Can we trust the Land Office?

IN June 2008, Datuk Mohamad Nor Mohamad was driving around Jalan Duta in Kuala Lumpur when he saw some people on his plot of land. He got out of the car and inquired.

One was the "owner" of the land and the other was an architect who was in the process of determining the extent of development that could be carried out.

Mohamad Nor stood his ground and said that he was the legal and registered owner of the land and asked the trespassers to leave immediately.

Unknown to him, someone had obtained a "title" to the same land and sold it for a princely sum of RM4.5 million.

The buyer, Poh Yang Hong, said he had bought the land and offered to produce his title to the land. But Mohamad Nor too had a clean title – he had owned that plot for more than two decades.

According to court documents, Poh and Ng Lai Yin had entered into a sale and purchase agreement on Oct 8, 2007 for the purchase of a piece of land at RM4,451,160. A deposit of RM89,023 representing 2% of the purchase price was paid by Poh to Ng's solicitors.

Before the execution of the sale and purchase agreement, a search that was conducted by Poh's solicitors on the title of the land confirmed that Ng was the registered proprietor and that the description of the land and the title were correct.

Upon the execution of the agreement, Poh paid to Ng's solicitors RM356,092 which was the balance of the deposit. Poh also made two payments to Ng's solicitors for the sums of RM1 million and RM506,044 respectively and a bank loan obtained by Poh for RM2,500,000 was disbursed to Ng's solicitors.

When Poh discovered that the land was registered to Mohamad Nor upon confirmation from an official search at the Land Registry he lodged a police report.

Poh sued Ng for losses and damages on the basis that he had falsely, knowingly and fraudulently misrepresented that he was the registered proprietor of the land.

The director of Lands and Mines and the registrar of Land Titles were also party to the suit in that they had breached their duty of care by misrepresenting the true and actual particulars of the land and had failed to maintain true and accurate records of the particulars of the land which had resulted in losses suffered by the plaintiff.

The High Court held in Poh's favour and said it is fair and reasonable that the director and the registrar should owe the plaintiff a duty of care.

By virtue of the relationship of proximity between the two and the members of the public who wish to search the register, it is reasonably foreseeable that if the register contained incorrect or inaccurate or false information, there would be a real risk and danger that members of the public could suffer loss and damages as a result of relying on and acting on such information.

There was a clear breach by the registrar of the statutory duty imposed by the National Land Code and that he was clearly negligent because the private search conducted by Poh's solicitors had disclosed that Ng was the registered proprietor of the land at the material time and the description of the title to the land was also different from the title which was registered under Mohamad Nor.

The decision on this case was made on June 3 last year and a copy of the judgment was made available to us by a former banker following the comments made about a plot of land in Templer's Park in this column on Monday.

He argued that Ishmael Lim's case and that of Poh's should open the eyes of the public when safeguarding their property.

In both these instances, even the banks provided the loans after checks by their own solicitors found that the titles were "clean" and without encumbrances.

Justice Su Geok Yiam noted that the director and registrar ought not to be allowed to invoke and to rely on the act or acts of the fraudster to protect the latter from liability from Poh's claim as there was no evidence that he and his officers had taken all the necessary precautions in order to prevent the fraudster, who had not been established to be in actual fact a third party instead of an officer of the registry, from creating the fake or fraudulent title.

"It would otherwise be unfair and unjust to the plaintiff and other members of the public who had to suffer loss and damages through no fault of their own, especially in light of the director's admission that the responsibility lay with the registrar," she said.

It is quite obvious that there are crooked civil servants working inside to change, amend and falsify records without which no fresh titles can be issued. So, can we start with a massive clean up of the land offices? -Sundaily