Equitable interests in lease agreements, combined with substantial renovations, confer caveatable rights under the National Land Code, ensuring protection until resolved in court.

JUDGMENT

George Varughese JC:

Introduction

[1] Enclosure 1 is the plaintiff's application in Originating Summons dated 26 February 2020 made pursuant to s 327(1), National Land Code 1965 ("NLC 1965"), inter alia, seeking the following orders:

(i) removal of the private caveat registered/lodged by the defendant on 3 December 2019 by way of Presentation No 0799B2019012713 ("Private Caveat"), pertaining to an interest on the land and hereditament held under HS (D) 61106, Lot No 50425, Mukim 11, Daerah Seberang Perai Tengah, Negeri Pulau Pinang ("Land"); and

(ii) a declaration that the Private Caveat lodged by the defendant is invalid, wrongfully presented or registered without reasonable cause and that the defendant has no interest or caveatable interest in the Land to enter the Private Caveat.

Brief Facts

[2] The plaintiff is the registered proprietor for the Land together with a 4-storey shop-lot erected thereon bearing assessment address No 37, Jalan Icon City, Icon City, 14000 Bukit Mertajam, Pulau Pinang ("Premises").

[3] The defendant entered into a Tenancy Agreement ("Agreement") with the plaintiff on the 1 October 2015 to rent the Premises for a tenure of 5 years from 1 October 2015 till 30 September 2020 with an option to renew for a further term of 3 years from the date of expiry of the first term of tenure by giving 3 months' notice in advance.

[4] The nature of the defendant's business is a beauty and educational centre known as "Rosemary De Beauty Therapy Centre" ("Centre). The defendant utilised the Premises to run the Centre.

[5] The defendant had entered and occupied and is still in occupation of the Premises since 2015 and spent a substantial amount of money to renovate the 4-storey shop-lot to run their business.

[6] On 8 October 2019, the defendant received a notice from the plaintiff, terminating the Agreement and to deliver vacant possession of the Premises, within 2 weeks from the date of the notice and to settle the sum of RM11,712.80 being rental for the month of October 2019 ("Notice of Termination").

[7] Thereafter, the defendant exercised the option to renew the tenancy for a further term of 3 years from the date of expiry of the first term of tenure by way of Notice of Renewal dated 7 November 2019 ("Notice of Renewal").

[8] Subsequently, the defendant came to know that the Premises was to be sold and lodged the Private Caveat to protect their rights and interest under the Agreement.

[9] The plaintiff filed Civil Action No: PB-A52NCVC-25-06/2020 at the Butterworth Sessions Court ("Civil Action"), wherein the plaintiff alleged certain breaches of the Agreement thus terminating the Agreement and sought vacant possession of the Premises.

[10] The defendant in their Defence denied any breach of the Agreement and challenged the Notice of Termination and in their Counter Claim prayed for, amongst others, specific performance of the Agreement based on equity/equitable estoppel and declarations.

Plaintiff's Grounds For Removal Of The Private Caveat

[11] On 12 December 2019 the plaintiff entered into a Sale and Purchase Agreement ("SPA") with Lean Hwa Poultry Processing Sdn Bhd ("Purchaser") and sold the Land for RM3,550,000.00 and the Purchaser has paid a sum of RM355,000.00 as 10% deposit to the plaintiff.

[12] The registration or transfer of the Land to the Purchaser could not be effected as a result of the presence of the Private Caveat.

[13] As a result, the plaintiff suffered loss and damage for not being able to fulfill their contractual obligations under the SPA.

[14] The defendant breached the terms of the Agreement by failing to pay the monthly rental in a lump sum payment on or before the 7th day of each month.

[15] By way of the Notice of Termination, the plaintiff terminated the Agreement and thus the defendant has no caveatable interest to enter the Private Caveat and/or in the alternative, the defendant as a tenant has no interest to lodge the Private Caveat.

[16] There are no serious issues that warrants a trial an