This document discusses various ways in which a registered title under the National Land Code of Malaysia can be defeated, including: 1. Fraud/fraudulent misrepresentation, registration obtained by forgery, or registration obtained by an insufficient or void instrument. 2. To prove fraud, one must show actual fraud, that the registered proprietor was party to the fraud, and intent to deceive. 3. Forgery relates to the instrument of transfer itself and focuses on whether the instrument was valid, rather than the actions of the parties. If the instrument was forged or otherwise defective, the registered title may be defeated.

1. AreejTorla areej@iium.edu.my

3.  Section 340(2)
1. Fraud/fraudulent misrepresentation
2. Registration obtained by forgery
3. Registration obtained by insufficient or void
instrument
4. Unlawfully acquired title or interest

4.  Must prove 3 elements of fraud:
1. “Actual fraud”
2. The RP whose title is to be defeated must be
party or privy to the fraud.
3. Intention to cheat.

5.  “dishonesty – a willful and conscious
disregard and violation of the rights of other
persons”
– Waimiha Sawmilling Co. Ltd [1923] NZLR 1137

6.  FederalCourt: there must be actual fraud to
defeat a person of his title or interest.
 Cited Assetts v Mere Roihi:
 “fraud in actions seeking to affect a
registered title means actual fraud, a
dishonesty of some sort, not what is called
constructive or equitable fraud”

7.  Developer sold houses to purchasers.
Charged the land to appl. Defaulted in
payment.
 Appl applied for an order for sale of the land.
 Purchasers opposed. Argued that appl had
failed to make inquiries before executing the
charge.
 If the appl had make proper inquiries, they
would have found out that the houses on the
land had been sold to the purchasers.

8.  High Court: Appl had constructive notice of
the purchasers interest in the land.
 Its demand for sale of the land constituted
fraud on the purchasers.
 However, Fed Court: there must be actual
fraudto defeat title or interest.

9.  Requirement laid down in section 340(2)(a).
 In Assets v Mere Roihi, Privy Council:
 “The fraud must be brought home to the
person whose registered title is impeached or
to his agents”.

10.  Tara, RP, lived on the land with husband
Devan and 5 children
 Devan’s brother, Dr. Das, obtained a loan
from Hong Kong and Shanghai bank in
Singapore to obtain a loan for his computer
medical centre.
 Dr Das consulted Devan who persuadedTara
to put up the land as security for the loan.

11.  Jagindar, a lawyer, was a guarantor for the
loan. He and his friends, Suppiah and Arul,
went toTara’s house and asked her to signed
a few documents.
 They misrepresented toTara that the security
was to be effected by a transfer.

12.  Without knowing it,Tara had transferred her
land to Suppiah and 18 days later he
transferred it to Arul.
 Later, the land was transferred to a developer
company belonging to Datuk Jagindar.
 The land was subdivided and sold to various
purchasers.

13.  Held:
 There was fraud to defeat Suppiah’s title,
Arul’s title and the developer company’s title.
 However, the purchasers titles could not be
defeated since they were bona fide
purchasers for value without notice of the
fraud.

14.  Goh HooiYin v Lim
 “it is not enough to show that the transfer
had the effect of depriving the plaintiff of a
known existing right.
It must be demonstrated that the transfer was
executed with the intention of cheating the
plaintiff of such right…”

15.  --beyond reasonable doubt
 (Saminathan v Pappa)
 Note: onus to prove forgery is only on a
balance of probability

16.  Other cases on fraud:
 OweThen Kooi 1990 1 MLJ 234
 Nallammal v Karuppanan 1993 4 CLJ 454

17.  Forgery is the creation of a false written
document or alteration of a genuine one,
with the intent to defraud.
 Although it is a species of fraud, under the
NLC, forgery is not the same as fraud.
 The requirements are different.
 No need to prove that the RP is party or privy
to the forgery.

18.  Forgery relates to the instrument of transfer.
 Forgery invalidates the instrument of dealing.
 Focus is on the instrument, and not act of the
parties.
 The instrument becomes a defective
instrument of dealing.

19.  Court of Appeal:
 “A registration obtained by forgery is of no
effect…it is clear that there can be no
registration without an instrument. Hence, one
of the ways in which to defeat a registration is by
impugning the very instrument of transfer by
means of which the registered proprietor
obtained his title. If the instrument was forged
or by other reason was insufficient or void, the
title of the registered proprietor may be set
aside.”

20.  Mrs. Messer (the RP) executed a POA to her
husband, Mr. Messer, with power to transfer
the land.
 Both of them left the country and left the title
in the custody of a solicitor, Mr. Creswell.
 Creswell forged Mr. Messer’s signature and
transferred the land to a Mr. Cameron (a
fictitious person).

21.  Creswell posed as an agent of Messer and
presented the transfer for registration.
 The transfer was registered.
 He then posed as an agent for ‘Mr. Cameron’,
who was now the RP, and created a mortgage
over the land.
 When Mrs. Messer returned, Creswell
absconded.

22.  Mrs. Messer brought an action for an order to
cancel the certificate of title in the name of
Mr. Cameron and for the issuance of a new
title free from the mortgage.
Messer
“Cameron”
(fictitious
person)
Mortgageetransfer mortgage
forgery

23.  Issue:
 Whether Mrs. Messer could defeat the
mortgage on the grounds of forgery.
 Held:
 The mortgage was invalid due to forgery

24. Mr.
Frazer
Radonskis Walkermortgage
transfer
forgery

25.  The Court held in favour of immediate
indefeasibility
 The title of the Radonskis was an indefeasible
title from the time of registration.
 Even though the mortgage was a void
document at common law, it did not affect
the indefeasibility of their title.

26.  The Court’s decision in Frazer vWalker did not
overrule Gibbs v Messer but distinguished it
on the basis that Gibbs v Messer involved a
fictitious person.

27.  Balance of probabilities
 -- Federal Court Adorna Properties 2001
 (Note: Beyond reasonable doubt
--High Court in Adorna Properties 1995)

28.  Other circumstances where registration is
obtained by a defective instrument of
dealing:
 It was signed by a minor
 It was signed under an invalid POA
 Insufficiently stamped
 Not attested
 Effect:The instrument becomes
void/voidable

29.  If immediate indefeasibility applies,
registration cures the defect.
 The new RP obtains an indefeasible title even
though a defective instrument was used.
 If deferred indefeasibility applies, the title of
the RP is open to attack (defeasible) until it is
transferred to a subsequent transferee who is
a bona fide purchaser for value without
notice of the defect.

30.  The Registrar had rejected the instrument of
transfer as it was signed by the transferor
under an invalid power of attorney.
 The transferee (appellant) appealed claiming
to be entitled to indefeasibility.
 The appeal was dismissed.
 There was nothing registered in favour of the
appellant.

31.  This case shows that Malaysia applies
deferred indefeasibility.
 Even if the transfer had been registered, the
court would still hold that the appellant’s title
is defeasible due to the invalid POA.

32.  Two instruments of transfer executed by a
minor.
 Held: the transfers are void

33.  Court:
 An instrument of dealing signed pursuant to
an invalid or insufficient power of attorney is
reagrded as an ‘insufficient or void
instrument’.

34.  Charge registered in breach of a restriction in
interest.
 Court: title of the chargee was defeasible.