CM Auto Holdings Sdn. Bhd. v 1. ) Pengerusi, Persatuan Pemilik Hub Bangi (BA-24NCvC-2416-10/2024)

PENGERUSI, PERSATUAN PEMILIK HUB BANGI [Register No.: PPM-007-10-06042014]

PENDAFTAR HAKMILIK … RESPONDENTS NEGERI SELANGOR GROUNDS OF JUDGMENT Introduction 1. This is an originating summons application filed for the removal of a caveat with presentation no. 001B49373 lodged by the 1st respondent in respect of a property known as HSD166906, PT78133, Bandar Baru Bangi, Daerah Ulu Langat, Negeri Selangor and for the recovery of damages as against the 1st respondent.

The originating summons was dismissed with RM7,000.00 costs.

Therefore, the appellant commenced the appeal process.

CM Auto Holdings Sdn Bhd (hereinafter referred to as the Applicant) and Pengerusi Persatuan Pemilik Hub Bangi (hereinafter referred to as the 1st Respondent) entered into a sale and purchase agreement dated 6-2-2013 for the purchase of property from Suntrack Development Sdn Bhd. Additionally, the Applicant also entered into a Deed of Mutual Covenant on the same date with Suntrack Development Sdn Bhd.

The 1st respondent was established on 6-4-2014. It serves as the management body under the Deed of Mutual Covenant, performing the developer's duties, responsibilities, and obligations, and ensuring that owners and purchasers of the factory units comply with the terms and conditions set forth in the Deed of Mutual Covenant. (refer to Enc 5, TKK-3)

The Applicant is a property owner and a member of the 1st respondent.

On 11-7-2019, during the 3rd Annual General Meeting, it was unanimously agreed by the members present to permit the 1st respondent to register private caveat(s) in accordance with the terms and conditions of the Deed of Mutual Covenant. (refer to Enc, exhibit TKK-5). A copy of the meeting minutes was served to each member. (refer to Enc, TKK-6)

Subsequently, a letter dated 26-8-2019 was issued by the developer to all property owners, including the Applicant, stating that the responsibilities, obligations, liabilities, and functions of the developer have been assigned and vested in the 1st respondent in accordance with the Deed of Mutual Covenant. (See Enc 5, Exhibit TKK-7). Private caveats were lodged accordingly.

The Applicant, through a letter dated 13-8-2024, formally requested the 1st respondent to withdraw the caveat lodged concerning their property to enable a sale and purchase transaction between the applicant and Aeglos Refrigeration (M) Sdn Bhd.

The Applicant contends that the 1st respondent refused, failed, and/or neglected to withdraw the caveat. Furthermore, the Applicant asserts that the 1st respondent imposed conditions requiring the proposed purchaser to make an initial payment equivalent to one year's maintenance fees and to sign a new Deed of Mutual Covenant, after which the 1st respondent would withdraw the caveat.

After numerous correspondences, finally, on 27-9-2024, the Applicant stated that the 1st respondent informed the applicant that the private caveat would be removed without any terms or conditions.

It is an undisputed fact that the private caveat was removed on 23- 10-2024. Issues to be Tried 13. Whether there was an unlawful entry of caveat?

Whether the Applicant possesses the right to claim damages from the 1st respondent owing to the registration of the private caveat under Section 329 of the National Land Code. Decision of this Court 15. Upon perusal of the cause papers, the prayer for the removal of the caveat is redundant as it has been removed on 23-10-2024 by the 1st respondent. This originating summons was filed on 28-10-2024.

Nevertheless, in the interest of completeness, I shall address the first issue.

The Applicant asserts that they are entitled to a declaration of compensation and/or damages from the 1st respondent for the wrongful entry of a private caveat. Reference was made to Section 329 of the National Land Code. The Applicant referred to a High Court case of Quill Construction Sdn Bhd v Tan Hor Teng @ Tan Tien Chi & Anor [2003] 6 MLJ 279.

The Applicant asserts that they were unaware of the existence of the private caveat.

Regarding the first issue, upon review of the affidavit evidence, it is evident that the Applicant’s claim of being caught unawares regarding the existence of a private caveat concerning its property is untenable.

On 11-7-2019, during the 3rd Annual General Meeting, it was unanimously agreed by the members present to allow the 1st respondent to register private caveat(s) in accordance with the terms and conditions of the Deed of Mutual Covenant. (refer to Enc, exhibit TKK-5). A copy of the meeting minutes was served to each member. (refer to Enc, TKK-6)

Subsequently, a letter dated 26-8-2019 was issued by the developer to all property owners, including the Applicant, stating that the responsibilities, obligations, liabilities, and functions of the developer have been assigned and vested in the 1st respondent in accordance with the Deed of Mutual Covenant. (See Enc 5, Exhibit TKK-7). Private caveats were lodged accordingly. Throughout, the Applicant admits that he has signed the sale and purchase agreement for his property, including the Deed of Mutual Covenant.

