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2011 MarsdenLR 2676

FEDERAL COURT PUTRAJAYA
UPMARKET DEVELOPMENT SDN BHD – Appellant
Versus
SRIERA DEVELOPMENT SDN BHD – Respondent
[Civil Appeal No: 02-16-2010 (B)]



Petitioner Advocates:WSW Davidson,S Selvaraj,Chan Yew Hoong,M Nagaletchimy ,Respondent Advocate: Jenny Lee,Masitah Alias

Caveats in boundary disputes require substantial compliance rather than strict adherence to form, and courts must assess balance of convenience when determining caveat validity.

Headnote:(A) National Land Code 1965 - Section 322(1) - Nature and effect of private caveats - Appellant as the registered proprietor of land claimed overlapping boundary with respondent's lot causing caveat registration - Caveat validity questioned based on defects in Form 19B - Court found substantial compliance existed, despite deviations - Significant misdirection in lower courts for not assessing balance of convenience before caveat removal - Court emphasized caveat's nature as provisional. (Paras 6, 12, 23-27)

(B) Caveatable interest - Criteria for establishing caveatable interest under s 323(1) of the Code - Must disclose serious question to be tried and assess balance of justice. (Paras 24-25)

Facts of the case:
Dispute over boundary between appellant's land and respondent's land, where respondent started development based on unverified title leading to overlap. Appellant registered caveat to protect its interests.

Findings of Court:
Appellant had substantial compliance with Form 19B; courts failed to assess balance of convenience, leading to misdirection in removing caveat.

Issues: Can a boundary dispute give rise to a caveatable interest? Is specific wording required in caveat forms under NLC?

Ratio Decidendi: Courts misdirected by not considering balance of convenience, leading to erroneous removal of caveat despite established caveatable interest.

Result: Appeal allowed; lower court's orders set aside.

Table of Content
1. background facts establish land ownership dispute. (Para 2)
2. high court's ruling on the caveat's validity challenged. (Para 3 , 6)
3. court of appeal confirmed caveatable interest exists. (Para 4 , 5)
4. legal provisions on caveats and their enforcement. (Para 7 , 12)
5. defects in form 19b debated regarding caveat's validity. (Para 13 , 14 , 15)
6. caveats compared to equitable remedies like injunctions. (Para 20 , 21)
7. balance of convenience critical in caveat matters. (Para 23 , 24 , 26)
Abdull Hamid Embong FCJ:

[1] Two questions of law were posed for our determination, namely:

(a) Whether a boundary dispute over a portion of the land between two neighbouring lots which involves the physical aspect of the land i. e. the actual size and not the ownership, rights, title or interest registrable in the document of title, can give rise to a caveatable interest.

(b) Whether a caveator who is claiming a title and/or interest in respect of a part of a land:

(i) who has described the nature of his claim;

(ii) who has explained that the caveat applied for was to protect only that part of the land.

is further required by s 322 (1) of the National Land Code 1965 to expressly state in Form 19B that the caveat was to bind only that part of the land.

[2] Background Facts

2. 1 The defendant (the appellant in the present appeal) was the registered proprietor of several pieces of land which were derived from the subdivision of a larger lot known as Lot No. 16245, Mukim Petaling, Daerah Kuala Lumpur.

2. 2 The appellant's land adjoined Lot PT 5105 whose proprietor was Zuhrah Bina Sdn Bhd ("Zuhrah Bina"), a construction firm. Zuhrah Bina had entered into a joint venture agreement with the plaintiff (the respondent herein), a housing developer, to develop Lot PT 5105 into a housing estate.

2.3 The appellant alleged that the respondent had obtained a development order from the relevant authority based on the title of Lot PT 5105, a provisional title which had not been properly surveyed to define its exact boundary. The boundary of Lot PT 5105 as shown in the plan annexed to the title had overlapped with a portion of the appellant's land.

2. 4 The respondent however began development on Lot PT 5105 relying on the demarcation of boundary in the provisional title to demarcate its area of development. It had laid sewage pipes, constructed manholes and driven concrete piles on the portion claimed by the appellant.

2.5 To protect its interest pending the resolution of the dispute by the court, the appellant lodged a caveat on Lot PT 5105. i. e. a caveat against the whole of the respondent's land.

[3] Findings in the High court

3. 1 At the High court, the respondent applied under s 327(1) of the National Land Code ( NLC ) to remove the caveat as a person aggrieved by the existence of the caveat by reason of its interest in the land under the joint venture agreement it had entered into with Zuhrah Bina.

3. 2 The main issues for the determination of the High court were pertaining to the locus of the respondent to make the application to remove the caveat entered by the appellant on the land and whether the question of the overlap of the boundary between the appellant's land and the land on which the respondent carried out the construction work gave the appellant a caveatable interest to lodge a caveat on the said land. The High court allowed the respondent's application to remove the caveat without adverting to the issue of the overlapping boundary.

Findings in the court of Appeal

[4] At the court of Appeal, the appellant's appeal was dismissed on the ground that the appellant's Form 19B was defective since the appellant had failed to express in that form that the caveat was to bind only the small portion of Lot PT 5105 which overlapped the appellant's lots. i. e. the portion on which the appellant claimed an interest. The court of Appeal found that:

" We have examined Form 19B which the appellant submitted with care. We are convinced that while the appella

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