REGISTRATION &

INDEFEASIBILITY
LXEB2112 LAND LAW I

REGISTRATION

Definition of dealings
ss 5 & 205 NLC

Definition of dealings
Registrable dealings:
1. Transfers
2. Leases
3. Charges
4. Easements

Definition of dealings
s 206(2) Non-registrable dealings:
1. Tenancy
2. Lien
Q: How are unregistrable dealings protected under the
Torrens system?

Persons & body to whom

dealings may be effected
ss 205(2) & 43 NLC

Requirements
ss 207-212, 293-294, 206(1) &(2) NLC:

Requirements

In the
prescribed
forms

Duly executed

Presented to
Registry or Land
Office
+ accompanying
documents

Requirements

Entry in
Presentation
Book

Registrar
determines
Fitness for
Registration

Registration
if Fit

Requirements
1. In the prescribed forms First Schedule (s 207)
2. Duly executed:
a. To contain the descriptions of the parties (s 208)
b. To contain the description of land (s 209)
c. To be executed by the parties or persons acting on a
valid POA (s 210)

Requirements
2 c. s 210 What is execution?

Natural person
Signing OR affixing thumbprint

Corporations (subject to its constitution)

Seal of the corporation & statement signed by
the authorized office-bearers

Requirements
2 c. s 210 What is execution?
- Signing does not include making a mark, e.g.

Requirements
2 d. S 211- Every execution must be attested

Requirements
2 d. S 211- Every execution must be attested
Who may attest? See Fifth Schedule

Requirements

Requirements
See Tenth Schedule to the NLC
Para 11 Writing including signing shall be in permanent
black or blue-black ink

Requirements

Requirements
3. Presented to Registry or Land Office, s 292
Q: What may be presented & registered?
S 292(1)
Q: What is a certificate of sale under Part 16?

Requirements
4. To be accompanied with
a. Registration fees, s 293
b. The necessary documents, s 294
the original instrument shall be duly stamped, s 294(1)
(a)

Requirements
5. To be entered in Presentation Book, s 295
6. Registrar decides fitness for registration, ss 297-300
a. if an instrument satisfies all the requirements in s 301(a)(e)
b. Rent due paid before presentation, s 301A
c. May make enquiries, s 302 subject to limitations on
Registrars powers under s 303

Requirements
if the instrument is not fit for registration: s 298(2) NLC
Reject except solely of clerical error/formal defect
suspend registration for maximum 14 days

Requirements
if the instrument is fit for registration: s 304
S 304(1) the time & date of registration shall be the time
& date of the entry of an instrument in Presentation Book
How registration is effected, s 304(2)

Requirements
Mohammad bin Buyong v Pemungut Hasil Tanah, Gombak
& Ors
Where a prescribed memorial of the dealing is made on
RDT under the hand and seal of the registering
authority

Requirements
Island & Peninsular Development Bhd & Anor v Legal
Adviser, Kedah & Ors [1973] 2 MLJ 71
If an instrument is in order and fit, it is the Registrars
duty to register it

Effect of registration
s 340 NLC
Tan Ying Hong v Tan Sian San [2010] 2 MLJ 1 FC

Effect of registration
Registration = cornerstone of the Torrens system
Torrens system Title by registration only registration
of title

Effect of non-registration
s 206(3) NLC

INDEFEASIBILITY

INDEFEASIBILITY
S 340

SECTION 340
s 340(1) the general rule
S 340(2) exceptions to s 340(1)
S 340(3) the effect of the exceptions in s 340(2) to
subsequent purchaser & any interest subsequently
granted also defeasible
Proviso to s 340(3) title or interest of bona fide purchaser
not affected

SECTION 340
Q: Proviso to s 340(3) applicable to persons/bodies in s
340(2) or only those in s 340(3)?

