PRIVATE CAVEATS

Sharifah Zubaidah Aljunid

(Sem. 2- 2019/2020)
 Coverage:
1) Nature of a Private Caveat
2) Functions of a Private Caveat
3) Who May Enter a Private Caveat?
4) Effect of a Private Caveat
5) How to Enter a Private Caveat
6) Registrar’s Duties in Entering a Private Caveat
7) Duration of Private Caveat
8) Removal of a Private Caveat
9) Compensation for Wrongful Caveat
 What is a Private Caveat ?
A personal caveat
entered by the Registrar
upon application by a
person or body who has
a ‘caveatable interest’.
A statutory injunction
to protect a claim to an
existing unregistered
registerable interest in
land.
 Effect?

Preserves the status

quo of the land.
Suspends the process
of registration until
settlement of
conflicting claims
relating to the land
under dispute.
 Nature of a Private Caveat
Damodaran v
Vasudeva [1974]:
“a 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 per Syed Agil Barakbah,
the right of the J.
parties.”
 Main purpose of caveat?

To restrain the caveatee from

dealing with the land in dispute
pending the determination of the
caveator’s interest in the land by a
court of competent jurisdiction.
 (Miller v Minister of Mines
1963, Privy Council).
 Purposes of a Caveat:
1) A notice to the world at large that the
caveator has a claim to an alleged interest in
the disputed land.
2) Prohibits subsequent dealings with the
land or interest therein. (including a
Certificate of Sale – Form 16F/I)
3) Preserves the status quo of the land
pending resolution of the dispute by the
court.
 Private Caveat does not create or
enhance interest of caveator

Does not have the effect of enhancing the

caveator’s interest in the land – it does not
create a legal interest in the land.
See Syed Agil Barakbah’s observation in
Damodaran v Vasudeva: “…no person can
create rights in his own favour nor enlarge
or add to his existing proprietary rights by
means of a caveat.”
Temenggong Securities Ltd. & Anor. v
Registrar of Titles Johor & Ors.[1976]

“…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 court.”
 Who can apply for a Private Caveat?
See s.323 that specifies categories of persons:
a) any person or body claiming title to, or any
registrable interest in, any alienated land, or any
right to such title or interest;
b) any person or body claiming to be beneficially
entitled under any trust affecting such land or
interest;
c) the guardian or next friend of any minor
claiming to be entitled under any trust affecting
such land.
Levels of Caveatable Interest
 s.323(1)(a) interpreted liberally?

Macon Works & Trading S/B v Phang Hon

Chin [1976] 2 MLJ 177:
“…the whole system of caveats is founded
on the principle that they exist for the
protection of alleged as well as proved
interest…”
(per Hashim Yeop Sani, J.)
Interpretation of First Limb of s.323
(1)(a) – can be divided into 2:

‘Person or body
claiming title to, or ‘any right to such
any registrable title or interest’
interest in,…land’
 ‘Claiming title to’

Kumpulan Sua Bentong v Dataran Segar

S/B [1992]
A 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.
 ‘Person claiming a registrable
interest in land’

Standard Chartered Bank v Yap Sing

Yoke [1989]
A chargee could enter a private caveat
where the charge document had been signed
but had yet to be registered.
Krishna Kumar v UMBC [1983]

 Held:

An unregistered 2nd chargee who had an

instrument of charge in registrable form but
had not obtained the consent of the first
chargee had a ‘registrable interest’ in the
land and could enter a private caveat to
protect its interest.
 Interpretation of Second Limb
of s.323 (1)(a)
The second limb ‘person or
body claiming ANY In Macon Engineers
RIGHT to such title or
interest’ may cover those S/B v Goh Hooi Yin
who have signed contracts [1976],
relating to land and have a purchaser of land
an equitable or ‘in under an agreement
personam’ right to have
such contact enforced.
has a right to the land
A purchaser who has paid or interest in the land
a deposit and signed the and can thus lodge a
SPA could thus be private caveat.
included.
 Wong Kuan Tan v Gambut Dvpt Sdn.
Bhd.[1984] 2 MLJ 113

