M Shahool Hameed Bin Mohamed Meerah v 1. ) Pengarah Tanah dan Galian Selangor (BA-21NCvC-30-06/2019)

PENGARAH TANAH DAN GALIAN

2.

KERAJAAN NEGERI SELANGOR …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] The Plaintiff was interested to engage in property development. He was shown a piece of land to purchase in the area of Gombak. Upon verifying the particulars of the land from the land title and other documentation shown to him, he purchased it. It later transpired that the land was non-existent as it had been subject to a land acquisition almost 40 years prior. 15/05/2023 14:24:50 BA-21NCvC-30-06/2019 Kand. 43 [2] The Plaintiff now claims against the Defendants damages for negligence premised on their failure to maintain an accurate record of the land he purchased. The Plaintiff seeks to recover losses suffered as a result of entering into a sale and purchase agreement for a non-existent land. The salient facts [3] The Plaintiff was in the publications business at the material time but has since retired. Although he owned several pieces of land he had no experience in real estate development. This changed in 2013 when he engaged his agent, one Hussain to source for available land. Hussain contacted one Arun, who claimed to represent Salleh bin Awang (“Salleh”). Salleh was interested to sell his land identified as GM 946, Lot 3669 Bandar Selayang Tempat 9th Mile Rawang Road, Daerah Gombak, Negeri Selangor (“said land”). It was about 5 acres in size. [4] Arun then brought the Plaintiff to the office of Raja Raman & Associates. At the office he met Salleh for the first time. The Plaintiff was shown the result of a private search conducted on 20.12.2013, wherein Salleh was stated as the registered proprietor of the said land. [5] The Plaintiff was also shown a valuation dated 23.10.2013 done by Jurunilai Bersekutu on the said land. The market valued of the land was assessed at RM 8,000,000.00, and the forced sale value at RM 5,600,000.00. The Plaintiff relied on this valuation as a basis to negotiate the price of the land to be transacted with the proprietor. [6] The Plaintiff then instructed Hussain to conduct an official search on the said land. The official search on 26.12.2013 again confirmed Salleh to be the registered proprietor. [7] On 24.2.2014, the Plaintiff and Salleh entered into a sale and purchase agreement (“SPA”). The SPA was prepared by Raja Raman & Associates. The Plaintiff did not engage any solicitors to represent him in the sale and purchase transaction. [8] Amongst the salient terms of the SPA, were the following:-

the purchase price of the said land was RM 1,000,000;

(ii) simultaneous with the execution of the SPA, the Plaintiff was to pay Salleh the sum of RM 350,000; and

