Caveatable interests require a connection to land ownership or registrable interest, not mere monetary claims, as established by the National Land Code and related case law.

[1] The Plaintiff seeks an order for the removal of private caveats lodged by the 1st Defendant over four (4) properties. The 1st Defendant, in opposing this application, asserts that she has a caveatable interest in the properties based on her claim in an ongoing Syariah Court Harta Sepencarian proceeding. The 2nd Defendant does not object to the Plaintiffs application.

[2] The key issue before this Court is whether the 1st Defendant possesses a caveatable interest in the properties under s 323(1)(a) of the National Land Code 1965 (NLC).

Factual Background

[3] The Plaintiff and the 1st Defendant were married on 25 December 2004 and later divorced on 27 November 2018. During the marriage, the four properties were acquired and are now subject to the 1st Defendant's claim in the Syariah High Court under Harta Sepencarian.

[4] The Plaintiff initiated this action to remove the private caveats as he intends to use the properties as collateral for refinancing. The 1st Defendant lodged the private caveats on the basis that she had a claim to Harta Sepencarian in the Syariah Court. The reasons she had stated did not mention any ownership to the 4 properties.

[5] The Syariah High Court had ruled on the Harta Sepencarian on 15 August 2024. In its recent judgment, it was held that the 1st Defendant is entitled to one-tenth of the monetary value of the properties, rather than a direct ownership interest. Thus, this Court proceeds to determine at this OS whether the 1st Defendant's claim to a share of the monetary value of the properties constitutes a caveatable interest within the meaning of s 323(1)(a) of the NLC.

[6] The law under s 323(1)(a) NLC provides that a private caveat may be lodged by any person claiming title to, a registrable interest in, or any right to such title or interest in alienated land.

[7] The Federal Court in Score Options Sdn Bhd v. Mexaland Development Sdn Bhd 2012 MarsdenLR 941 ; [2012] 6 MLJ 475 ; ; [2012] 5 AMR 485 ruled that a caveatable interest must relate to ownership or a registrable interest in the land and not merely a monetary entitlement. Similarly, in Tan Heng Poh v. Tan Boon Thong & Ors 1992 MarsdenLR 584 ; [1992] 2 MLJ 1; [1992] CLJ (Rep) 1 316 , the Court held that a claim to the proceeds of sale of land does not constitute a caveatable interest because it does not confer a proprietary interest in the land.

[8] The Court of Appeal in Ib Capital Sdn Bhd v. Ivory Indah Sdn Bhd & Anor 2021 MarsdenLR 3229 ; reaffirmed that a caveat operates as a protection of an alleged interest in the land itself, not as a security for monetary claims

Application Of The Law To The Facts

[9] The Syariah High Court's ruling did not grant the 1st Defendant a proprietary or registrable interest in the properties but only a monetary entitlement equivalent to one-tenth of the properties' value. Although there is notification from the Defendant that the said Syariah High Court's ruling is pending appeal, there is no stay of the said decision. The NLC and case laws consistently exclude monetary claims from caveatable interests. Since the 1st Defendant's claim is purely for monetary compensation, she does not satisfy the legal requirements to lodge private caveats on each of the respective 4 properties.

[10] The Plaintiff rightfully argued that Form 19B filed by the 1st Defendant does not establish any ownership rights or registrable interest. The assertion of a right in Harta Sepencarian proceedings does not automatically create a registrable proprietary interest in the properties under land law.

[11] The retention of the caveats would effectively function as a monetary restra