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ABI, LILLY, NAD, JANNA

LAND LAW II
A + EXAM NOTES

TRANSFER  Restriction in interest


Section 214-220 NLC Section 214 (2) (c)
ONLY RP HAS POWER TO TRANSFER THE  The provisions of lease, charges and
LAND tenancies
Md Kamis B Yaakob Section 214 (3)
 Agreement to transfer land was invalid  No lease and charge may be transferred to
since the P has entered into an agreement two or more persons or bodies otherwise
with a party who was not the RP, thus has than as trustees and representatives
no right to transfer the land
INSTRUMENTS
SUBJECT MATTER OF TRANSFER
FORM 14 A;
Section 214 (1) NLC
 Section 215(1) NLC- Alienated Land
a) The whole not a part of the alienated land  Section 217(1) NLC-Undivided share of
b) The whole of undivided share in an Alienated Land
alienated land  Section 218 (1) NLC- Lease
c) Lease including sub lease in an alienated
land FORM 14 B;
d) Charge over an alienated land/
 Section 218(2) NLC- Charge
e) Tenancy exempt from registration
FORMALITIES
Peter Lai Kee Chin
 Section 207-212
 If one of the proprietors wants to sell his
part of the land, the whole land must be EFFECT OF NON REGISTRATION
transferred and the new purchaser shall be
inserted as the new co-proprietor Section 206(3)
 Peter wanted to give his wife ownership of  Contractual operation
the whole of the land
 The lawyer transferred a certain share to Section 220 (1)
both the husband and the wife  By word of mouth or any written instrument
 Court accepted this as a common practice
between husband and wife EFFECT OF TRANSFER

RESTRICTION ON EXERCISE OF POWERS Section 227

Section 214 (2) (a)  Upon registration the interest of any


lessee, sub-lessee or tenant shall include
 Prohibition under the NLC or any other the benefit of all then registered interests
written law such as; enjoyed with the land (encumbrances) i.e
o AGRICULTURAL LAND charge etc.
[Section 205 (3) (4)]
o ESTATE LAND cannot be DUTIES OF SOLICITOR
transferred to 2 or more persons
Ngeoh Soo Oh & Ors
without prior approval of the
Estate Land Board  Duties of a solicitor encompasses the use
[Section 214 A] of reasonable skill and care in giving
advice and taking such action as the facts
Section 214 (2) (b)
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

of the particular case demanded of a  The vendor holds the title as a bare trustee
reasonably competent and careful solicitor
 This requires beyond making searches on
the RDT Borneo Housing
 The solicitor has the duty of making proper
investigation and take proper caution AGREEMENT MADE

STAKEHOLDER DEPOSIT PAID

 Stakeholder (usually the purchaser‟s DUE PAYMENT MADE


lawyer) will hold money until the transfer is (BARE TRUST)
registered (by the vendor) then the REGISTRATION
stakeholder will release the money to the
vendor  Bare trust did not arise as the vendor did
 In the event of the breach, the money not pay the full purchase price
given to the stakeholder will be returned to
the purchaser.
Bachan Singh
Tan Suan Sim
4 ELEMENTS TO MAKE THE VENDOR A BARE
 A stakeholder undertakes to hold the TRUSTEE
money paid by the purchaser pending the
outcome of the future event when the  An existence of contract sufficient in form
future event happens the stakeholder will and substances
pay the money to the vendor  Purchaser carried out and fulfilled all
 Pending the outcome of the future event ; obligation needed in the contract
REGISTRATION  Vendor must have title of the land
 Vendor has no duty to perform other than
Kuldip Singh
execute the transfer and perfecting the
 Where the specified events for which a document
stakeholder is appointed have taken place
Section 11 (2) Specific Relief Act
the stakeholder would then be treated as
only an agent for the parties  The court will go through this act and
 Therefore, when the future event has compel the vendor to do specific
happened, he or she will no longer be a a performance to give the title to the
stakeholder purchaser
 If the stakeholder absconded, the loss
should fall on the person who according to
the contract had a claim to the money at
that time

BARE TRUST DOCTRINE

 The vendor must duly execute valid


registrable instrument of transfer
(beneficial ownership of the land)
 The purchaser must pay the payment of
the full purchase price
 The beneficial ownership of land passes to
the vendor whilst waiting for registration
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

LEASES AND TENANCIES RESTRICTIONS


Lease Section 225
Section 221 (2)  General restrictions;
o Any prohibition or limitation
 A lease refers to a letting of a land for a
imposed by this Act or any written
term exceeding three years and is a
law
registrable interest
o Any restriction in interest
Section 227 o So far as they are conferred on
lessees sub-lessees and tenants,
 It is a registrable interest the provisions express or implied
Tenancy of the lease or sub-lease or
tenancy in question (they must
Section 213 know)
 No lease or tenancy may be granted to
 Tenancy denotes a letting of land for a
two or more persons or bodies otherwise
term NOT exceeding three years
than as trustees or representatives
Section 223
Section 226
 It is not a registrable interest
 Where any alienated land, lease or sub-
CREATION OF A LEASE & TENANCY lease is subject to a charge, the proprietor
or sub-lessee shall not grant any lease or
Lease tenancy without the consent of the
Section 221 (4) chargee

 FORM 15A
 For a lease CHARACTERISTICS
Section 222(4) 1) The right to exclusive possession
 FORM 15B Woo Yew Chee
 For a sub lease
 The ultimate test is “the nature and quality
Tenancy of the occupancy : whether it was intended
that the occupier should have a stake in
Section 223 (2)
the sub-let or whether he should only have
 Orally or by written instrument in any form a privilege
whatsoever  Looked at the agreement and interpret the
intention of the parties whether the
Section 213(3) agreement was to create a lease or a
 May be protected by an indorsement on license
the RDT 2) Intention to create a lease or tenancy
TO WHOM ? Kandasami v Mustafa
Section 43  Exclusive possession is no longer a
Section 433B decisive factor
 What is important is the intention of the
FORMALITIES parties
Section 207-Section 212
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 If there is exclusive possession but no  Where a lease or tenancy has been


intention then it is not a lease/tenancy created, a lessee or tenant is estopped
from denying that the lessor or landlord
3) Must be granted for a specified time had legal title or interest to grant the lease
Siew Soon Wah v Yong Tong Hong or tenancy

 What was meant by the words “the SIngma Sawmill


tenancy shall be permanent” in the written  Estoppel only operates when there is a
agreement was that R should rent the
tenant in possession
premises for as long as the landlord could
let them and so long as R wishes to Wee Tiang Yap
occupy it and pay rent
 The learned judge upheld Section 116 of
 It did not mean that the tenancy was to be
the Evidence Act 1950, whereby a lessee
forever in perpetuity as there is no such
or a tenant is estopped during the
thing in law as a lease in perpetuity
continuance of the lease or tenancy to
 If the agreement was vague and uncertain
deny that the lessor or landlord had at the
it shall be deemed to be void for
beginning of the tenancy no title to the
uncertainty
land
TYPES OF LEASES AND TENANCIES  Despite the notice and knowledge of the
change of ownership to the P‟s
Leases
(deceased) son the defendants continued
Lease for a fixed term to tender and pay the monthly rental of
$280.00 to the plaintiffs
 Maximum 99 years for the whole of the
land 5) Tenancy coupled with equity
 Maximum 30 years for a part of the land Devi v Francis
Siew Soon Wah  Mrs Devi lived in a portion of Francis‟s
 It did not mean that the tenancy was to be house permitted by his mother whilst she
forever in perpetuity as there is no such was alive.
thing in law as a lease in perpetuity  Then SHE DIED. Francis now wants to
kick Mrs Devi out of the portion of the land
Tenancy which now belongs to him.
1) Tenancy for a fixed term  APPLIED the DOIL.
 CANNOT APPLY not enough detriment
 Up to 3 years  The court must prove that there was;
 Periodic tenancy-weekly , monthly, yearly o Verbal agreement with the
landlord for a certain interest in
2) Tenancy at will
the land
 Holds over after expiry with the o Existence of expectation and
lessor/landlord‟s permission encouragement of the landlord
 Can be terminated by either party anytime o Reliance on the part of the lessee
by taking possession of the land
3) Tenancy at sufferance and incurring expenditure to
develop/improve the land
 Holds over after expiry without
o The reliance is to the detriment of
lessor/landlord‟s permission
the lessee
 Lessor/landlord may repossess
 If a party can prove the above, he is said
4) Tenancy by estoppel to have a tenancy coupled with equity or
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

an irrevocable license which is also an RP will depend on whether his tenancy


equitable principle has been endorsed in the RDT
 IF YES, the tenancy (not the agreement) is
binding the new RP
EFFECT OF NON-REGISTRATION ON LEASE
Section 206 (3)
INDORSEMENT OF TENANCY
Where Malaysian courts applied English
 A tenancy exempt from registration does
equitable principles;
not bind a subsequent purchaser unless
1) A LEASE WHICH IS NOT REGISTERED IS prior to the transaction, an indorsement
VOID AS A LEASE BUT IS GOOD AND VALID AS has been made on the RDT
AN AGREEMENT FOR A LEASE AND MAY BE
Than Kok Leong
ENFORCEABLE BY A DECREE OF SPECIFIC
PERFORMANCE  The learned judge in this case referred to
Section 316 (1) NLC which provides that
Margaret Chua
any person claiming to be entitled to the
 As the lease was unregistered, it was void benefit of a tenancy exempt from
but it was good and valid as an agreement registration may apply to the Registrar for
for a lease and can be enforced in equity the indorsement of his claim on the RDT.
by a decree of specific performance  Therefore upholding Section 213 (3) NLC,
this oral agreement is not binding on the
plaintiff as it is not indorsed accordingly.
2) EFFECT OF ENTRY UNDER AN
UNREGISTERED LEASE IS EQUITABLE RIGHTS EXPRESS AND IMPLIED PROVISIONS
Cheng Hang Guan
 By way of agreement or expressly
 Promises and assurances have been provided or implied by law
made by Khoo Kongsi that so long as he Section 229
or his family continued to pay ground rent
he could stay and cultivate the farm as  Lease agreements may incorporate the
long as he wanted provisions in the 6th Schedule
 Relying on that, he and his family
Section 230
converted what was once a swampy land
into a productive farm  It should be implied in all lease
 There was proprietary estoppel in their agreements that the lessee or sub-lessee
favour will pay rent in the manner specified and
 The general rule is that a person who will duly perform all conditions
spends money on improving the property
of another has no right to claim Section 231
reimbursement or any proprietary interest  Agreements on the part of the lessee shall
therein be implied
3) A TENANCY CLAIM SUBSEQUENT TO THE Section 232
UNREGISTERED LEASE
 Agreements on the part of the lessor shall
 Will not be adversely affected not bound be implied
by the agreement for the lease
 Unregistered lessee is still in occupation OPTION
and treated as a periodic tenant v The new
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 In some agreements, a clause granting the Section 239 (3)


