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Khoo Pi Fong v Chua Cher Leng (JA-24NCvC-627-05/2025)

High Court of Malaysia16 Jan 2026JA-24NCvC-627-05/2025

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1 DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TA’ZIM SAMAN PEMULA NO: JA-24NCvC-627-05/2025 Dalam perkara tanah dipegang di bawah hakmilik GM 1414, Lot 2074, Mukim Sungai Pinggan, Daerah Pontian, Negeri Johor Dan Dalam perkara Kaveat Persendirian yang didaftarkan pada 16.2.2023 melalui Perserahan 203/2023 ke atas tanah tersebut Dan Dalam perkara mengenai Seksyen 327 dan 329(1) Kanun Tanah Negara Dan Dalam perkara mengenai Aturan 7 Kaedah-Kaedah Mahkamah 2012 13/04/2026 14:58:04 JA-24NCvC-627-05/2025 Kand. 19 S/N 0kxk4zY22kaqfSH4Be2cnQ ANTARA KHOO PI FONG … PLAINTIF DAN CHUA CHER LENG … DEFENDAN Grounds of Judgment (Enclosure 1) Introduction

This is an application by the Plaintiff (“P”) via Originating Summons (Enclosure 1) dated 15.05.2025 who seeks for the removal of the private caveat entered by the Defendant (“D”) vide registration number 203/2023 dated 16.02.2023 on a piece of land held under GM 1414, Lot 2074, Mukim Sungai Pinggan, District of Pontian, State of Johore (“the subject land”).

D opposes Enclosure

S/N 0kxk4zY22kaqfSH4Be2cnQ

At the conclusion of the hearing, this Court dismissed Enclosure 1 with no order as to costs.

P has since appealed to the Court of Appeal against this Court’s decision. Salient facts

The evidence before this Court is not much in dispute.

The subject land is registered under one Khoo Mean Sheng (“KMS”).

KMS were lawfully married to D until they were judicially separated by way of a Consent Decree of Judicial Separation as pronounced by the Johor Bahru High Court (“the said Decree”) on 27.09.2015 in Divorce Petition No. 33-288-06/2014.

P is the eldest offspring of both D and KMS.

P and KMS are the directors and shareholders of Kwong Yak Hong Sdn Bhd (“KYHSB”), a private limited company incorporated in Malaysia. S/N 0kxk4zY22kaqfSH4Be2cnQ

From the said Decree, it is apparent that KMS owns substantial assets in the form of agricultural lands where KMS is to divide and transfer certain percentage from his ownership in 62 pieces of such lands to D.

In summary, the relevant terms in the said Decree are as follows:-

(a) KMS to transfer 2/5 of his share in 62 pieces of land held under his name to D; and

(b) D is conferred with beneficial interest in relation to the 62 pieces of land and pending its transfer to D, KMS is to hold the lands as trustee for D.

Some of the 62 pieces of lands have no encumbrances whilst some are charged by KMS to KYHSB’s lenders.

The subject land is one of the 62 pieces of land stated in the said decree that are not free from encumbrances having been charged to Maybank Islamic Berhad by KMS under a third-party charge as security for the loan made by KYHSB.

The said Decree, which is again not disputed, is still subsisting. S/N 0kxk4zY22kaqfSH4Be2cnQ

To protect her interest, D had caused a private caveat be entered on the subject land on 16.02.2023.

It is unfortunate that KYHSB had defaulted its monthly loan repayment. The said default led to the subject land being put up for auction at the instance of Maybank Islamic Berhad.

P was the successful bidder of the subject land at the auction held on 07.08.2024. The concluded sale price at the auction was RM679,200.00. P eventually paid the full amount.

Due to the existence of the caveat, P could not complete the transfer of the subject land into his name.

