Weaknesses in The Registration of Land Dealings System in Malaysia - Ainul

Weaknesses in the Registration of Land Dealings System in Malaysia: Suggestions
for Improvements for Enhancing the System

By
Ainul Jaria Bt Maidin
1. Introduction
Land is a source of wealth and has continued to be a cause of social, ethnic, cultural and
religious conflict from time immemorial. Thus, as society evolved, laws were developed
to promote a proper land administration system in order to meet the changing needs of
the world societies. A good land registration system is pertinent to ensure protection of
property rights. As society progressed and became more complex, the need for certainty
increased. The Industrial Revolution experienced by many nations required something
beyond the practice of walking the boundaries of a field and throwing dirt over one’s
shoulder especially when it involved change of ownership of plantations, factories, or
buildings. Governments recognised the need to eliminate uncertainty and perjury by
requiring production of land title documents to prove existence of title.
According to Dale & McLaughlin, land registration system is a system used in land
administration to recognise formalised property rights and for regulating the character
and transfer of these rights.1 The importance of appropriate land registration systems is
aptly put in a research paper from Maine University, which makes a number of important
statements including; “Improvements to land-registration systems and the establishment
of land-information systems are basic reforms which are a prerequisite for efficient
human settlements development”.2 An efficient and reliable land registration system is
important for the socio-economic development of the nation.
Land-title registration is a critical starting point in the continuum of modernisation, and it

has ramifications for many other aspects of land management. Registration of title to land
identifies ownership of the parcel or plot of land, as well as other forms of tenure and
interests on it, simplifies, cheapens and expedites land transactions and conveyancing and
improves credit flow to land development, as well as facilitates more effective planning
for orderly human settlement.3
Innovations in improving the land registration and recording system led to

computerisation of titles. Of course not all innovations can work well without teething
problems. However, the pressing issue at present that requires immediate attention from

Associate Professor, Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia, Senior
Consultant of Land Tenure & Environmental Management Unit (LATEM) Non Practising Advocate &
Solicitor Malaya.
1
Dale, P D and McLaughlin, J D, Land Administration (Oxford: Oxford University Press, 1999).
2
Department of Spatial Information Science and Engineering, University of Maine US Dept of Agriculture
and US Dept of Commerce “Land Title Recording in the United States: A Statistical Summary”, State and
Local Government Special Studies No 67 (1974). See also Stein, R T J and Stone, M A, (1991), Torrens
Title, Butterworths, Sydney, p 15.
3
Ibid, p 1.
1
all stakeholders is the increase in fraudulent land dealings which though small in number
has an adverse impact and could erode the confidence of investors and cripple the
economy if left unchecked.
This article seeks to identify the strengths and weaknesses within the Malaysian land
dealings registration system in order to make recommendations to improve the system.
The first part of the paper provides background information on the rationale for
introducing the Torrens system into Malaysia, and important concepts and features of the
Torrens system to provide background information on the strength of the system. The
procedures involved in registration of all title and interests arising from land dealings will
be set out to provide an insight into the Malaysian property conveyancing practice where
fraud could possibly occur. The functions of the Registrar in registering dealings will be
examined in order to identify the constraints imposed on the Registry in the land dealings
registration process. Finally, the paper seeks to highlight some inherent defects within the
land dealings registration system that provides room for fraudsters to commit the act in
order to make suggest recommendations for improving the Malaysian land registration
system.
2. Torrens Land Administration system
The Malaysian land administration system is based on the Torrens system. Torrens title is
a South Australian invention that revolutionised the method of recording and registering
land ownership, and was introduced by Sir Robert Torrens. The historical origins of the
Torrens title are a matter of considerable controversy. Torrens himself acknowledged
adapting his proposals from earlier systems of transfer and registration, particularly the
system of registration of merchant ships in the United Kingdom. Stanley Robinson,4 has
argued that Ulrich Hübbe, a German lawyer living in South Australia in the 1850s, made
the most important single contribution by adapting principles borrowed from the
Hanseatic registration system in Hamburg.5
Nevertheless, it cannot be denied that Torrens’ political activities were substantially

responsible for securing acceptance of the new system in South Australia and eventually,
in other Australian colonies and New Zealand.6 Torrens decided that there must be a
4
Robinson, Stanley, Transfer of Land in Victoria (Sydney: Law Book Co, 1979), see also Hogg, James E,
(1905) The Australian Torrens system : being a treatise on the system of land transfer and registration of
title now in operation in the six states of the Commonwealth of Australia, the colony of New Zealand, and
Fiji and British New Guinea (London : W. Clowes) .
5
Ibid.
6
Refer Esposito, Antonio, “A Comparison of the Australian (‘Torrens’) System of Land Registration of
1858 and the Law of Hamburg in the 1850s”, [2003] Australian Journal of Legal History 13, where he
argues that the Torrens system owes it roots to the 600 year old system that operated in the Hanseatic towns
of Germany, especially in Hamburg, and points to Dr Ulrich Hübbe, a German lawyer from Hamburg who
emigrated to South Australia in 1842 and died there in 1892, and who was consulted by Torrens in the
preparation of the original draft of 1858. Refer Fox, “The story behind the Torrens System”, (1950) 23
Australian Law Journal 489; Stein, Robert and Stone, Margaret, (1991) Torrens Title, Butterworths,
Sydney, p 17; Whalan, D J, “The origins of the Torrens System and its introduction in New Zealand” in
Hinde, G W (ed), (1991), The New Zealand Torrens System Centennial Essays Wellington, New Zealand
2
better and easier way of registering not only the ownership of land, and interests in land,
but also recording any transactions that were undertaken by those with an interest in that
land. He is credited with a system of land title registration that still bears his name, the
Torrens system of Title, effected by the Real Property Act (RPA) to give effect to a land
title register system which, in some key areas, was substantially different from the deeds
system. The Torrens Title System was first introduced in South Australia in 1858 and
subsequently used in other Australian states and some parts around the world.
Torrens reasoned that any substitute system that was to be introduced in place of the
deeds recording system must be simple, secure, certain, inexpensive, able to be applied
without necessarily engaging a solicitor and allow every transaction to be effected
quickly. He considered that three important and fundamental principles were necessary
for this system. In keeping with his aims of simplicity and effectiveness he concluded
that the three most important principles were that:
 All properties must have a document called a certificate of title, to evidence
ownership
 All interests in property must be registered and endorsed on the certificate of
title (both register and issue document of title)
 The certificate of title had to be guaranteed by the government with the
establishment of an assurance fund.
The main objective of the Torrens title system is to make the Register of documents of
title conclusive evidence of land ownership. Once a person’s title or interest is registered
in accordance with the prescribed registration procedures, it will be recorded in the
Register document of title, and the person in whose favour the dealing is registered will
become the indefeasible proprietor or interest holder to the exclusion of all others.
Under the system, a certificate of title is issued for every piece of land. The certificate
contains particulars including details of proprietors, interests affecting the land and any
encumbrances including charges (mortgages), leases and other interests in the land.
Torrens Title is useful because it prevents unnecessary litigation of disputes, avoids the
consequences of lost certificates and reduces the costs of land sale and transfer. The
Torrens system advocates the concept of indefeasibility, which simply means that a
person who is registered and recorded as the owner of a parcel of land cannot have their
title challenged or overturned. However, their title can be questioned or impeached if it
can be proven to fall within the exceptions to this general rule, for instance if the
registration was obtained by way of fraud, forgery, insufficient instruments, or incapacity
of parties to deal with the land.7
The Register is everything and all dealings must be registered in order to gain recognition
and protection and be conferred the status of indefeasibility. The reason for the need to
p 1; Mary Geyer, Robert Richard Torrens and the Real Property Act: The Creation of a Myth (BA (Hons))
Thesis, University of Adelaide, 1991), p 1; Howell, P A, “Constitutional and Political Development, 1857–
1890” in Jaensch, Dean (ed), (1986), The Flinders History of South Australia: Volume 2, Political History
(Wakefield, Adelaide) p 158.
7
National Land Code 1965, s 340(2).
3
change the existing land tenure system is basically due to the deficiencies in the deeds
system especially where equitable interests could prevail under the system of deeds when
a purchaser took with actual notice of that interest; the complex and uncertain deeds
system which was time consuming and costly.
The Register is given importance and it helps create a reliable, simple, cheap, speedy
system suited to the needs of the community.8 In Teh Bee v Maruthamuthu,9 it was
affirmed by the Malaysian court that, under the Torrens system, the register is everything
and it would be wrong to allow an investigation as to the right of the person to appear
upon the register when he holds the certificate of title.
In Fels v Knowles,10 the Court of Appeal of New Zealand opined that “[t]he cardinal
principle of the [Torrens] statute is that the register is everything”. That decision from
New Zealand was approved and followed by the Privy Council in Damodaran v Choe
Kuan Him.11 The registration provisions are provided in Part Eighteen of the National
Land Code 1965. The importance of registration was stressed by Lord Wilberforce in
Frazer v Walker,12 that “it is the registration and not its antecedents which vests and
divests title”.
The Torrens system is based on the land as the basis of record and not based on an
individual proprietor. The Chief Justice of the High Court in Australia, Sir Garfield
Banwick, describes the characteristic of the Torrens system in Breckwen v Wall,13 as a
form, not a system of title by registration of title but a system of title by registration. That
which the certificate of title describes is not the title which the registered proprietor
formerly had, on which but for registration would had.
The basic difference between the deeds registration and Torrens system is that the former
involves registration of instruments while the latter involves registration of title.
Moreover, though a register of who owned what land was maintained, it was unreliable
and could be challenged in the courts at any time. The limits of the deeds registration
system meant that transfers of land were slow, expensive, and often unable to create
certainty of title. In assessing the benefits and means of converting titles issued under old
system, to the Torrens title, it is observed that title registration is an efficient land
administration system that facilitates conveyancing. It is a system of record, not of land
tenure, and is readily adaptable to any form of land tenure. Plural tenure systems may be
handled at one time as long as the tenure systems are accepted by society.14
8
Khublall, “Title to Land – Defects, Protection Against Loss and Marketability”, [1991] 3 MLJ cv at p cxi.
9
Teh Bee v Maruthamuthu [1977] 2 MLJ 7, FC; in this case, it was established that the fact that the register
document of title was in the name of the appellant was conclusive evidence that the title to the land
was vested in the appellant.
10
Fels v Knowles (1906) 26 NZLR 604 at 620.
11
Damodaran v Choe Kuan Him [1980] AC 497; [1979] 2 MLJ 267, PC.
12
Frazer v Walker [1967] 1 AC 569 at 580B, PC.
13
Breckwen v Wall (1972) 46 ALJR 68.
14
This is true in the case where the customary land tenure is recognised under the National Land Code
1965, s 4 and it co-exists with Torrens system. Similarly in Australia too, conversion to Torrens system did
not affect the co-existence of the existing land administration system: see Holstein, L C, and Williamson,
4
The Torrens system works on three cardinal principles:
 Mirror Principle
The register (Certificate of Title) reflects (mirrors) accurately and completely the current
facts about a person’s title. This means if a person is to sell an estate, the new title has to
be identical to the old one in terms of description of lands, except for the owner’s name.
Under the Torrens system, the register reflects all the facts material to the proprietor’s
title in the land. These material facts consists of the following:
 name of the proprietor of the land;
 the particulars of the alienated land;
 the area and location of the land;
 the survey plan and boundary limits of the land.
The phrase “Mirror Principle” is very apt since all the necessary information related to
the land is reflected on both the Register Document of Title and the Issue or Extract of
Document of Title. This will assist all interested purchasers, lessees, or chargees to obtain
all relevant particulars of the land as well as any encumbrances created over the land in
the event they decide to obtain the proprietorship or any interest in the land.
 Curtain principle
One does not need to go behind the Certificate of Title as it contains all the information
about the title. This means that ownership need not be proved by long complicated
documents that are kept by the owner, like in the private conveyancing system. All the
necessary information regarding ownership is on the Register Document of Title. This
principle emphasises that the intending purchaser or interest acquirer need not look
“behind” or beyond the Register. It is sufficient if the purchaser examines the Register
Document of Title in order to obtain particulars related to the land.
 Assurance Principle
Torrens system provides for compensation for losses incurred if there are errors made by
the Registrar of Titles. However, the system that has been developed for the Malaysian
land law has only adopted the two principles ie, the mirror and curtain principles.
Accordingly, Lord Diplock advised in the Privy Council case of Registrar of Titles,
Johore v Temenggong Securities Ltd,15 that the National Land Code 1965 applies a
modified form of Torrens system of registration of titles relating to alienated land. The
most important feature of the Torrens system is conferment of indefeasibility of title and
interest upon registration. The following paragraphs will discuss the concept of
indefeasibility and its importance in maintaining the sancity of the land registration
system of the Torrens system as envisaged by the founder.
3. Conferment of Indefeasibility of Title and Interests under Torrens System
I P, “Conversion of Deeds Registration Titles to Torrens Title – A Review of the Situation in NSW”, Aust J
Geod Photo Surv, No 40, June 1984, p 1–28.
15
Registrar of Titles, Johore v Temenggong Securities Ltd [1977] AC 302 at 306F; [1976] 2 MLJ 44 at 45,
PC.
5
The most noticeable feature of the Torrens system is the indefeasibility of title. A
warranty given by the state of an indefeasible title in favour of a person registered as an
owner of any title on interest in land. The Register creates unimpeachable, unexaminable
and conclusive title.16 Nevertheless, indefeasibility is not absolute as under certain
circumstances a registered title or interest may be set aside or defeated by a better claim.
However, supremacy of such title is still subject to the statutory exception as spelt out in
section 340(2) of the National Land Code 1965.17 In Ong Chat Pang & Anor v Valiappa
Chettiar,18 the court observed that in the absence of any of the vitiating factors laid down
in section 340 of the National Land Code 1965, a title once registered is indefeasible. In
PJTV Denson (M) Sdn Bhd & Ors v Roxy (M) Sdn Bhd19 Raja Azlan Shah CJ held that:
The concept of indefeasibility of title is so deeply embedded in our land