SECTION 340

A (Initial land owner)

B (Buyer)

SECTION 340

X
A (Initial land owner)

B (Buyer)

SECTION 340

A (Initial land owner) B (Buyer) C (Subsequent purchaser)

S 340(3)
S 340(2)

SECTION 340
C=Bona fide
Purchaser
Proviso to s 340(3)
X

A (Initial land owner) B (Buyer)

C (Subsequent purchaser)
S 340(2)
S 340(3)

Adorna Properties v Boonsom

Boonyanit

Adorna Properties v Boonsom

Boonyanit

Adorna Properties v Boonsom

Boonyanit
from The Star

Adorna Properties v Boonsom

Boonyanit

Adorna Properties v Boonsom

Boonyanit

Adorna Properties v Boonsom

Boonyanit
Land of R, RP of the land, was sold & transferred to A
R: the vendor, who sold the land to A had forged her
signature

Q; Whether A, unaware of forgery, obtained an

indefeasible title to the land under the proviso to s 340(3)?

Adorna Properties v Boonsom

Boonyanit
Forged Rs signature &
transferred land to A

X, impostor
R (Original land owner)

A (Buyer) unaware of forgery

Adorna Properties v Boonsom

Boonyanit
Eusoff Chin Chief Justice, Wan Adnan CJ (Malaya) & Abu
Mansor FCJ:
Registered proprietors who fall under the category under
the proviso to s 340(3) get immediate indefeasible title
Even if the instrument of transfer was forged, A obtained
an indefeasible title to the land

Adorna Properties v Boonsom

Boonyanit
Overruled by FC in Tan Ying Hong

INDEFEASIBILITY Tan Ying

Hong
IMMEDIATE INDEFEASIBILITY
Immunity is immediate upon registration
UNLESS
Registration was obtained by fraud
DEFERRED INDEFEASIBILITY
Immunity is postponed until it is registered in the name of a subsequent
bona fide purchaser
Even if the immediate purchaser was not guilty or party to forgery

INDEFEASIBILITY Tan Ying

Hong
IMMEDIATE INDEFEASIBILITY
Once registration has been effected,
the system is not concerned with the substance, form & probity
of the instrument
Registration cures any defect instrument
DEFERRED INDEFEASIBILITY
Even after registration, the instrument still matters & affect
the registered title/interest
The indefeasibility only attaches to the title/interest upon a
subsequent transfer

Indefeasibility
Immediate indefeasibility the RP loses
Deferred indefeasibility the buyer loses
No assurance fund under Malaysian Torrens system

Indefeasibility
A state guarantee is an integral part of a system of
registration of titles Sir Robert Torrens

1 of the 3 fundamental principles of a Torrens system is

missing in Malaysia

Indefeasibility
Kobchai Sosothikul (representative of the estate
ofBoonsom Boonyanit@ Sun Yok Eng, deceased) v
Pengarah Tanah dan Galian, Pulau Pinang [2012] 3 MLJ
297
Action claiming damages against the State Director for
negligence. Elements of tort of negligence were
established. But the court held that Ps action was time
barred under s 2(a) of the Public Authorities Protection
Act 1948 (PAPA) as it was filed after the expiry of 36 mths
from the date on which cause of action accrued

S 340(2)
3 vitiating factors:
a) fraud or misrepresentation to which the RP or interest
holder or his agent was a party or privy
b) forgery OR by void or insufficient instrument
c) unlawful acquisition by purported exercise of power
or authority

S 340(2)(a) Fraud
1) fraud to which the RP or interest holder or his agent
was a party or privy
2) fraud to which the agent of the RP or interest holder
was a party or privy => even if the RP or interest holder
was unaware of the fraudulent act

S 340(2)(a) Fraud
Abu Bakar Ismail v Ismail Husin & Ors [2007] 3 CLJ 97 CA
Charge was defeasible as the solicitor, acting for the
chargee bank & thus the agent of the bank, had acted
fraudulently

S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
R1 (RP)
A obtained order for
Developer
2 charges
sale upon R1s default
S&P for
houses
R2-R7 before
charges

R2-R7 set aside the order for

sale
Rs: If A did careful inquiries
would have known about sale
of houses to R2-R7 & with
such constructive notice, the
charges were not indefeasible
under s 340(2)(a)

