator and Registrar testified that the 3rd Defendant being a Chinese company which is wholly owned by Chinese shareholders and operated by Chinese directors did not breach the condition imposed when the said land was transferred to the 3rd Defendant. Moreover, there was no mention of the word “person” in the English version of the title. Under Section 5 NLC, "proprietor" is defined as any person or body for the time being registered as the proprietor of any alienated land. As to person Section 3 of Interpretation Act 1948 and 1967 (Consolidated and Revised 1989)[Act 388] defines "person" includes a body of persons, corporate or unincorporated. Relying on the above, I find that the 5th Defendant has not breached the express condition when the said land was transferred and registered to 3rd Defendant and in turn the 3rd Defendant has qualified itself as a Chinese or “Orang Cina”. [37] The next express condition in respect of its land use. The 3rd Defendant testified that it did not misuse the land in contravention to the express category usage since it was merely used for storing scrap metal. Further, DW3 testified that even though such storing of scrap metal is in breach of the express category usage of the land, it is for the Land Administrator or the relevant Local Authority to take appropriate action. [38] Taking into account of the above, the crux of the question at this point, to my mind, is whether the transfer to the 3rd Defendant was invalid due to the breach of the two (2) express conditions. Section 301 NLC stipulates that an instrument is fit for registration if the conditions therein are satisfied. Under paragraph (c) Section 301 stipulates that the dealing 21 which it effects is not contrary to any prohibition or limitation imposed by this Act or any other written law for the time being in force, or to any restriction in interest to which the land in question is for the time being subject. In essence, an interest in land is a right that someone has in, against, under or over - or with respect to – a parcel of land. If the person holding the interest in land is the current owner of the land itself, then the “interest” means “simply” ownership of that land. [39] When the State Authority has decided to approve any application for alienation, one of the matters to be considered upon approval is that land alienated will be subject to a category of land use – Section 76(d) NLC. Section 52 NLC stipulates that category of land use that may be imposed by the State Authority can be either for the category of agricultural, building or industry. Endorsement of any one category of land use shall be endorsed by the State Authority on the title as under Section 52(1)(b) NLC. Section 5 then defined "condition" does not include any restriction in interest. [40] Relying the above, I find that the transfer of title to the 3rd Defendant by the 5th Defendant is not in breach any express condition as to vitiates the validity of the said transfer and registration to the 3rd Defendant as the proprietor of the said land. I am of the view that the 5th Defendant was not negligence and/or acted in contrary of the statutory requirement when the transfer and registration of the said land to the 3rd Defendant was executed. All the documents received to validate the transfer were in order and in accordance where DW3 eventually registered the 3rd Defendant as the registered owner of the said land effective 1.11.2009 and also 22 registered the charge to the 4th Defendant on 2 occasions namely on 1.12.2009 and 17.4.2012. Therefore, in answering the 2nd issue, it is my finding that the transfer of the said land was not in breach of the two (2) express conditions in so far as to the 3rd Defendant. [41] As to the 4th Defendant, DW4 testified that the 4th Defendant has taken reasonable steps prior to the execution of the charge including confirming the status of the said land free from encumbrances and have conducted a valuation on the said land. The solicitors attending the 4th Defendant confirmed that all security documentation for the banking facility were in order. The 4th Defendant acted in good faith and has exercised reasonable care and diligent before disbursing the banking facility. The charge created by the 3rd Defendant in favour of the 4th Defendant arises from an indefeasible title and therefore it does not affect the