Monday, March 17, 2008

Protecting the landowners

The Star
by Chelsea L.Y. Ng

HOLDING on to a piece of land title used to be the most secure way for landowners to state ownership of their properties.

The situation has however turned wobbly lately with the implementation of the computerised e-Tanah system.

Fraudulent land ownership transfers can be done at the click of the mouse. It can happen quickly and right under one’s nose.

Designed to streamline land transactions and ownership, the system was introduced late last year with a noble intention.

It aimed to cut transaction time in half, enable online comprehensive land database collection and make the application and registration of titles more efficient.

However, the new system which was gazetted through the National Land Code (Amendment) Act 2007 did not address the bigger problems of land fraud and the loophole in Section 340 of the National Land Code (NLC) 1965.

The loophole had resulted in the Federal Court’s landmark ruling in Adorna Properties Sdn Bhd v Boonsom Boonyanit in 2001.

The case revolves around a Thai woman, Boonsom Boonyanit, who lost two pieces of prime land in Tanjong Bungah, Penang, to a third party – Adorna Properties Sdn Bhd – after some unscrupulous parties forged her signature to sell and transfer the land.

The result of the case, which was heard right up to the Federal Court, could be said to be unfair to Boonsom. At the end of it, she lost everything.

The court held that Adorna Properties could rightly claim ownership over the two pieces of land worth millions of ringgit because it was an innocent buyer.

Since then some have felt that justice had not been administered according to the law stated in Section 340 of the NLC as the section does not contain any remedy for landowners.

The most senior Court of Appeal judge, Datuk Gopal Sri Ram, said on July 13 last year in Au Meng Nam & Anor v Ung Yak Chew & others that the controversial decision of the Adorna Properties case should not be followed because it was wrongly decided.

His view, however, immediately drew flak from then Chief Justice Tun Ahmad Fairuz Sheikh Abdul Halim who chided him for ignoring the ruling of a superior court merely on the grounds that someone felt the higher court had made a wrong decision.

This dilemma has got the Bar Council working on a memorandum which it submitted to the then Natural Resources and Environment Minister Datuk Seri Azmi Khalid on July 24, last year.

In the memorandum, the Bar Council proposed several amendments to be made to the relevant sections of the NLC, especially Sections 340(3) and (4) and 187B.

The move, however, did not bring about any change to the status quo as amendments to the NLC in December last year did not include Section 340.

It was only during a workshop on Thursday, organised by the Land and Mines Department to find ways to overcome the Adorna case, that a glimmer of light was seen at the end of the tunnel.

Land and Mines director-general Datuk Zoal Azha Yusof, whose department had organised the workshop, said the change was necessary to restore property owners’ rights.

“It is not fair to property owners to have their rights taken away,” he had said before.

The Bar Council’s Conveyancing Practice Committee chairman Roger Tan said the step was a positive move towards giving protection to land owners.

Apart from the Adorna Properties case, there were a serious number of fraudulent cases involving land in the country.

Statistics disclosed by police showed that 16 cases were recorded in 2001, 19 in 2002, 22 in 2003, 32 in 2004, 35 in 2005 and 40 in 2006.

The Consumers Association of Penang has cried foul over why hardly anyone had been prosecuted for the crimes.

The Government has also not been sitting idle. The National Resources and Environment Ministry has been correcting some of the teething problems in the e-Tanah system.

Among the measures noted for action since December were the use of digital signatures and security codes to increase security for land matters such as keeping data on transferring property in a special read-only database to prevent tampering.

Steps had also been taken to stop fraudsters from getting land titles by claiming that they had “lost” their land titles and trying to apply for new ones via their lawyers.

Now, landowners have to go personally to the Land Office to get replacement titles to ensure they are the legitimate owners.

These measures would definitely help to solve some of the teething problems but it is hoped that the amendment to Section 340 will provide the quantum leap for a more drastic change in the law for the benefit of bona fide landlords.

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