The court ruled that a party must demonstrate a legitimate caveatable interest to maintain a caveat, and failure to do so justifies removal to facilitate the liquidation process.

(Removal Of Caveat In Post Winding Up Proceedings)

Kenneth St James J:

Prelusion

[1] Mega Fasteners (M) Sdn Bhd (Company) was wound up by Court Order. The Official Receiver (OR) was appointed the liquidator.

[2] The OR (liquidator) is in the process of identifying and calling in the Company's assets, vesting the properties, liquidating them, and distributing dividends to the creditors.

[3] The OR found that the Company owned six properties. The OR also found that the Respondent (R) had entered private caveats on two of the properties.

[4] The Companies Act 2016 ( CA 2016) provides that in the liquidation process, the OR has the duty (and hence the right) to take custody of, or to take under his control, the Company's properties. The OR can also apply for a Court Order that the Company's properties vest in the OR (as liquidator).

[5] This proceeding is the OR's post-winding up application for a Court Order to remove the two caveats that R entered on the two properties, so that the properties can be vested in the OR. Should the caveats be removed so that the OR can deal with the properties in the liquidation process?

Pertinent Statutory Provisions

[6] Section 483 of CA 2016 provides that when a winding up Order is made against a company, the liquidator (here: the OR) must "take into his custody or under his control" all the company's property. It provides that the OR can apply for a Court Order to vest the property in the OR. It also provides that the OR can file proceedings relating to the property in the liquidation process.

[7] The pertinent parts of s 483 of the CA 2016 (s 483(1), (2) and (3)) are set out below for reference (with my emphases added)-

Section 483 . Custody and vesting of company's property

(1) Where an interim liquidator has been appointed or a winding up order has been made, the interim liquidator or liquidator shall forthwith take into his custody or under his control all the property to which the company is or appears to be entitled.

(2) On the application of the liquidator, the Court may order that all or any part of the property belonging to the company or held by trustees on behalf of the company shall vest in the liquidator and the property shall, subject to subsection (3), vest accordingly and the liquidator may, after giving such indemnity, if any, as the Court directs, bring or defend any action which relates to that property or of which is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.

(3) Where an order is made under subsection (2), every liquidator in relation to whom the order is made shall within seven days of the making of the order-

(a) lodge an office copy of the order with the Registrar; and

(b) where the order relates to land, lodge an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land.

[8] Section 327 of the National Land Code 1965 (NLC) provides that any person aggrieved by a private caveat can apply for a Court Order to remove it.

[9] The pertinent parts of s 327 of the NLC (s 327(1) and (2)) are set out below for reference (with my emphases added)-

Section 327 . Removal of private caveats by the Court.

(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.

(2) The Registrar shall, on being duly served with any order under this section for the removal of a caveat, cancel the entry thereof on the register document of title, and note thereon the reason for the cancellation and the date thereof.

[10] Section 417 of the NLC provides that the Court can order the land registrar and land administrator to do anything necessary to give effect to a Court Order in any proceeding relating to land. It also provides that the Court can order the cancellation of