Federal Court observed:

“The words ‘any rights to such title or interest’ may be
wide enough to allow rights arising under a contract
for a registrable dealing to be protected by a caveat but
they are not wide enough to cover mere personal right
relating to land.”
Examples:
Sale and purchase agreement- lease agreement - charge
annexure - agreement for an easement
Does an intended purchaser at negotiations
stage have a ‘caveatable interest’?
Million 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.
No concluded contract, no
caveatable interest.
Murugappa 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.
Score Options S/B v Mexaland Devp
S/B [2012] 6 MLJ 475 (FC)

In order to be a ‘caveatable interest’, the interest

should represent a transaction that could ultimately
lead to its registration on the register.
The respondent had no ‘caveatable interest’ in the
land because the agreements that it signed were not
agreements that conferred a registerable interest in
the land but were joint venture and project
management agreements for the purpose of
developing the land.
 Pasupathi a/l Sithamparam v Adam bin
Abdullah [2019] 2 MLJ 254

An option to purchase is Held:

not a caveatable interest. The mere existence of the
Grounds of caveat was option was insufficient in
that the caveator had an law to support a caveat.
option to purchase the There was no transaction
land within one month that would ultimately lead
period immediately after to registration of the land.
the borrower failed to Ordered caveat to be
repay the loan. removed.
Effect of Restriction in Interest on IDT?

Where 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 ‘caveatable interest’ until the consent of the
State Authority has been obtained.
See Goh Hee Sing v Will Raja & Anor. [1993] 3
MLJ 610)
Thus, caveatable interest only arises after
restriction is complied with.
Effect of a Private Caveat?
(s.322(2) NLC)
Eng Mee Yong & Ors. v Letchumanan
[1979]:

“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 caveator’s 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.”
 (per Lord Diplock)
 Wong Kim Poh v Saamah [1987]
Supreme Court:
So long as a caveat is in force, registration,
endorsement or entry on the RDT of any
instrument of dealing shall be prohibited.
Under the Torrens system where registration is
everything, the prohibition in s.322(2) must be
strictly complied with.
The Registrar is statutorily obliged to refuse the
registration because failure to do so would be a
violation of an express provision of the NLC.
 How to Enter a Private Caveat?
S.324 NLC:
a) Fill in the prescribed statutory Form 19B.
b) Accompanied by:
i) prescribed fee
ii) 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.
Cont.:
 d) Registrar will endorse on the RDT the words ‘private
caveat’ together with a statement specifying 4 things:
 i) Whether the caveat binds the land itself or a particular
interest.
 ii) Name of caveator.
 iii) Time it is effective – time the application was
received (s.324(2)(c))
 iv) The reference under which it is filed.

 e) The Registrar will notify the proprietor in Form 19A

or any other person vested with the interest caveated.
 When Does A Caveat Become
Effective?
Federal Court in Version Held:
Buy Sdn. Bhd. v. Thong Although, under section
Wee Kee & Anor. [2015] 324(2)(c) the entry of a
3 MLJ 22 private caveat is dated
Issue: from the time the
Does a private caveat application for its entry
take effect upon is received, it only takes
presentation to the land effect after endorsement
office or upon entry by by the Registrar on the
the Registrar on the RDT.
RDT?
 Registrar’s Duties in entering a
Private Caveat ( s.324(1))

The entry of a private caveat is purely an

administrative act of the Registrar.
The Registrar cannot refuse to accept a caveat
presented so long as it conforms to the form
prescribed.
The Registrar cannot question the merits or validity of
the caveat.
No undertaking in damages in required as a
precondition of the right to lodge a private caveat.
 Can a Registered Proprietor Caveat His
Own Land?
TWO VIEWS:
In 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:
“a person who relies on his status as 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.”
 Contrary View:
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.