law that it seems almost trite to restate it. Therefore, the registration of the
transfer of the said land under the NLC defeats all prior unregistered
interests in that land unless the party who acquires the registered title has
been guilty of fraud.20
Indefeasiblity is not limited to a registered title but extends to registered interests, 21 for
example, the court upheld the interest of a registered chargee on the land over that of a
caveator.
Similar to most legal terminologies the term “indefeasibility” is apparently loaded with a
plethora of meanings that sometimes makes it difficult to apprehend. For some writers
“indefeasibility” corresponds to “immutability” while to others it is that which is
“unchangeable”. According to Black’s Law Dictionary the term is used to mean:
That which cannot be defeated, revoked, or made void22. The term is

usually applied to an estate or right which cannot be defeated.
The question to be answered is why is it necessary to subscribe to the concept of

indefeasibility or rather, why it is necessary to have rights over land precisely defined.
The following could be the best possible response:
 Land is an immovable property, as such unlike other forms of property, a
subject matter that is capable of conferring different types of interests to be held
by different persons at the same time. All or some of these interests might or
might not appear on the register.
16
National Land Code 1965, s 340.
17
For exception in equity, see the discussion of Salleh Buang, “Equity and the NLC, Penetrating the Dark
Cloud”, [1986] 1 MLJ cxxv.
18
Ong Chat Pang & Anor v Valiappa Chettiar [1971] 1 MLJ 224, FC.
19
PJTV Denson (M) Sdn Bhd & Ors v Roxy (M) Sdn Bhd [1980] 2 MLJ 136, FC.
20
Ibid, at 138.
21
In KSM Insuran Bhd v Amanah Chase Merchant Bank Bhd [1992] 1 MLJ 649, SC, for example, the court
upheld the interest of a registered chargee on the land over that of a caveator.
22
Emphasis added.
6
 Land is a great source of income to the government, either by levying taxes on it
or by rent collection,23 and to the individual citizens or commercial bodies who
would use it to generate wealth either through sale, leasing or as a security for
loans.
 In order to be able to support who has what in a piece of land. This helps to
reduce conflict (time and expenses) over property by the unsatisfied contesting
parties. It may also further minimise the overutilisation of government or public
resources especially court time in resolving any disputes arising therein.
It is because of these differences, and in certain occasions, multiple interests held by

