Content
1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: B-01(NCVC)(W)-326-09/2017 PENDAFTAR HAKMILIK NEGERI SELANGOR …
Loading…
/akn/my/judgment/court-of-appeal/2020/a12880ad-a742-4c48-903c-03101b8e3c93
Court of Appeal of Malaysia8 Jan 2020B-01(NCVC)(W)-359-08/2017 B-01(NCVC)(W)-326-09/2017
The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.
Citations and treatment detected automatically from later judgments and the authorities this decision relies on.
Later cases and laws citing this decision
Not yet cited by a later decision.
Earlier cases and laws this decision relies on
“RHC on the ground of limitation to bring an action, a distinction must be made as to which provision of the law is used to ground such application. If it is based on s.2(a) of PAPA or s.7(5) of the Civil Law Act, where the period of limitation is absolute then in a clear and obvious case such application should be gran”
“of the case can be found in the grounds of judgment of the learned High Court Judge which, for ease of convenience, are reproduced as follows: “[2]…The plaintiff is a company incorporated under the Companies Act 1965 and since 1993 is the registered owner of the said Land. It has in its possession the manual IDT of the”
“(ii) whether sections 5 and 6 of the Government Proceedings Act 1956 (Act 359) apply; 12”
“ute then in a clear and obvious case such application should be granted without having to plead such a defence. However, in a 14 situation where limitation is not absolute, like in a case under the Limitation Act, such application for striking out should not be allowed until and unless limitation is pleaded as required”
“e 1993 is the registered owner of the said Land. It has in its possession the manual IDT of the said Land at all times until today. However on 28.9.2011 a Change of Name pursuant to 5 s.378 of the National Land Code (‘NLC’) for the said Land was registered at the land office vide Presentation No. 500056/2011. The appli”
“f damages against the 7th defendant as well as against other defendants was dismissed. 11 [11] Finally, on the issue of the plaintiff’s claim was time barred by limitation under section 2(a) of the Public Authorities Protection Act 1948 (Act 198) as raised in the submissions of the learned Assistant State Legal Advisor”
“committed through the 3rd defendant in obtaining ownership of the said Land. Hence, relying on this Court’s decision in Heveaplast Sdn Bhd v See Leong Chye @ Sze Leong Chye & Others & Other Appeals [2016] MLJ 835, the 1st and 2nd defendants cannot benefit from their own wrongful conduct. [51] The learned ALA also submi”
Auto-detected from judgment text; not a substitute for a citator check.
Content
1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: B-01(NCVC)(W)-326-09/2017 PENDAFTAR HAKMILIK NEGERI SELANGOR …
1
CAESIUS DEVELOPMENT SDN BHD
7
MOHAMAD BIN MAHMUD … RESPONDENTS [HEARD TOGETHER WITH] IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: B-01(NCVC)(W)-359-08/2017 2
2
TAN TENG HOCK …
1
CAESIUS DEVELOPMENT SDN BHD
6
PENDAFTAR HAKMILIK NEGERI SELANGOR … RESPONDENTS [In the matter of High Court in Malaya at Shah Alam In the State of Selangor Darul Ehsan, Malaysia Civil Suit No: 22NCVC-219-04/2015 CAESIUS DEVELOPMENT SDN BHD (COMPANY NO: 88878-U) …
2
TAN TENG HOCK 3
7
PENDAFTAR HAKMILIK NEGERI SELANGOR … DEFENDANTS] CORUM UMI KALTHUM ABDUL MAJID, JCA ABDUL RAHMAN SEBLI, (then JCA) ZALEHA YUSOF, (then JCA) GROUNDS OF JUDGMENT [1] There are 2 appeals before us. Appeal B-01(NCVC)(W)-326- 09/2017 (Appeal 326) was filed by Pendaftar Hakmilik Negeri Selangor (PHMS), who was the 7th defendant in the High Court. Appeal B- 01(NCVC)(W)(359)-08/2017 (Appeal 359) was filed by Chua Kim Hin and Tan Teng Hock who were the 1st and 2nd defendants respectively in the High Court. [2] The subject matter of the dispute here and below is in regard to a piece of land held under H.S.(D)85466, P.T. 24515, Mukim Petaling, 4 Daerah Petaling, Negeri Selangor (the said Land). The 1st respondent in both Appeal 326 and Appeal 359 was the plaintiff in the High Court. The appeals before us were against the decision of the learned High Court Judge who allowed the 1st respondent’s claim that the 1st respondent is the true and lawful registered owner of the said Land. In deciding so, the learned High Court Judge found the appellant in Appeal 326 was negligent and in breach of its statutory duty which resulted the 1st respondent to lose the ownership of the said Land to the appellants in Appeal 359. [3] For ease of reference, parties in these appeals will be referred to as they were in the High Court. [4] The salient facts of the case can be found in the grounds of judgment of the learned High Court Judge which, for ease of convenience, are reproduced as follows: “[2]…The plaintiff is a company incorporated under the Companies Act 1965 and since 1993 is the registered owner of the said Land. It has in its possession the manual IDT of the said Land at all times until today. However on 28.9.2011 a Change of Name pursuant to 5 s.378 of the National Land Code (‘NLC’) for the said Land was registered at the land office vide Presentation No. 500056/2011. The application for the change of name was filed by the 3rd defendant and a computerised IDT was issues by the land officer under the name of the 3rd defendant, i.e. Spec Development & Construction Sdn Bhd. The 3rd defendant then sold and transferred the said Land to the 1st and 2nd defendants vide a sale and purchase agreement dated 2.12.2011 (‘the said SPA’) for a consideration of sum of RM2,000,000.00. The memorandum of transfer in favour of the 1st and 2nd defendants was registered at the land office on 19.4.2012 vide Presentation No. 38016/2012 and a new computerised IDT was issued to the 1st and 2nd defendants. [3] Sometime in May 2012, one of the Plaintiff’s directors received enquiry from a real estate agent asking whether the plaintiff was interested to buy a piece of land, and the description of that land appeared to be similar to the said Land. A land search was then conducted at the land office, and it was then the plaintiff discovered that there was (a) a registration of change of name in the register of title for the said Land from the plaintiff’s name to the 3rd defendant’s name, and (b) a registration of transfer from the 3rd defendant to the 1st and 2nd defendants. Shocked at the discovery, the plaintiff wrote and complained to the land office, and on 17.5.2012 the Pendaftar Hakmilik Negeri Selangor, the 7th defendant, lodged a Registrar Caveat on the said Land. A police report was also lodged by the 6 plaintiff. The plaintiff subsequently also lodged a private caveat on the said Land. Pursuant to the plaintiff’s complaint, the land office then conducted an inquiry pursuant to s.27 of the NLC where both the representative of the plaintiff and the 1st and 2nd defendants were called. However, it appears that the land office inquiry did not solve the issue as to the true ownership of the said Land and hence the filing of this suit by the plaintiff. [4] The essence of the plaintiff’s claim herein is for a declaration that the plaintiff