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Indefeasibility, Revision - Coggle Diagram

- - - - Definitions
        
        Assets Co Ltd v Mere Roihi [1905]:
        
        Actual fraud means dishonesty of some sort - not called constructive or equitable fraud
        
        Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1923]:
        
        Actual fraud is defined as dishonesty which is the willful and conscious disregard and violation of the rights of the other persons
        
        Datuk Jagindar Singh v Tara Rajaratnam [1983]:
        
        Identifies the connection between fraud and fraudulent misrepresentation
      - Actual Fraud
        
        Datuk Jagindar Singh v Tara Rajaratnam [1983]:
        
        Registered proprietor (R) claimed that she was induced by fraud and undue influence by the A1 and A2 to transfer the property to A2. R was informed that the property won't be transferred to anyone else and when she repaired a sum of $220,000 within 1 year, the property will be transferred back to her. In 18 days, A2 transferred the property to A3 who then transferred the property a company wholly owned by A1 adn subdivided and sold
        
        Held:
        
        HC held that the appellants were guilty of fraud
        
        FC upheld the decision on the finding of fraud. The security agreement did not constitute an outright transfer of the land
      - Privy to Fraud
        
        Situation A:
        
        Original owner (first transfer tainted with fraud) to fraudster (immediate trasferee - defeasible)
        
        Fraudster (second transfer) to subsequent transferee (deferred transferee - defeasible unless S.340(2) applies)
        
        Situation B:
        
        Original owner (first transfer, worked with fraudster) to bona fide purchaser (will be indefeasible)
        
        Bona fide purchaser (second transfer) to subsequent transferee (will be indefeasible)
  - - - Situation A:
        
        Original owner (first transfer using forged document) to forger (immediate transferee - defeasible)
        
        Forger (second transfer) to subsequent transferee (deferred transferee - defeasible unless S.340(2) applies)
        
        Situation B:
        
        Original owner (first transfer with forged document, worked with forger) to bona fide purchaser (defeasible)
        
        Boda fide purchaser (second transfer) to subsequent transferee (deferred transferee - defeasible unless S.340(2) applies)
      - CIMB Bank Bhd v AmBank (M) Sdn Bhd & ors [2017]:
        
        Facts: Land was charged in favour of CIMB by original owner. Owner intended to sell to a purchaser who then wanted a loan from AmBank to finance purchase. When CIMB's charge was discharged, AmBank was registered as the charge of the land and the purchaser registered as the registered proprietor. It was later found that the the removal of the CIMB charge and registration of the purchaser was forged - there were 2 titles to the land.
        
        Issue: whether the registration of AmBank is defeasible and if CIMB remains the registered chargee
        
        Held:
        
        HC held that AmBank being the immediate purchaser is not protected by S.340(2) and thus registration is defeasible
        
        Both COA and FC - AmBank derived interest in the land from the charge executed by Wong - it became a holder of a subsequent interest in the land and protected by S.340(2)
  - - - Tan Hee Juan v Teh Boon Keat [1934]:
        
        Transfer documents executed by minor are void and title conferred thereto becomes defeasible
        
        UMB v Syarikat Perumahan Luas Sdn Bhd (No.2) [1988]:
        
        Charge registered was in breach of restriction in interest on the title. Such charge would require express sanction of the State Authority
  - - - Ong Chat pang & Anor v Valliapa Chettiar [1971]:
        
        Operation of law is a generic term deliberately used by the legislature to grant relief in cases where contractual or conscientious obligations are undertaken and imposed on the registered proprietor either by way at law or in equity
      - Krishnadas a/l Achutan Nair & ors v Maniyam a/l Samykano [1997]:
        
        The purpose of S.340(4)(b) is to deal with facts that do not fall squarely within the other exceptions to indefeasibility that appears in the second subsection of S.340 NLC. While recognising that its neither possible nor desirable to predict with certain the wide range of cases that, while failing to come within the vitiating categories specified by the second subsection, may yet come within the scope of S.340(4)(b)
  - - - Au Meng Nam & Anor v Ung Yak Chew & ors [2007]:
        
        Facts: C were the original owners. Land was discovered to be transferred to D1. C claimed that they never signed any documents for the transfer. D1 claimed that he was bona fide - claimed against D2 and D3 who were the solicitors for D1 in handling the transaction. D2 and D3 then claimed that the Pentadbir Tanah Daerah JB, D4 was negligent.
        
        Held: HC found the documents to be forged but dismissed the claim following Boonsom Boonyanit
        
        COA allowed the appeal - S.340(3) does not apply to S.340(2). D1 was an immediate purchaser and not a subsequent purchaser.
        
        Liputan Simfoni Sdn Bhd v Pembangunan Orkid Desa Sdn Bhd [2019]:
        
        POD was the original owner. An imposter company claiming to be POD applied for a new title where in fact the original title had always been with POD. Imposter sold property to D2, who then sold to LS.
        
