An Agreement to Purchase does not confer a caveatable interest in land unless a formal Sale and Purchase Agreement is executed, as mere negotiations do not establish a registrable interest.

Matter Before This Court

[1] This a decision on an application brought by the Plaintiffs in encl 1 ('Application') for an order that the private caveat No 0400B2022004794 entered by the Second Plaintiff on a land known as GRN 1461 Lot 122 and GRN 21779 Lot 124 be extended either:

(a) until the properties in question which are the subject of an intended sale between the Plaintiffs and the Defendants are transferred to the Plaintiffs or;

(b) until the disposal of suit MA-22NcVC-17-04/2023 that is still pending between them.

Background Facts

[2] Vide a document known as Agreement to Purchase ('ATP') dated 11 July 2022 entered into between the First Plaintiff acting on behalf of the Second Plaintiff and the First Defendant acting on behalf of the Second Defendant, the Defendants agreed to sell and the Plaintiffs agreed to purchase two pieces of land held under GRN 14641 Lot 122 and GRN 21779 Lot 124 in the state of Melaka for a total purchase consideration of RM3,200,000.00.

[3] Pursuant to that ATP, a sum of RM96,000.00 being earnest deposit was paid by the Plaintiffs. Of that amount, RM16,000.00 was paid to the First Defendant and the balance was paid to a realty agent Robin Realty as their fees.

[4] There arose a dispute over the purchase when the Plaintiffs alleged that the Defendants had failed, refused or neglected to complete the sale of the lands to the Plaintiff. That dispute resulted in a suit vide MA-22NCvC-17-04/2023 where the Plaintiffs seek, inter-alia, a specific performance of the sale of the Lands. That suit is still pending.

[5] The Plaintiffs believe that by entering into the ATP they have acquired a caveatable interest in the lands and therefore filed the same vide Registration No: 201701024022 (1238188-U)) under Presentation No: 0400B2022004794 and registered on 12 October 2022. The Defendants then sought to cancel the caveat pursuant to s 326 of the National Land Code and the Registrar's Form 19C dated 24 November 2022 was served on the Plaintiffs on 21 March 2023.

[6] The Defendant's intention to cancel the caveat prompted the Plaintiffs to act to preserve the caveat by filing this Application. The Application is supported by the affidavit of the 1st Plaintiff in encl 3. The Defendant's response can be found in the 2nd Defendant's affidavit in reply in encl 7.

Issues

[7] The core issue in this Application is whether ATP conferred upon the Plaintiff's a caveatable interest in the lands and therefore the right to enter a private caveat on them including the right to extend its term.

Arguments Of Parties

[8] Learned Counsel for the Plaintiffs contend that the Plaintiffs have a caveatable interest in the lands based on the following factors:

(a) that the ATP is by operation of cl 4(c) a binding contract and legally binding agreement between the parties;

(b) payment of earnest deposit; and

(c) the progress in negotiations of the Sale and Purchase Agreement ('SPA') brought parties to near execution of the SPA if not for last-minute changes in terms insisted by the Defendants.

[9] To support the Plaintiff's case reference was made to the decisions in Macon Engineers Sdn Bhd v. Goh Hooi Yin 1976 MarsdenLR 121 ; 1976 MarsdenLR 238 ; Murugappa Chettiar Lakshmanan v. Lee Teck Mook 1995 MarsdenLR 1166 ; [1995] 1 MLJ 782; [1995] 2 CLJ 545; Charles Grenier Sdn Bhd v. Lau Wing Hong 1996 MarsdenLR 1149 ; 1997 MarsdenLR 1514 ; ; ; Cipta Cermat Sdn Bhd v. Perbadanan Kemajuan Negeri Kedah 2007 MarsdenLR 809 ; [2007] 1 MLJ 746; 2007 MarsdenLR 2742 ; Sinar Wang Sdn Bhd v. Ng Kee Seng [2001] 1 MLRA 781; [2005] 2 MLJ 42; [2004] 3 CLJ 679; Ayer Hitam Dredging Malaysia Bhd v. YC Chin Enterprises Sdn Bhd 1994 MarsdenLR 740 ; 1994 MarsdenLR 2110 ; 1994 MarsdenLR 1535 ; an