lessee or tenant an option to renew the
 For tenancy exempt from registration,
lease or tenancy may be included
surrender can be done by word of mouth
Wisma Sime Darby Sdn Bhd v Wilson Parking or any written agreement
(M) Sdn Bhd
Section 239 (4)
 An option for a further term at “a rent to be
 Surrender must obtain consent of the
agreed” was void unless the agreement
charge
provided some machinery or formula
which the courts could utilise to ascertain it Section 239 (5)
Voo Min En & Ors v Leong Chung Fatt  Any sub lease or tenancy granted from the
lease will not be affected
 Since the respondent gave no written
request as required of the lease, the Forfeiture
agreement is deemed to not be renewed.
 The alleged oral agreement even if Section 234 (1)
proved, could not renew the lease,  Every lease/sub lease/tenancy is liable to
because it is completely outside the forfeiture when; (a-c)
purview of this clause. a) Breach of any provision
 Unless and until this clause is amended or b) Adjudicated a bankrupt
modified so as to include an oral c) A company going into liquidation
agreement as a mode of renewal, the
alleged oral agreement remains ineffective Section 234 (2)
and irrelevant.  Manner of forfeiture is enforced by court
by re entry or by action of the court subject
to any other written law for the time being
TERMINATION OF LEASES/TENANCIES in force
Expiry Section 234 (3)
Section 240 (1) CROSS REFER Section 313  Any act done which shows an intention to
treat the lease/sublease/tenancy as
 The Registrar may cancel the registration
subsisting constitutes a waiver of the right
of the lease/ sub lease on the RDT
to forfeit
Section 240 (2)
Section 235
 The tenancy indorsed on the RDT may be
 Only after the service of a written notice on
cancelled
the lessee/tenant specifying the breach
Surrender and to remedy the breach can a forfeiture
take place
 A lease or tenancy may be surrendered
before its term is up
 The surrender must be in accordance with
Recovering Possession Of Land
Section 239 of the NLC
Section 7 Specific Relief Act
Section 239(2)
 If lessee/tenant continues occupation after
 Lease/sub lease can be surrendered by
expiry of notice the lessor/landlord may
executing FORM 15C
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

recover possession by an order of the CHARGES


court

CHARGES V MORTGAGES

A charge acquires an A mortgagee acquires


interest in the land title to ownership of the
-Statutory right to land with a promise to
enforce security reconvey by a certain
date
-Mortgagor has equity
of redemption
Takes effect upon Takes effect upon
registration execution
Upon repayment of Upon repayment of
debt the chargee has debt the mortgagee
to discharge the has to reconvey the
charge title to the mortgagor
Upon failure of the Upon failure of
repayment of the debt redemption-foreclosure
the chargee may get
an order for sale or to
take possession of the
land

Bank Bumiputera Berhad

 It is wrong to treat a charge under the NLC


as the same as an English mortgage at
common law
 A charge is governed by statutory
provision of the NLC while an English
mortgage at common law was a horse of a
different colour altogether
HLBB v Goh Sin Khah

 There are 3 conditions that will amount to


an equitable mortgage;
o There must be a loan
o Assignment of rights
o There must be a contractual right
to repay and redeem the land
Chuah Eng Khong v Malayan Banking Berhad

 An equitable mortgage could exist


because NLC does not have provisions
which would render it null and void
 However such a charge does not entitle
the chargee the benefits of the registered
charge under the Code
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

Tun Salleh Abbas fraud on the part of the lender and the third
party purchaser
 Malaysian law does not recognize a
 Therefore, the right of the borrower on the
mortgage in the sense of English land law land was still protected
whereby the ownership of land is
 This case was termed as an irregular jual
transferred to mortgagee while the
janji therefore the interest of the borrower
mortgagor only has an equitable right to
was suppose to be protected
redeem
 The act of selling the land to a third party
 For our country it must follow the Torrens
constitutes fraud in this case
System which the mortgagor retains the
legal ownership whilst the mortgagee RIGHTS AND REMEDIES IN THE EVENT OF A
acquires a statutory right to enforce his BREACH
security
 Our NLC drops the word mortgage and  In the event the borrower defaults, the
use the word charge to avoid the lender becomes absolutely entitled to the
confusion land in question, making the transaction a
jual putus
CHARGE
JUAL JANJI
POWERS OF CHARGING
Salleh Abbas CJ
Section 241 (1)
 It could be interpreted to mean that a jual
a) A charge may be created over the
janji transaction intended to operate as a
whole but not apart only of any
security transaction and could be taken as
alienated land or lease thereof or
an equitable customary security
undivided share therein
transaction
b) To secure the repayment of any debt
 Not recognized under NLC
or the payment of any sum other than
 The borrower transfers his land to the
a debt or of any annuity or other
lender who thereby takes possession of it
periodic sum
 Whatever profits the lender may make out
c) It will take effect as a security
of the land will be his to keep as a reward
transaction under the National Land
 The borrower is entitled to resume the land Code only upon registration so as to
upon discharging the debt except that render the land, lease or undivided
where a period was fixed for the share in question liable as security for
repayment of the loan, default will turn the the loan or sums of money advanced
original arrangement into an absolute sale
“jual putus” R & I Securities
JUAL JANJI IN CASES OF FRAUD
 There is no possibility for the creation of a
Mohamed Isa v Haji Ibrahim charge where there is no loan transactions
as it defeats the essence of a charge
 The lender sold the land to a third party which is to ensure the repayment of the
while the agreement was still subsisting loan
 The due date of the repayment had not
been lapsed and the borrower had not
caveated the land, Mahadevan s/o Mahalingam v Manilal & Sons
 Somehow or rather his interested was (M) Sdn Bhd
protected on the ground that there is a  An agreement to secure a debt in favour of
the creditor in respect of the debtor‟s land
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

may create an equitable charge giving rise Section 241 (3)


to an equitable right in favour of the
creditor although no charge within the  However, it is subject to :
provisions of the National Land Code o Limitation by any prohibition of
(Section 206 (3)) law being in force
o Restriction in interest
o In relation to a lease (if at that
time there is an existing lease)
Oriental Bank v Chup Seng Restaurant
 If there is the existence of any of the
 Although the unregistered charge has no above limitations, the charge can be void
right to enforce the charge under the or defeasible
National Land Code until the charge is
Harta Empat Sdn Bhd
registered, recourse under the contract
may still be available  The appellant is a director of a company
 He applied a loan under his company
Standard Chartered Bank v Yap Sing Yoke
 When the director wants to charge the
 When the unregistered chargee has land, Harta Empat said can‟t because it is
custody of the issue document of title, against Section 133 of the Companies Act
there may also be a right to lien  In that Section it provides that the director
cant charge the land which is the
Section 241 (2)
company‟s property, although the
 The powers conferred under subsection appellant borrow for the company
(1) shall include power to create second  According to Section 241 (3) (a) of the
and subsequent charges NLC, a charge is subject to a prohibition
imposed by any written law for the time
Yee Sin Cheong v UMBC being in force
 A charge duly registered amounts to an  A charge takes effect upon registration
interest in land under Section 243 of the NLC
 The RP still has title over the land  Section 133 of the Companies Act renders
 What he confers upon the chargee is the charge unfit for registration due to a
merely an interest prohibition in that section
 Thus, he can still create subsequent  Therefore, the court in this case, rendered
charges subject to obtaining consent from the charge to be unfit for registration
the prior registered chargee by applying in rendering the charge invalid
writing to the person lawfully holding the Section 241 (4)
IDT or duplicate lease requesting to
release the relevant document to enable  No charge may be granted to two or more
the subsequent charge to be effected persons or bodies otherwise than as
 If without prior consent then the trustees or representatives
subsequent dealing cannot be validly
created
 The chargee however must not withhold Section 242(1)
consent unreasonably
 The charges however will take priority in  FORM 16A ;repayment of debt in lump
accordance with the date of registration sum/instalment

Section 242 (2)


ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 FORM 16B; payment of annuity or


periodic sum
LOAN AGREEMENT CUM ASSIGNMENT (LACA)
Tan Yee Yee In instances where no document of title has been
issued to the land, therefore a charge cannot be
 Even if FORM 16A was the proper form to created, the borrower may enter into a loan
be used, the deviation from it using FORM agreement and a deed of assignment assigning all
16B according to Section 62 of the his rights, title an interest under the sale and
Interpretation Act could not be said to have purchase agreement to the lender to secure the
any substantial effect or be calculated or loan
mislead
Vallipuram
Section 243  Purchaser may make valid assignment of
rights under a contract to a third party who
 It will take effect only upon registration so
will be treated as in the same position as
as to render the land lease or undivided
the original purchaser
share in question liable as security of the
 May assign beneficial ownership to a third
loan or sums of money advanced
party equally and validly
 Can also be assigned to a bank (third
party) in consideration of a loan.
Section 244
 Therefore, if the original purchaser
 This section just mention that the chargee defaults in repayment, bank can undergo
is entitled to the custody of the IDT so long an order for sale
as there is still a charge under that
property
 Chargee if requested by proprietor or Damai Freight (M) Sdn Bhd
lessee must give the IDT to the Registry
Land Office  Although LACA is against the NLC, it is
still enforceable under Section 206(3) of
 The chargee who is first in time is entitled
the NLC as it enforces the contractual
to retain the IDT to the land or the
obligation of parties in an agreement of the
duplicate lease whilst the charge remains
assignment of parties‟s rights
in existence
 The appellant can proceed with OFS
 A co-proprietor of land can obtain a copy
under LACA
of IDT for the purposes of charging his
share in the land and the charge will be  LACA doesn‟t need a charge, just an
entitled to hold such copy agreement of assignment of parties‟s
rights
 The chargee does not lose the security
during the time he departs with the IDT
whilst the loan remains unsettled POSITION OF UNREGISTERED CHARGE
There is no provision under the National Land Code
TO WHOM ? which prohibits the creation of equitable charges

Section 43 Such a charge gives rise to an equitable right in


favour of the creditor
Section 433B
Section 206(3)
FORMALITIES
Such a right under the contract is preserved and
Section 207-Section 212 recognised under the Section 206 (3) of the
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

National Land Code, where the court may in  In situations where parties fail to proceed
exercise of its equitable jurisdiction and in with registration despite the completion of
appropriate circumstances grant an order for the instrument of the charge, parties may
specific performance by ordering the execution of a obtain contractual relief through Section
valid and registrable charge document 206 (3) NLC where the court will exercise
its equitable jurisdiction and grant the
creditor specific performance of the
Standard Chartered Bank v Yap Sing Yoke contract

 The term equitable charge has also been


used in the following circumstances; PRIORITY OF CHARGES
o Where a charge instrument has
been executed but not presented  A charge will be given priority in order of
for registration creation
o Where no separate title has been  The principle first in time will get first
issued and instead of a charge, a priority
loan agreement and a deed of  Under the NLC the priority of a charge
assignment are entered into to may be affected using the following
secure a loan mechanisms;
o Where a charge instrument had Consolidation
been erroneously attested
 Consolidation takes place where the
Tan See Hock v Development and Commercial chargor has charged two pieces of land A
Bank Berhad &B
 An equitable charge not being a charge  Normally relief would only be given if
under the National Land Code is not money is paid for both pieces of land
entitled to the benefit of indefeasibility  A chargee who is registered over different
under Section 340 properties belonging to the same chargor
can refuse to discharge one charge
Oriental Bank v Chup Seng Restaurant without the chargor simultaneously
discharging all the other existing charges
 An equitable charge is not entitled to the
 The effect of consolidation is to alter the
remedies available to a registered chargee
priority of a subsequent chargee by
under the National Land Code
restricting its priority in respect of land, by
Mahadevan s/o Mahalingam giving the consolidation chargee an
advantage
 An agreement to secure a debt in favour of
the creditor over the debtor‟s land may
create an equitable charge although no Section 245
charge within the provisions of NLC has
been executed  Consolidation is permitted if it is expressly
 The creation of equitable charge depends provided for by the charge
upon the intention and conduct of the  Otherwise, there is a restriction on the
parties at the time when the payments right to consolidate
were made
 The provision in NLC is silent and does not Public Finance Bhd v Hock Seng Housing
prohibit the creation of equitable charges
 The right to consolidate should be
and liens exercised before any application for an
order for sale
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 Look at the charge agreement “the