(iii) the balance purchase price of RM 650,000 shall be paid by firstly, setting off the sum of RM 500,000 from another land belonging to the Plaintiff, which was to be transferred to Salleh. The land in question was identified as H.S.(M). 9860 FT 13422 Mukim Kapar, Rantau Panjang Daerah Klang, Negeri Selangor. Secondly, by paying the sum of RM 150,000.00 to the Plaintiff’s solicitors as stakeholders on or before the expiry of 6 months from the date of the SPA. [9] On 24.2.2014, the Plaintiff paid the deposit of RM 350,000.00 to Raja Raman & Associates by way of a cheque. The instrument of transfer in Form 14A was also executed on 24.2.2014. [10] The Plaintiff then paid the balance purchase price of RM 674,000.00 comprising RM 650,000 for the said land and stamp duty of RM 24,000.00 on 14.3.2014 and 20.3.2014 respectively. [11] The Form 14A was presented for registration on 18.3.2014. Upon completion of the registration, the document of title in respect of the said land was handed to the Plaintiff with his name endorsed as the registered owner. To confirm his ownership of the said land, the Plaintiff conducted a private search on 21.3.2014. The search results showed his name had been entered as the registered proprietor on the title. [12] Soon thereafter, in April 2014, the Plaintiff engaged a consultant firm, PCM Kos Perunding Sdn. Bhd. to conduct a feasibility study on the Plaintiff’s proposal to develop the land. Following the study, a report titled Cadangan Membina 48 Unit Rumah 4 Tingkat Superlink dan sebuah Pencawang Elektrik di Lot 3669, Mukim Bandar Selayang 68100 Gombak, Selangor Darul Ehsan untuk Tetuan SNR Multitech Sdn Bhd (M. Shahool Hameed bin Mohamed Meerah) was issued. The report encompassed the costing involved as well as the estimated return on investment. [13] He also engaged a land surveyor to verify and ascertain the boundary of the said land. He was shocked when he was informed by his surveyor that the physical land based on the plan in the title was non-existent. He was also told that instead of vacant land, there were residential buildings erected on it. [14] I note that the land surveyor’s letter adduced in evidence was dated 23.3.2015, which strangely was at variance with the Plaintiff’s oral evidence that the land surveyor’s discovery and findings was in May 2014. [15] The Plaintiff then presented himself at the office of the 1st Defendant on 4.6.2014 to confirm the status of the said land. It was then that he was informed that the physical land was non-existent. He was advised to lodge a police report which he did two days later, at the Sea Park police station. He also obtained a certified plan of the said land from Jabatan Ukur dan Pemetaan Malaysia, which showed the said land to have been subject to an acquisition. [16] He then instructed the firm of Raja Raman & Associates to write to the office of the Director General of Land & Mines of the Federal Territory regarding the matter. A letter was sent by Raja Raman & Associates on 9.6.2014. [17] On 20.6.2014, the office of the Director-General of Land & Mines of the Federal Territory (“D-G of Land & Mines”) wrote to the Director of the Department of Commercial Crimes. The letter stated that the taskforce known as Pasukan Petugas Pencegahan Fraud Ke Atas Urusniaga Dan Pendaftaran Hakmilik Tanah had received a complaint from the Plaintiff. The letter further added that preliminary investigation conducted by the office of the D-G of Land & Mines suggested fraud in the sale and purchase transaction of the said land. [18] Subsequent to the discovery that the physical land for the said land title did not exist, the Plaintiff instructed his solicitors to demand compensation from the Defendants. The Plaintiff also filed a suit in the Shah Alam High Court against Raja Raman & Associates and Rajasegaran a/l Raman as the sole proprietor of the said firm, for the return of all monies paid to the firm in respect of the transaction involving the said land. On 22.4.2015, judgment for the sum of RM 1,100,000.00 was obtained by the Plaintiff. [19] The Plaintiff now claims that he has been deprived of the said land as a result of the Defendants’ negligence. The particulars of negligence are primarily as follows:-

failed to take adequate steps to ensure the accuracy of the records kept in the Computerised Land Registration System of the 1st Defendant;

(ii) failed to ensure that no overlapping/duplicate land title is kept;

(iii) issued a land title in which the physical land did not exist; and

(iv) issued land searches for which the information is not accurate. [20] The Plaintiff seeks relief in the nature of damages for the loss of land as well as damages for mental and emotional distress resulting from the said loss which he claims were caused by the Defendants’ actions. [21] The Defendants deny all the particulars of negligence. Instead the Defendants take the position that they had taken all necessary and reasonable steps to verify the requisite documents presented for registration of the transfer to the Plaintiff. At the material time, there was nothing to raise the suspicions of the land office. [22] The defence case relied mainly on the historical records of the Gombak land office pertaining to the antecedent transactions as they transpired decades earlier. The historical facts are significant. [23] The said land was the subject matter of acquisition vide Warta Kerajaan Negeri Selangor no.390 dated 12.9.1975. It formed part of land registered as E.M.R 4128, Lot 3669, Mukim Batu, Daerah Gombak, Selangor (“EMR 4128”). EMR 4128 was fully acquired by the Land Administrator for Tapak Pusat Bandar Ibu Daerah Gombak. [24] At the time of acquisition, EMR 4128 was registered in the name of Lim Hee and Lim Shang Lai. The record of the Defendants showed that compensation monies in respect of the acquisition had been fully paid. Possession of the land acquired had also been taken by the State Authority. However, the registered proprietors did not surrender the land title for the requisite endorsement to be made upon acquisition, pursuant to the Land Acquisition Act, 1960. [25] Upon acquisition, the land was alienated to Shah Alam Properties Sdn. Bhd. on 13.10.1988 by the State Authority. [26] Based on the records on the 1st Defendant, on 10.10.2005, Lim Hee applied for a replacement title on the grounds that he had lost his original title. The following documents were presented in support of the application:-

