Huan Kok Sy v Pendaftar Hakmilik, Pejabat Tanah dan Galian Negeri Johor (JA-21NCvC-39-12/2019)

The Plaintiff filed this suit against the Defendant to claim for losses suffered due to the Defendant’s negligence premised on the breach of statutory duty and/or duty of care owed by the Defendant to Plaintiff. In his Statement of Claim (“SOC”), the Plaintiff prays for the following orders:

Gantirugi berjumlah RM1,758,140.68 atau apa-apa jumlah yang dianggap adil dan munasabah oleh Mahkamah yang Mulia ini;

Faedah pada kadar 8% setahun atas jumlah di perenggan 19(a) di atas dari 29/05/2019 hingga tarikh penghakiman;

Faedah pada kadar 5% setahun atas jumlah penghakiman dari tarikh penghakiman hingga tarikh pembayaran atau realisasi;

Kos

(ii) In total, there were four witnesses called; two by the Plaintiff and two by the Defendant. BACKGROUND FACTS [2] The Plaintiff entered into a Sales and Purchase agreement dated 13.02.2016 with an imposter who claimed to be Mr Ng Chee Yau, the real owner, to purchase a piece of land held under Grant No. 392689, Lot No. 88359, Mukim Pulai, Daerah Johor Bahru, Johor (“the said property”). [3] The Defendant is the Registrar of Titles in the Johor State Land and Mines Department. [4] It is not disputed that the Plaintiff became the registered proprietor of the said property on 20.04.2016 after paying the purchase price of RM1,000,000.00. The payment was made through the Plaintiff’s solicitors, Messrs Kamarudin & Partners, to the imposter and/or imposter’s solicitors, Messrs Munusamy Gopal & Partners. The Plaintiff has also paid all the quit rent and outstanding maintenance charges for the said property in the sum of RM5,880.94 on behalf of the seller as part of the purchase price. [5] However, after the transfer of the said property had been completed and registered in the name of the Plaintiff, Mr Ng Chee Yau, the real owner, initiated civil suit no. JA-22NCvC-4-01/2018 (“the Previous Suit”) against the Plaintiff for the following orders, inter alia: i) Deklarasi bahawa pindahmilik hartanah Nombor Peserahan: 26649/2016 bagi hartanah yang dipegang di bawah Geran No 392689, Lot No 88359, Mukim Pulai, Daerah Johor Bahru, Johor daripada Plaintif kepada Defendan yang didaftarkan pada 20/4/2016 diisytiharkan sebagai tidak sah dan terbatal dari awal (void ab initio); ii) Deklarasi bahawa Plaintif (Mr Ng Chee Yau) diisytiharkan sebagai pemilik berdaftar yang sah hartanah di bawah Geran No. 392689, Lot No. 88359, Mukim Pulai, Daerah Johor Bahru, Johor; iii) Perintah bahawa Pejabat Tanah dan Galian Johor (PTG Johor) menguatkuasakan Perintah di Perenggan 1 dan Perenggan 2 di atas dalam tempoh dua puluh satu (21) hari dari tarikh Perintah dikeluarkan iaitu PTG Johor adalah diperintahkan untuk melaksanakan yang berikut:-

Membatalkan pendaftaran pindahmilik hartanah Nombor Peserahan: 26649/2016 bagi hartanah yang dipegang di bawah Geran No 392689, Lot No 88359, Mukim Pulai, Daerah Johor Bahru, Johor yang dibuat daripada Plaintif (Mr Ng Chee Yau) kepada Defendan pada 20/4/2016;

Mengembalikan dan mendaftarkan semula Plaintif sebagai pemilik berdaftar yang sah dan sebenar hartanah di bawah Geran No 392689, Lot No 88359, Mukim Pulai, Daerah Johor Bahru, Johor; dan

Membatalkan hakmilik Geran No. 392689, Lot No. 88359, Mukim Pulai, Daerah Johor Bahru, Johor dan mengeluarkan Suratan Hakmilik baru bagi hartanah yang dipegang di bawah Geran No 392689, Lot No 88359, Mukim Pulai, Daerah Johor Bahru, Johor di atas nama Plaintiff. [6] The learned Judge in the Previous Suit, See Mee Chun (J) (as she then was), allowed Mr Ng Chee Yau’s claims and made a declaration, inter alia, that the transfer of the said property to the Plaintiff is void ab initio. The learned Judge also allowed the consequential orders prayed for, including that the said property be registered in the name of the real owner. ISSUES [7] Although the parties listed fourteen (14) issues to be tried, the pivotal issues are as follows:

Sama ada Defendan adalah pada setiap masa material mempunyai tanggungjawab statutory (statutory duty) dan/atau kewajipan berhati-hati (duty of care) terhadap Plaintif. [Whether the Defendant owes a statutory duty and/or duty of care to the Plaintiff.]

