Page 1

ICLR: Appeal Cases/1913/LOKE YEW DEFENDANT; AND PORT SWETTENHAM RUBBER COMPANY,
LIMITED PLAINTIFFS. ON APPEAL FROM THE COURT OF APPEAL OF SELANGOR (FEDERATED
MALAY STATES). - [1913] A.C. 491
[1913] A.C. 491
[PRIVY COUNCIL.]

LOKE YEW DEFENDANT; AND PORT SWETTENHAM RUBBER COMPANY, LIMITED

PLAINTIFFS. ON APPEAL FROM THE COURT OF APPEAL OF SELANGOR
(FEDERATED MALAY STATES).

1913 Jan. 30, 31; Feb. 25; March 19.

LORD ATKINSON, LORD SHAW OF DUNFERMLINE, and LORD MOULTON. LORD MACNAGHTEN*.
Registration of Titles Regulation, 1891 (Reg. IV. of 1891, State of Selangor), s. 7 - Fraud - Knowledge of
Unregistered Rights - Rectification - Trustee - Specific Relief Enactment, 1893 (Enact. IX. of 1903), s. 3,
Illustration (g).
The Registration of Titles Regulation, 1891, provides for the registration of all titles to land in the State of
Selangor, and by s. 7 provides that the title of the person named in the certificate of title issued thereunder
shall be indefeasible except on the ground of fraud or misrepresentation or of adverse possession for the
prescriptive period. In June, 1910, one Eusope was the registered owner of 322 acres of land in Selangor, as
to 58 acres of which the appellant was in possession under unregistered Malay documents constituting him
the owner subject to the payment of an annual rent to Eusope. The respondents, who had knowledge of the
appellant's interest, bought from Eusope the 322 acres excepting the said 58 acres. A transfer of the whole
322 acres was prepared, and in order to induce Eusope to sign it the respondents' agent told him that if he
did so the respondents would purchase the appellant's interest, and signed a document which stated "As
regards Loke Yew's interest I shall have to make my own arrangements." Eusope thereupon signed the
transfer. The respondents, having obtained thereunder registration of the entire 322 acres, called upon the
appellant to give up possession of the 58 acres, and upon his failing to do so commenced an action, claiming
possession thereof and damages. The appellant asked for rectification:Held, that the action should be dismissed and the respondents ordered to execute and register in the
appellant's name a grant of the 58 acres subject to the rent reserved, on the grounds -

(1.)

that, on the facts, the respondents obtained the transfer by fraud and misrepresentation.

(2.) That, apart from the exception in s. 7, as the rights of third parties did not intervene, the
respondents could not better their position

Page 2

LORD MACNAGHTEN, who was present on January 30 and 31, died on February 17.

[1913] A.C. 491 Page 492

by obtaining registration under circumstances which made it not honest to do so, and that it
was the duty of the Court to order rectification.
(3.) That under the Specific Relief Enactment, 1903, s. 3, the respondents having bought
with notice of the appellant's rights were trustees for him in respect thereof.

APPEAL from an order (July 24, 1911) of the Court of Appeal of the State of Selangor (Federated
Malay States) reversing an order (November 21, 1910) of the Court of the Judicial Commissioner at
Kuala Lumpur.
The action was for ejectment and to recover possession of certain land in Selangor. The land in
dispute consisted of about fifty-eight acres forming part of a block of 322 acres known as grant 675,
which was on January 4, 1894, granted under the Selangor Land Code, 1891, to Haji Mohamed
Eusope, "to hold for ever" subject to an annual rent of about 10 cents an acre to the Sultan of
Selangor, his heirs and successors. This grant was registered under the provisions of the
Registration of Titles Regulation, 1891 (Reg. IV. of 1891) (1), and Haji

(1)

The following are the more material portions of the Registration of Titles Regulation, 1891:-

Sect. 4: "After the coming into operation of this regulation, all land which is comprised in any grant, whether issued
prior or subsequent to the coming into operation of this regulation, shall be subject to this regulation, and shall not
be capable of being transferred, transmitted, mortgaged, charged, or otherwise dealt with except in accordance with
the provisions of this regulation, and every attempt to transfer, transmit, mortgage, charge, or otherwise deal with
the same, except as aforesaid, shall be null and void and of none effect."

