2. What is a Private Caveat ?
īA personal caveat
entered by the Registrar
upon application by a
person or body who has a
âcaveatable interestâ.
īA statutory injunction to
protect a claim to an
existing unregistered
registerable interest in
land.
3. Effect?
īPreserves the status quo
of the land.
īSuspends the process of
registration until
settlement of conflicting
claims relating to the
land under dispute.
4. Nature of a Private Caveat
īDamodaran v
Vasudeva [1974]:
īâa caveat is nothing more
than a statutory
injunction to keep the
property in status quo
until the court has had an
opportunity of
discovering what are the
right of the parties.â
īper Syed Agil Barakbah, J.
5. Main purpose of caveat?
īTo restrain the caveatee from dealing with
the land in dispute pending the
determination of the caveatorâs interest in
the land by a court of competent
jurisdiction.
ī (Miller v Minister of Mines
1963, Privy Council).
6. Purposes of a Caveat:
ī1) A notice to the world at large that the
caveator has a claim to an alleged interest
in the disputed land.
ī2) Prohibits subsequent dealings with the land
or interest therein.
ī3) Preserves the status quo of the land pending
resolution of the dispute by the court.
7.
8. Private Caveat does not create
or enhance interest of caveator
īDoes not have the effect of enhancing the
caveatorâs interest in the land â it does not create
a legal interest in the land.
īSee Syed Agil Barakbahâs observation in
Damodaran v Vasudeva: ââĻno person can
create rights in his own favour nor enlarge or add
to his existing proprietary rights by means of a
caveat.â
9. Temenggong Securities Ltd. &
Anor. V Registrar of Titles Johor
& Ors.[1976]
īââĻis 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 court.â
10. Who can apply for a Private
Caveat?
īSee s.323 that specifies 3 categories of persons:
īa) any person or body claiming title to, or any
registrable interest in, any alienated land (1), or any
right to such title or interest (2) ; (Notice 2 limbs
here.)
īb) any person or body claiming to be beneficially
entitled under any trust affecting such land or interest;
īc) the guardian or next friend of any minor claiming
to be entitled under any trust affecting such land.
11. s.323(1)(a) interpreted liberally?
Macon Works & Trading S/B v Phang Hon
Chin [1976] 2 MLJ 177:
īââĻthe whole system of caveats is founded on the
principle that they exist for the protection of
alleged as well as proved interestâĻâ
ī(per Hashim Yeop Sani, J.)
12. Interpretation of First Limb of
s.323 (1)(a) â can be divided
into 2:
īâPerson or body claiming
title to landâ
īSee: Kumpulan Sua Bentong
v Dataran Segar S/B [1992]
īA prior registered
proprietor challenging the
title of a new registered
proprietor is a body
claiming title to the land u-
s.323(1)(a) and has a
caveatable interest.
īâPerson and body claiming
a registrable interest in
landâ.
īStandard Chartered Bank v
Yap Sing Yoke [1989]
īA chargee could enter a
private caveat where the
charge document had been
signed but had yet to be
registered.
13. Krishna Kumar v UMBC [1983]
īAn unregistered 2nd
chargee who had an instrument of charge
in registrable form but had not obtained the consent of the
first chargee had a âregistrable interestâ in the land and could
enter a private caveat to protect its interest.
14. Interpretation of Second Limb
of s.323 (1)(a)
īThe second limb âperson or body claiming ANY RIGHT to
such title or interestâ may cover those who have signed
contracts relating to land and have an equitable or âin
personamâ right to have such contact enforced.
īThis would include a purchaser who has signed the SPA and
has paid the deposit towards the purchase.
īIn Macon Engineers S/B v Goh Hooi Yin [1976], a purchaser of
land under an agreement has a right to the land or interest in
the land and can thus lodge a private caveat.
15. Effect of Restriction in Interest on IDT?
īWhere there is a restriction in interest on the title requiring
the consent of the State Authority for the transfer of the
land, the purchaser will not have any âcaveatable interestâ
until the consent of the State Authority has been obtained.
īSee Goh Hee Sing v Will Raja & Anor. [1993] 3 MLJ 610)
16. Does an intended purchaser at
negotiations stage have a
âcaveatable interestâ?
īMillion Group Credit S/B v
Lee Shoo Khoon & Ors.
[1986] 1 MLJ 315, it was
held that an intended
purchaser at negotiation
stage who has not yet
concluded a contract does
not have any caveatable
interest.
17. No concluded contract, no
caveatable interest.
īMurugappa Chettiar v Lee
Teck Moon [1995], the COA
held that in the absence of
an assertion of a concluded
contract, it cannot be said
that the caveator had a
claim to the title to land-
thus no interest that is
capable of being protected
by the entry of the caveat.