(ii) Sama ada Defendan telah cuai dan/atau memungkiri tanggungjawab statutory (statutory duty) dan/atau kewajipan hati-hati (duty of care) terhadap Plaintif. [Whether the Defendant has breached that statutory duty and/or duty of care to the Plaintiff.]

(iii) Sama ada Plaintif berhak untuk menuntut gantirugi seperti yang disenaraikan dalam perenggan 18 Pernyataan Tuntutan daripada Defendan. [Whether the Plaintiff has suffered losses as listed under paragraph 18 of the Statement of Claim (“SOC”) as a result of the Defendant’s breach of duty of care and consequently, is entitled to damages as prayed in the SOC]. PLAINTIFF’S CASE AND EVIDENCE [8] With respect to the particulars of negligence committed by the Defendant, the Plaintiff pleaded as follows:

That the Defendant failed to take any precautionary steps or exercise reasonable care to ensure that all documents submitted for the transfer of ownership of the said property were genuine and valid before registering the transfer of the said property to the Plaintiff; and/or

(ii) That the Defendant breached its duty of care by allowing a fake title to be used to register the transfer of the said property while still holding the original Issue Document of Title (DHKK) in its safe (bilik kebal); and/or

(iii) That the Defendant breached its duty of care by failing to follow established procedure when it used the wrong type of title, i.e. the Register Document of Title (DHDK), to do the registration of transfer of the said property; and/or

(iv) That the Defendant has breached its statutory duty and/or duty of care by leaking a copy of the original Issue Document of Title (DHKK) to an unknown third party (the imposter) who is not the registered owner of the property. [9] The Plaintiff’s witnesses are the Plaintiff himself (“PW1”) and one Ragunath A/L Sivalingam (“PW2”), who was the Plaintiff’s previous solicitor engaged to handle the sale and purchase of the said property. The Defendant’s witnesses are Md Hasanuddin bin Mohmad Hasim, Penolong Pengarah Pendaftaran Hakmilik Pejabat Pengarah Tanah dan Galian Negeri Johor (“DW1”) and Nurul Sa’idah binti Mohameda, Pembantu Tadbir di Pejabat Pengarah Tanah dan Galian Johor (“DW2”). [10] The Plaintiff avers that during the trial of the Previous Suit, Mr Mohamad Noor Azam bin Sulaiman, the Assistant Director of the Registration Division, Johor Land and Mines Office, testified as follows: a. There are two types of title documents, i.e. Dokumen Hakmilik Daftar Komputer or Register Document of Title (“DHDK”); and Dokumen Hakmilik Keluaran Komputer or Issue Document of Title (“DHKK”) or commonly referred to as IDT; b. Transfer of any titles to land can only be made using a DHKK (IDT) title. The transfer of any land cannot be made using a DHDK title; c. The record shows that the physical copy of the original DHKK of the said property has not been collected by anyone and is stored in the vault (bilik kebal) of the Johor Land and Mines Office; d. That the transfer of the said Property was made using a DHDK title grant but later, during the last part of the cross-examination, he (Mr Mohamad Noor Azam bin Sulaiman) changeed his testimony and said that the transfer was made using a DHKK title; and e. The stamp duty on the transfer of the said property had been fully paid. THE LAW – DUTY OF CARE [11] The Plaintiff relies on the case of Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v Poh Yang Hong [2016] MLJU 824; Pendaftar Hakmilik Negeri Selangor & Ors v Shaifulizam bin Mohd Salleh & Anor [2020] 5 MLJ 1; and Pendaftar Hakmilik Negeri Selangor v Caesius Development Sdn Bhd & Ors and Another Appeal [2020] MLJU 25 to support his submission that the Defendant, as the officer who is responsible for the system of land registration, owes a duty of care to landowners to ensure that landowners’ interests are well protected and safeguarded. The Defendant, thus, should have discovered the forged title and the forged documents when the imposter presented the documents for registering the transfer. [12] The Plaintiff further avers that the Defendant has used the wrong type of title in effecting the registration of the transfer of the said property. A registration of the transfer should only be done using a DHKK title and not the DHDK title, as in the present suit. -DW1 in his witness statement (“DWS1”) avers as follows: “16.S : Untuk tujuan urusan pindahmilik, boleh kamu terangkan prosesnya? : Pindahmilik tanah merupakan satu urusan urusniaga yang bertujuan untuk mendaftarkan pemilik baru bagi mana-mana tanahmilik. Pemohon perlu membuat perserahan melalui Memorandum Pindahmilik Borang 14 A yang lengkap yang telah dibuat penyaksian serta telah disetemkan oleh pihak LHDN. Dokumen-dokumen lain yang perlu diserahkan bersama antaranya adalah DHKK asal, salinan kad pengenalan serta dokumen sokongan lain. Sekiranya didapati telah lengkap dan teratur kerani kemasukan akan memasukkan maklumat ke dalam SPTB dan seterusnya pendaftar akan mendaftar urusan tersebut dan mencetak DHKK dan DHDK yang baru terkini.” [13] The Plaintiff submits that the testimony of both DW1 and DW2 should be given less weightage or no value at all, as those testimonies contradict the unchallenged finding of facts by Justice See Mee Chun in the Previous Suit, which is that the title used by the land office to register the transfer of the said property was a certified copy of DHDK, the wrong type of title. DW1 in his witness statement (“DWS1”) avers as follows: “25.S : Semasa urusan pindahmilik tanah tersebut, apakah dokumen yang diserahkan kepada PTG? : Saya merujuk sekali lagi kepada “resit urusan tanah” melibatkan urusniaga pindahmilik tanah tersebut Nombor Perserahan 26649/2016 bertarikh 20 April 2016 jam 3:28:45 petang, dokumen yang diserahkan adalah Borang 14A, satu hakmilik keluaran (DHKK), 1 notis taksiran, 1 resit cukai tanah dan 1 Borang 19G.” DW2 in her witness statement (“DWS2”) avers as follows: “5. S : Bagaimana kamu terlibat dalam kes ini? : Saya merupakan kerani kaunter yang bertugas pada 20.04.2016 yang telah menerima dokumen-dokumen perserahan bagi urusniaga pindahmilik bagi hartanah yang menjadi subjek di dalam kes ini.

