Mohd Najid Bin Yusof v 1. ) Mak Offshore Sdn Bhd (BA-22NCvC-311-06/2018)

MAK OFFSHORE SDN BHD [Business Registration No.: 894583-H]

MALIAMI BIN HAMAD [NRIC NO: 540507035059]

MOHAMMAD FAUZI BIN HAMAD [NRIC NO: 590820035325] … RESPONDENTS 14/03/2023 15:46:20 BA-22NCvC-311-06/2018 Kand. 175 JUDGEMENT [1] The following is the Court’s decision at the end of a full trial between the parties. Trial commenced on 07.12.2021 and was swiftly concluded on 15.06.2022. During the trial, a total of five (5) witnesses called by the Plaintiff. On the other hand, the First Defendants (“1st Defendant”) called three (3) witnesses and the Second (“2nd Defendant”) and Third Defendants (“3rd Defendant”) had called four (4) witnesses to testify. [2] Having gone through the pleadings of all parties, the evidence adduced at the trial both oral and documentary, and upon reviewing the submissions of counsel, this Court had on 23.12.2022 allowed the Plaintiff’s claim in part and dismissed the 2nd and 3rd Defendant’s counterclaim. [3] The Defendants have since lodged an appeal against the above decision by way of a Notice of Appeal dated 13.01.2023 and 18.01.2023 respectively to the Court of Appeal. The following are my grounds of judgment in relation to the said appeal. Brief Facts [4] The factual matrix of the Plaintiff’s claim are as follows: - a. Circa February 2012, the Plaintiff was facing financial difficulties. Knowing that the Plaintiff needed financial assistance, SP1 (the Plaintiff’s friend), introduced him to SD3 in his capacity as a representative of the 1st Defendant for purposes of securing a loan. The meeting took place at SD3's office in Jalan Klang Lama and later at the 1st Defendant's solicitor's office in Petaling Jaya, Selangor. b. Having met the Plaintiff, the 1st Defendant through SD3 agreed to provide a loan of RM 600,000.00 to the Plaintiff subject to the following conditions: i. The Plaintiff will only receive the sum of RM 412,000.00 while the balance of RM 188,000.00 will be used as loan interest payment for a period of six (6) months and legal costs; ii. The Plaintiff is required to hand over the original document of title to the land grant Mukim No 2123 Lot 20908, Setapak Mukim, Gombak District, Selangor State (“the Land”) to the 1st Defendant as security for the loan. c. The Plaintiff subsequently signed the loan agreement document at the 1st Defendant's solicitor's office on 08.02.2012. The title of the Land was also handed over to the 1st Defendant. Thereafter, the Plaintiff received a sum of RM 100,000.00. On 09.02.2012, the Plaintiff subsequently received a balance sum of RM 312,000.00 via telegraphic transfer to the Plaintiff's bank account. d. It is the Plaintiff’s plaint that he was not given a copy of the loan agreement. e. On or about December 2012, the Plaintiff contacted SD3 and requested for the Land title document be returned to him. This was to enable the Plaintiff to mortgage the Land to Malayan Banking Berhad who in principle had agreed to give the Plaintiff a loan of RM 1.3 million. SD3 refused to do so and instead placed a condition that he will only agree to return the title, if the amount of RM 1.3 million was paid to him to recover the Land. As a result, the original loan of RM 600,000.00 could not be paid or explained by the Plaintiff to the Defendant or his representative SD3. f. In May 2017, the Plaintiff was approached by the real estate agent of the 1st Defendant (SD4) telling him that the Plaintiff's Land had been purchased by the 2nd Defendant and 3rd Defendant at a price of RM 690,000.00. g. The Plaintiff then conducted a search on the Land and found that the Land has been transferred to the name of the 1st Defendant through a Power of Attorney dated 27.06.2012. Further, the transfer of ownership was registered on 25.05.2013. The Plaintiff made police reports and entered a private caveat against the land. In 2018, the Plaintiff filed legal proceedings seeking relief against the transfer of the Land from his name to the 1st Plaintiff and also against the transfer from the 1st Defendant to the 2nd and 3rd Defendants. h. The Plaintiff’s suit was opposed by all the three (3) Defendants with the 2nd and 3rd Defendants filing a counter claim for trespass against the Plaintiff. Summary of the Plaintiff’s submission [5] The Plaintiffs’ case can be summarised on the following issues as follows:

The transaction between the Plaintiff and the 1st Defendant was money lending or loan transaction cloaked as a sale of the Land. The Plaintiff’s evidence on this is supported by SP2 and SP3.

