Property sales by forgers leave owners high and dry

The Straits Times, Singapore

By Carolyn Hong, Malaysia Bureau Chief

Lawyers seek change to law as court ruling gives land owners no recourse

KUALA LUMPUR - A SIX-YEAR-OLD land case is haunting property owners in Malaysia as dozens have suddenly found themselves with no remedy after their land was sold by forgers.

Lawyers say there are at least 17 to 20 cases where mainly elderly land owners found their lands sold to a third party by a forger.

Under the law as it stands, following a court case in 2001, they have no remedy.

The Federal Court, in the case of Adorna Properties v Boonsom Boonyanit, decided that if a property was sold through forgery to an innocent buyer, the law favours the buyer.

The decision was criticised at that time for undermining the integrity of land titles.

Lawyer Datuk Theng Book said the spate of cases suggest that there could be a syndicate at work targeting mainly elderly land owners who have left their property idle for a while.

'I won't say Adorna is wrong in law but it is not a good decision. It encourages people to steal,' he told The Straits Times.

This situation, much debated at that time, received renewed attention recently when retired judge Datuk N.H. Chan published a book lambasting this decision among several others as causing serious injustice.

He called it a case of 'most outrageous injustice' as Thai national Boonsom Boonyanit lost her two pieces of land in Penang after someone forged her signature and sold them to a third party.

The Federal Court decided that, despite the forgery, the buyer bought the land in good faith and obtained a good title.

'You do not have to be a lawyer or a judge to know that the Federal Court is plainly wrong,' he wrote.

Datuk Chan retired from the Court of Appeal in 2000.

As a result of this decision, dozens of land owners are now fighting a losing battle after discovering that their properties have been fraudulently sold.

'We have 17 cases reported to the MCA, and 80 per cent of the victims are elderly people,' said Datuk Theng Book, who is also legal adviser to the Malaysian Chinese Association's public complaints department.

The typical modus operandi is to forge the identity card of the land owner and lodge a police report claiming that the land title is lost.

A new title is obtained, and the land is then quickly sold.

The cases include the fraudulent sale of a piece of land worth RM10 million (S$4.4 million) in Cheras, Selangor.

Datuk Theng Book said the victims usually discovered the fraud when they suddenly found strangers taking possession of the property.

A few managed to find out early enough to prevent the sale from going through.

Lawyer Roger Tan, who is head of the Bar Council's conveyancing practice section, said the lawyers association was preparing a memorandum with proposed legal amendments to urge that the government rectify the law.

'The amendments will have to take into account the interests of two victims - the original land owner and the bona fide purchaser. We are looking at mechanisms in Canada and Australia where the government has set up a compensation fund for victims,' he said.

AGGRIEVED PARTIES

'The amendments will have to take into account the interests of two victims - the original land owner and the bona fide purchaser.'

LAWYER ROGER TAN, who says the Bar Council is preparing a memorandum with proposed legal amendments to urge the government to rectify the law in question.