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2021 MarsdenLR 3393
HIGH COURT MALAYA SHAH ALAM
SRI MUDA CORNER HOLDINGS (M) SDN BHD – Appellant
Versus
TAN SRI DATO SRI RAMASAMY MUTHUSAMY – Respondent
[Originating Summons No: BA-24NCVC-1604-11-2019]
A caveatable interest must be established legally; failure to conduct due diligence in property transactions can disentitle a party from compensation.
Headnote:(A) National Land Code 1965 – Sections 327 and 329 – Removal of private caveat and claim for compensation – Court finds that the Plaintiff, as the purchaser of the property at public auction, qualifies as 'a person aggrieved' and is entitled to remove the caveat. However, the Plaintiff's failure to conduct property search prior to the auction disentitles them from claiming compensation under s 329. (Paras 17, 28)
Facts of the case: The Plaintiff applied to remove a caveat lodged by the Defendant on property purchased through public auction. The Defendant claimed a caveatable interest based on a loan agreement. The Plaintiff had not conducted a search prior to the auction.
Findings of Court: The Court agreed that the caveat should be removed but denied compensation to the Plaintiff due to their negligence in failing to conduct a search of the property.
Issues: Whether the Plaintiff had the right to remove the caveat and if they were entitled to compensation despite not conducting a property search before bidding.
Ratio Decidendi: The Court emphasized that a monetary claim does not constitute a caveatable interest, and one must be proactive in conducting due diligence before participating in property auctions. (Paras 20, 28)
Result: The caveat was ordered to be removed, but the Plaintiff was denied compensation.
JUDGMENT
Introduction
[1] By this Originating Summons (Enclosure 1), the Plaintiff is applying, amongst others, for the following orders:
(a) to remove a Private Caveat Presentation No 3507/2015 at H.S. (M) 4531, PT 773, Tampat Padang Jawa, Mukit Bukit Raja, Daerah Petaling, Negeri Selangor ("the said Property") under s 327 of the National Land Code, and
(b) for compensation and damages under s 329 of the National Land Code.
Cause Papers
[2] The relevant cause papers pertaining to the application in Enclosure 1 are as follows:
(a) Originating Summons dated on the 13th of November 2019;
(b) Affidavit in Support affirmed by the Plaintiff dated on the 8th of November 2020;
(c) Affidavit in Reply affirmed by the Defendant, Tan Sri Ramasamy dated on the 10th of December 2019.
(d) Affidavit in Reply to the Plaintiff's reply affirmed by Tan Sri Ramasamy dated on the 26th of December 2019; and
(e) The Plaintiff's Skeletal Submission dated on the 6th of January 2020.
Brief Facts
[3] The Plaintiff in its Originating Summons has filed an affidavit through its Director one Thillai Nathan a/l Krishnasamy affirmed on the 8th of November 2019 supporting the Originating Summons.
[4] The Defendant in this suit is in the capacity as a Director of IRDK Land Sdn Bhd ("IRDK") over the said property. A private caveat bearing a number 3507/2015 is reflected in the title of the said Property, which granted in favour of IRDK in line with the spirit of the Authorization Letter by Uthama executed with IRDK and is irrecoverable by the Power of Attorney dated on the 9th of July 2013 that has been duly registered with the High Court.
[5] In the Affidavit affirmed by the Plaintiff, it is stated that the Plaintiff purchased the said Property vide a public auction which was conducted by Alliance Bank Malaysia Berhad vide a Proclamation of Sale dated on the 27th of April 2019 (POS)(Exhibit TN1) and the auction price is RM 3,720,000.00 and a Memorandum of Sale was signed.
[6] The deposit of RM 372,000.00 was paid by the Plaintiff. With regards to the remaining balance of RM 3,348,180.00, the Plaintiff had been approved of the two loans which were by Am Bank (M) Berhad on the 14th of May 2019 amounting to loan of RM 2,790,000.00 and by Alliance Islamic Bank Berhad on 1st of July 2019 of RM1,540,000.00.
[7] On the 20th of November 2015 a Private Caveat has been lodged by the Defendant, which shows that the name of IRDK whom is the Developer as the Registered Land Owner through a searched conducted by the Land Office (Exhibit TN5).
[8] The Plaintiff had written to the Defendant requesting him to remove the caveat but no replies were received (Exhibit TN6).
[9] On the 27th of August 2019, the Plaintiff received a letter from Messrs Shafee & Co, the solicitors for IRDK stating that, currently, there is a caveat on the said property by one Tan Sri Ramasamy a/l Muthusamy coupled with a Power of Attorney. In para 4 of the Power of Attorney, it clearly stated that the caveat had been put in place as a result of pecuniary interest on the said Property by the caveat holder (Exhibit TN9).
[10] On the 10th of December 2019 an Affidavit in Reply was affirmed by the Defendant.
[11] Later on, the 26th of December 2019 the Plaintiff filed an Affidavit in Reply affirmed by Thillai Nathan which clearly demonstrating as to why the caveat lodged by the Defendant is not valid.
[12] Accordingly, the Plaintiff initiated this Originating Summons against the Defendant amongst others, to remove the said Private Caveat and applying for the compensation and damages.
The Law
[13] Section 327 (1) of the National Land Code 1965 reads:-
327. Removal of private caveats by the Court.
"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."
[14] Section 329 of the National Land Code 1965 reads