Sect. 7: "The duplicate certificate of title issued by the registrar to any purchaser of land upon a genuine transfer or
transmission by the proprietor thereof shall be taken by all Courts as conclusive evidence that the person named
therein as proprietor of the land is the absolute and indefeasible owner thereof, subject to the conditions and
agreements expressed or implied in the original grant, and the title of such proprietor shall not be subject to
challenge, except on the ground of fraud or misrepresentation to which he is proved to be a party, or on the ground
of adverse possession in another for the prescriptive period."

Sect. 21: "Except as is hereinafter otherwise provided .... instruments registered in respect of or affecting the same
land shall notwithstanding any express implied or constructive notice be entitled to priority according to the date of
registration and not according to the date of each instrument itself. ..."

Sect. 68: "Any person claiming to be interested under any will, settlement, or trust deed, or any instrument of
transfer or transmission, or under any unregistered instrument, or otherwise howsoever in any land,

Page 3

[1913] A.C. 491 Page 493

Mohamed Eusope was the registered owner of the whole 322 acres under that regulation. During
1895 and 1896 Eusope subdivided the 322 acres into allotments of from one to four acres and
disposed of them to Malay cultivators at an increased annual rent. Each of these cultivators
received from Eusope a document in the Malay language. The documents were all in the same
form and gave to each cultivator an absolute right to enjoy the land for the period in the original
grant, that is, for ever, subject to the payment of a rent of $1.25 to the holder of the original grant.
Between 1899 and 1909 the appellant, a Chinese, with the assent of Eusope purchased from the
Malay cultivators fifteen of these allotments for a total sum of $7716. From each cultivator the
appellant received a document in the Malay language signed by the cultivator and by Eusope.
These documents were all in the same form and referred to the allotment as being sold by the
cultivator to the appellant and as forming part of the original grant. The appellant took possession of
these fifteen allotments, which together made about fifty-eight acres and were the subject-matter of
the litigation, and he duly paid the annual rents reserved to Eusope. No steps were taken to register
any of the Malay documents under s. 7 or to protect them by caveat under s. 68 of the Registration
of Titles Regulation, 1891.
In 1910 the respondents, who had knowledge of the transactions above referred to, opened
negotiations with Eusope for the purchase of the whole 322 acres comprised in the original grant,
and Eusope bought back from the Malay cultivators for about $115,000 all the allotments except
the fifteen held by the appellant and seven further acres which had been acquired by a Chinese
partnership called Sz Woh Kongsi.
____________

may lodge a caveat with the registrar to the effect that no disposition of such land be made either absolutely or in
such manner and to such extent only as in such caveat may be expressed, or until notice shall have been served on
the caveator or unless the instrument of disposition be expressed to be subject to the claim of the caveator as may
be required in such caveat, or to any conditions conformable to law expressed therein. ...."

Sect. 86: "Nothing contained in this regulation shall take away or affect the jurisdiction of the Court on the ground of
actual fraud."

[1913] A.C. 491 Page 494

Early in June, 1910, the respondents agreed to purchase from Eusope the whole of the 322 acres,
except the appellant's fifty-eight acres, for $350,000, and on June 4 the representatives of the
appellant and of the respondents met to complete the sale. It was agreed that out of the price
$14,000 should be retained, being an amount agreed to be accepted by the Chinese partnership in
respect of their seven acres, payment thereof being deferred till the conclusion of litigation between
the members of the partnership.
The respondents' local solicitors had prepared a transfer purporting to transfer the whole 322 acres
without exception to the respondents' trustees; this Eusope refused to sign unless he received an
agreement on the part of the respondents not to disturb the appellant in his possession. Mr. Glass,

