The Natural Resources and Environment Minister Datuk Seri Azmi Khalid should stop his three-year “sleeping” on the gross injustice of the land law in the country allowing forgery of land titles and fraudulent land transfers and should get Cabinet approval tomorrow to introduce a bill to amend the National Land Code in the current parliamentary meeting to overrule the Federal Court decision on Adorna case.
Last week, the Director-General of Lands and Mines Department, Datuk Zoal Azha Yusof, who was promoted to the post last August from his previous position as Selangor’s Land and Mines Director, said there is a need to amend the National Land Code (NLC) to restore property owners’ rights which have been affected by Adorna Properties Sdn Bhd v Boonsom Bunyanit.
Zoal Azha said he would bring up the matter with the Attorney-General.
How long would this process take? Another two, three or five years?
Such procrastination and insensitivity to the gross injustice created by the Federal Court’s 2001 decision in Adorna case, which interpreted Section 340 of the NLC to favour innocent buyers of land transferred through forgery or fraud, has destroyed the integrity of land titles, leaving the original owners without any means to recover their land. It reflects very poorly on a government which claims to be efficient, just and pro-active in allowing a gross injustice in the land law to stay unchallenged for the past seven years.
The Adorna case is a heart-rending tale which took more than a decade before it finally ended with gross injustice to the rightful owner.
Boonsom, a woman of Thai descent, owned two plots of land in Tanjong Bungah, Penang worth about RM12 million. Unknown to her, the land was transferred to a company, Adorna Properties, by an imposter who in 1989 held herself out as the true owner who had lost the original title to the land and subsequently obtained a certified copy of the title.
Upon discovering the fraud, forgery and deceit, Boonsom went to court to challenge the validity of the transfer of her land to Adorna Properties by the imposter.
The High Court ruled in favour of Adorna in April 1995, the Court of Appeal allowed the appeal in March 1997, but the Federal Court headed by Eusoff Chin overruled the Court of Appeal in favour of Adorna in December 2000. Two unsuccessful attempts had been subsequently made by Boonyanit’s family (as Boonsoom had since died) asking the Federal Court to review the main judgment — in Febrary 2001 and August 2004.
As a result, the current position of the law is that the fraudster and forger is capable of transferring a good title to a purchaser who buys the subject property in good faith and for a valuable consideration — spawning crimes of forgery of land titles by syndicates compromising the computerized land registration system and implicating “inside people” in the land offices followed by fraudulent land transfers resulting in several registered proprietors and purchasers losing millions of ringgit.
From what had been reported in the press, landowners who have fallen victim to such forgers and fraudsters, as well as the gross injustice of the land law as laid down by the Federal Court in the Adorna case, easily run into hundreds, and is a nation-wide problem although it is most prevalent in Kuala Lumpur, Selangor, Penang and Johore.
As the Minister responsible for the Land and Mines Department for the past three years, Azmi should explain why he had shut his eyes to such blatant injustice in the land law which nullifies the constitutional guarantee of sanctity of property in Article 13 of the Federal Constitution and why he had never taken up the matter to the Cabinet.
It is also most shocking that in the past seven years of the gross injustice of the Adorna case, not a single Minister had thought it fit or proper to raise it in Cabinet on the urgent need to amend the National Land Code to end the manifest injustice — again providing proof to Tun Dr. Mahathir Mohamad’s strictures on a “half-past six Cabinet”.
Having been a victim of forgery of land titles, I could explain it this way.
The original titles are kept in land registries/offices. They are evidenced by copies corresponding to originals (called issue document of title or “IDTâ€Â) given to their registered owners. Forgery is greatly facilitated when the properties are unencumbered ie not charged to the banks.
The Forger colludes with land registries/offices employees. He gets a copy of the IDT and type in all particulars of the unencumbered property title including name of its registered owner. He arranges for land registrar’s or administrator’s chop to be affixed on the IDT. He forges land registrar’s or administrator’s signature by signing on the IDT. He takes the forged IDT out to transact by either purporting to sell and transfer or charge it to any party unsuspecting. He still has a problem when it comes to signing the transfer or the charge : his name is not that of the real owner. In the past period of ‘temporary’ identity cards (in yellow slips of papers), he could easily forge by inserting owners particulars and pasting his photograph there. Nowadays that’s difficult with permanent Ics or Mykads. He then colludes with some lawyers clerks to draft him a power of attorney (PA) in which the owner purportedly gives him full power to deal, transfer and charge the title. All that is needed is to then forge the owner’s and the attesting lawyer’s signatures on the PA.
