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  • i[2013] 1 CLJ Current Law Journal

    Caveats, Prohibitory Orders And Injunctions

    Under The National Land Code 1965*

    by

    Datuk Dr. Wong Kim Fatt**

    Introduction

    The Malaysian National Land Code 1965 (the NLC), modelled

    on the Australian Torrens System, came into force on 1 January

    1966 and applies to the eleven states of Peninsular Malaysia, the

    Federal Territory of Kuala Lumpur (with effect from 1 February

    1974 P.U. (A) 56 of 1974), and the Federal Territory of

    Putrajaya (with effect from 1 February 2001, see Federal Territory

    of Putrajaya (Modification of National Land Code) Order 2001).

    Before the NLC came into force in 1966, there were seven

    separate land laws in Peninsular Malaysia, ie, (a) the National

    Land Code (Penang and Malacca Titles) Act 1963 codifying the

    land laws of Penang and Malacca, (b) the Federated Malay States

    Land Code of 1926 (Cap 138) applicable to the four federated

    states of Negeri Sembilan, Pahang, Perak and Selangor, (c) the

    five land laws of each of the states of Johor, Kedah, Kelantan,

    Perlis and Terengganu. As for the State of Johor, its land laws

    were codified as the Land Enactment No. 1 (2 of 1910). It was

    in operation for over 50 years until it was replaced by the NLC

    in 1966. It is interesting to note that under s. 2 of the repealed

    Johore Land Enactment, the court means the Supreme Court of

    Johore, and only one form of caveat in Schedule L is provided

    under s. 55 of this Enactment, where the person whose title is

    bound by the caveat is called the caveatee, an expression not

    * This article is based on a talk given by the writer on Day 1 in a 3-day

    seminar on Land Development Issues held on 27 November 2012 in

    Mutiara Hotel, Johor Bahru, organised by Uni-Link Smart Venture Sdn

    Bhd. I wish to thank Mr. Wong Boon Lee, Mr. Wong Boon Chong and

    Miss Kelly Yeo Hui Yain for the valuable discussions I had with them on

    the relevant subjects and authorities. I am solely responsible for the

    shortcomings of this article which discusses restraints of dealings,

    injunctions, and the appeal procedures in the Malaysian Courts.

    ** Advocate & Solicitor Co-founder & Partner, Gulam & Wong

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  • i i [2013] 1 CLJCurrent Law Journal

    used in the NLC. To meet modern requirements and for

    uniformity, it was necessary to have a single Land Code to

    replace these seven out-moded separate land laws in the States of

    Malaya before they achieved independence on 31 August 1957.

    Clause 1 of the Introduction to the Explanatory Statement of the

    National Land Code Bill published in the Federal Government

    Gazette on 1 July 1965 reads:

    Under the present law of the States of Malaya two quite different

    systems of land tenure exist side by side:

    (a) The States of Penang and Malacca retain a system peculiar

    to the pre-war Straits Settlements (modelled on the

    English laws of property and conveyancing) whereby

    privately executed deeds are the basis of title to land;

    (b) The nine Malay States, by contrast, employ a system based

    on the principle that private rights in land can derive only

    from express grant by the State or secondarily from State

    registration of subsequent statutory dealings.

    The purpose of the Bill is stated in cl. 4 of the Explanatory

    Statement:

    The purpose of the present Bill is to remedy this state of affairs

    to replace the complex of seven separate and out-moded laws

    by a single statute of general application throughout all eleven

    States and so establish a uniform system of land tenure and

    dealing appropriate to the present day.

    For such a unified system there can be only one model that is

    already in existence in the majority of the States as described in

    (b) above. In itself it is entirely acceptable; it is efficient, well tried

    and familiar and can without difficulty be modified to suit modern

    requirements. In nine States its introduction will mean no break

    in continuity and in Penang and Malacca the way for its

    introduction has already been prepared by the National Land Code

    (Penang and Malacca Titles) Act 1963 which, when brought into

    force, will abolish the existing system described in (a).

    Caveat Under The NLC

    Under s. 5 of the NLC on interpretation, a caveat means a

    registered caveat. This shows that a caveat is not effective unless

    registered under the provisions of the NLC. A caveat, when

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  • iii[2013] 1 CLJ Current Law Journal

    registered, will have the particulars of registration, the serial or

    presentation number, with the date and time of entry, and signed

    under his seal by the Registrar of Titles in respect of a registry

    title or the Land Administrator in respect of a Land Office title.

    Thus a caveat entered under the NLC is an entry or an

    endorsement on the register document of title under the hand and

    seal of the Registrar of Titles or the Land Administrator, as the

    case may be. Unless the caveator gives his consent in writing

    under s. 322(5)(b) of the NLC, a caveat shall prohibit dealings by

    the registered proprietor in the land or interest affected. A caveat

    gives notice on the register document of titles to the world at large

    as well as protects the existing interests or claims to such interest

    of the caveator in the land or particular interest affected. A

    caveat, often described as a temporary or interlocutory statutory

    injunction, is not an instrument of dealing and it creates no new

    interest in land. However, when determining the priority of

    competing claims or equities between the claimants in any dispute

    concerning the land or interest bound by the caveat, it is material

    to note that, everything being equal, the first in time prevails.

    The New Rules Of Court 2012

    Effective From 1 August 2012

    It should be noted that, with effect from 1 August 2012, the new

    Rules of Court 2012 (P.U. (A) 205/2012) came into operation,

    repealing, under O. 94 r. 1, the Rules of the High Court 1980

    and the Subordinate Courts Rules 1980.

    Language Of The Courts

    Under the National Language Acts 1963/1967, in Peninsular

    Malaysia, the language of the courts is the national language

    (bahasa kebangsaan), ie, the Malay language. However, currently

    the language of the courts in the two East Malaysian states of

    Sabah and Sarawak is the English language. Writs, pleadings,

    cause papers, orders, and legal documents in the courts in these

    two states are filed in English and proceedings are still conducted

    in English. In Peninsular Malaysia, all writs pleadings, cause

    papers, orders and legal documents filed in the courts, and

    correspondence with the courts, government ministries and

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  • i v [2013] 1 CLJCurrent Law Journal

    departments, shall be in the national language (bahasa

    kebangsaan), other than the giving of evidence by witnesses.

    However, all these documents filed in the courts in the national

    language may be accompanied by their English translations. In

    practice court proceedings in chambers or in open court are very

    often conducted in English in the High Court, the Court of

    Appeal, and the Federal Court in Peninsular Malaysia, and written

    and oral submissions are frequently made in English in the interest

    of justice. In these superior courts counsel and judges more often

    conduct the proceedings in English, unlike in the Subordinate

    Courts, ie, the Magistrates Court and the Sessions Court where

    proceedings are virtually conducted in the national language,

    except the giving of evidence by witnesses. Section 8 of the

    National Language Act reads:

    8. All proceedings (other than giving of evidence by a witness) in

    the Federal Court, the Court of Appeal, the High Court or any

    Subordinate Court shall be in the national language:

    Provided that the Court may either of its own motion or on the

    application of any party to any proceedings and after considering

    the interests of justice in those proceedings, order that the

    proceedings (other than the giving of evidence by a witness) shall

    be partly in the national language and partly in the English

    language.

    In this connection, it is relevant to refer to art. 152 of the Federal

    Constitution which reads:

    152 National language

    (1) The national language shall be the Malay language and shall

    be in such script as Parliament may by law provide:

    Provided that

    (a) no person shall be prohibited or prevented from using

    (otherwise than for official purposes), or from teaching or

    learning, any other language; and

    (b) nothing in this Clause shall prejudice the right of the

    Federal Government or of any State Government to

    preserve and sustain the use and study of the language

    of any other community in the Federation.

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  • v[2013] 1 CLJ Current Law Journal

    .

    (4) Notwithstanding the provisions of Clause (1), for a period

    of ten years after Merdeka Day, and thereafter until

    Parliament otherwise provides, all proceedings in the Federal

    Court, the Court of Appeal or a High Court shall be in the

    English language:

    Provided that, if the Court and counsel on both sides agree,

    evidence taken in language spoken by the witness need not

    be translated into or recorded in English.

    (5) Notwithstanding the provision of Clause (1), until Parliament

    otherwise provides, all proceedings in subordinate courts,

    other than the taking of evidence, shall be in the English

    language.

    Grounds Of Judgment In English Are Lawful

    The crucial national language issue concerning the grounds of

    judgment written in the English language came up for adjudication

    by the Federal Court in a criminal case in Harcharan Singh Piara

    Singh v. PP [2011] 6 CLJ 625 in which the Federal Court

    unanimously held that the grounds of judgment in the English

    language do not contravene the National Language Act and the

    court has a wide discretion to conduct proceedings in English or

    in the national language. Delivering the judgment of the Federal

    Court, Richard Malanjum CJ (Sabah and Sarawak) said at p. 636:

    [30] Accordingly, on the authority of Dato Seri Anwar Ibrahim v.

    Tun Dr. Mahathir (supra) which we accept as good law, we hold

    that grounds of judgments do not fall within s. 8 of the Act, and

    the court has a wide discretion whether to conduct proceedings in

    the English language or in the national language, be it on the

    courts own motion or on application by the parties. Further,

    judges have the discretion to provide their grounds of judgment

    in either in the national language or the English language. The

    choice of language adopted by the respective judge is not open

    for challenge as long as it is in the national language or the

    English language.

