Chock Yook Kwai v.

[2002] 8 CLJ Chock Yook Choong & Ors 161

CHOCK YOOK KWAI a

v.
CHOCK YOOK CHOONG & ORS
HIGH COURT MALAYA, SHAH ALAM b
LOW HOP BING J
[SUIT NO: 22-559 OF 1993]
4 DECEMBER 2001
LAND LAW: Indefeasibility of titles and interest - Transfer of land - Whether
c
tainted with fraud or fraudulent misrepresentation - Whether fraud proved
beyond reasonable doubt - Instruments of transfer - Transfer not supported
by proper consideration - Whether effected by means of void or insufficient
instrument - National Land Code, ss. 340(1), (2)(a), (b)
CONTRACT: Illegality - Agreement to transfer property - Whether tainted d
with fraud or fraudulent misrepresentation - Non est factum - Applicability -
Whether agreement explained to plaintiff - Whether plaintiff understood nature
of transaction - Contracts Act 1950, s. 26(a) - National Land Code,
s. 340(2)(a)
CONTRACT: Consideration - Sufficiency - Natural love and affection - e
Agreement by uncle to transfer property to nephew - Failure to prove natural
love and affection - Whether transfer void - Whether lacking consideration -
Contracts Act 1950, s. 26(a) - National Land Code, s. 340(2)(b)
WORDS & PHRASES: “Natural love and affection” - Section 26(a) f
Contracts Act 1950
The plaintiff and the first defendant were brothers and co-owners of two pieces
of land (‘the property’). On 26 June 1991 the plaintiff executed two memoranda
of transfer (‘MOT’) and by that transferred his share in the property to the
first defendant’s sons and his nephews, the second and third defendants herein. g
The transfer allegedly was for consideration of natural love and affection, and
was attested by a solicitor.
Subsequently, however, the plaintiff alleged that the transfer was void and
consequently applied for an order that his share in the property be retransferred
h
to him. The plaintiff argued that the transfer was void as: (i) the MOT was
obtained through fraud and misrepresentation; (ii) he did not understand the
nature or implication of the MOT when signing the same; and (iii) the transfer
was devoid of consideration as there was no natural love and affection between

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a him and his said nephews. The defendants retorted that there was no fraud or
misrepresentation as the MOT had been explained to the plaintiff and was
prepared at the mutual instruction of the plaintiff and the defendants.
In the court, evidence was put, inter alia, that the plaintiff did not trust the
second and third defendants, and that the latter, apart from addressing the
b plaintiff by name and only visiting him two or three times a year, had seldom
mixed with the plaintiff’s children. The questions that arose were: (i) whether
the MOT was tainted with fraud or misrepresentation; (ii) whether non est
factum applied to the facts and circumstances herein; (iii) whether natural love
and affection could be said to have existed between the plaintiff and his
c nephews; and (iv) whether the transfer was effected through void or insufficient
instrument, and in any case, whether the indefeasibility provision of s. 340(1)
of the National Land Code (‘the Code’) could be defeated on account of the
absence of the consideration of natural love and affection.
Held:
d
[1] The burden is on the plaintiff to prove beyond reasonable doubt that the
registration of transfer was obtained through fraud or fraudulent means
or misrepresentation. (p 171 e)
[2] The plaintiff has not established fraud beyond reasonable doubt to which
e the defendants are parties or privies, under s. 340(2)(a) of the Code.
Likewise, the plaintiff has also not established the fact of
misrepresentation ie, fraudulent misrepresentation, actual fraud or
dishonest intention on the part of the defendants beyond reasonable doubt.
(p 175 a-d)
f [3] The plea of non est factum is established if it is shown that (i) the
document signed was fundamentally or essentially different in substance
or in kind from what the signer believed it to be; and (ii) the signer
signed it with the care to be expected of a normal person of prudence.
(p 177 d)
g
[3a] The plaintiff has failed to establish non est factum. The MOT was
explained by the attesting solicitor to the plaintiff and he signed it not
as a witness but as a transferor. The fact that the plaintiff has pleaded
that he has effected the transfer allegedly on account of love and affection
shows that it was a transfer which he understood thereby removing any
h plea of non est factum, or for that matter fraud or misrepresentation.
(p 177 f-g)

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[2002] 8 CLJ Chock Yook Choong & Ors 163

[4] For s. 26(a) of the Contracts Act to apply, two requirements must be a
fulfilled, namely, (i) the agreement is in writing and registered; and (ii)
there must be natural love and affection between parties standing in near
relation to each other. The burden is on the defendants to establish that
the transfer of the property was supported by natural love and affection
as consideration. (pp 178 b-h & 179 f) b
[5] The word ‘natural’ in the context of ‘natural love and affection’ means
inborn, spontaneous, happening in the usual course, related by actual
birth. The word ‘love’ is denoted by fondness, an affection of the mind
caused by that which delights, strong liking. The word ‘affection’, on
the other hand, denotes an act of influencing, emotion, disposition, love c
or attachment. (p 179 b)
[5a] None of the elements or ingredients of natural love and affection existed
as a matter of fact between the plaintiff and the defendants at any time
leading to the execution of the MOT. Indeed, the second and third d
defendants had no natural love and affection whatsoever from the plaintiff
and nor had they ever exuberated any natural love and affection for the
plaintiff. (p 179 c)
[6] The plaintiff cannot be said to have transferred the property as gifts to
the second and third defendants as the element of natural love and e
affection has never been established. As there was no emotional
attachment or feeling between the plaintiff and second and third
defendants, s. 26(a) of the Contracts Act 1950 did not apply to the facts
of this case nor to persons standing in the position of uncle and nephew.
It follows that the transfer was obtained through void or insufficient f
instrument as envisaged by s. 340(2)(b) of the Code. (p 181 g)
[Plaintiff’s claim allowed.]
Case(s) referred to:
Ang Hiok Seng v. Yim Yut Kiu [1997] 1 CLJ 497 FC (refd) g
Assets Company Ltd v. Mere Roihi [1905] 1 AC 176 (refd)
Datuk Jagindar Singh & Ors v. Tara Rajaratnam [1983] 2 MLJ 196 (refd)
Doshi v. Yeoh Tiong Lay [1975] 1 MLJ 85 (refd)
Foster v. Mackinnon [1869] LR 4 CP 704 (refd)
Goh Hooi Hyin v. Lim Teong Ghee & Ors [1990] 2 CLJ 203; [1990] 2 CLJ (Rep)
48 HC (dist) h
Goh Jong Cheng v. MB Melwani Pte Ltd [1991] 1 MLJ 482 (dist)
In Re Tan Soh Sim, Deceased; Chan Lam Keong & Ors v. Tan Saw Keow & Ors
[1951] 17 MLJ 21 (refd)
Jafar Ali v. Ahmed Ali [1868] 5 BHC (refd)
Kwan Teck Meng & Ors v. Liew Sam Lee [1963] MLJ 333 (refd)
i

