INDEFEASIBILITY

What is indefeasibility?
- Registration is an important feature of Torrens system – once a title/interest is
registered, the proprietor shall be immune from all adverse attack/ prior
unregistered claim (Dr. Ti Teow Siew)
- Give a conclusiveness to an owner of a land – cannot be challenged/ defeated
(Teh Bee v K. Maruthamuthu)
- 2 types of indefeasibility – immediate and deferred
- Immediate
 Registration immediately confers immunity to the title of the owner
except in cases of fraud
 Notwithstanding that a void instrument has been used to obtain
registration – registration cure the defect
 Frazer v Walker – the wife forge the husband signature and charge the
land to a R – R, in default of the wife to pay, sold the land to Walker –
held, R`s interest had been registered – immediate indefeasibility had
been conferred to R
- Deferred
 Registration does not immediately confers indefeasibility – does not
cure the defect of void instrument – immediate purchase remains
potentially open to attack
 Indefeasibility will only be confer if the land was subsequently transfer
to a subsequent bona fide purchaser with value
- Section 89 – RDT is a conclusive evidence of a land ownership
- Section 340
- A title which had been registered remains indefeasible unless it falls under the
vitiating factors of s340(2) and (4) – Khoo Yong Seng

Factors Which Could Render theTitle Defeasible

Fraud
- Fraud in Torrens – dishonesty of some sort
- Fraudulent – designed object to cheat a guy of a known existing right i.e.
deliberate and dishonest trick causing an interest not to be registered
(Waimiha Sawmiling)
- Fraud – must be an actual fraud, not constructive/equitable fraud
- The fact that A might have know of the fraud/existing interest if he had
exercised due diligence does not prove fraud on his part (Assets Co. v Mere
Rohiri, Tai Lee)
- The knowledge alone of an adverse unregistered interest does not make the
purchase and registration of the land defeasible (Pekan Nenas)
 - The alleged person must have been a party/ privy to the fraud too (Tai Lee
Finance v Official Assignee)
- Fraud must be committed either before or after registration (Tai Lee)
- Fraud may be committed against a holder of an unregistered interest (Datuk
Jaginder Singh, Loke Yew v Port Swettenham)
- Degree of proof – lower than reasonable doubt and higher than balance of
probabilities (Lee Chong Fah) – but in Boonsom Boonyanit – balance of
probabilities
- Evidence of fraud – haste of transactions, words used, relationship btw the
party (Datuk Jaginder Singh v Tara Rajaratnam)
- Severely unconscionable conduct can also amount to fraud under s340(2)(a)

Misrepresentation
- Misrepresentation must be a fraudulent misrepresentation i.e. statements
meant to mislead the party and cheat him of his title/interest (Loke Yew)

- Although fraud n misrepresentation must be read disjunctively in s340(2)(a),

courts have accepted the wider view that fraud includes fraudulent
misrepresentation (Datuk Jaginder Singh)

- If other type of misrepresentation is allowed i.e innocent and negligent

misrepresentation, a title would be easily be open to attack and defeated –
against the idea of indefeasibility (Lee Chong Fah)

Forgery
Boonsom Boonyanit v Adorna Properties (COA)

- A`s signature was forged and his title was eventually transferred to X – X
subsequently transfer the title to R – R said that he is a bona fide purchaser
with value without notice
- Held, the word ‘any purchaser’ in the proviso of s340(3) refers to subsequent
and not immediate purchaser
- Cardinal rule of interpretation – proviso to a particular section only embraces
the field which is covered by the section
- Wording of s340 – M`sia applies deferred indefeasiblity

- R is a immediate purchaser from X – not entitled to the protection of the

proviso

Pekan Nenas Industries

- Good faith – absence of notice/constructive knowledge of the fraud/forgery

- The knowledge alone of an adverse unregistered interest does not make the
purchase and registration of the land defeasible
 - Payment of substantial amount of purchase price – sufficient valuable
consideration

OCBC Bank v Pendaftar Hakmilik Negeri Johor

- S340 – M`sia applies deferred and not immediate indefeasibility

- How does this indefeasibility applies?
a) First, prove the vitiating factors under s340(2)
b) If proven, the title of the immediate purchaser will be liable to be set aside

c) But, if the immediate purchase had transferred the title to a subsequent

purchaser, the subsequent will gain indefeasibility provided that he is a
bona fide purchaser with value

*A party did not necessary to be privy to the forgery

Insufficient/Void Instruments
- S205 – s213, s301 – failure to follow this section – instrument will be void
- Insufficient./void instruments include; (UMBC v Syarikat Perumahan Luas)
a) Obtained by forgery
b) Contrary to the restriction in interest

c) Contrary to prohibitions/statutory provisions of NLC/other law

- Example of insufficient/void inst;

a) Land dealings entered by minor – no capacity under s10 CA1950 (Tan Hee
Juan v The Boon Keat)
b) Invalid/ultra vires exercise of power of attorney in effecting dealings of land
which were not suppose to be effected (Puran Singh)
c) Dealings of land which were in contradiction with other law i.e.
Moneylender`s Ordinance (Appoo s/o Krishnan)

d) Dealings of land in contradiction with NLC itself (M&J Frozen Food)

- However in Sarawak, a title will not be defeated by reason of illegality of doc –

unlike NLC in Peninsular, S`wak Land Code does not have provision like
s340(2)(b) (Awang Osen b Awang Mat)

Unlawful Acquisition via Ultra Vires Acts

Woon Kim Poh

- Registration of title despite a private caveat had already been entered

- Ultra vires act of the Registrar – failed to observe s322 of NLC – registration is
null and void – title is defeated
UMBC v Sykt Perumahan Luas

- Creation of charge in contradiction with the restriction in interest – Registrar

had acted ultra vires in registering the charge

M&J Frozen Food

- Improper exercise of the power of sale of charged land in contrary to s259 –

unlawful acquisition of title – registration not valid

Operation of Law
Ong Chat Pang v Valliappa Chettiar

- The term ‘operation of law’ is a generic term deliberately used by the

legislature to grant relief in cases where contractual or conscientious
obligations are undertaken by or imposed on the registered proprietor either at
law or in equity

- Knowledge of an existing sale and purchase agmt – conscientious obligation

arise out of equity will be owed to that party

Equity
- Registration does not deprive equity of the jurisdiction to enforce in personam
claims on grounds of conscience (Oh Hiam v Tham Kong)

- A person who fails to bring his claim under s340(2) can use s206(3) as an in
personam claim – discretion will then lies on the court to order/refuse the
specific performance (Luggage Distributors v Tan Hor Teng)

- NLC does not exclude equity but modifies it to suit its operation (Lian Keow
Sdn. Bhd)

- For example, the use of equitable estoppels (Cheng Hang Guan v Perumahan
Farlim)

Power of Correction (s380)

- Only limited to the mistakes make by the Registrar and not errors made by the
parties (Mohammad b Buyong)

- Correction of errors as ordered by the court is not a violation of indefeasibility

– until an error is corrected, the title remains defeasible (Hassan b Seman v
Jusoh)