Comments for Federal Court to deliver major decision on property sales by forgers this Thursday at http://www.malaysianbar.org.my , comment 0 to 10 out of 10 comments http://www.malaysianbar.org.my Fri, 10 Feb 2012 08:02:56 +0100 FeedCreator 1.7.2 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9726 Dear Tan I am not the Solicitor acting for the 3rd Respondent. I was appointed as counsel only at the Court of Appeal level and subsequently assisted the lead counsel at Federal Court. Be that as it may, the record (Note of Proceeding) of the High Court shows that the Appellant has unequivocally confirmed that he did not apply for the said land and that the said land does not belong to him. Police report has also been made by him to that effect. The Appellant's claim was dismissed by the High Court on this ground and the Court of Appeal also dismissed the appeal on the same ground though also touching on Adorna. Obviously, his name was used by the forger. The point is that should he be given the benefit of 'becoming' an actual owner (thus unjustly enriched) if the Federal Court allowed the appeal because the effect of allowing the appeal will be that the charge will be declared null and void. Ong Siew Wan - Ong Siew Wan Tue, 19 Jan 2010 16:31:28 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9724 The 3 principles of the Torrens System ought to be adhered to and be promoted by all parties in Malaysia since the Indefeasibility Principle has been copied from Australia : 1. Mirror principle - the register (Certificate of Title) reflects (mirrors) accurately and completely the current facts about a person's title. This means that, if a person sells 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. 2. 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, as in the Private Conveyancing system. All of the necessary information regarding ownership is on the Certificate of Title. 3. Insurance principle - provides for compensation of loss if there are errors made by the Registrar of Titles. Therefore, errors /fraudulent conducts of parties ought to be eliminated through the utilization of the 3rd principle, the INSURANCE PRINCIPLE. Regards, Tan Peek Guat - Tan Peek Guat Tue, 19 Jan 2010 09:56:44 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9723 Dear Ong, With regards to your matter in question, what acted as the bank's solicitors? It would be good to let us all hear what that solicitor has to say pertaining to the answer(s) given by the registered owner of the land; or is it a fraudulent scheme involved? We never know until we hear the whole truths. Regards. Tan Peek Guat - Tan Peek Guat Tue, 19 Jan 2010 09:26:09 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9722 I wonder if it is Parliament's desire that "Indefeasibility" is meant to allow for any fraudulent conduct in dealings in Land matters. If not, every Commissioner of Oaths and Solicitors involved in any manner whatsoever in disputed cases ought to declare their stand, knowledge and understanding pertaining to the matters concerned. If so, the brokes and franksters would be unrighteously gaining and winning their day, and days ahead! Regards, Tan Peek Guat - Tan Peek Guat Tue, 19 Jan 2010 09:16:06 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9721 I am the counsel acting for the 3rd respondent at Court of Appeal level and assist Dato Bastian at Federal Court. The following is my personal view. The perculiar fact in this case is that the Appellant ie the registered owner of the land testified in his evidence that he did not apply for the land and actually the land does not belong to him. He did not even know that he has the said land. The point we are taking here is that whatever answer the Federal Court may be given to the question posed the appeal ought not to be allowed as to allow the appeal will unjustly enrich the Appellant who has himself confirmed that the said land does not belong to him. Where both parties are victim to the fraud, the Bank that has disbursed the monies to the forger is the bigger victim. The Federal Court ought to do the balancing act in not allowing the appeal so that the Bank's charge is protected with a rider that the Bank cannot go after the Appellant for the shortfall if the proceed of foreclosure proceeding is not sufficient to cover the total outstanding sum. Any decision that the Bank, being a victim and innocent party where the registered owner himself confirmed that the land not belong to him, will lose its charge will have far reaching impact on the banking industry. Ong Siew Wan - Ong Siew Wan Mon, 18 Jan 2010 23:14:59 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9720 My dear Shanmuga Thanks for enlightening us. Yes, on the facts of the case, OCBC was equity's darling when the law is applied since it was not proved that the bank or its officers had a hand in assisting the forgery. As to your suggestion that the transfer and charge should be seen as one step instead of two, I guess it will depend on the fact patterns of each case. Your suggestion is interesting, though, since I always thought that the law, as we know it, always divides what the ordinary man sees as one step into many little steps to get to the point at which the law is applied to that miniscule step. In any case, do you share my view that Adorna was a decision that enfeebled instead of