For a good discussion on this issue, see Teo Keang

Sood’s article: “Caveating One’s Own Land: Cold
Comfort for the Registered Proprietor” in [1991] 1
MLJ xxxiv
 Caveating Part Only of Land
See proviso to s.322:
“Provided that where the claim is in respect a part of
the land, the caveat binds the whole land…”
Does this mean that one may not caveat only a portion
of land?
See discussion of cases at p. 390-391 of your text.
Position after amendment of NLC in 2001 – 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)
 Duration of a Private Caveat ?

s.328(1) : a private Azlan b. Maidin &

caveat lapses after 6 Anor. V. PT Melaka
years. Tengah & Anor. [2007]
Similarly observed in 2 MLJ 47, it was held
Goh Heng Kow v Raja that once a caveat has
Zainal Abidin [1995]. lapsed, the caveator
will not be able to rely
on any claim to a
caveatable interest in
the land anymore.
Can the caveator apply to the court for
extension of the caveat after it lapses?
Taipan Focus Sdn. Bhd. v Tunku Mudzaffar [2011]
1 MLJ 441
Federal Court held:
The Court has no power to extend the life span of
a private caveat as doing so would be contrary to
section 328 NLC.
Note however that the court may order the
extension of a private caveat in an application for
its removal – see s.326. Such application only
happens before the caveat lapses.
 Can a Private Caveat be
Withdrawn?

Yes, by the caveator by filling in Form 19G and a

prescribed fee.
(See s.325 NLC)
REMOVAL OF A PRIVATE
CAVEAT
PROVISIONS FOR REMOVAL OF
PRIVATE CAVEAT
 TWO WAYS TO REMOVE
 s. 326  s. 327

A caveatee can apply to ‘Any other person or body

the Registrar for removal aggrieved by the existence

of the private caveat of the private caveat’ may
under s.326. apply to the High Court
under section 327 for an
Caveat will be removed
order to remove the caveat.
after 2 months unless the The purposes and
caveator obtains a court procedures under s.326 and
order to extend the s.327 differ.
duration of the caveat.
 Section 326
Who can apply? – “any person whose land or interest
is bound by a private caveat”
This would mean:
1) the registered proprietor
2) a registered chargee
3) registered lessee or sub-lessee.
4) a registered grantee of an easement.

(See article by Salleh Buang; “Dislodging Interest on

Land” – link on e-learning)
 Procedure under s.326
1) Caveatee applies for removal of caveat by
presenting Form 19H accompanied by prescribed fee.
2) Registrar will serve the caveator with a Notice of
Intended Removal in Form 19C and endorse the
RDT that F.19C has been served.
3) 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).
Extension of Private Caveat u-s.326
It is the caveator who The court will look at
applies to the court for the ground for entry of
extension. the caveat as stated in
He is to satisfy the court Form 19B and NOT
that there are sufficient new grounds.
grounds in fact and in (See COA decision in
law for continuing the Luggage Distributors
caveat in force. (per (M) Sdn. Bhd. v Tan
Lord Diplock in Eng Hor Teng (1995) 2
Mee Yong’s case) AMR 969)
 Normal Approach by the Court?

The 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.)
What is the Effect of Removal of the
Caveat u-s.326?
The caveator cannot enter another private
caveat on the same grounds. (See s.329(2)
NLC)
Cases:
-Hong Keow Tee & Anor. V Alkhared &
Khoo Holdings S/B [1982] 2 MLJ 42.
- Hock Hin Bros. S/B v Low Yat Holdings
S/B [1984] 1 MLJ 92.
CASE LAW ON s. 326
 Tan Lay Soon v Kam Mah Theatre
S/B [1990] 2 MLJ 482
The caveator in this case was a purchaser under a
contract of sale and the caveatee, a chargee.
Caveator applied for extension of the PC upon
receiving Form 19C under s.326(2) NLC.
Held: (Edgar Joseph Jr., J.)
There was sufficient grounds for continuing in force
the caveats…until the claim for specific performance
is adjudicated by the court.
 Luggage Distributors (M) S/B v Tan
Hor Teng & Anor. [1995] 1 MLJ 719
COA laid down 3 guidelines on whether a caveat
should be extended under s.326(1B):
1) Whether the respondent has disclosed a
caveatable interest?
2) If yes, then whether his affidavit in support of his
application for extension discloses a serious
question to be tried?
3) If yes, then whether the balance of convenience is
in favour of the caveat remaining on the register
pending the disposal of his suit.
 Goh Paik Swan v Ng Choo Lum
[1996] 3 MLJ 437