(ii) The Plaintiff did not receive the purchase price of RM 600,000.00 for the Land. Instead the Plaintiff only received a total sum of RM 412,000.00 form the 1st Defendant. In this regard, the documentary evidence relied upon by the 1st Defendant to show that the Plaintiff did receive the sum of RM 600,000.00 does not support the 1st Defendant;

(iii) The evidence of given by SD1, being the 1st Defendant’s solicitors did not support the existence of a genuine sale and purchase of the Land. This includes the following facts: a. there was no resolution prepared in respect of the transaction by the 1st Defendant as normally required in the case of a company; b. there was no CKHT forms prepared in respect of the purchase of the Land; c. there was no Memorandum of Transfer executed for the purchase of the Land; and d. there was no delivery of vacant possession of the Land by the Plaintiff to the 1st Defendant.

(iv) The transfer of the Land was done vide a Power of Attorney dated 27.06.2012 which has no mentioned in the purported Sale & Purchase Agreement. Moreover, the details of the land described in the Power of Attorney is not the same as the details of the subject Land. This makes the said Power of Attorney, a void instrument of transfer.

The fact that there was no purchase of the land is also supported by the 2017 Suruhanjaya Syarikat Malaysia (‘SSM”) search report of the 1st Defendant which shows that the 1st Defendant’s asset. is only at RM 97,000.00. Had there been a purchase of the Land at a price of RM 600,000.00, the SSM search report would have shown that the 1st Defendant’s assets is more than RM 600,000.00.

(vi) The fact that the Memorandum of Transfer was only registered a year later using the void Power of Attorney, this support the Plaintiff’s case that there was no sale or transfer from the Plaintiff to the 1st Defendant.

(vii) As the purported transfer from the Plaintiff to the 1st Defendant was obtained by fraud, the 2nd and 3rd Defendants are deemed as ‘immediate purchaser’ and not ‘subsequent purchaser’. Thus, they are not entitled to the protection under Section 340

of the National Land Code (“NLC”).

(viii) The 2nd and 3rd Defendants are not bona fide purchasers as they had purchased the Land at RM 690,000.00. This is well below the market value of RM 1.488 million and well the advertised sales price of RM 800,000.00.

(ix) As the Plaintiff’s cause of action is based on fraud which was discovered only in August 2017 i.e. when the Plaintiff was informed by the 1st Defendant’s estate agent that the Land was being sold to the 2nd and 3rd Defendants, pursuant to Section 29 of the Limitation Act 1953, the Plaintiff’s claim is not time barred. The 1st Defendant’s submission [11] I have set out a summary of the 1st Defendant’s submission below:

The Plaintiff’s cause of action is time barred pursuant to Section 6 of the Limitation Act 1953. The 1st Defendant contends so as the Plaintiff’s cause of action to set aside the Sale and Purchase Agreement (“SPA”) dated 02.02.2012 would have commenced from 02.02.2012. Given the time frame of six (6) years provided under the above provision, the Plaintiff’s cause of action would have expired on 01.02.2018. The filing date of the Plaintiff’s Writ being 25.06.2018 is well beyond the expiry date of 01.02.2018;

(ii) Despite the Plaintiff’s denial that he had willingly entered into the SPA with the 1st Defendant, his conduct in offering to purchase part of the Land from the 2nd Defendant shows that the Plaintiff has full knowledge that the Land had initially been sold off to the 1st Defendant.

(iii) Despite testifying that he did not sign the SPA, the Plaintiff did not appoint a signature expert to challenge the genuineness of his signature on the SPA, the Power of Attorney, payment vouchers and Hong Leong bank cheque nos. 729615 and 729667 tendered by the 1st Defendant to prove the existence of a sales transaction between parties. The Plaintiff’s excuse that he did not have the funds to do so is non sensical as the Plaintiff could have easily sought the assistance of the Government Chemist Department.

