The document discusses the meaning and effects of a prohibitory order (PO) under Malaysian law. A PO is a court order obtained by a judgment creditor against a judgment debtor to restrain the debtor from disposing of land subject to execution proceedings to recover a judgment debt. It prohibits registration of dealings on the land. Case law discussed establishes that a PO only binds the interest still held by the debtor and cannot override prior interests, and an extension requires proof of special circumstances. The document provides definitions and explanations of key terminology and procedures regarding POs under the relevant laws and rules of court.

1. PROHIBITORY ORDER
Sharifah Zubaidah Syed Abdul Kader
LAW 3111
(2009)

2. Terminology:
Judgment debt: a court judgment obtained by the
judgment creditor to claim a debt from the
judgment debtor.
Judgment creditor: the party who claims the
judgment debt.
Judgment debtor: the party who owes money to
the judgment creditor.
Execution proceedings: proceedings to
enforcement judgment.

3. Meaning of Prohibitory Order?
See s.334 NLC
‘is to be sold in execution proceedings’ refers to
the judgment creditor obtaining a writ of seizure
and sale that will enable the court to sell the land
to pay off the judgment debt.
Thus, the PO will restrain the judgment debtor
from disposing off the land to frustrate the
execution proceedings.

4. Equivalent Concept
Writ of fieri facias :
a writ for the levy of property as a mode of
enforcing a court judgment, authorising a
court officer to seize and sell the property
of the judgment debtor, proceeds of which
would be used to satisfy the judgment debt.

5. When is a PO obtained?
When a judgment creditor applies to court
to enforce the judgment debt by way of writ
of seizure and sale against the land/interest
under Order 47 Rule 6, Rules of the High
Court 1980.
The court will issue a PO to restrain any
dealings on the land/interest.

6. P.O. = Court Order
A prohibitory order is
issued by the court.
It is an order of the
court against the land
owner who is the
judgment debtor to
stop him from dealing
with his land.

7. PO effective only upon entry on
the RDT
A PO is issued by the
High Court but can
only be effective to
restrain dealings on
land when it is entered
by the Registrar on the
RDT under section
335 NLC.
See s. 335.

8. O.47 r.6(3) RHC 1980:
“No PO issued under this rule shall affect
any immoveable property/ registered
interest therein and no immoveable
property…shall be deemed to have been
seized until such PO shall have been
registered as provided by any written law
relating to such land.”

9. Effect of PO:
See s. 336.A PO prohibits the registration or
entry of:
1) any instrument of dealing EXCEPT a
certificate of sale;
2) any TER
3) any Lien Holder’s Caveat
If PO is to restrain a particular interest on
land, see effect in s.336(2).

10. Differences between a PO and a
Private Caveat:
1) A P.O. must be entered by a judgment
creditor, whilst a private caveat is
entered by a person with a ‘caveatable
interest’ in s.323(1) NLC.
2) A private caveat restrains the
registration of a certificate of sale, a PO
does not. (See s.322(2) and 336)

11. Which has priority,
a PO or Lien Holder’s Caveat?
S.336(1): If LH Caveat is to be entered after
PO, PO takes priority and will restrain the
entry of a LH Caveat and Registrar must
reject the entry of a LH caveat. (see
s.336(4))
S.336(3): If LH caveat presented/entered
prior to PO, LH Caveat shall have priority.

12. When Can Land Subject to a PO
Be Sold in Execution Proceedings?
14 days after entry of the PO on the RDT.
(Order 47 rule 7(a) RHC 1980)
See discussion in p.420 of your textbook.

13. Standard Chartered Bank v Yap
Sing Yoke & Ors. [1989]
The sale of land made 3 days after entry of
a PO was set aside as being contrary to
Order 47 r.7(a) RHC – as 14 days had not
yet expired.

14. Duration of PO?
6 months (see s. 338)
Can a PO be extended?
Yes, through application by the Judgment
Creditor for a court order to extend the PO.
(see s.338(1))
When is the extension order effective? (See
s.338(2))

15. Karuppiah Chettiar v Subramaniam
[1971] 2 MLJ 45
The vendor sold land to the purchaser and the
transfer was executed but not registered.
On 13 Nov. 1968, the purchaser entered a private
caveat on the land.
On 14 April 1969, the judgment creditors obtained
judgment agst the vendor and entered a PO on the
property already sold to the purchaser.
Purchase applied to set aside the PO.

16. Held:
High Court allowed the purchaser to set aside the
PO.
Judgment creditors appealed to the Federal Court.
Federal Court dismissed the appeal on the ground
that the vendor had already sold his entire interest
in the land and had received the full purchase
price. Hence the vendor (judgment debtor) was
only a ‘bare trustee’.

17. Ong, CJ:
“If the land cannot be sold,
what is the point in allowing a PO to stand
on the register?”

18. Principle from Karuppiah
Chettiar’s case:
A purchaser who has entered a caveat in order to
protect his interest in the vendor’s land has
priority over the claim of a Judgment Creditor
who subsequently entered a Prohibitory Order in
respect of that land.
(Note however, such purchaser must have
concluded a contract of sale and has paid the full
balance purchase price!)

19. Meriam bt Yaacob & Ors v Shell
M’sia Trading S/B [1984] 2 MLJ 31
Federal Court held:
A judgment creditor can only take whatever
interest the judgment debtor has in the land
and not against any interest in the land in
respect of which the right of the judgment
debtor has since ceased to exist.

20. Chua Hee Hung & Ors. v QBE
Supreme Insurance Bhd. [1990]
This was an application to set aside the PO
as the judgment debtor had sold the land.
Supreme Court held:
1) When the court orders the sale of a
judgment debtor’s property, it cannot
sell more than what the judgment debtor
himself is entitled to sell.

21. 2) Neither a PO nor a caveat creates a legal
interest in land.

22. Ban Hin Lee Credit S/B v Utama
Computer Centre S/B & Anor. [1991]
Held: (High Court)
1) The court’s jurisdiction to renew a PO
ought to be exercised with caution
because a PO is in the nature of a caveat
and it interferes with the rights of a
registered owner of the land in dealing
with it. The court can only renew a PO
upon proof of special circumstances.

23. Cont.:
2) A sale of land in execution proceedings
can only be carried out if a PO is in
force. A void PO would vitiate the order
for sale.

24. Airmartech Corp. M’sia S/B v Equaltra
M’sia S/B [2002] 6 MLJ 657
There is no rigid formulation as to what
constitutes ‘special circumstances’ in an
application to extend a PO.
Depends on circumstances of each particular case.
In this case, court refused to extend the PO as it
found no special circumstances.
See discussion on ‘further PO’ in this case
discussed at p. 309 of your textbook.