Goh Seng Chue v Pentadbir Tanah Hulu Selangor (B-01(NCVC)(W)-163-05/2017 Didengar Bersama B-01(NCVC)(W)-164-05/2017)

Page 1 of 17 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: B-01(NCVC)(W)-163-05/2017 ANTARA

1. GOH SENG CHUE (No. K/P: 500820-10-5483)

2. TAN POH YOKE (No. K/P: 510306-10-5578)

3. NG KIM LEONG (No. K/P: 720512-10-6139) … PERAYU-PERAYU DAN

1. PENTADBIR TANAH HULU SELANGOR

2. PENGARAH TANAH DAN GALIAN

3. NEGERI SELANGOR TEH SOON KEE (No. K/P: 6000204-10-6296) (beramal di Tetuan Teh Soon Kee & Partners)

4. SALVARAJU A/L KANNIAH (NO. K/P: 481024-10-5609) (beramal di Tetuan Salva & Co) … RESPONDEN-RESPONDEN DIDENGAR BERSAMA: DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: B-01(NCVC)(W)-164-05/2017 ANTARA

1. PENTADBIR TANAH HULU SELANGOR

2. PENGARAH TANAH DAN GALIAN NEGERI SELANGOR … PERAYU-PERAYU Page 2 of 17 DAN

1. GOH SENG CHUE (No. K/P: 500820-10-5483)

2. TAN POH YOKE (No. K/P: 510306-10-5578)

3. NG KIM LEONG (No. K/P: 720512-10-6139) … RESPONDEN-RESPONDEN [Dalam Mahkamah Tinggi Malaya Di Shah Alam Dalam Negeri Selangor Darul Ehsan, Malaysia Guaman Sivil No: 21 NCVC-26-07/2014 Antara

1. Goh Seng Chue (No. K/P: 500820-10-5483)

2. Tan Poh Yoke (No. K/P: 510306-10-5578)

3. Ng Kim Leong (No. K/P: 720512-10-6139) … Plaintif-Plaintif

1. Dan

2. Pentadbir Tanah Hulu Selangor

3. Pengarah Tanah Dan Galian Negeri Selangor Teh Soon Kee (No. K/P: 6000204-10-6296) (beramal di Tetuan Teh Soon Kee & Partners)

4. Salvaraju A/L Kanniah (No. K/P: 481024-10-5609) (beramal di Tetuan Salva & Co) … Defendan-Defendan] CORAM: UMI KALTHUM ABDUL MAJID, JCA VERNON ONG LAM KIAT, JCA ZALEHA YUSOF, JCA Page 3 of 17 GROUNDS OF JUDGMENT INTRODUCTION [1] At the High Court, the plaintiffs sued (i) the Pentadbir Tanah Hulu Selangor (1st defendant) and the Pengarah Tanah Dan Galian Negeri Selangor (2nd defendant) for damages for negligence and breach of statutory duty and (ii) the solicitors (3rd and 4th defendants) for damages for breach of contract and negligence. [2] The learned Judicial Commissioner (JC) allowed the plaintiffs’ claim against the 1st and 2nd defendants and dismissed the plaintiffs’ claim against 3rd and 4th defendants. [3] Appeal [163] is the plaintiffs’ appeal against the decision dismissing their claim against the 3rd and 4th defendants and against the inadequacy of the quantum of damages awarded against the 1st and 2nd defendants. Appeal [164] is the 1st and 2nd defendants’ appeal against the decision allowing the plaintiffs’ claim and award of damages of RM130,000.00 against the 1st and 2nd defendants. After hearing of counsel of the parties and reading the written submissions, we dismissed Appeal [163] and allowed Appeal [164]. We now set down the reasons for our decision. THE SALIENT FACTS [4] On 9.2.2011, the plaintiffs entered into a sale and purchase agreement (‘SPA’) for the purchase of a piece of land with one Chow Wei Page 4 of 17 Sium (‘CWS’) who signed the SPA as the attorney under a power of attorney (‘PA’) given by the purported registered proprietor of the property. [5] The 3rd defendant solicitor who was engaged by the plaintiffs had drawn up the SPA. The 4th defendant was acting for the purported owner and CWS in the transaction. [6] After the SPA was completed the plaintiffs were registered as the proprietors of the land in question. Subsequently, it turned out that the purported owner was an imposter and that the sale of the land was conducted without the knowledge of the actual owner. The identity card (‘IC’) of the imposter was found to be a fake. In 2012 the actual owner initiated a civil suit (‘Suit 826’) against the plaintiffs and the 1st and 2nd defendants for restitution of his property. The High Court allowed the actual owner’s claim and ordered that the land be restored to him, the power of attorney declared to be void. The 1st and 2nd defendants were also found liable in failing in their duties to safeguard the interests of the actual owner. FINDINGS OF THE HIGH COURT [7] The key findings of the learned JC may be summarised as follows:

(ii) the claim against the 1st and 2nd defendants was not time barred as the limitation period of 36 months ran from Page 5 of 17

9.10.2013, the date the registration was declared void by the High Court in Suit 826;

(iii) res judicata did not apply to bar the plaintiffs’ claim against the 1st and 2nd defendants as the plaintiffs’ counterclaim in Suit 826 was dismissed for non-compliance with O.15 r.3 of the ROC 2012 and not heard on the merits;

(iv) the 1st and 2nd defendants failed to observe the requirements of the NLC in the following instances: a) failure to verify and check the PA (exh. P5) which accompanied the presentation with the copy of the PA (exh. D36) which was kept in the land registry; b) failure to cause the entry of the IC number contained in the manual issue document of title (IDT) to the computer printed IDT (exh. P13) ; c) failure to comply with paragraph 8(9)(c) and (d) of the Fourteenth Schedule of the NLC pertaining to the computerised land registration system, in particular, the issuance of the computer printed IDT without the cancellation and destruction of the existing manual IDT; and d) the 1st and 2nd defendants’ reliance on sections 302 and 303 of the NLC were misplaced; Page 6 of 17

(vi) the plaintiffs were contributorily negligent as they failed to take ordinary precautions which ought to have been taken in the circumstances of the case; [8] The learned JC ordered the 1st and 2nd defendants to pay the plaintiffs:

(ii) fees for the presentation to the land office of RM580.00;

(iii) interest of 5% on aforesaid sums from 9.10.2013 until date of full realisation;