(iv) Despite the Plaintiff contending that the loan agreement was a disguise, the Plaintiff did not furnish any documentary proof to support his allegations. The Plaintiff also did not lodge any complaint against the solicitor who assisted in preparing the so called ‘illegal’ loan agreement to the relevant authorities.

According to SD1, the Power of Attorney was duly signed before her by the Plaintiff. At that point in time, the Plaintiff never protested or objected to the contents of the said Power of Attorney (see exhibit D-7).

(vi) The fact that the Plaintiff did not pay the quit rent for the Land from 2013 to 2016 also signifies that the Plaintiff had parted with Land.

(vii) The fact that the Plaintiff did not make any fuss or got angry when the 1st Defendant’s agents told him that the Land concerned was about to be sold to the 2nd and 3rd Defendants support the 1st Defendant’s case that the Plaintiff had already sold off the Land to the 1st Defendant; and

(viii) In totality, the Plaintiff has failed to discharge the burden of proof required of him as provided for by Section 101 of the Evidence Act 1950 (reliance placed on Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 7 CLJ 584). Summary of 2nd and 3rd Defendant’s submission [12] The 2nd and 3rd Defendant’s submissions can be summarised as follows:

The Plaintiff has failed discharge his burden of proof to enable him to invoke Section 340(2) of the NLC to defeat the 2nd and 3rd Defendant’s title of the land;

(ii) The Plaintiff has failed to prove that the transfer between him and the 1st Defendant was done by way of fraud or misrepresentation. In this regard, there was no evidence to support the Plaintiff’s case that the transaction between him and the Defendant was for a loan and not an outright sale. In addition, there is no evidence of the Plaintiff paying any monthly instalments to the 1st Defendant. The Plaintiff has also not paid the 2013 quit rent for the Land since it was transferred to the 1st Defendant on 12.02.

This conduct is inconsistent with that of the owner of the

(iii) The Plaintiff has also failed to prove that transfer was done based on a Power of Attorney which bears his forged signature. Moreover, the Plaintiff only lodged a police report approximately five (5) months after finding out that the Land was about to be sold to the 2nd and 3rd Defendants;

(iv) To the contrary, the 2nd and 3rd Defendants have established that there is nothing peculiar or suspicious about the sale and purchase transaction between them and the 1st Defendant;

Whilst the Plaintiff harps on the issue that the 2nd and 3rd Defendants purchased the land without conducting a valuation, there is no requirement in law for a prospective purchaser to do so before purchasing a particular piece of property;

(vi) The 2nd and 3rd Defendants are bona fide purchasers for value. They are also subsequent transferee to the Land concerned. In the circumstances, they are protected by Section 340(3) of the NLC; and