S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
Fraud means actual fraud, dishonesty of some sort to which
the RP is a party or privy, not what is called constructive or
equitable fraud
Fraud implies a wilful act, on the part of one, whereby another
is sought to be deprived, by unjustifiable means, of what he is
entitled
If the object of a transfer is to cheat a man of a known existing
right, that is fraudulent

S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
The mere fact that one might have found out fraud if he
had been more vigilant, and had made further inquiries
which he omitted to make, does not of itself prove fraud
on his part
But if ones suspicions were aroused and he abstained
from making inquiries for fear of learning the truth, fraud
may be established

S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
Whether fraud exists is a Q of fact, depending on the
circumstances of each case
The onus is one the person alleging fraud to prove fraud,
not on a balance of probabilities but beyond reasonable
doubt

S 340(2)(a) Fraud
Tai Lee Finance Co Sdn Bhd v Official Assignee & Ors FC
For a developer to charge land to secure loans for the
purposes of development is a common practice. It could
not be said that the designed object of the charge was to
defeat Rs beneficial interest
At the very most A had constructive notice of Rs prior
beneficial interests, but no evidence of fraud to which A
was a party. Fraud not proved beyond reasonable doubt.

S 340(2)(a) Fraud
Datuk Jagindar Singh & Ors v Tara Rajaratnam FC
Transferred to Suppiah (A)
R, RP of land in Kulai

18 days later transferred to

Arul who
Dr Das, bro of Rs husband
A, Jagindar
then transferred to co.
guarantor for Ds loans
owned by J
had difficulties with his center in Sg
Went to Rs
house with another 2
Asked bro who persuaded
As (lawyers),
made R to sign doc
R to charge the land

S 340(2)(a) Fraud
Datuk Jagindar Singh & Ors v Tara Rajaratnam FC
As were not honest as all A1 & A2 wanted was to get R to
sign the transfer so that they could lay their hands on the
property
A3 (Arul) must have known what was going on. A3 claimed
to be a bona fide purchaser for value. But he colluded with
other As to get the property. The haste with which A2
transferred the property to A3 was part of a design to
deprive R of the property.

S 340(2)(a) Fraud
Knowing about an unregistered interest may amount to
fraud: Loke Yew v Port Swettenham Rubber Co Ltd
Cf Tueh Guat Choo v Cheah Ah Hoe & Anor

S 340(2)(a) Misrepresentation
Loke Yew v Port Sweettenham Rubber Co Ltd PC
=> Fraudulent misrepresentation, a species of fraud
Datuk Jagindar Singh & Ors v Tara Rajaratnam FC
Does not include innocent misrepresentation

S 340(2)(b) Forgery
e
l
b
i
s
)
a
b
e
(
f
e
r
d
o
)
e
l
a
t
(
i
)
t
2
s
(
0
B
4
3
s
r
e
und

A (Initial RP)

B forged

S 340(2)(b) Forgery
X forged

A (Initial RP)

e
l
b
i
s
a
e
f
)
e
b
d
(
)
e
l
2
t
(
i
0
t
Bs er s 34
und

B unaware of forgery
or not involved in forgery

S 340(2)(b) Forgery
Cf other jurisdictions implementing Torrens system e.g.
NZ & Australia registration obtained by forgery gives
indefeasible title or interest (immediate indefeasibility)
Sarawak Land Code practises immediate indefeasibility

S 340(2)(b) Forgery

Tan Ying Hong

A,
Two
RP of land in Kuantan charges
R1,
Purporting to act underFor loan
to R2
a forged power of attorney

R3
-UMBC

S 340(2)(b) Forgery
Tan Ying Hong
Q: Did UMBC obtained indefeasible interest?