different persons in the same piece of land, that the law requires that such rights and the
land itself should be precisely defined. The purchaser of a piece of land must be careful
enough when he tries to spend money to purchase a piece of land or else he may end up
with something less than his money’s worth. This, of course will give rise to lots of
conflicts and unnecessary litigation.
In order for the state authority to minimise the occurrence of such problems, it has to
make the title acquired more precise by providing a registration system, although there is
more to the system of title registration than merely determining who owns what and in
what proportion and where. The existence of the registration system does not in itself
mean that problems or disputes over land would totally be eradicated. It is only a
convenient method devised by some jurisdictions to properly carry out land
administration. In the modern market economy the requirement becomes even more
conducive.
The National Land Code 1965 adopts the Torrens system of acquisition of title and
interest by registration. However, one of the most important features of any Torrens
system of title by registration is the presumed warranty or assurance given by the state or
the government that upon registration, a person so registered as a proprietor will acquire a
good title, that is, mere registration of a person’s title means that his right is stronger than
any other person whose name does not appear on the register. Thus, the person whose
title or interest appears first on the register will be protected and hence his interest will be
enforced by law. In Mohammad bin Buyong v Pemungut Hasil Tanah Gombak & Ors,24
the court held that section 340 of the National Land Code refers to the doctrine of
indefeasibility. It “protects … the title or interest of any person for the time being
registered as proprietor of any land [which] shall be indefeasible”25. The whole practice is
a sheer question of policy on the part of the government authority to encourage members
of the community to comply with the legislative requirement to make it more effective.
“The protection which the statute gives to persons transacting on the faith of the Register
is, by its terms, limited to those who actually deal with or derive right from a proprietor
whose name is upon the register”.26 Thus, and “as registration is a prerequisite of
23
See the National Land Code 1965, ss 76(b), (c), 62(1), 65(1), 70, 75(A), (D).
24
Mohammad bin Buyong v Pemungut Hasil Tanah Gombak & Ors [1982] 2 MLJ 53.
25
Ibid, at 54, per Hashim Yeop A Sani J (as he then was).
26
Per Lord Watson in Gibbs v Messer [1891] AC 248, PC, at 254–255.
7
indefeasibility” a person claiming indefeasibility must first be registered as proprietor27.
In Malaysia, similar to other Torrens jurisdictions, the concept of indefeasibility is central
to the whole registration system.28 This means that mere registration of the title or an
interest in land is enough to confer indefeasibility of title.
However, a differentiation must be made between the nature of “indefeasibility” and the
conditions or restrictions imposed upon the proprietor by the state authority. A condition
or a restriction imposed by the state authority on a title or an interest thereof does not
impeach or necessarily diminish or form an attack on the title or an interest thus
registered.29 Thus, in order that such a registration should be of any use, that is to confer
indefeasibility of title, it must be effected through certain formalities, i.e. a proper form or
an instrument of a dealing as referred to under the National Land Code 1965. That means
a registration carried out without a proper form or instrument becomes unenforceable by
the law. It is, therefore, the formal registration of the instrument of dealing in its statutory
requirement, under the “strict Torrens principles”, and not any transaction that takes place
between the parties regarding land prior to such registration, that passes the title or
creates an interest in the said land. This is the gist in the decision of the Privy Council in
the case of Frazer v Walker where Lord Wilberforce states that: “it is in fact the
registration and not its antecedents which vests and divests title”. 30
Having said that, let us now turn and find out what is it that the National Land Code 1965
declares to be indefeasible. Pursuant to section 340(1), indefeasibility is attributed to title
and all registrable interests in land. Title here refers to proprietorship or ownership of
land. Interest refers to those “rights” that are created in land and which are capable of
transfer and hence registration. They are lesser than the full ownership e.g. leases,
charges, liens, easements, etc., however, and the holders of such interests may not in law
be referred to as “proprietors of the land itself”.31 Nevertheless, and since their interests
have been registered under the Code, they will be considered as proprietors of the legal
interest in such land. Such interests would therefore be declared indefeasible in the eyes
of the law.
Thus, and despite the apparent generality of section 340(1) of the National Land Code
1965, two things may be observable. Firstly: the Code refers to alienated land only.
Secondly: only persons mentioned under section 43 are capable of acquiring
indefeasibility of title under the Code. As mentioned by Sihombing “indefeasibility
27
Mohammad bin Buyong v Pemungut Hasil Tanah Gombak & Ors [1982] 2 MLJ 53 at 54.
28
See per Raja Azlan Shah CJ (Malaya) in PJTV Denson (M) Sdn Bhd v Roxy [1980] 2MLJ 136, FC, who
mentions that: “the concept of indefeasibiliy … is so deeply embedded in our land law that it is almost trite
to restate it”.
29
See Sihombing, J, National Land Code: A Commentary, 2nd edn (Kuala Lumpur and Singapore:
Malayan Law Journal, 1992). Also refer to the National Land Code 1965, ss 103–129 inclusive.
30
Frazer v Walker [1967] 1 AC 569, PC, at 580.
31
Cf, per Jemuri Serjan SCJ in Malayan United Finance Bhd v Tay Lay Soon [1991] 1 MLJ 504, SC. A
lease holder is therefore not a proprietor as decided in Lee Chuan Tuan v Commissioner of Lands and
Mines, Johor Bahru [1973] 2 MLJ 188.
8
belongs only to those parties entitled to hold land”.32 However, a judicial problem arises
when courts come to determine what types of the registered proprietors should be
protected. Suppose we have two persons one of whom “A” enters into a contractual
agreement to purchase a specific piece of land but his execution was partial only in that
he paid the price but was not registered. “B” on the other hand obtained title to land
gratuitously without valuable consideration and was registered as a proprietor – as in
cases of gifts. The question is: which of the two should the law protect. The Code itself
does not make this clear since section 340(1) mentions in general terms that
indefeasibility of title should be conferred on “any person or body for the time being
registered as proprietor”. This means that the Code does not make any distinction as
between a purchaser for value and a volunteer. At least this is what is presumably
understood by the phrase “any person or body for the time being registered as proprietor
of any land.”33
This, of course, seems to suggest that even a volunteer may be protected so long as he
becomes a registered proprietor. But if one looks further down the same section, we can
find that section 340(3) makes a distinction as to whether a person is a purchaser in good
faith and for valuable consideration or not but not a word is mentioned about a volunteer.
However, judicial attitude on the matter suggests that volunteers should not be protected
– at least as seems, on policy consideration. The case of Ong Chat Pang v Valliappa
Chettiar34 would afford a good illustration to this judicial attitude. In this case, “A” a
registered proprietor contracted to sell his land to “B”, but later transferred the same land
to “C”. B brought an action against A and C claiming specific performance. The court
granted relief to B on the ground that C failed to prove that he was a bona fide purchaser
for value. Registration did not avail C from having his interest be set aside. Teo & Khaw
are disagreeable to this decision and query as to “how [can] the title to the land registered
in the name of the … defendants … be set aside”35 without the proof of any of the
vitiating factors required by the Code?36 According to Teo & Khaw a registered title
gives rise to a prima facie presumption of indefeasibility unless such an action is caught
by the legal exceptions under section 340(2) of the National Land Code 1965.37 They
continue to agree with David Wong38 and argue validly that, that being the case and since
section 340(2) of the National Land Code 1965 specifically legislates about the
circumstances that vitiate a registered title under the National Land Code 1965, then there
seems no cogent reason to bring the Specific Relief Act 1950 to bear on this case, the
latter being a general law meant for granting equitable remedies.39
32
Sihombing, J, National Land Code: A Commentary, 2nd edn (Kuala Lumpur and Singapore: Malayan
Law Journal, 1992), p 792. See the National Land Code 1965, s 43.
33
34
Ong Chat Pang v Valliappa Chettiar [1971] 1 MLJ 224, FC.
35
Teo Keang Sood and Khaw Lake Tee, Land Law in Malaysia: Cases and Commentary, 2nd edn (Kuala
Lumpur, Singapore and Hong Kong: Butterworths Asia, 1995), p 139.
36
37
38
Wong, David, (1975), Tenure and Land Dealings in the Malay States, ((Singapore : Singapore University
Press)., at pp 380–387.
39
Teo Keang Sood and Khaw Lake Tee, (1995), Land Law in Malaysia: Cases and Commentary, 2nd edn
(Kuala Lumpur, Singapore and Hong Kong: Butterworths Asia), p 139. See per Mohamed Dzaiddin JC (as
9
The following can be understood:
(1) Since the concept of adverse possession leading to acquiring title by prescription
through long user does not apply in Malaysia,40 a defeasible title will remain so until
set aside or be removed from the register. There is no time limit for attacking a
defeasible title.
(2) Any defeasible title could subsequently be converted into an indefeasible title.
(3) It follows that, in Malaysia, indefeasibility of a registered title or interest may be
postponed or deferred to a later date until such time as the defective title is either
rectified or is transferred into the hands of a subsequent purchaser in bona fide (good
faith) and for valuable consideration.
It has been mentioned earlier that the concept of indefeasibility is not absolute in nature.
Thus, and since the registration is what “vests” and “divests” the title, a prima facie
registered proprietor continues to hold a good title until attacked or challenged by a
rightful claimant. Any registered person, therefore, has power in law to transfer an
indefeasible title to a third party who is innocent and with valuable consideration without
notice of the defective title. In other words, if the aggrieved party fails to act timeously by
immediately contesting the registered title, then he will not be able to recover if such title
or interest has been passed by the apparently or presumably registered proprietor to
another person who has relied on the register and thus did not have any knowledge that
the title to land or any interest thereof was in any way defeasible in nature. Here the third
party who is innocent acquires an indefeasible title even against the original proprietor.
Under such situations the only remedy open for the contesting party is damages in an in
personam claim against the previous defeasible title holder.41 However, what prevents the
original proprietor from recovering from the innocent third party is the fact that such a
person has already been registered as a proprietor. In other words, anything less than the
actual registration, that is the entry of the memorial in the register document of title under
the hand and seal of the Registrar42, would be open for attack by the aggrieved claimant.
This means that a mere entry in the presentation book43 is not by itself sufficient to confer
an indefeasible title as required by the Code.44
Section 340(2) of the National Land Code 1965 provides for what is commonly referred
to as statutory exceptions to the concept of indefeasibility in Peninsular Malaysia.
Although with certain controversy, a good number of academics believe that “deferred
indefeasibility” is applied in Peninsular Malaysia. This inherently raises the importance
he then was) in a tenancy case of Than Kok Leong v Low Kim Hai [1983] 1 MLJ 187 where he comments
on the Specific Relief Act 1950 (Revised 1974), s 26(b).
40
41
Sihombing, J, (1992), National Land Code: A Commentary, 2nd edn (Kuala Lumpur and Singapore:
Malayan Law Journal), p 804
42
43
44
National Land Code 1965, ss 92, 340(1) respectively.
10
of the instrument used for registration.45 It is important to point out in this connection that
the nature of indefeasibility varies from one Torrens jurisdiction to another. There exists
a number of instances leading to statutory exceptions under the National Land Code
1965 through fraud and misrepresentation; forgery, void or an insufficient instrument;
and lastly if a title was acquired unlawfully.46 This means that after registration, if a
person comes forward and establishes that such a registration was acquired through one
of the above means, then such a title or interest “shall not be indefeasible”47 and would
thus be held vulnerable to attacks and challenges by others,48 and if the claimant succeeds
then the registration may be liable to be set aside.
The Federal Court decision in Adorna Properties Sdn Bhd v Boonsom Boonyanit @ Sun
Yok Eng49 (Adorna Properties), created some misconceptions to the concept of
indefeasiblity in Malaysia.. In that case it was held, inter alia, that by virtue of the
proviso to subs.( 3) of s.340 of the NLC, any purchaser in good faith for valuable
consideration is excluded from the application of the said provision. It follows, therefore,
that this category of proprietors enjoy immediate indefeasible title to the lands. Therefore,
despite the court’s finding that the instrument of transfer was forged the appellant
nevertheless obtained an indefeasible title to the land. The decision of the Court in that
case had a far reaching effect on the land law and land administration in this country.
Before the decision of Adorna Properties the prevailing view was that s.340 of the NLC
confers deferred indefeasibility as opposed to immediate indefeasibility. This was
confirmed by the Federal Court in Mohammad bin Buyong v Pemungut Hasil Tanah
Gombak & Others.50 This is further reinforced by the Supreme Court’s decision in M & J
Frozen Food Sdn Bhd & Anor v Siland Sdn Bhd & Anor.51 There the Supreme Court,
comprising of Abdul Hamid Omar LP, Edgar Joseph Jr and Wan Yahya SCJJ held that
indefeasibility can be rebutted not only by fraud but also in cases where registration is
obtained by the use of an insufficient or void instrument or where the title or interest is
unlawfully acquired.
The effect of Adorna Properties is to confer immediate indefeasibility to the registered

proprietor. That decision was followed, albeit reluctantly, in a number of subsequent
cases such as Ismail bin Mohamad & Anor v Ismail bin Husin & 4 Ors.52
45
Sihombing, J, National Land Code: A Commentary, 2nd edn (Kuala Lumpur and Singapore: Malayan
Law Journal, 1992), p 816
46
See the National Land Code 1965, s 340(2)(a), (b), (c) respectively.
47
48
Kassarmal & Anor v Valliappa Chettiar [1954] 1 MLJ 119, PC.
49
[2001] 1 MLJ 241
50
[1982] 2 MLJ 53
51
[1994] 1 MLJ 294
52
[2005] 6 AMR 123, see also Mok Yong Chuan v Mok Yong Kong & Anor [2006] 7 MLJ 526 and Liew
Yok Yin v AGS Harta Sdn Bhd [2006] 7 MLJ 49
Refer PK Nathan “Nightmare For Registered Owners of Landed Property” [2002]CLJ xxiii
Teo Keang Sood "Demise of Deferred Indefeasibility Under the Malaysia Torrens System?"(Singapore
Journal of Legal Studies, 2002, pp 403-408.
11
However, in the recent case of Tan Ying Hong v Tan Sian San & Ors.53 the Federal Court
was asked to decided whether an acquirer of a registered charge or other interest or title
under the National Land Code 1965 by means of a forged instrument acquires an
immediate indefeasible interest or title. The court stressed that, the fact that the interest in
question is obtained in good faith for value is not an issue, because once the court is
satisfied that the interest (charges) arose from void instruments, it automatically follows
that they are liable to be set aside at the instance of the registered proprietor.
4. Protecting Sanctity of Indefeasibility with Imposition of Rigid Procedures for

Registration of Dealings
The following paragraphs will examine the procedures involved in registration of title
and interests in land to identify the weaknesses within the system to suggest reforms so as
to reduce the problems towards enahncing the Malaysian land registration system.
 Procedures Involved in Registration of Title and Interests in Land

The National Land Code 1965 provides in clear terms that once a dealing to confer title
or interests is registered in accordance with the prescribed requirements, the owner or
interest holder cannot have their title or interests challenged or overturned. There are
exceptions to the concept of indefeasibility, i.e. section 340(2) of the National Land Code
1965 provides several exceptions to indefeasibility of title, and these represent situations
when a registered title or interest may be open to attack in the following circumstances:
 in any case of fraud or misrepresentation to which the person or body, or any
agent of the person or body, was a party or privy;
 where registration was obtained by forgery, or by an insufficient or void
instrument;
 where the title or interest was unlawfully acquired through purported exercise
of any power or authority conferred by law.
In such instances, the title of the person can be impeached and challenged in a court of
law. However, this is a very complex area of law and the burden of proving the
allegations is imposed on the person questioning the indefeasible rights. In the event if
the allegation is proved, the court will declare the title or interest created by virtue of the
fraudulent or forged transfer as void and unenforceable and revest the land back to the
original proprietor.54 A purchaser can also bring a claim against the Land Registry or
Land Office seeking compensation if they suffer a loss as a consequence of fraud or the
omission of some legal interest relating to the title or if there are discrepancies in the
survey and marking of the boundary of the land.
 Use of Prescribed Stereotype Statutory Instrument of Dealing