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a Lo Hieng Chiong v. Kok Tek Shin [1983] 1 MLJ 31 (refd)

M Ratnavale v. S Lourdenadin; M Mahadevan v. S Lourdenanin [1988] 2 MLJ 371
(refd)
Nallammal & Anor v. Karuppanan & Anor [1993] 3 MLJ 476 (refd)
PJTV Denson (M) Sdn Bhd & Ors v. Roxy (Malaysia) Sdn Bhd [1980] 2 MLJ 136
(refd)
b Poonoo Bibee v. Fyez Buksh [1874] 15 BLR App 5 (refd)
Queck Poh Guan v. Quick Awang [1998] 6 MLJ 388 (refd)
Saminathan v. Pappa [1981] 1 MLJ 121 (refd)
Saunders v. Anglia Building Society [1971] AC 1004 (refd)
Tai Lee Finance Co Sdn Bhd v. Official Assignee & Ors [1983] 1 CLJ 183; [1983]
CLJ (Rep) 387 FC (refd)
c
The First National Bank Of Chicago v. How Lee Realty Pte Ltd & Ors [1981]
1 MLJ 183 (dist)
Throughgood’s Case [1584] Co Rep 9a 76 ER 408 (refd)
Venkatasamy v. Rangasamy [1903] 13 Mad LJ 428 (refd)
Waimiha Sawmilling Company v. Waione Timber Company Ltd [1926] AC 101 (refd)
d Legislation referred to:
Contracts Act 1950, s. 26(a)
Evidence Act 1950, s. 114(g)
National Land Code, s. 340(1), (2)(a), (b)
Real Property Gains Tax Act 1976, para 12, sch 2
e Contracts and Specific Relief Act [India], s. 25(1)
Other source(s) referred to:
Pollock & Mulla, Indian Contract And Specific Relief Act, 10th edn, p 300
For the plaintiff - SL Chow (LC Chua); M/s Chan Leong & Co
For the defendants - Kemkumar S Lopez; M/s Kamarudin & Partners
f
Reported by WA Sharif
JUDGMENT
Low Hop Bing J:
g Plaintiff’s Claim
Both the plaintiff and the 1st defendant are brothers, while the plaintiff is an
uncle of both the 2nd and the 3rd defendants who are the 1st defendant’s sons.
The plaintiff’s statement of claim avers, inter alia, as follows:
h 1. The plaintiff and the 1st defendant were originally co-owners of equal share
of two pieces of agricultural land held under EMR No. 3231 Lot No. 1236
(“Lot 1236”) and EMR 3233 Lot 1239 (“Lot 1239”), both in the Mukim
of Serendah, District of Ulu Selangor, State of Selangor (“the said
property”), which were given by both the plaintiff’s and the 1st defendant’s
i late father in 1967.

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2. On or about 26 June 1991, two memoranda of transfer (“the said MOT”) a

were signed, transferring Lot 1236 to the 3rd defendant and Lot 1239 to
the 2nd defendant.
3. The plaintiff particularised that the 1st, 2nd and/or the 3rd defendants have
fraudulently induced the plaintiff to transfer the plaintiff’s respective share
b
in the said property and that the 1st, 2nd and/or the 3rd defendants have
misrepresented to the plaintiff that the plaintiff was helping the plaintiff’s
brother, the 1st defendant, and signed as a witness.
4. Alternatively, the plaintiff avers that when he signed the said MOT, he
did not understand the nature or implication of the said MOT and he would c
not have signed them if he had so understood.
5. The plaintiff also avers that the transfers of the plaintiff’s respective share
in the said property are void for want of consideration as the uncle-nephew
relationship does not constitute a valid consideration on account of love
d
and affection. The plaintiff further avers that the registrations of the transfer
of plaintiff’s respective share in the said property were obtained by means
of insufficient and/or void instruments.
6. The plaintiff prays for the following relief:
e
(1) against the 1st, 2nd and 3rd defendants for damages, interest, costs and
such further or other relief as the court may grant.
(2) against the 2nd and 3rd defendants, for:
(a) an order directing the 2nd defendant to retransfer to the plaintiff
f
an undivided half share in Lot 1239, free from encumbrances and
at the 2nd defendant’s expense;
(b) an order directing the 3rd defendant to retransfer to the plaintiff
an undivided half share in Lot 1236, free from encumbrances and
at the 3rd defendant’s expense; g

(c) an injunction restraining the 2nd and/or 3rd defendants, their agents
or servants from disposing of or dealing in any way with the
plaintiff’s respective share in the said property; and
(d) such further or other relief. h