Sg. Jarom police report dated 7.10.2005 made by Lim Hee;

(ii) the Statutory Declaration of Lim Hee dated 6.10.2005 stating the loss of the land title pertaining to Mukim Batu, Daerah Gombak of area 2.0487 hektar; and

(iii) the Statutory Declarations of both Lim Hee and Lim Shang Lai dated 6.10.2005 stating that they authorize one Ng Kian Seng to deal with the application for a replacement title on their behalf. [27] Upon verifying the documents, the 1st Defendant took the following action to process the application:-

issue a notice in Form 10D of the National Land Code on 17.10.2005;

(ii) gazette Form 10D on 17.10.2005;

(iii) apply for a plan for the replacement title;

(iv) issue a title in continuation pursuant to sections 166 and 168 of the National Land Code on 27.10.2005. The new title issued following the Computerised System of Land Registration was GM 946 (replacing GM 898) Lot 3669, Mukim Batu, 9th Mile Rawang Road, Selangor. The particulars of the new title relates to the said land in question; and

issue a notice in Form 5F dated 14.12.2005 to Lim Hee to collect the replacement title. [28] The documents adduced at the trial showed that on 14.12.2012, (some 7 years after obtaining the replacement title) Lim Hee and Lim Shang Lai appointed one Tan Chin Huat as their attorney to deal with the said land, by virtue of a Power of Attorney registered in the Kuala Lumpur High Court on 21.1.2013. [29] By a Sale and Purchase Agreement dated 7.1.2013, Tan Chin Huat sold the said land to Salleh for RM 1,200,000.00. The instrument of transfer in Form 14A was presented for registration on 11.10.2013 and the title was then duly registered in the name of Salleh bin Awang. He remained the registered proprietor until 18.3.2014 when the Form 14A, pursuant to the SPA entered into between Salleh and Plaintiff, was presented for registration in the Plaintiff’s name. Issues for determination [30] The cause of action of the Plaintiff’s suit is founded on negligence, which is turn is premised on the failure of the Defendants to maintain a true and accurate record of the said land in its register. The alleged failure arises from the statutory duty on the part of the 1st Defendant. [31] Whilst the Plaintiff did not expressly plead breach of statutory duty, the Federal Court in Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v. Poh Yang Hong [2016] 9 CLJ 309 held that a suit in negligence can lie in respect of a breach of statutory duty. It said as follows, [37] We would like to state here that a common law duty of care can arise in the performance of a statutory function. In the instant case, the second defendant had a statutory function to ensure that the records entered in the Register of Titles and maintained in the office of the second defendant contained particulars which are accurate. A failure of that duty can give rise to the coexistence of statutory duty and common law duty of care. (See the case of X (Minors) v. Bedfordshire County Council [1995] 3 WLR 152). [32] Premised on the pleaded case for the parties, the determination of this suit turns on a confined issue, whether the particulars of negligence alleged have been established by the Plaintiff. Analysis and decision of this court [33] It cannot be gainsaid that the Plaintiff bears the burden of proving his case. As the issue pertains to negligence, I am guided by the settled principles stated in Caparo Industries plc v Dickman [1990] 2 AC that a party suing in negligence must establish that the defendant has a duty of care of the nature asserted owing to the plaintiff and that the said duty had been breached by the defendant; and that such breach had caused injury to the plaintiff. (See also: Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v. Poh Yang Hong (supra), Pendaftar Hakmilik, Pejabat Tanah Dan Galian Negeri Selangor v. Bank Pertanian Malaysia Bhd [2016] 3 CLJ 871). Duty of care to maintain true and accurate records [34] The issue that a duty of care exists in maintaining accurate records in the land office has been settled in several cases. I shall merely refer to one. In Pendaftar Hakmilik, Pejabat Pendaftaran Wilayah Persekutuan Kuala Lumpur & Anor v. Poh Yang Hong (supra), the Federal Court