Banking Securities

Assignment 2: Indefeasibility of registered title

a)        Madam Soomchit owns a vacant piece of land in Penang since 10th Jan 200X. She continues to pay the annual quit rent without fail until in 20th June 201X when she realises that the said property is not in her name anymore. A search at the land office reveals that the new registered land owner after her is Edona Properties Sdn Bhd. She feels extremely sad and confused because she has never ever sold the land to Edona Properties. She makes a Police report and engages a lawyer to file a sue aganst Edona Properties for fraudulently acquired her land. At the High Court, the judge rules that the transfer of the land to Edona Properties is not indefeasible under National Land Code (NLC) because it is a fraud. As such, Madam Soomchit is still the rightful owner of the land.

However, Edona Properties appeals the case to the Court of Appeal on the ground they have acquired the land for a valuable consideration and purchase the land in good faith. The Chief Judge of the Appellate Court gives the judgement in favour of Edona Properties based on NLC Section 340 (3). Although Madam Soomchit appeals the case to the Federal Court, the judge decision is with the Appelate Court.

i)        Malaysian law follows the Torrens System in all land dealings. Briefly describe the basic underlying principle of the Torrens System.

Under Torrens System, transfer of ownership or interest in the land is by means of registration at appropriate land office. Registration confers a good tittle to and/or interest. The person named in the Register Document of Titles (at land office) is the holder of interest. Confirms the indefeasible tittle to the land &/ or interest.    

Minor principle- the register reflects (minors) accurately and completely the current facts about title to each registered a lot. This means that each dealing affecting a lot of such a transfer title, a mortgage, or discharge some a lease, an easement or a covenant must entered on the registered and so viewable by cheap online search.

Curtain principle- one does not need to go behind the certificate of title as it contain all information about the title. This means that the ownership need not to be proved by long complicated documents that are kept by the owner, as in the private conveyancing system. All of the necessary information regarding ownership is on the certificate of title.

Indemnity principle- provides for compensation of loss caused by private fraud or by errors made by the Register of Title                                                                                                                                                   (3 marks)

ii)        Explain “indefeasible” in the above case.

     Indefeasibility means registered tittle or interest shall not be defeated by any unregistered or subsequently registered title or interest. The concept of indefeasibility of interest and tittles is an essence in Torrent System of land dealing.                                                                                                                                                                    (2 marks)

iii)         At the High Court, the judge rules the decision in favour of Madam Soomchit.  Quote the