Federal Court says ex-CJ wrong on land title

In a clear reversal to its 2000 judgment, the Federal Court ruled today that its decision on the controversial Adorna Properties Sdn Bhd vs Boonsom Boonyanit case nine years ago was erroneous.

A five-member panel led by Chief Justice Zaki Azmi ( below ) unanimously departed from the court's previous judgement made by a three-member panel headed by former chief justice Eusoff Chin.

The others were Court of Appeal president Alauddin Mohd Sheriff, Chief Judge of Malaya Arifin Zakaria and Federal Court judges Zulkefli Ahmad Makinudin and James Foong Cheng Yuen.

The declaration was made in the case of Tan Ying Hong vs Tan Sian San, Cini Timber Industries Sdn Bhd and United Malayan Banking Corporation Bhd today.

This 1985 case, quite similar to Adorna Properties, involves Sian San who had purported to possess power of attorney (PA) to secure loans of RM200,000 and RM100,000 respectively where the loans were made for Cini Timber.

However, Ying Hong who claimed he did not sign the PA, said his signature was forged and was only aware of the matter when a notice of demand was given to him following unpaid loans.

It was not disputed that Ying Hong's signature was forged and he had not charge the land.

The Adorna Properties decision in 2000 was "revisited" following a question of law posed in the present case.

The questions pertain to "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".

This questions relates to Adorna Properties decision made by the apex court in 2000. Indefeasible by definition means it was not liable to being annulled or voided or undone. 

'Obvious and blatant error'

Zaki said he was legally obligated to restate the law since the error committed was so obvious and blatant.

"It is quite a well-known fact that some unscrupulous people have been taking advantage of this error by falsely transferring titles to themselves.

"I hope that with this decision, the land authorities will be extra cautious when registering transfers."

Meanwhile, the Chief Judge of Malaya Justice Arifin ( right ), in his 28-page judgment in answering the posed question in the negative, said the court holds the Federal Court decision in the Adorna Properties was misconstrued.

"It misconstrued Section 340 (1) (2) and (3) of the National Land Code and came to the erroneous conclusion that the proviso appearing in sub section (3) equally applies to subsection 2.

"By equally so doing the Federal Court gave recognition to the concept of immediate indefeasibility under the Code which we think is contrary to the provision of section 340.

"It is interesting to note the learned representatives of UMBC and the attorney-general agreed that the Adorna Properties was wrongly decided."

As a result of this decision, landowners could now heave a sigh of relief that the transfer of land by fraudulent means would no longer be legally accepted.

Some 30 landowners are affected by the outcome of this landmark case.

The panel had deliberated on 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.

Stolen land sold for RM12 mil

The case was brought to court by Boonsom Boonyanit, who was residing in Thailand and owned two plots of land in Tanjung Bungah in Penang.

In 1988, a woman who claimed to be Mrs Boonsoom Boonyanit made a statutory declaration that she had lost the original titles to the two plots.

She was able to get the Land Office to issue her a certified copy of the title and the impostor sold the land to Adorna Properties for RM12 million.

On discovering that his land was sold without his knowledge, Boonyanit sued Adorna Properties.

In 1995, Penang High Court judge Vincent Ng ruled in favour of Adorna Properties, arguing that the transfer was legitimate despite that the land was acquired fraudulently.

Boonyanit appealed to the higher court. A three-member Court of Appeal panel, comprising Gopal Sri Ram ( right) , Siti Norma Yaakob and Ahmad Fairuz, ruled in Boonyanit’s favour in 1997.

Adorna then appealed to the country's highest court where the three-member Federal Court panel comprising Eusoff Chin, Wan Adnan Ismail and Abu Mansor Ali  decided in favour of the company in 2000. By then, Boonyanit has died.

The decision has great impact on many other cases where land acquired fraudalently were subsequently sold.

Following today's matter, Arifin allowed Ying Hong's appeal and allowed his application of declaration that the said charges are void and ordered the bank to deliver the land title to him.

The court awarded costs of this appeal and the courts below to the appellant (Ying Hong).

Ying Hong was represented by counsel T Mura Raju and Bob S Arumugam. Lawyer Roger Tan held a watching brief for the Bar Council .

At last, a wrong judgment made right