Registrar\'s Caveat Land Law PDF

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FATHIN SORFINA BT MOHAMAD HUSSIN FACULTY OF SYARIAH & LAW, USIM [2021]REGISTRAR’S CAVEATNature of Registrar’s Caveat Section 319(1) of NLC 1965 Also referred to as official caveat Entered or lodged by the Registrar on the application by person who are specified in s320 of the NLC 1965. To protec...

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REGISTRAR’S CAVEAT Nature of Registrar’s Caveat • • • • •

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Section 319(1) of NLC 1965 Also referred to as official caveat Entered or lodged by the Registrar on the application by person who are specified in s320 of the NLC 1965. To protect & inhibit dealings with the land. The entry or lodgement of the Caveat does not create or enhance any existing claim to title or interest or give rise to any claim to title or interest. Registrar means: ➢ For Registry title: Registrar of Titles or Deputy Registrar of Titles ➢ For Land office title: Land Administrator

Section 320(1): Circumstances Where (RC) Registrar’s Caveat May Be Entered 1.

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For prevention of fraud or improper dealing: ➢ The Registrar performs a quasi-judicial function in entering his Caveat ➢ He is required to make adequate inquiries and examine the allegation of fraud/ improper dealing. ➢ The Registrar is not required to take part in any examination of severity of fraud or improper dealing. ➢ Not required to make decision that the alleged act of fraud has actually been committed. For protecting interests of: (i) The Federation/ State Authority (ii) Any minor, person with mental disorder/ unsoundness of mind or owner absent from Federation. For protection of the unsecured government debts. ➢ Temenggong Securities Ltd v Registrar of Titles- the registrar entered his caveat to protect the interest of the inland revenue department in respect of a claim for unpaid income tax. Held: Privy Council held that interests, which can be protected were those in the land that are recognised by the Code as being either registrable or otherwise entitled to protection. This means the interest must be proprietary as such an unsecured creditor of the proprietor of the land has no such interest in the land. Therefore, the caveat must be removed because the interest did not represent an interest in the land. ➢ The government dissatisfied with the decision in Temenggong Securities, & inserted subsection (ba) to section 320 of the National Land Code 1965 so that even in circumstances where the debt is unsecured or judgment has yet to be obtained against the registered proprietor, the Government reserves the right to apply to enter a Registrars Caveat to prevent dealing with caveated land prior to the settlement of the Government's claim. ➢ Section 320(1) (ba) has been used increasingly by Inland Revenue Department (IRD) to place a registrar’s caveat over landed properties belongs to

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registered proprietor who are in arrears of income tax payment. Protection of register pending correction of errors on register document of title.

Who Can Apply for Registrar’s Caveat? 1) Minority Interest; Registrar can enter his caveat to protect the interest in land or right to such an interest for minor. 2) Mental Disorder or Unsound Mind; Registrar can enter his caveat to protect the interest for a person who is land disordered or of unsound mind. 3) Owner Absent from the Federation; An owner who is not in the Federation of Malaysia will be able to seek protection for his land. Effects on Registrar’s Caveat •

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Section 319(1)(b): A Registrars caveat once entered on the land as will have the effect of preventing the creation of the following dealings: 1. The registration of all dealings such as transfer, charge, lease, sub-lease, easement on the disputed land by anyone including the registered proprietor. 2. Claim for tenancy exempt from registration on the disputed land. 3. Entry of Lien-Holders caveat on the disputed land. However, RC will not prevent the entry of Private Caveats, Trust Caveats or Prohibitory Orders. RC is unique and different from all Caveats as it takes effect retrospectively. It has the effect preventing registration of all registered dealings, which was presented for registration but yet to be registered at the point of time when Registrars Caveat was entered. RC however will not affect any prior registered dealings.

Functions of Registrar •

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The Registrar has to exercise discretionary powers. ➢ Whether Registrar has discretion to enter caveat or refuse entry of Caveat? ➢ ARPL Palaniappa Chettiar v PL. AR. Letchumanan Chettiar & Anor - discretion is with Registrar as to whether to enter a caveat. (must be exercise judiciously and reasonably without any element of mala fide (bad faith). Must be exercised judiciously or reasonably and bona fide. The court may remove the caveat if its entry is misleading and is no longer necessary or desirable in the circumstances specified. By contrast in the case of application for the entry of a private caveat or lien holder’s caveat his function is purely ministerial or administrative.

FATHIN SORFINA BT MOHAMAD HUSSIN FACULTY OF SYARIAH & LAW, USIM [2021]

Tan Soo Bing v Tan Kooi Fook [1996]- Held: A person desirous of entering a Registrar’s caveat in respect of any land must apply to the Registrar. If Registrar refuses his application, his remedy is to appeal to the court against such refusal. He cannot go straight to the court, which has no jurisdiction to entertain such applications. The court only has appellate jurisdiction under section 418 of the National Land Code 1965.

Pendaftar Hakmilik Negeri Kedah & Oversea Chinese Banking Corp Ltd [ 1991

Entry of RC to Protect Interests of Federation

Held: The Registrar had failed to take into consideration several material factors in entering the Registrar’s caveat on the application of the Inland Revenue Department……if the debt due on any prior charge or charges exceeds the market value of the land, then the Registrar’s caveat cannot be entered against the land as it can reasonably inferred that the debt due to the federation can never satisfied from the land.

Who Has Priority? Prior Registered Chargee or Gov Under the RC.

Whether the Court can make an order to compel the registrar to enter his caveat?

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Section 417(1) NLC:

MBF Finance Bhd v Pendaftar Hakmilik Negeri Perak & Anor [1990] Held: Even if there was an existing charge, the Registrar or Land Administrator was entitled to enter a caveat under section 320(1) (ba). The onus was on the Director General of Inland Revenue to satisfy the court the court that there is a serious question to be tried. Serious question to be tried: there would be surplus remaining after the debt is satisfied.

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“The court may by order direct the registrar or any collector to do all such things as may be necessary to give effect to any judgment or order of given or made in any proceedings relating to land and it shall be the duty of the registrar or collector to comply with the order forthwith.”

Development & Commercial Bank Bhd v Land Administrator, Wilayah Persekutuan & Anor [1991] Held: Although a Registrar’s caveat may be lawfully entered to secure any debt due to the Federation even where there is already an existing charge on the land. However, the caveat cannot take priority over the prior registered charge which is indefeasible.

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Pendaftar Hakmilik Negeri Kedah & Oversea Chinese Banking Corp Ltd [ 1991] Held: The Registrar must have considered all the material information pertaining to the matter such as the value of the Government debt, the land and the debt or debts due on any registered charge or charges. Where he enters the caveat without doing so, he will be regarded as having acted ultra vires the said paragraph with the result that the caveat can be ordered by the court to be removed.

Procedure for Entry • •

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Application –Form 19F(Section 321 NLC) Upon the entry of the Registrar’s caveat, the Registrar is required to serve a notice on the registered proprietor in Form 19A No life span for Registrar’s caveat. Shall continue to be in force until it is cancelled.

Removal of Registrar’s Caveat A Registrars Caveat will be in force until cancelled by the Registration in the following circumstances: 1. 2. 3.

S.321(3)(a) NLC: Removed by the Registrar on his own motion. S.321 (3)(b) NLC: On the application by the proprietor of the caveated land. S.321(3)(c) NLC: By a Court Order. FATHIN SORFINA BT MOHAMAD HUSSIN FACULTY OF SYARIAH & LAW, USIM [2021]...