SOO KAM HOW (NO K/P: 680413-08-5295) …PLAINTIFFS LIM ING TIONG (NO K/P: 850831-10-5657) ...DEFENDANT GROUNDS OF JUDGMENT (ENCLOSURE 1- REMOVAL OF CAVEATS) A. BACKGROUND FACTS [1] The present case is a clear and meritorious application by the Plaintiffs under Section 327 of the National Land Code 1965 to 3 remove caveats lodged by the Defendant for a resounding lack of caveatable interest. The present dispute, succinctly put, is the Defendant’s attempt to stake an interest in personam of an unsecured debt, which is totally foreign into a piece of land against the clear rights and interest of the Plaintiffs as co-proprietors of the land. It is somehow, the Defendant’s erroneous contention that an interest in personam which is not even registrable (an unsecured debt) is sufficient ground for a caveatable interest. [2] Soo Kam Cheong (“1st Plaintiff”), Soo Kam How (“2nd Plaintiff”) as well as one, Soo Kam Yew (“SKY”) are registered co-proprietors of three separate shop-houses held under HSD 4376, Lot PT 41012, Mukim Klang, Daerah Klang, Negeri Selangor, GRN 51163, Lot 44 Seksyen 1, Mukim Bandar Port Swettenham, Daerah Klang, Negeri Selangor, and GRN 27307, Lot 24 Seksyen 1, Mukim Bandar Port Swettenham, Daerah Klang, Negeri Selangor (“collectively referred to as Properties”). SKY had also executed trust deeds in which he vests the Plaintiffs with beneficial ownership of SKY’s shares in the Properties. [3] Lim Ing Tiong (“Defendant”) alleges that he is an unsecured creditor of SKY and that SKY had defaulted repayment of a 4 personal loan to the amount of RM 2,500,000.00. It is on this alleged failure to repay the loan that the Defendant had lodged private caveats onto the Properties. It remains undisputed that the alleged interest of the Defendant is one of an unsecured debt altogether foreign to the Properties. The Properties were never in any contention in relation to the unsecured debt. [4] It is this lodgement of caveats that forms the basis of the Plaintiffs’ Application in the present case. It is pertinent to note that the Defendant had contended very little to nothing at all to oppose the Plaintiffs’ Application. All that was a fallible attempt to dispute trite and time-celebrated principles of land law. B. THE ALLEGED UNSECURED DEBT IS NOT A CAVEATABLE INTEREST [5] Even before this Court delves to the other issues in the present Application, it is verily pertinent that this Court emphasises that the sheer basis and foundation of the Defendant’s caveats is legally wrong. There are great justifications behind the law’s separate treatment and demarcation between secured and unsecured debts and between claims in rem and in personam. It is ultimately trite 5 that a claim in personam cannot simply be attached and registered against an interest in rem especially when the interest in personam is totally foreign to the interest in rem. Especially in the present case, SKY’s rights and/or interests in rem in the Properties were never a contention between whatever loan agreement which SKY is alleged to have with the Defendant. SKY’s shares in the Properties was never part of the loan and SKY had never even indicated any surrender or deposit of SKY’s rights in the Properties to be security in consideration of the loan. [6] Simply put, SKY’s interests in rem in the properties is a world apart and is a total stranger to the Defendant’s alleged interest in personam against SKY. It would be dangerous and altogether legally flawed if this Court were to simply allow any claim in personam to be registered to a property when the claim in personam has no relation to the property at all. [7] This Court finds valuable guidance in the landmark case of Standard Chartered Bank v Yap Sing Yoke & Ors [1989] 2 CLJ (Rep) 500 where the following was held: 6 “…It is of course axiomatic that a personal claim (i.e. in general law terms a mere, personal, in personam claim) enforceable against the registered proprietor and not the land, is not able to be caveated. Only claims to interests in land (i.e. in general law terms in rem claims) which relates to interests capable of registration, can be caveated” [8] Applying the same to the present case, it is clear that the alleged unsecured debt (if there is any) is an interest enforceable only against SKY, but not against SKY’s properties. This Court cannot simply