The focus of this case is on the extent of protection afforded to a subsequent purchaser or chargee under the Torrens system and the National Land Code. The dispute is on whether Malayan Banking Berhad, as a chargee who relied on the land register, acquired an indefeasible interest in land despite defects in the underlying transaction between the earlier parties. The courts were required to determine whether a bank has a legal duty to investigate prior sale transactions before accepting a charge, and what constitutes ‘good faith’ under s 340(3) of the NLC. The case reflects the tension between commercial certainty in land dealings and the protection of unregistered interests.