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    In the 1991 issue of the Singapore Journal of Legal Studies, I had

    the opportunity at pp. 611 and 612 to make the following

    observations on the language issue:

    For over a century, English has been the language, both spoken

    and written, of the courts in Peninsular Malaysia. The change

    came when s. 8 of the National Language Act was amended by

    the National Language (Amendment) Act 1990 which took effect

    from 30 March 1990 and administratively from 1 June 1990 by

    Practice Direction of the Chief Justice (Malaya).

    ...

    The Bench and the Bar in Peninsular Malaysia are doing

    reasonably well in the conduct of cases in the National language,

    especially in the Subordinate Courts. Judges of the High court and

    Supreme Court are encouraged to write their judgments in the

    National Language. Some of these judgments and their English

    translations, have found their way into the law journals. However,

    it is respectfully urged that Malaysian judges should continue to

    write their judgments in English so that these may be read and

    studied in other parts of the world interested in Malaysian laws

    because their published judgments in the Malay language will

    hardly be read or understood in the English-speaking world. As

    long term objective, English should continue to be used, alongside

    Malay, where justice requires it in the superior courts of the

    country. The best of post-independence judgments written in the

    English language by judges of the Malaysian High Court, the

    Federal Court and its successor, the Supreme Court [now the

    Federal Court with the Court of Appeal below it] are of

    comparable standard and quality with those of their counterparts

    in the Commonwealth.

    National Language Not Threatened

    Now looking back the last 55 years since Merdeka Day on 31

    August 1957, I am of the view that the secure constitutional

    position of the Malay language as the national language of

    Malaysia has never been threatened, and will never be, by the

    continued use of English in the Malaysian Courts. Malaysians of

    different races accept the Malay language as the national language

    of the country. Mastery and use of the English language will be

    to the benefit of Malaysia and her citizens in the international and

    domestic scenes, now and in the future.

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    Application Of The New Rules

    Order 1 r. 2 of the Rules of Court 2012 provides as follows:

    2(1) Subject to paragraph (2), these Rules apply to all proceedings

    in

    (a) the Magistrates Court;

    (b) the Sessions Court; and

    (c) the High Court.

    (2) These Rules do not have effect in relation to proceedings in

    respect of which rules have been or may be made under any

    written law for the specific purpose of such proceedings or

    in relation to any criminal proceeding.

    Overriding Objective Of The Rules: Justice

    It should be borne in mind at all times that the overriding

    objective of these Rules is justice, as provided in O. 1A reading

    as follows:

    In administering these Rules, the Court or a Judge shall have

    regard to the overriding interest of justice and not only to the

    technical non-compliance with these Rules.

    Non-Compliance With The Rules

    Under O. 2 r. 1(1) mere non-compliance of the Rules of 2012

    does not nullify the proceedings. It is significant to note that

    under O. 2 r. 1(2), the parties must now assist the court to

    achieve the overriding objective of dealing with the cases justly.

    Commence By Writ, Or Originating Summons, Or Notice Of Application

    We should take note that O. 5 of the Rules of 2012 makes

    provisions for the mode of commencement of civil proceedings by

    writ or originating summons (rr. 3 and 4). Order 32 r. 1 of these

    Rules provides that every application in chambers shall be made

    by notice of application in the new Form 57, replacing, but

    practically in the same format of, the old familiar summons-in-

    chambers, except the new Form 57 is headed Notice of

    Application.

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    Cases In Which The Rules Of Court 2012 Are Inapplicable

    Currently, in Peninsular Malaysia, proceedings relating to company

    winding-up matters may still be filed in the English language.

    Under the Appendix C (O. 94 r. 2), the Rules of Court 2012 do

    not apply to the following proceedings under the following laws:

    Appendix C

    List Of Exempted Laws

    1. Bankruptcy proceedings Bankruptcy Act 1967

    2. Proceedings relating to Companies Act 1965

    the winding up of

    companies and capital

    reduction

    3. Criminal proceedings Criminal Procedure Code

    [Act 593]

    4. Proceedings under the Elections Offences Act

    Elections Offences Act 1954 [Act 5]

    1954

    5. Matrimonial proceedings Law Reform (Marriage and

    Divorce) Act 1976 [Act 164]

    6. Land reference Land Acquisition Act 1960

    [Act 486]

    7. Admission to the Bar Legal Profession Act 1976

    [Act 166], Advocates

    Ordinance of Sabah

    [Sabah Cap. 2], Advocates

    Ordinance of Sarawak

    [Sarawak Cap. 110]

    8. Proceedings under the Income Tax Act 1967 [Act 53]

    Income Tax Act 1967

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  • i x[2013] 1 CLJ Current Law Journal

    Proceedings Under The New Rules

    Proceedings relating to caveats under the caveat system,

    prohibitory orders, and injunctions relating to the NLC should now

    be taken under the Rules of Court 2012, with effect from

    1 August 2012. On the caveat system, there are four types of

    caveats provided under Part Nineteen on Restraints on Dealing in

    the NLC. These caveats are the Registrars caveat, private caveat,

    lien-holders caveats, and trust caveat. Over the last 46 years since

    the coming into force of the NLC in 1966, there have been many

    amendments made to the NLC. In the future, there will many

    more arising under the NLC amendments in order to update the

    NLC to meet future requirements. Our courts have adjudicated on

    many disputes and have had many cases decided and reported in

    the law reports for guidance of the legal profession.

    The Registrars Caveat

    Form Of Registrars Caveat

    The Registrars caveat is now entered by the Registrar in Form

    19F (previously Form 7) on the register document of title to any

    land under specified circumstances. Form 19F provides as follows:

    [Form 19F]

    (Section 320)

    ENTRY OF REGISTRARS CAVEAT

    By virtue of the power conferred on me by section 320 of the

    National Land Code, I have entered a Registrars Caveat on the

    land held under Title No. ..................... for Lot No.

    .....*Town/Village/Mukim ...

    District .. for the following reason:

    .........

    2. This caveat shall, so long as it continues in force, prohibit

    the registration, endorsement or entry on that document, of any

    instrument of dealing, any claim to the benefit of a tenancy

    exempt from registration and any lien-holders caveat. This

    prohibition shall apply to any such instrument, claim or application

    notwithstanding that it was received before this caveat was

    entered.

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    Dated the day of .., 20 .

    ..

    Registrar/Land Administrator

    Definitions

    Note the following definitions under s. 5 of the NLC:

    Court means the High Court in Malaya.

    Dealing means any transaction with respect to alienated land

    effected under the powers conferred by Division IV, and any like

    transaction effected under the provisions of any previous land law,

    but does not include any caveat or prohibitory order.

    Registrar means

    (a) in relation to land held or to be held under Registry title, or

    under the form of qualified title corresponding to Registry

    title, or under subsidiary title dependent on a Registry title,

    a Registrar of Titles or Deputy Registrar of Titles appointed

    under section 12;

    (b) in relation to land held or to be held under Land Office title,

    or under the form of qualified title corresponding thereto, or

    under subsidiary title dependent on a Land Office title, the

    Land Administrator.

    Registry title means title evidenced by a grant or a State lease,

    or by any document of title registered in a Registry under the

    provisions of any previous land law.

    Land Office title means title evidenced by a Mukim grant or

    Mukim lease, or by any document of title registered in a Land

    Office under the provisions of any previous land law.

    Land Administrator means a Land Administrator appointed

    under section 12, and includes an Assistant Land Administrator

    appointed thereunder; and, in relation to any land, references to

    the Land Administrator shall be construed as references to the

    Land Administrator, or any Assistant Land Administrator, having

    jurisdiction in the district or sub-district in which the land is

    situated.

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    Prohibitive Effect Of Registrars Caveat

    Under s. 319(b) of the NLC, so long as the Registrars caveat

    remains in force, it shall prohibit the registration, endorsement or

    entry of:

    (i) any instrument of dealing;

    (ii) any claim to the benefit of a tenancy exempt from

    registration; and

    (iii) any lien-holders caveat.

    The Registrars caveat is more powerful than a private caveat in

    that it can operate backward to prevent registration of an

    instrument of dealing under s. 319(b) (i) above like a transfer of

    land in Form 14A, or the tenancy claim under (ii) above or a lien-

    holders caveat under (iii) above, notwithstanding these documents

    were presented, but had not been registered or endorsed, prior to

    the entry of the Registrars caveat. Under s. 319(3), the Registrar

    has the discretion to waive the prohibition.

    Circumstances For Entry Of The Registrars Caveat

    Section 320 of the NLC, as amended in 1979 by Act A444 by

    the insertion of subsection (1)(ba), now reads as follows:

    320 Circumstances in which Registrars caveats may be entered

    (1) Subject to sub-section (2), a Registrars caveat may be

    entered in respect of any land wherever such appears to the

    Registrar to be necessary or desirable

    (a) for the prevention of fraud or improper dealing; or

    (b) for protecting the interests of

    (i) the Federation or the State Authority; or

    (ii) any person who is in his opinion under the disability

    of minority, mental disorder or unsoundness of mind,

    or is shown to his satisfaction to be absent from the

    Federation; or

    (ba) for securing that the land will be available to satisfy the

    whole or part of any debt due to the Federation or the

    State Authority, whether such debt is secured or

    unsecured and whether or not judgment thereon has been

    obtained; or

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    (c) by reason of some error appearing to him to have been

    made in the register or issue document of title to the

    land or any other instrument relating thereto.