Section 206(1)(a) of the National Land Code 1965 prescribes that in order for any dealing
to be valid and enforceable under the Code, it shall be effected by an instrument
complying with the requirements stipulated in sections 207 to 212 and it must be
53
Civil Appeal No. 02(f)-19-2009(C); This appeal was heard by a coram of Zaki Tun Azmi CJ, Alauddin
Mohd Sheriff, PCA; Arifin Zakaria, CJM; Zulkefli Ahmad Makinudin, FCJ; James Foong Cheng Yuen,
FCJ
54
Chiew Lip Seng v Perwira Habib Bank Malaysia Sdn Bhd [1999] 1 AMR 789.
12
registered. Section 207(1) prescribes that every instrument effecting any dealing must be
made using the prescribed statutory instruments provided in the First Schedule with some
variations or adaptations permitted as long as they are not a matter of substance. Section
207(2) specifically requires that headings and schedules must be inserted in instruments
of dealings as indicated by the relevant forms in the First Schedule as provided in Form
13A. Section 207(3) provides that this form must be attested as required by section 211.
The court has held that the statutory forms are flexible enough. Therefore, the use of the
wrong statutory form will not invalidate a dealing created. In V Letchumanan v Central
Malaysian Finance Bhd.55 a charge provided that the loan money was to be paid in
instalments after execution of the charge rather than payment in full before execution as
was stated in the charge. In an annexure, repayment was to be made on demand, though
unless and until demand was made, the loan was repayable by instalments. On default,
the chargee sought to sell the land, but the chargor objected on the basis that the charge
should not have been made in Form 16A because it provided for payment in instalments.
The Federal Court held that the use of Form 16A in this case was correct as the statutory
form is flexible enough.
A charge was created using Form 16A to secure the payment of rent under a chattel-lease
of equipment. On default the charge applied to the Land Administrator for sale of the
land. However, the chargor objected on the basis that the charge should have been made
using Form 16B and so was invalid. The court held that it was a charge within the
provisions of subsection (2), but although the wrong form had been used, the charge
remained valid by virtue of the Interpretation Act 1948 and 1967. The deviation was not
of substantial effect nor was it calculated to mislead. The High Court also rejected the
contention of the chargor that a charge had to be in one of the two available forms,
namely Form 16A for repayment of principal sum and Form 16B for payment of periodic
sums. In Tan Yen Yee & Anor v Equity Finance Corp Bhd,56 the dispute was on the type
of form to be used for creation of charge. The first plaintiff, as the managing director of a
company, entered into a leasing agreement with the defendant whereby the company
agreed to pay the total rental sum of $127,000.08 payable in advance by 36 equal
monthly rentals of $3,527.78. The plaintiffs then executed a charge over land as security
for the payment of the rental under the lease. The charge was in Form 16B of the First
Schedule to the National Land Code 1965. The company defaulted on the instalments and
the defendant applied to the Land Administrator, Batu Pahat, for an order of sale of the
land. The plaintiffs applied for a declaration that the charge was null and void because the
charge should not be in Form B but in Form A of the First Schedule to the Code. Richard
Talalla JC held that; “It is provided in section 207(1) of the National Land Code 1965 as
follows: ‘Every instrument effecting any dealing under the Code must be in the forms
prescribed in the First Schedule as is specified in relation to the dealing in question in the
appropriate part of this division. Provided that the form so specified for any dealing may,
so long as the variation is not in a matter of substance, be used in any particular case with
such adaptations, alterations or additions as may be rendered necessary by the character
of the parties or other circumstances of the case’.”
55
V Letchumanan v Central Malaysian Finance Bhd [1980] 2 MLJ 96, FC.
56
Tan Yen Yee & Anor v Equity Finance Corp Bhd [1991] 1 MLJ 237.
13
Table A List of Prescribed Statutory Instruments Forms for Registration of
Dealings as prescribed by National Land Code 1965.57
Forms/Instruments Types of Dealings
14A Transfer of land, share or lease

14B Transfer of charge
15A Lease of land
15B Sub-lease of land
15C Surrender of lease
16A Charge-to secure payment of a principal sum
16B Charge-to secure payment of a periodic sum
16C Postponement of a charge
16F Certificate of sale by Court
16I Certificate of sale by Land Administrator
16N Discharge of charge
17A Grant of easement
17B Grant of cross-easement in respect of a party-wall
17C Release of easement
Sections 208 and 209 of the National Land Code 1965 impose a statutory requirement
that every instrument used to effect dealing must clearly specify all the following
information:
(a) full name of parties to transaction as in the identity card;
(b) address of the parties;
(c) where the effect of instrument is to transfer any land to two or more persons or
bodies as co-proprietors, the shares in which land is to be held;
(d) description of the land to which it relates by reference to:
(i) administrative area;
(ii) town, village or mukim
(iii)lot number of the land in case of land held under the final title;
(iv) title number of the land;
(v) if land consist of a parcel of buildings held under strata title, that parcel
must be described. For instance the parcel number and the title number of
the parcel.
 Execution of Instrument of Dealings

Section 210(1) of the National Land Code 1965 lays down four categories of persons or
bodies who can execute the instrument of dealings. First, it can be executed by the
respective parties. For instance in the case of transfer of land through an ordinary sale and
57
The National Land Code 1965, s 436, Sch 10 provides for supplementary provision as to forms and
procedure in which inter alia it states that it is not necessary for a person to use a form printed under s 376;
instead a form which is reproduced in print or typescript may be used. The forms are available from the
Government Printers.
14
purchase process, Form 14A must be executed by the respective parties, that is by the
proprietor of the land being the transferor, and the purchaser as the transferee. Secondly,
it may be executed by a person acting under a valid power of attorney or the authority of
any written law or by order of court. In such a situation, a Registrar or Land
Administrator as the case may be, is under a duty to require the production of documents
to prove a valid power of attorney before accepting the instrument for registration.
Thirdly, it also can be executed by any person acting on the authority of any written law,
including the National Land Code 1965. Fourthly, an instrument of dealing can be
executed by any person on an order of the court.
Section 210(2) of the National Land Code 1965 provides that the execution of any such
instrument by a natural person shall consist of his signing it or affixing his thumbprint
thereto. “Natural persons” include an individual, an individual in his capacity as a trustee,
a public officer such as any officer of the Court (i.e. Assistant Registrar of High Court)
and an Official Assignee; and an individual in his capacity as done under a power of
attorney.58 Further section 210(3) of the National Land Code 1965 states that in the case
of execution by a corporation, the Code requires that it shall be effected in such a manner
as it is authorised by its constitution and it shall be deemed to have been duly executed
and shall be conclusive evidence of the execution if the seal of that corporation and a
statement signed by two authorised officers of the corporation to the effect that the seal
was affixed thereto in their presence. Thus in the case of a company registered under the
Companies Act 1965, the execution of an instrument of dealing must follow the manner
prescribed in the articles of association. Similarly any specific person who may be
authorised to sign any instrument of dealing on behalf of the company will be specifically
mentioned in the articles of association.
On the other hand, the execution by a co-operative society that is registered under the
Cooperative Societies Act 1993 shall be in accordance with the procedures laid down in
its by-laws. Similarly for a society established under the Societies Act 1966, the
execution shall be performed in accordance with the provisions of the constitution of the
society where the party that is authorised to sign for any dealings involving that
respective society is identified. Meanwhile for a body corporate established by a Federal
or a State law, the execution of the instrument of dealing must be in the manner
prescribed by the enabling statute.
 Attestation of Instrument of Dealings

In order to satisfy the requirement of having the genuine signature or thumbprint
presented for registration under the land law or the mining law, it is provided by section
211 of the National Land Code 1965 that every execution by a natural person (but not
corporation) or any instrument affecting any dealing be attested by one of the following
persons namely: (1) a magistrate; (2) the State Director; (3) the Registrar; (4) a Land
Administrator; (5) an advocate and solicitor; and (6) a notary public. It is also provided
58
Koperasi Pegawai Pentadbiran dan Pengurusan Tanah Malaysia Berhad. & Malaysia. Dept. of Director
General of Lands and Mines. & Malaysia. 2002 A manual on the National Land Code Koperasi Pegawai
Pentadbiran dan Pengurusan Tanah Malaysia Berhad in cooperation with Dept. of Director General of
Lands and Mines, Kuala Lumpur :), p 211.
15
that where any instrument is attested outside Malaysia the people listed in the Fifth
Schedule59 are authorised to attest. However, if dealings involve a Malay holding or
customary land,60 every execution by of any instrument must be witnessed and attested
by the Land Administrator only. The requirement of attestation by Land Administrator is
not imposed on the instrument of charge in respect of any Malay holding or land
reservation executed by a person under a power of attorney on behalf of a body corporate
or a company, provided that such body corporate or company is allowed to be a chargee
under the Malay Reservations Enactment of the State as well as any instrument of
discharge of charge.61
Section 211(2) of the National Land Code 1965 requires the attestation clause to be used
in the format shown in Form 13B while section 211(3) states that the officer attesting any
execution shall sign the attestation clause and, if he has a seal of office, authenticate his
signature with that seal. Section 212 further provides that for the purpose of simplicity,
no instrument shall be capable of effecting dealings with respect to more lands than one
unless the dealings in question are all of the like nature, and are all effected by the same
person or body in favour of the same person or body; and the register documents of title
to the lands in question are all kept in the same Registry or Land Office as the case may
be.
 Registration of Instrument of Dealings

As the Torrens system requires registration, all instruments of dealings must be duly
registered. As stated in 206(1)(b) of the National Land Code 1965, no such dealing shall
operate to transfer the title to any alienated land or, as the case may be, to create, transfer
or otherwise affect any interest therein, until it has been registered under Part Eighteen of
the National Land Code 1965. Failure to register any of the dealings however as stated in
section 206(3), does not affect the contractual operation of any transactions. Section
292(1) of the National Land Code 1965 states that a particular instrument may be
registered; the word “may” indicates that registration of any dealing is optional.
Therefore, parties to a transaction despite not being entitled to claim any right under the
National Land Code 1965 due to lack of registration according to the manner prescribed,
can seek enforcement of remedies under contract.
 Procedures on Registration of Dealings

Basically the registration of dealings according to section 304 of the National Land Code
1965 is effected by the making of a memorial of the dealings on the Register Document
of Title under the hand and seal of the Registrar or the Land Administrator as the case
may be. According to section 5 of the National Land Code 1965, Land Administrator is
59
The National Land Code 1965, Sch 5 provides specifically for persons authorised to attest instruments of
dealings
60
See the Malay Reservations Enactment of the Federated Malay States, the Malay Reservations
Enactment of Johore, the Malay Reservations Enactment of Terengganu, Enactment No 63 (Malay
Reservations) of Kedah, the Malay Reservations Enactment of Kelantan, the Malay Reservations
Enactment of Perlis, Enactment No 63 (Malay Reservations) of Kedah, the Malay Reservations Enactment
of Perlis and land that is subject to the National Land Code (Penang and Malacca) Titles Act 1963,
Part VIII. See the National Land Code 1965, Sch 10 para 3.
61
National Land Code 1965, Sch 10 para 4.
16
the person appointed for registering land dealings involving the Land Office Title (Mukim
Register) and Registrar of Title for Registry Title. The National Land Code 1965 has
prescribed conditions precedent to be complied with in order for an instrument to be
accepted for presentation and registration.
The presentation of an instrument of dealing can be accepted and entered in the