Tacking Annexure to the Charge”
 Whenever there is a tacking transaction,
Implied
the chargee offering tacking facilities will
gain priority in respect of the original sum  Section 249-252
and further advances
Section 246 (1) BREACH / REMEDIES FOR A REGISTERED
CHARGEE
 Any charges may make further
advancements to rank in priority to any Kimlin Housing Development Sdn Bhd
subsequent chargee  The provisions of this Code setting out the
Section 246(2) right and remedies of the parties under a
statutory charge over a land are
 May do so if the making of advance is exhaustive and exclusive and any attempt
expressly authorized by the prior charge at contracting out of those rights, unless
OR if the advance is done with the consent provided in the Code would be void as
of the subsequent chargee being contrary to public policy
Section 253
Section 246 (3)
 Advance made before he is informed in  The charge is entitled to obtain an order to
writing of the registration of subsequent sell the land or lease to which the charge
charge is deemed to have been made with relates or to enter into possession of the
the consent of the subsequent chargee land
 A chargee who has entered into
Section 246 (4) possession of the land under the charge is
 The right to tack is inapplicable except not barred from subsequently obtaining the
provided in this section (unregistered sale of the land
charge)
Section 254 (1)
Postponement
 In the event of a breach as in Section
 It operates to alter the priority of prior
253(1) which has continued for a period of
charge by placing it on a lower lever or
atleast one month or any such alternative
priority
period as specified in the charge which
Section 247 (1) shall not be less than a month
 The chargee shall serve on the charger a
 A charge may be postponed to any
notice in FORM 16D-
subsequent charge by FORM 16C
a) Specifying the breach
Section 247 (2) b) Requiring it to be remedied
within one month on the date
 The charges to which any instrument of on which the notice is served ,
postponement relates shall rank as or such alternative period as
between each other in the order therein may be specified in the charge
specified as from the date on which the c) Warning the chargor that if the
instrument is registered notice is not complied with, the
EXPRESS & IMPLIED PROVISIONS chargee will take proceedings
to obtain an order for sale
Express
Syarikat Kewangan Melayu Raya
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 A notice of default with respect to a charge the principal sum as well interest which
or charges in FORM 16D wherein is cited have become due and payable provided
two charges and in respect of which the that the principal sum is payable on
sums due under both the charges are demand
lumped together, will not be regarded as
defective where, in the circumstances of Mary Michael v UMBC
the case, the chargor had not been  Although FORM 16E is specially provided
prejudiced or misled by any effect in the for this purpose, FORM 16D, being a
notice general form of notice, may also be used
in such a case (as stated above)

Cooperative Central Bank Ltd ORDER FOR SALE BY COURT ORDER OR


THROUGH THE LAND ADMINISTRATOR
 A notice of demand which does not state
the exact and precise amount owing does An order for sale application must be made in
not have the effect of rendering the notice accordance with the relevant provisions for the time
invalid unless it demands payment of a being in force relating to the civil procedure i.e
sum to which the chargee is not entitled Order 83 Rule of Court 2012

Perwira Habib Bank


Section 254 (2)  The true intention of Order 83 must be
given effect
 The notice shall be valid and effectual after  Failure to comply with the requirements
the service of the notice under Order 83 in an order for sale would
Section 254 (3) render any order for sale granted defective
and liable to set aside
 If at the expiry of the period specified in Court Order
the notice, and the breach in question is
not remedied, Section 256
o The whole sum secured by the  An order for sale by a court order applied
charge shall become due and to land held under Registry title ( more
payable to the chargee; and than 4 hectars, town/village land)
o The chargee may apply for an  The court shall order an order for sale
order for sale unless there is cause to the contrary
Section 255
 If the principal sum secured by any charge CAUSE TO THE CONTRARY
is payable by the chargor on demand, the
chargee may make the demand by a Overseas Union Bank Ltd
notice in FORM 16E  It is for the chargor or any interested third
 If the sum in question is not paid to him party to prove the existence of any “cause
within one month of the date on which the to the contrary” at the application for an
notice is served, may apply order for sale order for sale
without serving FORM 16D
Low Lee Lian v BHL Bank
Jacob v Overseas Chinese Banking Corp  The chargee is entitled to pursue all
 Although Section 255 (1) refers to the remedies available to him “simultaneously,
principal sum, it is settled law that the contemporaneously or successively to
chargee may use FORM 16E to recover recover the money lent” unless there are
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

circumstances that may show a cause to MATTERS TO BE DEALT WITH PRIOR TO THE
the contrary SALE
 Circumstances that show that there is a Section 257
cause to the contrary;  Every order for sale made by the Court
 The title is defeasible under under Section 256 shall be in FORM 16H
Section 340 (2) and shall;
 There is a failure to meet a) Provide that the sale to be by
condition precedent such as public auction
giving notice under FORM 16D b) The sale must be held on as soon
as may be after a date specified
Cempaka Finance Berhad being a date not less than one
month after the date on which the
 If there is no proper notice given to the order is made
chargor, or where the notice demands for c) Specify the total amount due to
a sum to which the charge is not entitled, the chargee at the date on which
the existence of cause to the contrary can the order is made
be established d) The Registrar will fix a reserved
price for the purpose of the sale,
being a price equal to the
 The OFS is against the rule of estimated market value of the
equity or law land
e) The officer of the court must
Oriental Bank v Chup Seng Restaurant Sdn Bhd make sure that all bidders
 NLC clearly requires a charge to be possess the sum equivalent to
registered in the prescribed form before a ten percentum of the reserved
charge can enforce his statutory remedies price specified
f) The sum equivalent to ten
Keng Soon Finance percentum of the reserved price
 The courts have cautioned against any shall be paid as a deposit to the
attempt to refuse relief merely on the chargee at the fall of the hammer
ground that the court felt sorry for the pending settlement of the balance
borrower or that it regarded the lender as of the purchase price
arrogant, boorish or unmannerly g) The balance of the purchase
price shall be settled on a date
OCBC v Lee Tan Hwa not later than one hundred twenty
 The provisions for “cause to the contrary” days from the date of the sale
can provide for both the chargor and the and there will be no extension of
chargee, because: the period so specified
o CHARGOR : can apply to annul h) If the balance of the purchase
the notice of demand or order for price is not settled in one hundred
sale if the sale has been and twenty days from the date of
conducted fraudulently or the sale, the sum paid as a
improperly deposit shall be forfeited and
o CHARGEE : The order for sale disposed off by Section 267A
can only be void if it falls under which referred to Section 268
the 3 situations (1) (a) (b) (c) (d) (e)
o
Maimunah bte Megat Montak
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 An order for sale made by the court must o The IDT deposited to the Court a
be in FORM 16H and must contain the week before the sale
particulars as set out in Section 257 which
is mandatory and failure to comply would Land Administrator
render the order for sale invalid
Section 258 Section 260
 It shall be the duty of the Registrar to ;  An order for sale by a court order applied
 Serve a copy thereof on the to land held under Land Office title ( less
chargor and on every chargee of than 4 hectars, country land)
the land or lease in question and  An application for an order for sale by the
 See that the sale is publicly chargee shall be made via FORM 16G
advertised in accordance with the
rules of court or according to the LAND ADMINISTRATOR WILL HOLD ENQUIRY
practice customarily adopted by Section 261
the State  Upon receiving any application, the Land
 The chargee on whose the application was Administrator shall
made shall ; o Appoint a time and a place for the
 Prepare the conditions of the sale holding of an enquiry
 Deposit the IDT to the Court not o Notify the chargee of the time and
less than a week before the date place so appointed
fixed for the sale o Cause a summons to be served
on the chargor requiring him to
PROCEDURE AT THE SALE appear at the enquiry and show
Section 259 cause why the order should not
 The officer shall be made
o Receive bids ENQUIRY
o Settle summarily any question  During the enquiry LA must make
arising from the proceedings enquiries as to whether default has been
o In the absence of any bid at or made rather than examining the merits of
above the reserve price, withdraw the charge itself and its validity
the land in question, direct it to be
put up for auction on a Section 262
subsequent date, either at the  Only the chargor and the chargee shall be
same or at a new reserved price entitled to be heard or to adduce evidence
and see that the subsequent sale or in their absence, a person or body
is publicly advertised in the like appointed by the chargor or the chargee
manner  The chargor and the chargee of the person
o Declare the sale concluded in or body appointed shall be entitled to apply
favour of the highest bidder for a postponement or change of venue or
 The purchaser at the sale shall, upon cancellation
payment to the said officer of the full  If the chargee fails to appear at the time
amount, be entitled to receive from him ; fixed for the hearing of any such enquiry,
o A certificate of FORM 16F that the LA may dismiss the application
the land in question has been  If the chargee appears but not the chargor,
sold to him and treated as an the LA;
instrument of dealing and be o If satisfied that a summons to
registrable by the purchaser appear was duly served on the
chargor , and in sufficient time to
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

enable the chargor to appear and d) Fix a reserved price for the
answer shall proceed with a purpose of the sale, being a
hearing ex parte price equal to the estimated
o If not satisfied, shall adjourn the market value of the land in
hearing to a later date and cause question as estimated by the LA
a fresh summons to be served e) The LA to make sure that all
 If there are more chargees than one, and bidders possess the sum
some only of them appear, or more equivalent to ten percentum of
chargors than one and some only of them the reserved price specified
appear, the LA may at his discretion f) The sum equivalent to ten
proceed with the hearing or adjourn it to a percentum of the reserved price
later date shall be paid as a deposit to the
chargee at the fall of the hammer
Suppiah v Ponnampalam pending settlement of the
balance of the purchase price
 If the LA is satisfied that the charge in g) The balance of the purchase
question is on the register, he only has to price shall be settled on a date
decide whether or not there has been a not later than one hundred
default in the payments provided for and if twenty days from the date of the
he is so satisfied he is required to grant sale and there will be no
the application for order for sale extension of the period so
specified
Gurpal Singh v Kananayer h) If the balance of the purchase
price is not settled in one
 He has no power to consider or hear hundred and twenty days from
pleadings and defences raised on behalf the date of the sale, the sum
of the chargor which are ordinarily heard paid as a deposit shall be
by courts forfeited and disposed off by
Section 267A which referred to
Section 268 (1) (a) (b) (c) (d) (e)
MATTERS TO BE DEALT WITH PRIOR TO THE
SALE M & J Frozen Food
 At the fall of the auctioneer‟s hammer, a
Section 263 contract of sale is formed between the
1) At the conclusion of any enquiry, the LA vendor and the highest bidder
shall order the sale of the land unless he  Although a sale is concluded , the
is satisfied of the existence of cause to proprietary rights in the land do not pass to
the contrary (Low Lee Lian) or vest in the purchaser until registration
2) Every order shall be in FORM 16H
a) Provide that the sale to be by Government of Malaysia v Omar Haji Ahmad
public auction
b) Specify the date on which the  When there is no existence of a cause to
sale is to be held being a date the contrary, the LA at the conclusion of
not less than one month after the the enquiry is obliged to make an order for
date on which the order is made sale
c) Specify the total amount due to
the chargee at the date on which Section 264
the order is made 1) The LA shall;
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