Page 4

the respondents' agent, assured Eusope that he need not be afraid, as he would purchase the
appellant's interest. Eusope, however, pressed for something in writing, and Mr. Glass signed a
document to the effect that he had purchased the land comprised in grant 675, adding, "as regards
Loke Yew (the appellant) and Kongsi's land which is included in the said grant I shall have to make
my own arrangements." Their Lordships found that this was a statement of a present intention and
was false and fraudulently made for the purpose of inducing Eusope to execute a transfer of the
whole 322 acres comprised in the grant.
Upon receipt of this document Eusope signed a formal transfer in the statutory form required by the
Registration of Titles Regulation, 1891, for the whole 322 acres comprised in the grant. This
transfer was to Glass, and was shortly afterwards registered. Subsequently Glass transferred the
land to the respondents, who registered the transfer. No duplicate certificate under the Registration
of Titles Regulation, 1891, s. 7, was issued to the respondents, but a memorial under s. 28 was
indorsed upon the original grant to Eusope. On June 22, 1910, the respondents' solicitors wrote to
the appellant a letter in which, while not admitting that the appellant had any rights in the fifty-eight
acres, they offered him $20,000 for the surrender of any rights which he claimed. This offer was
declined. On August 18,1910, the respondents gave the appellant notice to quit the land, and on
[1913] A.C. 491 Page 495
August 29, 1910, the appellant commenced proceedings under s. 72 of the Registration of Titles
Regulation, 1891, for the purpose of having the respondents' documents of title to the 322 acres
rectified by excluding therefrom the fifty-eight acres now in dispute. The progress of this suit was
stayed pending the decision of the present appeal.
On August 24, 1910, the respondents commenced the present suit, alleging that they were
registered owners of the whole 322 acres and claiming possession and damages. The appellant by
his defence claimed title to occupy the land in dispute by virtue of the Malay documents and
pleaded that the respondents had taken their transfer with full knowledge of the appellant's title and
rights and that their conduct amounted to fraud within the Registration of Titles Regulation, 1891, s.
7. He also claimed that the respondents' registered title should be rectified and that the land in
dispute should be assured to him by a proper registered transfer. The appellant also pleaded that
the suit was barred by the Limitation Enactment, 1896, but the decision of this point became
unnecessary and the arguments thereon are omitted from this report.
The action was heard by the Judicial Commissioner on September 21, 22, and 23, 1910, and on
November 21, 1910, he gave judgment dismissing the respondents' suit and ordering that they, on
the footing of being trustees for the appellant, should execute and register in his favour a grant of
the fifty-eight acres in dispute subject to the annual rent reserved. The Judicial Commissioner found
(and it was admitted) that the respondents took their transfers with actual notice of the appellant's
rights; he also found that they paid nothing in respect of the fifty-eight acres in dispute. He was of
opinion that the respondents did not gain an indefeasible title under the Registration of Titles
Regulation, 1891, s. 7, as the probative force of a memorial of transfer entered upon the registered
grant under s. 28 was not the same as an actual certificate of title under s. 7, and that accordingly it
was not necessary to find fraud within the latter section in order to avoid the respondents' title. He
further held that s. 4 did not render the Malay documents nullities, but only prevented their
operation as legal transfers, and that they
[1913] A.C. 491 Page 496
were contracts which could be enforced against the respondents, who had purchased with notice.
Notices of appeal and of cross-appeal were given. The appeal and cross-appeal were heard by the
Court of Appeal of Selangor, and on July 24, 1911, judgment was given allowing the respondents'
appeal, and an order was made for possession of the land in dispute and for an inquiry as to