draw a parallel between the two distinct interests when there is no nexus between the two interests. [9] Solidifying the Plaintiffs’ case further is the fact that the Courts have time and time again decided in agreement that unsecured monetary debts or claims are claims in personam and thus are not caveatable interests. [10] The Court of Appeal in the case of Kundang Lakes Country Club v Garden Masters (M) Sdn Bhd [1999] 2 CLJ 633 had held that: 7 “It is trite law that a claim for a mere debt cannot give rise to a caveatable interest.” (see also Dusun Desaru Sdn Bhd & Anor v Wang Ah Yu & Ors (No.2) [2001] 5 CLJ 8; Saffaruan Mohamad v Kamaludin Ibrahim & Satu Lagi [2008] 8 CLJ 531) [11] Thus, even before this Court were to delve into other issues in the present Application, it is already clear even at this early juncture that the Defendant had no rights at all to lodge the caveats onto the Plaintiffs’ land or even SKY’s shares to the Properties to be exact. It matters not if the Defendant intended to put a caveats on the entirety or only SKY’s shares in the Properties. Either way, the Defendant has no business at all to lodge any caveats whatsoever over the Properties or any shares in the Properties. On the same note, it also matters not whether the trust made in favour of the Plaintiffs were valid or otherwise, as at the very essence of the Defendant’s alleged claim in personam, the Defendant has no caveatable interest to lodge caveats into the Properties. The validity or invalidity of the trust is irrelevant to the Defendant’s total absence of interest in rem as well as caveatable interest. It 8 ultimately remains constant that the Defendant has no caveatable interest whatsoever however the stone may be turned. [12] Thus, it is this Court’s finding that the Defendant has no interest in rem against the Properties and absolutely has no caveatable interest to warrant the lodgement of caveats onto the Properties. C. THE PLAINTIFFS AS REGISTERED PROPRIETORS OF THE PROPERTIES CLEARLY HAVE THE LOCUS STANDI IN THE PRESENT APPLICATION TO REMOVE CAVEATS [13] Desperate to salvage an ultimately failing defence, the Defendant attempted to contend against time-tested and trite principles in Land Law with regards to the rights of registered proprietors. It is the Defendant’s preposterous contention that the Plaintiffs have no locus standi to make the present application on two grounds: a. In that the Plaintiffs shares are separate and distinct from SKY’s shares and are not aggrieved at all from the Defendant’s caveats; 9 b. and that the Plaintiffs are not parties to the alleged personal loan agreement between SKY and the Defendant. [14] Against the contention in (a.) above, it is already settled law that co-proprietors of undivided shares in a land are entitled to use and occupy the whole entirety of the property. (see Law King Po & Ors v Sacofa Sdn Bhd & Ors [2008] 10 CLJ 258). It is also trite that co-proprietors of each share shall be entitled to the possession and enjoyment of the land as a whole and not in parts according to their respective shares. (see Wan Salimah bte Wan Jaafar v Mahmood Bin Omar [1998] 5 MLJ). And the Courts have upheld the former principles simply because no one co-proprietor can simply identify and demarcate particular portion of the land to be his (see Mohd Yusof Ujang v Tenaga Nasional Berhad [2015] 1 LNS 624; Setiawah @ Siti Hawa Abd Talib & Ors v Haji Kamaruddin Haji Abd Talib [2011] 1 LNS 41. Thus, since the portions could not be identified, any part of the land may have been a portion of each and every co-proprietor. Thus, it is clear that it matters not if the Defendant intended to only caveats SKY’s portion of the land. The Defendant of course could not identify which portion of the land to be caveats. And owing to the principles stated earlier, the Defendant’s caveats lodged onto any 10 portion of the land is as good as caveating the Plaintiffs’ portion of the Properties as the Plaintiffs’ have the rights to the use, possession, as well as enjoyment of the entirety of the Properties. And caveats to any portion of the Properties would aggrieve and affect the Plaintiffs. [15] It is baffling to this Court that the Defendant would refer to the following excerpt of the Court’s decision in Rohaya bte Ibrahim v Yusof bin Ibrahim [2008] 7 MLJ 466: “Being the