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a Defence
The defendants’ defence avers that:
1. The said property was transferred to the 2nd and 3rd defendants on account
of love and affection and that execution of the said MOT was effected in
the presence of and attested by an advocate and solicitor and so all
b
allegations of fraud and misrepresentation do not exist.
2. As the said advocate and solicitor is a Chinese, the defendants put the
plaintiff to strict proof of his allegation that he was not explained and did
not understand the nature or implication when signing the said MOT.
c
3. The said MOT is valid according to the provisions of the National Land
Code, and deny the plaintiff’s allegation of insufficient and/or void
instrument.
Finding Of Facts After Full Trial
d The plaintiff’s evidence revealed that his late father, Chock Mun Tin, had
transferred the said property to the 1st defendant and him in equal share in
1967 and that the said property is now registered in the names of Chock Kim
Yiew (Lot 1236) and Chock Kim Chang (Lot 1239) after the said MOT was
registered at the relevant land office.
e
On the execution of the said MOT, the plaintiff testified that his brother, 1st
defendant (DW4) had informed him that the 1st defendant wanted to transfer
his own shares in the said property to the 2nd defendant (DW2) and 3rd
defendant (DW3) and that the 1st defendant needed the plaintiff’s help to sign
a few documents as a witness.
f
The plaintiff had agreed to do so because DW4 is his only brother who is
still alive and whom he trusted. The plaintiff thought that he was going to
sign only as a witness to the documents for transferring DW4’s shares in the
said property to DW2 and DW3.
g The defendants appointed a firm of solicitors viz. M/s. T.C. Chong & Rakan-
rakan (“the legal firm”), for the preparation and finalisation of the transfer of
the said property. The defendants also arranged to fetch the plaintiff from his
shop to the legal firm using DW2’s car. That was the plaintiff’s first visit
ever to the legal firm. During that visit, the plaintiff, DW4, DW4’s wife, DW2
h and DW3 were attended to by an advocate and solicitor (DW1).
The plaintiff is illiterate in Bahasa Malaysia and English, but attended a Chinese
school for some three years. He claimed that he did not know what the
documents were nor understood the contents of documents given to him for
signing at the legal firm.
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When DW1 asked (in Cantonese) the plaintiff to sign the said MOT, the a
plaintiff claimed that the content thereof was not explained to the plaintiff and
the plaintiff had signed, assuming that he did so as a witness. The plaintiff
testified that he would not have signed the said MOT if he had known that it
was for transferring his half share in the said property to DW2 and DW3
respectively. b
The plaintiff did not give any instructions and paid no legal fees or
disbursements to anyone in the legal firm. The address stated in the said MOT
ie, No. 12, Jalan Mata Air 4, Taman Genting Setapak, 53200 Kuala Lumpur
was not his address then, which actually was at No. 5, Jalan Bunga Kantan,
Taman Forlong, Setapak. c

In May 1992, when the plaintiff’s son, Chock Kim Chong (PW2) knew of the
plaintiff’s visit to the legal firm, PW2 became suspicious. The plaintiff together
with PW2 then went to see DW4, requesting to look at the titles for the said
property. d
DW4 refused to show the titles but promised to retransfer plaintiff’s shares in
the said property in November or December 1992 when DW3 returned from
Penang.
Plaintiff and PW2 again saw DW4 in December 1992 to inform DW4 that e
the said property belonged to the plaintiff.
In December 1992, the plaintiff also requested his uncle, PW3, to ask DW4
to retransfer plaintiff’s respective share in the said property to the plaintiff,
but DW4 refused.
f
Subsequently, a search at the relevant land office in January 1993 confirmed
that the plaintiff’s respective share in the said property had been transferred
to DW2 and DW3 for consideration of love and affection. Thereupon, the
plaintiff entered caveats on the said property in January 1993 and lodged a
police report against DW4, DW2 and DW3. g
Under cross-examination, the plaintiff affirmed that DW1 only asked him to
sign the said MOT, without any explanation that the said MOT was actually
intended to transfer plaintiff’s respective share in the said property to DW2
and DW3 and that it was DW4 and not DW1 who told plaintiff that plaintiff
was signing the documents at the legal firm as a witness. h

Prior to 1991 although the plaintiff was close to DW4 and trusted him,
nevertheless, it was not the case with DW2 and DW3.

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a In re-examination, the plaintiff testified that DW2 and DW3 addressed him by
calling his name since they were young, and only visited him two to three times
a year, but not during Chinese New Year and/or other festivals. DW2 and DW3
seldom mixed with plaintiff’s children.
PW2, plaintiff’s eldest son, is DW4’s nephew and a cousin of DW2 and DW3.
b
PW2 is working together with PW1 in a tyre shop known as Wing Chuan
Trading Sdn. Bhd. in Setapak. PW2 also has four siblings viz. Chock Kin
Chong (male), Chock Mei Ling (female), Chock Kin Fook (male) and Chock
Kim Peng (male).
c
Prior to 1991 both PW1’s family and DW4’s family only met once or twice
a year, but not after 1991, when PW1 realised the abovesaid transfer of the
plaintiff’s half share in the said property.
During the year of 1991, DW4, Chua Ah Moi (DW4’s wife) and DW2 had
d come to the tyre shop in Setapak to fetch PW1, but PW2 was not aware of
the place to which they brought PW1. In 1992, PW1 informed PW2 that the
defendants had brought him to a legal firm to sign some documents as a
witness. At that moment PW2 felt something had gone amiss and brought PW1
to see DW4 in Shah Alam, for the purpose of looking at both the land titles
e which were with DW4, but PW1 was unable to do so.
PW2 subsequently brought PW1 twice to see PW2’s grand uncle, Mr. Check
Mun Chong (PW3) who is PW1’s and DW4’s uncle, to seek PW3’s assistance
to persuade DW4 to retransfer PW1’s share in the said property to PW1, but
the defendants refused to do so.
f
PW3 testified that from 1991 to 1993, DW4 was residing next to his house
in Shah Alam and they maintained their contact. PW3 confirmed that both
PW1’s family and DW4’s family did contact each other previously, but not
after the transfer of the said property.
g DW1, the advocate and solicitor who attested the transfer of the said property,
was a legal assistant in M/s TC Chong & Rakan-rakan, in charge of
conveyancing and banking documentations. DW1 could speak the Hokkien,
Cantonese and Hakka dialects. DW1 explained in English and Cantonese to
all those in a group who were present in the legal firm about the nature of
h the transfer and PW1 was agreeing in silence.
DW1 is an independent witness having no interest in this dispute. DW1 met
PW1, DW2, DW3, DW4 and DW4’s wife at the legal firm. DW1 was acting
on behalf of the transferees (DW2 and DW3) in this transaction.
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In her evidence given during the cross-examination as to whether DW1 a