No unsuspecting party dealing with the forger knows either the owner or the lawyer or their signatures or ordinarily seek to verify them. Armed with the forged PA and the IDT, he transacts and dupes even the other party’s solicitors.
When a check is made in the land registry/office, the owner’s name is there, the property is unencumbered which means that the owner can freely transact with the property, and here there is a PA which, not known as a forged, purportedly states that the owner gives unfettered power to the forger to transact. The land registry/office accepts the IDT and the transfer or charge documents and register them. The party duped pays the transaction amount to the forger who disappears.
The original owner finds out and sues the party deceived/duped. Both suffered and were deceived by the forger, but who between them in competition now deserves the property? Who is less innocent?
Commonsense dictates that the original owner Boonyanit’s family deserves the property that is rightfully theirs – and not third party Adorna.
There are 2 basic reasons for this.
The first is that the third party duped like Adorna could have averted the deception of the forger if Adorna or its solicitors have exercised due care. They could have contacted the law firm that purportedly prepared the PA and enquired if indeed the owner had made such a PA witnessed and attested by their solicitors. A simple verification procedure would have discovered the forgery.
The second reason is that a transfer/charge/dealing in property fraudulently procured via forgery ought not to take legal effect and pass property interest. That is I believe the proper construction of the indefeasibility provision under section 340 of our National Land Code. I believe the preponderance of past cases stated it so.
But here the Federal Court headed by Eusoff Chin overruled the Court of Appeal in favour of Adorna in December 2000.
I don’t have an idea how the judicial logic worked in the mind of the same Chief Justice who was embroiled in the Internet posting of him having a holiday with lawyer in New Zealand!
Our public delivery system involving land registries/offices is also at fault. The clerks or peons there are willing for a fee to provide the forger with the IDT with title particulars of owner and property. This lache is part of overall problem of lack of integrity when it comes to reward of money!
Lastly, the lawyers acting for the third party are also partly to blame for not going the extra mile to check on the genuineness of the PA and the signatures in it.
In this circumstances, the Federal Court should review the case and interpret the law in relation to section 340 in a manner that is correct and in line with previous decisions (including that of previous Federal Courts).
The Boonyanit’s family will not benefit from the change in law because such an amendment to make what is already clear (but somehow then not clear to Eusoff Chin) to even more clear will take a long time, and in addition such an amendment is not going to be retrospective, ie applicable backwards to cover Boonyanit’s family.
We have heard so many Irish jokes in the past about having how many of them to screw a light bulb and what not. HOw about we start a book on the same topic about our very own inept ministers?
Oh, oh, this means that following the principle of ‘res judicata’ (the finality of judicial decisions on precisely the same question or action i.e. action estoppel), poor ‘Forgery Victim’ will have to wait for justice in the next world!
There is prima facie nothing to suggest that the FC’s decision was perverse notwithstanding Eusoff’s indiscretion in going for a ‘surf-sun-supper’ holiday with parties probably unconnected with the Booyanit’s case. But even if assuming Eusoffe Chin was indiscreet and ‘you-know-what-I mean’, what about the other members of the panel in the Federal Court …. did they just follow the boss’s decision or were there dissenting opinions?
That aside, the law should never be made to appear grey when it can be white. I think this case has set a very dangerous precedent for High Court judges and higher to skirt this difficult problem. THe reason why we have courts and judges in this world is because we want JUSTICE in this world and not the next!
BTW, if I want justice in the next world, I would not depend on fallible judges….but GOD. Undergrad2 agree or not?
“That aside, the law should never be made to appear grey when it can be white.” HORNBILL
Most things in life are grey – and that is why we have courts.
“As a result, the current position of the law is that the fraudster and forger is capable of transferring a good title to a purchaser who buys the subject property in good faith and for a valuable consideration – spawning crimes of forgery of land titles by syndicates compromising the computerized land registration system and implicating “inside people†in the land offices followed by fraudulent land transfers resulting in several registered proprietors and purchasers losing millions of ringgit.†LKS
In law school when I was first told that you can transfer a better title than you have, and a transferee in good faith receives a better title than the transferor has, I was ready to pack up and pursue a different profession. It seems to me then that law has nothing to do with justice.
