Cahaya Muhibah Sdn Bhd v E Chia Qi (BA-24NCvC-1844-08/2025)

In the Originating Summons (“OS”), the Plaintiff seeks relief under Section 327(1) of the National Land Code (Act 828) (“Act 828”) to remove a private caveat, registered as Presentation No.: 00B42372/2024, dated 2 July 2024 (“Private Caveat”), lodged by the Defendant over a piece of leasehold land, registered as PN 77052 Lot 2624, Pekan Baru Sungai Besi, Daerah Petaling, Negeri Selangor Darul Ehsan (“Property”).

Yang Commerce Sdn Bhd (“Yang Commerce”) is the registered proprietor of the Property.

By a sale and purchase agreement dated 30 September 2021 (“SPA”), Yang Commerce agreed to sell the Property to the Plaintiff for a valuable consideration of RM3 million.

Upon payment of the full purchase price of RM3 million, the Plaintiff acquired beneficial ownership of the Property.

Despite holding the Property’s issue document of title (“IDT”), the Plaintiff could not complete the transfer of the Property or register its interest in the Property on the IDT because of the Private Caveat.

The Defendant, a director of Yang Commerce, impugned the SPA and raised these issues:

she never executed it on behalf of Yang Commerce;

the Plaintiff obtained the SPA fraudulently;

Yang Commerce never received any payment under the impugned SPA from the Plaintiff;

Clause 3 of the Special Condition of the SPA is a condition precedent requiring the Plaintiff to secure the State Authority’s consent within two years of the SPA’s date to transfer the Property (“CP”). As the Plaintiff failed to meet the CP, there was no contractual relationship between the

Yang Commerce had already commenced a civil suit in the Kuala Lumpur High Court, Civil Suit No.: WA- 22NCVC-591-10/2025, against the Plaintiff, TCC Network Solutions Sdn Bhd, Messrs Tan, Yap, Chin & Chew, and Messrs Kuek, Ong & Associates. In that civil suit, Yang Commerce alleged, among other things, fraud, forgery of the Defendant’s signature on the SPA, and conspiracy. ISSUES

The main issues to be determined in this OS are as follows:

Can the Defendant lodge the Private Caveat?

Is the Plaintiff an aggrieved person under Section 327(1) of Act 828?; and

Does the Defendant or Yang Commerce have a caveatable interest in the Property? ANALYSIS AND FINDINGS Issue No. 1: Can the Defendant lodge the Private Caveat?

The Learned Counsel for the Plaintiff argued that the Defendant had no caveatable interest in the Property, as she was merely a director of Yang Commerce, and for that reason alone, the Private Caveat should be removed.

I am unable to accede to that argument for the following reasons:

the Defendant did not lodge the Private Caveat in her personal capacity;

the Defendant lodged the Private Caveat in her capacity as the largest shareholder and director of Yang Commerce (Enclosure 3, pages 39 and 41): “Saya E Chia … sebagai pemegang saham dan pengarah kepada syarikat YANG COMMERCE SDN BHD…” [Emphasis added]

until today, Yang Commerce or Yang Yang, as a director and minority shareholder, has not challenged the Defendant’s authority to lodge the Private Caveat on behalf of Yang Commerce.

It must therefore be taken that the lodgment of the Private Caveat by the Defendant on behalf of Yang Commerce was authorised by Yang Commerce and Yang Yang. Issue No.2: Is the Plaintiff an aggrieved person under Section 327(1) of Act 828?

The Plaintiff filed the OS under Section 327(1) of Act 828, which provides that: “(1) Any person or body aggrieved by the existence of a private caveat may at any time apply to the Court for an order for its removal, and the Court (acting, if the circumstances so require, ex parte) may make such order on the application as it may think just.” [Emphasis added]

The Learned Counsel for the Defendant argued that the Plaintiff is not an aggrieved person under Section 327(1) of Act 828.

As regards whether the Plaintiff is an aggrieved person or body under Section 327(1) of Act 828, I am guided by the interpretation of the words ‘aggrieved person’ by the Court of Appeal in Wong Kok Leong & Anor v. RHB Bank Berhad [2014] 7 MLRA 482. It was held that: “Section 327(1) of the Code clearly shows it does not require an applicant to be a person who has a registrable interest to qualify him to apply for the removal of the caveat. It need only be a person aggrieved by the existence of a private caveat …” [Emphasis added]

In this case, the Learned Counsel for the Plaintiff argued that, apart from executing the SPA and paying the full price, the Plaintiff has in its possession the original IDT but was unable to complete the transfer and register its name on the IDT of the Property because of the Private Caveat.

Considering the above complaint of the Plaintiff and the Court of Appeal’s interpretation of the words ‘aggrieved person’ in Wong Kok Leong & Anor v RHB Bank Berhad [2014] 7 MLRA 482, I am of the view that the Plaintiff qualifies as an aggrieved person under Section 327(1) of Act 828. Issue No. 3: Does The Defendant Or Yang Commerce Have A Caveatable Interest In The Property?

Before I deal with Issue No.3, it is pertinent to refer to the position of the law pertaining to the removal of a private caveat under Section 327(1) of Act 828.