        Held: HC allowed POD's claim and this was upheld by COA. LS claimed that they are a purchaser of good faith and appealed to FC
        
        A important fact - LS attended enquiry at land office whereby they acknowledged the existence of POD's adverse claim - they should have avoided the sale but did not. They are not purchaser in good faith
      - Good Faith definition
        
        T Sivam a/l Tharamalingam v Public Bank Sdn Bhd [2018]:
        
        'good faith' includes due inquiry and implies not only upright mental attitude + clear conscience of a person but also the doing of an act showing ordinary prudence has been exercised according to standard of a reasonable person
- - - - S.340(2) - The title/interest of any such person/body shall not be indefeasible
        
        (a) any case of fraud/misrepresentation
        
        (b) registration obtained by forgery/by means of insufficient or void instrument
        
        (c) title/interest unlawfully acquired by someone in the purported exercise of any power/authority
        
        S.340(3) - Where title/interest of any person/body is defeasible by reason of any circumstances specified in (2)
        
        (a) shall be liable to be set aside in hands of any person to whom it may subsequently be transferred
        
        (b) any interest subsequently granted thereout shall be liable to be set aside in the hands of any person/body to whom for the time being vested
- - - - Held:
        
        On the basis of immediate indefeasibility, RC obtained indefeasible title. Hence, subsequent transfer of property to Walker in valid
    - - cont.
        
        COA allowed appeal. Standard proof for forgery is on the balance of probabilities. The word "subsequent" in S.340 NLC refers to subsequent purchaser and not an immediate purchaser, hence creating a deferred indefeasibility which only benefits subsequent purchaser. Title of an immediate purchaser is defeasible if tainted by one or more vitiating factor. Trial judge erred in his reliance on Frazer v Walker
- - - - Held per FC:
        
        FC held that a person in the position of Adorne Properties cannot take advantage of S.340(3) - FC in Boonsom Boonyanit misconstrued S.340 and came to the wrong conclusion.
        
        D£ even in good faith for value, obtained title from void instruments. It automatically follows that such charge was liable to be set aside
    - - Kararulzaman bin Omar & ors v Yakub bin Husin and & ors [2014]:
        
        When a registered title/interest is sought to be set aside under S.340:
        
        (1) ascertain whether the title/interest under challenge is registered in the name of an immediate purchaser/subsequent purchaser
        
        (2) If the title/interest is registered in the name of an immediate purchaser, the bona fides of the immediate purchaser won't offer indefeasibility. The title/interest of an immediate purchaser is still liable to be set aside if any of the vitiating elements as laid out in S.340(2)
        
        (3) If the title/interest is registered in the name of a subsequent purchaser then the vitiating elements in S.340(2) won't affect the title/interest of a bona fide subsequent purchaser.
        
        (4) The title/interest of a subsequent chaser is only liable to be set aside if the subseqient purchase is not a bona fide subsequent purchaser
        
        (5) The title/interest acquired by a subsequent purchaser in good faith and for valuable consideration or by any person or body claiming through or under such a subsequent purchase is indefeasible
- - - - Assets Co Ltd v Mere Roihi:
        
        Actual fraud means dishonesty of some sort - not called constructive or equitable fraud
      - Waimiha Sawmilling Co Ltd v Waione Timber Co:
        
        Actual fraud is defined as dishonesty which is the willful and conscious disregard and violation of the rights of other persons
      - Datuk Jagindar Singh v Tara Rajaratnam:
        
        Fraud must be the actual and involve dishonesty of some sort
        
        Where intention of the actual transfer is to cheat a person of an existing right
        
        A deliberate and dishonest act to deprive another of his/her rights
        
        Case established that fraud and fraudulent misrepresentation will have a disjunctive effect due to word "or" - as such what requires to be proven is either actual fraud or fraudulent misrepresentation or both
- - - - Boonson Boonyanit v Adorna Properties:
        
        C owned property in Penang where fraudster claiming to be C procured land title from Land Register claiming to have lost the original one and sold the property to D. C claimed she had to original IFT, remained in Thailand hadn't left the country
        
        Title shown to D was fake and signature was forged. D argued that the title was indefeasible notwithstanding the forged signature as they were an innocent 3rd party
        
        Held:
        
        At first HC failed to prove the fraud. Later CA allowed the appeal. The word "subsequent" in S.340 refers to subsequent and not immediate purchaser, hence creating deferred indefeasibility that will only benefit the subsequent purchaser. Title of immediate purchaser is defeasible if tainted by one or more vitiating factor
  - - - Tan Yin Hong v Tan Sian San & ors:
        
        C was a registered owner of a property. D1 purposely acted under power of an attorney and charged the property to D3 (a bank) to secure a loan in favour of D2 (a company). C claimed that the charge was defeasible
        
        Held per HC:
        
        C never granted power of attorney therefore D1 did not have authority to charge the land but court is bound by Boonsom Boonyanit
        
        Thus D3 (a purchaser of good faith) obtained immediate indefeasible title even if registration is obtained with fraud
        
        Held per FC:
        
        A person in the position of Adorne Properties cannot take advantage of S.340(3) - FC in Boonsom Boonyanit misconstrued S.340 and came to the wrong conclusion. D3 even though in good faith for value obtained title through void instruments
        
        Automatically followed that such charge should be set aside
        
        When to set aside per Kararulzaman:
        
        (3) if the title/interest is registered in the name of the subsequent purchaser then the vitiating elements of S.340(2) won't effect the title/interest of a bona fide subsequent purchaser