held, Firstly, there is the statutory duty under the NLC to maintain the register of all lands caused to be registered at the Registry, and in particular to ensure that the information contained in the Register is correct, true and accurate and reflects the true and actual description of the title to the land as well as the true identity of the registered proprietor thereof. Breach of duty in failing to maintain an accurate record of the said land [35] The Plaintiff’s grievance is that he bought a land which was non-existent. The search made prior to the purchase showed Salleh as the owner of the said land. Based on the records of the Defendants, the land was available to be bought by the Plantiff. [36] It is critical to understand how Salleh to be the registered owner in the records of the 1st Defendant. DW1, the assistant land officer in the Gombak land office testified on behalf of the Defendants. He said that when Li Hee the previous co-owner, attended at the land office on 10.10.2005 to request for the replacement title, the requisite documents for the processing of a replacement title was presented. These were the documents required under the National Land Code 1965. The procedure provided in the law was also duly followed in that the gazette under section 168 was done on 27.10.2005 before the replacement title by a title in continuation was issued, for the said land. His evidence in this regard was not challenged. [37] Unfortunately, the replacement title was then used to transact the said land sometime in 2013. By a Power of Attorney granted by the registered proprietors to one Tan Chin Huat, a sale and purchase agreement was entered into with Salleh. Salleh bought the said land from Lim Hee and Lim Siang Lai to Salleh on 7.1.2013 for RM 1,200,000.00. This allowed Salleh to procure his name on the title. A year later, Salleh sold the land to the Plaintiff in February 2014 at a loss, at RM 1,000,000.00 [38] The genesis of the transaction by Salleh to the Plaintiff was the issuance of the replacement title to Lim Hee and Lim Shang Lai. In view of the circumstances in which the replacement title was applied for, fraud was clearly perpetrated. The land had been acquired in 1975. Both Lim Hee and Lim Shang Lai were the owners at the material time. Notwithstanding the acquisition, they applied for a replacement title some 30 years later. [39] It is pertinent that the Plaintiff did not plead that the replacement title was negligently issued. There is nothing in the Statement of Claim to suggest that this fact was the pleaded case of negligence. [40] In any event, I have considered the explanation given by DW1 to negative any lapse on the part of the Defendants. His evidence was as follows, Semasa pengeluaran hak milik sambungan atas nama Lim Hee dan Lim Shang Lai serta kedua-dua pindahmilik yang selanjutnya, pihak Defendan Kedua tiada pengetahuan mengenai status sebenar hartanah tersebut. Ini berlaku kerana dokumentasi dan perserahan bagi permohonan geran hilang dan pindahmilik tidak menunjukkan sebarang keraguan mahupun kecatatan nyata di mata Defendan Kedua pada masa tersebut. Walaubagaimanapun, selepas aduan dibuat oleh Plaintif, semakan terperinci telah dijalankan oleh Defendan Kedua dan pengkhidmatnya ke atas sejarah berkait hartanah tersebut, Setelah semakan dibuat, hartanah tersebut didapati telah dibuat pengambilan oleh Pihak Berkuasa Negeri (“PBN”) melalui Warta Kerajaan Negeri Selangor (No. 390) bertarikh 12 September 1975 selaras Akta Pengambilan Tanah 1960 (“APT 1960”). Melalui warta tersebut, adalah jelas bahawa keseluruhan hartanah tersebut yang dahulunya dikenali sebagai E.M.R 4129 4128, Lot 3669, Mukim Batu, dalam daerah Gombak, dalam negeri Selangor Darul Ehsan telah dibuat pengambilan sepenuhnya oleh Pentadbir Tanah. Pada masa pengambilan tanah dibuat, hartanah tersebut didaftarkan di atas nama Lim Hee dan Lim Siang Lai. Berdasarkan rekod, di dapati pengambilan tanah tersebut telahpun sempurna dan Borang K APT 1960 telahpun dikeluarkan. Pampasan untuk pengambilan tanah tersebut juga telah dibayar kepada pemilik berkenaan. Oleh yang demikian, haratanah tersebut bukan lagi milik Lim Hee dan Lim Siang Lai. Walaubagaimanapun, rekod di pejabat