JUDGMENT

Choong Yeow Choy J:

Introduction

[1] The lodgement of a private caveat over land belonging to another individual or entity serves the legitimate purpose of protecting the interestts of the caveator. However, such a mechanism must not be abused. Where a caveat is shown to be unjustified, the caveatee is entitled under the law to seek its removal, and may also pursue damages against the caveator for any loss suffered.

[2] The present application, filed via Originating Summons in encl 1, illustrates the judicial responsibility that arises when a party asserts what it believes to be a legitimate interestt warranting the lodgement of a private caveat, and that assertion is subsequently challenged by the registered proprietor. In this instance, the Plaintiff, as the caveatee and registered proprietor, seeks the removal of private caveats lodged by the 1st Defendant over nine separate parcels of land. The 2nd Defendant is named in these proceedings in its statutory capacity under the National Land Code.

The Fundamental Issue

[3] The central issue for determination in this Originating Summons is whether the private caveats lodged by the 1st Defendant ought to be removed. This question is to be considered in accordance with the statutory framework under the National Land Code, as well as the applicable legal principles developed through a consistent line of judicial authorities which this court is bound to follow and apply.

The Parties

[4] The Plaintiff, Kepala Batas Bihun Sdn Bhd ("KBB"), is the proprietor of 9 plots of lands.

[5] The 1st Defendant, Bank Kerjasama Rakyat Malaysia Berhad, has lodged 9 separate private caveats onto the Plaintiff's lands.

[6] The 2nd Defendant, Pentadbir Tanah, Seberang Perai Utara, is the Land Administrator.

Pertinent Background Facts

[7] This case traces its origins to a commercial arrangement dating back to 2011, when the 1st Defendant Bank granted banking facilities to a company known as EKA Noodles Sdn Bhd ("EKA"). Security for these facilities was granted solely between the 1st Defendant and EKA.

[8] Subsequently, EKA defaulted on its obligations and sought to restructure its debts through a Scheme of Arrangement under s 366 of the Companies Act 2016, to which the 1st Defendant Bank was the largest creditor.

[9] As a condition of the 1st Defendant Bank's consent to support the proposed scheme, EKA, through its financial advisor, proposed providing additional security by charging nine plots of land belonging to the Plaintiff and one plot belonging to Mr. Ang Eng Hooi, a director of KBB. This offer was premised on a proposed acquisition where EKA would purchase 100% of KBB's shares, making KBB a subsidiary of EKA. Accordingly, on 20 February, 2018, KBB and Ang executed letters of undertaking ("Undertakings") in favour of the 1st Defendant Bank, irrevocably and unconditionally agreeing to register charges over their respective lands as continuing obligations subject to the settlement agreement between the 1st Defendant Bank and EKA.

[10] Despite these arrangements, none of the conditions required for the Scheme of Arrangement had been fulfilled by 30 June, 2018. The acquisition did not proceed, KBB's factory was destroyed in a fire in March 2020, and the scheme was ultimately called off. EKA was wound up on 10 September, 2021.

[11] In the meantime, the 1st Defendant Bank had lodged caveats over the lands owned by KBB and Ang to protect its registrable interestts pending formal registration of charges. This was in October 2021. For approximately two years, there was no dispute concerning these caveats. However, complications arose when Ang purportedly sold his land to a third party, Tang Soon Huat ("Tang"), and KBB charged its lands to other financial institutions instead of the 1st Defendant Bank.

[12] In January 2022, the 1st Defendant Bank initiated two civil suits - PA-22NCC1-01/2022 ("Suit 1) and PA-22NCC-2-01/2022 ("Suit 2") - against Ang Eng Hooi and Tang Soon Huat and against KBB respectively. Through