a) Serve a copy thereof on the prejudice to the making of a fresh


chargor on every chargee of the application by the chargee
land in question
b) Give public notice of the sale in PROCEDURE AT SALE
such manner as he may consider Section 265
appropriate  Where a sale is held pursuant to an order
2) The chargee on whose application the under Section 263-
order was made shall deposit to the LA not o The sale shall take place under
less than 7 days before the date fixed for the direction of the LA who may
the sale; seek assistance of any licensed
a) The duplicate charge; and auctioneer and
b) If he is in custody the IDT or as o The chargee shall be entitled to
the case may be duplicate lease bid at the sale
3) The LA may if he thinks expedient to do  If at the sale, no bid is received at or
so, postpone any sale ordered under above reserve price, the land in question
Section 263 shall be withdrawn from the sale and the
4) Notice of any such postponement shall be LA shall direct that it be put up for auction
given to each of the persons or bodies on on a subsequent date, either at the same
whom a copy of the order has been served or at a new reserve price and shall give
the initial notice and shall be published in such notice of the subsequent sale as he
any such manner as the LA may consider may consider appropriate
appropriate  If at the subsequent date no bid is
received at or above the reserve price, the
POSTPONEMENT OR CANCELLATION OF AN LA may-
ORDER FOR SALE BY LA o Direct that it be put up for auction
at a subsequent date either at the
Section 264A same or a new reserve price and
1) An order for sale made under Section 263 shall give such notice of the
may be postponed only once for a period subsequent sale as he may
not exceeding three months or cancelled consider appropriate
by the LA upon any application of the o Withdraw it from the sale and
chargee with the consensus of the chargor refer the matter to the Court
in FORM 16O + fee as may be prescribed.  The purchaser at any such sale shall upon
payment to the LA of the full amount of the
The application must be submitted to the purchase price be entitled to receive from
Land Administrator not less than seven him :
days before the date of the sale o A certificate of FORM 16I that the
2) Upon receiving the application the LA may land in question has been sold to
approve or reject the application him which is registrable by the
3) If the LA approves to postpone the sale, purchaser as if it were an
the LA will give an order in FORM 16P to instrument of dealing and
each persons or bodies on whom a copy o If deposited with the LA the IDT
of the order for sale initially served and or duplicate lease
give public notice in such manner as he
may consider appropriate Ho Giok Chay v Nik Aishah
4) The rejection of any application made
 Upon default the charge may issue
under Section 264A shall be without
summons to call the landowner to show
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

cause why the land charged should not be  There is no power to cancel the order; the
auctioned order for sale will only cease to have effect
 Such power given to the chargee is a right when the land is finally sold or when
or interest in the land pursuant to Section 266 (1) the chargor
tenders full amount before the conclusion
RIGHT OF CHARGOR TO TENDER PAYMENT
of the sale
TO CHARGEE AT ANY TIME BEFORE THE SALE
 Any chargor can seek to stop the public Section 267 (1) (a)
auction by tendering the full amount due  Where the certificate of sale in respect of
under the charge before the conclusion of the land, lease or undivided share sold has
the sale been registered in the name of the
 The chargee is obliged to accept this purchaser the title or interest of the former
amount and this will terminate the sale by registered proprietor or co-proprietor or
public auction lessee shall pass to and vest in the
 The chargor will be entitled to a discharge purchaser, freed and discharged from all
of a charge and the returning of the IDT or liability under the charge in question an
the duplicate lease any charge subsequent thereto

M & J Frozen Foods Sdn Bhd Jones v Palaniappa


 As regards to the sums due under any
 For “sale concluded” or “conclusion of the charge created subsequent to the charge
sale” are merely used to signify the point in question and which is now discharged
of time where there was an acceptance of from the land, they can be recovered from
the bid the chargor in a personal action based on
 Thus even after the order for sale was the charge agreement
made and when the auction sale was  Any sums left outstanding under the
already in progress, but before a bid has charge in question or ranking in priority to
been accepted the chargor still retained it
the right to tender payment of the amount
which he owes Section 267 (1) (b)
 Any registered lease or easement
subsisting in respect of the land or lease
sold, they will bind the purchaser
ONCE AN ORDER FOR SALE HAS BEEN MADE,
THE COURT OR LA IS FUNCTUS OFFICIO Section 267 (2)
 Any tenancy exempt from registration
Functus Officio : The order becomes a final order granted by the chargor after the date of
unless appealed against registration of the charge will not bind the
purchaser unless it was granted with the
The court is functus officio once : consent of the chargee and has become
 Order for sale has been granted protected by an indorsement under
 The public auction pursuant to the order Section 316 NLC prior to the date of
has been completed and registration of the certificate of sale
 The certificate of sale has been issued to
the successful purchaser SALE BY PRIVATE TREATY
 The chargor can sell the charged land by
way of private treaty if he cannot remedy
Bank Bumiputera Berhad the default after he gets consent of the
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

chargee prior to the commencement of  Any chargee intending to take possession


foreclosure proceedings by the chargee as of any land is required to serve a notice of
long as the chargee‟s interest had not taking possession using FORM 16J
been adversely effected.  Failure to serve the notice will render the
chargor‟s act of taking possession invalid
UMBC v Chong Bun Sun
 Once an order for sale by way of a public Section 273 (1)
auction has been made by the court, the  A chargee in possession can remain in
court does not have the power to make a possession as the loan remains unpaid
subsequent order to vary or set aside the
earlier order Section 273 (2)
 Section 266 (1) seems to support the right  The chargee in possession of any land by
to fall back on sale by private treaty when occupation may remain in possession
attempts to sell by public auction were either by continuing in occupation or by
exhausted exercising his power under Section 275 to
 I cannot afford paying, I ask consent of the lease the land and receive the rent
chargee, I want to take the land and sell to payable under the lease
another party any proceeds I give to you
 “at any time tender payment” it suggest Section 274 (1)
any means necessary  The chargee is entitled to manage the land
and take all the profits accrued from the
TAKING POSSESSION land
 The right to take possession is not given to  He must be accountable to the chargor for
all chargees all sums actually received by him, but also
 It is only available to chargees of land held additional sums which he might
under registry land and it is available to reasonably receive
first chargees only  He is liable to the chargor for any act
whereby the capital value of land is
Section 270-277 impaired or the chargor is put to any loss

Section 270 (1) (aa) Section 275


 It expressly denies the right of possession  This section enhances the power of the
where the subject matter of the charge is chargee to act to recover the money owing
an undivided share in the land to him by entitling the chargee to lease or
sub-let the land
Section 271  However, the right does not extend to
 Any chargee may at any time when the granting a tenancy exempt from
chargor is in breach of any agreement on registration
his part, may enter into possession of the  The lease can subsist of a maximum of 14
whole or any part of the charged land or years
the land comprised in the charged lease
by; A DISCHARGE OF A CHARGE
o Receiving rent by granting a
lease on the land A chargee is obliged to discharge the charge upon
o Entering the land by occupation full and final settlement of the loan amount secured
by the charge
Section 272
Section 278 (1)
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 A chargee may by FORM 16N discharge LIENS


any land/lease from further liability,
Halsbury Laws of England
discharge effective on the date of
registration of FORM 16N  Lien means a right in common law in one
man to retain rightfully and continuously in
Section 278 (2) his possession belonging to another until
 A discharge does not release the chargor the present and accrued claims of the
from his personal liability under the charge person in possession is satisfied
SUBJECT MATTER OF LIENS
Section 279
 The method of creating lien is by the
 A chargor can apply to discharge the proprietor, co proprietor, lessee depositing
charge if chargee is unable or unwilling to the IDT or duplicate lease with any person
accept the payment due to the grounds: or corporation as security for a loan
o Chargee is dead, cannot be  The depositee-lender should use FORM
found, evades or refuses to 19D accompanied by IDT or duplicate
accept payment lease that belongs to the registered
o Chargor is unable to trace any proprietor
person or body authorized to
receive the payments on the CAN A CO-PROPRIETOR CREATE A LIEN OVER
chargee‟s behalf HIS UNDIVIDED SHARE IN THE LAND?
 The Registrar after satisfied the grounds Co-proprietor can also create a lien as a copy of
specified, must authorize the chargor to IDT is also allowed
deposit the amount in question with him
 Once the deposit is made, the land must Section 343(3)
be discharged  A co-proprietor may apply for a copy of the
IDT
Section 280
Section 343 (6)
 Where the land/lease has become
 A co-proprietor may use the copy for the
discharged by payment to the Registrar
purpose of effecting transfer, charge or
under Section 279, the Registrar shall
creating any lien under Section 281 in
cancel the registration of the charge
respect of his undivided share
pursuant to Section 314
Section 281(1)
Section 314
 The depositing of an IDT or duplicate
lease entitles the person holding the title or
 Any chargor may apply to the Registrar
duplicate lease to apply for the entry of a
under Section 314 for cancellation of the
lien-holder‟s caveat over the said land or
registration of the charge on the ground
lease
that a discharge has been effected by
 The person will then be entitled to a lien
payment to the chargee
over the lease/land

Section 281(2)

 Where the lien holder has obtained


judgment for the amount due to him, he
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

shall be entitled to apply to the court for an  It does not prescribe the procedure for or
order for sale of the land/lease the manner of depositing
Section 206(2)(b) Deposited as security of loan
 Non-registrable  NOT FOR ANY OTHER PURPOSES
Paramoo v Zeno
LIEN IN EQUITY
 HELD: Intention to create lien is
Mercantile Bank mandatory
 Such intention may be gathered from the
 Although registration of a LH caveat is
fact that IDT had been deposited with the
essential for a valid statutory lien, the court
lender as security for loan & not for other
can still give effect to equitable rights
purposes.
existing between the parties.i.e lien in
equity Perwira Habib Bank Malaysia

 Once it was deposited as security for a


loan, the lender was entitled to a lien in
equity despite the absence of an
3 REQUIREMENTS:
agreement for the entry of a lien-holder‟s
1) deposit of IDT or duplicate lease caveat
2) the IDT was deposited as security for a loan Nallammal
3) entry of a lien-holder‟s caveat  The element was not satisfied when
possession of IDT was obtained by fraud
or misrepresentation and the RP had
Deposit of IDT/Lease never authorized the deposit as security
for loan hence the Bank cannot enforce
ORMORM the security on the RP
 There must be a deposit IDT or duplicate Entry of Lien-Holder’s Caveat
lease
 Separating from the possession of the IDT  A lien is an unregistrable interest as NLC
or duplicate lease for purposes other than does not provide a form to create lien
surrendering the lien, as when the title is  Thus the lien holder must proceed to enter
delivered to the registered proprietor or the lien holder‟s caveat over the said land
lessee for a purpose that is required under then only will the lien take effect
the NLC or any other laws, will not cause
Section 330 (1)
the lien to be lost
 Any person or body with whom the IDT or
Staghorn
duplicate lease has been deposited as
 A third party may also deposit the title as security for a loan may apply to the
long as it was done upon instruction or Registrar under this section for the entry of
consent was given by the registered a lien-holder‟s caveat in respect of the land
proprietor or lease in question
 HELD: Section 281(1) is an enabling or
Section 330 (2)
empowering provision which allows or
enables the RP to deposit IDT with any  Any such application shall be in FORM
person/body as security for loan. 19D
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 It must be duly attested in accordance with  Section 433B(1)(b) imposed restrictions


Section 211 on land dealings in favour of foreigners
 Prescribed fee and foreign companies.
 Together with the IDT or duplicate lease  However, caveat was entered in 1987, by
then the NLC was amended so as to
Section 330 (3) impose no restriction on non-citizens &
 The Registrar shall note on the time which foreign companies.
it was received  HELD: Until the entry of a lien-holder‟s
 If the application is by post, the time at caveat, no lien was created or could arise.
which it was withdrawn from its cover in  Since at the time of the entry of the lien-
the Registry or as the case may be the holder‟s caveat, there were no restrictions
Land Office on the creation of lien in favour of foreign
 If there is no prohibition under a companies, a valid lien existed.
Registrar‟s Caveat, private caveat, trust
caveat or prohibitory order, Registrar shall;
o Enter the caveat on the RDT to DETERMINATION OF LHC
the land or a lease; and
Section 331(1)
o Serve a notification in FORM 19A
on the proprietor of that land or  A LHC may be withdrawn at any time by a
as the case may be the person or written notice to the Registrar by the lien
body for the time being entitled to holder
the benefit of the lease in  Registrar shall cancel the entry of the
question caveat as soon as may be after receipt of
the notice
Section 330 (4)
Section 331(2)
 The entry of a lien-holder‟s caveat on any
RDT shall be effected by the endorsement  Where the land/lease subject to LHC is
thereon, under the hand and seal of the sold pursuant to an order of the court i.e
Registrar with the words “ Caveat (Lien)” order for sale under Section 281(2):
together with a statement specifying;
o Whether the caveat binds the (a) certificate of sale presented for registration by
land itself or a lease thereof only the purchaser shall be deemed to have been
o The person or body on whose presented with the lien holder‟s consent
application it was entered (b) upon registration of the certificate, the caveat
(caveator) shall lapse and its entry shall be cancelled by the
o The time from which it is effective Registrar
(being the time of receipt of the
application as noted in subsection
(3) earlier and
Section 331(3)
Section 330(5)
 Cancellation by the Registrar upon proof to
 Effect as specified in Section 322(2)-(5) & his satisfaction that all sums due under the
(6)-(7) lien have been duly paid