(vii) As the 2nd and 3rd Defendants are lawful owners of the Land, the Plaintiff is liable for trespass by refusing to remove the structures which he built on the Land. That being the case, the 2nd and 3rd Defendants are entitled to damages for trespass. Court’s Analysis and Findings [13] Having reviewed the pleadings, the evidence adduced by parties and the respective submissions by counsel, I have chosen to form my decision based on the issues listed in the following paragraphs. A. Whether the Plaintiff’s claim is caught by Limitation? [14] The simple answer to this is ‘NO’. Firstly, under Section 9 of the Limitation Act 1953, the limitation period to file an action for recovery of land is twelve (12) years. The Plaintiff’s cause of action seeking to recover his land, clearly falls under this category. Secondly, Section 29 of the Limitation Act 1953 provides that the time limit to a file an action based on fraud is six (6) years from the date the prospective plaintiff had knowledge of the fraud. In the present case, despite the SPA being executed on 02.02.2012, the Plaintiff only knew of the purported fraud upon discovering that his land is being sold off to the 2nd and 3rd Defendants sometime in August 2017. Based on said Section 29, the limitation period will start running only from August 2017 and not from 02.02.2012 as contended by the 1st Defendant. B. Whether there was a Sale & Purchase transaction between the Plaintiff and the 1st Defendant? [15] In terms of whether the SPA between the Plaintiff and the 1st Defendant is a valid sale transaction or not, I found that the SPA is a sham agreement. Sham means something made up and designed. Even though it is alleged that this document was signed by the Plaintiff and the Plaintiff did not prove that this signature was not his signature, this Court found that this document is a sham document. It was designed to hide the real fact that there was a loan agreement. Even though SP1: Abdul Rahim bin Mohd Yusof’s testimony itself does not help much in this regard, the fact that there is evidence shows that this is not a normal sale and purchase transaction "in the ordinary cause of business". [16] Firstly, I conclude so because at the time the disputed SPA was executed, there was no Form 14A signed. There is also no Form CKHT 2 sent to the Inland Revenue Board. There is also no resolution of the 1st Defendant’s company for purposes of entering the SPA to acquire the Land. There is also no documentation to signify the reasons as to why and how monies were transferred from other companies to facilitate the said transaction. [17] Secondly, I fail to understand as to why the transaction required a Power of Attorney to be signed. In light of the fact that the Plaintiff had given the original grant of the Land to the 1st Defendant, there was no necessity for such Power of Attorney to be signed. The execution of a Form 14A of NLC by the Plaintiff to the 1st Defendant would have sufficed. Ipso facto, I found that the existing SPA was a sham agreement. [18] For the purpose of giving a clearer picture of what is meant by the term "sham agreement", I can do no better than refer to LJ's Diplock judgment in Snook v London and West Ridding Investments Ltd [1967] 2 QB 786 at page 902: “Acts done or documents executed by parties to the “sham” which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (If any) which the parties intend to create. But one thing, I think is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co v Maclure (1882) 21 Ch D 309 and Stoneleigh Finance Ltd v Phillips [1965] 2 QB 537), that acts for documents to be a ‘sham’, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a ‘shammer’ affects the rights of a party whom he deceived.” [19] Similarly, in the case of Global Globe Property (Melawati) Sdn Bhd v Jangka Prestasi Sdn Bhd [2020] 6 MLJ 333, the Court of Appeal held inter alia as follows: - “[23] Whenever an allegation is made that an agreement and related documents prepared are a sham to camouflage what the law specifically prohibits, the court must tread cautiously and comb carefully the evidence presented. It is only to be expected that generally all tracks would be covered so as not to leave behind anything coming close to resemble a smoking gun. (emphasis added) [24] On the one hand, there must be certainty in written agreements executed as meaning what they say and on the other hand, there will always be the nefarious elements in society that are bent on circumventing the law without being exposed for what it is.” [20] In the present case, the SPA was created to give the impression as if there is a bond that binds both parties in terms of a sale of property whereas the original purpose of the agreement is completely different. An illegal money lending transaction disguised as a sale and purchase transaction is contrary to public policy and therefore unenforceable pursuant to section 24 (e) of the Contracts Act 1950. I take the view that such an agreement cannot be enforced against a party that has been deceived like the Plaintiff in this case (see the Federal Court decision in Yoganathan a/p AS Thambaiya v Harta Pusaka Idris Osman [202] 5 MLJ 455 and the Court of Appeal decison in Ong Thean Chye & Ors v Tiew Choy Chai & Anor [2011] 1 CLJ 674). C. Did the Plaintiff received sufficient consideration for his Land? [21] The Plaintiff contends that he never received the purchase price of RM 600,000.00 for the Land. Although there are a lot of documentations showing the vouchers supposedly signed by the Plaintiff, cheques issued and so on, upon scrutiny of the documentary of the evidence and reviewing the testimony of SP4, this Court agree with the Plaintiff’s counsel’s submission that the money received by the Plaintiff only amounted to RM 412,000.00 (see Plaintiff’s submission from paragraph b - i at page 16 to 19 of the Plaintiff’s submission in Enclosure. 127). This fact could not be explained by SD1 (Puan Zeti Zulfah), the lawyer handling this transaction who said that she was not sure on the payment of the full purchase price to the Plaintiff. D. Whether the Power of Attorney (exhibit D-7) was valid? [22] It is a finding of this Court that there are is a major defect in the Power of Attorney purportedly signed by the Plaintiff. In this regard, the Plaintiff’s failure to prove that he did not signed exhibit D7 is immaterial. This still unable to overcome the defect in the Power of Attorney. [23] Under the Power of Attorney, the Plaintiff had purportedly assigned the Property known as Lot 1702-11F, Jalan Changkat Mulia, Kg. Changkat Gombak, 53100 Wilayah Persekutuan erected on part of title known as Individual Title Geran Mukim 213, Lot 20908, Mukim of Setapak, in District of Gombak in the State of Selangor Darul Ehsan. The description of the above Property is wrong as Lot 1702- 11F is not situated in Geran Mukim 2133. In fact, Lot 1702-11F and Lot 20908, Mukim Setapak are two (2) different lands. Despite the above error, the land office concerned still allowed the transfer of Lot 20908 belonging to the Plaintiff to the 1st Defendant. [24] This defect was never amended at any time before it was used for the purpose of signing and completing the Form 14A. As the particulars of the property in the Power of Attorney is not the same as the property in the Memorandum of Transfer, this Court takes the view that the Power of Attorney is defective and void pursuant to Section 340(2)(b) of the NLC which enunciates as follows: - “Registration to confer indefeasible title or interest, except in certain circumstances

