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2021 MarsdenLR 669
HIGH COURT MALAYA SHAH ALAM
VICMETA SDN BHD – Appellant
Versus
KT HARVEST SDN BHD – Respondent
[Originating Summon No: BA-24NCVC-1839-12/2019]
A caveatable interest must be a present interest and cannot be contingent; prospective rights do not qualify under the National Land Code.
Headnote:(A) National Land Code 1965 – Sections 323, 327, and 329 – Removal of caveat – Plaintiff sought to remove a caveat lodged by the Defendant over two specific pieces of land, claiming entitlement and damages for loss caused by the caveat – Court established the Plaintiff's aggrieved status under s 327 and assessed the Defendant's claimed caveatable interest as insufficient. (Paras 12, 15, 25, 35)
(B) Caveatable Interest – A caveatable interest must exist at the time of lodging a caveat; prospective or contingent interests do not confer caveatable rights under s 323 – Defendant's rights under the Joint Venture Agreement were contingent upon obtaining loan approval, thus lacking a present caveatable interest. (Paras 34, 40)
Facts of the case: The Defendant lodged a caveat following a Joint Venture Agreement with the Plaintiff regarding land development. The Plaintiff claimed a caveat removal, asserting no valid interest from the Defendant.
Findings of Court: The Defendant lacked a caveatable interest as their rights were contingent and not registrable according to the stipulated agreements.
Issues: The main issue was whether the Plaintiff could establish an aggrieved status and prove the absence of a caveatable interest by the Defendant.
Ratio Decidendi: The court articulated that a caveatable interest must be clearly defined and existing; the court cited established principles from prior cases confirming that contingent interests were insufficient. The court ruled that the Defendant's right to the lands had not yet matured and thus no valid caveat existed. (Paras 25, 36-37)
Result: Plaintiff's application to remove the caveat was allowed.
JUDGMENT
Introduction
[1] By an Originating Summons dated 31 December 2019, the Plaintiff applies under ss 323, 327 and 329 of the National Land Code to remove a private caveat lodged by the Defendant and be compensated for the loss suffered as a result thereof.
[2] The private caveat was entered vide presentation no. 61871/2017 on two pieces of land identified as HS(D) 40234 PT 84 and HS(D) 40235 PT 85 Pekan Tanjong Duabelas, Daerah Kuala Langat, Negeri Selangor Darul Ehsan ("the said lands").
Background Facts
[3] The facts, in the main, are not in dispute. The Plaintiff was the registered owner of a piece of land known as H.S.(M) 20214, PT 81, Mukim Tanjung Dua Belas, Daerah Kuala Langat, Negeri Selangor Darul Ehsan ("the master land").
[4] On 12 December 2013, the Plaintiff and the Defendant entered into a joint venture agreement ("the JV Agreement"). Pursuant to the JV Agreement, the parties agreed that the Defendant was to develop the master land and procure the subdivision of the master land with individual titles. The master land was subsequently subdivided into five lots with the following titles:-
(i) HS(D) 40234 PT 84 (Lot 3);
(ii) HS(D) 40235 PT 85 (Lot 4);
(iii) HS (D) 40236 PT 86 (Lot 1);
(iv) HS(D) 40237 PT 87 (Lot 2); and
(v) HS(D) 40238 PT 88.
[5] In consideration of the Defendant undertaking to develop the master land at its own costs, the JV agreement provided that the Defendant was entitled to all the subdivided lots and the factories to be built on the land, and RM5.2 million in cash or in kind or partly both shall be paid to the Plaintiff.
[6] The terms pertaining to the Defendant's entitlement were varied by a First Supplementary Agreement dated 13 December 2013. The payment of RM5.2 million to the Plaintiff was reduced to only RM2.8 million, and such sum was to be paid by the Defendant within a period of two years from the date the Defendant commences construction of the buildings in accordance with the JV Agreement.
[7] The term as to the parties' entitlement was again varied pursuant to the Second Supplementary Agreement ("the 2nd Supplementary Agreement") executed on 8 October 2015. The new terms provided that the Plaintiff's entitlement was to be reduced from RM2.8 million to RM1.4 million only, to be paid by the Defendant within a period of twenty-four months from the date of construction. In addition, the Plaintiff was to appoint the Defendant to build for it two units of factory on Lot 1 and Lot 2 at a cost of RM3.5 million to be paid by the Plaintiff as agreed construction costs. Lot 3 and Lot 4 however, the subject matter the of the caveat entered, were to be lots allocated to the Defendant.
[8] The implementation of the JV Agreement was not successful. On 15 August 2017, the Plaintiff's director sent a letter to the Defendant to inform that it was not to commence work on Lot 1 and 2 until the latter had obtained a bank loan. The letter further added that if construction were to commence on Lot 3 and Lot 4 without the Plaintiff's consent, it will not be responsible for any cost or risk incurred.
[9] Following the Plaintiff's action, the Defendant lodged a caveat on Lots 3 and 4, on 24 August 2017. Through its solicitors' letter of 2 January 2018, the Defendant informed the Plaintiff that it had decided to terminate the JV Agreement. In the same letter the Defendant also gave notice to the Plaintiff that it intended to pursue its claim to recover all costs, losses and damages it had incurred thus far.
[10] The Defendant then commenced proceedings in the Shah Alam High Court vide Civil Suit No. BA-22NCC-77-02/2018 ("Suit 77") premised on the Plaintiff's breach of the agreements entered into by now refusing to allow the Defendant to carry out the construction works on the land. It sought for reliefs comprising of general and special damages, the latter amounting to RM1,116,908.71 being wasted expenditure which the Defendant had expended for preliminary works.
[11] Suit 77 was subsequently wit