. Section 331(4)

Heap Huat Rubber  Where the Court is satisfied that any lien-
holder‟s caveat ought not to have been
 IDT deposited to the lender, a foreign
company, in 1985.
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

entered or ought to have been withdrawn, CAVEATS


the court may order;
The entry of a caveat is a unilateral act which
o The cancellation of the LHC by
serves the following purposes;
the Registrar
o If the entry or failure to withdraw  As a notice to the world at large that the
caused damage or loss to any person entering the caveat (caveator) has
person or body, the payment of a claim to an alleged interest in the land
compensation by the caveator  To prohibit subsequent dealings with the
ought to be done land or an interest therein
Section 331 (5)  To preserve the status quo of the
contending parties pending the resolution
 On the cancelling of the entry of any by the court of their dispute over the land
caveat, the Registrar shall note on the or interest in question
register document of title the reason of the
cancellation and the date thereof The entry of a caveat does not enhance the
 Where any such entry is cancelled by caveator‟s interest or claim to an interest in the land
reason of withdrawal of the caveat, the Neither does it create a legal interest in land
Registrar shall give notice of the
withdrawal to the person or body for the FOUR TYPES OF CAVEAT :
time being entitled to the land or lease
formerly affected
 Registrar‟s Caveat
Section 281 (2)  Lien-Holder‟s Caveat
 Private Caveat
 Where the holder of any lien has obtained  Trust Caveat
judgment for the amount due to him
thereunder, he shall be entitled to apply to
the Court for, and obtain forthwith an order
Macon Engineers v Goh Hooi Yin
for sale of the land or lease
 A creature of statute and is in the nature of
a statutory injunction
DIFFERENCES BETWEEN A TORRENS LIEN  The entry of the caveat does not make the
AND A CHARGE claim or right either better or worse
 Thus frozen
 In lien, there must be an intention to create
a lien Haroon v Nik Mah
 The failure to enter a lien-holder‟s caveat
will not necessarily deprive the lender of  Competing equities arise, priority
the right to a lien in equity determined by ordinary rules of equity
 A person entitled to a lien must have first  A caveat entered to protect an interest that
obtained judgement for the amount due to has lower priority according to such rules
him, then only he can be able to apply to can be defeated by person with
the court for order for sale higher/better priority.
 A lien is not transferable as there is no
statutory provision providing for the
transfer
 There can only be only one lien created at
one time, as there is no provision to create
subsequent lien
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

REGISTRAR’S CAVEAT (b) for protecting the interest of-


RC is entered into to protect and inhibit dealings (i) the Federation or State Authority, or
with land
(ii) any person who is in his opinion under the
The entry or lodgement of the Caveat does not disability of minority, mental disorder or
create or enhance any existing claim to title or unsoundness of mind, or is shown to his
interest or give rise to any claim to title or interest satisfaction to be absent from the Federation; or
(ba) for securing that the land will be available to
satisfy the whole or part of any secured or
EFFECT OF A REGISTRAR’S CAVEAT
unsecured debt due to the Federation or the State
Section 319 (1) (b) Authority

 A RC has the effect of prohibiting the


registration, endorsement or entry on that Development & Commercial Bank v Land
document of; Administrator, Wilayah Persekutuan
o Any instrument dealing (NOT
 Section 320(1)(ba) enlarge the interests of
PROHIBITORY ORDERS i.e
govt to be protected to include unsecured
private caveats, trust caveats,
creditors.
prohibitory orders)
 The only form of priority given is the
o Any claim to benefit from the
priority over other unsecured creditors
tenancy exempt from registration
 The right of Registrar to maintain caveat
o Any lien holder‟s caveat
under Section 320(1)(ba) is subject to the
Section 319 (2) indefeasible interest of the chargee.

 RETROSPECTIVE EFFECT (c) by reason of some error appearing to him to


 A RC has the effect of preventing the have been made in the register or issue document
registration of any instrument dealing of title to the land or any other instrument
presented prior to the time the RC takes
(2) Knowledge of the Registrar that any land or
effect
interest has been acquired by any person or body in
Section 319 (3) fiduciary capacity is not a ground for entering a
Registrar‟s Caveat
 The Registrar has the discretion to waive
any of subsection (1) (b) (i)-(iii) prohibition
 The Registrar must be satisfied that it will Registrar of Titles, Johor v Temenggong
be inconsistent with the purpose for which Securities
a caveat is entered
 The Registrar may in any case, reject the  What was claimed was merely the
instrument or the application for assessment of a contingent claim to a debt
endorsement or entry and not some right or interest of lands to
be caveated
Section 320  HELD: Vs, having parted with their interest
 A Registrar‟s Caveat may be entered in in the land to As, were only bare trustees
respect of any land wherever such and have no interest in land over which a
appears to the Registrar to be necessary valid caveat can be lodged
and desirable- Pendaftar Hakmilik Negeri Kedah v OCBC
(a) for the prevention of fraud and improper dealing;  HELD: In order to enable the Registrar to
or decide whether that land will be available
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

to satisfy the whole or part of the debt due


to the Federation, he must find out:
REMOVAL OF RC
Section 321(3)
1. The market value of the land;
2. The amount of debt due on any  A RC shall continue to subsist until it is
registered charge/charges; and cancelled by the Registrar;
3. The value of debt owed to the govt… a. On his own motion; or
before exercising the Registrar‟s b. On an application by the
discretion under Section 320(1)(ba) proprietor of the land effected
 Registrar had exceeded his powers under c. Pursuant to any order of the court
Section 320(1)(ba) and acted ultra vires made on an appeal under Section
 The act was invalid as he did not consider 418 against the decision to enter
several material matters before deciding the caveat or his refusal of any
to enter the RC application for its cancellation as
per in (b)
REMEDY IF AGGRIEVED BY ENTRY OF RC
DISCRETION OF REGISTRAR
RP
Section 319(1)(a) cross refer Section 320 (1)
“necessary and desirable” Section 321(3)(b)

ARPL Palaniappa Chettiar v PL AR  Application for removal


Letchumanan Chettiar If (b) fails go to (c)
 The discretion is with the Registrar as to Section 321(3)(c)
whether to enter the caveat or not
 The discretion must be exercised  2nd limb: appeal under Section 418
judiciously and reasonably without the against the refusal
element of mala fide
CHARGEE OR ANY OTHER PERSON
 The court may remove the caveat if it‟s
AGGRIEVED BY THE ENTRY RC
entry is misleading and is no longer
necessary or desirable Section 418
PROCEDURE  Empowers parties aggrieved by decision
of the Registrar to appeal to court.
Section 321(1)
 Section 418 is the STARTING POINT for
 A RC shall be in FORM 19F actions resulting in a judgement (subject
 The entry shall be effected by the matter of order to Registrar under Section
endorsement under the hand and seal of 417)
the Registrar of the words “Registrar  Registrar has duty to decide whether to
Caveat Entered” AND a statement of time enter RC under Section 320(1)(a), (b), (ba)
of entry or (c). the refusal is a decision within
Section 418 so appeal must be made
Section 321 (2) under Section 418.
 As soon as the entry, the Registrar shall  any person/body aggrieved by decision
serve upon the proprietor of the land and under NLC of… Registrar, may appeal
any person or body having registered to the court within the period of 3
interest in the land a notification via FORM months beginning with the date on
19A
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

which it was communicated to him (the or a claim to a right to such title or


entry of RC) unregistered registrable interests therein
which interests must ultimately be capable
Public Bank v Pengarah Tanah dan Galian,
of registration
Johore Bahru

 The decision in this case which could be


appealed against by A, who is not the RP, EFFECT
under Section 418 is VALID
Section 322(2)
 Because of the phrase “any person”
 This provision deals with the effect of a
private caveat that binds the land itself/ an
CHARGEE‟S REMEDY FOR REMOVAL OF RC undivided share in the land
 It will prohibit any instrument of dealing,
Section 417 any claim to the benefit of any tenancy
 General authority of court is to direct exempt from registration, or lien holder‟s
Registrar or LA to do necessary things to caveat as long as it continues to be in
force
GIVE EFFECT to judgement/order
 PROVIDED that where the claim is in
given/made in any proceedings relating to
respect of a part of the land, the caveats
land binds the WHOLE LAND and where the
Tan Soo Bing v Tan Kooi Fook claim is in respect of an undivided share
in the land, the caveat binds the WHOLE
 Court can only give direction to Registrar if OF THE UNDIVIDED SHARE OF THE
it is necessary to give effect to any LAND
judgement/order of court.
 Court has no power to direct the Registrar Eng Mee Yong & Ors v Letchumanan
to enter the RC
 The effect of a caveat expressed to bind
Development & Commercial Bank v Land the land itself is to prevent any registered
Administrator, Wilayah Persekutuan disposition of the land except with the
caveator's consent until the caveat is
 A, chargee, has no alternative remedy removed.
and is entitled to apply for a declaration  This is a very grave curtailment of the
and a consequential order to set aside rights of the proprietor, yet it can be
caveat under Section 417 imposed at the instance of anyone who
 No express provision in Section 321 to makes a claim to title to the land, however
enable a chargee on its own right to apply baseless that claim may turn out to be.
for removal of RC  The caveat under the Torrens system has
often been likened to a statutory injunction
PRIVATE CAVEATS of an interlocutory nature restraining the
caveatee from dealing with the land
 To protect title/interests of persons pending the determination by the court of
seeking to deal with the land or disputing the caveator's claim to title to the land, in
title/interests in land pending registration an ordinary action brought by the caveator
or settlement of dispute against the caveatee for that purpose.
 The issue of a caveat differs from the grant
Krishna Kumar of an interlocutory injunction in that it is
issued without the intervention of the court
 A private caveat may be entered for the
and is wholly unsupported by any
protection of claims to title to or an evidence at all.
unregistered registrable interest in any
alienated land or undivided share therein
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