empowered the owners of property in our country? Stephen Tan Ban Cheng - Stephen Tan Ban Cheng Mon, 18 Jan 2010 17:13:54 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9719 It's been pointed out to me that in OCBC, the Charge was presented some time after the forged transfer. Thus on the facts the decision is probably wrongly decided, and the Bank in that case was probably in fact and in law equity's darling. I therefore owe counsel for the Bar Council an apology. Be that as it may, I think my point remains valid in ordinary circumstances - the Charge and Transfer ought to be construed as one composite transaction if it is done together (as ordinarily done in legitimate transactions). In that instance, neither the forger who received the benefit of the forged transfer nor the Bank who released monies to enable the forged/fraudulent Transfer to be effected should be able to claim the affections of equity's fickle heart! [I do not know if this point I am raising is merely of academic interest. I am not sure how "ordinary" forgery/fraud cases work, and whether the norm is for a bank loan to be obtained later in the form of "refinancing" after the forged/fraudulent transfer is completed and registered. I just find it odd to think of a Charge and a Transfer to be separate and independent transaction, although I know this is what they are on a strict construction of the statute.] Shanmuga Kanesalingam - Shanmuga Kanesalingam Mon, 18 Jan 2010 16:45:59 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9718 My dear Shanmuga Can you please enlighten us? Was it proved as a fact in the case that the bank assisted the forger? If the answer is yes, then the bank cannot be equity's darling. If the answer is no, then the bank is equity's darling who enjoys the full protection of the law. Stephen Tan Ban Cheng - Stephen Tan Ban Cheng Mon, 18 Jan 2010 16:33:35 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9717 This is a very well-written and comprehensive approach to the Adorna decision that enfeebled most property owners. The concept of "equity's darling" was alluded to in this paragraph: " ... the principle of deferred indefeasibility operates in this way: For example, A is the registered (land )owner. B forges A's signature and transfers the land to himself. B later sells and transfers the land to C. C has no knowledge of the forgery, and C obtains an indefeasible title. Or if B forges A's signature and transfers the land from A to C and C later transfers the land to D. Then, D and not C, who has no knowledge of the forgery, will obtain an indefeasible title. C and D in the first and second examples are known as subsequent purchasers under s 340(3). However, after Adorna Properties which embraces the principle of immediate indefeasibility, C will still get an indefeasible title if B forges A's signature and transfers the land immediately to C without first having transferred to B himself." C and Din the first and second examples are clearly equity's darling (s.340)(3) because they are "bona fide purchasers of value without notice" (of any thing irregular or even fraudulent). Once anything smacking of the irregular or the fraudulent is detected in any land deal, the concept of indefeasibility of title (leave alone immediate or deferred) no longer applies. In short, the irregular vitiates the protection of the law that the indefeasibility of title affords. As I have said many a time, the quality of a photograph composed depends not the camera but on the person behind the camera. In other words, we can have the best set of laws in this country, but if those behind the best set of laws cannot produce the rightful and righteous result for whatever reasons known or unknown to them, then it is to them that the blame must fall. Vengeance is mine, says the Lord. There will be retribution. Karma will operate ... Stephen Tan Ban Cheng - Stephen Tan Ban Cheng Mon, 18 Jan 2010 16:19:45 +0100 http://www.malaysianbar.org.my/conveyancing_practice/federal_court_to_deliver_major_decision_on_property_sales_by_forgers_this_thursday.html#pc_9716 Hopefully the decision will bring some common sense to this pressing problem. However, with respect, I disagree with counsel for the Bar in his submission on the OCBC case. Whilst there is universal condemnation for Adorna, I do not think OCBC attracts the same level of criticism. Although in technical terms, the charge is a "subsequent" transaction on a strict reading of the National Land Code, in reality and in most cases the Transfer and Charge are part and parcel of 1 composite transaction. The Transfer cannot exist without the Charge since the consideration specified in the Transfer would not be paid if not for the Charge. Both documents are inevitably presented together at the Land Registry by the bank's solicitors. In many cases, the solicitors attending to the Charge and Transfer are the same. Hence, I would think that a purposive construction of the NLC would recognize that these situations are better considered (depending on the facts) as indivisible parts of a composite transaction involving SPA, Loan Agreement, Transfer and Charge. After all, it is just as unjust for the original landowner to lose his land to the forger as it is to lose it to the bank who assisted the forger. Shanmuga Kanesalingam - Shanmuga Kanesalingam Mon, 18 Jan 2010 14:54:24 +0100