S : Di dalam kes ini, apakah dokumen-dokumen yang kamu terima untuk perserahan ini? : Bagi kes ini, saya menerima satu Borang pindahmilik 14A, Dokumen Hakmilik Keluaran (DHKK), satu notis taksiran, dan satu borang 19G.” [14] The Plaintiff submits that, both DW1 and DW2’s evidence are unreliable and ought to be given less weightage since their evidence is directly in conflict with the findings of fact by the learned Judge in the previous suit. Even if DW1 and DW2’s evidence is accepted, it is still apparent that the Defendant had used a forged documents to register the transfer in the name of the Plaintiff. [15] Therefore, the Plaintiff avers that had the Defendant been careful and diligent in perusing the said documents, the Defendant would have discovered the anomalies in the documents presented and the transfer of the said property would have been rejected, thus ensuring that the transaction of sale between the Plaintiff and the imposter did not have happen. DEFENDANT’S DEFENCE [16] In reply, save for the agreed facts, the Defendant denies all the allegations of wrongdoing and/or breach of statutory duty alleged by the Plaintiff. [17] With respect to the Plaintiff’s allegation that the Defendant breached the statutory duty, the Defendant cites in support the case of Asia Pacific Land Bhd & Ors v Datuk Bandar Kuala Lumpur [2006] 2 MLJ 137; X (Minors) v Befordshire County Council [1995] 3 ALL ER 353; and Hui Sepang v Keong On Eng & Ors [1991] 1 MLJ 440 and submits that the Plaintiff failed to state the specific provisions of statutes regarding the breach of statutory duty by the Defendant. [18] The Defendant, in relying on the Caparo test derived from the case of Caparo Industries Plc v Dickman and Others [1990] 2 AC 605 and which was followed in the case of Loh Kok Beng v Loh Chiak Eong & Anor [2015] MLJU 261, contends that the loss claimed by the Plaintiff was not reasonably foreseeable as the loss arose from the forged transaction between the Plaintiff and the imposter, which the Defendant did not have any knowledge of. [19] The Defendant also relies on the case of Loh Kok Beng v Loh Chiak Eong (supra) and submits that there is no legal proximity between the Defendant and the Plaintiff as the Defendant was only performing its administrative duties in receiving and registering the application for transfer. The Defendant relies on provisions in the National Land Code 1965 (NLC) in stating its administrative duty as the Registrar and submits that according to sections 297, 298, 301 and 303 of the NLC, the duty of the Defendant is only to determine fitness for registration of every instrument presented to it without the need to further examine the authenticity of the instruments. The Defendant then submits that the definition of fitness can be determined by section 301 of the NLC. For ease of reference, the provisions of sections 297 and 298 of the NLC are reproduced below: “297. Registrar to determine fitness for registration, and register if fit and accompanied by necessary documents. Except in the case of any such instrument which is subsequently withdrawn under section 296, it shall be the duty of the Registrar to determine in accordance with the provisions of Chapter 3 the fitness for registration of every instrument entered in the Presentation Book, and-