entry of any instrument on the register


document of title
Woon Kim Poh
Section 322 (6)
 The Registrar had registered a transfer of
land in favour of the A when R‟s caveat  If the registration of any instrument, or the
was still in force. endorsement or entry of any claim or lien-
 The court held that the Registrar is holder‟s caveat is prohibited by any private
statutorily obliged to refuse the caveat, the Registrar shall reject the
registration as to do so would violate instrument or endorsement or entry
Section 322(2).
PROCEDURE
 Thus, the transfer was null and void
Section 323(2)
Section 322 (3)
 Any such person who wishes to apply for
 This provision deals with the effect of a
the entry of a private caveat can do so in
private caveat that binds a particular
FORM 19B
interest ONLY
 The application shall be attested in
 It will prohibit the registration,
accordance with Section 211
endorsement or entry on the register
 State the nature of the claim on which the
document of title of;
application is based upon
a) Any instrument of dealing directly
 Express whether the caveat is to bind;
affecting that interest
o The land itself or an undivided
b) Where that interest is a lease or a
share in the land; or (322(2))
sub-lease-
o A particular interest only (322(3))
 Any claim to the benefit
of any tenancy exempt Goh Keng How v Raja Zainal Abidin bin Raja
from registration granted Hussin & Anor
 Any lien holder‟s caveat
 Failure to do so may be fatal and the
Section 322(4) caveat may be removed.
 A private caveat shall not prohibit the Section 323(3)
registration, endorsement or entry of any
instrument, claim or lien holder‟s caveat  Any application under this section shall be
where the instrument was presented or accompanied by-
the application for endorsement or entry a) The prescribed fee
received before the private caveat takes b) The grounds giving rise to the
effect claim, verified by a statutory
 NO RETROSPECTIVE EFFECT declaration by the applicant or his
lawyer
Section 322(5) c) A description or a plan of the land
affected for a part of the land or
 Does not prohibit registration of any
an undivided share of the land for
instrument/claim entered by
sufficient identification (if related)
(a) the caveator;
(b) with written consent Section 324(1)
Section 322 (5A)  Registrar shall note on the application the
time of receipt at which it was received (IF
 Even with the express consent of the
SENT BY POST : the time at which it was
caveatee of the private caveat is NOT TO
withdrawn from its cover in the Registry or
EFFECT any registration, endorsement or
Land Office)
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 AS SOON AS MAY BE THEREAFTER Eng Mee Yong & Ors v Letchumanan


give effect to the entry of the caveat as
 Registrar is required to act in an
per subsection (2)
administrative capacity only
Section 324(2)  He is not concerned with the validity of the
claim on which the caveat purports to be
 The entry of any private caveats shall be
based.
effected by the endorsement on the RDT
 If the document is in the correct form he
under the hand and seal of the Registrar
must enter the caveat on the register
with the words “Private Caveat” together
with a statement specifying- Section 418
o Whether the caveat binds the
land itself or an undivided share  Aggrieved person/body may appeal to the
in the land or a particular interest court
only WHO IS A PERSON WITH CAVEATABLE
o The person or body on whose INTEREST
application it was entered
o The time from which it is effective
(being the time receipt of the Macon Works & Trading Sdn Bhd v Phan Hon
application) Chin

Section 324(3)  The whole system of caveats is founded


on the principle that they exist for the
 As soon as may be after the entry of any protection of the alleged as well as proved
such caveat, the Registrar shall serve a interest and therefore not only is a
notification under FORM 19A to all person who has a right to a registrable
persons bound by the caveat interest in land who may enter a caveat
but also any person claiming title to it
ROLE OF REGISTRARS IN PRIVATE CAVEAT
or any registrable interest in any
Section 324(1) alienated land or even claiming only a
right to such title or registrable interest
 …and without being concerned to may enter a caveat.
enquire into the validity of the claim on
which it is based Luggage Distributors (M) Sdn Bhd

Nanyang Development  In essence the parameters of caveatibility


are circumscribed by the words “title” and
 HELD: The role of the Registrar in
“registrable interest, it is only one who
entering a caveat is purely administrative. makes a claim to either title or a
Ong Chat Pang & Anor v Valiappa Chettiar registrable interest in land or who claims a
right thereto who may enter a private
 So long as all the formalities in the NLC caveat
are complied with, the Registrar has no
power to reject a caveat.
Section 322(1)(a)
 He cannot require the caveator to
establish his claim.  It may be entered by the Registrar on the
 His duty goes no further than this, that if RDT at the instance of any of the persons
the claim of the caveator or to an interest or bodies specified in Section 323
in land is prima facie good, the caveat
Section 323 (1)
should be registered.
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 The person and bodies at whose instance for lack of registration, the agreement
a private caveat may be entered are- nevertheless gave a right in equity
a) any person or body claiming title sufficient to constitute a caveatable
to or any registrable interest in interest.
any alienated land or undivided
EM Buxton
share in any alienated land or any
right to such title or interest  The caveator was seeking recovery of the
deposit and not specific performance of
Macon Engineers
the agreement.
 So long as there is in existence a valid  By doing so, it was clear that the caveator
agreement for the sale of land, the was no longer interested in buying the
purchaser is entitled to lodge a caveat to property.
protect his rights under the contract and to  Thus it cannot be said that the caveator
sue for specific performance of the had any interest in the land capable of
agreement being registered.
 The caveator had only a claim in
J Raju v Kwong Yik Bank
personam against the RP for which a
 There was conflict of evidence, which caveat was not the proper remedy as a
appeared on the face of it not to be means of protecting such claim.
inherently improbable.  Such claim originated from the agreement
 Court held that the issue is serious enough but was not capable of being registered
to be tried. under the Torrens system
 Hence, he had a caveatable interest.  NO CAVEATABLE INTEREST

Sing Lian Express v Soh Kim Tee Eu Finance Bhd v Siland Sdn Bhd

 An option for the purchase of A's land to  A person relying on his status as RP
be exercised by R within a certain period must nicely be a person already
gave R a caveatable interest in the land. R possessing title in the land and thus
had shown his willingness to buy the land, cannot be said to be 'claiming title to'.
had offered to pay deposit and had even  NO CAVEATABLE INTEREST
submitted a draft agreement of sale for
execution by the vendor.
Affin Bank Bhd v Dato' Mohamed bin Embong
K Sockalingam Mudaliar
 A RP of land is not entitled to enter PC
 The unregistered chargee still conferred in respect of his own land unless he is able
P an equitable interest for the court to to establish a set of circumstances over
protect under the PC and above that of his status as RP.
 NO CAVEATABLE INTEREST
Inter-Continental Mining
Tan Heng Poh
 An agreement for a sublease, though not
in statutory form, can give rise to a right in  The legatee of a share in the residue
equity sufficient to constitute a caveatable where the administration of the
interest. deceased's estate is incomplete and
before the residue has been ascertained
Pok Kew Chai
 NO CAVEATABLE INTEREST
 Although failure to get the chargee's
consent for the creation of the lease
would render the lease agreement void
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

Murugappa Chettiar Lashmanan v Lee Teck  After which the PC will lapse and cease to
Moon have any effect
 In the absence of an assertion that Goh Keng How
there was a concluded contract for the
sale & purchase of the land, it could not  The statutory life of a caveat is 6 years,
be said that R had a claim to the title to the and any decision of the court to extend the
land. life of the caveat should not do so for a
 Unless a purchaser has an enforceable period greater than the statutory six years
contract for the sale of land, he can lay no Taipan Focus Sdn Bhd
claim to the title to the land.
 Thus he has no interest capable of  The court has no power to extend the PC
protection by the entry of a caveat. beyond its six years lifespan.

Anafartalar Caddessi WITHDRAWAL OF PC

 A shareholder of a company has no Section 325 (1)


right to caveat land owned by the  A private caveat may be withdrawn by the
company person or body at whose instance
Luggage Distributors v Tan Ho Teng (caveator) it was entered at any time by a
notice in FORM 19G
 Any claim to the benefit of a tenancy  Accompanied by a prescribed fee
exempt from registration & a statutory  Presented by the Registrar
lien cannot be protected by PC as they
are not capable of registration. Section 325 (2)
 Tenancy may be protected by  Upon receiving any notice of withdrawal
endorsement while lien may be protected
the Registrar shall;
by entry of a lien-holder‟s caveat. o Cancel the entry of the caveat on
the register document of title,
b) any person or body claiming to be noting the reason for the
beneficially entitled under any
cancellation and date
trust affecting any such land or o Give notice of the withdrawal to
interest and
persons whose land or an
Rajinder Kaur v Jeswant Singh undivided share in the land or
interest formerly bound by the
 Failure to show the existence of a trust caveat
affecting the land/interest therein and that
the claimant is beneficially entitled under it REMOVAL OF PC
is fatal to the entry of a caveat. 1. Removal by Registrar
Section 326 (1)
c) the guardian or next friend of any
 On application by any person/body whose
minor claiming to be entitled title/interest is bound by the caveat (the
under paragraph (b) caveatee)
DURATION  Only persons with registered interest may
apply
Section 328(1)  The caveatee may at any time apply in
 6 years from the time from which it took FORM 19H to the Registrar for its removal
effect
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

and such application shall be 2 .Removal By Court


accompanied by a prescribed fee
Section 327 (1)
Section 326(1A)
 Any person/body aggrieved by the PC may
 Upon receiving any application for apply to the court for an order for its
removal, the Registrar shall then; removal
a) Serve upon the person or body at  The court may make such order on the
whose instance the caveat application as it may think just
(caveator) was entered a notice
of intended removal through
FORM 19C and Eng Mee Yong v Letchumanan
b) Make an endorsement on the
RDT that the notice (FORM 19C)  An order of removal is available not only to
has been served on the caveator the caveatee but also to any other person
and the date of such service aggrieved by the existence of the caveat.
 … when the applicant under this section is
Section 326(1B) someone other than the caveatee, he must
 The caveat lapses at the expiry of 2 prove by satisfying the court that there
months in the notice unless the Registrar are sufficient grounds in fact and law
is served with an order of the court for treating him as a person claiming
extending the time specified in the notice such an interest in the land as would, if
it were established, make him
Section 326(2) aggrieved by the existence of the
caveat.
 The caveator served with FORM 19C may
apply to the court extending the period of 2 Puncak Klasik Sdn Bhd
months
 The Registrar upon being duly served with  A „person aggrieved‟ is a man who has
an order of the Court shall make an suffered a legal grievance, a man against
endorsement on the RDT of the date of whom a decision has been pronounced
service on him of the order and the period which has wrongfully deprived him of
of extension something, or wrongfully refused him
something, or wrongfully affected his title
Section 326(3) to something.
 The Registrar shall remove any caveat Wu Shu Chen v Raja Zainal Abidin Raja Hussain
pursuant to this section by cancelling the
entry of the caveat on the RDT and noting  The word „aggrieved‟ must be given its
the reasons for the cancellation & date of ordinary meaning.
the cancellation  To be aggrieved means one is dissatisfied
 It is the caveator‟s duty to show sufficient with or adversely affected by a wrongful
grounds in fact and law for the caveat to act of someone.
continue in force after the expiry of the two  An aggrieved person is a person whose
months period legal right or interest is adversely affected
by the wrongful act or conduct of another
Eng Mee Yong v Letchumanan person or body.
 A purchaser who had paid full purchase
 If a PC has lapsed upon expiry of the two
price to the vendor and who was therefore
month period in Section 326(1B), the
the beneficial owner of the land is an
court has no power to revive, renew or
'aggrieved person' under s 327(1).
extend it under Section 326(2).
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

Malayan United Finance Bhd v Tay Lay Soon  If the caveator has not brought action
timeously, the balance of convenience
 A registered chargee is treated as an
may not be in favour of status quo
aggrieved party because he has an
indefeasible interest in the land which is
affected by the subsequent entry of the Hock Seng Mining
caveat
 The same applies where the caveator‟s
Ismaga Bina Sdn Bhd v Govindasamy claim may be met by alternative claim for
damages
 A lessee who was prevented from sub-
letting the land due to the existence of a COMPENSATION FOR WRONGFUL ENTRY OF
caveat by a third party was an aggrieved CAVEATS AND LIMITATION ON REPEATED
party. APPLICATIONS
Section 327 (2) Section 329(1)

