Low Hop Bing J

Application

This is the plaintiff's application by way of originating summons in encl (1) for the removal of the caveat entered by the defendant ('defendant's caveat') on 13 March 1992.

Facts

The facts of the case are as follows. By a loan agreement cum assignment dated 26 March 1984 ('the LACA'), the plaintiff had granted to one Chuah Eng Khong ('Chuah') a housing loan of RM60,000 to purchase all that parcel of land held under HS (M) 14801, PT 5533, Lot 023815, Mukim &ang, together with a building erected thereon ('the land') from Sri Donglai Sdn Bhd ('the developer'). There was then no issue of the document of title ('the title') to the land.

Under cl 5 of the LACA, Chuah has, inter alia, expressly assigned unto the plaintiff all his rights, title and interest in the land. Clause 12 of the LACA provides that upon issuance of the title, Chuah shall execute a charge over the land in favour of the plaintiff.

The title was issued on 19 November 1984.

Without the plaintiff's knowledge and the developer's consent, Chuah, by a sale and purchase agreement dated 3 June 1985, purportedly sold the land to one Tan Ah Tong ('Tan'), who is the defendant's husband, for the sum of RM160,000 ('the sale'). Tan, in turn, by a novation cum assignment dated 3 June 1986 ('the assignment'), purportedly assigned the same to the defendant without any monetary consideration. Two private caveats ('the caveats') dated 8 April 1986 and 13 March 1992 had been entered by Tan and the defendant respectively against the land.

As a result of the caveats, the plaintiff was unable to effect transfer of the charge on the land. The private caveat dated 8 April 1986 entered by Tan had subsequently lapsed. The plaintiff has now commenced this originating summons to remove the defendant's caveat. The solicitors acting for Chuah, Tan and the defendant and who were in charge of the preparation of the LACA, the sale and the assignment as well as the entries of the caveats were, at all times, Messrs Lian & Co. From the date of issuance, the title is registered in the developer's name and hence it has to be transferred to Chuah to subsequently enable the plaintiff to register the charge as security for the loan granted by the plaintiff to Chuah. The title has a restriction in interest that it cannot be sold, pledged, charged or transferred in any manner without the approval of the State Authority ('the restriction'). Approval of the State Authority had been duly obtained by the developer in respect of the transfer of the land to Chuah and the charge of the same to the plaintiff. However, no approval had been obtained by Tan for the sale and by the defendant for the assignment. By action vide Kuala Lumpur High Court Suit No S6—22—684—l993 ('the suit'), the defendant and Tan sought, against Chuah, specific performance of the sale and of the assignment. However, the same was only filed on 19 August 1993. No further steps had been taken by the defendant and Tan in the suit at least until 13 August 1996, ie the date the affidavit of Chai Su Boon [encl (13)] was affirmed. Even until today, there is no evidence of any further steps taken by Tan or the defendant in the suit.

Issues for Court's determination

Is the plaintiff an aggrieved person and therefore entitled to apply to remove the defendant's caveat?

Does the defendant have the right to enter her caveat?

Aggrieved person or body

Section 327(1) of the National Land Code 1965 ('the Code') enables an aggrieved person or body to apply to the Court for the removal of a private caveat and reads as follows:

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 ... may make such order on the application as it may think just.

Person who may enter a private caveat

Section 323(1)(a) of the Code provides for the person who may enter a private caveat and reads as follows:

The person and bodies at whose instance a private caveat may be ent