is the true and sole registered owner of the said Land. It is the plaintiff’s case that the Change of Name in respect of the said Land from the plaintiff’s name to the 3rd defendant’s name was fraudulently made and therefore null and void. The 4th, 5th and 6th defendants, at all material times, were the directors of the 3rd defendant. It is also the plaintiff’s case that the purported transfer of the said Land from the 3rd defendant to the 1st and 2nd defendants, and the issuance of the computerised IDT in favour of the 1st and 2nd defendants are null and void. In other words, the plaintiff avers that the 1st and 2nd defendants’ title to the said Land is defeasible under s.340(2) of the NLC. The plaintiff further claims that, in any event, 1st and 2nd defendants were not bona fide purchasers for valuable consideration and therefore they are not protected by the proviso to s.340(3) of the NLC. The plaintiff is also claiming damages against the 7th defendant for negligence and breach of statutory duty. 7 [5] The 1st and 2nd defendants’ case is simply that they were bona fide purchasers for value without any notice or knowledge of any defects in the title of the said Land, It is the 1st and 2nd defendants’ case that they have purchased the said Land from the 3rd defendant vide the said SPA dated 2.12.2011 for a sum of RM2,000,000.00 which they have fully paid. The 1st and 2nd defendants also averred that they have conducted the necessary searches and investigation relating to the said Land through their solicitors, and the land searches at the land office confirmed that the 3rd defendant was then registered owner of the said Land. They claim that they are now the lawful and legal registered owner of the said Land where the computerised IDT was issued in their favour. In any event, if the court finds for the plaintiff at the end of the trial of this case, the 1st and 2nd defendants claim contribution and indemnity from the 3rd, 4th, 5th, 6th, and/or the 7th defendants. [6] The 3rd defendant together with the 4th, 5th, and 6th defendants did not file any appearances nor appeared in court to contest the plaintiff’s claim. [7] The 7th defendant is the Pendaftar Hakmilik Selangor. The 7th defendant denies any negligence and breach of statutory duty on his part and/or his office’s part in respect of the Change of Name and 8 issuance of the computerised IDT in respect of the said Land. The 7th defendant essentially pleaded that he has duly exercised his statutory duty in accordance to the provisions of the NLC. As for the claim for contribution and indemnity by the 1st and 2nd defendants, the 7th defendant averred that 1st and 2nd defendants were involved or complicit in the fraudulent act of the 3rd defendant and therefore their claim for contribution and indemnity should not be allowed”. Findings of the High Court [5] The learned High Court Judge found there was overwhelming evidence to show that the registration of the Change of Name from the plaintiff’s name to the 3rd defendant’s name was done by way of forged documents and by fraudulent means. Hence the registration of the Change of Name from the plaintiff to the 3rd defendant is null and void and should be set aside. [6] Her Ladyship also observed that the issuance of the computerised IDT to the 3rd defendant while the original manual IDT for the said Land is still in the possession of the plaintiff was clearly in contravention of the scheme provided under section 8 of the fourteenth Schedule of the NLC. As the Change of Name from the plaintiff to the 3rd defendant is a nullity and void, on this ground alone it can be held that the 1st and 2nd 9 defendants’ title to the said Land is null and void, notwithstanding the issuance of the computerised IDT to the 3rd defendant and subsequently to the 1st and 2nd defendants. [7] The learned High Court Judge further found the 3rd defendant was not an immediate purchaser but a fraudster and impersonator of the plaintiff. Hence the position of the 1st and 2nd defendants in the transaction was as the immediate purchasers and not subsequent purchasers of the paid Land. Her Ladyship found support in the Federal Court’s case of Kamarulzaman bin Omar & Ors v Yakub bin Husin & Ors [2014] 2 MLJ 768. The 3rd defendant had no title to pass, having obtained the land through void instruments. Thus, the 1st and 2nd defendants’ title to the said Land became defeasible pursuant to section 340(2)(b) of the NLC because the registration of the transfer was obtained by means of void instrument. [8] Based on the totality of the evidence before the court, Her Ladyship also found that the 1st and 2nd defendants were not bona fide purchasers of the said Land as there was no proof that the purported RM2 million had been paid in full. Moreover, the 1st defendant was a director of the 3rd defendant and only resigned on 15.11.2011 and was replaced by the 10 4th defendant; whilst the discussion to buy the said Land between the 1st defendant and the 4th defendant was made around 28.9.2011, the same date the registration of Change of Name was done. [9] As for the 7th defendant, Her Ladyship found there were evidence to show that DW4, the officer of the 7th defendant who was the officer in charge at the material time in handling the 3rd defendant’s application for the Change of Name, had failed to exercise due diligence and care in carrying out his responsibility that resulted in the plaintiff’s ownership to the said Land being jeopardised. Hence, she found there was negligence and breach of statutory duty by the 7th defendant in the registration of the Change of Name for the said Land from the plaintiff to the 3rd defendant. Since Her Ladyship found the 7th defendant to be negligent and in breach of statutory duty, she was of the view that section 22 of the NLC could not render protection to the 7th defendant [10] However, Her Ladyship found the plaintiff had not been deprived of physical possession and usage of the said Land and failed to prove that it had suffered loss and damages. Hence, the plaintiff’s claim for assessment of damages against the 7th defendant as well as against other defendants was dismissed. 11 [11] Finally, on the issue of the plaintiff’s claim was time barred by limitation under section 2(a) of the Public Authorities Protection Act 1948 (Act 198) as raised in the submissions of the learned Assistant State Legal Advisor of Selangor (ALA) for the 7th defendant was disregarded by the learned High Court Judge as this was not pleaded by the 7th defendant. Issues As alluded to above, only the 1st and 2nd defendants and the 7th defendant are appealing against the decision of the learned High Court Judge. The plaintiff does not appeal. As the appeals are interwined, we shall deal with the issues in both appeals together. The issues are:
i
(i) whether the suit filed by the plaintiff against the 7th defendant was time barred by virtue of section 2(a) of Act 198;
Subparagraph
(ii) whether sections 5 and 6 of the Government Proceedings Act 1956 (Act 359) apply; 12
Subparagraph