explained the nature of the transfer to them one by one, DW1 gave evidence
that she explained to them in a group.
DW1 was unable to recall whether PW1 understood the nature of the transfer
although DW1 thought that the whole group understood the nature of the
b
transaction.
DW1 admitted that she did not expressly ask whether plaintiff understood the
nature of the transaction.
It is my specific finding that the evidence of DW1 is independent and credible
c
and I accept her evidence as adumbrated above, in particular the content of
the MOT was explained to the entire group including the transferor i.e. the
plaintiff and the nature and implication of the transaction contained therein.
DW2 testified that PW1’s and DW4’s families had once stayed together since
he was born until 1982, but DW2 visited his grandmother in the old house d
until his grandmother’s death in 1985.
DW2 claimed that the relationship between DW4’s and PW1’s families was
very cordial after the transfer of the said property, but no longer so when DW4
was arrested by the police, charged in court and acquitted.
e
DW2 drove his mother, his father (DW4), PW1 and DW3 to the legal firm.
DW3 confirmed this. DW2 said that in the legal firm, DW1 explained to them
the transfer was for transferring DW4’s and PW1’s shares to the sons or
nephews respectively, and no money was paid for the transfer. DW2 added
that DW1 spoke to them in Cantonese only. DW1 obtained their identity cards f
and passed them to the clerk for typing and thereafter to bring the said MOT
to DW1. Titles to the said property were given by DW4 to DW1 through DW2.
PW1 agreed to sign. They did not persuade PW1 to sign. DW3 confirmed this
evidence substantially. DW2 said the reason for the transfer was because the
said property belong to his family and DW4 paid the legal fees and g
disbursements to the legal firm.
DW2 could not recall how often he kept in touch with PW1 before 1991, but
only fetched his parents to visit PW1 during Chinese New Year and not when
someone else could replace him in fetching his parents. DW2 had never given
PW1 any pocket money nor taken PW1 out for a meal or sightseeing or visited h
him when he fell ill. DW2 confirmed that his love for DW4, his father, is
different from that for PW1 his uncle.

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a DW3 testified that the relationship between the two families was good since
he was small but it turned bad after DW4 was arrested by the police. He added
that at the time the MOT was signed, the relationship between the two families
was “baik dan mesra” (good and cordial). DW3 claimed to have a good and
cordial relationship with the plaintiff.
b
DW4 denied asking PW1 to sign as a witness for transfer of the said property.
He also denied having cheated, lied or misrepresented to PW1 in order to induce
him to transfer the plaintiff’s respective share to DW2 and DW3, but that the
plaintiff did it willingly.

c He said that the reasons for the transfer was that between 1982 and 1983,
DW4’s mother talked to him that four pieces of land were to be transferred to
him with four sons and three other pieces of land to PW1 with three sons but
this remained unsupported and unconfirmed. DW4 added that the arrangement
to go to the legal firm was made by DW2 and that he paid the legal fees and
d gave the title deeds to DW1.
Submission For Plaintiff
Cik SL Chow, assisted by Encik LC Chua, learned counsel for the plaintiff,
submitted that the 1st, 2nd and 3rd defendants have fraudulently induced and/
or misrepresented to the plaintiff into transferring the plaintiff’s respective share
e in the said property to the 2nd and 3rd defendants, as they contended that when
the plaintiff signed the said MOT, he did not understand the nature or
implication of the said MOT which the plaintiff would not have done had the
plaintiff so understood, relying on the doctrine of non est factum.

f
It was argued that there was no valid consideration on account of love and
affection as between the plaintiff and the 2nd and 3rd defendants who stand
in the relationship of uncle and nephews to each other.
The plaintiff then contended that the said transfer was obtained by means of
insufficient and/or void consideration.
g
Defendants’ Case
The defendants’ case is that the transfer of the said property took place for
the consideration stated in the MOT prepared by solicitors on the instructions
of the plaintiff and the defendant and explained to them by DW1 who attested
their signatures.
h
Encik K Lopez, learned counsel for the defendants, submitted that the burden
of proof is on the plaintiff to establish fraud beyond reasonable doubt, and
that there is no provision in the National Land Code (“the Code”) to defeat

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the indefeasibility provisions of s. 340(1) of the National Land Code by vitiating a

contractual circumstances, non est factum or absence of consideration on
account of love and affection.
He added that the plaintiff has failed to establish fraud and that the allegation
of fraud or misrepresentation is a fabricated afterthought. The plaintiff in his
b
view is merely relying on the absence of consideration based on love and
affection.
It was argued for the defendants that there was a gap in the evidence of PW1
and PW2 with regards to the visit in May 1992 and so the evidence was
inconsistent, unreliable and untruthful. He said that DW4’s evidence is the c
logical and credible account of the actual events.
The defendants contended that the plaintiff has failed to produce the police
report which he had lodged and so the provisions of s. 114(g) of the Evidence
Act 1950 should be invoked against the plaintiff. As DW4 was acquitted by
d
the magistrate in Kuala Lumpur without defence being called, it was further
submitted that this is the plaintiff’s second bite at the cherry, as there was no
fraud established against the defendants.
On the issue of misrepresentation, it was contended for the defendants that the
plaintiff has the burden of proving fraudulent misrepresentation as a species e
of fraud which therefore must be proved beyond reasonable doubt, but which
the plaintiff has failed to do so.
The defendants also contended that the plaintiff has failed to prove non est
factum, as it was argued that the plaintiff should have known that he was not
required to be a witness. f

On the issue of love and affection, it was canvassed for the defendants that
the plaintiff has to prove that love and affection between uncle and nephews
is not a valid consideration in law, and the plaintiff has failed to do so. It
was also stated for the defendants that s. 26(a) of the Contracts Act 1950 g
permits the relationship of uncle and nephews to constitute natural love and
affection.
Finally, it was the defendants’ case that the transfer was effected as a result
of valid or sufficient consideration.
h
Decision Of The Court
Fraud Or Misrepresentation
Section 340(1) of the Code provides, in effect, for the general doctrine of
indefeasibility ie, the title or interest of any person or body for the time being
registered as proprietor of any land shall be indefeasible. i