registered owner of 1/3 undivided share in the said land whose title over the same is indefeasible, she is at liberty to deal with her land in the manner she things fit. She can sell or transfer or mortgage her share in the land to whomever she pleases and can pass a good title to any purchaser.” [16] All this excerpt stands to prove is that a co-proprietor owning a portion and not the entirety of the land shall enjoy indefeasible rights over his shares of the land. No doubt the Plaintiffs and SKY enjoy the same indefeasible rights over their shares, and are able to deal with their shares howsoever they deem fit. However, this 11 does not negate the principle that the co-proprietors have the rights to the use and enjoyment of the entirety of the land, and any disturbance over any portion of the land, aggrieves all of the co-proprietors. The apportionment of shares in a property may be demarcated in the sense of ownership and rights of dealing with the ownership. However the use and enjoyment of the entirety of the Properties cannot be demarcated and identified between co-proprietors and their respective shares. Not only that, even as to the indefeasible rights of SKY and the Plaintiffs to deal with their shares, the caveats would surely affect the Plaintiffs’ rights to deal with the Properties as it naturally entails that any prospective buyers would be less inclined to deal with the Plaintiffs considering the caveats lodged by the Defendant being an obstacle for all co-proprietors of the Properties. (see also Eng Mee Yong v Letchumanan [1979] 1LNS 18) [17] Therefore, it is this Courts finding that indeed the Plaintiffs in the present case are aggrieved persons under Section 327 of the National Land Code 1965 as the caveats may hinder their rights to use, possess, and enjoy the entirety of the Properties. More probable than not, a buyer would be less willing to deal with a land 12 in which a private caveats was already registered onto the tile, notwithstanding if the caveats intended to secure the entire or a portion of the land. [18] Against contention (b.) above, the factum of the Plaintiffs lack of privity of contract with the alleged loan agreement between the Defendant and SKY instead proves to defeat the Defendant’s own case. The sheer fact that the Plaintiffs were never part of the alleged loan agreement goes further to show that the alleged loan agreement is altogether alien to the Properties. And considering this fact, it further shows that it was wrong for the Defendant to disturb the Plaintiffs’ indefeasible rights to the use and enjoyment of the entire Properties when the Plaintiffs are not even parties in the loan agreement between SKY and the Defendant. [19] Thus, it is this Court’s finding that the Plaintiffs clearly are ‘aggrieved persons’ under Section 327 of the National Land Code and have the necessary locus standi to apply to have the Defendant’s caveats to be removed. D. THE DEFENDANT’S CAVEATS OUGHT TO BE REMOVED 13 [20] In defending a caveats, it is incumbent for the caveator to prove that he has a caveatable interest. If the caveator succeeds to prove caveatable interest, the caveator then must prove that he has a serious question to be tried. Finally, the Court would then have to look at the balance of convenience. If the balance of convenience lies with the Applicant (in that the Applicant would suffer grave damage if the caveats is retained), then the caveats should be removed. (see Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLJ 719) [21] It is not difficult to find that the Defendant had utterly failed to meet any of these requirements. It is reiterated here that the Defendant’s claim in rem is not at all a caveatable interest. The Defendant also had failed to show that he has a serious question to be tried. On the balance of convenience, the Defendant stands to lose nothing if the caveats are removed as the Defendant has no rights at all to lodge the caveats in the first place. However, the Plaintiffs stand to have their indefeasible interests and rights to possession, use, as well as enjoyment of the Properties to be disturbed unless the caveats are removed. Therefore, the balance of convenience lies in the favour of the Plaintiffs. 14 [22] Thus, it is this Court’s finding that the Defendant’s caveats in the Properties should be removed.