(iii) whether the 7th defendant had breached its statutory duty under the NLC and therefore negligent when it registered the Change of Name of the plaintiff to the name of the 3rd defendant; and later in registering the name of the 3rd defendant as the owner of the said Land;
Subparagraph
(iv) whether the title of an immediate purchaser such as the 1st and 2nd defendants is liable to be set aside under section 340(2) of the NLC;
v
(v) if the title obtained by the 1st and 2nd defendants is set aside, whether the 1st and 2nd defendants are entitled to claim for indemnity from the 7th defendant for losses suffered by them in purchasing the said Land. Our Decision
i
(i) Whether the suit filed by the plaintiff against the 7th defendant was time barred by virtue of section 2(a) of Act 198 Section 2(a) of Act 198 provides, inter alia, as follows: “..(a) the suit, action, prosecution or proceeding shall not lie or be instituted unless it is commenced within thirty-six months next after the act neglect of default complained of or, in the 13 case of a continuance of injury or damage, within thirty-six months next after the ceasing thereof;” [12] Learned ALA for the 7th defendant argued that the Change of Name took place on 28.9.2011. The Writ of Summons was only filed on 20.4.2015. Hence the action filed by the plaintiff was clearly caught by limitation as more than 36 months had passed from the date of the Change of Name being the date the cause of action arose till the date of the filing of the suit and this was against section 2(a) of Act 198. He argued that the provision of section 2(a) is absolute and therefore need not be pleaded. He relied, inter alia, on the case of Tasja Sdn Bhd v Golden Approach Sdn Bhd [2011] 3 CLJ 751 where the Federal Court had, inter alia, stated as follows: [25] After scrutinizing the authorities above we agree with the submission of the plaintiff that in an application for striking out under O.18 r. 19(1) RHC on the ground of limitation to bring an action, a distinction must be made as to which provision of the law is used to ground such application. If it is based on s.2(a) of PAPA or s.7(5) of the Civil Law Act, where the period of limitation is absolute then in a clear and obvious case such application should be granted without having to plead such a defence. However, in a 14 situation where limitation is not absolute, like in a case under the Limitation Act, such application for striking out should not be allowed until and unless limitation is pleaded as required under s.4 of the Limitation Act. Our reasons are these: [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 phrase 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 applied 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 & Anor (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….” (emphasis added) [13] Learned counsel for the plaintiff on the other hand argued that the issue of limitation cannot now be raised by the 7th defendant as it had not 15 been pleaded contrary to O.18 r. 8 of the Rules of Court 2012 (ROC) which provides:
8
Matters which shall be specifically pleaded. (O.18, r.8)
Subsection
(1) A party shall in any pleading subsequent to a statement of claim plead specifically any matter, for example, performance, release, any relevant statute of limitation, fraud or any fact showing illegality
a
(a) which he alleges makes any claim or defence of the opposite party not maintainable;
b
(b) which, if not specifically pleaded, might take the opposite party by surprise; or
c
(c) which raises issues of fact not arising out of the preceding pleading. [14] He further argued that the case of Tasja, supra, only relates to application for striking out under O. 18 r. 19(1) of the Rules of the High Court 1980 (RHC). It does not state as a rule that a defence of limitation based on section 2(a) of PAPA or section 7(5) of the Civil Law Act 1956 (CLA) is not required to be pleaded at all. The words “…shall be specifically pleaded …” in O. 18 r. 8 of the ROC make it mandatory to plead the relevant statute of limitation as a defence to an action. 16 [15] However, he further submitted that if the rule as propounded in Tasja, supra, extends to all cases, the plaintiff is relying on the second part of section 2(a) of Act 198 and therefore is still not time-barred from filing the action as the loss and damages are still continuing and yet to cease as of this date. [16] We have painfully considered this issue. With due respect to the learned ALA, we find this argument would only be relevant if it had been raised at the outset of the trial before witnesses were called because it goes to the jurisdiction of the court. But not when it was raised only during the submissions stage, after 8 days of full trial had been completed with witnesses called by all parties who had completed giving their evidence. This Court must not allow this to become a practice. Much time have been spent to hear witnesses, and to allow this issue, which goes to the jurisdiction of the court, is like conducting a trial by ambush. [17] Moreover, when questioned by this Court, the learned ALA did not dispute that the plaintiff only became aware of the Change of Name in May 2012. Hence, we find the cause of action actually began only in May 17
2012
As the action was filed on 20.4.2015, the plaintiff was therefore clearly within the 36month time stipulated to file this action. [18] In any event, it is also not disputed that the said Land is still registered under the 1st and 2nd defendants’ names which means the said Land has not been restored to the plaintiff which also means the injury suffered by the plaintiff is still continuing and has not ceased. This Court in Ronald Beadle v Hamzah HM Saman & Ors [2007] 1 CLJ 421 in discussing section 2(a) of Act 198 had, inter alia, stated as follows: [17] Two sets of situations are therefore envisaged for the limitation periods stipulated therein to arise. The first set deals with where the ‘act, neglect or default complained of’ referred to is confined to a single act, neglect or default and does not involve an element of continuance thereof and that a single act per se would constitute a complete cause of action. (See: (Malaysia) in Credit Corporation (M) Bhd v Fong Tak Sin [1991] 2 CLJ 871; [1991] 1 CLJ (Rep) 69 (SC). [18] The other set is where the limitation period begins to run when the injury or damage ceases. (See: Ibrahim bin Mohideen Kutty v Timbalan Menteri Dalam Negeri, High Court [2003] 6 CLJ 144) 18 [23] Further, we are also in agreement with learned counsel for the appellant that during the period when the passport of the appellant was retained by the respondents the damage to the appellant continued. Hence, his cause of action only began to run from the time his passport was released, that is, from 24 April 1998. Since he filed his claim on 21 May 2000 he was therefore well within the 36 months period as prescribed in the second limb of s. 2(a) of PAPA.” [19] Similarly, in the instant appeal, the injury or damage to the plaintiff is still continuing and yet to cease as submitted by learned counsel for the plaintiff. Hence the action brought by the plaintiff is in our view not caught by limitation.