Hence the filing of Enclosure 1 by P against D. Analysis and decision

In general, a private caveat on any alienated land may be entered by persons or bodies of persons if their claim against the said land fall within the categories as stated in s.323(1)(a) or (b) or (c) of the National Land Code (Revised 2020) (“NLC”). The said provision is reproduced below as follows:- S/N 0kxk4zY22kaqfSH4Be2cnQ “323(1) The persons and bodies at whose instance a private caveat may be entered are-

(a) any person or body claiming title to, or any registrable interest in, any alienated land or undivided share in any alienated land or any right to such title or interest;

(b) any person or body claiming to be beneficially entitled under any trust affecting any such land or interest; and

Clearly, the key words relating to such claim over the land by any person must only be related either to the title to or the interest in or as beneficiary to a trust affecting the land.

On the other hand, any person or body aggrieved by the existence of the private caveat may apply to court under s.327 NLC, as in this instant action, for such caveat to be removed. For ease of reference, s.327 NLC states as follows:- "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." S/N 0kxk4zY22kaqfSH4Be2cnQ

The leading authority on the principles relating to applications for removal of caveat can be found in the judgments of the Court of Appeal in Luggage Distributors (M) Sdn Bhd v. Tan Hor Teng @ Tan Tien Chi & Anor [1995] 1 MLRA 225.

In essence, there are three (3) stages that the court should investigate as a matter of law and of fact. The first is to identify whether D as the caveator has a ‘caveatable interest’ in the subject land. The relevant excerpts from Luggage are as follows:- "[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. … [46] Hashim Yeop A Sani FJ (later CJ, Malaya) stated the proposition (at p 115) in language unrivalled for its clarity: 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 a caveat under s 323 of the National Land Code.”

The Court of Appeal further had laid down succinctly on the meaning and scope of caveatable interest in the following words:- S/N 0kxk4zY22kaqfSH4Be2cnQ "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:

Subsection

(1) the title to land; or (2) any registrable interest in land. 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. 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 the title (the equivalent of the English fee simple) and registrable interests, that is, leases, charges and easements. 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. Only certain interests are capable of registration. Within this are two sub-categories, namely: (a) 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'; and (b) Registrable interests falling short of ownership. These are leases, charges and easements. 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. 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. These are unregistered interests which are capable of protection by the entry of a private caveat. In the context S/N 0kxk4zY22kaqfSH4Be2cnQ 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. 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."

Upon perusal to the said Decree (exhibit CCL-1 in Afidavit Balasan Defendan dated 13.06.2025), it is apparent that there is a judicial order, albeit by consent of the parties, that D is the 2/5 beneficial owner of the subject land and, pending its transfer from KMS as the registered proprietor to D, KMS would hold such portion of the subject land as trustee for D.

In my view, the 2/5th share in the subject land granted to D under the said Decree forms ‘a title to’ or at the very least ‘any right to such title to’ the subject land as envisaged under s.323(1) NLC. The said Decree, unless it is set aside (which is not the case here), confers a 2/5th title in the subject land to D which is capable of protection under s.340 NLC. Whether D’s 2/5th portion in the subject land can be properly registered in the document of title or otherwise, that is certainly a different issue altogether. What matters most is that the 2/5th title to the subject land is an uncontroverted right of D as conferred by the Family Court pursuant to the said Decree. S/N 0kxk4zY22kaqfSH4Be2cnQ

Thus, after giving due consideration on the background facts, the said Decree as evidence and the relevant legal positions as alluded to above, I hold that D indeed has a caveatable interest on the subject land.

The next stage to consider is to find whether there exists a serious question to be tried. Reference to this is again made to Luggage where the Court of Appeal held that:- "The matter does not come to an end once the caveator satisfies the court that his claim as expressed in the application in Form 19B amounts in law to a caveatable interest. He must go on to show, in appropriate cases, that, based on the affidavits filed, his claim discloses a serious question meriting a trial. This then is the second stage. The degree of proof that has to be offered will, of course, vary from case to case. At this the second stage the court is more concerned with matters of evidence and proof offered to support the caveator's claim.";

This I admit to be a bit tricky at first sight. As far as this instant matter is concern, there is no other action involving P and D. Since the nature of the caveat tend to resemble with an interim injunction, then what is there pending for the Court to decide later between P and D on the said serious issue, if any? S/N 0kxk4zY22kaqfSH4Be2cnQ

At the outset, it needs to be re-emphasised that P is not the registered proprietor of the subject land but only the successful bidder during auction of the subject land.

