The Court of Appeal’s ruling in ECH Development & Management Sdn Bhd v Prabagaran a/l Perumal & Anor [2020] MLJU 516 illustrates how a developer successfully addressed a title registration error under Malaysia’s NationalLand Code (NLC), reinforcing the Torrens system’s principle of indefeasible title.
Background of the Case
ECH Development sold a semi-detached house in its Lumina Kiara project to the Previous Proprietors in 2008, with aQualified Title for 340 m², built per approved plans. The Final Title issued in 2009, erroneously listed 289 m², a 51 m²shortfall due to a Land Office survey error. The Previous Proprietors successfully sued ECH. In 2013, the Land Office issued a Separate Title (51 m²) to ECH, but part of the house (kitchen, store, shed) encroached onto this land. ThePrevious Proprietors sold the property (289 m²) to the defendants in 2015 without disclosing the issue
ECH sued the defendants for trespass, but the High Court dismissed the claim, finding ECH negligent for building acrosstwo titles. Both parties appealed.
Court of Appeal’s Ruling
The Court of Appeal unanimously allowed ECH’s appeal, overturning the High Court’s decision. It addressed key issues:
- Indefeasible Title: Under sections 92 and 340 of NLC, ECH’s Separate Title (51 m²) was indefeasible, granting exclusive rights under section 44(1)(a). The defendants’ encroachment constituted trespass, actionable per se.
- No Negligence by ECH: ECH built within the Qualified Title (340 m²) per approved plans. The Land Office’s error caused the title split, and ECH owed no duty of care to subsequent purchasers for pure economic loss.
- No Laches: ECH acted promptly, notifying the defendants in 2015 and suing in 2016. Adverse possession was inapplicable as per section 341 of NLC.
- Res Judicata: The defendants’ counterclaim was barred, as the title issue was settled in the Previous Proprietors’ suit.
ECH’s Resolution Strategy
ECH resolved the title dispute through:
- Administrative Action: Persistent engagement with the Land Office led to the 2013 issuance of the Separate Title, correcting the 51 m² shortfall.
- Legal Action: ECH’s trespass suit protected its title rights, with the Court of Appeal affirming its indefeasible ownership and rejecting negligence claims.
Key Takeaways for Developers
- Verify Titles Early: Check Qualified and Final Titles during project planning to identify discrepancies early to prevent disputes.
- Engage Authorities Promptly: Proactive engaging with the Land Office to correct title errors.
- Enforce Title Rights: Pursue legal action under sections 92 and 340 of the NLC to enforce rights against encroachments or trespass.
- Maintain Clear Records: Document timely notices and actions to counter defenses like laches, to strengthen the legal position.
At a Glance
ECH Development successfully resolved a title registration error by securing a Separate Title from the Land Office and winning a trespass claim. The Court of Appeal upheld ECH’s indefeasible title under sections 92 and 340 of the NLC, ordering the defendants to remove encroaching structures or purchase the land.
– By George Miranda, Joy Sam Jia Qian, Nurafiqah ‘Izzati –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