S 340(2)(b) Forgery
Tan Ying Hong
The two charges were based on void instruments since the
charge instruments were not executed by A, but by R1
pursuant to a forged PA

The charge instruments were void, thus the charges are

liable to be set aside under s 340(2)(b)

S 340(2)(b) Void or Insufficient

Instrument
Tan Tock Kwee & Anor v Tey Siew Cha & Anor
insufficient instrument failure to comply with the
procedures or formalities under the NLC
void instrument any prohibition under the NLC or any
other written law

S 340(2)(b) Void or Insufficient

Instrument
Tan Hee Juan v Teh Boon Keat
Two transfers were executed by the infant P .
Minors cannot make a contract within the meaning of the
Contracts Act 1950.
Thus the transfers were void. The registration was
obtained by avoid instrument and thus defeasible.

S 340(2)(b) Void or Insufficient

Instrument
Invalid power of attorney: Puran Singh v Kehar Singh & Anor
Dealings <-> restriction in interest: Toh Huat Khay
There were restrictions in interest endorsed on the document of title as follow:
(a) that the said land could not be transferred within a period of ten years from
the date of registration of the title; and (b) that after the period of ten years,
the said land could only be transferred with the consent of the state authority.
Notwithstanding the said restriction in interest, the defendant became the
registered owner of the said land on 31 March 1998, ie, about 18 months after
TKC had become the registered owner. The director of lands and mines
purported to approve the transfer

S 340(2)(c) Unlawful acquisition by

purported exercise of power or authority
Dealings <-> restrictions in interest: Toh Huat Khay
Woon Kim Poh v Saamah bte Haji Kasim: a dealing
registered <-> prohibition imposed by a caveat

Other Exceptions to Indefeasibility

The power of the Registrar to correct errors or omissions
under s 380 not really an exception
Power of the court to give directions necessary to give
effect to any judgment or order under s 417 not really an
exception too
S 340(4)(b) Ong Chat Pang v Valliappa Chettiar FC
Oh Hiam & Ors v Tham Kong claims in personam

S 340(3) Subsequent purchaser

S 340(3)

A indefeasible, s 340(2)
B also indefeasible,
s 340(3)

S 340(3) Subsequent purchaser

S 340(3)
Owe Then Kooi v Au Thiam Seng & Anor
Subsequently means after the event of fraud or other
situations mentioned in s 340(2).

S 340(3) Subsequent purchaser

Proviso to s 340(3) nothing in this SUB-SECTION
nothing in this SECTION

S 340(3) Subsequent purchaser

S 340(3)

!
g
n
i
l
r
a
d
s

y
t
i
u
q
e
m

I
But

A indefeasible, s 340(2)
B also indefeasible,
s 340(3)

S 340(3) Subsequent purchaser

S 340(3)

Im
equitys
darling
too!

A indefeasible, s 340(2)

Sorry, darling,
proviso to s 340(3)
is
for me, not for
you!

B also indefeasible,
s 340(3)

S 340(3) Subsequent purchaser

Boonsom Boonyanit v Adorna Properties Sdn Bhd CA
The words any purchaser in the proviso to s 340(3) do
not include a RP whose immediate title is rendered
defeasible by one or more of the vitiating elements in s
340(2).
Any other construction would, in our view, denude sub-s
(2) of all effect.

S 340(3) Subsequent purchaser

Kasai Reiko v Annie Lor Lee Fong & Ors (Public Bank Bhd,
Intervener) [2014] 7 MLJ 652
The term purchaser in the proviso to s 340(3) is not
limited to the person or body that has acquired title to the
land but extends to those taking an interest in the land,
e.g. a chargee or a lessee

Tan Ying Hong

Q: Was the proviso to s 340(3) applicable to R3?
R3 was immediate holder of the charges, thus could not
take advantage of the proviso to s 340(3)

FC in Adorna Properties had misconstrued s 340(1), (2) &

(3) by applying the proviso to s 340(3) to s 340(2)

Proviso to s 340(3)
In good faith
& for valuable consideration

Proviso to s 340(3)
Datuk Jagindar Singh
In good faith
Must not be a party to fraud, deception, dishonesty

Proviso to s 340(3)
Lai Soong Cheong v Kien Loong
Pekan Nenas Indsutries Sdn Bhd v Chang Ching Chuen &
Ors
Negligence per se fraud