    (2) Knowledge by the Registrar of the fact that any land or

    interest therein has been acquired, or is to be held, by any

    person or body in a fiduciary capacity shall not of itself

    constitute a ground for entering a Registrars caveat in

    respect of that land.

    Cancellation Of The Registrars Caveat

    Section 321(3) of the NLC provides as follows:

    (3) A Registrars caveat shall continue in force until it is

    cancelled by the Registrar

    (a) of his own motion; or

    (b) on an application in that behalf by the proprietor of the

    land affected; or

    (c) pursuant to any order of the Court made on an appeal

    under section 418 against his decision to enter the

    caveat, or his refusal of any application for its cancellation

    under paragraph (b).

    Authority Of The High Court

    The decision, including any act, omission, refusal, direction or

    order, of the Registrar or the Land Administrator is subject to the

    control and order of the High Court in proceedings relating to

    land. It is the duty of the Registrar or the Land Administrator to

    comply forthwith with the order of the court under s. 417(1) of

    the NLC.

    Appeals To The High Court

    It is important to note that under s. 418(1) of the NLC, any

    person or body aggrieved by the decision of the Registrar or Land

    Administrator has the right of appeal to the High Court within the

    period of three months beginning from the date of communication

    of the decision. Unlike O. 3 r. 5 of the Rules of Court 2012

    where the High Court has the discretion to extend time, the court

    has no jurisdiction to extend this statutory period of three months

    under s. 418(1) of the NLC. See the Federal Court case of Land

    Executive Committee of Federal Territory v. Syarikat Harper Gilfillan

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    Bhd [1980] 1 LNS 150; [1981] 1 MLJ 234, where Raja Azlan

    Shah AG LP (as he then was) said at p. 237:

    Reading section 418 of the Code, we are satisfied that the latter

    is the correct interpretation. Having regard to the special provision

    for limiting the time within which to enforce the right, the

    indications are that Parliament has by using plain and

    unambiguous language intended the right to be exclusive of any

    other mode of enforcing it. The time-limit is the foundation of the

    right given in the section. It is in the highest degree improbable

    that the period of three months as a limitation would have been

    inserted if an indefinite period were intended to be given. The

    period of the three months is obviously for the purpose of

    preventing stale claims.

    In Public Bank Bhd v. Pengarah Tanah & Galian & Anor [1989] 1

    LNS 159; [1990] 2 MLJ 510, Mohtar Abdullah JC (as he then

    was), without referring to the above earlier case of Land Executive

    Committee of Federal Territory, held that the three-month period

    runs from the date of communication. His Lordship said at p. 510:

    By virtue of s. 418, the time limited for appeal against the order

    of the registrar is three months from the date of communication

    of the decision of the registrar. The decision of the registrar in

    this case is the decision to enter the caveat and not the decision

    to refuse the application for cancellation of the said caveat since

    para (b) and the second limb of para (c) of s. 321 are not

    relevant in the present case. Therefore, for the purpose of

    computation of time under s. 418, it is crystal clear that time runs

    from the date of communication of the decision of the registrar to

    enter the caveat, ie, 20 October 1988. The plaintiffs appeal under

    s. 418 was entered on 29 January 1989. Therefore, I hold that

    the Plaintiffs appeal was filed out of time and consequently time

    barred.

    Appeal Procedure

    The appeal procedure was, before the commencement of the Rules

    of Court 2012 on 1 August 2012, by originating motion. Under

    the new Rules of 2012, I am of the opinion that the appeal will

    be by originating summons under O. 5 r. 4. Section 418 of the

    NLC reads:

    418(1) Any person or body aggrieved by any decision under this

    Act of the State Director, the Registrar or any Land

    Administrator may, at any time within the period of three

    months beginning with the date on which it was

    communicated to him, appeal therefrom to the Court.

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    (2) Any such appeal shall be made in accordance with the

    provisions of any written law for the time bring in force

    relating to civil procedure; and the Court shall make such

    order thereon as it considers just.

    (3) In this section decision includes any act, omission,

    refusal, direction or order.

    Person Aggrieved

    In a nutshell, a person aggrieved is one whose legal right or

    interest is affected by the wrongful act or conduct of another

    person. Following the Privy Council case of AG of Gambia v. Pierre

    Sarr Njie [1961] AC 617, Mokhtar Sidin JCA, in delivering the

    judgment of the Court of Appeal in Wu Shu Chen & Anor v. Raja

    Zainal Abidin Raja Hussin [1997] 3 CLJ 854, said of an aggrieved

    person at p. 868:

    The Code contains no definition on who is an aggrieved person.

    To my mind, the word aggrieved must be given its ordinary

    meaning. To be aggrieved means one is dissatisfied with or

    adversely affected by a wrongful act of someone. An aggrieved

    person is therefore a person whose legal right or interest is

    adversely affected by the wrongful act or conduct of another

    person or body. The category of aggrieved persons is never

    closed.

    Cases On Registrars Caveat

    There are relatively a few cases reported in the law reports on the

    Registrars caveat. One of the leading cases under s. 418 against

    the decision of the Registrar to enter his caveat under the NLC

    is Temenggong Securities Ltd and Tumbuk Estate Sdn Bhd v. Registrar

    of Titles, Johore which was commenced by originating motion No.

    4 of 1973 by the two applicants in the Muar High Court as

    persons aggrieved. In this High Court case (unreported), the

    Malaysian Inland Revenue Department requested the Registrar of

    Titles to enter a Registrars caveat over certain lands sold by the

    registered proprietor Li-Ta Company (Pte) Ltd as vendor to the

    first applicant Temenggong Securities Ltd which had paid the full

    purchase, and had received the transfers and the issue documents

    of title and possession of the lands on completion of the

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    transaction on 22 September 1972. The Registrars caveat was

    entered on 11 October 1972 to protect the interest of the Federal

    Government for recovery of income tax due from the vendor. The

    Registrar rejected the transfers and other documents presented,

    after adjudication for stamp duty payment, for registration on

    14 December 1972, and informed on 15 March 1973 the

    applicants that a Registrars caveat had been entered. The

    applicants lost their case before Pawan Ahmad bin Ibrahim Rashid

    J, who erroneously held in his judgment (reproduced from p. 32

    of the appeal record in Privy Council Appeal No. 38 of 1975):

    I am of the view that the legislature clearly had in view the

    protection of the interests of the Federation or the State authority

    and because of this, gave the Registrar specific powers under

    Section 320 to enter a caveat in respect of any land when he

    deemed it necessary or desirable to do so in the protection of

    such interests. It might also be mentioned here that the word

    interests is plural in number and in my view it can be

    interpreted to include interests other than registrable interests,

    whereas in Section 323 the word interest is singular in number

    and includes only a registrable interest. For this reason I am of

    the opinion that interests such as vested or contingent are also

    within the purview of Section 320 of the National Land Code, as

    far as it pertains to the Federation or the State authority.

    In The Federal Court

    The applicants appealed to the Federal Court in Temenggong

    Securities Ltd & Anor v. Registrar of Titles, Johore & Ors [1974] 1

    LNS 175; [1974] 2 MLJ 45. In allowing the appeal and reversing

    the decision of the learned High Court Judge, Ong Hock Sim FJ,

    in delivering the unanimous judgment of the Federal Court, said

    at p. 47:

    We are of the view that the vendor, having parted with their

    interest in the lands to the appellants, are bare trustees and have

    no interest in the land over which a valid caveat can be lodged.

    Respondents counsel tried to make much of clause 1 of the

    Agreement of August 30, 1972 that the vendor shall sell and

    purchaser shall purchase and that therefore no rights passed as

    the agreement was non-registrable and a non-statutory instrument

    capable of passing title to the appellants. He glossed over the fact

    that the vendors had done everything that was required of them

    to transfer the title and had thereby constituted themselves bare

    trustees for the appellants and had no other or further interest in

    the lands.

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    In The Privy Council

    The Registrar of Titles appealed to the Privy Council against the

    judgment of the Federal Court. The Privy Council dismissed with

    costs the appeal by the Registrar in Registrar of Titles, Johore v.

    Temenggong Securities Ltd [1976] 1 LNS 135; [1976] 2 MLJ 44,

    [1976] 2 WLR 951, [1977] AC 302. In delivering the judgment

    of the Privy Council, Lord Diplock said of the Registrars caveat

    at [1976] 2 MLJ 44, at p. 46:

    A registrars caveat has substantially the same prohibitory effect

    as a private caveat expressed to bind the land itself. It is entered

    by the registrar of his own motion by endorsing the register

    document of title to the land with the words Registrars Caveat

    Entered and the time of entry. In one respect its effect is more

    severe than that of a private caveat: it operates to prohibit the

    registration, endorsement or entry of instruments, claims to

    exempt tenancies and lien-holders caveats which were received at

    the registry before the time of entry of the registrars caveat if

    they have not been already entered on the register document of

    title by then. On the other hand the registrar may waive the

    prohibition in any case where he is satisfied that this would not

    be inconsistent with the purpose for which the caveat was entered.