Presentation Book by the Registrar or Land Administrator only if:
(a) it is accompanied by the registration fee as prescribed in the state land rules;62
(b) it is accompanied by the delayed registration fee, if it is presented after three months
from the date of its execution;63
(c) it is the original copy and it is duly stamped in accordance with the provisions of the
Stamp Act 1949;64
(d) it is a lease or a sub-lease or a charge, accompanied by a duplicate lease or a
duplicate sub-lease or a duplicate charge (as the case may be) which has been
certified as a true copy of the original by one of the officers specified in the Fifth
Schedule to the Code and is duly stamped;65
(e) it is executed on behalf of any person or body under a power of attorney,
accompanied by the supporting document or documents required by section 309 of
the National Land Code 1965;66
(f) it is executed by a management corporation under the powers conferred by section
47 of the Strata Titles Act 1985, accompanied by the certificate required by section
47(3)(c) of that Act;67
(g) it is accompanied by relevant documents depending on the type of dealing that is
going to be created.68
Section 294(4) of the National Land Code 1965 clearly states that any instrument which
is not accompanied by the relevant documents abovementioned will not bar the entry of
the dealing in the Presentation Book69 but it is the duty of the Registrar to make enquiries
with respect to any missing documents, and take necessary action for securing its
production.70 The Registrar is entitled to reject any instrument of dealing presented for
registration in the event if it is not in order. However, the Registrar can register the
instrument upon production of the document or if he is satisfied that its production ought
62
National Land Code 1965, s 293(1)(a).
63
National Land Code 1965, s 293(1)(b).
64
National Land Code 1965, s 294(1)(a), A Manual on the National Land Code (Koperasi Pegawai
Pentradbiran dan Pengurusan Tanah Malaysia Berhad, 2002), at p 214.
65
66
National Land Code 1965, s 294(3)(a).
67
68
National Land Code 1965, s 294(2). For details of documents to be submitted for each type of dealing
refer to the Manual on the National Land Code (Koperasi Pegawai Pentadbiran dan Pengurusan Tanah
Malaysia Berhad, 2002), p 215.
69
The Presentation Book is one of the features of the Torrens system in which the Presentation Book must
record an entry with a short description of every instrument presented for registration; amongst others it
must include the name and address of the persons or body by whom it was presented and the time of
presentation: see the National Land Code 1965, s 295.
70
17
to be dispensed with, or he can reject it altogether.71 It appears that the Registrar has full
power and discretion to require the production of necessary documents pursuant to
section 299 of the National Land Code 1965. This has given rise to considerable
differences in the Land Offices practices.72
The entry of the instrument in the Presentation Book according to section 295 of the
National Land Code 1965 is conclusive evidence as to the time of presentation of any
instrument of dealing at the Land Registry. However, this does not amount to registration.
The instrument submitted for registration can be withdrawn at any time before its
registration. As provided in section 296 a withdrawal can be made by serving a notice on
the Registrar by the person or body by whom it was presented. Consequently a note in the
Presentation Book must be made upon such withdrawal.
 Function of Registrar in Registering Dealings

It is the duty of the Registrar to determine whether an instrument presented is fit for
registration according to the provisions of Chapter III. He can only proceed with the
registration according to the manner prescribed in Chapter IV if the instrument is fit for
registration, and accompanied by all documents required by section 294 of the National
Land Code 1965. Otherwise, he can proceed in accordance with the provisions of section
289 or 299 as appropriate. As long as an instrument of dealing is in order and fit for
registration according to the requirements of section 301,73 it is the duty of the Registrar
to register it.
The power of the Registrar is administrative in nature in which he will proceed with the
registration if he finds that the applicant had complied with all the necessary
requirements and procedures. However, if he finds that such procedures had not been
complied with, he then has a right to suspend or reject that application.74 In Mohammad
Bin Buyong v Pemungut Hasil Tanah, Gombak,75 it was held that the words “shall not
register” in section 300 of the National Land Code 1965 are merely directory and not
mandatory and failure on the part of the Registrar to comply with it does not invalidate
the registration.
The Registrar is vested with the power to require production of certain documents
whenever he considers them necessary. However, this power is subject to certain
limitations as prescribed in section 303 of the National Land Code 1965 as follows:
(i) the Registrar need not be concerned to enquire whether any transfer of a lease,
sub-lease or a grant, constitutes a breach of any agreement against assignment
or sub-letting.
71
Ibid, s 299(1).
72
Refer Seah Choon Chye, “A National Land Code?” in INSAF (Journal of Malaysian Bar (2006) xxxv
No 1), p 63 for comments on the practices of certain land offices which have caused inconveniences to
legal practitioners.
73
Apart from the conditions of the National Land Code 1965, s 301 that section also requires that, before
presentation of the documents for registration is made, the rent due in respect of that particular land must be
paid.
74
75
Mohammad Bin Buyong v Pemungut Hasil Tanah, Gombak [1982] 2 MLJ 53.
18
(ii) in the case of a lease, sub-lease or surrender granted or accepted by a chargee
in possession, the Registrar is not obliged to enquire whether the chargee was
rightfully in possession.
(iii) the Registrar is also not concerned to enquire into the validity of any
certificate of sale issued pursuant to a sale upon default of a charge.
(iv) where a dealing is effected by a person registered as a trustee or
representative, the Registrar is not concerned to enquire whether the dealing is
consistent with or permitted by the trust instrument. He is under no obligation
to make any enquiries or to seek further information even if he suspects that
the transaction may be in breach of trust. However where it has come to his
knowledge that the transaction is in breach of trust, he must reject the
instrument as being unfit for registration.76
Registration is effected by the Registrar by making a memorial on the Register Document

of Title. A memorial is also made on the instrument itself. The registering officer must
sign and affix his seal to the memorial and until signed, it is not effective to mean
registration.77 A memorial must include a short description of the nature, effect of
instrument, identity of parties, file reference number, time and date when the registration
is effective. The effective date of registration of any instrument shall be taken as the time
and date of its presentation as entered in the Presentation Book78 and upon such
registration, the title or interest of any person or body for the time being registered as
proprietor of any land or in whose name any interest is for the time being register shall be
indefeasible. However, this indefeasibility of title or interest is subjected to several
statutory and customary exceptions.
If the dealing is ex facie registrable the Registrar cannot refuse to register it unless he
believes or is aware that the instrument has been executed improperly or impropriety is
present in the application for registration. Although the registration of a transfer in which
the transferor’s name has been forged cannot protect even a bona fide purchaser for value
without notice, yet on registration of that transfer it is possible for the transferee to confer
an indefeasible title on a bona fide purchaser for value without notice on the principle
that indefeasibility is deferred rather than immediate.79
According to Abdoolcader J in Pow Hing & Anor v Registrar of Titles, Malacca,80 in

commenting on the conduct of officials carrying out their duties under the Code, the party
presenting the instrument for registration would be entitled to take action against the
Registrar who fails to carry out his duty or who performs it mala fide, and the action the
76
77
National Land Code 1965, s 304. See Wong, David, (1975),Tenure and Land Dealing in the Malay States
(Singapore : Singapore University Press). p 319. See Mohammad Bin Buyong v Pemungut Hasil Tanah,
Gombak [1982] 2 MLJ 53.
78
79
Gibbs v Messer [1891] AC 248, PC; Boonsom Boonyanit v Adorna Properties Sdn Bhd [1997] 2 MLJ 62,
CA; Au Meng Nam & Anor v Ung Yak Chew & Ors 2007 [CA]
80
Pow Hing & Anor v Registrar of Titles, Malacca [1981] 1 MLJ 155, FC, at p.160.
19
Land office and this could result in an order for mandamus made against the Registrar by
the High Court in an application made by the aggrieved persons.81
Tun Zaki Tun Azmi, the Chief Justice of Malaya in delivering his judgement in Tan Ying
Hong v Tan Sian San & Ors.82 said that he hope that the Land Authorities will be extra
cautious when registering transfers. Thus, Land Administrators and Registrars entrusted
with the responsibility to register dealings must ensure that they carry out their duties
with absolute care and caution to protect innocent landowners from scrupulous people.
 Powers of Registrar to Make Enquiries

