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Righting a wrong

21/07/2007 NST By Salleh Buang

Once again, that awful Federal Court decision of 2001, in the Boonsom Boonyanit vs Adorna Properties case, has cast its dark shadow on the legal landscape. The New Straits Times front-paged it last Saturday under the headline, "Land Deal: Court of Appeal declares Federal Court Ruling Wrong".

This is not the first time that the Court of Appeal has declared a decision of the highest court in the land as "wrong".

While this, in itself, has also become a worrying trend, I expect the debate on whether the principle of which stare decisis (in Latin means "to stand by that which has already been decided"), still can be used to rage on for some time more.

In the aftermath of the Boonsom decision from the then Land Ministry (which strangely has the word "land" distinctively missing from its new name, National Resources and Environment), there were indications that the law would be revamped soon. However, this never came to be.

And so the shroud of uncertainty in the law continues. To the common folk, this state of affairs is very unsettling. As more cases of fraudulent land transactions make headlines, the more the feeling of hopelessness among property owners.

Did you ever hear the story of the woman who went to the Land Office to pay her quit rent and was told that she didn't have to pay it anymore? When she asked why, she was told, "Why should you, since you have already sold your land...?"

There is no need to recap the Boonsom story, but to put it briefly, it was a tussle between the registered owner of a property in this country (who is completely blameless of any wrong-doing) and another person who claimed to be the bona fide purchaser. The Federal Court in its decision favoured the latter.

The Boonsom decision made the innocent, registered proprietor of the land a victim of somebody else's criminal and fraudulent actions.

If we maintain that the "bona fide purchaser" is also blameless and should be protected (over and beyond the registered proprietor, who had to bear the loss), then the National Land Code has failed the people.

One of the cardinal principles of the Torrens System is "security of tenure".

However, in the Boonsom case, the registered owner got no such security. During the days I taught law, I used to tell my students that when we borrowed the Torrens System from Australia at the close of the 19th century, we failed to do a complete job.

There have been several past attempts to get the Federal Court to review the Boonsom decision. Boonsom's own son mounted one attempt but failed. The Federal Court said that while some injustice has been caused, no "grave injustice" had occurred. Upon reading this, I couldn't help but wonder if injustice comes in different shades.

I congratulate Justice Datuk Gopal Sri Ram for coming out strongly, declaring that the Federal Court was wrong. Not many judges will say that openly in a court of law, though they may say so in quiet conversations with colleagues.

I agree with the judge's finding that in the Boonsom case, Adorna Properties (the purchaser) "was not a subsequent purchaser. It took its title from a forger".

I also agree with him when he said that the 2001 Federal Court decision had "wreaked havoc in the law of real property" in this country.

We have two options if we want to correct and resolve this "havoc" in the law. The first is to continue to place our hopes on a future panel of the Federal Court to put things right. However, the problem with these, we cannot say with any degree of confidence when it can happen. I call this option "Having faith in our judiciary".

The second way is to galvanise our legislators to pass a minor amendment to Section 340 of the National Land Code.

Actually, it does not take a genius to draft the amendment (all that's needed is the insertion of a couple of illustrations) as was done when the Penal Code and the Evidence Act were passed by Parliament.

In case this has been forgotten, legislations can refer to Section 300 of the Penal Code, which deals with "murder". Here, there are more than two pages of illustrations.

In the illustration to Section 340 of the National Land Code, the legal draughtsmen can, for example, insert:


1. A is the registered owner of a piece of land. B, a conman, forges A's signature on a memorandum of transfer, resulting in the land being transferred to C. C then sells and transfers the land to D, a bona fide purchaser, for value. D acquires an indefeasible title.

2. A is the registered owner of a piece of land. B, a conman, forges A's signature on a memorandum of transfer, resulting in the land being transferred to X. X is not a bona fide purchaser for the purpose of Section 340(3). X does not acquire an indefeasible title.

My fervent hope is that the Attorney General's Chambers and the relevant ministry in charge of the National Land Code can look into this with some degree of urgency. Any further delay in resolving the "havoc" in the law may have an unhealthy effect on how foreign investors view our country's potentials.

Salleh Buang is senior advisor of a company specialising in competitive intelligence. He is also active in training and public speaking and can be reached at sallehbuang@hotmail.com

 

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