JUDGMENT

Lord Diplock (delivering the judgment of the Board):

The facts which give rise to this appeal can be stated briefly.

In 1972, Li-Ta Company (Pte.) Limited ("Li-Ta") was the registered proprietor of alienated land in the State of Johore held under a number of titles. It was incorporated in Singapore and was indebted to the federation of Malaysia for income tax, which was overdue. On 30 August 1972, Li-Ta entered into an agreement with another company incorporated in Singapore, Temenggong Securities Ltd ("Temenggong"), for the sale of its Johore land to Temenggong. The consideration for the sale was the issue to Li-Ta of shares in Temenggong. The date for completion under the contract was on or before 30 September 1972. It took place on 22 September 1972, when the purchase price was satisfied and Li-Ta executed the transfers of the land in favour of Tumbuk Estate Sdn. Bhd. ("Tumbuk"), a wholly-owned subsidiary and nominee of Temenggong. Nine of the titles were subject to registered charges. These were discharged by Temenggong before applying to the Registrar of Titles for registration of the transfer of the land from Li-Ta to Tumbuk and the discharge of the charges. The applications to the Registrar were made on 14 December, 1972.

In the meantime, the Revenue Department of the Federation had learnt that Li- Ta was proposing to sell its land in Johore. It had started an action against Li-Ta for recovery of the tax on 24 September 1972. Fearing that its chances of enforcing by execution any judgment ultimately. obtained against Li-Ta would be jeopardised if that company disposed of its land in Johore and removed its assets outside the jurisdiction before judgment was recovered against it, the Department of Inland Revenue on 2 October 1972, wrote a letter to the Registrar of Land Titles requesting him to enter a registrar's caveat in respect of the nine lots of land of which Li-Ta was the registered proprietor at that date. Neither Temenggong nor Tumbuk had applied to the Registrar to enter a private caveat in respect of the land based on their claim to be beneficially interested in the land as purchasers under a Contract of Sale of 30 August or as transfers under the Instrument of Transfer of 22 September 1972. The Registrar was accordingly unaware of this contract and of its completion. On 11 October 1972, he entered a registrar's caveat in respect of the nine lots in purported pursuance of his powers under s. 320(1)(b)(i) of the National Land Code for protecting the interest of the Government of the Federation.

On 15 March 1973, the Registrar formally rejected the application by Tumbuk for registration of the transfer of title and for the discharge of the charges upon the ground that these were prohibited by the entry of the registrar's caveat on 11 October 1972. On 12 June 1973, Temenggong and Tumbuk applied by originating motion in the High Court in Malaya for an Order directing the Registrar to cancel the registrar's caveat of 11 October 1972, and to register the transfer of the title in the land to Tumbuk and the discharge of the charges.

This application was dismissed by the High Court (Pawan Ahmad J) upon the ground that the claim of the Federation to recover overdue income tax from Li-Ta was an interest of the Federation entitled to protection by a registrar's caveat under s. 320(1)(b)(i) of the National Land Code. Upon appeal to the Federal Court, that Court allowed the appeal and directed the Registrar to enter upon the register the transfer of 22 September 1972, transferring the titles of the nine lots from Li-Ta to Tumbuk and to enter discharges of the charges on those titles.

From the judgment of the Federal Court, the Registrar now appeals to His Majesty The Yang Dipertuan Agung by special leave of this Board, with the object of clarifying the nature of the "interests" which the Registrar is entitled to protect by a registrar's caveat under s. 320(1)(b) of the National Land Code.

In each of the States