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a Section 340(2), ibid, contains exceptions to the above general doctrine. Relevant
to the issue of fraud or misrepresentation is s. 340(2)(a) which expressly
provides that the title or interest of any such person or body shall not be
indefeasible in any case of fraud or misrepresentation to which the person or
body, or any agent thereof, was a party or privy.
b
Under s. 340(2)(a), “fraud” means actual fraud, dishonesty of some sort, not
constructive or equitable fraud: per Lord Lindley in Assets Company Ltd v.
Mere Roihi [1905] 1 AC 176 PC; Tai Lee Finance Co Sdn Bhd v. Official
Assignee & Ors [1983] 1 CLJ 183; [1983] CLJ (Rep) 387 FC; Doshi v. Yeoh
Tiong Lay [1975] 1 MLJ 85 FC; PJTV Denson (M) Sdn Bhd & Ors v. Roxy
c (Malaysia) Sdn Bhd [1980] 2 MLJ 136 FC.
“If the designed object of a transfer be to cheat a man of a known existing
right, that is fraudulent” per Lord Buckmaster in Waimiha Sawmilling Company
v. Waione Timber Company Ltd [1926] AC 101 PC. In Goh Hooi Hyin v.
d Lim Teong Ghee & Ors [1990] 2 CLJ 203; [1990] 2 CLJ (Rep) 48, Edgar
Joseph Jr, J (later FCJ) went a step further and said:
It is not enough to show that the transfer had the effect of depriving the
plaintiff of a known existing right. It must be demonstrated that the transfer
was executed with the intention of cheating the plaintiff of such right.
e
As the plaintiff is alleging fraud, the burden is on the plaintiff to prove beyond
reasonable doubt that the registration of the transfer was obtained through fraud
or fraudulent means: Saminathan v. Pappa [1981] 1 MLJ 121 PC.
The fraud or misrepresentation may arise at the point of the execution of the
f agreement or at the point of registration of the interest: M Ratnavale v. S
Lourdenadin; M Mahadevan v. S Lourdenanin [1988] 2 MLJ 371 FC.
Whether fraud exists is a question of fact, to be decided upon the circumstances
of each particular case; Tai Lee Finance, supra, PJTV Denson, supra.
g By way of illustration, in Datuk Jagindar Singh & Ors v. Tara Rajaratnam
[1983] 2 MLJ 196, the respondent, Tara, was the registered proprietor of a
five-acre piece of land with a house erected thereon (“the proprietor”), and she
lived there with her late husband (Devan) and their five daughters. One Dr
Das was Devan’s brother. The three appellants were advocates and solicitors.
h Dr Das was in financial difficulty and with Jagindar as guarantor managed to
obtain short-term overdraft facilities. Dr Das consulted Devan when Devan was
alive and Devan persuaded Tara to put up the property as security. On 30
March 1974, the three appellants came to Tara’s house and asked Tara to sign
various documents. Tara questioned Suppiah, one of the appellants, about the
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use of the word “transfer” when the transaction was going to be a security, to a
which Suppiah answered that the security was by way of transfer. Jagindar
attested and dated the transfer form as 5 July 1975 which Tara signed earlier
to transfer the property to Suppiah. The transfer was registered on 22 July
1975. Some 18 days later Suppiah transferred the property to one Arul on 9
August 1975. Later on Jagindar instructed that the property be transferred to b
Jet Age Construction Company which was wholly owned by Jagindar. The
property was eventually subdivided into 70 lots and sold to the public. So Tara
was unable to get the property back. On the evidence, the learned judge of
the High Court held that the three appellants were not honest in that, inter
alia, all they wanted was mainly to get the respondent to sign the transfer form c
so that they could lay their hands on the property at the time of their choosing.
This was upheld by the Federal Court through the judgment of Lee Hun Hoe
CJ (Borneo) (as he then was) who described the transaction as a defrauder’s
act or conduct that the court is concerned with. The Federal Court’s judgment
was also upheld by the Privy Council.
d
In Lo Hieng Chiong v. Kok Tek Shin [1983] 1 MLJ 31, the learned trial judge
found that there was a conspiracy between the appellant and one Bong to cheat
the respondent; prior to this, Bong had approached one Thian to join the scheme
but Thian had refused and then warned the respondent who was a farmer. The
conspiracy to cheat was held to constitute fraud and the purported exchange e
of lands on 7 February 1977 between the appellant and the respondent was
declared void. This first instance decision was upheld by the Federal Court
where the judgment which was delivered by Syed Othman, FJ (as he then was)
contains the following passage:
As regards the law, it has been said that the courts have so far not ventured f
to lay down as a general proposition what amounts to fraud. It can only be
determined from acts and circumstances of a particular case. It usually takes
the form of a statement of what is false or a suppression of what is true.
Where the relative position of the parties is such as raises the presumption
of an unconscientious use of power arising out of the circumstances and
g
conditions, the transaction cannot stand unless the person claiming benefit of
it is able to repel the presumption by contrary evidence proving to have been
in point of fact, fair, just and reasonable; per Lord Selborne LC in Earl of
Aylesford v. Morris [1873] 8 Ch App 484, 491. See also Fry v. Lane 40 Ch
D 312.
h
In Derry v. Peek [1889] 14 App Cas 337, 374 it was held that to establish
fraud it is necessary to prove the absence of an honest belief in the truth of
that which has been stated; in the words of Lord Herschell “Fraud is proved
when it is shown that a false representation has been made (1) knowingly,
or (2) without belief in its truth; or (3) recklessly, careless whether it be true
or false”. i

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 174 Current Law Journal [2002] 8 CLJ

a On the other hand, Tai Lee Finance, supra, provides an example where fraud
was established in the High Court but set aside by the Federal Court. There
the first respondent Ngan Kim Yong (chargor) the registered proprietor of a
piece of land executed two separate charges over the said land in favour of
the appellant on 4 February 1970 and 10 March 1970 respectively to obtain
b two loans. Both charges were registered. As the chargor has defaulted in
payment, the chargee applied for an order for the sale of the said land and
obtained an order in default of appearance. The default order was set aside
by the second to seventh respondents (“the respondents”). The chargor was a
developer who had during the second half of 1996 entered with each of the
c respondents to build houses for them. When the respondents became aware of
the charge sometime in the month of August 1970, they lodged caveats. On
the above facts the learned judge of the High Court held that the appellant
had constructive notice of the respondents’ interest in the land, as at the time
the charge was executed, the chargor was bound by contract to sell the land
to the respondent, and that the appellant’s demand for the sale of the land in
d
the face of such notice is unconscionable and constituted a fraud on the
respondents, by virtue of s. 340(2)(a) of the Code. On appeal, the Federal Court
held that at the very most the appellant had constructive notice of the
respondents’ prior beneficial interests, but that there was no evidence of fraud
to which the appellant was a party. The Federal Court held that the respondents
e had not proved beyond any reasonable doubt that the appellant had acted
dishonestly, wilfully and consciously or violating the rights of the respondents
or in any way in collusion with the chargor. In the circumstances, the Federal
Court allowed the appeal and granted an order for sale.

