Land Law II - Private Caveat PDF

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Land Law II Restraints on Dealings Private Caveat Introduction It is to protect an unregistered interest or title to land pending the finalisation or registration or settlement of a dispute in court. Nature of Private Caveat Caveatable Interests Look at s323 (1). What are caveatable (the list is not...

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Land Law II 2015/2016 Restraints on Dealings – Private Caveat Introduction 

It is to protect an unregistered interest or title to land pending the finalisation or registration or settlement of a dispute in court.

Nature of Private Caveat Caveatable Interests  

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Look at s323 (1). What are caveatable interests:- (the list is not exhaustive) – s323 (1) (a)  A purchaser seeking specific performance of the SPA  A chargor who can satisfy the court that his claim to the interests in the property would raise a serious question to be tried  A person who has an option to purchase  An unregistered chargee  A person who has an interest in a lease/sublease S323 (1) (b) – “…beneficially entitled under any trust…” o Registrar of Titles, Johore: Malaysian Torren system does not prevent or restrict the creation of beneficial interests in land whether under express, resulting or constructive trust. o Rajinder Kaur v Jeswant Singh: Failure to show the existence of a trust affecting the land/interest therein and that the claimant is beneficially entitled thereunder is fatal to the entry of a caveat. o Tan Heng Poh v Tan Boon Thong: A residuary beneficiary has no caveatable interest in the land where the administration of the estate is incomplete.

Effect of Private Caveat

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S322 (2): Private caveat is to prohibit registration, endorsement or entry on the register document of title of:o Any instrument of dealing and anyc ertificate of sale relating thereto; o Any claim to the benefit of a tenancy exempt from registration granted thereout; o Any lien-holder’s caveat in respect thereof. Macon Engineers Sdn bhd v Goh Hooi Yin: The entry of the caveat does not make the claim or right eithr better or worse. Woon Kim Poh v Sa’amah bte Hj Kasim: F: The Registrar had registered a transfer of land in favour of the appellant when Respondent’s caveat was still in force.

Land Law II 2015/2016 H: The Registrar is statutorily obliged to refuse the registration as to do so would violate an express provision of the NLC. 

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S322 (2) proviso: Where the claim is in respect of a part of the land, the caveat binds the whole land and where the claim is in respect of an undivided share in the land, the caveat binds the whole of the undivided share in the land. o N Vangedaselam v Mahadevan: Fedeal Court - A person who claims a registrable interest in a specific portion of land may caveat the whole land provided that the effect of the caveat is expressly limited only to that specific portion. What shall not prohobit by private caveat:o S322 (4): the instrument, endorsement of the tenancy or entry of the lien-holder’s caveat was received prior to the time from which the private caveat takes effect; o S322 (5) (a): where the instrument of dealing was presented, or the application for endorsement of a tenancy was made, by the caveator himself; o S322 (5) (b): where the caveator has consented in writing to the registration of the instrument of dealing or endorsement of the tenancy, as the case may be.

Function of Resgistrar 

s324 (1): The function of Registrar in application to enter a private caveat is purely administrative and he is not required to go into the merits of the claim on which the application for the entry of the caveat is based. o Nanyang Development Sdn Bhd v How Swee Poh: The role of the Registrar in entering a caveat is purely administrative. He must grant the application by making the necessary endorsement on the register.

Procedures and Entry of Private Caveat 

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To enter to private caveat, one must do so in Form 19B – s323(2); Together with Form 19B, the application shall be accompanied by (a) the prescibed fee; (b) grounds giving rise to the claim thereto; (c) a description or a paln of the land affected – s323(3). Failure to comply with this requirement is fatal to the enrty of the caveat and may be a valid ground for its removal. o Tan Heng Poh v Tan Boon Thong: The appellant’s caveat was legally unsustainable for non-compiance with thi requirement and that the caveatee was entitled to have the caveat removed. Failure to state the nature (grounds) of the claim on which the caveator’s application is based is also fatal to the entry of the caveat. Reason being is that it leads to the irresistible inference that the claim is baseless, frivolous and vexatious.

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S417 (2): It is no duty of the court to save the defective caveat by amending or modifying it so as to restrict its application to the claim or interest of the caveator in the land.

