Bad Statute Law

During my law studies, one of the cardinal principles of law we must learn is that any property transferred through fraud is destitute of legal effect. The title remains with the original owner and the purchaser, even if he is a bona fide innocent purchaser for value, will not be able to obtain good title by reason of forgery. This remains true even when the said property were to be sold over a hundred times. No good title passes through each and every one of these transactions. With that in mind let us draw our attention to a very controversial case of Boonsom Boomyanit v  Adorna Properties Sdn Bhd. This is a very sad and tragic case of an elderly lady Mrs. Boonsom Boonyanit, a Thai national who formerly owned two pieces of land in Tanjong Bungah, Penang. She was the registered proprietor and had her title documents  securely locked inside her safe, so she thought. Unfortunately for her, some unscrupulous persons had forged her signature and sold and transferred her two plots of land to Adorna Properties Sdn Bhd who is now the registered owner. She brought an action against Adorna Properties to have the land restored to her but she failed in the High Court, succeeded in the Court of Appeal but lost in the Federal Court who held that even if the instrument of transfer was forged, Adorna Properties because they have bought the land in good faith and had paid the price for it, albeit unknowingly to the forger, nevertheless had obtain an indefeasible title to the land. Any reasonable person will know that this cannot be right. Imagine yourself the owner of a beautiful house with the title securely locked in your safe, were to out of a sudden be told that you no longer own the property because someone had forged your signature and sold it to a third party. How would you feel? It is sad the Judiciary took more than ten years to discover that this decision was wrong. So with this enlightened discovery, will everything be okay now? Not so. There is another equally big problem. Let us look at Section 340 of the National Land Code 1965. Professor Visu Sinnadurai explained "...The registered proprietor who had acquired his title by registration of a void or void able instrument does not acquire an indefeasible title under s.340(2)(b). The indefeasibility is postponed until the time when a subsequent purchaser acquires the title in good faith and for valuable consideration." In other words he is saying that a registered proprietor, the vendor, under a sales and purchase agreement , even though he himself does not possess an indefeasible title, may give an indefeaseible title to a bona fide purchase. In simple language he is saying that the Act says a person with a defective title can pass a good title to a genuine buyer. To any law student, this cannot be good law. Even after the property had undergone a hundred transactions, the final buyer must return the title back to the original owner who had done no wrong and in fact had the title documents carefully lock in safe or safe deposit box. Then this is good law and the public will be able to accept it. One may ask whether it is fair to allow the final bona fide purchase to suffer loss? I always wonder why it is so easy for a forger to acquire a title for registration when it impossible to do so in developed countries like UK and Singapore. The conclusion must be that there is negligent (hopefully not collusion) perpetrated by our Land Office. The injured party can recover his loss by taking action against the authorities involved for negligence provided that our Judiciary will not commit the same mistake  which it did to our poor old Mrs.Boonyanit. Finally after coming back to our senses and realising that the old law is always good law which is - All transactions executed through forgery are destitute to legal effect, it is high time we remove the offending sections under s.340 of the National Land Code, failure which will certainly bring an increase of forgeries of land titles, this time through syndicates so that they can quickly sell their defeasible titles to their associate companies thereby obtaining indefeasible good titles. If we failed to act, there is a strong possibility that no big investors will ever dare to come to our shore bearing in mind that the Boonyanit's case had attracted world attention. Surely this is not good for our nation.