 The Registrar, upon duly served with order  Any person/body who wrongfully, or
under Section 327, shall cancel the entry without reasonable cause, secures the
of PC on RDT, and note the reasons for entry of a PC, or fails to withdraw a PC,
the cancellation & date shall be liable to pay compensation to any
person/body who thereby suffers any
damage or loss
Quill Construction
CAVEATOR’S DUTY TO MAINTAIN THE
 The plaintiff has to satisfy the two limbs in
CAVEAT DURING REMOVAL OF PC
Section 329(1):
Kumpulan Sua Betong o that the private caveat entered by
the defendants was entered
 It is more efficacious to combine both wrongfully or without reasonable
traditional approach in Macon Engineers cause; and
and Eng Mee Yong o that the plaintiff had suffered
o the caveator must show that he damages or losses as a result of
has caveatable interest in the the lodgement of the private
land; caveat.
o the caveator must show that his  Usually it is the RP of the land who may
claim does raise a serious institute an action under section 329(1)
question to be tried and that on NLC.
balance of convenience, the  However, any person or body taking any
caveat ought to remain interest from the registered proprietor
Syed Hussein bin Salim Alattas of a land and who has suffered loss by the
entry of, or refusal to withdraw, the private
 Inordinate delay on the part of the caveat, is also entitled to initiate an action
caveator in entering a caveat may also for wrongful entry of a private caveat.
render the claim being deemed vexatious
and thus no serious question to be tried
Mawar Biru
Kwan Yoon Fatt & Sons
 The plaintiff in an action for wrongful entry
 The caveator brought proceedings 8 of caveat must prove actual loss to be
months after the entry of the caveat. entitled to damages.
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 Thus there must be real loss, not what 2. A caveator who has withdrawn the PC under
might have been the damage. Section 325 may enter a fresh caveat
Hock Hin Bros
** Examples of loss :  A second caveat may be entered in
circumstances not caught under Section
o the caveat had prevented the sale
of the land or caused it to be sold 329(2) NLC.
for a lesser price  However, entry of a fresh caveat may in
some circumstances amounts to abuse of
caveat and thus may be prohibited by the
Section 329 (2) court

 Where the Court has ordered; Damodaran v Vasudeva


o Section 327 : The removal of PC  A second caveat may not be entered in
by the Court; or respect of the same ground as that on
o Section 326(3) : The removal of which the former caveat was based,
PC by a Registrar, unless the second caveat is not a
o The court refused the application 'renewal, revival or continuance of the
under Section 326(2) : Extension former„.
of two month period through
FORM 19C (notice of intended
removal of caveat by Registrar; or
LIEN-HOLDER’S CAVEAT
The registrar shall not entertain any
Section 330 (1)
application for the entry of a further caveat
in respect of the land or interest in question  Any person or body with whom the IDT or
if it is based on the like claim as that on duplicate lease has been deposited as
which the former one was based security for a loan may apply to the
Registrar under this section for the entry of
2 SITUATIONS WHERE PROHIBITIONS UNDER
a lien-holder‟s caveat in respect of the land
SECTION 329(2) IS INAPPLICABLE:
or lease in question
1. Where the caveat has lapsed at the expiry of
PROCEDURE
its lifespan (6 YEARS)
Section 330 (2)
Thevathason v Kwong Joon
 Any such application shall be in FORM
 There was nothing in NLC to prohibit the
19D
entry of a fresh caveat 'on different
 It must be duly attested in accordance with
grounds from the former and after the
Section 211
former caveat has ceased to exist'.
 Prescribed fee
 There was nothing to prevent the entry of
 Together with the IDT or duplicate lease
a caveat on the same grounds 'if it is for
the bona fide purpose of protecting the Section 330 (3)
caveator's interest in respect of the same
land„  The Registrar shall note on the time which
it was received
 If the application is by post, the time at
which it was withdrawn from its cover in
the Registry or as the case may be the
Land Office
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 If there is no prohibition under a (a) certificate of sale presented for registration by


Registrar‟s Caveat, private caveat, trust the purchaser shall be deemed to have been
caveat or prohibitory order, shall; presented with the lien holder‟s consent
o Enter the caveat on the RDT to
(b) upon registration of the certificate, the caveat
the land or a lease; and
shall lapse and its entry shall be cancelled by the
o Serve a notification in FORM 19A
Registrar
on the proprietor of that land or
as the case may be the person or
body for the time being entitled to
the benefit of the lease in Section 331(3)
question  Cancellation by the Registrar upon proof to
Section 330 (4) his satisfaction that all sums due under the
lien have been duly paid
 The entry of a lien-holder‟s caveat on any
RDT shall be effected by the endorsement Section 331(4)
thereon, under the hand and seal of the  Where the Court is satisfied that any lien-
Registrar with the words “ Caveat (Lien)” holder‟s caveat ought not to have been
together with a statement specifying; entered or ought to have been withdrawn,
o Whether the caveat binds the the court may order;
land itself or a lease thereof only o The cancellation of the LHC by
o The person or body on whose the Registrar
application it was entered o If the entry or failure to withdraw
o The time from which it is effective caused damage or loss to any
(being the time of receipt of the person or body, the payment of
application as noted in subsection compensation by the caveator
(3) earlier and ought to be done
Section 330(5) Section 331 (5)
 Effect as specified in Section 322(2)-(5) &  On the cancelling of the entry of any
(6)-(7) caveat, the Registrar shall note on the
. register document of title the reason of the
cancellation and the date thereof
DETERMINATION OF LHC  Where any such entry is cancelled by
Section 331(1) reason of withdrawal of the caveat, the
Registrar shall give notice of the
 A LHC may be withdrawn at any time by a withdrawal to the person or body for the
written notice to the Registrar by the lien time being entitled to the land or lease
holder formerly affected
 The Registrar shall cancel the entry of the
caveat as soon as may be after receipt of
the notice TRUST CAVEAT
Section 331(2) Section 332 (1)
 Where the land/lease subject to LHC is  It may be entered by a Registrar in respect
sold pursuant to an order of the court i.e of any land or interest which is expressed
order for sale under Section 281(2): to be held by any persons or bodies as
trustees
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

EFFECT OF A TRUST CAVEAT PROCEDURE


Section 332 (2) Section 333(2)

 It shall prohibit either absolutely or except  Any application for the entry of a trust
subject to conditions of the registration, caveat shall be in FORM 19E
endorsement or entry of all or any of the  It must be duly attested as in Section 211
following :  Accompanied by a prescribed fee
o Any instrument of dealing, or
class or description of instrument Section 333(3)
of dealing directly affecting the  The Registrar shall note on any such
trust property application the time at which it was
o Any claim to the benefit of any received (SENT BY POST: the time when
tenancy exempt from registration it was withdrawn from its cover)
granted directly  As soon as may be thereafter, the
o Any lien-holder‟s caveat Registrar shall enter the caveat applied for
 PROVIDED that no such caveat shall on the RDT
prohibit the registration of any instrument/
endorsement/entry which was presented Section 333(4)
prior to the time from which it takes effect
 The entry of a trust caveat on the RDT
 NOT RETROSPECTIVE
shall be effected by the endorsement
Section 332 (3) thereon under the hand and seal of the
Registrar of the words “Caveat (Trust)”
 Where the registration of any together with a statement specifying:
instrument/endorsement/entry of any claim o Whether the caveat is entered in
is prohibited by the trust caveat, the respect of the land itself or a
Registrar shall reject the particular interest only
instrument/endorsement/entry o The precise effect thereof
WHO MAY ENTER TRUST CAVEAT o The time from which it is effective
(being the time of receipt of the
Section 333(1) application for its entry)
 The Registrar may enter a trust caveat on DETERMINATION OF A TRUST CAVEAT
the application of
a) The trustees from the time being Section 333 (5)
of any land or interest or  A trust caveat shall continue in force until it
b) The person or body by whom any is cancelled by the Registrar on behalf of
land or interest is transferred to the trustees of any other person who is
trustees or beneficially entitled under the trust
c) The person or body by whom any
interest is created in favour of Section 333(6)
trustees
 On cancelling a trust caveat, the Registrar
 PROVIDED that the application for (b) and
shall endorse against the cancelled caveat
(c) is presented with the instrument of
a note of the date of cancellation
transferring or creating the land or interest
in question
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

INJUNCTION Eng Mee Yong


PART III of the Specific Relief Act 1950  The application for a caveat differs from an
application for an interlocutory injunction
 Comes from the word “injunct” to stop/prevent
because in an application for a caveat, a
from doing something
caveat can be entered on a piece of land
MBF Holdings Berhad without any supporting evidence as the
Registrar acts in an administrative
 It is forbidding the initiation or the capacity.
continuance of some act or state of affairs  In an application for an interlocutory
or commanding than an act be done injunction, the applicant must show a
Kwan Yoon Fatt & Sons Sdn Bhd strong arguable case from the affidavit
deposed by the applicant and the judge
 It is a discretionary remedy. exercises full judicial powers in this
 Whether it is granted depends upon a respect.
variety of factors.
 The preservation of the status quo or the Foo Poh Sang
subject matter in dispute till the trial is  A caveator when called upon to justify his
often the prime concern of the court. caveat, would have to satisfy the court that
 Injunctive procedures could be resorted to he has a caveatable interest in the land in
where the entry, or further entry, of a question
caveat is not possible  An injunction can restrain a person from
doing anything, not just concerning
American Cynamid Co land…a caveatable interest is, ofcourse, a
relevant but by no means sine qua non (an
 An injunction may be granted if the essential condition) for an injunction to
conditions or principles governing the issue.”
grant of an injunction are satisfied
TYPES OF INJUNCTIONS
Heng Bak Teong & Anor v Ng Ah Seng
1) PROHIBITORY INJUNCTION;
 The court when granting an injunction,
acts in personam… an injunction does Section 52 SRA
not accord statutory protection of the  TO STOP SOMEONE FROM DOING
purchaser's interest under the … Code SOMETHING/FROM DOING AN ACT
and therefore is not registrable or  PI is a negative action in nature
endorsable on the title to the said
property 2) MANDATORY INJUNCTION;
Section 53 SRA
• Since injunction is not endorsed on the
title, it does not serve as a notice to others  TO COMPEL A PERSON TO PERFORM AN
ACT/UNDO AN ACT
• An injunction is not as effective as a
 MI is positive in nature
caveat , whereby a caveat is that as long
as it remains, will prevent the registration
of any dealings by the RP Gibb v Malaysia Building Society

Khoo Cheng Yee v Khoo Teng Seong & Ors  The courts will take into account how the
interests of the parties may be best
• An injunction could be set aside where protected, bearing in mind both of the
there was no disclosure of material facts in position of the parties subsequently at the
the application for it. final hearing
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 And also questions of hardship and  Execution Proceedings


inconvenience in the meantime and will o Proceedings to enforcement
take into account any other relevant judgment.
discretionary considerations which may
arise DEFINITION

3)PERPETUAL INJUNCTION Section 334


 Injunction which takes effect forever  Where the land or an interest in land held
 An injunction that will bind the parties until by a judgement-debtor is to be sold in
injunction is lifted execution proceedings, an order made
o Perpetual + Prohibitory= forever following the rules of court prohibiting the
don‟t do something judgement-debtor from effecting any
o Perpetual + Mandatory= do first dealing therewith or from effecting such
then can only be lifted
dealing therewith as specified in the order
o Can only be obtain in full trial
o Its like a full injunction delivered
by the court  „is to be sold in execution proceedings‟
refers to the judgment creditor obtaining a
4) INTERLOCUTORY/INTERIM/TEMPORARY writ of seizure and sale under Order 47
INJUNCTION Rule 6, Rules of High Court 2012 that will
 A temporary injunction enable the court to sell the land to pay off
 An injunction granted pending a trial of action the judgment debt.
 Interlocutory injunction will last during the trial  Thus, the PO will restrain the judgment
is going on until conclusion of the trial debtor from disposing off the land to
 Interlocutory injunction to maintain status quo frustrate the execution proceedings.
between parties pending full disposal of the
trial Order 47 Rule 6 (3)

5) EX PARTE INJUNCTION; • “No PO issued under this rule shall affect


any immoveable property/ registered
 A type of interlocutory injunction (temporary) interest therein and no immoveable
 An injunction which is granted when the plaintiff property…shall be deemed to have been
OR applicant asking for the injunction has been seized until such PO shall have been
heard by the court registered as provided by any written law
 The other party has not been heard yet relating to such land.”
 Granted in only very URGENT MATTERS