f In M Ratnavale v. S Lourdenadin; M Mahadevan v. S Lourdenadin, supra,

the first appellant M Retnavale who was the registered proprietor of a piece
of land in Kuala Lumpur entered into an agreement for the sale and purchase
of the land for RM93,000. As there was a delay in the completion of the sale,
the first appellant terminated the said agreement and entered into another sale
and purchase with the second appellant, M Mahadevan who was one of the
g
executors of the estate of the first appellant’s deceased husband. The second
appellant became the new registered proprietor of the land. On these facts, the
Federal Court held that there was no evidence of conspiracy and fraud to
implicate the first appellant save for the evidence of family relationship with
the second appellant which was insufficient to infer conspiracy to defraud.
h
As alluded to above, the question of what constitutes fraud is wholly and
exclusively a question of fact which may only be established by reference to
the evidence adduced in each particular case. There can be no rigid formula
of what constitutes fraud. The aforesaid cases merely provide illustrations of
i judicial determination of what could amount to fraud.

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 Chock Yook Kwai v.
[2002] 8 CLJ Chock Yook Choong & Ors 175

On the finding of facts as noted above, I am of the view that the plaintiff has a
not established fraud beyond reasonable doubt to which the defendants are
parties or privies, under s. 340(2)(a) of the Code. I would further add that the
plaintiff has also not established fraud even on the lower standard of proof ie,
on a balance of probabilities applicable in civil cases generally, as was held
by the Federal Court in Ang Hiok Seng v. Yim Yut Kiu [1997] 1 CLJ 497 b
per Chong Siew Fai CJ (Sabah and Sarawak) (as he then was).
I shall now consider the issue of misrepresentation for the purposes of
s. 340(2)(a) of the Code. The word “misrepresentation” means fraudulent
misrepresentation, actual fraud or some sort of dishonest intention or even both,
as has been demonstrated by the Federal Court through the judgment of Lee c
Hun Hoe CJ (Borneo) in Datuk Jagindar Singh & Ors, supra.
Reverting to the finding of facts in the instant case, I hold that the plaintiff
has also not established the fact of misrepresentation ie, fraudulent
misrepresentation, actual fraud or dishonest intention on the part of the d
defendants beyond reasonable doubt as envisaged in s. 340(2)(a) of the Code,
and not even on a balance of probabilities in civil cases generally: Ang Hiok
Seng & Ang Yeok Seng, supra FC.
Execution Of The Said MOT
Since the plaintiff alleges that he had signed the said MOT without e
understanding the nature or implication of the MOT, thereby relying on the
doctrine of non est factum (it is not my deed), to say that the said MOT is
void, as a result of which the defendants have no right in law to make use of
the said MOT. This burden is the burden applicable to civil cases generally
and may be discharged by adducing evidence on a balance of probabilities and f
not the higher burden based on a standard beyond reasonable doubt.
In Nallammal & Anor v. Karuppanan & Anor [1993] 3 MLJ 476, 485, Lim
Beng Choon, J (as he then was) traced the origin and development of the
doctrine of non est factum in English courts ie, “the plea of non est factum”
g
was formerly held by the English judges to be available only if the mistake
was as to the very nature of the transaction – if a party had been misled into
executing a deed or signing a document essentially different from that which
he intended to execute or sign, he could successfully plead non est factum in
an action against him – see Foster v. Mackinnon [1869] LR 4 CP 704 at
p. 711. The law on this subject was completely reviewed and restated by the h
House of Lords in Saunders v. Anglia Building Society [1971] AC 1004 where
it was held that in exceptional cases, the plea was available so long as the
person signing the document had made a fundamental mistake as to the
character or effect of the document. Their Lordships appear to have directed
i

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 176 Current Law Journal [2002] 8 CLJ

a their minds on the disparity between the effect of the document actually signed
and the document as it was believed to be. It was also held that the disparity
must be ‘radical’, ‘essential’, ‘fundamental’, or ‘very substantial’.
In Nallammal & Anor, supra, the facts revealed that the first plaintiff, the
registered proprietor of a piece of land, at the first defendant’s request, loaned
b
the title of the land to the first defendant believing that it was for some contract
works and on condition that the title be returned to her within a month or two.
The first defendant later brought a document for the first plaintiff to affix her
thumbprint on, as told by the first defendant who did not tell the first plaintiff
anything about the contents of the said document. The first defendant used the
c title as security for a loan obtained from the second defendant. Lim Beng
Choon, J had no doubt that the first defendant did defraud the plaintiff by way
of misleading the plaintiff in order to get possession of the title to the land.
The learned judge also invoked the doctrine of non est factum and therefore
allowed the plaintiffs’ claim for, inter alia, a declaration that the documents
d purported to be signed by the first plaintiff were null and void.
In Goh Jong Cheng v. MB Melwani Pte Ltd [1991] 1 MLJ 482, the facts in
the headnote are as follows:
The plaintiff was the registered proprietor of a piece of property (the
e ‘property’). The defendant had extended credit facilities to a company (the
‘company’) of which the plaintiff’s son was a director. The plaintiff had
handed the title deeds of the property to her son and had later been
accompanied by her son to the solicitor’s office whereby she signed two sets
of a mortgage deed mortgaging the property to the defendant. The same
solicitor acted for the plaintiff and the defendant in the transaction, and the
f plaintiff’s son acted as an interpreter between the solicitor and the plaintiff.
The plaintiff’s son subsequently requested a return of the mortgage deed from
the solicitor, and the deeds were returned to the plaintiff. The solicitor later
lodged a caveat in the registry against the property in respect of the
defendant’s interests.
g The plaintiff sought a declaration that no equitable mortgage had been created
by the deposit of the title deeds and that the caveat lodged by the defendant
against the property be cancelled. The issue before the court was whether the
plaintiff did knowingly hand the title deeds of the property to her son and
whether the doctrine of ‘non est factum’ applied.
h Chao Hick Tin, JC of the Singapore High Court after referring to the origin
of this doctrine in Throughgood’s Case [1584] Co Rep 9a 76 ER 408 and
the House of Lords’ decision in Saunders, supra, held that the plaintiff has
succeeded in pleading ‘not est factum’ as:

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 Chock Yook Kwai v.
[2002] 8 CLJ Chock Yook Choong & Ors 177

(i) The plaintiff did not know when she handed the title deeds to her son that a
they were to be used as security for credit facilities to be granted by the
defendant to the company.
(ii) Although the solicitor may have explained the general nature of the deed
to the plaintiff, the solicitor did not explain the mortgage deed sentence
b
by sentence to the plaintiff in Hokkien.
In The First National Bank Of Chicago v. How Lee Realty Pte Ltd & Ors
[1981] 1 MLJ 183, the 4th defendant who was illiterate signed a deed of
guarantee but did not know that it was for an unlimited amount. The contents
were never explained to her by either the attesting lawyer or the bank. D’Cotta, c
J of the Singapore High Court held that the 4th defendant has succeeded in
establishing ‘non est factum’ and the plaintiff’s claim against the 4th defendant
was dismissed. The learned judge said that the burden of establishing ‘non est
factum’ is a heavy burden which lies on the person seeking to avail himself
of it. The plea is established if it is shown that: d
1. The document is signed was fundamentally or essentially different in
substance or in kind from what the signer believed it to be (a mistake about
the amount of the liability involved may make such a difference); and
2. The signer signed it with the care to be expected of a normal person of e
prudence.
The facts in the aforesaid cases (in which the plea of non est factum was
upheld) are substantially different from the facts of the case before me in that
the said MOT has been explained by the attesting advocate and solicitor (DW1)
to the plaintiff in particular and to the whole group in general and the plaintiff f
has signed the said MOT not as a witness but as a transferor. The fact that
he has pleaded that he has effected the transfer allegedly on account of love
and affection shows that it was a transfer which he has understood and which
would thereby remove any plea of non est factum, or for that matter fraud or
misrepresentation as alluded to above. g

Had he signed as a witness, he would not have been able to raise the
consideration of the transfer on account of natural love and affection. I therefore
hold that on the facts of the instant case, the plaintiff has not succeeded in
discharging the burden of establishing ‘non est factum’.
h
The aforesaid finding leads me to the consideration of the issue as to whether
a transfer based on love and affection in the instant case is sufficient
consideration in law.

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 178 Current Law Journal [2002] 8 CLJ

a Natural Love & Affection

Paragraph 11 of the plaintiff’s statement of claim avers that the transfer of
the said property is void for want of consideration as the consideration of love
and affection cannot exist either in fact or in law between uncle and nephews.
The determination of this question would call for a judicial construction of the
b provisions of s. 26(a) of the Contracts Act 1950, the relevant portion of which
reads as follows:
26. Agreement without consideration, void, unless:

An agreement made without consideration is void, unless:

c it is in writing and registered;

(a) it is expressed in writing and registered under the law (if any) for the
time being in force for the registration of such documents, and is made
on account of natural love and affection between parties standing in a
near relation to each other;
d
Whether there is in fact any natural love and affection may be determined by
reference to the evidence adduced and the surrounding circumstances: Kwan
Teck Meng & Ors v. Liew Sam Lee [1963] MLJ 333; Queck Poh Guan (As
Administrator Of The Estate Of Sit Kim Boo, Deceased) v. Quick Awang
e [1998] 6 MLJ 388.
Since the defendants are insisting that the transfers of the said property by the
plaintiff to the 2nd and 3rd defendants are supported by natural love and
affection as consideration, the burden of proof is on the defendants to establish
this fact. It is necessary for me to evaluate the evidence adduced herein in
f order to determine whether natural love and affection ever existed at any time
leading to the said transfer. The plaintiff was never close to the 2nd and 3rd
defendants nor trusted them. The 2nd and 3rd defendants addressed the plaintiff
who is their uncle by calling his name, and visited him two or three times a
year but not during Chinese New Year or other festivals. They never mixed
g with the plaintiff’s children. The 2nd defendant could not recall how often he
kept in touch with PW1 before the said transfer, and had never taken the
plaintiff out for a meal, sightseeing nor visited the plaintiff when plaintiff fell
ill. The 2nd defendant confirmed that his love for the plaintiff was different
from his love for his own father DW4. The furthest that the evidence of the
h 3rd defendant could prove was that at the time the said MOT was signed, the
relationship between the plaintiff’s family and the defendants’ family was good
and cordial. On the basis of the plaintiff’s evidence and the defendants’
evidence, I am unable to conclude that there was any natural love and affection
existing between the plaintiff and the 2nd and 3rd defendants who stand in the
i position of uncle and nephews respectively.