19. Eng Mee Yong & Ors. v
Letchumanan [1979]:
īâthe effect of entry of a caveat expressed to bind the land
itself is to prevent any registered disposition of the land
except with the caveatorâs consent until the caveat is
removed. This is a very grave curtailment of the rights of the
proprietor. It can be imposed at the instance of anyone who
makes a claim to title to the land, however baseless that
claim may turn out to be. A private caveat does not have the
effect of altering the ownership of the land or interest. It
merely functions as a notice of a claim and priority of a
claim.â
ī(per Lord Diplock)
20. Wong Kim Poh v Saamah [1987]
īSupreme Court:
īSo long as a caveat is in force, registration, endorsement
or entry on the RDT of any instrument of dealing shall
be prohibited.
īUnder the Torrens system where registration is
everything, the prohibition in s.322(2) must be strictly
complied with.
īThe Registrar is statutorily obliged to refuse the
registration because to do so would be a violation of an
express provision of the NLC.
21. How to Enter a Private
Caveat?
īS.324 NLC:
īa) Fill in the prescribed statutory Form 19B.
īb) Accompanied by:
īi) prescribed fee
īii) statutory declaration of applicant or solicitor to verify the
claim.
c) Upon receipt of F.19B, Registrar will note on the
application the time it was received.
22. Cont.:
īd) Registrar will endorse on the RDT the words âprivate
caveatâ together with a statement specifying 4 things:
īi) Whether the caveat binds the land itself or a particular interest.
īii)Name of caveator.
īiii) Time it is effective â time the application was received
(s.324(2)(c))
īiv) The reference under which it is filed.
īe) The Registrar will notify the proprietor in Form 19A or any
other person vested with the interest caveated.
23. Registrarâs duties in entering a
Private Caveat ( s.324(1))
īThe entry of a private caveat is purely an administrative act
of the Registrar.
īThe Registrar cannot refuse to accept a caveat presented so
long as it conforms to the form prescribed.
īThe Registrar cannot question the merits or validity of the
caveat.
īNo undertaking in damages in required as a precondition of
the right to lodge a private caveat.
24. Can a Registered Proprietor Caveat His
Own Land?
īIn Eu Finance Bhd. v Siland S/B [1989] 1 MLJ 195, Justice LC
Vohrah said that the registered proprietor could not caveat
his own land because:
īâa person who relies on his status registered proprietor must
necessarily be a person already possessing title/interest in the
land and not merely a person claiming title to or any interest
in that land and must as a matter of logic have been excluded
by the language of s.323(1) NLC.â
īHowever in Hiap Yiak Trading S/B & Ors V Hong Soon Seng
S/B [1990]. Richard Tallalla JC allowed the registered
proprietor to caveat his own land.
25. Caveating Part Only of Land
īSee proviso to s.322:
īâProvided that where the claim is in respect a part of the
land, the caveat binds the whole landâĻâ
īDoes this mean that one may not caveat only a portion of
land?
īSee discussion of cases at p. 390-391 of your text.
īPosition after amendment of NLC in 2001 â a caveator may
caveat a particular interest only in the land by caveating the
whole land but expressing it to bind a particular interest
only. (See s.322(3) NLC)
26. Duration of a Private Caveat ?
īs.328(1) : a private
caveat lapses after 6
years.
īSimilarly observed in Goh
Heng Kow v Raja Zainal
Abidin [1995].
īAzlan b. Maidin & Anor. V.
PT Melaka Tengah & Anor.
[2007] 2 MLJ 47, it was
held that once a caveat
has lapsed, the caveator
will not be able to rely
on any claim to a
caveatable interest in the
land anymore.
27. Can a Private Caveat be
Withdrawn?
īYes, by the caveator by filling in Form 19G and a prescribed
fee. (See s.325 NLC)
28. Can a Private Caveat Be Removed?
īYes, under section 326 and 327 NLC.
īWho can apply?
īA caveatee can apply to the Registrar for removal of the
private caveat under s.326. Caveat will be removed after 2
months unless the caveator obtains a court order to extend
the duration of the caveat.
īâAny other person or body aggrieved by the existence of the
private caveatâ may apply to the High Court under section
327 for an order to remove the caveat.
īThe purposes and procedures under s.326 and s.327 differ.
29. Section 326
īWho can apply? â âany person whose land or interest is
bound by a private caveatâ
īThis would mean:
ī1) the registered proprietor
ī2) a registered chargee
ī3) registered lessee or sub-lessee.
30. Procedure under s.326:
ī1) Caveatee applies for removal of caveat by presenting
Form 19H accompanied by prescribed fee.
ī2) Registrar will serve the caveator with a Notice of
Intended Removal in Form 19C and endorse the RDT
that F.19C has been served.
ī3) Under s.326(1B) the caveat will lapse after 2 months
specified in the notice.(unless the caveator obtains a
court order to extend the said caveat).
31. Extension of Private Caveat u-
s.326
īIt is the caveator who applies to the court for extension.
īHe is to satisfy the court that there are sufficient grounds in
fact and in law for continuing the caveat in force. (per Lord
Diplock in Eng Mee Yongâs case)
īThe court will not usually test the validity of the
claim/interest protected by the caveat but will consider
whether or not the caveator had taken any other court action
to determine his claim. (e.g. claim for specific performance
of the agreement.)
