Chen denies any knowledge of the transaction and although he holds the
original title to his land, attempts to retrieve records of his ownership at
the Land Office have proved unsuccessful. There is also no memorandum of
transfer on the sale to the private company.
He has since lodged a report with the Anti-Corruption-Agency (ACA).
Chen’s case is not isolated; there have been numerous other cases of land
fraud. In a parliamentary session recently, Deputy Internal Security
Minister Datuk Johari Baharum said that 16 cases were recorded in 2001, 19
in 2002, 22 in 2003, 32 in 2004, 35 in 2005 and 40 in 2006. There were 16
cases in the first five months of this year.
Police statistics however reveal that in 2006, there were 80 cases
involving land worth RM4,874,567.30, while this year (up to October) there
have been 49 cases involving land worth RM10,402,559.00 (See table on Page
29).
MCA Public Services and Complaints Department, meanwhile, has received 18
such complaints involving land worth RM30mil in the past five years.
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Chang: ‘When transactions take two or three weeks,
there is something fishy’
|
The department's legal adviser Datuk Theng Book believes that such cases
are on the rise.
“After publicising Chen’s case, we received many more calls from lawyers
about this problem. Many of these cases seem to happen in KL and Selangor
where the value of land is high,” he said.
“We are concerned over the numerous unsolved cases. There is a problem;
just how are we going to solve the problem then?” said National House Buyers
Association Secretary-General Chang Kim Loong.
The situation where a landowner can lose his land even though he holds a
good title is a direct result of the Federal Court's decision in Adorna
Properties Sdn Bhd v Boonsom Boonyanit. This case concerned the
interpretation of the law as laid out in Section 340 of the National Land
Code (NLC) 1965 (see sidebar).
In this now-infamous case, Boonsom Boonyanit, a Thai national, owned some
land in Penang. She eventually discovered that an impostor claiming to be
her – and with supporting identification documents as well as statutory
declarations – had declared that she had lost the original title and managed
to obtain a replacement title from the land office.
The impostor subsequently sold the land to Adorna Properties, who bought
it on good faith, and did not suspect that there was anything amiss in the
transaction.
When Boonyanit sued for the return of the land at the Penang High Court,
she was unsuccessful. She appealed to the Court of Appeal (COA), which
decided in her favour. However, Adorna Properties then made an appeal to the
Federal Court, and won. In essence, Boonyanit – who has since passed away –
lost her land without receiving a single sen for it.
Because it was a decision of the highest court in the land, it has to be
followed by every other (lower) court in the country. A subsequent attempt
to overturn the previous decision, made by Boonyanit's estate, was also
defeated in the Federal Court.
As a result of this case, assistant professor Dr Sharifah Zubaidah Syed
Abdul Kader of the Public Law Department of the International Islamic
University Malaysia said: “The law now does not protect landowners –
especially in cases of forgery. Even if they are able to prove the title is
theirs, they can still lose their land. The court will inevitably rule
against them as long as it can be proven that the purchaser bought it on
good faith.”
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Tan: ‘The Adorna Properties decision has wreaked havoc
on every landowner’
|
Roger Tan, the Malaysian Bar Council’s Conveyancing Practice Committee
chairman, agreed with this “The Adorna Properties decision has
wreaked havoc on every landowner in this country. It not only puts a
landowner at risk of losing his property to fraudsters and forgers, but also
when the landowner loses his land to these crooks, he loses everything
without any compensation or remedy.”
The root of the problem, according to Tan, is that, “lawyers have always
interpreted S340 as outlining the principle of ‘differed indefeasibility’.
Our NLC is based on this concept, and this decision has affected that.”
What is more perplexing, said Tan, is that the Federal Court had another
chance to review the law after a recent COA case in July this year (Au
Meng Nam & Another v Ung Yak Chew & Others). The COA essentially did not
follow the Federal Court's decision in Adorna Properties, and
reverted the title back to the original owners. But when the purchasers
applied for leave to appeal to the Federal Court, it was denied.
“They should have granted leave and then dealt with the Adorna case.
However, they refused to confront it.”
As a result of the current situation, the Bar Council submitted a
memorandum to the Natural Resources and Environment Minister Datuk Seri Azmi
Khalid that listed proposed amendments to the relevant sections of the NLC
on July 24.
However, an amendment bill to the NLC was passed in the last Dewan
Rakyat sitting, which concluded on Dec 19.
“The NLC amendments did not deal with this issue, and the Bar Council is
disappointed with this. Also, there appears to be no urgency on the part of
the government to look into it,” Tan commented.
He further stated, “We want to make it clear that the principle under
section 340 is that of deferred and not immediate indefeasibility.”
Given the current position of the law, Tan advised that precautions be
taken.
“The dealings usually involve lawyers, and they must be both diligent and
vigilant. They should do a search before they advise their clients to
purchase the property or release the money.”
To that effect, Tan said, the Bar Council is in the process of changing
its solicitor account rules to ensure that all withdrawals from the clients'
accounts are made by cheque and not by cash so as to ensure it can be
traced.
“Proposals have been made and we hope to have the rule implemented by
next year,” he informed.
But until the NLC is amended or the Federal Court reviews its decision,
the responsibility is on landowners to ensure that title to their property
has not been transferred without their knowledge.
“Do regular searches every three months or so, which costs less than
RM100 per search. And it is best to go through lawyers whenever they buy or
sell property,” Tan advised.
Chang hopes that an insurance scheme backed by the government is
initiated.
“Indemnify anyone who loses in fraudulent land transfer. The land office
is a government agency and the government should be responsible if its house
is not in order,” said Chang adding that special squad by the Land and Mines
department to identify weaknesses in the national computerised land
registration system be set up.
Chang hopes that it doesn't reach a stage where the Land Office makes
buyers sign a letter of indemnity, just as how the Road and Transport
Department (JPJ) does when people buy used cars.
“This means that you are cannot sue JPJ if they make a mistake such as
recording the wrong chassis number for instance. I am just worried that this
will apply to property as well one of these days,” said Chang.
Theng, meanwhile, urges the police to set up a special task force made up
of forensic and conveyance experts to look into the problem.
Commercial Crimes Investigation Department legal/inspectorate division
principal assistant director ACP Tan Kok Liang at the 14th Malaysian Law
Conference had suggested using fingerprinting during land and property
transactions as it offered a unique security feature to prevent fraud and to
identify impostors.
Chang urges the government and relevant agencies to solve the problem as
soon as possible.
“It will lead to serious loss of confidence in Malaysian property market
and potential investors may well find it easier to invest in property
elsewhere,” he said.
The Land and Mines Department was not available for comment.