    Note the learned Law Lords concluding opinion on s. 320(1)(b)

    (ii) that the Registrar was not entitled to enter a Registrars for

    unpaid income tax at p. 48:

    The characteristic which is common to the three categories of

    persons specified in sub-paragraph (ii) is that they are handicapped

    in their ability to search for themselves the entries in the register

    relating to land in which they are entitled to an interest or to learn

    of any threatened dealing with the land which might have the

    effect of overriding their interest and which accordingly would

    justify an application for a private caveat. So far as these three

    categories of persons are concerned, in their Lordships view the

    clear intention of Parliament in including paragraph (b) in

    s. 320(1) was to enable the registrar of his own initiative to do

    for persons in any of these categories what could have been done

    upon an application made by them for private caveat; and to do

    no more than that. As a public servant appointed by the state,

    the registrar is an appropriate officer himself to do on behalf of

    the Federation and the State Authority what in the case of private

    individuals he could be required to do by a formal application on

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    their part for the entry of a private caveat. Their Lordship

    accordingly conclude that the interests which the registrar is

    empowered to protect under s. 320(1)(b) are confined to interests

    in the land that are recognised by the Code as being either

    registrable or otherwise entitled to protection. An unsecured

    creditor of the proprietor of land has no such interest in the land.

    Even if no contract of sale by Li-Ta to Temenggong had been in

    existence at the time, the registrar would not have been

    empowered by s. 320(1) to enter any registrars caveat in respect

    of Li-Tas land, upon the information which their Lordship have

    assumed was available to him. Upon this ground they would

    dismiss the appeal.

    If the Registrar were entitled to enter the Registrars caveat for

    unpaid income tax, then many individual and corporate tax payers

    will run the risk of having their lands caveated by the Registrar.

    Amendment To s. 320

    After the decision in the Privy Council was made against the

    Registrar of Titles, amendment was made to s. 320 of the NLC

    by the insertion of (ba) to s. 320(1) by Act A444, gazetted on

    15 February 1979 (see my article Registrars Caveat Amended

    [1980] 1 MLJ, vii, and judgment of Mohamed Dzaiddin J (as he

    then was) in Lim Ah Hun v. Pendaftar Hakmilik Tanah, Pulau

    Pinang & Anor [1990] 2 CLJ 640; [1990] 2 CLJ (Rep) 369,

    cancelling the Registrars caveat). The amendment to s. 320 does

    not appear to assist the Government in tax collection where the

    land in question has been charged. But the situation may well be

    different where the tax payers land is not charged and is free

    from encumbrances. In Oversea-Chinese Banking Corp Ltd v.

    Pendaftar Hakmilik, Negeri Kedah [1990] 2 CLJ 275; [1990] 2 CLJ

    (Rep) 594, KC Vohrah J (as he then was) did not support the

    entry of the Registrars caveat. He said at p. 598:

    It seems to me that once there is a charge registered in respect

    of the land, a Registrars caveat is incapable of being entered in

    respect of the land for it cannot possibly appear necessary or

    desirable to him for securing that the land will be available to

    satisfy the whole or any part of the debt due the Federation

    since the caveat will not transform an unsecured debt into a

    secured debt let alone give the debt a priority over other

    registered interest in the land; instead the caveat serves to interfere

    with the legitimate right of the chargee to sell the land under the

    provision of the code to recoup losses secured by the charge.

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    In Public Bank Bhd v. Pengarah Tanah & Galian & Anor [1989] 1

    LNS 159 referred to earlier, a Registrars caveat was entered also

    at the request of the Inland Revenue Department. In this case,

    the plaintiff bank as registered charge applied by letter to the

    Registrar to remove his caveat but the Registrar rejected the

    chargees application to cancel the caveat. The proprietors of the

    land affected, however, had not made the application for

    cancellation of the caveat under s. 321(3)(b) of the NLC. Mohtar

    Abdullah JC (as he then was), accepting the submissions of the

    then Johor State Legal Adviser Zulkefli bin Ahmad Makinudin

    (now CJ (Malaya)) for the first defendant, and Senior Federal

    Counsel Balia Yusof bin Wahi (now JCA) for the second

    defendant, correctly dismissed the appeal of the plaintiff

    represented by Tan Kiah Teck on the ground that the appeal was

    filed out of the three-month statutory period. A lesson to be

    learned from this case is that whether or not a person or body

    aggrieved requests the Registrar to cancel his caveat, it is always

    prudent to file the appeal in the High Court within the three-

    month period.

    Private Caveat

    Sections 322 to 329 of the NLC make provisions relating to

    private caveats. Private caveats are practically entered every day

    throughout Peninsular Malaysia in transactions involving sales and

    purchases of land of various categories of uses (including industrial

    land, houses and strata title units like condominiums), and loan

    transactions to finance the purchases of various immovable

    property. A basic working knowledge of private caveats is therefore

    important to the practice of advocates and solicitors in advising or

    acting for their clients whether in conveyancing or litigation.

    Nature And Effect

    Section 322 of the NLC as amended now reads as follows:

    322 Nature and effect of private caveats.

    (1) A caveat under this section shall be known as a private

    caveat, and

    (a) may be entered by the Registrar on the register

    document of title to any land at the instance of any of

    the persons or bodies specified in section 323;

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    (b) shall have the effect specific in sub-section (2) or (3),

    according as it is expressed to bind the land itself or an

    undivided share in the land or merely a particular interest

    therein.

    (2) The effect of any private caveat expressed to bind the land

    itself or an undivided share in the land shall, subject to sub-

    sections (4) and (5), be to prohibit so long as it continues

    in force the registration, endorsement or entry on the register

    document of title thereto of

    (a) any instrument of dealing executed by or on behalf of the

    proprietor thereof, and any certificate of sale relating

    thereto;

    (b) any claim to the benefit of any tenancy exempt from

    registration granted by the said proprietor; and

    (c) any lien-holders caveat in respect thereof;

    Provided that where the claim is in respect of a part of the land

    the caveat bind the whole land and where the claim is in respect

    of an undivided share in the land, the caveat binds the whole of

    undivided share in the land. [Inserted by Act A1104].

    (3) The effect of any private caveat expressed to bind a

    particular interest only shall, subject to sub-sections (4) and

    (5), be to prohibit the registration, endorsement or entry on

    the register document of title of

    (a) any instrument of dealing directly affecting that interest

    (including any certificate of sale relating thereto); and

    (b) where that interest is a lease or sub-lease -

    (i) any claim to the benefit of any tenancy exempt from

    registration granted directly thereout, and

    (ii) any lien-holders caveat in respect thereof.

    (4) A private caveat shall not prohibit the registration

    endorsement or entry of any instrument, claim or lien-

    holders caveat where the instrument was presented, or the

    application for endorsement or entry received, prior to the

    time from which the private caveat takes effect.

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    (5) A private caveat shall not prohibit the registration or

    endorsement of any instrument or claim where

    (a) the instrument was presented or the application for

    endorsement made by the person or body at whose

    instance the caveat was entered; or

    (b) the said instrument or application was accompanied by

    the consent in writing of that person or body to its

    registration or, as the case may be, to the making of the

    endorsement.

    (5A) No consent of the person or body at whose instance a

    private caveat has been entered on a part of the land, an

    undivided share in the land or a particular interest therein is

    necessary to effect any registration, endorsement or entry of

    any instrument on the register document of title not affecting

    the claim relating to the part of the land, undivided share in

    the land or interest therein. [Inserted by Act A1104].

    Cases On Purpose And Effects Of Caveats

    As early as 1917, in the well-known Australian High Court case

    of Butler v. Fairclough [1917] 23 CLR 78 Griffith CJ was

    considering the nature and effect of a caveat. The learned Chief

    Justice said at p. 84:

    The effect of these provisions is not to enlarge or add to the

    existing proprietary rights of the caveator upon which the caveat

    is founded, but to protect those rights, if he has any.

    In 1976 in Registrar of Titles, Johore v. Temenggong Securities Ltd

    [1976] 1 LNS 135; [1976] 2 MLJ 44 Lord Diplock said at p. 46

    (also at [1976] 2 WLR 951, and [1977] AC 302 at p. 308) on

    the purpose of a private caveat:

    The purpose of a private caveat is to preserve the status quo

    pending the taking of timeous steps by the applicant to enforce

    his claim to an interest in the land by proceedings in the courts.

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    In 1979 in an appeal from the Federal Court of Malaysia, the

    Privy Council in the often-quoted case of Eng Mee Yong & Ors v.

    Letchumanan [1979] 1 LNS 18; [1979] 2 MLJ 212, Lord Diplock

    has the opportunity to make useful observations on private caveats

    under the NLC at p. 214:

    The system of private caveats is substituted for the equitable

    doctrine of notice in English land law. By s. 322(2) the effect of

    entry of a caveat expressed to bind the land itself is to prevent

    any registered disposition of the land except with the caveators

    consent until the caveat is removed By s. 324 the Registrar is

    required to act in an administrative capacity only; he is not

    concerned with the validity of the claim on which the caveat

    purports to be based. The caveat under the Torrens System has

    often been likened to a statutory injunction of an interlocutory

    nature restraining the caveatee from dealing with the land pending

    the determination by the court of the caveators claim to title to

    the land, in an ordinary action brought by the caveator against the

    caveatee for that purpose. Their Lordship accept this as an apt

    analogy with its corollary that caveats are available, in appropriate

    cases, for the interim protection of rights to title to land or

    registrable interests in land that are alleged by the caveator but

    not yet proved.