Page 5

damages. The learned judges of that Court adopted the findings of fact of the Judicial
Commissioner, but differed from him as to the effect of the indorsement of a memorial under s. 28,
which they held was as effectual to give an indefeasible title as a certificate under s. 7, and they
further held that the Malay documents were absolute nullities and conferred no right or interest
upon the appellant of which he could be deprived by fraud or otherwise.
Buckmaster, K.C., and Alfred Adams, for the appellant. It is only a certificate of title which, under the
Registration of Titles Regulation, s. 7, carries a title indefeasible except in the case of fraud or adverse
possession for the prescriptive period. There is no provision that a memorial under s. 28 has the same effect,
and it was not necessary for the appellant to prove fraud. If, however, s. 7 is to be taken as applying to a
memorial as well as to a certificate, the evidence shews that there was fraud within the meaning of that
section, as well as "actual fraud" within s. 86. The respondents' agent obtained the transfer of the entire 322
acres by a representation, both verbal and in writing, the effect of which was that there was an intention to
settle with the appellant in respect of his interest. The inference to be drawn from the evidence is that there
was not any such intention and that the statement was fraudulently made for the purpose of obtaining a
transfer of the whole 322 acres. But apart from this the conduct of the respondents in registering the transfer
with knowledge of the appellant's rights was fraud within s. 7 of the Regulation. Similar conduct is described
by Lord Hardwicke in Le Neve v. Le Neve (1) as "a species of fraud and dolus malus itself," and it was so
held with regard to the registration of a

(1)

(1747) Amb. 436 (a); 2 W. & T. L. C. (8th ed.) at p. 196.

[1913] A.C. 491 Page 497

deed in Natal in Crowly v. Bergtheil. (1) The decision in Assets Co. v. Mere Roihi (2) is not applicable, the
registration being obtained in that case bona fide, and no question arose as to registration with knowledge of
an outstanding title. In various colonies in which there are provisions for registration of title there has been a
conflict of judicial authority upon this point: see Hogg's Australian Torrens System, 1905, p. 836. The Malay
instruments cannot be treated as nullities. Though ineffectual as transfers for want of registration, the law will
give effect to them as contracts: Shep. Touch., c. 24, p. 514; Mouys v. Leake (3); Parker v. Taswell (4);
Tailby v. Official Receiver (5); as to the effect of part performance upon an unregistered transfer see White v.
Neaylon. (6) They are enforceable against the respondents, who purchased with knowledge and subject to
the appellant's rights thereunder. Under the Specific Relief Enactment, 1903, s. 3, Illustration (g), the
respondents, having notice, became trustees for the appellant, and they can be ordered to give effect to the
rights of their cestui que trust. The intention of the Malay grants can be carried out by registered instruments
in accordance with the Regulation. Sects. 7 and 25 shew that a transfer may be made subject to agreements
or conditions on the part of the transferee, and this includes an agreement to pay a rent-charge.
Upjohn, K.C., and Sargant, for the respondents. The effect of a memorial under s. 28 is the same as that of
a certificate under s. 7, and that section must be so read. It is at the option of the registrar whether he shall
issue a certificate or merely indorse a memorial, and it cannot be that the character of the title differs
according to which course he adopts. The respondents have therefore under s. 7 a title indefeasible except
on the ground of fraud or continued adverse possession. There was no fraud. The respondents purchased
subject to the appellant's rights so far only as they were enforceable rights. Fraud cannot be attributed to a
purchaser because he disregards a

Page 6

(1)

[1899] A. C. 374.

(2)

[1905] A. C. 177.

(3)

(1799) 8 T. R. 411, at p. 415.

(4)

(1858) 2 De G. & J. 559.

(5)

(1888) 13 App. Cas. 523, at p. 543.

(6)

(1886) 11 App. Cas. 171.