Defendan Kedua mendapati pemilik-pemilik hartanah tersebut tidak pernah membuat penyerahan balik geran hakmilik asal hartanah tersebut selaras keperluan di bawah APT 1960 selepas pengambilan tanah tersebut selesai dan sempurna. Oleh sebab itu, hakmilik asal hartanah tersebut masih lagi di dalam simpanan Lim Hee dan Lim Siang Lai. Justeru, hakmilik asal dalam simpanan mereka masih belum diendorskan dengan Borang K APT 1960 yang akan membuktikan bahawa hartanah tersebut telah dibuat pengambilan sepenuhnya. [41] Having considered the explanation proferred by DW1, I accept his explanation as I consider it to be reasonable. [42] Section 24 of the Land Acquisition Act 1964 provides that upon the Land Administrator shall take formal possession of the acquired land by serving a notice in Form K. Upon such being done, a memorial is to be made on the register document of title that the land had been acquired. Whether such a memorial was made was not asked of DW1 in cross-examination. In any event, this fact was not the pleaded case of the Plaintiff. The facts pertaining to the acquisition were in fact disclosed from the defence case. [43] The computerized land registration system (“CLRS”) was implemented pursuant to amendments to the National Land Code which came into effect on 1.1.1993. The information in the existing register of documents of title was converted and migrated to the CLRS. The search done by the Plaintiff in 2013 was premised on information in the CLRS. [44] The Plaintiff alleged the information in the CLRS was inaccurate as there was no physical land. However, taking into account DW1’s explanation, it was accurate in so far as there was land to be transacted as a replacement title had been issued. [45] None of the individuals involved in the preceding transactions were called to testify. Had they been present, their testimony may well have thrown more light on the nature of the transactions. In the circumstances, I accept DW1’s explanation as to the issuance of the replacement title which was eventually used to facilitate the transfer to the Plaintiff. [46] In addition, I am of the view that the mere fact that a title was issued for a land which had been subject to acquisition cannot be ipso facto negligence. The Defendants were not privy to the fraudulent application for a replacement title. But for the fraud, the Plaintiff would not have entered into the SPA with Salleh. To my mind, this was the actual contributory cause of his alleged loss. They were supervening events which would supersede any lapse if at all, on the part of the Defendants. [47] I have drawn the inferences of fraud based on the facts from the documents adduced. The suspicion of fraud is fortified by the preliminary findings of the Commercial Crime Division of the police force and the subsequent entry of the Registrar’s caveat on the said land on 11.1.2017. [48] In view of my findings on the evidence adduced on the issue of breach, I conclude that the Defendants were not in breach of their duty to maintain an accurate record in the CLRS as alleged. Plaintiff’s knowledge of the circumstances pertaining to the said land [49] I also find the Plaintiff’s conduct in the entire transaction to be pertinent. There are circumstances to suggest he may not be unaware that the sale and purchase of the said was not genuine. [50] He purchased the said land for RM 1,000,000. It was the Plaintiff’s own evidence that the said land was valued at RM 5,000,000 to RM 8,000,000. The valuation done by Jurunilai Bersekutu was given to him by a real property agent, Arun. Arun was not called to testify. The Plaintiff stated that he relied on the valuation made to conduct his negotiation on the purchase price of the said land. I find his evidence that “Saya tidak buat penilaian atas hartanah. Saya bergantung kepada penilaian Jurunilai Bersekutu.” to be telling. [51] A property sold way below its market value would have raised a red flag to a reasonable person requiring him conduct further enquiries. [52] Even if it was a deal too good to refuse as it was way below the market value, he ought to have appointed an independent valuer to be certain as the true market value. [53] A prudent Plaintiff would have appointed