Subparagraph
(ii) Whether sections 5 and 6 of the Government Proceedings Act 1956 (Act 359) apply [20] This is again an issue of jurisdiction. Although this had been raised in paragraph 38 of 7th defendant’s Statements of Defence at the High Court, the learned High Court Judge made no mention of it in her Grounds of Judgment. Probably because the issue was not put to any witness, neither was it argued in the submissions before Her Ladyship. 19 [21] However, before us, the 7th defendant raised the issue. The learned ALA submitted that the plaintiff’s action against the 7th defendant was essentially an action in tort against the Government. Therefore, before liability can be attributed to the Government, the actual tort feasor must be named and liability is established against him as provided by sections 5 and 6 of Act 359. [22] Sections 5 and 6 of Act 359, inter alia, provide as follows: “5. Subject to this Act, the Government shall be liable for any wrongful act done or any neglect or default committed by any public officer in the same manner and to the same extent as that in which a principal, being a private person, is liable for any wrongful act done, or any neglect or default committed by his agent, and for the purpose of this section and without prejudice to the generality thereof, any public officer acting or purporting in good faith to be acting in pursuance of a duty imposed by law shall be deemed to be the agent of and to be acting under the instruction of the Government”. “6.(1) No proceedings shall lie against the Government by virtue of section 5 in respect of any act, neglect or default of any public officer, unless proceedings for damages in respect of such act, neglect or default would have lain against such officer personally.” 20 [23] The 7th defendant cited the cases of Steven Phoa Cheng Loon & Ors v Highland Properties Sdn Bhd & Ors [2000] 4 MLJ 200; Kerajaan Malaysia & Ors v Lay Kee Tee & 183 Ors [2009] 1 CLJ 663 and Government of the State of Sabah v Syarikat Raspand [2010] 7 CLJ 945 to support his contention. [24] Learned Counsel for the 1st and 2nd defendants had urged this Court not to allow the 7th defendant to raise this issue at the appeal stage as it had abandoned the issue at the trial and therefore the issue was never canvassed before and not considered by the learned High Court Judge. Learned counsel for the 1st and 2nd defendants cited the Supreme Court in Lian Keow Sdn Bhd (In liquidation) & Anor v Overseas Credit Finance (M) Sdn Bhd & Ors [1988] 2 MLJ 449; this Court in Pendaftar Hakmilik, Pejabat Tanah dan Galian Negeri Selangor v Bank Pertanian Malaysia Bhd [2016] 3 CLJ 851 and in Re Lim Ah Hee & Sim Ah Hee; Exparte Perwira Affin Bank Berhad (dahulunya dikenali sebagai Perwira Habib Bank Malaysia Berhad) [2000] 1 AMR 1177 and Privy Council in Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd & Anor [1989] 1 MLJ 457 to support his arguments. 21 [25] Learned counsel for the 1st and 2nd defendants further submitted that sections 5 and 6 of Act 359 are not applicable to this case as the plaintiff’s claim against the 7th defendant was for negligence and or in breach of its statutory duties pursuant to the NLC. Hence the NLC applies and not Act 359. The cases cited by the learned ALA are distinguishable as they deal with tortious action against the Government and do not come within the ambit of the NLC. He cited the recent decision of this Court in Malayan Banking Bhd & Ors v Tho Siew Wah & Anor and another appeal [2017]7 CLJ 573 to support his argument. [26] Learned counsel for the plaintiff adopted the submissions of learned counsel for the 1st and 2nd defendants on this issue; that it is proper and sufficient that the 7th defendant, Pendaftar Hak Milik Negeri Selangor, be named as the 7th defendant in the action. [27] Having heard and read the arguments of the parties on this second issue, we are more inclined to agree with learned counsel for the 1st and 2nd defendants that the 7th defendant must be estopped from now raising this issue at this appeal stage, having abandoned it at the trial and submissions stage at the court below. In Pendaftar Hakmilik, Pejabat Tanah dan Galian Negeri Selangor v Bank Pertanian Malaysia Bhd 22 [2016] 3 CLJ 851, this Court when faced with similar issue had this to say: “[86] With regard to the issue that the respondent has failed to name the tortfeasor raised by the appellant, the law on ss. 5 and 6 of the GPA 1956 is very settled in that it is mandatory to name a tortfeasor if the Government is to be made liable in tort for the negligence or omission by any public officer. Liability can only be attributed to the Government where the officer’s act, neglect of default is proved to have established the liability of the officer personally – see Government of The State of Sabah v Syarikat Raspand [2010] 7 CLJ 945. [87] However it was submitted by learned counsel for the respondent that this issue of not naming the tortfeasor was never raised before the High Court and the learned judge never had the opportunity to address the issue in her judgment. This issue was also not raised in the appellant’s memorandum of appeal. Therefore nothing more should be said on it.” (emphasis added) [28] Like the 1st issue, the 2nd issue also goes to the jurisdiction of the court. It therefore must be raised and argued before the trial court at the earliest possible time. Certainly not at this stage when the 7th defendant 23 had lost the case. What if the 7th defendant was to win at the trial stage, this issue would surely not be raised at the appeal! [29] Be that as it may, we also echo the view of this Court in Tho Siew Wah, supra. In that case this Court held that the Registrar of Titles, Selangor was the correct party to be sued. In delivering the judgment of the Court, Justice Abang Iskandar JCA (as he then was) had, after laying down the provisions of section 12 of NLC, stated as follows: “[27] In view of the clear provision as contained thereunder, we are of the view that it would be sufficient, for the purpose of making a claim for damages and/or indemnity and contribution, to name the “Pendaftar Hakmilik Negeri Selangor”, as the defendant. [28] Having considered the contentions of both parties, it is our view the provisions of the GPA do not apply in this case. This is because the NLC makes specific provisions as to the correct party to be sued in s. 12 of the NLC. Looking at how the statement of claim is couched, this is an action against the officer appointed as the Registrar of Titles, an office and appointment made by the State Authority, as can be seen under s. 12(1)(a) of the NLC. According to sub-s. (4) to s. 12 of the NLC, “The State Director, the Registrar and every Land Administrator, shall each have a seal of office, 24 and every instrument purporting to bear any such seal, and to have been signed by or on behalf of the officer in question shall, unless the contrary be proved, be deemed to have been sealed and signed by him or at his direction. (emphasis added.) [29] What that means is that any act relating to any instrument that bears the seal or signature of the Registrar or on behalf of the Registrar, is deemed unless the contrary is proven, to be attributable to the Registrar or done in his direction. [30] In this case, the Registrar of Titles, Selangor was the Registrar of Titles where the subject land was situated and where the land officers issuing and registering the land titles were working at the material time. It was alleged by the first, second, and third defendants that the negligence of the Registrar of Titles, Selangor had caused them to suffer losses. The question that needed to be answered would necessarily be: ‘who was to be held liable for such losses and who was to be sued, in the circumstances?’ [31] We reiterate that s. 12 answers that question more than adequately. We as supported in our view by Abdoolcader FJ’s judgment in Government of the State of Negeri Sembilan v Yap Chong Lan & Ors and Another Case [1984] 2 CLJ 150; [1984] 1 CLJ (Rep) 144; [1984] 2 MLJ 123 (“Yap Chong Lan case”) which reads as follows: 25 At the inception of the hearing the State Legal Adviser who appeared for the State Government and the Director of Lands and Mines took a preliminary objection to the joinder of the State Government as a party to the proceedings in view of the provisions of section 16(2). The learned Judge deferred his decision on this point until the conclusion of the trial and in his reserved judgement dismissed it on the grounds that ‘because of the various declarations sought against it, the State Government ‘should be a proper and necessary party and ought to be heard, for the purpose of completely adjudicating on all the issues herein.” We must with respect say that this is a paralogism as it involves the fallacy of petitio principii; it begs the question as there can be no question of any relief being accorded against the State Government if it is not a proper party. The State Government as such has nothing to do with proceedings under the Code. It is the State Authority that is the pertinent entity, and State Authority is defined in section 5 to mean the Ruler or Governor of the State, as the case may be. Section 12(1) provides for the State Authority to appoint a Director of Lands and Mines for the State and sub-section (3) of that section specifies his functions, powers, duties and responsibilities. Section 16 enacts provisions for actions by and against the State Authority, and sub-section (2) thereof specifically stipulates that any action, suit or other proceeding relating to land in which it is sought to establish any liability on the part of the State Authority shall be brought against the Director of Lands and Mines of 26 the State in the name of his office. It is accordingly abundantly clear that the State Government should never have been joined in the proceedings and on the preliminary objection taken it should have been discharged as a party thereto. There appears to be a popular misconception on this aspect of the matter and on the role of the Government of a State as such in relation to the Code with the resultant indiscriminate misjoinder of State Governments as parties in proceedings thereunder, and we expect due heed to be taken of the point we make in this regard. [32] Therefore, the Registrar of Titles, Selangor is the correct party to be sued. Another English case of relevance is that of Ministry of Housing and Local Government v Sharp and Another [1970] 2 QB 223 (“Sharp case”) [33] In this regard, we would refer the judgement of Lord Denning in Sharp case (supra) where the learned judge said: Who, then, is to bear the loss? The negligent clerk can, of course, be made to bear it, if he can be found and is worth the money – which is unlikely. Apart from the clerk himself, there is only one person in law who can be made responsible. It is the registrar. He must answer for the mistakes of the clerk and make compensation for the loss. He is a public officer and comes within the settled principle of English law that, when an official duty is laid on a public officer, by 27 statute or by common law, then he is personally responsible for seeing that the duty is carried out. He may, and often does, get a clerk or minor official, to do the duty for him, but, if so, he is answerable for the transgression of the subordinate: see Sanderson v Baker [1972] 3 Wils 309, 317, where Blackstone J states the position of the sheriff. Sometimes it is an absolute duty, in which case he must see that it is performed absolutely: see the instances given by Holt CJ in Lane v Cotton [1701] 1 Ld Raym 646, 651. At other times, it is only a duty to use due diligence, in which case he must see that due diligence is used: see the celebrated judgment of Best CJ in Henly v Lyme Corpn [1828] 5 Bing 91, 107-109. But, in any event, if the duty is broken, and injury is done thereby to one of the public, then the public officer is answerable. The injured person can sue him in the civil court for compensation … [34] Reverting to our case, the Registrar of Titles is responsible for the acts of the officers under its immediate control in the matter of managing the registration of land titles under its purview at the Land Office Registry in Gombak Land District, Selangor. That is clear from the provisions of s. 12(4) of the NLC. In this case, the Registrar of Titles, Selangor did not notify the plaintiff of the re-delineation although it would directly affect her land. Neither did the Registrar of Titles, Selangor request the plaintiff to surrender her old land title that was in her possession. The surrender of the old land title would enable the Registrar of Titles, Selangor to have it duly destroyed before a new title deed to the land was issued. Again, once, the new title 28 deed to the land was issued, the Registrar of Titles, Selangor would have to notify the plaintiff to collect the same from the land office. The witness for the Registrar of Titles, Selangor was not able to confirm from the records kept by their office whether the plaintiff was ever notified to collect the new title deed to her land. Neither did they know the identity of the person who had collected the new title deed from the Land Office Registry. It was however not disputed that the plaintiff never collected the new land title deed as she was in possession of the old title deed at all material times. It was no surprise then that the Registrar of Titles, Selangor admitted that someone had come to their office to collect the new title deed to the land and that the new title to the land was indeed released to that person. That the Registrar of Titles, Selangor was not able to confirm with certainty who had collected the new land title deed was indeed very telling. That was the basis from the claim for contribution from the Registrar of Titles, Selangor. [35] In the circumstances, we reiterate our conclusion that, it is sufficient and proper, that the Registrar of Titles, Selangor be named and cited as was done by the plaintiff in this case. As such, we find no merit in the preliminary point raised by the learned ALA and we therefore hold it as unsustainable. The preliminary point is therefore dismissed.” [30] We find no reason not to adopt the reasoning in Tho Siew Wah, supra, and therefore hold that the plaintiff herein was correct in naming the Pendaftar Hakmilik Negeri Selangor as the 7th defendant. As 29 submitted by learned counsel for the plaintiff, cases have shown that the Pendaftar Hakmilik has been made a party in other suits and is held liable for negligence and hence for breach of statutory duty. One of such cases is the decision of the Federal Court in Pendaftar Hakmilik, Pejabat Pendaftar Wilayah Persekutuan Kuala Lumpur & Anor v Pong Yang Hong [2016] 9 CLJ 297.
Subparagraph
(iii) Whether the 7th defendant had breached its statutory duty under the NLC and therefore negligent when it registered the Change of Name of the plaintiff to the name of the 3rd defendant and later in registering the name of the 3rd defendant as the owner of the said Land [31] It was the contention of the learned ALA that the 7th defendant had at all material time performed its statutory duties as provided by the NLC in particular section 378 which reads, inter alia, as follows: ‘S.378. Change of name by proprietors, etc The Registrar may, upon the production to him of evidence (whether in the form of deed poll, official certificate, statutory declaration or otherwise) from which he is satisfied of a change of name on the part of any person or body in whom any alienated land or interest is for the time being vested, or at 30 whose instance a caveat has been entered in respect of any land or interest, make a memorial of the change in the relevant register document of title and in any issue document of title or other instrument relating to the said land or interest.” [32] It was his contention that the learned High Court Judge was wrong in finding PW4 was negligent in registering the Change of Name when section 378 was clear and unambiguous and did not specifically state the type of documents which needed to be attached to the application. Section 378 does not put extra burden on PW4 but only requires the production of documents which can satisfy the 7th defendant. [33] In any event, the learned ALA submitted that section 22 of the NLC which provides as follows, gives protection to the 7th defendant: “22. Protection of officers No officer appointed under this Part shall be liable to be sued in any civil court for any act or matter done, or ordered to be done or omitted to be done, by him in good faith and in the intended exercise of any power, or performance of any duty, conferred or imposed on him by or under this Act.” 31 [34] Learned counsel for the plaintiff submitted that the learned High Court Judge’s finding on this issue should not be disturbed as it was based on the totality of evidence after hearing and seeing the demeanour of the witnesses during trial and after critically analysing the documentary evidence. [35] The learned High Court Judge’s finding on this issue can be found in paragraphs 31 to 33 of Her Ladyship’s Grounds of Judgment. To be coherent, we reproduce the said paragraphs as follows: “[31] The 7th defendant as Pendaftar Hakmilik Negeri Selangor and his office are charge with the responsibility to reasonably maintain an efficient and accurate particulars of land registration. The starting point, in so far as our present case, that resulted in the change of ownership of the said Land was the Registration of the Change of Name from the plaintiff to the 3rd defendant. The 7th defendant’s witness, DW4, was the officer in charge at the material time in handling the 3rd defendant’s Permohonan Untuk Menukar Nama (at page 10 of Bundle B). One of the documents required, based on the 7th defendant’s own office “carta aliran dan proses/fail meja’, which is