Firstly, in Eng Mee Yong v Letchumanan [1979] 1 MLRA 143; [1979] 2 MLJ 212 PC, Lord Diplock had this to say: “This is the nature of the onus that lies upon the caveator in an application by the caveatee under s 327 for removal of a caveat: he must first satisfy the court that on the evidence presented to it his claim to an interest in the property does raise a serious question to be tried: and, having done so, he must go on to show that on the balance of convenience it would be better to maintain the status quo until the trial of the action, by preventing the caveatee from disposing of his land to some third party.” [Emphasis added]

Secondly, in Wong Kuan Tan v. Gambut Development Sdn. Bhd. [1984] 1 CLJ Rep 441; [1984] 2 MLJ 113 FC, Hashim Yeop A. Sani FJ (as he then was), in delivering the decision of the Federal Court had this to say: “To put it more simply, the caveator in this case must first satisfy the Court that he has ‘caveatable interest’ in the land. Only if he has such an interest can he qualify to lodge caveat under s. 323(1) of the National Land Code. In the application to have the caveat removed the onus is cast upon the caveator to satisfy the court that on the evidence presented his claim to an interest in the land raises a serious question to be tried and after having done so he must go on to show that on the balance of convenience the caveat should he extended until the disposal of the main action.” [Emphasis added]

Thirdly, in Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLRA 496; [1995] 1 MLJ 719; [1995] 3 CLJ 520; [1995] 2 AMR 969 COA, Gopal Sri Ram JCA (as he then was) discussed the words ‘Caveatable Interest’ and had this to say: “Caveatable interest [92] To paraphrase s 323(1)(a) of the Code, a private caveat may be entered at the instance of any person or body who claims either:

the title to land; or

any registrable interest in Land. [93] The parameters of caveatability under s 323(1)(a) are therefore circumscribed by these words: “title” and “registrable interest”. It is only one who makes a claim to either of these in land may enter a private caveat. [94] Although the words “title” and "registrable interest" are not defined by the Code, their meaning may be gathered from the scheme of the Code and from the indefeasibility provision, namely, s 340(1). The latter points to a bifurcation between title (the equivalent of the English fee simple) and registrable interests, that is, leases, charges and easements. [95] In my judgment, the position that obtains under the Code, so far as is relevant to the present appeal, may be stated in the following way. The Code creates three categories of interests in land. They are as follows. Category 1: Registrable interests in land. [96] Only certain interests are capable of registration. Within this are two subcategories, namely:

Registered title. This may be in perpetuity or for a term of years. It pertains to ownership of land. The “owner” is termed by the Code as a “registered proprietor”,

Registrable interests falling short of ownership. These are leases charges and easements. [97] Registration carries with it a bundle of rights, which includes, subject to any restriction imposed by the alienating authority, the right to effect a transfer of the particular registered interest. The Code, in s 340(1), confers indefeasibility upon registered title and interests in land. Section 340(2) creates exceptions which, if established, may operate to defeat such registered title or interest; Category 2: Interests that are incapable of registration. [98] These include tenancies exempt from registration, which may be protected by means of an endorsement upon the register document of title; Category 3: Caveatable interests. [99] These are unregistered interests which are capable of protection by the entry of a private caveat. In the context of s 323(1)(a), it is only a claim to the interests falling under category 1(a) and (b) above that may be protected by the entry of a private caveat. Cases falling under category (2) are not caveatable interests. A private caveat cannot, therefore, be entered by one who claims such an interest. Protection for such interests must be secured in the manner prescribed by the Code. [100] I fear that any other construction upon s 323(1)(a), especially one that places a meaning wider than that I subscribe to, may result in judicial disobedience to the will of Parliament: and that in my view should be avoided at all cost. [101] Support for the view I have expressed may be found in two decisions of the Privy Council on appeals from our former Federal Court. They are Temenggong Securities (supra) and Damodaran v. Choe Kuan Him [1979] 1 MLRA 39; [1979] 2 MLJ 267”.”

Fourthly, in Score Options Sdn Bhd v Mexaland Development Sdn Bhd [2012] 6 MLRA 216; [2012] 6 MLJ 475; [2012] 7 CLJ 802; [2012] 5 AMR 485 FC, the Federal Court explained the words ‘caveatable interest’ and ‘registrable interest’. In delivering the decision of the Federal Court, Arifin Zakaria CJ (as he then was) said this: “[25] A caveat is a creature of statute namely, the NLC and hence it can only be lodged by a claimant who has a caveatable interest under the NLC… … [36] Emphasis should be given to the words “registrable interest” in s 323(1)(a) of the NLC. To be caveatable, the interest must be an interest in the land and that interest must be capable of registration. In short, it must represent a transaction that can ultimately lead to its registration on the register.” [Emphasis added]

Based on the foregoing authorities, the caveator must satisfy the following three-stage inquiry:

firstly, whether the caveator has a caveatable interest in the land (“First-Stage Inquiry”);

secondly, only if a caveatable interest is established in the First-Stage Inquiry, the Court will then consider whether, based on the affidavit evidence, the claim discloses a serious question meriting a full trial (“Second-Stage

thirdly, whether on the balance of convenience, the caveator can show that it would be better to maintain the private caveat until the full trial of the action (“Third-Stage Inquiry”).