Proviso to s 340(3)
In good faith
Must not be a party to any vitiating factors under s 340(2)
Should have no knowledge of matters in s 340(2) when he
entered into the transaction

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Transfer of land to
Equity Nominess Sdn Bhd
(CMS & wife sole propreitors)

Dep of IDT &

blank transfer form
Doshi
original RP

CMS
lender

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Doshi, previously the RP of a piece of land. He deposited
IDT and a blank transfer form executed by him with CMS
to secure a loan he obtained from the latter.
When Doshi failed to repay the loan within 3 months, CMS
transferred the land to Equitable Nominees Sdn Bhd
which subsequently sold the land to YTL.

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Assuming that the loan agreement was illegal and, thus
the transfer from CMS to equitable nominees was void,
and assuming that that transfer was also void because of
the falsity of the attestation clause (s 340(2)), the title
would thus be defeasible.

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
When it was later transferred to YTL, it was also liable to
be set aside under
s 340(3)(a).
But YTL was protected under the proviso to s 340(3),
being a purchaser in good faith & for valuable
consideration.

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
We must reiterate that the proviso to s 340(3) applies
exclusively to those situations which are covered by
sub-s (3) which is that s 340(3) will only take effect after
the immediate RP or holder in s 340(2) has transferred his
defeasible title or interest to someone else (see s 340(3)
(a)).

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
Is there then any difference between the two sets of
situations in s 340(2) and s340(3)? The difference is this:
In s 340(2) where a registered title or interest is rendered
defeasible by reason of any of the circumstances set out in
s 340(2), that title or interest in the hands of the
immediate RP or holder of an interest (for example, any
charge or lease) is liable to be set aside. And any interest
granted by such immediate proprietor or holder is also
liable to be set aside

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
In effect, s 340(2)(a) and (b) affect the immediate
proprietor, chargee or lessee even if he be a purchaser for
value under sub-s (2)(a), or, an innocent purchaser for
value under sub-s (2)(b). It is important to be reminded
that there is no proviso to this subsection.

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
On the other hand, s 340(3) applies only to a situation
after the immediate RP or holder in s 340(2) has
transferred his defeasible title or interest to someone else.
The result will be virtually the same in s 340(3) as in
s340(2) but for one important difference. Under s 340(2)
the title or interest in the hands of the immediate RP or
holder of an interest in the land (such as a charge or a
lease) is liable to be set aside.

Proviso to s 340(3)
Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85 FC
But, in s 340(3) although the title or interest which is in
the hands of the subsequent purchaser is also liable to be
set aside, the subsequent purchaser has the benefit of
the protection of the proviso to sub-s (3) which the
immediate proprietor or holder in s 340(2) does not have.

SECTION 340
s 340(1) the general rule
S 340(2) exceptions to s 340(1)
S 340(3) the effect of the exceptions in s 340(2) to
subsequent purchaser & any interest subsequently
granted also defeasible
Proviso to s 340(3) title or interest of bona fide purchaser
(only subsequent purchaser!!) not affected

SECTION 340
A
registered himself
as RP

B
Subsequent
purchaser

Q: Which transaction is tainted

with s 340(2) vitiating factors?

SECTION 340

A
B
Subsequent
registered himself
Purchaser
as RP
s 340(1), As title indefeasible
S 340(3)
If s 340(2) applies,
Defeasible
Proviso to s 340(3)
As title defeasible
Unless B is
bona fide purchaser

S 340(3)
Also defeasible
Proviso to s 340(3)
Unless C is
Bona fide
purchaser

SECTION 340
Original RP

By virtue of fraud
E.g. forged instrument
Or pass off as vendors

s 340(2)
Defeasible
B is party or privy
to fraud
B= immediate p
Bona fide purchaser
inapplicable

Subsequent
purchaser
s 340(3)
Also defeasible
Proviso to s 340(3)
Unless C is
Bona fide
purchaser