PROCEDURE
PROHIBITORY ORDER
Section 335 (1)
 Judgment Debt
o A court judgment obtained by the  No prohibitory order shall take effect until it
judgment creditor to claim a debt has been entered by the Registrar on the
from the judgment debtor. RDT
 Judgment Creditor
Section 335 (2)
o The party who claims the
judgment debt.  When a copy of the prohibitory order is
 Judgment Debtor presented to the Registrar for registration it
o The party who owes money to the shall be the duty of the Registrar to enter
judgment creditor. the order by endorsing on the RDT under
the Registrar‟s hand and seal the words
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

“Prohibitory Order” together with the lien-holder‟s caveat is prohibited by any


statement specifying; prohibitory order, the Registrar shall reject
o Whether the order relates to the the instrument
land itself or merely a particular
LAPSE OF TIME
interest therein
o The time at which the entry was Section 338 (1)
made
 Every prohibitory order shall lapse at the
EFFECT OF PO expiry of 6 months from the date on which
“Land Itself” it was made or at the end of such other
period as may be specified by the rules of
Section 336 (1) court
 So long as the PO continues to be in force, EXTENSION
the PO shall prohibit the endorsement or
Section 338 (2)
entry of:
o Any instrument of dealing  An order extending a prohibitory order
o Any claim to the benefit of any shall not have effect unless a copy of the
tenancy exempt from registration order is presented for registration before
o Any lien-holder‟s caveat the time at which the prohibitory order time
“Particular Interest” period has lapsed (6 months)

Section 336 (2)

 So long as the PO continues to be in force, Section 338 (3)


the PO shall prohibit the endorsement or  A note of the extension of any prohibitory
entry of: order shall be endorsed by the Registrar
o Any instrument of dealing other on the RDT
than a certificate of sale directly  The Registrar may of his own motion, and
affecting the interest and shall on the application of any interested
o Where that interest is a lease or a person cancel the entry on the RDT of any
sub lease; prohibitory order which has lapsed
 Any claim to the benefit
of any tenancy exempt Airmartech Corp. M’sia
from registration
 There is no rigid formulation as to what
 Any lien-holder‟s caveat
constitutes „special circumstances‟ in an
Section 336 (3) application to extend a PO.
 Depends on circumstances of each
 A PO shall not prohibit the registration, particular case.
endorsement or entry of any instrument,  In this case, court refused to extend the
claim or lien-holder‟s caveat where the PO as it found no special circumstances.
instrument was presented or the
application for endorsement or entry WITHDRAWAL OF PO
received, prior to the time from which the
Section 339 (1)
order takes effect
 NO RETROSPECTIVE EFFECT  Where a PO has been withdrawn at any
time by order of a court, the Registrar shall
Section 336 (4)
on receiving a copy of the order of
 Where the registration of any instrument or withdrawal, cancel the entry on the RDT
the endorsement or entry of any claim or
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

and note the reason of the cancellation COMPETING PRIORITIES


and the date thereof
RULES OF CP IN EQUITIES
CESSATION OF PO
A. First In Time
Section 339 (2)
Qui Prior Est Tempore Potiorest Jure

 He who is earlier in time is stronger in law


 A prohibitory order shall cease to have
effect and the entry thereof be cancelled Rice v Rice
accordingly on the registration of:
o Any transfer executed by an  Priority in time is the ground of preference
officer of a court as per Section last resorted to when the merits between
337 (1) the equities are equal
o Any certificate of sale given  As between persons only having equitable
(OFS) interests, if their equities are in all other
respects equal, priority of time gives the
Section 339 (3) better equity
 The Registrar shall notify the Court of any B. An Act of Omission
cancellation effected on the registration of
any certificate of sale Butler v Fairclough
 Any residual sums to which will be  But the claimant who is first in time may
disposed off in accordance with the rules
lose his priority by any act or omission
of court
which had or might have had the effect
of including a claimant later in time to
act to his prejudice
Karuppiah Chettiar v Subramaniam
Jasalam
 Judgement creditor only take whatever
interest the judgement debtor has on the  Although being the first in time in acquiring
land and not against any interest in land the equitable ownership of the said
which the judgement debtor had already portion, the caveator has lost
parted with his priority by his omission to register
his title to the said portion or to enter a
Chua Hee Hung caveat within reasonable time.
 When the court orders the sale of a  This conduct of the caveator certainly had
judgment debtor‟s property, it cannot sell caused prejudice to the purchaser
more than what the judgment debtor C. No Knowledge Of Subsequent Equity
himself is entitled to sell
Abigail v Lapin
Meriam bt Yaacob
 The interest of the possessor of the prior
 A judgment creditor can only take equity of the land cannot be postponed to
whatever interest the judgment debtor has the possessor of a subsequent equity
in the land and not against any interest in unless the proven act or omission on his
the land in respect of which the right of the part has contributed to a belief on the
judgment debtor has since ceased to exist part of the holder of the subsequent
equity, at the time he acquired it, that
the prior equity was not in existence
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

Ang Peng Chin registered in the names of the third and


fourth defendant
 The basic rule is that the rights and
 P brought an action for specific
interests primarily rank in order of creation performance of the sale agreement
 An important qualification to the basic rule
 The High Court gave judgement for
is the doctrine of purchaser without notice
specific performance of the agreement
 A subsequent purchaser must have no
 The third and fourth defendants appealed
notice of the earlier equitable interest
 The learned judge in the appellate court
 Subsequent purchaser is affected by
held that the third and fourth defendants
notice of an equity when there is actual
failed to prove that they were bona fide
notice, constructive notice or implied
purchasers for value without notice
notice
 It was proven that when P presented his
REGISTERED INTEREST V UNREGISTERED caveat, they knew that P had agreed with
INTEREST the first and second defendants to buy the
land and the P subsequently filed for a
Bank of Tokyo Ltd caveat
 The learned judge held that, in equity, the CONSIDERATIONS IN DETERMINING PRIORITY
basic rule is that rights and interests IN UNREGISTERED INTEREST V REGISTERED
primarily rank in order of creation INTEREST
 He who is earlier in time is stronger in law
 This will ONLY apply where the equities 1. Possession of IDT
are equal and neither claimant has the Vallipuram Sivaguru v Palaniappa Chetty
legal estate (registered)
 It was held that a person who has taken
In most instances, THE REGISTERED INTEREST possession of the land or IDT is said to
WILL HAVE PRIORITY unless : have given constructive notice to the world
at large of the prior interest in the and
1. The legal title holder has notice (actual, imputed even though the caveat was entered
or constructive) of the prior unregistered interest Standard Chartered Bank v Yap Sing Yoke
Applied in Abigail v Lapin & Ang Peng Chin
 Due to the clerk‟s negligence, the
2. Not done in good faith i.e the registered documents were brought to the solicitors‟
purchaser was not a bona fide purchaser attention only 7 months later (Feb 1986)
and the solicitors then tried to register the
Ong Chat Pang v Valiappa Chettiar charge.
 The first and second defendant agreed in  However, D2 had caveated the land in
writing to sell their land to P June 1985 for a judgment debt obtained
against D1.
 P paid the agreed purchase price and he
lodged a caveat against the land  D2 then entered prohibitory orders in
 On the same day, the third and fourth November 1985, September 1986, &
defendant approached him and offered to March 1987.
pay $10,000 to give up his rights under the  P caveated in March 1987.
agreement and to withdraw his caveat.  The court held that Ps‟ caveat has priority
 He refused over D2‟s caveat of June 1985.
 The P then called the land office and  Even without entering a caveat, lien holder
discovered that his caveat had been has the priority to caveat at any time
rejected and that the land had been without loss of priority as he was in
custody the IDT
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

 Even if he did not enter a caveat, he still  R was RIGHT in thinking that the
has a better claim than a person without a possession of the document of title, the
document in his hand. building of the house, and the
execution of the transfer were sufficient
2. Occupation of Land
protection against the subsequent
Haroon v Nik Mah purchaser.

 The court will also consider the factor of


whoever is in the possession of the land
 Even when the unregistered purchaser
didn‟t register nor entered caveat or has
possession of the IDT, the fact that he is in
possession over the land can be a sign
that he has the title over it
 H was never in possession of the land
while NM had been in possession of the
land at all material times.
 H was guilty of gross negligence by not
imposing a caveat, not having in
possession the IDT, and not taking
physical possession of the land.
 Thus his priority should be postponed to
the equity of the latter purchaser who had
taken any of those steps.
 NOTE: apart from lodging caveat, taking
physical possession of land may serve as
notice
 Caveat is merely one of the steps to be
taken by a purchaser to protect his rights
 Failure to caveat does not necessarily
defeat priority
ROLE OF CAVEATS
Butler v Fairclough

 Operates as notice to the whole world that


the registered proprietor‟s title is subject to
the equitable interest alleged in the caveat
Abigail v Lapin

 Dixon J: caveat acts as an injunction to the


Registrar to prevent registration of
dealings until notice has been given to the
caveator
Syed Ibrahim

 The court held that the removal of the


caveat was justified especially as A had
known about R's prior interest.
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

POWERS OF THE COURT  Correction of the errors effected pursuant


to Section 417 of the NLC can never be a
General Authority of the Court
violation of the indefeasibility principle
Section 417 NLC
Appeals to the Court
 The Court or a Judge may order the
Section 418 NLC
Registrar or Land Administrator to do all
such things as may be necessary to give  Any person aggrieved by any decision
effect to any judgement and it shall be the under this Act of the State Director, the
duty of the Registrar or Land Administrator Registrar or any Land Administrator may
to comply with the order forthwith at any time within the period of three
 Pursuant to any order made by virtue of months beginning with the date on which it
this section, the Registrar or any Land was communicated to him, appeal
Administrator ; therefrom to the Court
o Cancel any instrument relating to
the land, or any memorial or other Land Executive Committee of Federal Territory
entry on any such instrument; or v Harper Gilfillan Bhd
o Make any other amendment of or  The right of appeal under Section 418 and
addition to any such instrument the procedure of the enforcement of such
Che Dah & Anor v Commissioner of Land Titles right are mutually exclusive

 The general powers of the court or a judge Development & Commercial Bank v Land
are contained in Section 417 which are Administrator , Wilayah Persekutuan
exercisable whether on appeal or in an  Although the power to grant a declaratory
original application judgement must be exercised with great
Tan Soo Bing & Ors v Tan Kooi Fook care and jealousy, the court may in
circumstances where no right and remedy
 Section 417 limits the powers of the court are provided grant a declaratory relief
to give directions to the Registrar or Land
United Malayan Banking Corp Bhd v Pemungut
Administrator to cases where it is
Hasil Tanah, Kota Tinggi
necessary to give effect to a final
judgement  The phrase “.. court shall make such
order.. as it considers just” in section 418
(2) of the NLC cannot be taken to mean
Sungai Biak Tin Mines Ltd v Saw Choo Theng & that in every appeal the court has
Anor jurisdiction to grant equitable relief in
respect of the matter appealed against.
 The court has the power under Section
 This would necessitate an examination of
417 of the NLC to order a rectification of
the relevant substantive law to determine
the register to give effect to any judgement
whether or not it admits of the equitable
or order even where the judgement or
jurisdiction sought for
order has been perfected
Pengarah Tanah dan Galian, Wilayah
Hassan Bin Seman v Jusoh Bin Awang Persekutuan v Sri Lempah Enterprise
 Indefeasibility and correction of errors are
 An appeal under Section 418 of the NLC
two independent provision existing side by must be filed within three months of a
side. decision but service of the originating
motion need not be effected within the said
three months but follow the normal course
ABI, LILLY, NAD, JANNA
LAND LAW II
A + EXAM NOTES

for service with regard to originating


motions