(iv) no award for general or exemplary damages. Costs of RM10,000.00 each was awarded to the 3rd and 4th defendants. As between the plaintiffs and the 1st and 2nd defendants, each party was ordered to bear their own costs. SUBMISSION OF PARTIES [9] In relation to the question of damages awarded against the 1st and 2nd defendants, learned counsel for the plaintiffs argued that the learned judge erred in finding the plaintiffs contributorily negligent because (i) Page 7 of 17 contributory negligence was not pleaded as an issue and (ii) neither was it raised at the trial of the action. As such, the learned judge decided on a non-issue (Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152 (SC); Samuel Naik Siang Ting v Public Bank Bhd [2015] MLJU 519 (FC). It was also argued that the plaintiffs produced documentary evidence to support their claim for special damages of RM346,191.05 and that the plaintiffs’ evidence was not challenged. Therefore, the plaintiffs’ evidence in support of the special damages must be treated as accepted by the defendants (Lum Sow Kuen v Chuah Choong Heong & Ors [1998] 4 CLJ Supp 161; Pembinaan Juta Mekar Sdn Bhd v SAP Holdings Berhad & Ors [2014] 1 LNS 314). As such, the learned JC ought to have allowed the plaintiffs’ claim for special damages as pleaded. [10] In relation to the claim against the 3rd defendant, learned counsel for the plaintiffs raised four grounds to argue that the 3rd defendant breached his contract, common law duty of care and professional responsibility to the plaintiffs. Notwithstanding that the computer printed IDT, the PA, the purported proprietor’s IC and the letter of offer were suspicious and questionable, the 3rd defendant failed to take steps to investigate and verify the documents before proceeding with the SPA transaction. First, the computer printed IDT did not contain the IC number of the registered proprietor; if the 3rd defendant had checked with the land registry she would have discovered that the old IC number of the registered proprietor in the PA and the manual IDT is different. Second, the 3rd defendant ought to have been alerted to the fact that the PA contained many inconsistencies, in particular (i) the alteration to the donor and donee’s name on the cover page, (ii) the donor was referred as a ‘her’ in paragraphs 5 and 8 even though the donor is a male, (iii) the donor’s address at KLCC and which address is different from that in the purported Page 8 of 17 proprietor’s IC and quit rent receipt, and (iv) the mistake in the spelling of the surname ‘LOH’ instead of ‘Low’ Poh Kim. Third, the address of the purported proprietor in the IC being in KLCC is incredulous and the 3rd defendant ought to have checked with the National Registration Department. Fourth, the 3rd defendant failed to detect the obvious mistake in the spelling of the surname of ‘LOH’ instead of ‘Low’ Poh Kim. [11] As for the claim against the 4th defendant, learned counsel for the plaintiffs argued that the 4th defendant owed a duty of care to the plaintiffs even though he was not acting for the plaintiffs in the SPA transaction. Whether a solicitor is to be held liable to a third party must depend on the facts and circumstances of each case (Rajamani Meyappa Chettiar v Eng Beng Development Sdn Bhd & 6 Ors [2016] 1 LNS 91 (CA)). The 4th defendant failed to take necessary steps to verify the PA, the purported proprietor’s IC, the letter of offer, computer printed IDT and the true identities and status of the purported proprietor and the attorney CWS. [12] In reply, learned counsel for the 1st and 2nd defendants raised the same arguments as in the High Court. First, pursuant to sections 5 and 6 of the Government Proceedings Act 1956 (GPA 1956) the officers alleged to have been responsible for the act, neglect or default was not named as parties in the action. Consequently, the claim against the 1st and 2nd defendants was unsustainable (Steven Phoa Cheng Loon & Ors v Highland Properties Sdn Bhd & Ors [2000] 4 MLJ 200; Kerajaan Malaysia & Ors v Lay Kee Tee & Ors [2009] 1 CLJ 663 (FC); Government of the State of Sabah v Syarikat Raspand [2010] 7 CLJ 945). Second, the claim was time barred as it was not brought within 36 months after the act, neglect or default complained of pursuant to section 2(a) of the Public Authorities Protection Act 1948 (PAPA 1948). In this Page 9 of 17 case, time started to run from 16.3.2011 when the plaintiffs were registered as proprietors of the property. As such, limitation would have set in on 15.3.2014. However, the action was only filed on 23.7.2014, after the 36 month limitation period (Tasja Sdn Bhd v Golden Approach Sdn Bhd [2011] 3 CLJ 751 (FC)). Third, res judicata applied to bar the plaintiff’s claim as the plaintiffs’ counterclaim against the 1st and 2nd defendants in Suit 826 was dismissed (Letchumanan A/L Gopal (Wakil bagi harta pesaka Rajammah a/p Muthusamy, Simati) v Pacific Orient & Co Sdn Bhd [2011] MLJU 425 (CA)). Fourth, since the plaintiffs’ title was defeasible under section 340 of the NLC, there was no remedy of damages and the High Court had no jurisdiction to award special damages to the plaintiffs (Low Huat Cheng & Another v Rozdenil Toni & Another Appeal [2017] 3 CLJ 257 (FC)). DECISION [13] At the outset, this being an appeal after a full trial, it must be reiterated that an appellate court will only intervene when the trial court is shown to be plainly wrong in arriving at its decision. The duty of an appellate court is to determine whether or not the trial court had arrived at its decision or finding correctly on the basis of the relevant law and/or the established evidence. In so doing, the appellate court is entitled to examine the process of evaluation of the evidence by the trial court. Where there is no or insufficient judicial appreciation of the evidence by the trial judge appellate intervention will be warranted. As to what judicial appreciation of evidence involves, we cite the observations of Gopal Sri Ram JCA (later FCJ) speaking for the Court of Appeal in the case of Lee Ing Chin & Ors v