SECTION 340
Original RP

By virtue of fraud
of X=agent of B

s 340(2)
Defeasible
Bs agent is party or
to fraud
B= immediate p
Bona fide purchaser
inapplicable

C
Subsequent
purchaser
privy
s 340(3)
Also defeasible
Proviso to s 340(3)
Unless C is
Bona fide
purchaser

SECTION 340
Original RP

B forged documents

s 340(2)
Defeasible

Subsequent
purchaser
s 340(3)
Bona fide purchaser Also defeasible
inapplicable
Proviso to s 340(3)
B=immediate purchaser
Unless C is
subsequent purchaser
Bona fide
purchaser

SECTION 340
Original RP

X forged documents

s 340(2)
Subsequent
Defeasible
purchaser
Bona fide purchaser s 340(3)
inapplicable
Also defeasible
B=immediate purchaser
Proviso to s 340(3)
subsequent purchaser
Unless C is
even if B unaware of Bona fide
forgery!
purchaser

S 340(3) & Proviso

Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors
FC
As, nephew & nieces of one Saribu, deceased. The
deceased was the RP of 1/3 undivided share in 2 plots of
land in Dengkil, Sepang.
The deceased died in Indonesia without issue in 1941. 43
years later, R1 obtained an order to distribute the share in
the lands among R1-R4. R1-R4 later transferred the share
in the land to R5 & R6 respectively.

S 340(3) & Proviso

Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors
FC
As: R1-R4 obtained title to the lots by fraud or
misrepresentation. As obtained JID against R1-R4 because
they did not defend the claim.
Trial court & CA held that R5-R6 were bona fide
purchasers.

S 340(3) & Proviso

Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors FC
Held:
Both trial court & CA did not consider if R5-R6 were subsequent
purchasers.
for R5-R6 to have been bona fide subsequent purchasers, there
must have been an immediate purchaser in the first place. R1R4, from whom R5-R6 obtained title, were not immediate
purchasers. Rather, they were imposters of those entitled
to the estate of the deceased. ..

S 340(3) & Proviso

Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors FC
Held:
They, like the fake Boonsom who impersonated the true
Boonsom, had no title to pass to R5-R6. R5-R6 who were the
immediate purchasers, acquired a title that was not
indefeasible. But when the fraudulent title of R1-R4 were set
aside by the default judgment, the defeasible title of R5-R6
was also defeated.

S 340(3) & Proviso

Kamarulzaman bin Omar & Ors v Yakub bin

Fraud/
Husin Misrepresenta
& Ors
tion, s 340(2)

FC
R1-R4 obtained title in land by fraud/misrepresentation
Order of distribution Administrator effected MOT in
favour of R1-R4
S 340(3)?
R1-R4 transferred the land to R5-R6

Proviso to
s 340(3)?

S 340(3) & Proviso

R1-R4 impostors in Boonsom Boonyanit because the
latter never registered herself as the RP but R1-R4 did!
Note: Purchaser is used only in proviso to s 340(3), s
340(2) does not mention purchaser

 In the instant case, both the trial court and the Court of Appeal held that the fifth and sixth
respondents were bona fide purchasers. However, both courts failed to inquire whether the fifth or
sixth respondents were immediate or subsequent purchasers. Only a subsequent purchaser was
entitled to raise the shield of indefeasibility. An immediate purchaser of a title tainted by any one
of the vitiating elements acquired a title that was not indefeasible. Thus, even if the fifth and sixth
respondents were bona fide purchasers they could not by that fact alone have acquired a shield of
indefeasibility unless they had been bona fide subsequent purchasers. In the present case, the first
to fourth respondents, from whom the fifth and sixth respondents obtained title, were not
immediate purchasers but rather imposters of those entitled to the estate of the deceased.
Therefore, when the fraudulent title of the first to fourth respondents was set aside by the default
judgment, the defeasible title of the fifth and sixth respondents was also defeated (see para 43).
As immediate purchasers, the fifth and sixth respondents were not protected by the proviso to s
340(3) of the NLC (see para 44).

S 340(3) & Proviso