Lee Hun Hoe CJ (Borneo):

This is an appeal against the order made by the learned Judge in setting aside the caveat and the injunction and awarding damages to 4th respondent without a full trial.

The first three respondents ("the vendors") owned a piece of land described as geran no. 5700 for Lot 87 in the district of Pusing together with the building known as No. 16, Lahat Road, Pusing, Perak ("the land"). They charged "the land" to the Malayan Banking for RM50,000 for overdraft facilities. On 18 March 1982 they executed an agreement to sell "the land" to the 4th respondent. By way of deposit and part payment 4th respondent paid them RM28,000. The balance of Rm47,000 was to be made within one month from 27 July 1982 to settle the overdraft facilities. If it was insufficient then the vendors would have to settle with the bank, 4th respondent was entitled to specific performance of the agreement. On 23 April 1982 they executed another agreement to sell "the land" to the appellant, also for RM75,000. The appellant paid a deposit of RM25,000. As to the balance of RM50,000 the appellant agreed to redeem "the land" within 6 months from the bank with the balance. On 19 August 1982 the 4th respondent lodged a caveat. The appellant had lodged a caveat earlier.

Sometime in July, 1984 the 4th respondent deposited a cheque for the sum of RM47,000 with Messrs. Ngan & Tan, the bank's solicitors. Eventually, the discharge of the charge was duly executed, the title deed was given to 4th respondent. The vendors had executed the memorandum to transfer in form 14A in favour of 4th respondent's nominees, Lim Bee Bee (f) and Lim Ching Wan. Apart from caveating "the land" the appellant also obtained an order dated 24 October 1983 restraining the first three respondents from transferring, selling, disposing of or otherwise encumbering "the land". The 4th respondent contacted the appellant asking him to withdraw the caveat but he refused. The appellant showed the 4th respondent his agreement which was more than a month later than the 4th respondent's agreement. Because of non-payment of the balance of the purchase price by the appellant there was a serious breach of the terms of the agreement. Clause 5 of the agreement makes time the essence of the agreement. By paying the full purchase price the 4th respondent had become the beneficial owner. The first three respondents were merely bare trustees for the 4th respondent. There was therefore no interest against which the appellant's caveat could lie.

The appellant contended that the learned Judge was wrong in law. The burden was on the respondent. The question was whether the caveat was wrongfully entered or entered without reasonable cause. In this case there were competing equities. It was submitted that when faced with these facts the learned Judge should not set aside the caveat and the injunction but to decide on the conflicting equities. In support the following cases were cited:

Eng Mee Yong & Ors v. V. Letchumanan[1979]

Macon Engineering Sdn. Bhd. v. Goh Hoot Yin[1976]

Piang Hong Yon & Ors. v. Syarikat Seri Belian Sdn. Bhd.[1983] 1 CLJ 324 (Rep)

Haroon bin Guriaman v. Nik Mah bte Nik Mat & Anor.[1951]

Chatib bin Kari v. Mosbert Bhd.[1984] 1 CLJ 501 (Rep)

Although both the appellant and the 4th respondent were in breach of the terms of the agreement in respect of the final payment the vendors had waived the breach against the 4th respondent by accepting the final payment made by the latter. The appellant only offered to make the final payment on 16 May 1983 but the vendors refused to accept and finalise the discharge of the charge. As a result of the breach the vendors were entitled to treat the agreement as terminated.

On the facts of this case the entry of a private caveat by one party does not necessarily mean that he has better priority against another who has not as yet lodged one. In Crosbie-Hill v. Sayer [1908] 1 Ch.866 @ 875 on the question of priority Parker J stated at p. 875