(1) The title or interest of any person or body for the time being registered as proprietor of any land, or in whose name any lease, charge or easement is for the time being registered, shall, subject to the following provisions of this section, be indefeasible.

The title or interest of any such person or body shall not be indefeasible—

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

where registration was obtained by forgery, or by means of an insufficient or void instrument; or

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.

Where the title or interest of any person or body is defeasible by reason of any of the circumstances specified in subsection (2)—

it shall be liable to be set aside in the hands of any person or body to whom it may subsequently be transferred; and

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 subsection 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.” [25] As a result, this Court finds that there was no valid transfer of the Land from the Plaintiff to the 1st Defendant (see the Federal Court decision in Tan Ying Hong v Tan Sian San & Ors [2010] 2 MLJ 1). [26] In addition to the above, it is an undisputed fact that the date of the Power of Attorney is not the same as the date of the SPA. Similarly, the Form14A for purposes of the transfer was only executed one (1) year after the date of the SPA. There was no sufficient explanation as to why the Power of Attorney and Memorandum of Transfer were not executed on the same day of within the same period as the SPA. This Court therefore concludes that this is not a sale agreement "in the ordinary cause of business". In the above premise, there was no valid sale or transfer of the Land from the Plaintiff to the 1st Defendant. E. Whether the transfer of the Property by the 1st Defendant to the 2nd and 3rd Defendants is protected under Section 340 of the National Land Code. [27] The Plaintiffs takes the position that 2nd and 3rd Defendants are immediate purchasers and therefore not entitled to the protection accorded under Section 340 of the NLC. The Defendants on the other hand, contends that 2nd Defendant is not an immediate purchaser but a subsequent purchaser. [28] Due to the fact that the transfer from the Plaintiff to the 1st Defendant was affected by way of a void instrument; this Court finds that there was no effective transfer from the Plaintiff to the 1st Defendant. As a result, thereof, the transfer from 1st Defendant to 2nd and 3rd Defendants is tainted. That being the case, this Court takes the view that the 2nd and 3rd Defendants are not subsequent purchasers but immediate purchasers which are not entitled to the protection under Section 340 of the NLC. [29] Even if I am wrong in finding that 2nd and 3rd Defendants are immediate purchasers and not a subsequent purchaser as contended by learned counsel Puan Idza Hajar, I am still of the view that the protection accorded to a subsequent purchaser is subject to the condition that the ‘subsequent purchaser’ proves that he is a bona fide purchaser for value without notice. In the event the subsequent purchaser fails to prove so, his title is liable to be set aside as held by the Federal Court in the case of Kamarulzaman Omar & Ors v Yakub Husin & Ors [2014] 1 CLJ 987: “If the title or interest is registered in the name of an immediate purchaser, the bona fide of the immediate purchaser will not offer a shield of indefeasibility. The title or interest of an immediate purchaser is still liable to be set aside if any of the vitiating elements as set out in s 340(2) has been made out. If the title or interest is registered in the name of the subsequent purchaser, then the vitiating elements in s 340 (2) would not affect the title of or interest of a bona fide subsequent purchaser. The title or interest of a subsequent purchaser is only liable to be set aside if the subsequent purchaser is a not a bona fide subsequent purchaser. The title or interest acquired by a subsequent purchaser in good faith for valuable consideration, or by any person or body claiming through or under such a subsequent purchaser, is indefeasible.” (emphasis mine) [30] Whilst I do take the view that the SPA between 1st Defendant and 2nd and 3rd Defendants was based on a ‘willing buyer – willing seller basis’ and that the 2nd and 3rd Defendants were entitled to take advantage of the low price of the land compared to the valuation report by Jabatan Penilaian dan Perkhidmatan Harta (“JPPH”), there are other matters which a prospective purchaser must consider before entering into such a bargain. In this regard, I would like to draw 2nd and 3rd Defendants’ contention that the land concerned was occupied by a third party namely, the Plaintiff. There is nothing shown that 2nd and 3rd Defendants had taken steps to verify the Plaintiff’s position on the land prior to entering the SPA. In other words, 2nd and 3rd Defendants was hasty to conclude the transaction. As a result, 2nd and 3rd Defendants had only themselves to blame for not verifying the genuineness of 1st Defendant title to the Property. Such hastiness not to investigate further on this matter in my view, translates into a lack of bona fide. [31] Such a similar conclusion was also reached by the Court of Appeal in Yap Ham Seow v Fatimawati bt Ismail & Ors (supra). For purposes of clarity the facts of the case are summarily set out below: Facts: The 3rd defendant in this case, bought the property from a forger. The 3rd defendant then sold it to the 4th defendant. The plaintiff thereafter, upon discovering