[1913] A.C. 491 Page 498

claim which is unenforceable and based on a nullity, as the appellant's claim was, having regard to ss. 7 and
25 of the Regulation. So far as the Malay instruments gave the appellant any rights in law it was in contract
against Eusope; his only possible right against the respondents is a right in equity. As appears, however,
from a review of the Registration of Titles Regulation, 1891, and especially from s. 68, under which a caveat
could have been entered, the intention of the Legislature was to exclude those equitable rights to which
effect would be given in English law as against a purchaser with notice: Assets Co. v. Mere Roihi. (1) Sect.
21 of the Regulation provides that priority between registered titles is to be according to the date of
registration notwithstanding any notice, and it is a fortiori as between a registered and an unregistered title.
Registration of title with actual notice does not necessarily involve fraud: Battison v. Hobson. (2) No relief can
be given in equity against a legal invalidity which is caused by direct and positive statutory enactment:
Edwards v. Edwards (3); London and South Western Ry. Co. v. Gomm. (4) The appellant is not entitled to
any relief against the respondents under the Specific Relief Enactment, 1903, because his interest being
unregistered is not enforceable. Where, as here, the alleged cestui que trust is a rival claimant who can
prove no trust apart from his own alleged ownership, to treat him as a cestui que trust would be to destroy all
benefit from registration: Assets Co. v. Mere Roihi. (5) Sect. 3, Illustration (g), of the Enactment is subject to
s. 4, which expressly preserves the application of the law as to registration of title.
Buckmaster, K.C., in reply.
The judgment of their Lordships was delivered by
LORD MOULTON . This is an action of ejectment brought by the Port Swettenham Rubber Company,
Limited, against Loke Yew to recover possession of a piece of land situated in the State of Selangor. The
statement of plaint alleges that the plaintiff company is the registered owner of the land, that there is no

Page 7

(1)

[1905] A. C. 177.

(2)

[1896] 2 Ch. 403.

(3)

(1876) 2 Ch. D. 291.

(4)

(1882) 20 Ch. D. 562.

(5)

[1905] A. C. at p. 204.

[1913] A.C. 491 Page 499

incumbrance upon it, and that the defendant has no title to occupy it. It admits that the defendant is in fact in
occupation, but alleges notice to quit and refusal by the defendant to go out. The statement of defence
alleges title in the defendant, and that the registered title of the plaintiffs was obtained by fraud, and also
pleads possession for twelve years before the commencement of the suit, so that the plaintiff's right of action
is barred by the Limitation Enactment V. of 1896. The meaning and significance of the allegations in the
defence can only be understood by a reference to the history of the land in question and the transactions
relating to it.
On January 4, 1894, the Resident of Selangor under and by virtue of the power conferred upon him by the
Selangor Land Code, 1891, in the name and on behalf of the Sultan of Selangor, made a grant of a piece of
land in Kland, containing about 323 acres, to Haji Mohamed Eusope. The consideration for the grant was the
sum of $323, and an annual rent. The terms of the grant were: "To hold for ever, subject to the payment to
his said Highness, his heirs and successors, therefor of the annual rent of thirty-two dollars and thirty cents,
and to the provisions and agreements contained in the said Code."
Haji Mohamed Eusope having obtained the grant proceeded to dispose of portions of the land comprised in it
to cultivators, who seem to have laboured the land and brought it under cultivation. The documents effecting
the transactions in each case are in the Malay language, and are all in the same form. Taking, for example,
the one exhibited in the action, namely, the transfer of about 4 acres to Yeop Sow San, the operative
words (as translated) are as follows: "Now I have truly given to Yeop Sow San the right to hold a portion of
the said land on the same conditions that I hold it from the Government of Selangor - Yeop Sow San obtains
from me the right to hold the land on the same condition, that is, he can sell it, he can mortgage it, and he
can bequeath it to his heirs for the period mentioned in the big grant, that is - years. But during the said
period, Yeop Sow San, or whoever, after him, having the right to hold the land by purchase or otherwise,
must pay rent to me or, after me, to whomsoever that obtains the
[1913] A.C. 491 Page 500
right to hold the big grant, that is, $1.25 for an acre every year."
Although this grant may not be in a form such as would be used by skilled conveyancers, its language is
clear, and their Lordships have no doubt as to its meaning or effect. It is perhaps best described as a
sub-infeudation. The owner of the head grant parts with the whole of his interest in the specified portion of
the land for a payment of money, and an annual rent or feu. There is no reversion, because the grant is for