The importance of highlighting P’s position in relation to the subject land is for the purpose of ascertaining what should be the approach this Court should take in addressing the issues involved at this stage of investigation.

In this regard, I make my reference to Privy Council’s decision in Eng Mee Yong & Ors v. Letchumanan [1979] 1 MLRA 143 where if applied to the instant matter would put the burden to P to satisfy the Court that there are sufficient grounds in fact and law for treating him as a person claiming such an interest in the land as would, if it were established, make him aggrieved by the existence of the caveat. The relevant passages from the said authority are as follows:- “… In their Lordships' view a distinction must be drawn between cases where the applicant is the registered proprietor of the land (ie the caveatee) and cases where the applicant is some other person who claims a right to an interest in it. In the former case the caveatee can rely upon his registered title as prima facie evidence of his unfettered right to deal with the land as he pleases; it is for the caveator to satisfy the Court that there are sufficient grounds in fact and law for continuing in force a caveat which prevents him from doing so. So where, as in the instant case, the only parties to an application under s. 327 are caveatee and caveator there is no difference between what the caveator must establish to obtain an S/N 0kxk4zY22kaqfSH4Be2cnQ extension of the caveat under s. 326 and what he must establish to defeat the caveatee's application for removal of the caveat under s. 327. It is otherwise when the applicant under s. 327 is someone other than the caveatee. He has no registered title to rely upon as prima facie evidence of his interest in the land. It is for him to begin by satisfying the Court that there are sufficient grounds in fact and law for treating him as a person claiming such an interest in the land as would, if it were established, make him aggrieved by the existence of the caveat.”

From the affidavit in support filed by the P (Enclosure 2), it is not difficult at a glance to state positively that P being the successful bidder and who had paid full consideration for the subject land ought to have been aggrieved by the existence of the private caveat entered by D.

However, the same position is shaken and must even be taken in suspect subsequent to D’s averments in her affidavit in reply (Enclosure 3) where it was alleged that the breach of loan repayment by KYHSB which led to the subject land been put on auction was intentional by P and KMS as directors of KYHSB to frustrate the said Decree which granted D a 2/5th beneficial ownership in the subject land.

To support her allegation, D further avers that there is in fact an existing writ action filed by D against KMS and KYHSB at the S/N 0kxk4zY22kaqfSH4Be2cnQ Johor Bahru High Court under suit No. JA-22NCVC108-08/2024 (“Suit 108”). The claim is for unjust enrichment and equitable subrogation which are mainly related to the enforcement of the said Decree by D against KMS. Among the prayers sought for in the said action is an injunction to restraint KMS from dealing with or encumber or further encumber the 62 lands which include the subject land pending the transfer of shares of the lands from KMS to D.

To that end, D also avers that KYHSB is a going concern company which is worth over RM100 million in 2023 and 2024 according to its financial reports.

Now, P being one of the directors of KYHSB in my view must be assumed to have knowledge of Suit 108. Further, P must also be assumed to know of the existence of the caveat entered by D prior to him bidding at the auction. In fact, the existence of the caveat is even reflected in the Proclamation of Sale of the subject land.

Despite the abovesaid knowledge, P proceeded to bid the subject land during auction. Here, P’s good faith is questionable. His position in so far as the indefeasibility of title that he may be capable of obtaining under s.340 NLC is also shaky so to speak. S/N 0kxk4zY22kaqfSH4Be2cnQ

Further, being one of the directors of KYHSB, P ought to be held as the controlling mind behind KYHSB. The allegations by D that KYHSB is a going concern company with substantial financial positions are not seriously disputed by P.

These, to my mind raised a crucial question as to whether the default in payment that led to the auction was intentional and used as a device by P or KMS to frustrate D’s rights to 2/5th title in the subject land.