I will now address the First Stage Inquiry: whether the Defendant or Yang Commerce has a caveatable interest in the Property.

In this case, the Private Caveat application in Form 19B dated 13 June 2024 (Enclosure 3, page 38) (“Form 19B”) shows that the Defendant lodged the Private Caveat on the basis that Yang Commerce was the registered proprietor of the Land: “Saya syaki hartanah tersebut ini akan dipindahmilik oleh pemberi pinjam wang secara haram. Saya memasukkan kaveat persendirian ini untuk melindungi hartanah milikan syarikat saya.” [Emphasis added]

I am of the view that a registered proprietor cannot lodge a private caveat over his own land because his interest is already registered.

In EU Finance Bhd v Siland Sdn Bhd (M&J Frozen Food Sdn Bhd, Intervener) [1988] 3 MLRH 49; [1989] 1 MLJ 195 HC, LC Vohrah J (as he then was) held that: “I do not think Siland can successfully bring itself within this first limb in the light of its plain meaning because in my view a person who relies on his status as registered owner must necessarily be a person already possessing title or interest in the land and not merely a person claiming title to or any interest in that land and must as a matter of logic have been excluded by the language of s 323(1). As has been very succinctly put by the learned author Judith E Sihombing in her National Land Code (1981 Ed) at p 594, ‘one difficulty involved is that of deciding his standing under s 323 for he is not ‘claiming’ title to the land: title is already his…” [Emphasis added]

In Mohamed Ali Abdul Razak v Sim Hock Yong [2007] 2 MLRA 349, [2007] 6 CLJ 337 CA, Gopal Sri Ram JCA (as he then was) in delivering the decision of the Court of Appeal held that: “[3] In my judgment the decision of LC Vohrah J in Eu Finance Bhd v. Siland Sdn Bhd is correct and that Hiap Yiak Trading Sdn Bhd & Ors v. Hong Soon Seng Sdn Bhd must be overruled. As a plain matter of statutory construction a registered proprietor does not have a caveatable interest. The relevant provision is s. 323 of the National Land Code 1965 which in its first subsection permits the entry of a private caveat by “any person or body claiming title to ... any alienated land”. A person cannot “claim” title to something the title to which is already vested in him or her. Take the simplest case which exemplifies the point. If V agrees to sell and transfer his land to P, then P can claim the title to the land because the agreement renders V a constructive trustee for P. See, Temenggong Securities Ltd & Anor v Registrar of Titles, Johore & Ors [1974] 1 MLRA 163; [1974] 2 MLJ 45. But V cannot “claim” title against P because the title to the land is already vested in him. Since a registered proprietor will be unable to bring himself or herself within the terms of s. 323(1), he or she does not have a caveatable interest. The very first requirement being absent, the caveat was properly removed by the learned judge in the instant case.” [Emphasis added]

Based on the above authorities and Form 19B, Yang Commerce does not have a caveatable interest in the Property under Section 323(1) of Act 828, as its interest has already been registered as the proprietor.

Since the Defendant filed Form 19B on behalf of Yang Commerce and there is no evidence that she has a registrable interest in the Property in her personal capacity, I also conclude that the Defendant has no caveatable interest in the Property.

Since neither the Defendant nor Yang Commerce has a caveatable interest in the Property, I need not consider the Second-Stage Inquiry or the Third-Stage Inquiry.

In Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLRA 496; [1995] 1 MLJ 719; [1995] 3 CLJ 520; [1995] 2 AMR 969, CA, Gopal Sri Ram, JCA (as he then was) had this to say: “[44] In my judgment, there are three stages through which an inquiry of this nature must go. The first stage is the examination of the grounds expressed in the application for the caveat. If it appears that the grounds stated therein are insufficient in law to support a caveat, then cadit quaestio, and the caveat must be removed without the necessity of going any further.” [Emphasis added]

For the foregoing reasons, the Defendant has failed to establish that the Defendant or Yang Commerce has a caveatable interest in the Property.

The Private Caveat lodged by the Defendant on behalf of Yang Commerce is therefore unsustainable and should be removed.

I therefore allow prayers (a) and (d) of the OS with costs of RM3,000.00, subject to the allocatur fee payable by the Defendant to the Plaintiff.

The Pendaftar Hakmilik Negeri Selangor is also ordered to remove the Private Caveat upon service of the sealed Order and in accordance with Kaedah-Kaedah Tanah Selangor 2003. Dated this 27th day of March 2026 SGD HELMI BIN HAMZAH JUDICIAL COMMISSIONER HIGH COURT IN MALAYA AT SHAH ALAM NEGERI SELANGOR Counsel for the Plaintiff : Mr. Terry Tang Wen Kai (Messrs Kuek, Ong & Associates) Counsel for the Defendant : Mr. Aw Kai Xiang (Mrs. Khairunnisa Najihah Thaqifah) (Messrs Lee & Poh)