Removal of Private Caveat 

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3 ways:o S325: Withrawal by the caveator o S326: Application by the caveatee via Registrar o S327: Removal by the Court S325: Withdrawal by the caveator o Withdraw by a notice in Form 19G S326: Application by the caveatee or Registrar o Who may apply?: only a person or body having a registered title or interest therein eg a registered proprietor, lessee, sublessee and chargee, affected by the caveat is entitled to make the application.  Tan See Hock v Development & Commercial Bank Bhd: Application by the unregistered chargee to the Registrar for removal of the Pf’s caveats under s326 was bad and the act of the Registrar in issuing a notice of intended removal of the caveat in Form 19C was also ultra vires s326. o S326 (1): application would be made in Form 19H o S326 (1A) & (1B): A notice of inteneded removal of the caveat in Form 19C will be issued by the Registrar to the caveator intimating that he will cancel the caveat upon expiry of two months from the date of the service of the notice upon the caveator unless a court order extending the caveat is served to him. o The extinction of the caveat in such a situation is final and irrevocable. o The entry of a fresh caveat on the same ground and in respect of the same land arising from such a situaiton is prohibited by s329 (2). o However, in regard to the lapsing of a caveat at the expiry of its lifespan of 6 years, the right to enter a frest caveat is still available to the cavetor even where the fresh caveat is based on the same ground. o Service will be deemed good even if the caveator has not in fact received or been brought to his attention Form 19C if section 431 (Methods of Service) of the Code has been complied with. S327: Removal by the Court o One needs not to show he has a registered title or interest but all that needs to be shown is that is aggrieved by its existence irrespectice of whether or not he has a registered title or interest in the land – s327(1). o How to define “aggrieved”?

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RAP Nathan v Haji Abdul Rahman bin Haji Yusoff1: A pertinent question that arises is whether he will suffer loss if the caveat lodged by the plaintiff is not removed. Puncak Klasik Sdn Bhd v Abdul Aziz bin Abdul Hamid: A “person aggrieved” is a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully refused him something, or wrongfully affected his title to something. A successful purchaser of land sold by tender was an aggrieved party.

Wu Shu Chen v Raja Zainal Abidin Raja Hussain: The word “aggrieved” must be given its ordinary meaning and an aggrieved person is one whose legal right or interest is adversely affected by the wrongful act or conduct of another person or body. After the relevant parties proved that they are aggrieved parties, it is now caveator’s turn to defend his side – caveator duty. o Under s326 and s327, the caveator has the onus of satisfying the court that there are sufficient grounds in fact and law for the caveat to continue in force after the expiry of the said two months under s326 (1B) and s327 o Eng Mee Yong v Letchumanan: The caveator must first satisfy the court that on the evidence presented to it is claim to an interest in the land is neither frivolous nor vexatious but does raise a serious question to be tried, and having done so, he must go on to show that on the balance of convenience it will be better to maintain the status quo until the trial of the action, by preventing the caveatee from disposing of his land to some third party. 

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Serious questions to be tried, how? – In the same case, the court held that the court must determine in the first instance whether statements contained in affidavits that are relied upon as raising a conflict of evidence upon a relevant fact have sufficient prima facie plausibility to merit further investigation as to their truth. o Kumpulan Sua Betong Sdn Bhd v Dataran Segar Sdn Bhd: The caveator must first establish that he has a caveatable interest in the land and having done so, he must then go on to shw that his claim does raise a serious question to be tried and that on a balance of convenience, the caveat ought to remain. 1 This case is frequently mentioned in DZ’s lecture slides.

Land Law II 2015/2016 o Syed Hussein bin Salim Alattas: Inordinate delay on the part of the caveator in entering a caveat may also render the claim being deemed vexatious and thus no serious question to be tried. o If the caveator has not brought action timeously, the balance of convenience may not be in favour of status quo.  Kwan Yoon Fatt & Sons Sdn Bhd v Trends Building Sdn Bhd: The caveator brought proceedings 8 months after the entry of the caveat and the Court held that the caveator did not take prompt action. ** I think both Ms Sik and DZ still prefer that we prove in a way that aggrieved person – serious question to be tried – balance of convenience where it is the postion of Eng Mee Yong.

Competing interests  

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Main issue is that there are two or more competing claims to unregistred registrable interests in land. Butler v Fairclough: High Court of Australia held that failure to enter a caveat constitutes negligence on the part of the prior claimant so as to defeat the prior equity for it enables the registered proprietor to hawk the certificate of title around the twon and obtain advance of money on the face of the clean certificate. Abigail v Lapin: Privy Council held that where the proprietors of lands had transferred them to the nominee of the creditor together with the certificates of title but had entered no caveat, their equity should be postponed to that of the mortgagee because the proprietors had armed their transferee with the power to deal with the lands as owner. United Malayan Banking Corp Bhd v Goh Tuan Laye: The prior claimant will maintain his priority if he has not by any act or omission induced the subsequent claimant to act to his detriment. Under this issue competing priorities, one must understand the doctrine of notice:o There are 3 types of notice, be it actual, constructive or imputed. o In order for the subsequent claimant has better claim compard to the prior claimant, he must have no notice of the earlier eequitable interest. o Actual Notice: This is based on subjective awareness of the relevant facts giving rise to the prior interest, eg possession of land.  A party will only have actual notice if it can be established or inferred from their conduct that they had actual knowledge. o Constructive Notice:-

Land Law II 2015/2016 Arises when the purchaser ought to have known about the prior equitable interest. o Imputed Notice: Consists of the actual or constructive knowledge of the purchaser’s agent or legal practitioner.  Such parties must be acting in their capacity as agent or legal advisor for the purchaser when they obtain or ought to obtain the relevant knowledge.  They must be acting in connection with the particular transaction and not generally. ...