essentially a checklist, is the Form 13 from SSM. The Form 13 as I have referred to earlier is the confirmation of change of name of a company as certified by the SSM. In our present case, the Form 13 used by the 3rd 32 defendant for the registration of the Change of Name can be seen at page 12 of Bundle B. It appears that DW4 did not pay much attention to this Form 13 at the material time as otherwise he would have noticed the following: a. that the Form 13 was issued under the name of Pejabat Pendaftar Syarikat and not SSM; and b. that the 3rd defendant’s company registration number is 464962-X, which is different from the plaintiff’s company registration number 9110/82 (as appeared in the land office record). These two anomalies should have triggered alarm bell to DW4 that something was amiss. Instead DW4 proceeded to register the Change of Name and in fact even changed and made ‘correction’ to the plaintiff’s company number in the office file. DW4 is actually keenly aware that a change of name under s. 378 of the NLC does not involve a change of ownership of the said Land. It is not a reasonable excuse for DW4, or any officers of the 7th defendant for that matter, to say that he was not knowledgeable about the fact that a change of company name does not involve a change of company number. Further, it is common knowledge that Pejabat Pendaftar Syarikat no longer exist at the material time and has been replaced by SSM. But DW4 failed to realise this. [32] It is the evidence of DW4 that the other important mandatory document for registration of a change of name under s. 378 of the NLC is the original issue document of title or IDT. DW4 testified that the IDT for the said Land was submitted together with the application for the change of 33 name but the said IDT was cancelled and destroyed. The computerised IDT was issued for the said Land naming the 3rd defendant as the registered owner. Therefore there is no way now to know how that destroyed IDT looks like but based on the fact that the original manual IDT is actually still with the plaintiff, it can only be surmised that the destroyed IDT must be a fake one. [33] It is therefore my judgement that there was negligence and breach of statutory duty by the 7th defendant in the registration of the Change of Name for the said Land from the plaintiff to the 3rd defendant. DW4 has failed to exercise due diligent and care in carrying out his responsibility that resulted in the plaintiff’s ownership to the said Land been jeopardised. In view of such negligent act and breached of statutory duty, I do not think the 7th defendant can rely on the protection provided by s. 22 of the NLC.” [36] With due respect to the learned ALA, we find the argument put forward is a hollow one and does not hold water. We cannot expect the legislature to specifically list down all the documents required under section 378 as every application is distinct, hence its requirement differs. Hence the need for an office flowchart as an administrative guide to the work process. It did exist in the 7th defendant’s office but the learned High Court Judge found it had not been adhered to by PW4. Officers of the 7th defendant are not robots and therefore they need to apply their minds and 34 attention in processing every such application, which the learned High Court Judge found they had failed to do so. [37] As a keeper of all land titles, for a particular State (in this case Selangor) it is reasonable to impose upon the land office, including the 7th defendant, a duty of care towards all land owners, to ensure that the landowners’ interests are well protected and safeguarded. The land office, including the 7th defendant, has to ensure that the law and proceedings are followed strictly, failing which it can cause the landowners losing their lands. [38] We find the learned High Court Judge had correctly, in paragraph 16 of Her Ladyship’s Grounds of Judgment, explained the process needed to be followed in converting, first, the existing register documents of title to the computerised register documents of title, and then converting the existing issue documents of title to the computerised issue documents of title; as follows: “….. Under the scheme of s.8 of the 14th Schedule, the Registrar, inter alia: 35 a. shall convert the existing register [sic] documents of title (not the IDT) to computer printed register [sic] of title – see s. 8(1) of the 14th Schedule. It must be noted that the register [sic] documents of title are kept by the land office, while the issue document of title (the IDT) is usually kept by the registered proprietor of the land; b. an existing register [sic] document of title shall however continue to be in force and valid until a computerised printed of the same is prepared, signed and sealed by the Registrar – see s. 8(2) of the 14 Schedule; c. after conversion as above of the register [sic] document of title, the existing IDT (that is kept by the registered proprietor and in our case referred to as the manual IDT) shall continue to be in force and valid until a computerised version of the same is prepared and issued to the proprietor – see s. 8(3) of the 14th Schedule; d. any registered proprietor of a land may apply to convert his manual IDT to computerised IDT by surrendering or lodging the original IDT to the land office – see s. 8(4) of the 14th Schedule; e. but the Registrar himself may on his own accord convert any existing IDT to computerised IDT without there being an application made by the registered proprietor – see s. 8(5) of the 14th Schedule; f. then upon conversion of the existing document of titles (i.e. both the register [sic] document of title and the IDT) of the particular land, the Registrar SHALL, inter alia, 36
i
(i) call the registered proprietor to take delivery of the computerised IDT, and if the conversion was done by the Registrar on his own accord pursuant to s. 8(5) of the 14th Schedule, then the Registrar shall not be obliged to deliver to the proprietor the computerised IDT unless the existing manual IDT is produced to him – see s. 8(9)(c) of the 14th Schedule; and
Subparagraph
(ii) cancel and destroy the existing manual IDT when submitted to him – s. 8(9)(d) of the 14th Schedule.” [39] Based on the decision of the High Court in Shayo (M) Sdn Bhd v Nurlieda bt Sidek & Ors [2013] 7 MLJ 755 and the case of Uptown Properties Sdn Bhd v Pentadbir Tanah Wilayah Persekutuan & Ors [2012] 8 MLJ 713 the learned High Court Judge found that the 7th defendant had acted in contravention of the scheme provided under section 8 of the 14th Schedule when it issued the computerised issue document of title to the 3rd defendant while the original manual issue document of title for the said Land was still in the possession of the plaintiff. Instead of requesting the plaintiff to take delivery of the computerised issue document of title, the 7th defendant had issued and delivered it to the 3rd defendant who was not the then existing proprietor of the said Land. 37 [40] We find no reason to disturb this finding of the learned High Court Judge. Not only had the 7th defendant been negligent in handling the Change of Name under section 378 of the NLC, the scheme provided under section 8 of the 14th Schedule had also been breached. It must be emphasized that the Change of Name envisaged under section 378 is only in respect of the name of the proprietor and NOT on the ownership of the land. The ownership of the land remains unchanged. However the evidence showed that after the Change of Name was registered, the computerised issue document of title was issued by the 7th defendant in the name of the 3rd defendant as the registered proprietor of the said land. There was no reasonable explanation given by the 7th defendant as to why he allowed these utterly questionable transactions to take place. Paragraph (c) of subsection 8(9) of the 14th Schedule clearly states that where conversion is effected by the Registrar on his own accord, he shall not be obliged to deliver to the proprietor the computer printed issue document of title unless the existing issue document of title is produced to him. It is not disputed that the existing issue document of title has always been and is still with the plaintiff. [41] Therefore, the act of the 7th defendant in delivering the new computerised issue document of title to the 3rd defendant was clearly in 38 breach of paragraph 8(9)(c) of the 14th Schedule of the NLC. See the recent decision of the Federal Court in Pushpaleela a/p R. Selvarajah & Anor v Rajamani d/o Mengappa Chettiar & Other appeal [2019] 3 CLJ
441
[42] We hold that when the 7th defendant acted in breach of his statutory duty and when negligence is shown on his part while performing his duties, the 7th defendant cannot be said to be held to be acting in good faith. Consequently, he is disqualified from the protection of section 22 of the NLC. See – Uptown Properties Sdn Bhd and also the Federal Court in Poh Yang Hong, supra.
