1. ) PENDAFTAR HAKMILIK NEGERI SELANGOR 2. ) PENGARAH TANAH DAN GALIAN SELANGOR 3. ) SAHILA BINTI MOHAMAD SAJARI 4. ) AHMAD SUAIDI BIN ABDUL RAHIM v 1. ) Ooh Tong Hai 2. ) Goh Hui Li

Case Significance

Confirms that state land registration authorities may be held liable in negligence for failing to exercise due care in processing a dealing that effects a fraudulent transfer of title, and that such findings will be upheld where the registry did not observe the safeguards expected of it.

This Court of Appeal decision, one of two appeals heard together, arises from a case of land fraud and concerns the liability of the state land registration authorities for a fraudulent transfer of land. In the High Court at Pulau Pinang the registered proprietor's land had been found to have been fraudulently transferred to two transferees, and the High Court held the Land Registry and its relevant officers liable, along with others complicit in the transaction. In this appeal the Registrar of Titles and the Director of Lands and Mines of the state, together with the officers concerned, challenged the finding that they had been negligent in relation to the registration of the fraudulent transfer. The appeal engaged the responsibilities of the land registration authorities in processing dealings and effecting transfers of title, and the extent to which their failure to exercise due care in the registration process could render them liable to a proprietor whose land was fraudulently dealt with. The Court of Appeal examined the High Court's findings and upheld them, holding that the Land Registry had been negligent in the discharge of its statutory functions in relation to the impugned transfer. It agreed that the registering authorities, by failing to observe the safeguards expected of them when registering a dealing that turned out to be fraudulent, bore responsibility for the loss occasioned to the true proprietor. The Court accordingly affirmed the High Court's decision against the land registration authorities and dismissed their appeal, leaving the findings of negligence and the consequential liability intact. The decision underscores the important gatekeeping function that the land registration system performs: because the register is intended to be a reliable record of title on which the public may rely, the authorities responsible for maintaining it owe a duty to take reasonable care in processing dealings, and a failure to do so that facilitates a fraudulent deprivation of land can expose them to liability for the resulting loss.