validity of the 1st and 2nd charge transactions executed by the 4th Defendant. [42] On the totality of the evidence, the 3rd and 4th Defendants have shown themselves to be a purchaser in good faith and for valuable consideration without notice of the fraud or forgery to enable them to rely on the proviso of Section 340(3) NLC. As such the title of the 3rd and 4th Defendant to the said Land is indefeasible under the concept of deferred indefeasibility contained in the proviso to Section 340(3) of the NLC. Therefore, the Plaintiff’s claim against the 3rd and 4th Defendants is dismissed with cost. It follows that the caveat entered on the said land is to be lifted as prayed by the 3rd Defendant in its counterclaim. However, no damages and costs are awarded as to the counter claim. 23 [43] Following my finding that the initial transfer of the said land to the 1st Defendant who is the immediate purchaser is void and therefore, at that time, the 1st Defendant title is defeasible. At this position, whether the 5th Defendant was negligence in executing the said transfer to the 1st Defendant as claimed by the Plaintiff. The Plaintiff claimed that the 5th Defendant is negligence to ensure that the forms for registration of the said Land complied with Land Office requirement and to ensure the transfer of the said Land to the 1st and 3rd Defendants in breach of the express conditions. As I alluded earlier, there was no negligence on the part of 5th Defendant as to the transfer of the said Land to the 3rd Defendant. As to the expressed conditions, since the 1st Defendant is also a Chinese, there was also no negligence can be found on the 5th Defendant when DW5 transfer the said land to the 1st Defendant, on the basis elaborated earlier. [44] I will now deal as to whether there was negligence on the part of the 5th Defendant in ensuring that the forms for registration of the said Land complied with Land Office requirement. It is statutorily provided that the transfer any alienated land shall be affected by an instrument in Form 14A as provided under Section 215 (1) NLC. Thus, when a Land Instrument has been presented to the Land Registrar for registration, the NLC imposes the statutory duties that must be satisfied by the Land Registrar prior the registration of the land. [45] In this case the 5th Defendant has discretionary powers under Section 302(1) NLC to make enquiries; and/or require the production of any oral and/or documentary evidence as the Land Registrar considers 24 "necessary or desirable " for the purpose of determining the fitness of any Land Instrument for registration. On this score the 5th Defendant will only register the said Land Instrument according to Section 297(a) NLC only if the Land Instrument is fit for registration. According to Section 301 NLC, a Land Instrument "shall be fit for registration... if, but only if " all the conditions stipulated in Section 301(a) to (e) NLC are satisfied. [46] The 5th Defendant owes a duty to take reasonable care to the Plaintiff when the 1st Defendant presents a Land Instrument to the Land Registrar for registration. In other word, the Plaintiff would have relied on the 5th Defendant to carry out the abovesaid duty and powers with reasonable care. There is causal proximity between the Plaintiff and 5th Defendant because if the 5th Defendant has registered the Plaintiff’s Land Instrument without any reasonable care, it is reasonably foreseeable that the Plaintiff would have suffered loss. [47] The Court of Appeal in Pendaftar Hakmilik Negeri Selangor v. Caesius Development Sdn Bhd & Ors And Another Appeal [2020] 3 CLJ 327 held that: “(3) As a keeper of all land titles, it was reasonable to impose upon the land office a duty of care towards all land owners to ensure that the land owners' interests are well-protected and safeguarded. The land office, such as the seventh defendant, has to ensure that the law and proceedings are followed strictly, failing which it could cause the land owners losing their lands. The Legislature could not be expected to specifically list down all the documents required under 25 s. 378 of the NLC as every application is distinct, hence its requirement differs. There was a need for an office flowchart as an administrative guide to the work process. It did exist in the seventh defendant's office but it had not been adhered to. The officers