JUDGMENT

1. This is the plaintiff's application for the removal of the caveat lodged by the defendant and registered at Kuching Land Registry, as Instrument No. L 2806/1996, affecting the plaintiff's two parcels of land: viz

(a) ;Kuching Lease Crown Land No. 08882; and

(b) ;Lot 5292, Section 65 KTLD;

both situate at the 3rd Mile, Matang Road, Kuching (hereinafter called 'the said lands'). [3]

2. The application is supported by an affidavit of Ma Tie Jun, affirmed on 18th March, 1998. Ma is a director of the plaintiff. The defendant objected vide affidavit in opposition of John Shek of counsel for the defendant, affirmed on 18th April, 1998.

3. On 8th August, 1992, Visa BUCC Sdn. Bhd. (VBSB) bought all the shares in the plaintiff company, vide Agreement (Exhibit P1); thus the plaintiff was a wholly owned subsidiary of VBSB. Then the defendant and VBSB entered into a loan Agreement (Exhibit P3) and Debenture (Exhibit P4), and by virtue of these two documents, the defendant lodged a caveat in the said lands. It is to be noted that the plaintiff is not a privy to the loan P3 and Debenture P4. These facts are not in dispute.

4. At the onset of the hearing of this application, learned counsel for the defendant, Mr. John Shek, raised a preliminary objection on the ground that the plaintiff had no locus standi, and that as all the shares in the plaintiff company had been sold to VBSB, and the plaintiff was a mere trustee to the said lands.

5. Learned counsel for the plaintiff, Mr. Stanley Eddy submitted that the plaintiff was the registered proprietor of the said lands, and statute had conferred locus standi to a registered proprietor of land. Section 177(1) of the Sarawak Land Code (Cap 81) states:-

"Any registered proprietor or any other person having a registered estate or interest in the estate or interest against which a caveat has been lodged, may at any time, if he thinks fit, apply to the High Court for an order that the caveat be removed."

Thus to have locus standi under Section 177 the applicant must be a "registered proprietor" or must have "a registered estate or interest" in the land.

6. The defendant's objection was a non-starter; it was overruled.

7. As the plaintiff is the registered proprietor of the said lands, the onus of proof is upon the caveator to convince the court that he has a caveatable interest in the said lands. That is to say, whether the caveator has satisfied the court that on the evidence presented to it, its claim to [4] an interest in the said lands does raise a serious question to be tried, and if so, that on the balance of convenience, it would be better to maintain the status quo until the trial of the action. See Eng Mee Yong & Ors v Letchumanan (1979) 2 MLJ 212 [PC]; and Mohamed Bin Oki & Anor v Lau Hieng Ming & Ors (1981) 2 MLJ 88 .

8. Learned counsel for the defendant, Mr. John Shek, submitted that as the plaintiff was the trustee of VBSB by virtue of purchase of all the plaintiff's shares by VBSB, VBSB acquired a beneficial interest in the said lands. Further, by a loan agreement and debenture between VBSB and the defendant, he contended that the defendant had the beneficial interest in the lands, vide clause 18 of the Loan Agreement (P3) and Clause 15.4 of the Debenture (P4).

9. With respect, the learned counsel is labouring under a grave misconception that although VBSB owns all the shares in the plaintiff company, it is clear that it does not own the said lands. The plaintiff, as a subsidiary of VBSB, exists as a separate legal entity from VBSB. See People's Insurance Co. (M) Sdn. Bhd. v People's Insurance Co. Ltd. & Ors. (1986) 1 MLJ 86. Thus the registered proprietorship of the said lands remains with the plaintiff, and VBSB does not acquire any beneficial interest in the said lands unless there is evidence to that effect

10. The "bare trust" rule does not apply in this case. The effect of a bare trust alters the relationship of the parties from that of vendor/purchaser to that of trust