Subparagraph
(iv) Whether the title of an immediate purchaser such as the 1st and 2nd defendants is liable to be set aside under section 340(2) of the NLC [43] It is interesting to note that learned counsel for the 1st and 2nd defendants had in his oral submission before this Court admitted that the 1st and 2nd defendants are actually “immediate purchaser” under the NLC. They have abandoned the issue that the 1st and 2nd defendants are bona fide purchasers for value. 39 [44] The position of an immediate purchaser has been discussed in many cases. Suffice for us to quote only one decision of the Federal Court in Kamarulzaman Omar, supra, at page 796 as follows: [43] In the instant case, both the trial court and the Court of Appeal held that the fifth and sixth respondents were bona fide purchasers. But unfortunately, both the trial court and the Court of Appeal failed to inquire whether the fifth and or sixth respondents were immediate or subsequent purchasers. Only a subsequent purchaser is entitled to raise the shield of indefeasibility. An immediate purchaser of a title tainted by any one of the vitiating elements acquires a title that is not indefeasible. It flows from Tan Ying Hong that the bona fides of an immediate purchaser is not a shield to defeasibility. The defeasible title of a bona fide immediate purchaser is still liable to be set aside. The defeasible title of a bona fide immediate purchaser only becomes indefeasible when it is subsequently passed to a bona fide subsequent purchaser. That the fifth and sixth respondents were bona fide purchasers could not by that fact alone give a shield of indefeasibility. The fifth and or sixth respondents only acquired an indefeasible title if they were bona fide subsequent purchasers. But for the fifth and sixth respondents to have been bona fide subsequent purchasers, there must have been an immediate purchaser in the first place. The first to fourth respondents, from whom the fifth and sixth respondents obtained title, were not immediate purchasers. Rather, they were imposters of those 40 entitled to the estate of the deceased. They, like the fake Boonsom who impersonated the true Boonsom, had no title to pass to the fifth and sixth respondents. The fifth and sixth respondents who were the immediate purchasers, acquired a title that was not indefeasible. But when the fraudulent title of the first to fourth respondents were set aside by the default judgement, the defeasible title of the fifth and sixth respondents was also defeated”. (emphasis added) [45] The Federal Court in that case found the 5th and sixth respondents therein were immediate purchasers and so were not protected by the provisions of section 340(3) of the NLC. In Pushpaleela’s case, supra, the Federal Court was of the opinion that the land title would be void ab initio if the land registry had in blatant breach of its duty under the NLC wrongfully registered any land in the register document of title and issued the replacement issue document of title in the name of a 3rd party. In this instant appeal, we have already found that 7th defendant to be in breach of its statutory duty in handling the Change of Name and in issuing the computerised issue document of title. [46] Reverting back to our case, unlike a subsequent purchaser, the 1st and 2nd defendants’ title to the said Land is not indefeasible and liable to 41 be set aside even if they were not party to the fraud committed by the 3rd defendant. [47] Based on the above two authorities that we cited above, we find no difficulty to answer this fourth issue in the affirmative.
v
(v) If the title obtained by the 1st and 2nd defendants is set aside, whether the 1st and 2nd defendants are entitled to claim for indemnity from the 7th defendant for losses suffered by them in purchasing the said Land [48] Learned counsel for the 1st and 2nd defendants submitted that the learned High Court Judge erred in finding that this claim for indemnity against the 7th defendant cannot be entertained as they were not bona fide purchasers for value. Learned counsel found support in the case of Overseas Reality Sdn Bhd v Wong Yau Choy & 5 Ors [2014] 1 AMR 703 wherein the land office was ordered to indemnify the defendants albeit that they were not bona fide purchaser. [49] They further submitted that the learned High Court Judge erred when Her Ladyship failed to appreciate that the 7th defendant did not file 42 any Statement of Defence to the 1st and 2nd defendants’ Third Party Notice issued under 0.16 r.8 of the ROC dated 28.9.2015 and therefore are deemed to admit their claim. [50] The learned ALA submitted that there was no evidence produced in court that the 1st and 2nd defendants had paid the full purchase price to the 3rd defendant. He further submitted that the learned High Court Judge was correct in her finding based on the totality of evidence that the 1st and 2nd defendants were privy or at least had knowledge of the fraud committed through the 3rd defendant in obtaining ownership of the said Land. Hence, relying on this Court’s decision in Heveaplast Sdn Bhd v See Leong Chye @ Sze Leong Chye & Others & Other Appeals [2016] MLJ 835, the 1st and 2nd defendants cannot benefit from their own wrongful conduct. [51] The learned ALA also submitted there is nothing in the NLC which allows damages or indemnity to be paid pursuant to the provisions of section 340 of the NLC. He relied on the Federal Court’s decision in Low Huat Cheng & Anor v Rozdenil Toni & Another Appeal [2017]3 CLJ
257
43 [52] Let us first look at the purported failure of the 7th defendant to file any Statement of Defence to the 3rd party notice issued by the 1st and 2nd defendants pursuant to 0.16 r.8 of the ROC. Does it mean the 7th defendant is deemed to admit the 1st and 2nd defendants’ claim and judgment can be entered against the 7th defendant to pay damages or to indemnify the 1st and 2nd defendants? [53] The notice given as shown at pages 122-131 Record of Appeal Volume 1 is similar to Form 18 issued under 0.16 r. 1 of the ROC. Order 16 governs a 3rd party proceedings. There are steps or procedures to be taken or followed before a judgment can be entered in a third party proceedings. Serving the notice alone is not sufficient. The 7th defendant need not file an appearance as it was already a party and had already entered appearance in the main suit. However, before parties are bound to serve any defence to the notice, a court’s direction must first be obtained pursuant to 0.16 r. 4 and the order has to be in Form 23 of the ROC. It is for the court to give direction on the filing of defence. The 7th defendant shall be deemed to admit the claim stated in the 3rd party notice only if it has been ordered by the court to serve a defence and he fails to do so. See 0.16 r. 4 and r. 5 of the ROC. We find there is no evidence that such direction of the court had been obtained by the 1st and 2nd defendants. 