of the seventh defendant need to apply their minds and attention in processing every such application, which they failed to do”. [48] It was not disputed that the Plaintiff is the sole remaining trustee and at all material time the original title of the said Land is in his custody and possession and even it was produced in Court during trial on 15.12.2020. In fact, on 24.10.20120 the Plaintiff lodged a police report of the fraudulent transfer and a caveat entered on 4.3.2011 on the said Land. However, according to DW5, the original title was present for registration of an instrument of transfer during the application by the 1st Defendant but he was unable to produce the copy in Court since it was destroyed after the new title was issued under the 1st Defendant’s name. By the evidence before me, I am inclined to believe that the original title was at all material time in the Plaintiff’s custody and possession and it is beyond comprehension that the original title was destroyed by DW5. On the same footing, I am unable to believe the DW5’s testimony as to the existence of another original title of the said Land was produced before him and was in the custody or possession of another person. At most, in my opinion, it was not the original but a copy of the said title was produced before the 5th Defendant prior the transfer of the said Land to the 1st Defendant. It is incumbent for the DW5 to make enquiries and/or require the production of original title from the Plaintiff and to do so it does not need to have an expertise to sense that sometime is a miss. The absence of original title would have raised the suspicion of any reasonably competent person who 26 is in that business or that job scope. The 5th Defendant put the blames on the Plaintiff for not updating the details including the date of the demised of the 4 trustees on the original titles but, to my mind, such failure, if any, that the 5th Defendant is not absolving from the duty of care in effecting the transfer. [49] The Court of Appeal in Pendaftar Hakmilik Negeri Selangor (supra) cited with approval at para 41 “[41] Based on the decision of the High Court in Shayo (M) Sdn Bhd v. Nurlieda Sidek & Ors [2013] 1 CLJ 153; [2013] 7 MLJ 755 and the case of Uptown Properties Sdn Bhd v. Pentadbir Tanah Wilayah Persekutuan & Ors [2012] 3 CLJ 271; [2012] 8 MLJ 713 the learned High Court Judge found that the seventh defendant had acted in contravention of the scheme provided under s. 8 of the Fourteenth Schedule when it issued the computerised issue document of title to the third defendant while the original manual issue document of title for the said land was still in the possession of the plaintiff. Instead of requesting the plaintiff to take delivery of the computerised issue document of title, the seventh defendant had issued and delivered it to the third defendant who was not the then existing proprietor of the said land.” [50] I have no hesitation to find as a fact that on a balance of probabilities, the 5th Defendant had breached its duty to take all reasonable care when negligence is shown on his part while performing his duties in the registration of the said Land to the 1st Defendant. 27 [51] Now, whether 5th Defendant can rely on Section 22 NLC and/or Section 5 Government Proceeding Act 1956 [Act 359] [a] Section 22 NLC and s. 5 GPA provide as follows: "22 NLC - Protection of officers No officer appointed under this Part shall be liable to be sued in any civil court for any act or matter done, or ordered to be done or omitted to be done, by him in good faith and in the intended exercise of any power, or performance of any duty, conferred or imposed on him by or under [NLC].” “5 GPA - Liability of the Government in tort. Subject to this Act, the Government shall be liable for any wrongful act done or any neglect or default committed by any public officer in the same manner and to the same extent as that in which a principal, being a private person, is liable for any wrongful act done, or any neglect or default committed by his agent, and for the purposes of this section and without prejudice to the generality thereof, any public officer acting or purporting in good faith to be acting in pursuance of a duty imposed by law shall be deemed to be the agent of and to be acting under the instructions of the Government.” [52] The 5th Defendant has sought to