FUJI AUTO PARTS SDN. BHD. v nam foong (m) sdn bhd (WA-24NCvC-1681-05/2024)

Generally, the OS is an application to extend two (2) private caveats lodged on two (2) plots of land until the full and final disposal of Civil Suit No.: WA-22NCVC-268-04/2024 (Suit 268).

This Court allows the OS. The reasons are as deliberated. BRIEF FACTS [4] On 15.9.2023, the Applicant and Respondent entered into an Agreement to Purchase (ATP) for two properties namely Pajakan Negeri 32556, Lot 56251 and Pajakan Negeri 26307, Lot 47066 both of Mukim Batu, Daerah Kuala Lumpur, Negeri WP Kuala Lumpur (Properties) for S/N sQZ87pYvJUqkwMvQbuzrqg **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 RM9,100,000.00. The Applicant then paid RM182,000.00 as an Earnest Deposit (Earnest Deposit) to TechRealtors Properties Sdn Bhd as stakeholder.

On 5.12.2023, the Respondent terminated the ATP, citing the Applicant’s failure to execute a Sale and Purchase Agreement (SPA) and to pay the balance sum within the stipulated period.

The Applicant disputed this, alleging unjustified termination and the absence of a Certificate of Completion and Compliance (CCC) issuance.

Accordingly, the Applicant lodged two private caveats namely; PDB20470/2023 & PDB20471/2023 (Caveats) on 15.12.2023, to prevent sale to third parties.

Later, the Applicant sought a court extension of the Caveats, pending filing of a civil suit. An Ex-Parte Order was then granted on 15.5.2024 to extend the Caveats. The Respondent applied to set aside this Ex-Parte Order, which this Court granted on 14.3.2025 and fixed the OS for hearing.

Suit 268 was filed on 24.4.2024 seeking the relief of specific performance and damages. S/N sQZ87pYvJUqkwMvQbuzrqg **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 Contention of Parties [10] The Applicant contended that the ATP created a caveatable interest. The caveats entered by the Applicant is to prevent the Properties from being sold to a third party while seeking specific performance in Suit 268. Therefore, the caveat should be maintained until the disposal of Suit 268 to preserve the subject matter of the pending Suit 268.

The Applicant further contended that if the Respondent is permitted to forfeit the Earnest Deposit, it would result in unjust enrichment and significant injustice to the Applicant. Accordingly, the Applicant also contended that the balance of convenience favours the Applicant.

On the other hand, the Respondent contended that there is no concluded SPA. The ATP was created only as future interest, and mere negotiation or earnest payment does not confer a registrable interest under the National Land Code (NLC). The Respondent further contended that the Caveats must not be extended because the Applicant has no caveatable interest as it is just a pre-contract negotiation.

The Respondent also contended that since there is no binding SPA between the parties, it is legally impossible for the Applicant to have any caveatable interests on the Properties. Consequently, there are no triable issues which can result in the Applicant having a proprietary right (in rem) on the Properties. The balance of convenience is not in the Applicant’s favour. S/N sQZ87pYvJUqkwMvQbuzrqg **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 ANALYSIS AND FINDINGS Caveatable interest. [14] Basically, section 323(1)(a) of the NLC provides- “(1) The persons and bodies at whose instance a private caveat may be entered are –

any person or body claiming title to, or any registrable interest in, any alienated land or any right to such title or interest;…”. [15] In Wong Kuan Tan v Gambut Development Sdn Bhd [1984] 2 MLJ 113; [1984] 2 CLJ 26; [1984] 1 MLRA 321, the Federal Court held- “[11] To put it more simply, the caveator in this case must first satisfy the Court that he has a "caveatable interest" in the land. Only if he has such an interest can he qualify to lodge a caveat under s 323 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 be extended until the disposal of the main action.” [16] This Court is inclined to the Applicant’s contention and is of the considered view, that the Applicant has a caveatable interest in the Properties, being that the OS is to prevent the Properties from being sold to a third party while seeking specific performance in Suit 268. [17] Therefore, this Court finds that the caveat should be maintained until the disposal of Suit 268. Furthermore, there are triable issues to be S/N sQZ87pYvJUqkwMvQbuzrqg determined in regards as to whether there was a termination or not pertaining to the ATP. [18] In Inter-Continental Mining Co Sdn Bhd v. Societe Des Etains De Bayas Tudjuh [1974] 1 MLRA 324; [1974] 1 LNS 51; [1974] 2 MLJ 45, the facts are that the respondent applied to remove a caveat which the appellants had lodged, to protect their alleged interests under an agreement, whereby the respondents as the lessees of a piece of mining land, permitted the appellants "to enter upon the Mining Land to start and thereafter at all times to continue mining operations thereon". In order to protect their alleged rights under their "permit to mine" agreement with the respondents, the appellants lodged a caveat against the land in question. The Federal Court then held- “[19] The main ground of appeal is that the learned Judge misdirected himself in holding that the appellants could not bring their claim under any of the provisions of s 323(1) of the National Land Code and that a caveat could not be lodged in assertion of the rights under the agreement dated 1 July 1970. Putting the same ground in different words, it is said that the learned Judge should have held that a claim to an interest in land arising out of a contract or agreement is sufficient to make it a caveatable interest and therefore to support a caveat and that the agreement dated 1 July 1970 gave to the appellants an interest in the land in question which could be protected by a caveat. [21] It would seem clear that the question as to what can be registered under the provisions of the National Land Code has nothing whatever to do with the question as to whether an application can rightly be made for the entry of a caveat on the strength of any particular document which is incapable of being registered but may confer a right on one party of the agreement to require the other party to execute an instrument which can be registered. [35] It is true that there has been no sale here but the same principle applies if the contract is in substance a sublease or even a licence coupled with interests for valuable consideration. Thus, in Bannister v. Bannister [1948] 2 All ER 133. The Court of Appeal held that "it is enough that the bargain should have S/N sQZ87pYvJUqkwMvQbuzrqg included a stipulation under which some sufficiently defined beneficial interest in the property was to be taken by another." [43] To sum up, it would seem clear to me that on the basis of their agreement with the respondents the appellants had a caveatable interest both under s 323(1)(a) and 323(1)(b) of the National Land Code. I would therefore allow their appeal, set aside the order made by the Court below and make a further order that the caveat, if it has been removed, be restored. I would also make an order that the respondents do pay the appellants' costs both here and in the Court below.”. CONCLUSION [19] Based on the above reasons, this Court allowed the OS with costs. Dated: 21 JULY 2025 (SUZANA BINTI MUHAMAD SAID) Judicial Commissioner of the High Court NCVC 1 Kuala Lumpur COUNSELS FOR THE APPLICANT Messrs JR Ng & Chin Advocates & Solicitors B-5-6, Ativo Plaza No. 1, Jalan PJU 9/1 S/N sQZ87pYvJUqkwMvQbuzrqg Damansara Avenue Bandar Sri Damansara 52200 Kuala Lumpur FOR THE RESPONDENT Messrs Koo Cheong & Sony Shee Advocates & Solicitors B-2-15, Plaza Arkadia No. 3, Jalan Intisari Perdana Desa Park City 52200 Kuala Lumpur S/N sQZ87pYvJUqkwMvQbuzrqg