Gan Yook Chin & Anor [2003] 2 MLJ 97 (CA) at page 116: Page 10 of 17 “A judge who is required to adjudicate upon a dispute must arrive at his decision on an issue of fact by assessing, weighing and, for good reasons, either accepting or rejecting the whole or any part of the evidence placed before him. He must, when deciding whether to accept or to reject the evidence of a witness, test it against relevant criteria. Thus, he must take into account the presence or absence of any motive that a witness may have in giving his evidence. If there are contemporary documents, then he must test the oral evidence of a witness against these. He must also test the evidence of a particular witness against the probabilities of the case. A trier of fact who makes findings based purely upon the demeanour of a witness without undertaking a critical analysis of that witness’ evidence runs the risk of having his findings corrected on appeal. It does not matter whether the issue for decision is one that arises in a civil or criminal case: the approach to judicial appreciation of evidence is the same.” [14] We will address the preliminary question of whether the alleged tortfeasors instead of the 1st and 2nd defendants who should have been named as parties. In Malayan Banking Bhd & Ors v Tho Siew Wah & Another and Another Appeal [2017] 7 CLJ 573 (CA), the original title deed was cancelled by the Registrar of Titles as a result of a re-delineation of boundary exercise and a new title over the land was issued. The new title was collected by an imposter who transferred the land to third parties using the new title. The original owner of the land sued the servants or agents of the Registrar of Titles for negligence in the process of issuing the new title as the original owner never received any notification of the re-delineation or that a new title would be issued for the land. The Registrar of Titles argued that since he was sued for the tort of negligence, sections 5 and 6 of the GPA 1956 applied; as the actual tortfeasor of the negligent act was not named, the claim is unsustainable. The Court of Appeal held that the Registrar of Titles is the correct party to be sued. The Page 11 of 17 GPA 1956 does not apply in that case because the NLC makes specific provisions as to the correct party to be sued: section 12 of the NLC. Looking at how the statement of claim was couched, this was an action against the officer appointed as the Registrar of Titles, an office and appointment made by the State Authority under section 120(1)(a) of the NLC. In Rajamani (supra), the fraudulent transfer was effected by a bogus owner using a fraudulent title. The Land Administrator and the Registrar of Titles were negligent and in breach of statutory duty for having registered the transfer of the land despite the existence of a private caveat. One central issue was whether the designated officers who should be named as parties pursuant to sections 12 and 13 of the NLC should have been the Director of Land and Mines instead of the Land Administrator or the Registrar of Titles. The Court of Appeal opined that the answer turned on whether the allegation of negligence and breach of statutory duty related to system rather than negligent act of any particular officer. On the established facts, the Court of Appeal found that the negligence and breach of statutory duty was occasioned by system failure because the entire departments failed in the discharge of their statutory duties and no one person could be singled out for these breaches of statutory duty and negligence. [15] We are in accord with the aforesaid decisions of the Court of Appeal in Tho Siew Wah and Rajamani (supra) as the facts in the instant case were not entirely dissimilar. The trial judge in Suit 826 had found that the 1st and 2nd defendants did not have a system in place to ensure compliance with the exchange of the old manual IDT for a new computer printed IDT as provided under the NLC. In our considered view, the GPA 1956 is not applicable in the light of the specific provisions as to the correct party to be sued under section 12 of the NLC. The plaintiffs’ claim against Page 12 of 17 the 1st and 2nd defendants was pleaded in such a manner as to implicate the 1st and 2nd defendants negligence in the issuance of the computer printed IDT and the registration of the transfer of the land; that is to say that such acts that relate to instruments that bear the seal or signature of the Registrar or on behalf of the Registrar. Such acts are deemed, unless the contrary is proven, to be attributable to the Registrar or done under his direction. [16] The second issue raised by the 1st and 2nd defendants relates to res judicata. The 1st and 2nd defendants’ application to strike out the plaintiffs’ claim was premised on res judicata. Even though the application was allowed by the High Court, that decision was reversed on appeal by the Court of Appeal which ruled that res judicata did not apply and that the cause of action subsist. As such we agree with the submission of the plaintiffs that res judicata did not apply to bar their claim. [17] The third issue relates to the question of whether the plaintiffs’ claim against the 1st and 2nd defendants was time bared. As the 1st and 2nd defendants are public authorities within the meaning of PAPA 1948, the action must have been commenced within 36 months next after the act, neglect or default complained of: section 2(a) of PAPA 148. We note, however, that limitation is not pleaded in the 1st and 2nd defendants’ statement of defence. Be that as it may, this omission does not preclude the 1st and 2nd defendants from relying on limitation as a defence as the limitation prescribed under PAPA 1948 is absolute as opposed to that under the Limitation Act 1953 which is conditional. In this regard, we think it pertinent to reiterate the settled principles which was enunciated by the Federal Court in Tasja Sdn Bhd v Golden Approach Sdn Bhd [2011] 3 CLJ 751 (FC) at para. [26]: Page 13 of 17 “[26] Section 4 of the Limitation Act is explicit when it