Boonsom Penang High Court

Boonsom Boonyanit VS Adorna Properties Sdn Bhd High Court Malaya, Penang Tuan Vincent Ng Kim Khoay J Issues The learned judge identified the following issues turn up from the joinder expose in the pleadings:    

whether the memorandum of transfer in favour of the respondent was a forgery; and whether forgery, when raised in civil proceedings, had to be established beyond a reasonable doubt or whether it was sufficient to prove it on a balance of probabilities; whether the appellant was the registered proprietor of the said land prior to its transfer to the respondent. if it was, then, whether the respondent had acquired an indefeasible title to the said land (Hba.org.my, 2016).

Sections Referred to: National Land Code 1965 Section 340, 340(2a), (2b), (2c), (3a), (3b) Form 14A. Section 340 of National Land Code 1965 as stated below: Section 340: Registration to confer indefeasible title or interest, except in certain circumstances. (2) The title or interest of any such person or body shall not be indefeasible: (a) in any case of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy; or (b) where registration was obtained by forgery, or by means of an insufficient or void instrument; or (c) where the title or interest was unlawfully acquired by the person or body in the purported exercise of any power or authority conferred by any written law. (3) Where the title or interest of any person or body is defeasible by reason of any of the circumstances specified in sub-section (2): (a) it shall be liable to be set aside in the hands of any person or body to whom it may subsequently be transferred; and

(b) any interest subsequently granted thereout shall be liable to be set aside in the hands of any person or body in whom it is for the time being vested: Provided that nothing in this sub-section shall affect any title or interest acquired by any purchaser in good faith and for valuable consideration, or by any person or body claiming through or under such a purchaser. We had compare the NLC1965 and the FMS Land Code (old s. 42). The old s. 42 (ii) provides that the title of a proprietor in the case of a fraud "to which he is proved to be a party" shall not be indefeasible whereas sub-section (iii) expressly states that the registration of a forged instrument shall be void, though sub-section (iv) gives protection to a proprietor who has taken bona fide title for valuable consideration from a proprietor whose registration as such has been procured by fraud or forgery. Thus, a proprietor who has taken bona fide in the case of fraud is not caught by subsection (iii) of the old s. 42 whereas in the case of forgery the transfer is void ab initio and he obtains no title (Hba.org.my, 2016). The provisions in both s. 340(2)(a) and s. 42(ii) in regard to fraud are similar, in that a title shall not be indefeasible if the person or body was a party or a privy to the fraud. But, in regard to forgery, s. 340 subsection (2)(b) (in contrast with s. 42(iii)) merely states that the title registered in such manner shall not be indefeasible, rather than shall be void. Thus, it is highly significant that unlike the old Land Code, the new Land Code provides that registration obtained by forgery shall not be indefeasible rather than shall be void. By adopting this different approach in the new National Land Code, the intention of Parliament is clearly to protect parties who are bona fide and hence, to provide immediate indefeasibility to such innocent parties (Hba.org.my, 2016). The absence of the words "was a party or privy" (appearing in s. 340 (2)(a)) in s. 340 (2)(b) are not strong enough to persuade me to take a different view. Such absence could not have been a deliberate and considered omission, as the legislature under the new Code has in no uncertain terms placed both fraud and forgery on the same platform on the question of defeasibility and voidability (Hba.org.my, 2016).

Judgement The judge of Penang High Court review about these two grounds - fraud (pretending to be who you are not) and forgery (of the prescribed instrument of transfer).After considering the evidence before it, the High Court held that it could not determine whether the signature on the instrument of transfer was a forgery or not. It demanded a higher standard of proof of forgery from Boonsom, that she had to prove beyond reasonable doubt. The High Court accordingly held that Adorna Properties had acquired an indefeasible title to the land and dismissed Boonsom’s claim (Hba.org.my, 2016).

References 

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Hba.org.my. (2016). BOONSOM BOONYANIT V. ADORNA PROPERTIES SDN. BHD.. [online] Available at: http://www.hba.org.my/laws/CourtCases/1995/boonsom_boonyanit.htm [Accessed 18 Jul. 2016]. Hba.org.my. (2016). Long shadow of Boonsom Boonyanit. [online] Available at: http://www.hba.org.my/articles/salleh_buang/2005/long.htm [Accessed 18 Jul. 2016].