Maruthayee A/P P Sangrar v M S Christe A/L Maria Souce (JA-24NCvC-1117-09/2024)

This was an application by the Plaintiff (“P”) via Originating Summons (“OS”) dated 02.09.2024 for the removal of the private caveat (“the caveat”) entered by the Defendant (“D”) on 22.12.2020 on a piece of land held under GRN 52481, Lot 198, Mukim Sungai Tiram, District of Johor Bahru, Johor (“said land”).

D objected to P’s OS.

This Court had on 15.07.2025 dismissed the OS with costs of RM 2,000.00 to be paid by P to D.

Dissatisfied with this Court’s decision, P had since appealed to the Court of Appeal.

On 14.03.2020, D entered into an investment agreement (“the agreement”) with P for the subdivision and development of the said land belonging to P as the registered proprietor.

Under the agreement, a sum of RM 150,000.00 is to be paid by D to P as a deposit sum followed by an estimated sum of RM 600,000.00 once works are done on a progressive basis for the development of the said land.

One of the key terms of the agreement concerns the sharing of profits whereby D was promised a 30% interest in the said land including the return of the RM 600,000.00 mentioned above once P’s land has been subdivided.

Prior to the execution of the agreement, sometime in early January 2020, P had appointed one Siva Kumar A/L Sinnappan as a consultant to manage and supervise the subdivision of the said land and for the said land to be developed.

9.

P’s son and Siva Kumar A/L Sinnappan did all works pertaining to the subdivision and development of the land while D was in Singapore unable to return to Malaysia, as it was then during the Covid-19 pandemic period.

P’s solicitor via letter dated 20.10.2020 terminated the said agreement.

D who is also represented by the same solicitor via letter dated 30.10.2020 demanded from P for the return of the deposit sums together with sums spent by D apart from a penalty amount of 10% from the investment which amounted to RM 215,000.00.

D had then caused the caveat to be entered on the said land on 22.12.2020. Whether D has caveatable interest on the said land

The law relating to who may enter private caveat is provided under s.323 of the National Land Code (Revised 2020) (“NLC”) which states the following:- “(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 undivided share in any alienated land or any right to such title or interest;

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

the guardian or next friend of any minor claiming to be entitled as mentioned in paragraph (b).

Any such person or body wishing to apply for the entry of such a caveat shall do so in Form 19B and such application shall be attested in accordance with the provisions of section 211 notwithstanding that the provisions dealt with dealings in alienated land, and shall state therein the nature of the claim on which his application is based, and whether the caveat is to be expressed to bind the land itself or an undivided share in the land or a particular interest only, and the last known address of the proprietor if the caveat is to be expressed to bind the land itself or an undivided share in the land.

Any application under this section shall be accompanied by-

the prescribed fee;

the grounds giving rise to the claim thereto, verified by a statutory declaration by the applicant or his advocate and solicitor; and

if relating to a part of the land, a description or a plan of the land affected, and if relating to an undivided share in the land or a part thereof, a description, which is sufficient for identification.

On the other hand, the law relating to the removal of the private caveat can be found under s.327 NLC which states that:- "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."

In proceedings for removal of private caveat, the burden is on the caveator, in this instant action D, to prove (i) the existence of a caveatable interest, (ii) the existence of serious questions to be tried and (iii) the balance of convenience is in favour of the caveat being retained pending the trial of the action in order to prevent the disposal of the land to some third party.

The abovesaid legal requirement is trite as can be found in the judgment of the Privy Council in Eng Mee Yong v Letchumanan [1979] 2 MLJ 212 where it was held that:- "This is the nature of the onus that lies upon the caveator in an application by the caveatee under section 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 guestion 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.

Reference also may be made to Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLJ 719 where the Court of Appeal held as follows at page 741:- "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 caditquaestio, and the caveat must be removed without the necessity of going any further.";

On what constitutes a caveatable interest, reference can be made to Registrar of titles, Johore v Temeonggong Securities Ltd [1976] 2 MLJ 44 where it was held by the Privy Council at page 47 that:- 'The expression "interest" is used in many sections throughout the Code apart from section 320 and in none of them to which their Lordships' attention has been drawn can it be plausibly suggested that it bears any wider meaning than an interest in land of a kind which is recognised by the Code as being either registrable or otherwise entitled to protection.'

Based on the above authorities, and upon carefully perusing the affidavit evidence as well as the documents exhibited by the parties, this Court is satisfied that D has a caveatable interest on the said land. The reasons are as the following.

Firstly, there is in place an investment agreement between P and D entered into on 14.03.2020 (Exhibit ‘M-2’ Affidavit in Support). This investment agreement confers a contractual right on D for a 30% interest on the said land upon D paying the deposit sum and developing the said land as agreed upon.

What is also important is that 30% interest on the said land provided under the investment agreement is capable of being made as registrable under the NLC since such interest relate to the titles to the land where specific performance may be enforced by D should there be default on the part of the Plaintiff . The relevant paragraph in the agreement reads:- “6. Return of Investment Sum

6.1 The owner pledges to return the investment sum (the final amount will be finalized by the amount of investment sum invested upon completion of the project, FAILING WHICH, number of plots with equivalent market value at that time will be transferred to the investor IMMEDIATELY”