Page 8

the same period as the head grant, i.e., is a grant in perpetuity. Had this instrument been registered, it would
thereupon have given to the grantee the whole of the interest in the specified land possessed by the holder
of the head grant, and thus would have effectively carved out of the land included in the original grant the
portion covered by the derivative grant. But owing to the provisions of Regulation 4 of 1891, which is entitled
"A Regulation to provide for the Transfer of Land by Registration of Title," no instrument is effective to convey
any estate in land unless it is registered, and therefore the effect of the instrument rested in contract until
registration.
At various dates in and between December, 1906, and January, 1909, the defendant Loke Yew purchased
fifteen of these sub-grants from their owners, and thus became possessed of an area of about fifty-eight
acres of land, comprised in the original grant. Certain other portions were acquired by a Chinese partnership
called Sz Woh Kongsi. Other sub-grants of portions of the land were also created by Haji Mohamed Eusope,
but as these were subsequently bought back by him for a sum of about $114,000, prior to the transaction
between him and the plaintiff company about to be referred to, there is no need to make any further
reference to them.
In the year 1910 the plaintiff company formed the project of acquiring the land included in the grant to Haji
Mohamed Eusope, and commenced negotiations with him for that purpose. They had full knowledge of all
the transactions above referred to. For the purpose of the sale he purchased back all his sub grants with the
exception of those in the hands of the defendant Loke Yew and the Sz Woh Kongsi. He sought to acquire in
the
[1913] A.C. 491 Page 501
same way those that were in the hands of the defendant, but the defendant refused to part with his grants.
The Sz Woh Kongsi, on the other hand, were willing to sell their grants for $14,000 - the only difficulty being
that, by reason of a lawsuit among the members of the partnership, it was uncertain in what proportions and
to what members of the partnership that $14,000 would eventually be distributed. The difficulty was met, as
will presently be seen, by an allowance of the $14,000 out of the price paid by the plaintiff company - they
holding the sum so retained by them for the purpose of distribution among the members of the Sz Woh
Kongsi so soon as the shares should have been ascertained in the litigation.
The negotiations between the plaintiff company and Haji Mohamed Eusope were carried on by a certain Mr.
Glass as agent on behalf of the company. The evidence shews that Haji Mohamed Eusope recognized
throughout that he had parted with his interest in the Loke Yew lands (excepting the right to receive the
annual payments or feus), and that it was arranged originally that the conveyance to the plaintiff company
should not include Loke Yew's land. The price excluding that land was fixed at $350,000. The deed of
conveyance, however, purported to convey the original grant in its entirety. Haji Mohamed Eusope, who
appears to have acted honestly throughout, refused to sign that conveyance without a document shewing
that he was not selling Loke Yew's land, and originally a lengthy document to that effect was drawn up for
him by a conveyancer, which he asked Mr. Glass to sign. This document, however, Mr. Glass refused to
sign, apparently because of objections taken to it by the representative of the bank who was in charge of the
money to be paid as the purchase price. But Haji Mohamed Eusope would not proceed without an assurance
that the lands of Loke Yew and Sz Woh Kongsi were not included in the sale. Mr. Glass then replied that he
need not be afraid, as he knew Loke Yew, and would purchase his interest.
Haji Mohamed Eusope required, however, something in writing, and accordingly the following document was
written out and signed by Mr. Glass:[1913] A.C. 491 Page 502
"To Haji Mohamed Eusop bin Abubakar.

Page 9

I have purchased the land comprised in Grant No. 675 of Mukin Klang in the District of Klang for the sum of
$336,000.
"As regards Loke Yew and See Oh Kongsee's land which is included in the said grant I shall have to make my own
arrangements.