declares that “nothing in this Act shall operate as a bar to an action unless this Act has been expressly pleaded …”. This phase is clear and unambiguous. It demands the defendant to expressly state this as a defence before it can become effective. This differs from s. 2(a) of PAPA which said that no suit, action, prosecution or proceeding “shall not lie or be instituted unless: it is commenced within a certain specified time. The same applies to s. 7(5) of the Civil Law Act which says “such action shall be brought within three years after the death of the deceased’s person”. This is absolute and as Thomson LP in Kuan Hip Peng v Yap Yin & Another (supra) said it “gives no room for doubt as to when it begins to run”. And on top of this there are exceptions provided in the Limitation Act as well as the option for the defendant to waive this defence. These are absent in both the PAPA and the Civil Law Act. … Further, it is against the express provision of the law (s. 4 of the Limitation Act) which requires a defence of limitation to be pleaded before it can be effected.” [18] In this case, the acts complained of relate to (i) the wrongful issuance of the computer printed IDT on 20.4.2004, and (ii) the wrongful registration of the transfer of ownership into the plaintiffs’ names on 16.3.2011. If the later date falling on 16.3.2011 is taken as the starting point, the 36 month limitation period would expire on 15.3.2014; this means that the action should have been commenced no later than 15.3.2014. Page 14 of 17 [19] However, the learned JC opined that the limitation period runs from 9.10.2013 being the date the registration of the transfer was declared void in Suit 826. If so, the time bar would have set in on 8.10.2016. It is settled law that a cause of action in tort accrues when the claimant suffers damage (Goh Kiang Heng v Hj Mohd Ali bin Hj Abd Majid [1988] 1 MLJ 615; AmBank (M) Bhd v Abdul Aziz bin Hassan & Ors [2010] 3 MLJ 784 (CA)). In this case, the plaintiffs had suffered actual damage through the 1st and 2nd defendants’ negligence in registering the transfer of ownership of the land into the plaintiffs’ name based on the computer printed IDT. As to when the claimant suffers damage is a question of fact depending on the particular circumstances of each case. In Suit 826, the learned trial judge found that the computer printed IDT was an insufficient and void document and therefore any transaction based on it would be defeasible pursuant to section 340(2)(b) of the NLC. Consequently, the transaction was defeasible and invalid and should be cancelled under section 340(2) and (3) of the NLC as it was obtained by way of forgery or by an insufficient or void instrument. There is no appeal against this finding of fact in Suit 826. As such, as at the date of the registration of the transfer on 16.3.2011, the plaintiffs were subjected to a liability which might mature into a financial loss. The plaintiffs were also aware of this liability in 2012 when they were sued by the actual owner of the land. On this set of established facts, the plaintiffs would have suffered damage when the transfer was registered on 16.3.2011 because the plaintiffs would have, on that date, been encumbered with the liability of having their title defeated and invalidated for the reasons adverted to above. Clearly, the plaintiffs’ loss would have crystallised the moment the transfer was registered on the basis of forgery, an insufficient or void instrument. Page 15 of 17 [20] In the present case, the writ and statement of claim was filed on 23.7.2014 after the expiry of the limitation period which fell on 15.3.2014. Accordingly, we did not agree with the learned JC’s decision on this issue and were constrained to hold that the plaintiffs’ claim against the 1st and 2nd defendants was time barred and therefore unsustainable. [21] In the light of our decision aforesaid, we do not think it is necessary to deal with issue of inadequacy of damages. However, on the issue of contributory negligence found by the learned JC, we were also constrained to find that the learned JC erred in finding the plaintiffs contributorily negligent because contributory negligence was not pleaded as an issue nor was it raised as an issue at the trial of the action. [22] Insofar as the plaintiffs’ appeal against the dismissal of the claim against the 3rd and 4th defendants is concerned, we have perused the appeal record and the learned JC’s written judgment and we are satisfied that the learned JC had given proper consideration to the oral and documentary evidence before arriving at his findings on liability. We do not think that the learned JC’s findings was plainly wrong. Accordingly, we do not think that appellate intervention is warranted. [23] For the foregoing reasons, Appeal [163] was dismissed with costs for here of RM5,000.00 for each Respondent (3) and (4) subject to allocatur fees and Appeal [164] was allowed with costs. A global sum of RM30,000.00 for here and below was awarded to the Appellants in Appeal 164 and Respondents (1) and (2) in Appeal 163. Save and except for the order of the High Court dismissing the claim against the 3rd and 4th Page 16 of 17 defendants, the order of the High Court was set aside. The deposit in respect of Appeal 163 was ordered to be refunded to the Appellants. sgd (Vernon Ong) Judge Court Of Appeal Malaysia Dated : 2nd August 2018 Counsel: Civil Appeal No: B-01(NCVC)(W)-163-05/2017 For the Appellant: Ng Ka Choon (Chua Yeong Chien with him) Messrs Aaron Kc Ng & Partners. For the 1st and Wan Norazimin binti Kassim (Norfariza binti 2nd Respondents: Ridzuan with her) Kamar Penasihat Undang-Undang Negeri Selangor. For the 3rd Respondent: S.R. Raman Messrs Raman & Co. For the 4th Respondent: S. Kahvita Messrs Norliza, Sheela, Param & Co. Page 17 of 17 Civil Appeal No: B-01(NCVC)(W)-164-05/2017 For the Appellant: Wan Norazimin binti Kassim (Norfariza binti Ridzuan with her) Kamar Penasihat Undang-Undang Negeri Selangor. For the Respondents: Ng Ka Choon (Chua Yeong Chien with him) Messrs Aaron KC Ng & Partners.