his own solicitors to handle the documentation involved. The Plaintiff did not. The property was not of an insubstantial value. The Plaintiff was also not uneducated for him to ignore the value of legal counsel. [54] The terms of the SPA were unusual. The SPA provided for an initial cash deposit of RM 350,000. As RM 500,000 of the purchase price was to be by way of land swap, the balance of RM 150,000 was to be paid before the expiry of 6 months of the SPA. Strangely, the Plaintiff paid the balance purchase price of RM 670,000 (inclusive of stamp duty) by way of BIMB cheque dated 14.3.2014, way before the due date for completion. [55] The Plaintiff appointed his surveyor to determine the boundaries of the said land some 3 months after the SPA and some 2 months after the purchase price had been fully paid. He made this candid admission in cross examination. Again, I find it incredible that the Plaintiff commissioned a survey of the said land only after, when he should have done it before entering into the SPA. I would have expected him to ascertain the physical location of the said land by an expert in order to be certain of what he was purchasing. Instead, the Plaintiff chose to rely on some documents shown to him as proof of its existence. [56] In the light of the circumstances mentioned, I doubt his evidence on the genuineness of the transaction entered into with Salleh. Consequently, I do not regard the evidence in support of his case of negligence to be plausible. Whether the breach caused the Plaintiff’s loss [57] As the breach is not proved, the determination of this issue is not required. Nonetheless, for the sake of completeness, I shall deal with it. [58] It is trite law that any loss claimed consequent upon a breach of duty must be foreseeable and must result from it. [59] The Plaintiff complains that he had lost the opportunity to develop the said land. He claims damages for economic loss. A feasibility report was commissioned from PW2, a quantity surveyor. PW2 concluded that a net profit of RM 32,692,132.52 was potentially to be made from the development. I would be circumspect in relying fully and solely on the report of a quantity surveyor in a project of such magnitude. [60] The Plaintiff is not in the business of land development. He is now a retiree after serving in the publication industry. He admitted he has no experience in that area of business, neither does he possess a developer’s licence. In cross examination, he agreed with the defence that if the said land was to be developed, it would be his maiden foray as a developer. [61] I therefore find the evidence on the potential revenue to be earned from the land development to be unconvincing, but mere speculation. [62] The Plaintiff also seeks to be compensated for the value of the said land. To my mind, this is more appropriately sought from Salleh from whom he purchased a non-existent land. [63] In addition to the above, he also claimed for all monies paid and costs incurred as a result of entering into the purchase of the land. The Plaintiff stated that he paid a total of RM 1,110,000 to the firm of Raja Raman & Associates. I note that the Plaintiff had obtained judgment against the firm of Raja Raman & Associates for the sum of RM 1,100,000.00 on 22.4.2015. It is totally misconceived on his part to claim this judgment sum from the Defendants. [64] The Plaintiff also claims damages for the mental and emotional suffering attendant upon the purchase of a non-existent land. The claim is not supported with convincing evidence such as a medical report. There is therefore no basis to award any damages even if liability was established. Conclusion [65] Premised on the foregoing reasons, I do not find a case in negligence made out against the Defendants. Consequently, the Plaintiff’s claim must be dismissed. [66] I also order that costs of RM 20,000 subject to allocatur be paid by the Plaintiff to the Defendants. Dated : 15th of May 2023 -sgd- .………………..….... Alice Loke Yee Ching Judge High Court of Malaya at Shah Alam Counsel for the Plaintiff : Mr. Muhammad Farhan bin Hamdan (Mr. Naqiuddin Nazrin with him) Tetuan Naqiuddin Nazrin & Partners Counsel for Defendant : Mr. Mohd Abdul Hakim bin Mohd Ali