In the circumstances, I hold that the 2nd stage in Luggage, i.e. on the serious issue to be tried, can still be imparted to exist between P and D, albeit indirectly in Suit 108. Having said that, quickly I have to state that when I used the word ‘indirectly’, it is not my intention to extend or create a new class of ‘serious issue to be tried’ between P and D which I have already stated that there is no other action involving the subject land pending between P and D as parties. Hence, my finding herein must be taken to be strictly made based on the peculiar facts and circumstances of the case and nothing else. In other words, if P is a total stranger to D, KMS, KYHSB and Suit 108, then my assessment on P’s position as bona fide purchaser for value without notice may not be same as what I had hold herein. S/N 0kxk4zY22kaqfSH4Be2cnQ

Moving on to the final stage of investigation which is on the balance of justice or convenience issue, the Court of Appeal in Luggage had this say:- "The third stage is arrived at only after the first two hurdles have been crossed by the caveator. Here the question to be asked relates to the balance of justice, or what Lord Diplock termed in Eng Mee Yong as 'the balance of convenience."

On this issue, it needs to be re-emphasised that there is a pending proceeding in Suit 108 which relates to the subject land and indirectly involves P being one of the directors of KYHSB. I reiterate my earlier findings on the serious issue to be tried and further hold that it applies equally as the relevant factor that I take into consideration under this 3rd stage of investigation.

The subject land being a valuable and special commodity once lost might not be adequately be compensated by way of damages. In Kho Ah Soon v Ooi Kar Seng [1995] 3 MLJ 293 it was held by the Court of Appeal that:- "... Land being a valuable and special commodity, once lost, might not adequately be compensated by damages, and there was clear evidence in this case that the respondent was carrying out negotiations with potential buyers to dispose of the property. It followed that the balance of convenience and justice was in favour of maintaining the status quo." S/N 0kxk4zY22kaqfSH4Be2cnQ

Thus, upon carefully weighing the competing interest that exist between P and D, I hold that the dispute between them is real and on balance of justice, D has a genuine case for her caveat not to be removed pending the disposal of Suit 108.

I am also of the firm view that in the circumstances, should P’s application to remove the caveat is allowed, not only it has the effect of frustrating Suit 108 but it would also have the effect of circumventing the said Decree which confers a 2/5th share in the subject land to D. Conclusion

Based on the reasons as adumbrated above, I dismiss Enclosure 1 but I make no order as to costs due to the existing of a pending cause in Suit 108. Dated: 12th April 2026 sgd …………………………………………. (NOOR HISHAM BIN ISMAIL) JUDGE HIGH COURT, JOHOR BAHRU S/N 0kxk4zY22kaqfSH4Be2cnQ Solicitors for the Plaintiff : Messrs Loh & Renga Johor Bahru, Johor Solicitors for the Defendant : Messrs Chua & Partners Johor Bahru, Johor S/N 0kxk4zY22kaqfSH4Be2cnQ

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Case metadata

Court: High Court of Malaysia
Decision date: 16 Jan 2026
Case number: JA-24NCvC-627-05/2025
Coram: YA Tuan Noor Hisham bin Ismail
Practice area: Land Law — Private caveat — Removal of caveat — Application by auction purchaser — Land subject to third-party charge — Judicial separation — Consent decree — Beneficial interest of spouse — Whether caveator had a registrable interest — Whether caveat valid under s 323 National Land Code — Whether auction purchaser obtained title free from caveat — Whether caveat ought to be removed
Version: Alasan Penghakiman 1
Published: 13 Apr 2026
Source ID: e3644cd2-3636-46da-aa7d-21f805ed9c9d

Catchwords

Land Law — Private caveat — Removal of caveat — Application by auction purchaser — Land subject to third-party charge — Judicial separation — Consent decree — Beneficial interest of spouse — Whether caveator had a registrable interest — Whether caveat valid under s 323 National Land Code — Whether auction purchaser obtained title free from caveat — Whether caveat ought to be removed

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KHOO PI FONG - applicant - ejudgment_parties
CHUA CHER LENG - respondent - ejudgment_parties

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Khoo Pi Fong v Chua Cher Leng (JA-24NCvC-627-05/2025)

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