The Court of Appeal cited the guidelines in Luggage

Distributors with approval.
In 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.
See other latest cases mentioned at p.401 of your
textbook.
(Institut Teknologi Federal S/B v. IIUM Education
S/B, Sanjung Selamat’s case, etc.)
REMOVAL OF PRIVATE CAVEAT
BY THE COURT (S. 327)
s.327: Removal of Private Caveat by
the Court
Who can apply? – This refers not only to
‘person aggrieved’. 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.
e. g. an exempt tenant,
an equitable lienholder,
etc.
Eng Mee Yong’s case distinguished
s.326 and s.327

“whereas 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.”
(per Lord Diplock)
 Meaning of ‘”aggrieved party” in
s.327 not defined in NLC
Punca Klasik S/B v RAP Nathan v Hj
Abd. Aziz b Abd Abd Rahman [1980] :
Hamid & Ors. whether a person is
[1994]: “something aggrieved by the
wrongful in law existence of a caveat
which has been done will depend on
to a person or body whether he will suffer
that affects their title loss if the caveat is
to the property”. not removed.
 Can a chargee be an ‘aggrieved’
party?
CIMB Bank v Foo Suit
UMBC v D& C Bank Ching & Anor. [2011] 8
[1983], a registered MLJ 416,
chargee was held to be a chargee was an
an aggrieved party as aggrieved person when
the subsequent entry of the caveat of a
a caveat by the purchaser of some lots
appellants made it of the land was
difficult for them to preventing it from
effect a sale of the land. applying for an order for
sale of the land.
North Plaza S/B v United Securities S/B
[2010] 1 MLJ 631

COA held:

The plaintiff, a shareholder of the company,

was not an aggrieved person under s. 327
and could not seek the removal of a private
caveat lodged on the company’s land.
 Two approaches for the court to
decide in s.327:

Traditional The guidelines set

approach in Macon by the Privy
Engineers S/B v Council in Eng Mee
Goh Hooi Yin Yong’s case.
[1976] (Federal
Court decision)
 Macon Engineers’ Approach
In an application under s.327, the court is to ask first:
“Whether the caveator has a ‘caveatable interest’ ”.
If no, caveat removed.
If yes, caveator must show that his claim is not
frivoulous or vexatious.
Courts have therefore equated ‘caveatable interest’
with ‘serious question to be tried’.
Issue: Is this correct?
Guidelines in Eng Mee Yong:
If 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.
If he is not, his application to remove the caveat will be
dismissed.
If the applicant manages to prove he is a person
aggrieved, then the onus moves to the caveator.
The 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.
Current Approach of the Courts?
In Murugappa In Soon Seng Co. v
Chettiar v Lee Teck Toko Palayakat
Mook [1995], Jamal (M) S/B
Supreme Court [1999], the High
followed the Court followed also
approach in Eng the approach in Eng
Mee Yong. Mee Yong.
Upmarket Devpt S/B v Sriera Devpt
S/B [2011] 4 MLJ 681 (FC)

Observation by the Federal Court:

“A caveat was in essence a temporary equitable

remedy, like an interim injunction, to maintain the
status quo of the parties. As such, the balance of
convenience factor should be considered and
determined upon any application for its removal.”
 CIMB Bank v Foo Suit Ching &
Anor. [2011]
On application for removal of the caveat by the
chargee under s. 327, the court ordered the removal of
the caveat on 2 grounds:
1) That the caveator did not specify in Form 19B his
limited interest in the land and this was contrary to
s. 322(2) NLC.
2) The caveator had no ‘caveatable interest’ as there
was no serious issues to be tried. Furthermore, the
caveat should not remain due to the inordinate
delay on part of the caveator in bringing a case
against the developer for specific performance.
Compensation for Wrongful Caveat?
See s. 329(1)
Mawar Biru S/B v Lim Kai Chew [2002] 1 MLJ
336
In 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.
QUESTIONS?