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 Chock Yook Kwai v.
[2002] 8 CLJ Chock Yook Choong & Ors 179

The expression “natural love and affection” has not been defined in s. 26(a), a
supra, and so the ordinary popular dictionary meaning applies.
In ordinary parlance, “natural” in the context of “natural love and affection”
in my view means inborn; spontaneous; happening in the usual course; related
by actual birth (not adoption).
b
The word “love” is denoted by fondness; an affection of the mind caused by
that which delights; strong liking.
The word “affection”, denotes an act of influencing; emotion; disposition; love
or attachment: (See Chambers Twentieth Century Dictionary).
c
It seems clear to me that none of the aforesaid elements or ingredients of natural
love and affection existed as a matter of fact between the plaintiff and the
defendants, at any time leading to the execution of the said MOT. Least of
all, it is my specific finding that the 2nd and 3rd defendants who are the
transferees have no natural love and affection whatsoever from the plaintiff nor d
had these two defendants ever exuberated any natural love and affection for
the plaintiff.
There is in my view a special position, meaning and dimension attributed to
the expression “natural love and affection”, both in fact and in law.
e
In my considered opinion, in the case of the natural parents and their children,
a presumption of natural love and affection arises so that a valid consideration
is constituted in law for the purposes of s. 26(a), supra.
For s. 26(a) to apply, two requirements must be fulfilled, viz. the agreement
f
is in writing and registered; and there must be natural love and affection
between parties standing in near relation to each other.
In India, from which we derived our inspiration to legislate our Contracts Act
1950, the expression “near relation” in s. 25(1) of the Indian Contracts and
Specific Relief Acts have not been judicially construed, but it has been held, g
before Indian Contracts and Specific Relief Acts, that the relation of cousins
would not support a voluntary agreement though registered: Jafar Ali v. Ahmed
Ali [1868] 5 BHC, ACJ 37. Under the said Acts, Indian courts have, by way
of illustration, held the following parties to be standing in a near relation to
each other: h
(1) A registered agreement between husband and wife to pay his earnings to
her: Poonoo Bibee v. Fyez Buksh [1874] 15 BLR App 5.

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 180 Current Law Journal [2002] 8 CLJ

a (2) A registered agreement whereby A on account of natural love and affection

for his brother B, undertakes to discharge a debt due by B to C. In such
a case, if A does not discharge the debt, B may do so and sue A to recover
the amount: Venkatasamy v. Rangasamy [1903] 13 Mad LJ 428; (See p.
300, Pollock & Mulla, Indian Contract And Specific Relief Act, 10th edn).
b
In our country, the provisions of s. 26(a), supra, in particular the words “near
relation” were called into question in In Re Tan Soh Sim, Deceased; Chan
Lam Keong & Ors v. Tan Saw Keow & Ors [1951] 17 MLJ 21. Taylor, J
delivered the leading judgment and said:

c The words “relationship” and “near” must be applied and interpreted in each
case according to the mores of the group to which the parties belong and
with regard to the circumstances of the family concerned.

The judgment of Briggs, J in the same case illuminated as follows:

d The other requirement of section 26 is that the agreement should have been
made “on account of natural love and affection between parties standing in a
near relation to each other.” In the phrase “natural love and affection” I think
full effect must be given to the word “natural”, and that it means not only
“reasonably to be expected”, but “reasonably to be expected, having regard to
the normal emotional feelings of human beings.” This immediately establishes
e the connection of these words with the later phrase “standing in a near
relation.” That phrase indicates in my opinion, that the “emotional feelings”
required are of a special type, that is to say, they are such feelings as may
ordinarily be expected to spring from the fact of the “near relation.” If either
the feelings or the relation are lacking, the section does not apply.

f Illustration (b) of s. 26(a) provides for the relationship of father and son, in
the following words:
(b) A, for natural love and affection, promises to give his son, B $1,000.
A puts his promise to B into writing and registers it under a law for
the time being in force for the registration of such documents. This is
g a contract.

Section 26(a) was again judicially considered in Quek Poh Guan (as
administrator of the estate of Sit Kim Boo, deceased) v. Quick Awang, supra.
In that case, the plaintiff is the administrator of the estate of one Sit Kit Boo
(the deceased) while the defendant was the son of the deceased and one of the
h
beneficiaries of the estate. The deceased was the owner of 1/3 portion of a
piece of land. A few days before the deceased’s death, the latter had executed
a transfer of the land to the defendant who had assumed greater responsibility
towards the care and well being of his deceased mother as compared to the
plaintiff and the other children. Idris, J (as he then was) dismissed the plaintiff’s
i

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 Chock Yook Kwai v.
[2002] 8 CLJ Chock Yook Choong & Ors 181

application for declaration that the instrument of transfer was void for non a
compliance with s. 26(a) and held that the transfer of the land was a gift from
the deceased mother to the defendant on account of natural love and affection
based on the relationship of money and son and is thus valid.
Paragraph 12 in sch. 2 to the Real Property Gains Tax Act 1976 does provide
b
some guidelines pertaining to the extent of disposal of real properties by way
of love and affection ie, in the form of gifts, in the following words:
12. Where an asset is disposed of by way of a gift, the disposal shall be
deemed to be a disposal at the market value of the asset:

Provided that, where the donor and recipient are husband and wife, c
parent and child or grandparent and grandchild, and the gift is
made within five years after the date of acquisition of the asset by
the donor, the donor shall be deemed to have received no gain and
suffered no loss on the disposal and the recipient shall be deemed
to have acquired the assets at an acquisition price equal to the d
acquisition price paid by the donor plus the permitted expenses
incurred by the donor. (emphasis added)

Paragraph 12, sch. 2 to the Real Property Gains Tax Act 1976 lists down
only three categories of people recognised by the Act for the purposes of a
disposal of asset by way of a gift. They are husband and wife, parent and e
child and grandparents and grandchildren. Hence, the relationship of uncle and
nephew clearly does not fall within the recognised or permitted category under
the 1976 Act to claim that a particular transaction was a gift from the donor/
transferor to the donee/transferee.
On the facts before me and the law, I am unable to conclude that the plaintiff f
was transferring the said property as gifts to the 2nd and 3rd defendants as
the element of natural love and affection has never been established by the
defendants generally or the 2nd and 3rd defendants specifically. As adumbrated
above, the evidence shows otherwise, in that there is no emotional attachment
or feeling between the plaintiff and his nephews viz. the 2nd and 3rd defendants. g
I therefore hold that s. 26(a) of the Contracts Act 1950 does not apply to the
facts of this case nor to persons standing in the position of uncle and nephews.
This finding also covers the overlapping ground based on
s. 340(2)(b) of the Code that the transfer was obtained by means of a void
and/or insufficient instrument contained in Form 14A. h

On the aforesaid finding and reasons aforesaid, I allow the plaintiff’s claim
and give an order in terms of the plaintiff’s statement of claim as particularised
earlier in this judgment, viz. the relief as prayed in para. 6(1), 2(a), (b) and
(c). Costs to the plaintiff.
i

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