    Caveatable Interest

    It is important to note that not everyone is entitled to enter a

    private caveat and that before a person applies in Form 19B of

    the NLC for the entry of a private caveat, he must make sure that

    he has a caveatable interest in the land concerned under

    s. 323(1) of the NLC.

    In AKB Airconditioning & Electrical Sdn Bhd v. Hew Foo Onn &

    Anor [2002] 1 LNS 26; [2002] 5 MLJ 391, Abdul Malik Ishak J

    (as he then was) succinctly stated the law at p. 401 as follows:

    It is wrong to presume that every person has a right to enter a

    private caveat. Section 323 of the NLC envisages the situation

    that only a person having a caveatable interest may enter a private

    caveat. It is essential that a person who enters a private caveat

    must claim title to the land or any registrable interest in the land

    or any right to such title or interest to the land. Under s. 324(1)

    of the NLC, it is not the duty nor the function of the registrar

    to enquire into whether the application for the entry of a private

    caveat is validly made. It is the domain of the High Court to

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    exercise its judicial function to adjudicate on the validity of the

    entry of the private caveat. According to the long line of

    authorities, the registrars duty in respect of an application for

    entry of a private caveat is purely administrative or ministerial.

    In the Court of Appeal case of Luggage Distributors (M) Sdn Bhd

    v. Tan Hor Teng @ Tan Tien Chi & Anor [1995] 3 CLJ 520, Gopal

    Sri Ram JCA had paraphrased s. 323(1)(a) at p. 547 as follows:

    To paraphrase sec. 323(1) (a) of the Code, a private caveat may

    be entered at the instance of any person or body who claim

    either:

    (1) the title to land; or

    (2) any registrable interest in Land.

    The parameters of caveatability under s. 323(1) (a) are therefore

    circumscribed by these words: title and registrable interest. It

    is only one who makes a claim to either of these in land may

    enter a private caveat.

    In the case of Megapillars Sdn Bhd v. Loke Kwok Four [1996] 4

    CLJ 82, Kang Hwee Gee J (as he then was) made the following

    observations on caveatable interest at p. 90:

    It is trite law that a caveator must have a caveatable interest in

    the land and not merely a pecuniary interest in it before he can

    lodge a caveat under s. 323 of the National Land Code (Registrar

    of Titles, Johore v. Temenggong Securities Ltd. [1976] 2 MLJ 44).

    Thus, in Wong Kuan Tan v. Gambut Development Sdn. Bhd. [1984]

    2 MLJ 113, a contractual right to an unpaid balance of the

    purchase price of the sale of land was held by the Federal Court

    to be incapable of creating a caveatable interest in land which

    would entitle the caveator to continue to maintain his caveat.

    Likewise, in the Supreme Court case of Abdul Rahim v. Vallapai

    Shaik (a case cited by defendants Counsel), an agreement entered

    into by the three beneficiaries of the estate of the deceased to sell

    land which was conditional upon consent being given by the four

    other beneficiaries and upon the purchaser making the monthly

    instalments towards the discharge of charge of that land to the

    bank, was held to confer no caveatable interest on the purchaser.

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    Further, where that interest is claimed through a contract for the

    sale of land, the contract must be enforceable by the caveator and

    negotiations for a contract no matter how advanced is not capable

    of creating a caveatable interest in his favour (Ayer Hitam Tin

    Dredging Malaysia Bhd v. Y.C. Chin Enterprises Sdn. Bhd. [1994] 3

    CLJ 133). The point is well illustrated by the following passage in

    the Court of Appeal case of Murugappa Chettiar Lakshmanan (Wasi

    Tunggal Harta Pesaka M.R.L. Murugappa Chettiar, Simati) v. Lee

    Teck Mook [1995] 2 CLJ 545 at p. 551:

    Until and unless a purchaser has an enforceable contract for the

    sale of land, he can lay no claim to the title to registered land. A

    fortiori, he has no interest that is capable of protection by the

    entry of a caveat (per Gopal Sri Ram JCA).

    No Caveatable Interest

    The courts have held that in the following cases the following

    persons have no caveatable interest. A creditor or judgment

    creditor of a proprietor of land is not entitled in law to enter a

    private caveat against the debtors land to secure or realize a debt

    for the reason that a mere debt, whether under a judgment or not,

    is not an interest relating to land. A judgment creditor for a

    monetary debt may take out execution proceedings against the

    land of the judgment debtor made by way of a prohibitory order

    under ss. 334 to 339 of the NLC. In Hiap Yiak Trading Sdn Bhd

    & Ors v. Gim Hin & Co (M) Sdn Bhd [1989] 1 LNS 32 in which

    the applicants had paid the full purchase price, the private caveat

    and prohibitory order were removed because they were not

    interested in the land as they sought only the refund of the

    deposit and other expenses. In United Malayan Banking Corp Bhd

    v. Development & Commercial Bank Ltd [1983] 1 CLJ 82; [1983]

    CLJ (Rep) 421, the Federal Court held that failure to obtain the

    consent of the first chargee meant that the appellant bank did not

    have a caveatable interest in the land. The claimant for a mere

    chose in action arising out of or incidental to a contract for the

    sale of land is not entitled to enter a private caveat (see Mawar

    Biru Sdn Bhd v. Lim Kai Chew And Another Application [1990] 1

    LNS 123). The caveators appeals to the then Supreme Court

    were dismissed on 11 June 1991. A tenant for a tenancy for two

    years with an option for having it renewed for a further two years

    has no caveatable interest (see Luggage Distributors (M) Sdn Bhd

    v. Tan Hor Teng @ Tan Tien Chi & Anor [1995] 3 CLJ 520). A

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    purchaser of shares in a company has also no caveatable interest

    in the land of the company (see Pembangunan Wang Kita Sdn Bhd

    v. Fry-Fry Marketing Services Sdn Bhd [1998] 2 CLJ Supp 96). A

    shareholder or officer of a company does not have a caveatable

    interest in the land sold by his company, as was held in Hew Sook

    Ying v. Hiw Tin Hee [1992] 3 CLJ 1325; [1992] 1 CLJ (Rep) 120

    where Mohd Azmi SCJ said at p. 127:

    Further, once the company has executed the instrument of

    transfer in Form 14A in favour of the purchaser, and handed over

    the original document of title, the managing director either as an

    officer of the company or in his personal capacity as a shareholder

    has no fiduciary duty to challenge the conduct of the company by

    means of private caveat for the alleged purpose of protecting his

    own interest or the interest of other shareholders.

    In my article entitled Private Caveats, Entry, Extension and

    Removal published in INSAF, the Journal of the Malaysian Bar,

    (2006) XXXV No. 2, at p. 87, I wrote:

    Having determined that the applicant has a caveatable interest

    under s. 323(1) of the Code in the land in question, you may

    then apply for the entry of a private caveat in Form 19B in

    accordance with the provisions of s. 323 of the Code. The

    following points and procedure should be observed:

    (a) Apply in the prescribed Form 19B, which may be printed or

    typed. The relevant particulars must be properly completed.

    (b) Under para 2 of Form 19B, state concisely the grounds of

    the claim to the title in the land or undivided share in the

    land or interest therein, and/or further as stated in the

    supporting statutory declaration. It is important to bear in

    mind that what the applicant affirms in the statutory

    declaration may be used against him in any subsequent

    litigation concerning the caveat. Although the statutory

    declaration can be affirmed by the advocate and solicitor

    under para 3(b) of Form 19B, it is advisable for his client

    to affirm it in order to maintain detachedness on the part of

    the solicitor.

    (c) Note the supplementary provisions as to forms and

    procedure are provided under the Tenth Schedule of the

    Code. Under para 11 thereof, the signatures of the caveat

    applicant and the attesting witness should be in permanent

    black or blue-black ink. Signatures in ball point pens are not

    accepted. Roller point pens are accepted. It is important to

    know the practice of the relevant land registry or land office.

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    (d) Form 19B, if executed by a natural person, i.e. the caveator

    or his attorney or the attorney of a company (typically an

    attorney of a chargee bank whose power of attorney has

    been registered with the Registrar of Titles or the Land

    Administrator) requires attestation by one of the qualified

    person stipulated in the Fifth Schedule, typically an advocate

    and solicitor in Peninsular Malaysia. Execution of Form 19B

    by a limited company under its common seal requires no

    attestation but Form 19B must be accompanied by such

    documents as the Memorandum and Articles of Association

    of the Company, its board resolution, its Form 49 and the

    supporting statutory declaration which may be affirmed by

    one of its directors. If Form 19B is executed by a director

    on behalf of the company (see Mahadevan & Anor v. Patel

    [1975] 2 MLJ 207), the signature of the director requires

    attestation.

    (e) Identify the share of the land in column 4 of the Schedule

    in Form 13A. In most cases, the caveat is to bind the whole

    (semua in Malay) of the land itself. Sometimes, where the

    land is registered in the name of more than one proprietor,

    an undivided share like 1/2 or 1/3, caveat only the undivided

    share of the particular proprietor involved.