The Registrar can make enquiries, and require the production of evidence, oral or
documentary, as he may consider necessary or desirable for the purpose of determining
the fitness of any instrument for registration. The powers conferred by section 302 of the
National Land Code 1965 are exercisable subject to the limitations imposed by section
303 and, in the case of any instrument executed under a power of attorney, paragraph (b)
of section 311. The Registrar is not required to go outside the terms of the transaction if it
otherwise seems fit for registration. It was observed in ARPL Palaniappa Chettiar v PL
AR Letchumanan Chettiar & Anor,83 by Wong Kim Fatt JC, that: “It is clear that under
the Code the Registrar may act on his own motion or upon information or request made
to him. The word ‘may’ indicates discretion on the part of the Registrar. He is not bound
to act on such information or request in every case. ... [T]he Registrar is said to perform a
quasi-judicial function in the exercise of that discretion, but the discretion must always be
exercised judiciously or reasonably and in good faith, not arbitrarily nor in bad faith”. In
this case the plaintiff, inter alia, sought an injunction to prevent the Registrar registering a
transfer which was otherwise fit for registration; the basis of the claim was that the
transferor/executor was acting fraudulently. The injunction was refused on the basis that
the Registrar had a statutory duty to register an instrument on its face fit for registration.
The following are some of the circumstances where documents can be found to be unfit
for registration by Registrar:
o where the instrument does not relate to a registrable interest, or does not
comply with the requirements as to form, execution or attestation, or is not
stamped;
o where there has been a substantial variation in the statutory form;84
o where the instrument is linked to matters which would encumber the register
with unregistrable subsidiary matters;
o where the incorrect procedure was adopted; for example, where a personal
representative instead of applying for registration as proprietor of the subject
81
The provisions of the National Land Code 1965, ss 417 and 418 provide for applications to court and the
Registrar is required to comply with court orders.
82
Civil Appeal No. 02(f)-19-2009(C)
83
ARPL Palaniappa Chettiar v PL AR Letchumanan Chettiar & Anor [1982] 1 MLJ 232 at p.234.
84
National Land Code 1965, s 207(1); Crowley v Templeman (1914) 17 CLR 457.
20
land85 seeks to combine that application with a subsequent transfer of the
land;86
o where there is a prohibition or limitation on the dealing imposed by a written
law other than the Code; for example, the Land (Group Settlement Area) Act
1960 (Act 530) or the relevant Malay Reservation legislation of the various
States;
o where the dealing would be contrary to the restrictions in interest to which the
particular land is subject87 or to any other limitation or restriction imposed by
reference to the nature of the transaction or any prior transaction concerning
the same land; and
o where the instrument declares or discloses a trust contrary to section 344 of
the National Land Code 1965.
The Registrar is required to suspend the registration of any dealing presented for
registration for a period not exceeding 14 days, as he may consider necessary for
enabling the defect or error to be rectified or, as the case may be, the document or
documents in question to be produced, and, at the expiry of that period, shall register or
reject the instrument as appropriate. On suspending the registration of any instrument the
Registrar is required to give notice to the person or body by whom the instrument was
presented, specifying the period and the reasons for suspension.
On rejecting any instrument, the Registrar is required to mark it with the word
“Rejected”, return it to the person or body by whom it was presented together with a note
of the reasons, and cause a note of the rejection to be made in the Presentation Book.
In the event that there is defect of substance, the Registrar is obliged to reject the
instrument. An instrument rejected on the ground of defect of substance may not
thereafter be re-presented so that any priority for the dealing it represents will be lost. The
lodging party has two alternative methods of action on rejection. First, he is permitted to
redo the instrument in a manner acceptable to the Registrar; this will require the
instrument to be executed, attested and lodged in the usual way. Pending this, the lodging
party must enter a caveat to protect his claim to an interest in the land. Secondly, he can
seek an injunction against the Registrar requiring him to register the instrument in its
current form.
Where the process of registration is suspended because of a formal defect or clerical error
the solicitor, as the lodging party, can amend the instrument himself as long as the
amendment in not one of substance.88 Any required amendment which would make the
document difficult to read, should be made on an annexure to the instrument which
should be executed by all parties to the instrument and attested in the usual form,89
identified as an annexure to the instrument, and attached securely to the instrument. The
85
86
87
National Land Code 1965, ss 103–129.
88
89
21
suspended instrument does not lose the priority it obtained on presentation pending
correction of the defect.90
The Registrar is conferred a discretionary power to dispense with production of the

document, or to reject the instrument which has not been accompanied by a relevant
document. The rejected instrument must be so endorsed and cannot be lodged
thereafter.91 Where the Registrar does not reject the instrument, he can decide not to ask
for the production of the issue document of title but to issue a title in continuation or a
duplicate issue document of title pursuant to section 175 of the National Land Code 1965.
However, in taking this course of action, the Registrar must be aware of potential activity
of transactions outside the Code using any existing issue document of title which has
been claimed to have been lost or where the holder refuses to produce it.
 Registrar’s Power to Correct Errors

The Registrar has power to make corrections to the document of title whenever the
Registrar is satisfied that:
 any document of title has been registered or issued in the wrong name, or contains
wrong descriptions of land or boundaries or other errors or omissions; or
 any memorial or entry has been made mistakenly on any document of title; or
 any memorial or other entry made on any such document of title or instrument
itself contains any error or omission.92
It is important to note that the power of the Registrar to correct errors is confined to the
errors or omissions made by the registering authority and not by any other persons. 93 This
power cannot be exercisable in respect of land held under Land Office Title or the
corresponding form of qualified title except with approval of the State Director. Details
of all corrections made by the Registrar must be recorded in a book called “Correction
Note-book”.94 The procedures prescribed by the National Land Code 1965 with respect to
registration of dealings are very systematic. The registering authority assumes an
important role in ensuring that the registration of instruments of dealings is carried out
accordingly. However, in recent years, complaints about land fraud have increased and
this will have an adverse impact on the socio-economic development of the nation. The
weaknesses within the land registration departments have been cited as the major cause
of land fraud.
According to S K Das, “every system of Torrens legislation contains a provision

permitting the Registrar some latitude in registering a document modified or altered in
expression to suit the circumstances of every case and any variations from such forms
respectively in any respect not being a matter of substance”.95 SK Das further said that it
is not the duty of the Registrar to require proof negating fraud or improper dealing where
90
Crowley v Templeton (1914) 17 CLR 460 at 466–467; Putz v Registrar of Titles [1928] VLR 348 at 361.
91
Standard Chartered Bank v Yap Sing Yoke & Ors [1989] 2 MLJ 49.
92
National Land Code 1965, s 380(1), (3).
93
Island & Peninsular Development Berhad & Anor v Legal Adviser, Kedah & Ors [1973] 2 MLJ 71.
94
95
Das, S K, (1963) The Torrens System in Malaysia Singapore, Malayan Law Journal), p 397.
22
there is nothing on the face of the document submitted to suggest it, nor to enquire into
unregistered interests.96 This is in line with the provisions of section 22 of the National
Land Code 1965 where it expressly provides that; “No officer appointed under this part
shall be liable to be sued in any civil court for an act or matter done, or ordered to be
done, by him in good faith and in the intended exercise of any power, or the performance
of any duty, conferred or imposed on him by or under this Act.”
The power of the Registrar is confined to the errors or omissions made by the registering
authority and not others. This has been confirmed in the case of Island & Peninsular
Development Berhad & Anor v Legal Advisor, Kedah & Ors.97 Thus, the chance of
occurrences of fraud or any improper dealing in the Land Office is very minimum.
However, we cannot rule out the fact that it is possible if a dishonest member of staff
could be tempted to collude with the perpetrator of a fraudulent dealing.
The detailed description of the process of administration of land dealings under the
National Land Code 1965 shows clearly that it is not easy to commit fraud or improper
dealings. However, we do have cases of fraud and the statistics produced by the Police
Department are clear proof of occurrences of fraud. The subsequent paragraph will
examine the weaknesses in the land dealings registration system.
Diagram 1: Flow Chart on Registration of Dealings in Malaysia & Fraud & Forgery
Variables
REGISTRATION TO CONFER INDEFEASIBLE TITLE
OR INTEREST
Fraud & Forgery National Land Code 1965
Variables: INSTRUMENT Section 292:
Forgery of Preparation of instruments for
signature registrable dealings (i.e. Transfer,
charge, lease, etc).
Fraud by
misleading the PRESENTATION Section 292 to section 301A:
victim into Documentations are in order
signing relevant
documentation Fees paid.
Fraud by
VERIFICATION Section 303:
solicitors
Power of Registrar – documents
Identity fraud are fit for registration
Fraud by gaining Section 88, 89 & 304:
access to the REGISTRATION Manner of registration
digital signature
certificate and Authenticated under hand signature
associated and seal of the Registrar
password.
INDEFEASIBLE TITLE Section 340(1): “free from fraud /
Compensation forgery elements”
for Loss =
Section 340(2): “in consequence of
Assurance DEFEASIBLE TITLE fraud / forgery elements”
Fund
96
Ibid, p 330.
97
Island & Peninsular Development Berhad & Anor v Legal Adviser, Kedah & Ors [1973] 2 MLJ 71.
23
Source: IM Shukri, Department of Director General of Land and Mines (Federal) 98
5. Weaknesses in Conveyancing Practice Paving Inroad to Fraud

Despite the dealings registration system manifesting itself to be an efficient system,
however, fraud and improper dealings within the conveyancing system is unavoidable.
The Royal Malaysian Police investigation has identified a few modus operandi used by
criminals in transferring land to themselves or other unsuspecting bona fide purchasers.99
 Forging of Transfer Form 14A or Charge Form 16A/B

The National Land Code 1965 prescribes the use of Form 14A to effect transfer of title or
Form 16A/B for registering a Charge. The signature of the transferor or chargor
(especially for a third party charge) can easily be forged without anyone actually realising
it. It may go unnoticed, including by the registering authority, legal practitioners and a
commissioner for oaths who may be witnessing signatures of parties without actually
being present. A legal practitioner or commissioner for oaths can be cheated by an
imposter by using a forged identity card. Pictures in identity cards are usually not reliable
as it could be a picture taken some time ago or the person may have grown a
beard/moustache or shaved off his beard/moustache, removed their spectacles for the
picture or used some other method to disguise their identity.
 Registering Dealings Using Power of Attorney

The Land Registry or office when presented with a document of power of attorney will
only examine whether the document is legally effective such as the signature of donor
and donee, attestation by the commissioner for oaths, and registration with the court. The
registering authority is not trained to detect any defects on the instrument and they will
register the dealing presented with a power of attorney unsuspectingly as long as it carries
the court’s seal and endorsements.
 Using Court Order to Register Dealings in Favour of Prospective Title or

Interest Holders Without Verification of Validity
The Land Registry/Office very often registers dealings relying on court orders without
verifying the validity of such orders as the National Land Code 1965 does not require
them to question the validity of such orders. The registering authority simply relies on the
court’s common seal and other particulars of the case provided by the parties. The
registering authorities are not required to make any further enquiries and will register the
dealing unsuspectingly. Furthermore, they are not trained and unable to detect any
likeliness of fraud.
98
Shukri, I M, Director of Research & Development, “Insights on the Proposed Insurance Principle of
Malaysian Torrens System” (Putrajaya: Department of Director General of Land and Mines (Federal)
(DGLM), 2008), paper prepared for a Briefing Session on October 18, 2008 to explore the possibility of
introducing Title Insurance System in Malaysia.
99
Supt Shuhaimi Bin Othman, Commercial Crime Department of the Royal Malaysian Police Force,
“Penipuan dalam Penyelesaian Urusan Tanah: Isu dan Penyelesaian”, paper presented at the Peninsular
Malaysian Land Administrators Convention 2008.
24
 Applying for Issuance of Replacement Document of Title on the Pretext of
Having Lost the Original Title
An imposter can make a report of loss of the issue document of title to the police, and
submit the report to the Land Registry/Office with the intention of applying for a
replacement document of title. This is made simpler with the assistance of unsuspecting
Land Office staff or unscrupulous insiders who can be paid to assist the imposter.
 Problems in Computerised Land Registration System

Police investigation has shown that there are some staff employed by the private
consultants engaged to manage the computerised land registration system who have
misused the access code to the system. They have been involved in the land fraud scam
as they can enter information onto the computer using the access code given to them
especially if the particulars on the documents of title are not clear and this gives them
room to tamper with the particulars of ownership.
 Presentation and Collection of Conveyancing Instruments by Unauthorised

Persons
Police investigation shows that the fraudster or imposter has been using a middleman to
deal with the Land Office. Any unsuspecting conveyancing clerks could be used for the
purposes of presenting or collecting registered documents with a small amount of fee in
return for their services. The clerks being familiar to the Land Registry/Office can easily
present the instrument without arousing suspicion amongst the Land Office staff.
Table 1 Statistics of Forgery and Cheating Cases from 2005 – March 2008
State 2005 2006 2007 2008 Total