This Court concurs with the submission of the 1st respondent that the principles articulated in the Federal Court case of Bandar Eco-Setia Sdn Bhd v Angelane Eng [2016] 3 CLJ 173, and the High Court case of Leisure Farm Corporation Sdn Bhd v Loh Yuen Seng & Ors and Another Suit [2019] MLJU 1993, establish that the Deed of Mutual Covenant entered into between the Applicant and the 1st respondent is a legally binding contract. Consequently, the Applicant is not entitled to act selectively in accordance with their own convenience.

The true essence of the Deed of Mutual Covenant is to serve, among other beneficiaries, the factory owners in the following manner:

23.1 Guardhouse and security services, road cleaning, and green area maintenance;

23.2 The maintenance of the factories as a distinguished industrial development initiative.

23.3 The preservation of uniformity among the factories.

The obligation to make payments is intended to safeguard the 1st respondent from experiencing financial instability that could jeopardise its service provisions, consequently affecting the market value of the properties under the 1st respondent's management as stipulated in the Deed of Mutual Covenant. Furthermore, Article 9 of the Deed of Mutual Covenant explicitly states that, upon signing the Deed, property owners consent to and authorise the 1st respondent to file a private caveat with the appropriate authority.

Therefore, the Applicant cannot claim ignorance of the private caveat in accordance with Article 9 of the Deed of Mutual Covenant. The principle set out in the High Court case of Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127 is applicable.

This Court finds that, at all times, the 1st respondent was exclusively fulfilling its obligations pursuant to the Deed of Mutual Covenant, and all its conduct was validated by the exercise of voting by its members.

To facilitate effective business operations, this Court agrees with the 1st respondent's concern that the spirit of adhering to the Deed of Mutual Covenant must be maintained to uphold the status, interests, and benefits of property owners within the respective community. Reference is made to the Federal Court case of Bandar Eco-Setia Sdn Bhd v Angelane Eng [2016] 3 CLJ 173.

The Applicant have not furnished evidence demonstrating that the lodgment of the caveat was conducted without their consent. The fact that the caveat was lodged in the year 2019 and remained uncontested serves to establish that the Applicants were aware of its existence.

Considering the facts, this Court concludes that the private caveat was not lodged without reasonable cause, nor did it constitute an abuse of the legal process.

Moving on to the second issue, the Applicant’s main grievance was that it experienced hardship and losses in accordance with Section 329 of the National Land Code.

The Applicant argued that a potential purchaser was lost due to the existence of the private caveat. Additionally, it claimed that a deposit of RM114,000.00 was refunded when the transaction with the proposed buyer failed. It also alleges a loss of profits of RM1,110,000.00 arising from the unsuccessful sale of its property.

The Applicant further asserts that, in accordance with the ruling of the Court of Appeal in the case of MD Biomedical Engineering (M) Sdn Bhd v Goh Yong Khai [2021] 5 MLJ 408, it has the right to claim legal costs from the 1st respondent in relation to the improper registration of the caveat.

Section 329(1) of the National Land Code states as follows: “Any person or body who, or without reasonable cause, secures the entry of, or fails to withdraw, any private caveat shall be liable to pay compensation to any person or body who thereby suffers any damage or loss.”

Based on the Court's determination that the caveat was not lodged unlawfully, the issue regarding damages becomes moot.

To ensure completeness, I will address the second issue. Based on the matrix of facts and evidence before this Court, the offer to purchase failed because the proposed purchaser of the property was unaware of the existence of the Deed of Mutual Covenant at the time of making an offer to buy the property.

The facts demonstrate that, although the 1st respondent was prepared to withdraw the caveat and commenced the requisite procedures, the proposed purchaser continued to be unwilling to proceed with the transaction. Therefore, it can only be inferred that the caveat was not the decisive factor in the proposed purchaser’s reluctance to finalise the transaction with the applicant.

The legal test of causation is not satisfied in this case. Applying the principles from the High Court case of Hii Mung Young & Anor v Hii Kiew Ing (F) [2023] MLJU 2670 and Asia Plywood Company Sdn Bhd v Aeon Co (M) Bhd & Anor [2020] 3 CLJ 685, this Court determines that the applicant failed on the balance of probabilities with respect to the damages claims.

Conclusion This Court finds that the caveat was not entered unlawfully. The purpose of the caveat was to facilitate the provisions under the Deed of Mutual Covenant for business efficacy. As such, the Applicant's claim fails, especially now that the caveat has been removed.

This is a fit and proper case for the application to be dismissed with RM7,000.00 costs. Dated: 7th November 2025 (INDRA NEHRU SAVANDIAH) Judge High Court of Malaya Shah Alam Selangor Date of Decision: 26th August 2025 Counsels: For the Plaintiff : Alfred Vun Yun Fui Messrs Davis & Low For the 1st Defendant : Adrian Ng Chan Yip Messrs YC Pang, Chong & Gordon For the 2nd Defendant : Namirah Hanum binti Muhamad Albaki