    (f) Caveating a part of land or a strata title unit requires greater

    care. Note the new proviso to s. 322(2) of the NLC stating

    that where the claim is in respect of a part of the land the

    caveat binds the whole land. Note also para 3(c) of Form

    19B. In my experience, I would, while indicating the whole

    land, state and limit the caveat to the particular interest

    claimed in column 4 of the Schedule like limited to the X

    sq. ft. or limited to the Y unit (in Malay: Semua. Terhad

    kepada X kaki persegi or Terhad kepada unit Y). The

    details of the interest claimed in the agreement or a plan of

    the land affected can be disclosed in the supporting statutory

    declaration. Note the provisions in the new s. 322(5A) on

    the question concerning the consent of the caveator. (See the

    judgment of Suffian LP in the Federal Court case of N.

    Vengedaselam v. Mahadevan & Anor. [1976] 2 MLJ 161.)

    (g) Pay the appropriate registration fees, which vary from state

    to state [and time to time]. For example,

    (i) under the Federal Territory of Kuala Lumpur Land

    Rules 1995, the fee for entry of a private caveat in Form

    19B is RM300 per title (item 32),

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    (ii) under the Federal Territory of Putrajaya Land Rules

    2002 (P.U. (A) 76), the fee for entry of a private caveat

    under item 29 of Schedule 4 is RM50 per title.

    (iii) under the Selangor Land Rules 2003, the fee is RM300

    per title (item 40), and

    (iv) under the Johore Land (Amendment) Rules 2002, item

    15 (XXVI), the registration fee is RM150 per title.

    However, where Form 19B contains more than one title

    the fee for each title after the first title is RM30 per title.

    As for the solicitors legal costs relating to caveats, these are

    slightly increased and are provided under the Fifth Schedule to the

    Solicitors Remuneration Order 2005, which came into operation

    on 1 January 2006. The remuneration for a solicitor for entry of

    a caveat is now RM200 for the first title and RM50 for each

    subsequent title. For the withdrawal of a caveat, it is RM150 for

    the first title and RM50 for each subsequent title. Please observe

    the no discount rule of the Bar Council.

    Caveator Bound By His Grounds

    A caveator should remind himself that he is bound by what he has

    stated in his grounds for the entry of his private caveat, as these

    grounds may later be used against him. In Teck Hong Development

    Sdn Bhd v. Toh Chin Ann [2008] 4 CLJ 756, Gopal Sri Ram JCA

    (as he then was) said at p. 761 in delivering the judgment of the

    Court of Appeal:

    The caveat is not grounded on the fact that the order for sale is

    invalid. In Luggage Distributors Sdn Bhd v. Tan Hor Teng [1995] 2

    CLJ 713, this court held that a caveator is bound by the grounds

    he or she sets out in the application in Form 19B for the entry

    of the caveat. It was also held if the grounds disclosed in Form

    19B do not disclose a caveatable interest, then cadit quaestio.

    Further Caveat After Lapsing

    The statutory lifespan of a private caveat under s. 328(1) is six

    years, unless extended by order of the High Court, or earlier

    withdrawn or removed. Section 328(1) reads:

    A private caveat shall, if not sooner withdrawn under s. 325 or

    lapsing pursuant to sub-section (1B) of s. 326 or removed by the

    Registrar pursuant to an order of the Court under s. 327, lapse

    at the expiry of six years from the time from which it took effect,

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    and the entry thereof may be cancelled accordingly by the

    Registrar, either of his own motion or on an application in that

    behalf by any interested person or body.

    Can a further caveat be entered after lapsing? I am inclined to

    think that the caveator should be allowed to enter a further caveat

    to protect the same interest based on the same ground, provided

    his claim or interest is still subsisting and not barred by limitation.

    (See Wong: Restraints of Dealings in Land. in The Centenary of

    the Torrens System in Malaysia. (Malayan Law Journal (1989), and

    Teo: Further Thoughts on Second Caveats [1990] 3 MLJ cxvi.)

    That question was answered in the positive by LC Vohrah J in

    Thevathason s/o Pakianathan v. Kwong Joon [1990] 2 CLJ 308;

    [1990] 3 CLJ (Rep) 248, where he said at p. 251:

    I did not think that both these authorities which were cited in

    Damodaran v. Vasudeva to support the proposition that a second

    caveat may not be entered at the instance of the same applicant

    in respect of the same land and precisely the same grounds under

    the National Land Code in any way prohibited the entering of

    fresh caveat even after the lapse of the first caveat based on a

    different ground or even on the same grounds if it is for the bona

    fide purpose of protecting the caveators interest in respect of the

    same land. It was my judgment that if a contrary view was taken

    there would be no way in which caveator like the defendant who

    had already filed his action could protect his existing interest

    pending resolution of his dispute by the Court. It seemed to me

    that s. 328(1) merely provided for the normal longevity of a

    private caveat and envisaged a time frame within which the

    caveator should take action to realize his existing interest; it did

    not exist to extinguish his right to further protection of that

    interest if he had taken positive action, as was done in the present

    case, to realize it.

    Failure To Enter Caveat

    As a rule of prudence, a solicitor should advise the client to enter

    the private caveat immediately after execution of the sale and

    purchase agreement. However, failure to enter a private caveat or

    enter one later in time does not necessarily mean that a purchaser

    of land or a chargee will lose his equitable interest in the land,

    which eventually will be converted to a legal interest upon

    registration of the transfer or charge. In Haroon bin Guriaman v.

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    Nik Mah binte Nik Mat & Another [1951] 1 LNS 24, Briggs J held

    that the caveat of Haroon cannot prevail over the prior equities

    of Nik Mah. In the Temenggong Securities case, I was involved as a

    solicitor in the sale and purchase of the relevant lands in the early

    1970s, just a few years after the NLC had come into force. At

    that time I did not know of the Registrars caveat. The purchaser

    had paid the full purchase price and had received the transfers and

    other relevant documents. The purchaser and its nominee did not

    enter any private caveat. The Inland Revenue Department had

    caused a Registrars caveat to be entered against the lands. The

    High Court refused to remove the caveat. On appeal, the

    Registrars caveat was ordered to be removed by the Federal

    Court, which was affirmed by the Privy Council. Much to my

    relief, Temenggongs nominee eventually became the registered

    proprietor of the land free from encumbrances. In the Court of

    Appeal case of Tsoi Ping Kwan v. Medan Juta Sdn Bhd & Ors

    [1996] 4 CLJ 553, the second respondent company did not

    appear to have entered a private caveat and its knowledge of the

    appellants caveats did not affect its interest adversely. Gopal Sri

    Ram JCA (as he then was), finding the balance of convenience

    favours the second respondent, said at p. 567:

    In our judgment, it would be wholly unjust and inequitable to

    permit the appellant to contend that the caveats should remain as

    against the second respondent which, in the light of the

    circumstances adumbrated by Raja Aziz in the course of his

    address to us, is entirely innocent.

    The Federal Court applied the Australian case of Butler v.

    Fairclough in United Malayan Banking Corporation Bhd v. Goh Tuan

    Laye & Ors. [1975] 1 LNS 187 in which, in the absence of

    caveats and registrations, the Federal Court found in favour of the

    appellant bank which had possession of the documents of title.

    In Ng Kheng Yeow v. Chiah Ah Foo & Ors [1987] 2 CLJ 108;

    [1987] CLJ (Rep) 254, the Supreme Court held that the entry

    of a private caveat by one party does not necessarily mean that

    he has better priority against another who has not as yet lodged

    one. The court found in favour of the 4th respondent although

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    his caveat was later in time than that of the appellant. In

    delivering the judgment of the court, Lee Hun Hoe CJ (Borneo)

    said:

    The submission of the 4th respondent that he has better equity is

    well founded. He entered into the sale agreement with the vendor

    first. He had paid the full purchase price. The vendors had

    executed the Memorandum of Transfer in favour. Also, most

    importantly the title deed is in his possession. He had become the

    beneficial owner. The only thing against him is that he entered

    the caveat later than the appellant. However, we are satisfied that

    on the facts he has the better equity.

    In Bank of Tokyo Ltd v. Mohd Zaini Arshad & Anor [1991] 2 CLJ

    989; [1991] 2 CLJ (Rep) 341, Lim Beng Choon J held that the

    plaintiff bank, as financier and absolute assignee, had the better

    equity. The learned judge said at p. 349:

    On principle and authority I cannot, therefore, accept the

    proposition that just because the intervenor had caveated the land

    in question in 1984 the priority of the plaintiff should be reduced

    and be subservient to the equity of the intervenor.

    Withdrawal Of Private Caveats

    Withdrawal of private caveats poses no difficulty under s. 325 of

    the NLC. A caveator may withdraw his caveat at any time by

    presenting to the Registry or Land Office a notice in Form 19G

    duly completed and accompanied by the prescribed fees.

    Removal Of Private Caveats

    There are two ways of removing a private caveat under the NLC

    by the caveatee, ie, the person or body whose land or interest is

    bound by a caveat. One way is by application under s. 326 in

    Form 19H to the Registrar or the Land Administrator as the case

    may be and paying the prescribed fee. A registered proprietor or

    registered chargee under the NLC may proceed to remove the

    caveat under s. 326 by virtue of his registered interest. The other

    way is by application to the High Court as an aggrieved person

    under s. 327(1) of the NLC to cover any one whose land or

    interest therein is adversely affected by the caveat. See the well-

    considered judgment of Abdul Malik Ishak J (as he then was) in

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    AKB Airconditioning & Electrical Sdn Bhd v. Hew Foo Onn & Anor

    [2002] 1 LNS 26; [2002] 5 MLJ 391 at 403 on an aggrieved

    person, where he said:

    If you are acting for the caveatee, you will have to decide and

    advise clients as to which one of the two ways is the more

    expedient in the circumstances of the case, bearing in mind (a)

    the workload and the hearing time of the High Court concerned

    and (b) the duration for removal by the Registrar or Land

    Administrator is two months under s. 326(1B) after service, when

    the burden is on the caveator to obtain an order for extension of

    his caveat from the High Court.