44 Hence the 1st and 2nd defendants’ submissions that the learned High Court Judge erred on this issue is clearly misconceived. As there was no such direction obtained, it was only right for the court to decide on the issue of the 3rd party indemnity after the trial. See 0.16 r. 7 of the ROC. [54] We agree with the 1st and 2nd defendants that the fact that they are immediate purchasers do not disentitle them from claiming for indemnity from the 7th defendant if they can prove that the 7th defendant is the one who has caused losses to them. The 1st and 2nd defendants’ case is that they rely on the result of searches conducted through their solicitors. The computerized issue document of title of the said Land was in the name of the 3rd defendant and was issued by the 7th defendant. This computerized issue document of title was used by the 3rd defendant to enter into the Sale and Purchase Agreement of the said Land with the 1st and 2nd defendants. But for the reasons which we will explain below, these facts alone do not justify the payment of indemnity. [55] The learned ALA had brought to our attention the following paragraphs in Low Huat Cheng, supra, wherein the Federal Court had stated as follows: 45 “[48] Given the above circumstances, the most important question that we must ask here is whether in lieu of the retransfer of the property, a claim in damages is available to the plaintiff as the true owner of the property under s. 340 of the NLC. In our judgment, the question must be approached on the basis of the provision itself. The plaintiff’s case must stand and fall on the basis of this specific provision. It is to that provision we must look at. It is necessary to read the wordings and purport of the provision with great care. The first important point to notice is that s. 340(2) of the NLC creates a cause of action, which is in effect a form of action independent of any common law claim for tort or breach of contract. Over and above this, it is important to appreciate that the cause of action envisaged under s. 340 of the NLC is a statutory claim, where the relief is explicitly specified therein, that is to say, setting aside the title or interest in question. Once the legislative scheme in s. 340 is properly understood, it is apparent that the provision does not envisage a relief in damages at all; there is clearly no provision in relation to damages. In this regard, there is a general rule that when right is created by a statute and a special sanction is also given by the same statute regard must be had to that sanction, and the obligation can only be enforced in the prescribed manner (see The Cobar Corporation Limited and Rubind Henrik Corbett (t=Trustee) v The Attorney-General For New South Wales [1909] 9 CLR 378).” 46 “[57] As a result, for all the reasons set forth earlier, we therefore conclude that s. 340 of the NLC does not provide for the remedy of damages. In our judgment, all that s. 340 provides is the setting aside of the impugned title or interest upon one or more of the grounds of defeasibility specified therein. Yet again, keeping in mind that it is an action in rem, which is an action directed towards property, we are not at all convinced that under s. 340 of the NLC the court has the power to award damages. With respect, both the High Court and the Court of Appeal erred in law and in fact culminating in a miscarriage of justice in holding that as the third and fourth defendants were in no position to return the property to the plaintiff, they were statutorily bound to make good such loss by paying damages. This is in itself sufficient to warrant appellate interference on our part.” [56] However, with respect, the learned ALA did not bring to our attention paragraphs 60 and 61 of the same judgment which stated as follows: “[60] We once again return to the present case. The plaintiff’s claim in personam for damages against the third and fourth defendants was founded in tort of negligence. In his statement of claim the plaintiff averred that the third and fourth defendants accepted the transfer of the property from the second defendant even though they had reasons to know that the Power of Attorney was false…… 47 [61] However, when it came to adducing evidence, the plaintiff had not at all brought home the case of negligence against the third and fourth defendants. There was no attempt whatsoever by the plaintiff to affix any knowledge of the defective Power of Attorney on the part of the third and fourth defendants. On the contrary, the third and fourth defendants had proven their defence as bona fide purchasers of the property for value without notice. In our judgment, in the circumstances of this case, damages as a relief in a claim in personam founded in tort were only available if the plaintiff had proven that the third and fourth defendants had wronged him in a way as can be seen in the case of Datuk Jagindar Singh & Ors v Tara Rajaratnam (supra) ….” [57] Based on the above, we are of the view that as the 1st and 2nd defendants’ claim against the 7th defendant is based on the tort of negligence, they would be entitled for damages or indemnity if they can prove the 7th defendant had wronged them. However, having said that, we find that the 1st and 2nd defendants cannot simply allege that they have been wronged by the 7th defendant and therefore they must be paid. We agree with the learned High Court Judge as well as the learned ALA that the 1st and 2nd defendants need to first prove their losses. It is trite law that parties who claim for damages must prove actual losses suffered. It is also trite law that the purpose of indemnity is to keep the indemnified party harmless against the specified loss. So the amount awarded must correspond to the amount of actual loss. 48 [58] This Court in Tan Ah Chio & Ors v Lua Kim Soon & Ors [2015] 1 MLJ 330 had held, inter alia, a party claiming damages must prove actual losses suffered and that the losses suffered were caused by the opposing party’s breach. It is not enough for them to say that they have lost without proving the loss. [59] In this instant appeal, the learned High Court Judge had found that the 1st and 2nd defendants had failed to show evidence of any payment of the purchase price made. Even the so called payment made was only for the sum of RM325, 000.00 and was made payable not to the 3rd defendant but to the 4th defendant, a director of the 3rd defendant. This was admitted by the 1st defendant himself in his evidence which can be seen at page 769 of the Record of Appeal, Part B & C, Vol 2(4). They therefore had failed to show that they have paid the full purchase price of RM2,000,
000
000.00. [60] We find no reason to depart from the Her Ladyship’s findings which were carefully explained in paragraphs 24 and 25 of her Grounds of Judgment. We find the 1st and 2nd defendants have failed to show the 49 specified losses suffered by them. As such our answer to this issue is in the negative. Conclusions [61] Based on the above, we unanimously dismiss both Appeal 326 and Appeal 359 with costs. The order of the High Court dated 11th August 2017 is hereby affirmed. signed Dated : 8 January 2020 ( ZALEHA BINTI YUSOF ) Judge Court of Appeal Malaysia Counsel for the Appellant for Appeal No B-01(NCVC)(W)326-09/2017 Mohd. Syarizal Shah Zakaria (together with him Norfariza binti Ridzuan) PENOLONG PENASIHAT UNDANG-UNDANG NEGERI SELANGOR Kamar Penasihat Undang-Undang Negeri Selangor Tingkat 4, Podium Utara Bangunan Sultan Salahuddin Abdul Aziz Shah 40512 Shah Alam Selangor Darul Ehsan 50 Counsels for the Respondents: Rusdy bin Ishak (together with him Dato’ Bruce Lim Cheang Nyok and YapYik Yee) (Counsels for the 1st Respondent) TETUAN LIM & YEOH Peguambela & Peguamcara 145-M, Jalan Maharajalela 50150 Kuala Lumpur Wilayah Persekutuan Brian Ernest Cumming (together with him Teo Qing Qing) (Counsels for the 2nd and 3rd Respondents) TETUAN GIDEON TAN RAZALI ZAINI Peguambela & Peguamcara No. 812, Tingkat 8, Blok A Kelana Square, 17, Jalan SS7/26 47301 Petaling Jaya Selangor Counsel fot the Appellants for Appeal No. B-01(NCVC)(W) 359-08/2011 Brian Ernest Cumming (together with him Teo Qing Qing) TETUAN GIDEON TAN RAZALI ZAINI Peguambela & Peguamcara No. 812, Tingkat 8, Blok A Kelana Square, 17, Jalan SS7/26 47301 Petaling Jaya Selangor Counsels for the Respondents: Rusdy bin Ishak (together with him Dato’ Bruce Lim Cheang Nyok and Yap Yik Yee TETUAN LIM & YEOH Peguambela & Peguamcara 145-M, Jalan Maharajalela 50150 Kuala Lumpur Wilayah Persekutuan [Peguamcara bagi pihak Responden Pertama] 51 Mohd. Shahrizal Shah Zakaria (together with him Norfariza binti Ridzuan) PENOLONG PENASIHAT UNDANG-UNDANG NEGERI SELANGOR Kamar Penasihat Undang-Undang Negeri Selangor Tingkat 4, Podium Utara Bangunan Sultan Salahuddin Abdul Aziz Shah 40512 Shah Alam Selangor Darul Ehsan [Peguamcara bagi pihak Responden ke 6] N.B.: 4th to 7th respondents in appeal No 326, were not present no represented in court, likewise Respondents 2-5 in Appeal No. 359.
Wrong text, a broken link, out-of-date content, or a removal request — tell us and we'll check it against the official source.