Kuala Lumpur.
(Signed) Philip J. Glass.
4th June 1910.
Signed in the presence of
(Signed) G. H. Day.
Lease:
Nos. 1, 3, 4, 5, 6, 33,
36, 40, 42, 43, 50,
59, 82, 83, 84 & 2."
Their Lordships have no doubt that the true conclusion to be drawn from the evidence is that the above
statement of Mr. Glass to Haji Mohamed Eusope was intended to be and was a statement as to present
intention as well as an undertaking with regard to the future, and that that statement was false and
fraudulently made for the purpose of inducing Haji Mohamed Eusope to execute a conveyance which in form
comprised the whole of the original grant, and that but for such fraudulent statement that conveyance would
not have been executed. At that time it is evident that Mr. Glass intended to eject Loke Yew if he did not
accept whatever sum he chose to offer, and that therefore he did not intend to purchase Loke Yew's rights. It
is also clear that it was understood, and intended by Mr. Glass that it should be understood, that the
document above set out was written (to use the words of one of the witnesses) "for the security of the vendor
to shew that he was not selling Loke Yew's land," and their Lordships are of opinion that the document
carries out that intention. The purchase price there mentioned of $336,000 makes allowance for the $14,000
to be paid for the land of Sz Woh Kongsi which is the last of the parcels noted in the margin and called
therein "lease," the other fifteen being the numbers of the sub-grants held by Loke Yew. It is important in this
connection to note that the purchase price inserted in the conveyance is $417,000, shewing a difference of
[1913] A.C. 491 Page 503
$67,000 when compared with the sum actually paid after allowing for the $14,000 for the land of Sz Woh
Kongsi. This corresponds closely with the plaintiff company's own estimate of $70,000 as the value of Loke
Yew's land which appears elsewhere in the suit. It is clear, therefore, from the amount actually paid that Loke
Yew's lands were not included in the sale.
Having thus possessed himself of a formal transfer of the original grant to himself as trustee for the Port
Swettenham Rubber Company, Limited, Mr. Glass procured its registration, and thereupon the solicitors for

Page 10

the plaintiffs wrote to Loke Yew the following letter:Kuala Lumpur, Selangor,
Federated Malay States,
22nd June 1910.
Dear Sir,
On behalf of the Port Swettenham Rubber Company, Limited, we are instructed to inform you that our clients
have bought the land comprised in Grant 675, and we are further instructed to ask you to give directions to
your coolies to cease from entering on this land and tapping the trees thereon. We are informed that you
have an agreement of some nature with the former owner of this land, and that though our clients do not
admit, and in fact deny, that you have any right against any person whatsoever under this agreement, yet to
prevent any unpleasantness our clients are willing to pay you the sum of $20,000 if you will surrender to
them any rights you claim under the said agreement.
Yours faithfully,
Hewgill and Day.
Towkay Loke Yew."
and on the defendant's refusing to vacate the land the plaintiffs brought the present action for ejectment.
Their Lordships therefore find that the formal transfer of all the rights under the original grant was obtained
by the deliberate fraud of Mr. Glass. He was aware that he could not obtain the execution of a transfer in that
form otherwise than by fraudulently representing that there was no intention to use it
[1913] A.C. 491 Page 504
until the plaintiff company were able so to do honestly by having acquired Loke Yew's sub-grants by
purchase, and he therefore fraudulently made such representation, and thereby obtained the execution of
the transfer. It is an important fact to be borne in mind that although this fraud was clearly charged in the
defence, Mr. Glass was not called at the trial, nor was his absence accounted for. The inference to be drawn
from this is obvious and is entitled to great weight.
The case of the plaintiffs as argued before their Lordships rested mainly on the effect of registration. At the
date of the writ the transfer to the plaintiffs was registered while the sub-grants of Haji Mohamed Eusope
held by Loke Yew were not. Counsel for the plaintiffs therefore argued that under the provisions of the
Registration of Titles Regulation the plaintiffs possessed an indefeasible title to the land, and that under the
provisions of s. 4 all the sub-grants were "null and void and of none effect." A memorial of the transfer had
been made upon the duplicate grant under the provisions of s. 28, and they contended that that was
equivalent to a certificate of title under s. 6 and that by virtue of s. 7 this was "conclusive evidence that the
person named therein as proprietor of the land is the absolute and indefeasible owner thereof."