    Removal Under s. 326

    Removal, in my experience, it is often faster for the registered

    proprietor to remove the private caveat through the Registrar

    under s. 326. As the applicant is the registered proprietor of the

    land, the burden shifts to the caveator to show that his caveat

    should not be removed. See Eng Mee Yong & Ors v. Letchumanan

    [1979] 1 LNS 18, PC, Hew Sook Ying v. Hiw Tee Hee [1992] 2

    MLJ 189, at 194, SC and Pembangunan Wang Kita Sdn. Bhd. v.

    Fry-Fry Marketing Services Sdn. Bhd. [1998] 5 MLJ 709 at 716. A

    recent case in point of removal under s. 326 is Urethane Systems

    Sdn Bhd v. Quek Yak Kang [2006] 6 CLJ 81. In this case, the

    caveator failed to get an order to extend its private caveat before

    Helmy J (as he then was) and the caveat was accordingly removed

    by the Land Administrator.

    Removal Under s. 327

    Section 327 of the NLC provides for any person or body

    aggrieved by the existence of a private caveat to apply to the

    High Court for an order for its removal. In normal circumstances

    the caveator must be served with the application for removal. The

    procedure for removal of a private caveat is regulated by the rules

    relating to civil procedure, now the Rules of Court 2012 which

    came into force on 1 August 2012, repealing the Rules of the

    High Court 1980 which repealed the Rules of the Supreme Court

    1957.

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    In 1991 in Kumpulan Sua Betong Sdn Bhd v. Dataran Segar Sdn Bhd

    [1992] 1 CLJ 20; [1992] 1 CLJ (Rep) 150, the Federal Court by

    a 2:1 majority held that there were serious questions to be tried

    and that the balance of convenience was in favour of allowing the

    caveat to remain. Jemuri Serjan CJ (Borneo) said for the majority

    at p. 158:

    The crucial issue for our determination is whether in order to

    support the caveat to remain in force, the appellant has succeeded

    in satisfying us that it is a body at whose instance a caveat may

    be entered under s. 323(1)(a). This seems to be the logical

    approach to the issue. Be that as it may, the approach that is

    common in Malaysia before the case of Eng Mee Yong & Ors v.

    Letchumanan [1979] 1 LNS 18 was decided by the Privy Council,

    is to ask the question whether the caveator has a caveatable

    interest which terms are not defined in the National Land Code

    1965, by applying to him para. (a) of sub-s (1) of s. 323 of the

    Code. The relevant question which the court should address itself

    to is: Is the appellant a person claiming title to, or registrable

    interest in any alienated land, or any right to such title or interest?

    If it is not, that ends the matter and the caveat cannot be allowed

    to remain. The factual matrix of the claim to be a person or body

    within the purview of para (a) of the subsection must be minutely

    considered by evidence to establish that the claim is not frivolous

    or vexatious. This approach can be best illustrated by reference

    to the judgments of all the three Federal Court judges in the

    Federal Court case of Macon Engineers Sdn Bhd v. Goh Hooi Yin

    [1976] 1 LNS 67 where reference was made to s. 323(1)(a) of

    the Code in the course of the judgments. At p. 54 Gill CJ

    (Malaya), in dealing with s. 323(1)(a) of the NLC, says: As

    regards the first questions, s. 323(1)(a) of the National Land

    Code 1965 provides that a private caveat may be entered at the

    instance of any person or body claiming title to, or any

    registrable interest in, any alienated land or may right to such title

    or interest. It would seem clear that the respondent cannot claim

    title to or any registrable interest in the property in question

    merely on the strength of the sale agreement which is a non-

    statutory and non-registrable instrument, but it cannot be denied

    that has a right under that agreement to such title or interest by

    bringing an action for specific performance of the agreement,

    which in fact he has already done.

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    In the Court of Appeal case of Luggage Distributors (M) Sdn Bhd

    v. Tan Hor Teng @ Tan Tien Chi & Anor [1995] 3 CLJ 520, the

    court held that as exempted tenants the respondents private

    caveats were not available to them. In a claim to a caveatable

    interest, Gopal Sri Ram JCA (as he then was) at p. 535 stated

    there are three stages involved. The first stage is the examination

    of the grounds expressed in the application for the caveat. If it

    appears that the grounds stated therein are insufficient in law to

    support a caveat, then cadit quaestio, and the caveat must be

    removed without the necessity of going any further. In the

    second stage, the caveator must show his claim discloses a

    serious question meriting a trial. The third stage is to determine

    where the balance of convenience or justice lies. The caveator

    must satisfy the three stages before his caveat is permitted to

    remain.

    In 1996 in Kho Ah Soon v. Duniaga Sdn Bhd [1996] 2 CLJ 218,

    the Federal Court ordered the caveat which was removed by the

    High Court to be restored as there are indeed serious questions

    for trial. On the onus of the caveator, Peh Swee Chin FCJ, in

    delivering the judgment of the court, said at p. 223:

    It is settled that in a matter of removal of a caveat as between a

    caveator and caveatee, as in the instance appeal, the onus is on

    the caveator to satisfy the court that his evidence does raise a

    serious question to be tried as regards his claim to an interest in

    the land in question, and having done his claim so he must show

    that, on a balance of convenience, it would be better to maintain

    the status quo until the trial of the action by preventing the caveatee

    from disposing of his land, as laid down by Lord Diplock in Eng

    Mee Yong & Ors. v. Letchumanan [1979] 2 MLJ 212, and by

    analogy indirectly to American Cyanamid Co v. Ethicon [1975] AC

    396 as indicated by Lord Diplock, the serious question for trial

    referred to above could mean a question not being vexatious or

    frivolous.

    In a pending suit, where the caveator and the caveatee are

    parties, the removal application was previously made by summons-

    in-chambers (Woo Yok Wan v. Loo Pek Chee [1974] 1 LNS 192),

    which should now be made by an application under the Rules of

    Court 2012.

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    For an application to remove a private caveat made by originating

    summons, see Chi Liung & Son Sdn Bhd v. Chong Fah & Sons Sdn

    Bhd & Anor [1974] 1 LNS 21; Chiew Sze Sun v. Muthiah Chettiar

    [1982] CLJ 39; [1982] CLJ (Rep) 423; and Bank Utama

    (Malaysia) Bhd v. Periamma Vellasamy [2003] 1 CLJ 142 where

    Azmel J (as he then was) refused to remove the caveat. As the

    originating summons is retained by the new Rules of Court 2012,

    this procedure may, in an appropriate case where there is no

    serious dispute on facts, be used in removing a private caveat.

    No Further Caveat On Removal

    A caveator is prohibited from entering further caveats on like

    claims after removal by the court or the Registrar, as provided

    under s. 329(2) of the NLC:

    (2) where the Court has ordered the removal of any private

    caveat under s. 327, or has refused an application under sub-

    section (2) of s. 326 for an extension of time with respect to any

    such caveat, or where the Registrar has removed any caveat

    pursuant to sub-section (3) of s. 326, the Registrar shall not

    entertain any application for the entry of a further caveat in respect

    of the land or interest in question it is based on the like claim as

    that on which the former one was based.

    Caveating Own Land

    The provisions in s. 323(1) or any other section in the NLC is

    silent on the question whether a registered proprietor can or

    cannot caveat his own land or his interest therein to block a

    chargees sale or a dealing affecting his land or interest. In the first

    local case, the question was answered in the negative by LC

    Vohrah J when he removed the caveat in Eu Finance Bhd v. Siland

    Sdn Bhd (M & J Frozen Food Sdn Bhd, Intervenor) [1988] 1 LNS

    200, following Richmond J in the case of Re An Application by

    Haupiri Courts Ltd (No. 2) [1969] NZLR 353, at p. 357:

    He must go further and establish some set of circumstances over

    and above his status as registered proprietor which affirmatively

    gives rise to a distinct interest in the land. In such circumstances

    it would seem that the fact that he is the registered proprietor of

    an estate or interest under the Act may not prevent him lodging

    a caveat.

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    In Hiap Yiak Trading Sdn Bhd & Ors v. Hong Soon Seng Sdn Bhd

    [1990] 1 CLJ 912; [1990] 2 CLJ (Rep) 117, Richard Talalla JC

    (as he then was) held that the registered proprietor could caveat

    its own land, and the caveat in question should remain as the

    nature of the agreements and the compensation issue should be

    tried.

    Damages For Wrongful Caveats

    An intended caveator must first ensure he has a caveatable

    interest in the land before entering a private caveat, as a caveator

    is liable to pay compensation for his wrongful caveat under

    s. 329(1) of the NLC. In Luggage Distributors (M) Sdn Bhd v. Tan

    Hor Teng @ Tan Tien Chi & Anor [1995] 3 CLJ 520 Gopal Sri

    Ram JCA (as he then was) gave the following caution at p. 537:

    It is a serious matter to caveat a persons property, and unless a

    case is properly made out, caveat ought not to be permitted to

    remain on the register a moment longer than is absolutely

    necessary.