rely on s. 22 NLC and/or s. 5 GPA to exclude the 5th Defendant's liability for negligence to the Plaintiff. Both sections provide a defence for the 5th Defendant's act or omission in "good faith ". The NLC and GPA do not define the expression of "good faith ". I refer to a Federal Court case of Liputan Simfoni Sdn Bhd v. 28 Pembangunan Orkid Desa Sdn Bhd [2019] 4 MLJ 141 which concerns, among others, the meaning of "good faith " in the context of the proviso to s. 340(3) NLC (purchaser of land or interest in land in good faith and for valuable consideration). It is decided by Hasan Lah FCJ in Liputan Simfoni, at [72], as follows- "In Stroud's Judicial Dictionary of Words and Phrases (9th Ed) it states that the words 'in good faith' have a core meaning of honesty. It further states that the term is to be found in many statutory and common law contexts, and because they are necessarily conditioned by their context, it is dangerous to apply judicial attempts at definition in one context to that of another. " [53] Applying the definition of "good faith " as said above, I find that the 5th Defendant is not able to rely on Section 22 NLC and Section 5 GPA in this present case. It is clear that DW5 did not act in "good faith " within the meaning of Sections 22 NLC and 5 GPA because DW5 did not act honestly when he carried out the registration of the said land to the 1st Defendant. I hold that when the DW5 acted in breach of his statutory duty the 5th Defendant cannot be said to be held to be acting in good faith. Consequently, DW5 is disqualified from the protection of Section 22 of the NLC. [See Uptown Properties Sdn Bhd v Pentadbir Tanah Wilayah Persekutuan & Ors [2012] 3 CLJ 271, Lok Kok Beng & Anor v. Loh Chiak Eong & Anor [2015] 7 CLJ 1008 Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v Poh Yang Hong [2016] 9 CLJ 297], De Tebrau Makmur Sdn Bhd & Anor v. Bank Kerjasama Rakyat Malaysia Bhd [2017] MLJU 201] 29 [54] Thus, if the 5th Defendant had not been negligent in effecting the Registration of the title to the 1st Defendant, the Plaintiff would still in the registered proprietor the said land intact under his trusteeship. On the balance of probability, I find that the Plaintiff has proven it claims and entitled for damages due to the act negligence of the 5th Defendant. Therefore, a judgement is entered against the 5th Defendant with damages to be assessed. Interest at rate of 5% per annum on the assessed amount from the date of filing of the Writ and the date of realization and costs. Sgd. Rozana Ali Yusoff Judge Kuala Lumpur High Court Dated: 13th September 2021 30 SOLICITORS FOR THE PLAINTIFF: MESSRS CHEONG WAI MENG & VAN BUERLE Advocates & Solicitors 2nd Floor, 30, Jalan USJ 10/1 Taipan Business Centre 47620 Subang Jaya Selangor Darul Ehsan SOLICITORS FOR THE 3rd DEFENDANT: MESSRS SOH HAYATI & CO. Advocates & Solicitors 109A, Jalan Klang Lama Batu 3 1/4 58000 Kuala Lumpur SOLICITORS FOR THE 4th DEFENDANT: MESSRS LEE HISHAMMUDDIN ALLEN & GLEDHILL Advocates & Solicitors Level 6, Menara 1 Dutamas Jalan Dutamas 1 Solaris Dutamas 50480 Kuala Lumpur SOLICITORS FOR THE 5th DEFENDANT: PEJABAT PENASIHAT UNDANG-UNDANG NEGERI SELANGOR Pejabat Setiausaha Kerajaan Negeri Selangor Bangunan Sultan Salahudin Abdul Aziz Shah 40503 Shah Alam Selangor Darul Ehsan 31 LIST OF CASES REFERRED: 1. Pushpaleela R Selvarajah & Anor v Rajamani Meyappa Chettiar & Other [2019] 3 CLJ 441 2. Low Huat Cheng & Anor v Rozdenil Toni & Anor [2017] 3 CLJ 257 3. Tan Ying Hong v Tan Sian San & Ors [2010] 2 CLJ 269 4. Kamarulzaman bin Omar v Yakub bin Husin [2014] 2 MLJ 768 5. CIMB Bank Bhd v AmBank (M) Bhd [2017] 5 MLJ 142 6. Pendaftar Hakmilik Negeri Selangor v. Caesius Development Sdn Bhd & Ors And Another Appeal [2020] 3 CLJ 327 7. Liputan Simfoni Sdn Bhd v. Pembangunan Orkid Desa Sdn Bhd [2019] 4 MLJ 141 8. Uptown Properties Sdn Bhd v Pentadbir Tanah Wilayah Persekutuan & Ors [2012] 3 CLJ 271 9. Lok Kok Beng & Anor v. Loh Chiak Eong & Anor [2015] 7 CLJ 1008 10. Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v Poh Yang Hong [2016] 9 CLJ 297] 11. De Tebrau Makmur Sdn Bhd & Anor v. Bank Kerjasama Rakyat Malaysia Bhd [2017] MLJU 201 LEGISLATIONS REFERRED: 1. National Land Code 2. Interpretation Acts 1948 and 1967 (Consolidated and Revised 1989) 3. Malay Reserved Land Enactment (Cap 142) 4. Government Proceeding Act 1956 [Act 359] 32