Page 11

The conclusion to which their Lordships have come as to the transfer having been obtained by fraud brings
the case within the exception of s. 7 and is therefore a sufficient answer to these arguments. But their
Lordships are of opinion that for other reasons they are irrelevant and beside the mark. They take no account
of the power and duty of a Court to direct rectification of the register. So long as the rights of third parties are
not implicated a wrong-doer cannot shelter himself under the registration as against the man who has
suffered the wrong. Indeed the duty of the Court to rectify the register in proper cases is all the more
imperative because of the absoluteness of the effect of the registration if the register be not rectified. Take
for example the simple case of an agent who has purchased land on behalf of his principal but has taken the
conveyance in his own name, and in virtue thereof claims to be the owner of the land whereas in truth he is a
bare trustee for his principal. The Court can order him
[1913] A.C. 491 Page 505
to do his duty just as much in a country where registration is compulsory as in any other country, and if that
duty includes fresh entries in the register or the correction of existing entries it can order the necessary acts
to be done accordingly. It may be laid down as a principle of general application that where the rights of third
parties do not intervene no person can better his position by doing that which it is not honest to do, and
inasmuch as the registration of this absolute transfer of the whole of the original grants was not an honest act
under the circumstances it cannot better the position of the plaintiffs as against the defendant and they
cannot rely on it as against him when seeking to enforce rights which formally belong to them only by reason
of their own fraud. It must be remembered that in the present case the defendant immediately on the bringing
of the action applied to rectify the register and that such rectification only awaits the event of this suit. His
right to it is set up in the defence, so that he has taken all the necessary steps to obtain the full relief to which
he is entitled.
There is, however, another ground upon which, in their Lordships' opinion, the defendant is entitled to
succeed in this case. It is admitted that the plaintiff company bought with full knowledge of the transactions
with regard to the land occupied by Loke Yew, so that they knew that Haji Mohamed Eusope had parted with
his rights in that land. Under the provisions of s. 3 of Enactment No. 9 of 1903, entitled "An Enactment to
define and amend the Law relating to certain kinds of Specific Relief," the plaintiff company became by the
transfer trustees for Loke Yew in respect of that land. This is clear from Illustration (g) to that section, which
reads as follows:"A. buys certain land with notice that B. has already contracted to buy it. A. is a trustee within the meaning of this
enactment for B. of the land so bought."

The present is an even stronger case, inasmuch as the plaintiff company through Glass, their trustee and
agent in the transaction, were aware that Haji Mohamed Eusope had actually granted away these lands and
been paid for them. The plaintiff company, therefore, are trustees for the defendant for all the rights of which
they thus had notice. These rights amounted to
[1913] A.C. 491 Page 506
the rights of a freeholder subject to an annual payment to the owner of the head grant. Now, it is clear that a
cestui que trust has the right to require a trustee who is a bare trustee for him of land to register that land in
his name, seeing that he is the sole beneficial owner and that the trustee has no interest therein. The present
action from this point of view is an action by a bare trustee of land to eject the beneficial owner who is and
has for years been in possession of the land and is cultivating it.
It is not necessary for their Lordships to decide whether the defence of the Statute of Limitations is well
founded or not, and therefore that question must be taken to be left open.
In the Court of the Judicial Commissioner at Kuala Lumpur, in which the action came on in the first instance,
Braddell J. found in favour of the defendant with costs. On appeal to the Court of Appeal this was set aside.

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In their Lordships' opinion the appeal ought to have been dismissed. Their Lordships will therefore humbly
advise His Majesty that the judgment of the Court of Appeal should be discharged with costs, and the
judgment of the Court of first instance restored. The respondents must pay the costs of this appeal.
Solicitors for appellant: Gush, Phillips, Walters & Williams.
Solicitors for respondents: Hallowes & Carter.