    In the Court of Appeal case of Trans-Summit Sdn Bhd v. Chun

    Nyook Lin (P) [1996] 3 CLJ 502 Siti Norma Yaakob JCA (as she

    then was), with whom Shaik Daud JCA and Abu Mansor JCA

    concurred, in ordering payment of damages, said at p. 506:

    On that conclusion, we allow this appeal with costs here and

    below and order that the deposit be refunded to the appellant.

    Consequentially, there will also be an order to assess damages by

    the Registrar of the High Court, Melaka, to be paid by the

    respondent to the appellant under s. 329(1) of the National Land

    Code 1965. The private caveat Jilid 75 Folio 99 entered by the

    respondent against Lot 1915 is to be removed forthwith and ex

    parte order for extension of the caveat is set aside.

    In Pembangunan Wang Kita Sdn Bhd v. Fry-Fry Marketing Services

    Sdn Bhd [1998] 2 CLJ Supp 96 Low Hop Bing J (as he then

    was) ordered removal of the caveat and damages to be paid by

    the wrongful caveator. The learned judge said at p. 106:

    By reason of above, I hold that the defendants entry of the

    private caveat is wrongful as the defendant had not disclosed a

    caveatable interest in its application (Form 19B) under s. 323(1)

    of the National Land Code. Hence the defendant is unable to

    cross the first hurdle. I order that the private caveat be hereby

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    removed forthwith, without the necessity of going further. I also

    make a consequential order that damages be awarded to the

    plaintiff, to be assessed by the Registrar of this Court. Costs to

    be taxed and paid by the defendant to the plaintiff.

    Burden To Prove Damages

    To recover damages, the burden of proving loss or damage rests

    on the caveatee, ie, the person or body whose land or interest is

    bound by the private caveat. In practice, the task of proving loss

    or damage suffered is not always easy. For example, in Mawar

    Biru Sdn Bhd v. Lim Kai Chew [1992] 1 LNS 22, the defendant

    land proprietor did not recover any damages as he had failed to

    prove any loss for the wrongful entry of the private caveat by the

    plaintiff purchaser. In Plenitude Holdings Sdn Bhd v. Tan Sri Khoo

    Teck Puat & Anor [1994] 2 CLJ 796, a case concerning wrongful

    termination of contract for purchase of land, the High Court had

    awarded a total sum of about RM16 million in damages. On

    appeal, in Tan Sri Khoo Teck Puat & Anor v. Plenitude Holdings Sdn

    Bhd [1995] 1 CLJ 15, the Federal Court set aside the judgment

    of PS Gill J (as he then was) and reduced the huge damages of

    some RM16 million to a mere RM10 as nominal damages mainly

    because the land had appreciated in value. In the course of his

    judgment Edgar Joseph Jr. FCJ said at p. 31:

    At the end of the day, the purchaser got the land worth

    approximately RM120,000,000, for which they had paid only

    RM47,939,958.

    No Extension If Caveat Cancelled

    In Manian Kandasamy v. Pentadbir Tanah Daerah Raub & Anor

    [2011] 7 CLJ 583, the Court of Appeal refused to extend the

    caveat which had been cancelled by the Land Administrator.

    Zaleha Zahari JCA, in delivering the judgment of the Court of

    Appeal, said at p. 591:

    [15] The popular meaning attributed to the word extend in

    s. 326(2) of the Code is that it enlarges or gives further duration

    to any existing right rather than re-vests an expired right. We are

    in agreement with the judicial commissioner that the courts power

    to extend a caveat under s. 326(2) of the Code was only

    exercisable where a caveat is still alive and was no longer

    exercisable after a caveat had been cancelled.

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    [16] On the facts of this case the Land Administrator had clearly

    acted within the powers conferred upon him by s. 326(1B) of the

    Code in removing the appellants 4th private caveat for failure to

    furnish a court order within the time specified. The judicial

    commissioner was right in ruling that once a private caveat has

    been removed, the Code does not give the court power to revive,

    renew/continue a private caveat which has been cancelled. It is not

    within the inherent jurisdiction of the court to make orders which

    go beyond the limit of the powers expressly given to it by statute.

    Restoration Of Caveat

    If a private caveat had been wrongly removed, the court has the

    power to restore it. In Palaniappa Chettiar v. Letchumanan Chettiar

    [1981] 1 LNS 83; [1981] 2 MLJ 127, the caveat was removed

    by the High Court, but on appeal the Federal Court ordered the

    caveat to be restored on the ground at p. 129 that:

    There are many factors concerning the caveat which were not

    considered and from the evidence that is available the

    considerations in favour of maintaining the caveat outweigh any

    consideration that has so far been shown to be in favour of

    removing it. We therefore restored it.

    In Syed Ibrahim bin Syed Abdul Rahman v. Liew Su Chin (F) [1983]

    1 LNS 45; [1984] 1 MLJ 160, the Federal Court refused to

    restore the caveat of the appellant ordered to be removed by Wan

    Hamzah J Lee Hun Hoe CJ (Borneo) said at p. 163:

    The learned Judge rejected the contention of the appellant that he

    was entitled in law to have the caveat imposed. He cited the

    principle laid down in Karuppiah Chettiar v. Subramaniam and

    followed in Temenggong Securities Ltd. & Anor. v. Registrar of Titles,

    Johore & Ors. that once the owner by a sale had wholly disposed

    of the land he divested himself of all interest therein and he

    becomes thereby merely a bare trustee for the purchaser. There

    was therefore no interest remaining against which a third partys

    caveat can lie. He distinguished Macon v. Goh Hooi Yin from the

    case before him where the respondent had paid the full purchase

    price. But in Macons case the earlier of the two sales was not

    completed as only part payment was made. The later sale was

    completed by full payment of the purchase price. Also, there was

    a pending suit whereas there is none in the instant case. The

    question of notice on the part of the appellant becomes important

    as both sales were unregistered and subject to the approval of the

    State. On the evidence the learned Judge held that the appellant

    had notice of the earlier sale.

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    In affirming the judgment of the High Court, the learned Chief

    Justice said at p. 164:

    In the circumstances is it just for the learned Judge to restore the

    caveat? The answer must depend on the facts and merits of each

    particular case. On payment of the full purchase price on April 1,

    1978 the purchaser obtained the document of Title to the land

    from the vendor. By paragraph 9 of the affidavit the respondent

    stated that the issue document of title to the said land has been

    and is presently in my possession. True no caveat was lodged.

    It may be that she thought that her interest was sufficiently

    protected by taking possession of the document of Title and also

    that her husband was then building the house on the land.

    Further, the registered proprietor had executed a Memorandum of

    Transfer as mentioned earlier. The evidence that the appellant had

    prior notice is overwhelming. We do not think the learned Judge

    was wrong to refuse restoring the caveat.

    Joint-Venture Cases

    In the Court of Appeal case of Trans-Summit Sdn Bhd v. Chun

    Nyook Lin (P) [1996] 3 CLJ 502, at p. 506, Siti Norma Yaakob

    JCA (as she then was), in refusing to extend the private caveat

    entered in consequence of a joint venture agreement, said:

    In the proceedings before us, what interest does the respondent

    possess? It is not in the land. That has already been validly sold.

    Her interest really lies in the profits that her company hopes to

    gain from the joint venture agreement with the appellant, which is

    being challenged by the appellant. The civil suit testifies to this.

    As her interest is only monetary in nature, she has therefore no

    caveatable interest over the land. She cannot continue to have the

    private caveat lodged by her extended until after the disposal of

    the civil suit.

    The above Trans-Summit case, Hew Sook Ying v. Hiw Tin Hee

    [1992] 3 CLJ 1352; [1992] 1 CLJ (Rep) 120, and Perbadanan

    Setiausaha Kerajaan Selangor & Ors. v. Metroway Sdn Bhd & Anor

    & Another Appeal [2003] 3 CLJ 339 were referred to and followed

    by the Court of Appeal (Mokhtar Sidin JCA, Mohd Ghazali

    Yusoff JCA (as he then was), and Zulkefli Makinudin JCA (as he

    then was)) in Tan Geok Teck & Yang Lain lwn. Upaya Kelana (M)

    Sdn Bhd [2007] 3 CLJ 312, a case on joint-venture to develop a

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    piece of land caveated by the defendant. The application of the

    appellants (plaintiffs in the High Court) to remove the caveat

    entered by the defendant based on monetary interest in the joint-

    venture agreement (see also Wong Kuan Tan v. Gambut Development

    Sdn Bhd [1984] 2 CLJ 26; [1984] 1 CLJ (Rep) 441) was dismissed

    by the High Court and hence the appeal to the Court of Appeal

    which allowed the appeal and ordered the removal of the caveat.

    Mokhtar Sidin JCA delivered in the National Language the

    judgment of the Court of Appeal.

    File Action Timeously

    After the entry of the private caveat it is important to note that

    the caveator must take civil action, in the word of Lord Diplock

    in the Privy Council case of Eng Mee Yong & Ors v. Letchumanan

    [1979] 1 LNS 18; [1979] 2 MLJ 212 at p. 215 timeously for

    specific performance of t