the fraud, instituted an action against the defendants. At the High Court the claim was allowed, and the plaintiff was ordered to be restored as the owner of the property but dismissed the plaintiff’s claim for damages. Appeals were filed by the plaintiff, the 2nd defendant and the 4th defendant. On appeal, the Court of Appeal allowed the 4th defendant’s appeal and affirmed the principle that only a subsequent purchaser can avail itself to the bona fide defence. “[61] Thus, in our judgment guided by the pronouncement of the Federal Court in Tan Ying Hong, the fourth defendant being a subsequent purchaser obtains an indefeasible title if he can prove that he is a purchaser in good faith for valuable consideration. This is a statutory protection accorded to a subsequent purchaser and in the present case the fourth defendant stands to benefit from it if he (fourth defendant) can prove that he is a bona fide purchaser for valuable consideration. At the risk of stating the obvious, the burden of proving that there was valuable consideration and good faith in the conveyance of the land lies on the fourth defendant.” [32] The Court of Appeal further highlighted the following in considering a bona fide defence: - “[95] In so far as the third defendant is concerned whilst we agree with the learned trial judge’s findings that the third defendant was not a bona fide purchaser for value we do so for a different reason. In this regard the learned trial judge found that the third defendant was not a bona fide purchaser for value as it did not take physical possession of the land or attempted to recover the land even though it knew the land was cultivated by someone else with rubber plantation. It is our finding however that the third defendant is not a bona fide purchaser for value based on the fact that the whole transaction from the forger to the third defendant was tainted with fraud. The third defendant cannot have a good title which was obtained using voidable instruments. Being an immediate purchaser, the third defendant’s position is no different from that of the third respondent bank in Tan Ying Hong’s case.” “[102] Premised on the above, we are convinced that the third defendant had concluded the sale without any proper investigation into the title or the persons who are the actual proprietors. The third defendant took advantage of the low purchase price and he acknowledged that this was done to evade tax. We failed to see why an enormous sum of the money was then paid to Wong. The third defendant offered no explanation. The third defendant in the conveyance of the land was under obligation to investigate properly all matters relating to the sale of the land. Clearly based on the facts and circumstances of the case the third defendant was negligent in not doing so. In our considered view a negligent purchaser cannot be accorded the protection of this court because a purchaser in good faith does not include a purchaser who has been negligent or who had kept his eyes shut (Au Meng Nam & Anor v Ung Yak Chew & Ors [2007] 5 MLJ 136 (Au Meng Nam). This court in Au Meng Nam had held that the purchaser is under the obligation to investigate properly all matters relating to the sale and not just blindly accept what was claimed by the vendor as correct and genuine. The purchaser in that case clearly disregarded his obligations to investigate the alleged proprietors and the genuineness of the documents. Hence, when a purchaser failed to take ordinary precautions which ought to have been taken in such a matter, he is not entitled to the protection of the court.” [33] The existence of a duty of a prospective purchaser to investigate was also found Au Meng Nam & Anor v Ung Yak Chew & Ors (supra), the relevant part of the judgment is re-produced in extenso as below: - “[42] Had the learned trial judge taken the above facts and circumstances into consideration, he cannot possibly conclude that the first defendant was a bona fide purchaser for valuable consideration, so as to be protected under s 340(3) of the Code. To me, the first defendant had acted hastily. He concluded the sale without any proper investigation into the title or the persons claiming to be proprietors. No doubt he had every right to take advantage of the low price that was offered to him but he took the risk. When he embarked into such risk, it cannot be at the expense of the plaintiffs. This is because while he had a choice, the plaintiffs had none. In fact, the plaintiffs were helpless. The plaintiffs could not do anything to prevent the fraud. Even locking the title in a safe would not had help the plaintiffs. In such circumstances the court must not favour the first defendant, over the plaintiffs. To do so, would be doing injustice to the plaintiffs. ……. [44] So too here. The first defendant is under the obligation to investigate properly all matters relating to the sale of the said land and not to just blindly accept what was claimed by the ‘Vendors’ as correct and genuine. When the failed to take the ordinary precaution, which ought to be taken in such a matter he is not entitled to the protection of the court.” [34] Last but not least, I wish to touch about the Plaintiff in not paying any instalments for the alleged loan nor the quit rent for the Land from 2013 to 2016 which was raised by the Defendants. According to the Defendants, the Plaintiff’s failure to pay the statutory quit rent supported the 1st Defendant’s case that the Plaintiff had sold off the Land to the 1st Defendant. My finding on this issue is as follows:

It is an undisputed fact that the Plaintiff herein was in financial difficulties;

(ii) It has not been shown to this Court that the Plaintiff was ever given a copy of the SPA nor the alleged loan agreement;

(iii) The Plaintiff was in confused state of mind when the 1st Defendant refused to return the original title to the Land to him for purposes of re-financing it for the sum of RM 1.3 million as offered by Malayan Banking Berhad (this was in December 2012). This explains as to why the Plaintiff did not pay the quit rent;

(iv) The Plaintiff did not know what to do upon the 1st Defendant’s refusal to return the original Land title. Compounded with the fact that he had no financial resources, the Plaintiff did not pay the quit rent; and

The Plaintiff somehow became focused and awoke from his confuse state of mind upon bring informed by SD4 (Tan Zhen Hong) that the Land was being sold off to the 2nd and 3rd Defendants. Faced with the prospect of losing his Land, the Plaintiff was forced to take steps to protect his interest in the Land. This included lodging the police report, the caveat at the Land office and engaging solicitors. Conclusion [35] In light of the above, the Plaintiff’s claim is allowed in part and based on the following orders:

The Plaintiff’s prayer in paragraphs (a), (b), (c), (d), (e), (f), (g) dan (k) are allowed;

(ii) The 2nd and 3rd Defendants’ Counter claim for trespass/nuisance is dismissed with no order as to costs; and

(iii) The Plaintiff’s claim for cost on indemnity basis amounting to RM 51,000.00 is allowed and is to be paid by the 1st Defendant through the Plaintiff’s solicitor (Messrs Ashfar Ali & Associates) as a stakeholder. Dated 10th of March 2023, ……………………..…………. (MOHD FIRUZ BIN JAFFRIL) JUDGE HIGH COURT OF MALAYA AT SHAH ALAM Solicitors for the Plaintiff: Messrs Ashfar Ali & Associates A02/3, Block A, Garden City Business Centre, Jalan Dagang Besar, 68000 Ampang, Selangor Darul Ehsan [Ref: AS/LN-2337/2018(mny)] Solicitors for the First Defendant: Messrs Satvinder K & Associates; No. 3, Jalan Hujan Emas 10, Overseas Union Garden, 58200 Kuala Lumpur. [Ref: SK798/07/2018(L)] Solicitors for the Second and Third Defendant: Messrs Zul Rafique & Partners D3-3-8, Solaris Dutamas, No 1, Jalan Dutamas 1, 50480 Kuala Lumpur. [Ref: IDH/NMR2180619]