In Wong Kuan Tan v Gambut Development Sdn Bhd [1984] 2 MLJ 113, the Federal Court at page 115 had held that:- “Thus it is plain that the appellant claimed to have the right to lodge the caveat but based on Clause 4(a) of the Deed of Assignment. It is also plain that this was a contractual right applicable only when purchase price is not fully paid. But this alone cannot create a caveatable interest in the land. The contractual provision does not create an interest within the meaning of section 323 of the National Land Code. Interests which are protectable by caveat are only interests recognised by the Code. The contractual provision does not amount to an equitable or other interest sufficient to support a caveat. Section 323(1) of the National Land Code sets out the classes of persons who may lodge private caveat. They are person or body claiming title to any alienated land; or claiming any registrable interest in any alienated land; or claiming any right to such title or interest; and includes person or body claiming to be beneficially entitled under any trust affecting any such land or interest. The words "any right to such title or interest" may be wide enough to allow rights arising under a contract for registrable dealing to be protected by a caveat but they are not wide enough to cover mere personal rights as distinguished from rights relating to land. See also David Wong: Land Tenure in the Malay States - pg. 416-435. At the heart of this argument lies the very essence of the Torrens system. The indefeasibility of title means that the title can only be challenged under section 340(2) of the National Land Code; and only an interest in land recognised under section 323 of the National Land Code can support a caveat." Whether there are serious issues to be tried

On the issue of serious issues to be tried, the Court of Appeal in Luggage Distributors at page 742 had 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.";

A perusal of P’s Affidavit in-support particularly at paragraphs 7, 8 and 10 shows the role of one Siva Kumar A/L Sinappan who was appointed as a consultant where P is seemingly suggesting that she does not know who this Siva Kumar A/L Sinappan is and that his appointment is at the behest of D.

The above assertion is diametrically opposed to the evidence adduced by D where D had averred that Sivakumar A/L Sinappan was appointed by P herself in early January 2020 which could be seen at exhibit C-3 in D’s Affidavit in-reply which is P’s own Statutory Declaration.

From the affidavit evidence by the parties, there appears to this Court a dispute concerning the payment of the RM 150,000.00 as to whom are the recipients and what is its actual purpose for.

To this Court, the diametrically opposing positions by the parties would inevitably point to a conclusion that there are serious factual and issues to be tried as a whole. Reference is again made to Eng Mee Yong where it was held by the Privy Council:- “if there appears to be any conflict of evidence which is not on the face of it implausible, such a conflict ought not to be disposed of on affidavit evidence only.”

Reference is further made to Macon Engineers Sdn Bhd v Goh Hooi Yin [1976] 2 MLJ 53 where the Federal Court held that:- “In the present case the respondent claims that he has an interest in the said land. He has filed a claim against the registered proprietors for specific performance, damages and lien over the said property. Whether he has good grounds for his alleged claim is surely worthy of argument and consideration. I cannot say that his claim is so baseless or frivolous that he should be deprived of his chance to have that tried in an action. And it would be a denial of that chance if the caveat were summarily removed, for once the appellants registered the transfer, the caveator's right, if he has any, is destroyed. I further take the view that a caveat based on a document which prima facie is valid will not be removed on a summary application where the facts are involved and seriously disputed. Similar premonitory hint is detectable in SK Das on the Torrens System in Malaya (pp. 347-348) which was adopted in Jit Kaur v. Parl Singh [1974] 1 LNS 57: In dealing with applications for the extension of the operation of or for the removal of caveats against dealings with land it has always been the desire of the Court to allow the parties the fullest opportunity to litigate any matter that may be in dispute between them. The Court is loth to prevent parties litigating any right that they think they may possess: Re Caveat of Lewis [1903] 23 NZLR SC 581. Where there is a conflict of testimony the caveat will not be discharged.” Balance of convenience

It is trite law that since D has proven the existence of a caveatable interest and the existence of serious issues to be tried, this Court is of further view that the balance of convenience lies in favour of the retention of the caveat. On this issue, the Court of Appeal at page 743 in Luggage Distributors held:- "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 EngMee Yong as 'the balance of convenience'."

It needs to be also emphasized that based on the affidavit evidence, D had on multiple occasions approached P to achieve an amicable resolution to their respective predicaments but to no avail. In this regard, negotiations have been conducted apart from an attempt to execute a settlement agreement around June 2024 although the said agreement is still pending discussion.

However, instead of closing the negotiation, P had chosen to file the instant OS to remove the caveat. In this regard, this Court is of the view that, since the dispute in the agreement relates also to the transfer of 30% of the land to D upon default by P, compensation by way of damages might not be adequate once the land is lost. Reference in this regard is made to Kho Ah Soon v Ooi Kar Seng [1995] 3 MLJ 293 where the Court of Appeal held 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."

Accordingly, this Court hold that based on the facts and circumstances of the instant matter, it would be desirable for the status quo between parties to be maintained. Reference is also made thereto to Kasivisvanathan Chettiar v Pereira [1976] 2 MLJ 110 where it was held by the Federal Court that:- “The principal reason why we dismissed this appeal is that there is a real dispute between the parties regarding this land; that to resolve this real dispute the respondent had filed a suit against the appellant, and that it is desirable that the status quo be preserved pending the disposal of that suit, so that the appellant cannot deal with the land until then."

Based on the reasons adumbrated above, the OS is therefore dismissed with costs of RM 2,000.00 to be paid by P to D. Dated: 25.1.2026 …………………………………………. (NOOR HISHAM BIN ISMAIL) Judge High Court, Johor Bahru Solicitors for the Plaintiff : Messrs Julie Lim, Vasanthan & Co Lot 21-02, Level 21, Public Bank Tower, No 19, Jalan Wong Ah Fook, 80888, Ibrahim International Business District, Johor Bahru Solicitors for the Defendant : Messrs Daniel & Associates No 166-F, Jalan Kota Laksamana 13, Taman Kota Laksmana 75200 Malacca