subject to Part Nineteen, if the instrument is fit for registration, and accompanied by the documents required by section 294, to register it in the manner provided in Chapter 4;

if the instrument is not fit, or is not accompanied by the necessary documents, to proceed in accordance with the provisions of section 298 or 299, as appropriate.

Rejection or suspension for unfitness, or absence of certain documents.

Where any instrument is not fit for registration, the registrar shall reject it forthwith unless the unfitness consists solely of some formal defect or clerical error. [20] Relying on the case of Selvaraju Velasamy & Anor v Abdullah Ali Kutty & Ors [2009] 2 CLJ 753, the Defendants submits that it is not reasonable to impose on the Defendant a duty of care to assess the authenticity of the title presented for registration. Instead, the duty of care should be imposed on the Plaintiff and/or the Plaintiff’s solicitor when conducting the necessary document search and preparing the related documents before the transfer of the said property takes place. FINDINGS BY THIS COURT [21] I will first deal with the issue of whether the Defendant was negligent in allowing a registration to be made using a certified copy of DHDK instead of the original Issue Document of Title (DHKK), which was still kept by the Defendant. [22] It is pertinent to note that Justice See Mee Chun has stated in the grounds of judgment in the Previous Suit (see pages 18 and 19 of the Plaintiff’s Bundle of Documents) as follows: “The evidence of PW2 was that the documents presented at the Land Office for the transfer to the Dft was the title as in B/225-227, which was DHDK i.e. Dokumen Hakmilik Dalam Komputer. This is consistent with PW5’s evidence he presented the title to the Land Office. The evidence of PW2 was that when the physical title to the property was issued it would have to be given to the person applying for the transfer and in this instance it was not shown in P8 where there was no record of it being collected. This meant the document would be kept in PTG. A DHDK document such as B/225-227 could not be used for the presentation of the transfer but in fact it was. Although that document could not be presented for transfer, this does not without more renders it a fake title. This is because the chop at the right in B/225 showed it was a certified true copy and the chop at B/226 also showed it a certified true copy by the Assistant Registrar. Further it was not PW2’s evidence the title was fake but rather the evidence was it could not have been presented for registration.” [23] I am persuaded by the Plaintiff’s submission that the testimony of both the Defendant’s witnesses as seen in para 13 above should be given less weightage or no value at all as those testimonies contradict the unchallenged finding of fact by Justice See Mee Chun in the Previous Suit. The Defendant did not tender any documentary evidence or produce any witness to challenge the allegations of the wrongful action/and or negligence as pleaded by the Plaintiff. Instead, the Defendant only disagrees with the findings of facts by Justice See Mee Chun during the trial in the Previous Suit. The Defendant argues that the above-mentioned Mr Mohamad Noor Azam bin Sulaiman actually corrected his stand during the last part of the cross-examination and stated that the registration of transfer of the said property actually used the DHKK title and not the DHDK title, as mentioned by him during cross-examination. However this submission is unconvincing since the undisputed evidence is that the DHKK title remains in the “Bilik Kebal” and was never collected by the real owner. [24] This Court finds that the Defendant still owes a duty of care in ensuring the presentation of the instrument, which in the present case is Form 14A to be accompanied by the correct type of Issue Document of Title (DHKK) and not the wrong type of title. In the event that the presentation of the instrument is accompanied either by a wrong type of documents or forged documents, the Registrar should have rejected the instrument for registration. [25] This Court is guided by the decision of the Court of Appeal in Pendaftar Hakmilik Negeri Selangor v Shaifulizam bin Mohd Salh & Anor and another appeal [2020] 5 MLJ 1, where it was held: “[37] Next is the issue of the transfer of the title of the said property to the first Defendant. The question raised is how did the final title of the said property fall into the hands of the first Defendant? Section 90 of the NLC requires the final title to be retained by the Land Office. But it fell into the hands of the first Defendant. And yet the Land Office did not have any record as to whom the final title in respect of the said property was released to. As alluded to earlier, their own witness admitted that there was a deficiency in the record keeping systems and there were shortcomings on their part. Their witnesses even admitted there was negligence on their part. To further aggravate matters, the Land Office’s file for the said property was missing. [38] Such acts and omissions on the part of the Land Office amount to improper conduct and these improper conduct of the Land Office reflect bad faith on their part which, in our view, clearly show negligence on their part. Further, the non-compliance of the NLC shows a breach of their statutory duty which is equally a breach of a common law duty of care. The Land Office has failed in our view to properly keep land title details and land titles secure in the manner required by the NLC. In Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v Poh Yang Hong [2016] 6 MLJ 413; [2016] 9 CLJ 297, the Federal Court had, inter alia, held that the administrative shortcoming on the part of the Land Administrator or Registry amounts to negligence. This is clearly the case here as admitted by the Land Office’s own witnesses.” [26] Thus, this Court accepts the submission by the Plaintiff that had the Defendant been careful in performing its statutory duties and perusing the said record, the obvious fraud and/or forgery could have been discovered and the transaction between the Plaintiff and the imposter would not have happened. [27] The Plaintiff would not have suffered the losses but for the Defendant’s negligent act in:

Using the forged title to do the registration of the transfer of the said property; and/or

Using the wrong type of title to do the registration of the transfer of the said property; and/or

Not maintaining the uncollected Issue Document of Title properly; and/or

Leaking the original Issue Document of title (DHKK) to a third party not the land owner. [28] The losses suffered by the Plaintiff are reasonably foreseeable for the following reasons:

If the Defendant had checked the title properly and/or diligently, it would have discovered that the title presented to it is a forged title; or

If the Defendant had abided by its duties, it would not have used the wrong type of title to do the registration; or

If the Defendant had maintained the record system / kutipan system properly and/or diligently, the imposter would not have been able to forge the original Issue Document of Title;

If the Defendant had checked the record system before registration of the transfer was done, the Defendant would have discovered the anomalies in the presentation of the transfer documents. [29] Having found that the Defendant was negligent and had breached its duty of care to the Plaintiff and that the Plaintiff’s pecuniary losses are a direct consequences of the negligence of the Defendant, I award the Plaintiff damages in the sum of RM1,258,140.68 which was the total amount paid by the Plaintiff in the purchase of the property from the imposter and all incidental costs including the costs of the Previous Suit awarded against the Plaintiff. Additionally, I award interest of 4% per annum on the damages awarded from 29.05.2023 until the date of judgment; interest of 5% per annum on the damages awarded from the date of judgment until the date of full payment or realisation, and costs of RM20,000.00 be paid by the Defendant to the Plaintiff. Dated 27th September 2023 …………t.t…………. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE PLAINTIFF: MS KENNY LO SOLICITORS FOR THE PLAINTIFF: TETUAN K S PANG & CO COUNSEL FOR THE DEFENDANT: TN MOHAMAD AZZAM BIN ZAINAL ABIDIN SOLICITORS FOR THE DEFENDANT: PEJABAT PENASIHAT UNDANG-UNDANG NEGERI JOHOR Cases Referred to: ➢ Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v Poh Yang Hong [2016] MLJU 824 ➢ Pendaftar Hakmilik Negeri Selangor & Ors v Shaifulizam bin Mohd Salleh & Anor [2020] 5 MLJ 1 ➢ Pendaftar Hakmilik Negeri Selangor v Caesius Development Sdn Bhd & Ors and Another Appeal [2020] MLJU 25 ➢ Asia Pacific Land Bhd & Ors v Datuk Bandar Kuala Lumpur [2006] 2 MLJ 137 ➢ X (Minors) v Bedfordshire County Council [1995] 3 ALL ER 353 ➢ Hui Sepang v Keong On Eng & Ors [1991] 1 MLJ 440 ➢ Caparo Industries Plc v Dickman and Others [1990] 2 AC 605 ➢ Loh Kok Beng v Loh Chiak Eong & Anor [2015] MLJU 261 ➢ Selvaraju Velasamy & Anor v Abdullah Ali Kutty & Ors [2009] 2 CLJ 753 Legislation Referred to: ➢ Rules of Court 2012 (“ROC”) ➢