Wednesday, August 20, 2008

Taxpayers see red over RM1.8m land office blunder

by R. Nadeswaran and Terence Fernandez (The Sun)

PETALING JAYA (Aug 20, 2008): What’s in a colour? Is it mandatory that an application for a caveat on a land be signed in black and not blue? Whatever the shade, taxpayers in Selangor will be seeing red as the Klang Land Office has to pay RM1.8 million in compensation, not taking into account costs, for rejecting a caveat for among others, being marked with the wrong colour.

The civil suit by eight people against three individuals and the Land Office also revealed other startling facts:
» the land officer claiming that there was no annexure to the application while another contradicting him;
» a note on the application scribbled on a yellow piece of paper;
» claims of paying under-the-table money;
» claims that one party is able to "do things in the Land Office such as removing a caveat using his influence …"; and
» the cavalier manner in which applications for caveats are rejected.
The notes of judgment among others reveal the bureaucracy and incompetence of the Land Office personnel, besides highlighting a three-month delay which caused hardship to the rightful landowners.
Although Justice Datuk Faiza Tamby Chik made judgment on June 25, 1998 ordering the four defendants to pay damages to be assessed, it was not until Nov 7 last year that Justice Suriyadi Halim Omar awarded RM1.8 million.
In the meantime, the Land Office had applied to stay the order but on May 12, Judicial Commissioner Datuk Mariana Yahya dismissed the application.
While the Land Office was the fourth defendant, it has been ordered to pay the damages as the other respondents are deemed "persons of straw" – impossible to enforce judgment against them as they are unable to fork out the settlement.
The case involves a dispute between the children of R. Retnasamy Naina from his second wife and Retnasamy’s son from his first wife, his grandson and a purchaser of the said land (first, second and third defendants respectively).During a title search at the Klang Land Office on Oct 5, 1990, the children had discovered that the first and second defendants – R. Supia and P. Velauthan – had entered into an agreement to sell the land to third defendant Subramaniam N.S. Durai.
Having learnt of it, two children – the first and second plaintiffs R. Sandraksan and R. Balasingam – applied to register their interest on the land the same day and Subramaniam’s caveat was cancelled by assistant land officer Baharuddin Jantan.
According to the judgment, Sandraksan and Balasingam had signed the application but did not attach their birth certificates when applying for the caveat, prompting Baharuddin to reject the application, and allowing the land to be subsequently transferred to Sin Lian Tatt Hardware.
The caveat was rejected on the grounds that: "tandatangan mengkaveat menggunakan dakwat biru. Salinan sijil kelahiran tiada di lampirkan" (the applicants signed in blue ink and copies of birth certificates were not annexed).
According to court documents, Abd Rahman Ulang, an assistant land officer testified that he had witnessed and signed the applications of Sandraksan and Balasingam – Sandraksan signed in blue ink instead of the required black. However, during trial, he said he did not remember if the documents were attached.
"Usually, the documents are in order and usually I am satisfied," Abd Rahman said.
But during cross-examination, he admitted that if the required documents such as the birth certificates were not attached to the application, he would not have endorsed it.
The court also noted that the application was attached with a piece of yellow paper on which was written a caution – that the application was suspended due to the absence of the birth certificate.
With no oral evidence to this fact, Faiza said Baharuddin should have suspended the caveat instead of rejecting it outright.
"The court would not turn a blind eye to such cavalier attitude in the performance of a statutory duty," Faiza said, adding that Baharuddin had admitted that an oversight on his part caused the removal of the caveat.
The judge also said the Land Office had arbitrarily rejected the caveat when it could have notified the plaintiffs to return to the office and sign the application with black ink.
"The mere use of a blue ball pen is not such a grave error so as to warrant a caveat to be rejected outright," Faiza said, adding that furthermore, the plaintiffs signed the application before Abd Rahman.
The judge also said there was no notification of the rejection to the plaintiffs until Jan 7, 1991 – three months too late.
"If they were going to reject the caveat, they should have sent it by registered mail or AR Registered so the plaintiffs can take remedial measures," he said.
On the fifth plaintiff R. Uthrapathy who entered a caveat on Aug 1, 1995, Baharuddin said he overlooked this fact and transferred the property to Sin Lian Tatt Hardware.
Faiza also said Subramaniam, the third defendant, was not a bona fide purchaser as it could be inferred that Hock Tai Finance Corporation Bhd – Subramaniam’s finance company and intervener in the case – knew he was in no position to service a RM450,000 loan when his monthly salary was only RM1,588.
Hock Tai has since brought foreclosure proceedings against Subramaniam.The judgment in this case also draws inferences as to the sinister intentions and actions of some of the parties involved as a witness told the court that Subramaniam had said that he had to pay "under-table" money to Hock Tai Finance in order for the loan to be approved.
The witness also testified that Subramaniam could "do things in the Land Office such as removing a caveat using his influence…"

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