March
Perlis - - - 1 1
Kedah 6 6 8 2 22
Pulau Pinang 7 11 25 1 44
Perak 1 4 8 1 14
Selangor 12 12 9 6 39
Kuala Lumpur 14 8 10 6 38
Negeri Sembilan 1 3 5 - 9
Malacca 3 3 2 - 8
Johor 4 8 6 3 21
Kelantan 4 6 6 2 18
Terengganu 1 8 9 1 19
Pahang 3 3 3 - 9
Sarawak 6 2 7 3 18
Sabah 21 16 14 2 53
Total 83 90 112 28 313
25
Source: Commercial Crime Department, Royal Malaysian Police Force
Table 2 Statistics of types of cases involving forged documents used to cheat

land dealings for the period of 2005–2007
Type of Cases 2005 2006 2007 Total

(Jan – Jun)
Form 14A 39 43 20 102
Title, Identity Card and Sale 18 22 10 50

and Purchase Agreement
Power of Attorney and 6 18 9 33
Court Order
Total 63 83 39 185
Source: Commercial Crime Department, Royal Malaysian Police Force
6. Challenges in Detecting Fraud in Land Dealings

The following are some of the challenges faced in detecting fraud:
 Lack of Uniform Practice in Land Registry/Offices

Despite the preamble to the National Land Code 1965 manifesting the Code as amongst
others providing for uniform land and policy for registration of dealings, there is a certain
amount of resistance within the Land Offices. Land Offices resort to using special
guidelines, rules and procedures unique to their own office for their convenience.
 Limited Powers of Registrar/Land Administrator

The Registrar has limited powers in registering the land dealings. His duties are limited to
examining whether an instrument is fit for registration as prescribed in section 298 of the
National Land Code 1965. So long as the instrument is “fit for registration” he is duty
bound to register the dealing. He is not required to examine the instrument to for fraud or
improper dealings.
 Lack of Expertise and Resources in Detecting Forgery

The Land Registry/Office staff lacks expertise and resources to detect forgery in land
dealings. According to a senior experienced member of staff at the Land Office, it is not
possible for Land Office staff to identify a forged signature as they are not trained.100
100
Discussion with Tn Hj Hasnol officer at the Kuala Kelawang Land Office, District of Jelebu, Negeri
Sembilan on Friday October 17, 2008; refer to the paper by ACP Tan Kok Liang, “Property Rights under
the Malaysian Constitution: Should Fingerprinting be Introduced in Property/Land Dealings”, paper
presented at the 14th Malaysian Law Conference organised by the Malaysian Bar Council, Kuala Lumpur
Convention Centre, November 2007.
26
Furthermore, they have no reason to suspect unless they are alerted by the relevant
parties. Use of a thumbprint to execute the instrument of dealings instead of a signature
can be a good mechanism to reduce forgery in Malaysia as no one thumbprint is similar
to any other.
 Problems in the Land Title Computerisation System

The land computerisation system is said to have problems and can provide avenues to
those committing fraud. The security and stability of the register can be questioned. It is
important to ensure the accuracy of the registration system. Provision needs to be made
for the failings of technology. The private agency appointed to assist the land registration
departments to computerise the land titles has used temporary staff who have kept the
access code and use it for purposes of entering fraudulent dealings. They can go
undetected as they are appointed on part-time basis.101
 Lack of Concern Amongst Legal Practitioners and Commissioners for Oaths

The practice of legal practitioners and commissioners for oaths attesting the signatures
of parties without actually being present at the time of the party signing the conveyance
documents can allow fraud to occur. In any transaction affecting land be it a sale or a
purchase or establishing an interest over land, it is important to confirm the identity of
the parties involved in the transaction. However, the legal practitioners and
commissioners for oaths due to their heavy workload, at times rely on their clerks to
verify the identity of the signatory. There is a clear instruction from the Malaysian Bar
Council for legal practitioners and commissioners for oaths to be present at the time
when conveyancing or other documents are executed. However, at times, the instruction
is not complied with. The court in Lau Teck San @ Lau Beng Cheng & 3 Ors v SK
Song,102 held that an attesting solicitor would be liable for professional negligence and
or breach of an implied warranty of authority in the event the transferor turns out to be
an impostor. This could help deter the busy practitioners from relying on their clerical
staff to identify a person executing documents.
7. Suggestions & Recommendations

It is important to revisit the rationale for introducing the Torrens system of registration in
Malaysia especially as there is evidence of risks to the system posed by fraud and other
threats that have impacted the system so as to reduce its effectiveness. The following are
some of the suggestions and recommendations that could be considered in the context of
improving the dealings registration system.
 Enhancing Function of Land Administration Technical Committee

A committee has been established at the Federal and State Government level to identify
the issues and problems relating to land administration and fraud. The membership of the
committee must be extended to include Bar Council representatives besides the police.
This will help the committee to identify the weaknesses in the conveyancing practice and
capacity building of conveyancing practitioners.
101
“Sistem PTG diceroboh, Sindiket Palsukan Dokumen Pendaftaran Berkomputer”, Reported in Utusan
Malaysia March 14, 2007.
102
Lau Teck San @ Lau Beng Cheng & 3 Ors v SK Song [1995] 2 CLJ 425.
27
 Introduce Use of Certificate of Correctness
The certificate of correctness probably is a guarantee that the Registrar may accept an
instrument at its face value, i.e. that the person signing the certificate is aware of the
antecedent circumstances which culminated in the execution of the instrument. If the
instrument ex facie is not in order, then it will be rejected notwithstanding the certificate
of correctness. The Registrar only sees what actually appears in the instrument, hence it
seems necessary to have the dealing vouched for. In other words, the Registrar places a
trust in the solicitor or broker, and when a person certifies an instrument, only reasonably
close contact with the facts which culminate in the execution of that instrument would
appear to discharge that trust, but a solicitor or broker whose staff arrangements are such
that every transaction is investigated with care and accuracy should be safe in certifying.
A lawyer or real estate agent certifying as to correctness should sign his own name and
not that of his firm.103 And the certificate shall show that he is acting for the party
claiming under the instrument.
James Hogg, in the first leading text on the Torrens system says:104 “In addition to
attestation by prescribed witnesses, the instrument must … be endorsed with a certificate,
by the person who seeks to have it registered or his properly constituted agent that it is
‘correct for the purposes of’ the local Statute … The provision seems in the five Statutes
in which it occurs to afford some further ground for the argument that the intention of the
legislatures, in enacting it, was to ensure by all possible means the correctness of the
instrument tendered for registration, and relieve the person who obtained registration on
the faith of it from all further liability”.
Suppose a lawyer were to certify as correct an instrument which was the result of a
transaction the details of which were unknown to him, and he signed it as correct merely
to oblige an acquaintance, or merely as a matter of form to secure registration relying on
the clerk’s certification. The official view is that this would be an entire misconception of
the nature of the responsibility assignable to him. If a solicitor or broker is not aware of
the circumstances surrounding a given transaction, how can he give an assurance that is
bona fide, and it is this assurance which, it would seem, the certification was intended to
produce. For example, a lawyer or real estate agent who has interviewed both vendor and
vendee, has seen the contract for sale, has identified the land by official search, and has
officiated at the actual settlement, can honestly certify the memorandum of transfer, or a
solicitor or broker whose staff arrangements are such that every transaction is
investigated with care and accuracy should be safe in certifying.
The Registrar only sees what actually appears in the instrument hence it is necessary to
have the dealing vouched for. It can be seen therefore that much reliance is placed on the
certification. In other words the Registrar places a trust in the lawyer or real estate agent,
103
Peter Blair, Frank Ticehurst, K Nettle (1989), Baalman and Wells, Land Titles Office Practice, 3rd edn
(Law Book Co., Australia) , p 223.
104
James Hogg, The Australian Torrens System with Statutes (London: W Clowes, 1905); Stein, Robert and
Stone, Margaret, (1991) Torrens Title (Butterworths, Sydneys), p 17; Whalan, D J, “The origins of the
Torrens System and its introduction in New Zealand”, in Hinde, G W (ed), (1991), The New Zealand
Torrens System Centennial Essays ((Wellington, New Zealand ), p 1; Fox, “The story behind the Torrens
System”, (1950) 23 Australian Law Journal 489.
28
and when a person certifies an instrument, only reasonably close contact with the facts
which culminate in the execution of that instrument, would appear to discharge that
trust.105
 Verifying Identity of Clients

It is recommended for lawyers and any party entrusted to witness the execution of
documents to call all parties entering into the transaction to meet at one session where the
parties will meet eye to eye rather than relying on estate agents or land brokers. This will
provide verification as to the identity of the parties. There must also be established a
procedure for the thorough identification of the parties by asking for identity card,
driver’s licence or passport and keeping a copy in the file. It is advised to adopt the 100
Point Check verification procedure as a minimum standard.106 Extreme care should be
taken in transactions involving non English or Bahasa Malaysia speaking clients and
ensure they are fully aware of the contents and of the documents they are executing and
the nature of the transaction they are entering. The execution of documents must be
witnessed only after verifying the identity of all parties to the transaction. If dealing is
transacted by virtue of a power of attorney or trust deed, all documents purporting to
confer the authority to deal with the property must be verified to ensure the authenticity
of the documents to prevent fraud or improper dealing by unscrupulous parties seeking to
make fast cash.
 Capacity Building of Registry/land office Staff to Improve Competency