32. What is the Effect of Removal of
the Caveat u-s.326?
īThe caveator cannot enter another private caveat on the
same grounds. (See s.329(2) NLC)
īCases:
ī-Hong Keow Tee & Anor. V Alkhared & Khoo Holdings S/B [1982]
2 MLJ 42.
ī- Hock Hin Bros. S/B v Low Yat Holdings S/B [1984] 1 MLJ 92.
33. Tan Lay Soon v Kam Mah Theatre
S/B [1990] 2 MLJ 482
īThe caveator in this case was a purchaser under a contract of
sale and the caveatee, a chargee.
īCaveator applied for extension of the PC upon receiving
Form 19C under s.326(2) NLC.
īHeld: (Edgar Joseph Jr., J.)
īThere was sufficient grounds for continuing in force the
caveatsâĻuntil the claim for specific performance is
adjudicated by the court.
34. Luggage Distributors (M) S/B v
Tan Hor Teng & Anor. [1995] 1
MLJ 719
īCOA laid down 3 guidelines on whether a caveat should be
extended under s.326(1B):
ī1) Whether the respondent has disclosed a caveatable
interest?
ī2) If yes, then whether his affidavit in support of his
application for extension discloses a serious question to
be tried?
ī3) If yes, then whether the balance of convenience is in
favour of the caveat remaining on the register pending
the disposal of his suit.
35. Goh Paik Swan v Ng Choo Lum
[1996] 3 MLJ 437
īThe Court of Appeal cited the guidelines in Luggage
Distributors with approval.
īIn this case, as the purported agreement between the
respondent and the caveatee was merely an option and not a
concluded contract, there was no serious question to be tried
and thus, caveat was not extended.
īSee other latest cases mentioned at p.401 of your textbook.
ī(Institut Teknologi Federal S/B V IIUM Education S/B, Sanjung
Selamatâs case, etc.)
36. s.327: Removal of Private Caveat
by the Court
īWho can apply? â âperson aggrievedâ.
īThis refers not only to the registered proprietor but to any
party who is claiming an interest in the land but is unable by
virtue of the caveat to register his interest.
37. Eng Mee Yongâs Case
distinguished s.326 and s.327
īâwhereas the procedure under s.326 is available only to the
caveatee, the procedure for applying directly to the court for
an order of removal is available not only to the caveatee but
also any other person aggrieved by the existence of the
caveat.â
ī(per Lord Diplock)
38. Meaning of ââaggrieved partyâ in
s.327 not defined in NLC
īPunca Klasik S/B v Abd. Aziz b Abd Hamid & Ors. [1994], the
word was taken by the court to mean:
īâsomething wrongful in law which has been done to a person
or body that affects their title to the propertyâ.
īRAP Nathan v Hj Abd Rahman [1980], the court was of the
view that whether a person is aggrieved by the existence of a
caveat will depend on whether he will suffer loss if the caveat
is not removed.
īIn UMBC v D& C Bank [1983], a registered chargee was held
to be an aggrieved party as the subsequent entry of a caveat
by the appellants made it difficult for them to effect a sale of
the land.
39. Two approaches for the court to
decide in s.327:
īTraditional approach in
Macon Engineers S/B v Goh
Hooi Yin [1976] (Federal
Court decision)
īThe guidelines set by the
Privy Council in Eng Mee
Yongâs case.
40. Macon Engineersâ Approach
īIn an application under s.327, the court is to ask first:
īâWhether the caveator has a âcaveatable interestâ â.
īIf no, caveat removed.
īIf yes, caveator must show that his claim is not frivoulous or
vexatious.
īCourts have therefore equated âcaveatable interestâ with
âserious question to be triedâ.
īIssue: Is this correct?
41. Guidelines in Eng Mee Yong:
īIf the applicant has no registered interest on the land, he
must first satisfy the court that he is a person aggrieved by
the existence of the caveat.
īIf he is not, his application to remove the caveat will be
dismissed.
īIf the applicant manages to prove he is a person aggrieved,
then the onus moves to the caveator.
īThe caveator must then satisfy the court that on the evidence
presented to it, his claim to an interest in the land does raise
a serious question to be tried and show that on a balance of
convenience, it would be better to maintain the status quo
until the trial of the action.
42. Current Approach of the Courts?
īIn Murugappa Chettiar v
Lee Teck Mook [1995],
Supreme Court followed
the approach in Eng Mee
Yong.
īIn Soon Seng Co. v Toko
Palayakat Jamal (M) S/B
[1999], the High Court
followed also the
approach in Eng Mee
Yong.
43. Compensation for Wrongful
Caveat?
īS. 329(1)
īMawar Biru S/B v Lim Kai Chew [2992] 1 MLJ 336
īIn such cases, the court will determine whether there is a
property value loss (decrease in the price of the said
property) after the land is offered for sale subsequent to the
removal of the caveat.