But the fact remains that the court is often called to do justice between two innocent parties when the rogue is nowhere to be found. Very often the issue is which innocent party has to take the blame and suffer.
Now when it comes to land the NLC is very specific. The use of equitable principles in solving problems relating to land would lead to different and conflicting decisions – the reason why land law is codified. It has nothing to do with fairness or equity. It has everything to do with strict compliance with statutes. It has everything to with the legislative intent of Parliament when passing such laws. Whenever there is doubt as to the intent of Parliament, the only way to solve any problem would be to revert to Parliament and have the statute or statutes amended.
“In law school when I was first told that you can transfer a better title than you have, and a transferee in good faith receives a better title than the transferor has, I was ready to pack up and pursue a different profession. It seems to me then that law has nothing to do with justice.” – Undergrad2
Whjat law is that? You sure you want to blame the law and not the law school or the lecturer who taught you that? What a pity! Had you otherwise not packed or pursued a different profession, who knows, maybe we have, by now, better judicial decisions than the likes of Adorna Properties Sdn Bhd v Boonsom Bunyanit. :)
I admit I have not read the judgment but it is reasonable to surmise, in genetral terms, that when Eusoffe Chin & judicial colleaques decided in favour of Adorna, it probably had something to do with determining who was less innocent between two parties – Boonsom and Adorna – cheated by the forger, and they decided that Boonsom was somehow less innocent and Adorna more deserving of property. In a word, they decided on principles of equity.
But whilst principles of equity have a place, they however should not operate where position is aleady covered by statute like NLC whose language on section 340 has always been clear for purposes of interpretation of legislative intent – until Eusoffe Chin’s court that found it ‘murky’ and interpreted another way from the line taken by earlier courts, as a result of which justice was not done.
If one day, Jeffery, you decide to become a lawyer, I’ll be too happy and proud to move your Call.
Meanwhile allow me to read your posting which I missed.
I’m surprised by the depth of knowledge you show on land law and the National Land Code.
Let me just say that balancing equities is never easy. Somebody has to suffer – and it is not the rogue who has disappeared to enjoy the fruits of his crime somewhere in Hong Kong or Macau.
….”..//…If one day, Jeffery, you decide to become a lawyer, I’ll be too happy and proud to move your Call….//..”….
Honored by your kind gesture, look forward to it, but even if you were qualified and called to the Bar, you can’t unless you re-start practice and renew pratising certificate on which occasion, if it happens, will introduce big clients to you to help your start up and you’ll be looking to advising and structuring mega transactions like highway concessionaire agreements and other mega contracts awarded to BN’s politicians or cronies (which you criticise in this Blog). You will have to arrange for some reputable law firms in New York/UK to tie up with your set up in Malaysia. Here the legal service like financial service industry is on the brink of liberalising and allowing for admission of foreign associates and partners and plenty opportunities abound (with fewer talent pool and players here). You should really consider.
///Commonsense dictates that the original owner Boonyanit’s family deserves the property that is rightfully theirs – and not third party Adorna.///
The original landowner Boonyanit’s family cannot be expected to check all the time whether the titles of his land remain in his name, as if to defend his property like guarding his home. The land should remain his no matter who has taken any actions to effect a change in the records at the registry of land titles.
Adorna was cheated, and he should have the assistance of the government to recover the loss. But Boonyanit’s family cannot be made to recompense the loss of Adorna. Between Boonyanits and Adorna, it was the latter who initiated actions to involve Boonyanits, so Boonyanits cannot be made to suffer.
Obviously the laws would have aimed at the natural justice given in the above example. If the laws failed, then the state is responsible. When the Chief Justice decided otherwise, then he had taken the job of interpreting laws more literally than his job demands, that is to ensure justice.
this azmi clown is the minister who ran the short-lived “tukar mykad dan menang kereta kancil” right?
and yet he still remains in charge of natural resources ministry now – and recent news suggests that the paya indah wetlands will be the next victim of mismanagement and neglect
AAB is so blind & lame!
Don’t know about the case. But what I do know is that between the two innocent parties, one is less innocent – and that is the one who has lost his or her ‘virginity’. Damaged goods have less value.