The most important requirement for ensuring a successful and smooth working of the
Torrens system according to SK Das is an adequate and highly efficient staff in the
registry so that presentation of an instrument for registration is immediately noted in the
presentation book and a memorial thereof made with the least possible delay. The
possibility of any error in effecting a memorial must be avoided and, in that context,
noting in the presentation book of the date and the exact time of presentation of
instruments for registration becomes highly significant, for priority is thereby preserved
and indefeasibility of title assured.107 It is important to educate and train the Land
Registry/Office staff to ensure the land registration system is effective and lives up to the
principles and characteristics of the Torrens system.
105
Refer generally to the interesting discussion by Hayes, B E, “The Certificate of Correctness under the
Land Transfer Act” (Registrar-General of Land Information Paper 2000/01, Land Information New
Zealand, 2006).
106
Watkins, Paul, “Fraud In Conveyancing”, a paper presented at the Australian Institute of Conveyancers
2007 National Conference, March 2007, Internet edition accessed on August 20, 2009,
http://www.stewarttitlelimited.com.au/multimedia/relatedmedia/Fraud_in_Conveyancing_AIC_National_C
onference_Paper_2007.pdf. See also Department of Lands FAQ “How do I verify the identity of a person
claiming a right to deal with land”? http://www.lands.nsw.gov.au/valuation/faqs/proof_of_
identity?SQ_DESIGN_NAME. See Macdermott, Bruce, “Lawcover Risk Management – Managing the
Risk of Identity Fraud” Law Society Journal, November 2005, at p 53; Low, Roushi, “Opportunities for
fraud in the proposed Australian National Electronic Conveyancing System: Fact or Fiction? (2006)
Murdoch University Electronic Journal of Law 13(2), pp 225–253; Bransgrove, Matthew, “Mortgage Law:
What can solicitors do to reduce mortgage fraud?”, New South Wales Law Society Journal (November
2004) at p 52.
107
Das, S K, (1963), The Torrens System in Malaysia (Singapore, Malayan Law Journal), p 106.
29
 Constant Benchmarking to Improve the Dealings Registration System
‘Benchmarking’ has been defined by the AusIndustry-Best Practice Program (1995) as “an on-
going, systematic process to search for and introduce international best practice into your own
organization, conducted in such a way that all parts of your organization understand and achieve
their full potential. The search may be for products, services, or business practices and processes
of competitors or those organizations recognized as leaders in the industry or specific business
processes that you have chosen.”108
Benchmarking is recognised as having a key role to play in improving public sector

performance. Benchmarking is an important tool or mechanism developed to identify
strength and weaknesses of a particular system in order to suggest improvements. Tools for
benchmarking were developed to improve performance by identifying best practice through
learning from others and, in so doing, to stimulate innovation and to gain a competitive edge
in a rapidly changing and evolving business environment. At EU level, the importance of
competitiveness was given recognition with the establishment of a dedicated Enterprise
Directorate General. Erkki Liikanen, as EU Commissioner for Enterprise and the
Information Society, highlighted the importance of benchmarking for the public sector in the
year 2000 when he asserted that “Benchmarking has a key role to play ... by providing a
mechanism for identifying world-wide best practice and for learning from it…. I am
determined to promote benchmarking as a central instrument for improving the quality of
policy implementation. … Benchmarking can play a valuable role in helping public sector
organisations identify and share best practice.” In Ireland, benchmarking is commonly used
in the health sector and in pay determination for public sector workers. Steudler and
Williamson observed in 2002 that “there are no internationally accepted methodologies to
measure and compare the performance of land administration systems”.109
The United Nations Economic Commission for Europe (UNECE) Land Administration
Guidelines of 2005 state that “the efficiency, integrity and transparency of the land
administration system must be constantly measured and monitored, through performance
indicators relating for example to the time and cost of each transaction, and consumer
satisfaction”. 110 In this regard, the World Bank has developed a widely recognised “league”
table on registering property in different countries, which is based on three criteria, the
number of procedures involved, the time taken and the cost.111
108
Daniel Steudler and Ian P. Williamson, “A Framework for Benchmarking Land Administration
Systems,” paper presented, Commission 7 Annual Meeting, 11-16 June 2001, Gävle, Sweden Organised by
SLF, Sveriges Lantmätareförening in conjunction with Swedesurvey AB 1; Refer also AusIndustry (1995).
Benchmarking Self Help Manual - Your Organization’s Guide to Achieving Best Practice. AusIndustry-
Best Practice Program, second edition 1995, Australian Government Publishing Service, Canberra, ISBN 0
644 43110 5.
109
Steudler, Danial and Williamson, Ian P. (2000) A framework for Benchmarking Land Administration
Systems – FIG XX11 International Congress, Washington, D.C.
http://www.fao.org/DOCREP/005/X2038E/x2038e01.htm#TopOfPage
110
Inventory of Land Administration Systems in Europe and North America (2005) HM Land Registry
London on behalf of UN ECE Working Party on Land Administration
http://www.unece.org/hlm/publications.htm#WPLA
111
World Bank http://www.doingbusiness.org/ExploreTopics/RegisteringProperty/
30
Benchmarking exercises are important and it is would be useful to facilitate
throughout the country a benchmarking exercise so as to improve performance of
Land Administration departments and achieve the followings;
o to provide a basis for comparisons over time;
o to identify strengths and weaknesses of the land administration system;
o to justify the need to improve land administration and registration system and
identify areas/priorities for reform;
o to identify and link the all issues and sectors relating to land tenure such as
financial aspects, good governance, sustainability, social perspective and other
related issues from time to time with the changing needs of the society;
o to justify the need to invest in improving the land administration system;
o to constantly monitor improvements.
Benchmarking is a continuous process and requires a significant investment of effort by all

parties. The first steps might be to build simple models with neighbouring countries that have
comparable systems of land registration. This could be supported by the development of a
forum for exchange of information, evaluation of findings and consideration of the modalities
for exchange of comparative data
 Develop Principles of Good Governance for Land Administration

Principles for good governance of land administration were identified by Zakout as one
that must comprise of the following principles:112
No Principles Mechanism
1 Efficiency Procedures to register property transactions should be short
and simple. The fewer steps there are, the less opportunity for
informal payments
2 Effectiveness The effectiveness of land administration depends on capacity
building and financial provision, as well as on the general
socio-political conditions, such as political will and
commitment, the rule of law, regulatory quality and political
stability.
3 Transparency, Transparent recruitment of staff and transparent service
consistency standards and costs of services will contribute to higher
and efficiency, accountability, fairness and confidence in agency
predictability integrity
4 Integrity & Accountability in land administration can be improved through
accountability the implementation of uniform service standards that are
monitored, codes of conduct for staff (as well as mechanics of
sanction) and incentives such as awards for outstanding
employees.
5 Subsidiary, Increasing the autonomy of local land administration, while
112
Zakout, W, Wehrmann, B, Torhonen, M, (2007) “Good Governance in Land Administration: Principles
and Good Practices” (World Bank and Food And Agriculture Organzation Of The United Nations (FAO),
Washington, DC (USA) , full text available at Internet at url
http://www.fao.org/docrep/011/i0830e/i0830e00.htm accessed on 20th August 2009.
31
autonomy introducing checks and balances at the national level, can
& accountability improve services and reduce corruption.
6 Citizen response Client orientation and responsiveness in land administration
& participation can be achieved through improved access to information,
customer surveys to measure customers’ satisfaction and
hotlines to enable customers to report corruption and
misconduct.
7 Equity, fairness All people should have the same service standards independent
& impartiality of their political or economic status. The introduction of
counter offices and a numbering system for customers’ arrival
(“first come first served”) may achieve the objective.
8 Legal security Good governance in land administration requires a consistent
& rule of law and coherent legal framework, a fair and transparent judiciary
and general prevalence of the rule of law to protect property
rights.
8. Conclusion
This article has attempted to set out the strengths and weaknesses of the land registration
system and the circumstances where it can be exposed to fraud or improper dealings.
Police investigation shows that the majority of fraud occurs prior to registration and this
can go undetected at the Land Registry or Land Office as the staff entrusted with the
registration process has very limited powers. Thus, lawyers and all other parties entrusted
with preparing documents in conveyancing practice must assume an important role in the
contract and pre-registration process to prevent incidents of fraud. The various
suggestions especially the aspect relating to issuing of certificate of correctness and
closing of dealing session must be studied and explored further in the context of
improving Malaysian conveyancing practice. In Australia and New Zealand, this
mechanism has helped reduce fraud considerably. The Malaysian land registration system
is organised, efficient and provides clear guidelines, and fraudulent dealings can be
prevented if the Land Registry or Land Office staff are trained to detect fraud. The
Registrar has limited powers in that he is required to register all dealings if the dealings
are in order and fulfil all the conditions precedent for effecting registration. It is hoped
that the relevant authorities especially the land administration authorities would look into
the important aspects of land administration that is the capacity building of the personnel
involved in the land registration system so as to equip them with the relevant knowledge,
skills, the ability to combat fraudulent dealings and preserve the inviolability of the land
registration system as envisaged by Sir Robert Torrens. The Torrens system has many
advantages, other than those envisaged by Torrens. However, at present the system has
become very cumbersome and expensive for the layman. The Malaysian land dealings
registration system must be enhanced further to curb the increasing rate of fraud or any
improper dealings over land.
32

Weaknesses in The Registration of Land Dealings System in Malaysia - Ainul

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Weaknesses in The Registration of Land Dealings System in Malaysia - Ainul

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Weaknesses in the Registration of Land Dealings System in Malaysia: Suggestions

for Improvements for Enhancing the System

Land-title registration is a critical starting point in the continuum of modernisation, and it

Innovations in improving the land registration and recording system led to

2. Torrens Land Administration system

Nevertheless, it cannot be denied that Torrens’ political activities were substantially

3. Conferment of Indefeasibility of Title and Interests under Torrens System

The concept of indefeasibility of title is so deeply embedded in our land

That which cannot be defeated, revoked, or made void22. The term is

The question to be answered is why is it necessary to subscribe to the concept of

It is because of these differences, and in certain occasions, multiple interests held by

The effect of Adorna Properties is to confer immediate indefeasibility to the registered

4. Protecting Sanctity of Indefeasibility with Imposition of Rigid Procedures for

 Procedures Involved in Registration of Title and Interests in Land

 Use of Prescribed Stereotype Statutory Instrument of Dealing

Forms/Instruments Types of Dealings

14A Transfer of land, share or lease

 Execution of Instrument of Dealings

 Attestation of Instrument of Dealings

 Registration of Instrument of Dealings

 Procedures on Registration of Dealings

The presentation of an instrument of dealing can be accepted and entered in the

 Function of Registrar in Registering Dealings

Registration is effected by the Registrar by making a memorial on the Register Document

According to Abdoolcader J in Pow Hing & Anor v Registrar of Titles, Malacca,80 in

 Powers of Registrar to Make Enquiries

The Registrar is conferred a discretionary power to dispense with production of the

 Registrar’s Power to Correct Errors

According to S K Das, “every system of Torrens legislation contains a provision

5. Weaknesses in Conveyancing Practice Paving Inroad to Fraud

 Forging of Transfer Form 14A or Charge Form 16A/B

 Registering Dealings Using Power of Attorney

 Using Court Order to Register Dealings in Favour of Prospective Title or

 Problems in Computerised Land Registration System

 Presentation and Collection of Conveyancing Instruments by Unauthorised

State 2005 2006 2007 2008 Total

Table 2 Statistics of types of cases involving forged documents used to cheat

Type of Cases 2005 2006 2007 Total

Title, Identity Card and Sale 18 22 10 50

Source: Commercial Crime Department, Royal Malaysian Police Force

6. Challenges in Detecting Fraud in Land Dealings

 Lack of Uniform Practice in Land Registry/Offices

 Limited Powers of Registrar/Land Administrator

 Lack of Expertise and Resources in Detecting Forgery

 Problems in the Land Title Computerisation System

 Lack of Concern Amongst Legal Practitioners and Commissioners for Oaths

7. Suggestions & Recommendations

 Enhancing Function of Land Administration Technical Committee

 Verifying Identity of Clients

 Capacity Building of Registry/land office Staff to Improve Competency

Benchmarking is recognised as having a key role to play in improving public sector

Benchmarking is a continuous process and requires a significant investment of effort by all

 Develop Principles of Good Governance for Land Administration

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