Land Law Case Study

NUR SYUHADA BINTI ZULKAPLE (254586)
TUTORIAL CASE STUDY

TONG CHUN SING & SONS SDN BHD V NG GEOK HWA [2018] 7 MLJ 782
THE FACTS:
The plaintiff and the defendant had entered into a sale and purchase agreement (‘the 2013
SPA’) of a land located in Bukit Nanas, Kuala Lumpur. A dispute arose between the
parties in relation of the 2013 SPA and consequently, the defendant entered caveat on the
land. The defendant then commenced an action against the plaintiff (‘the suit’) and
subsequently they entered into consent order in relation to the said action. On 20
December 2016, the plaintiff entered into a sale and purchase agreement (‘the SPA’) with
a third-party whereby the plaintiff agreed to sell and the buyer agreed to buy the land for
a purchase price of RM29m. The plaintiff’s solicitors had notified the defendant of the
SPA (‘the notice’) and requested that the defendant withdraw the caveat in accordance
with cl 2(g) of the consent order but the defendant refused to withdraw the caveat. The
plaintiff then filed the present application (‘encl 1’) under s 327 of the National Land
Code for the removal of the caveat entered by the defendant on the land. The plaintiff
submitted that the caveat ought to be removed because the defendant did not have any
registrable interest and/or caveatable interest in the land; and there was no serious
question meriting trial. As opposed to the plaintiff’s submission, the defendant contended
that the SPA did not conform to the terms of the consent order and that the consent order
accorded him the right to maintain the caveat on the land. The defendant further
submitted that he had a caveatable interest on the land, which interest originated from the
2013 SPA.
THE ISSUES:
1) Whether the plaintiff has right to seek for the removal of the caveat?
2) Whether the defendant disclosed a caveatable interest pursuant to consent order?
3) Whether the defendant has right to the title of the land under National Land Code?
THE ARGUMENTS BY THE PLAINTIFF

The plaintiff’s solicitors had notified the defendant of the SPA (‘the notice’) and
requested that the defendant withdraw the caveat in accordance with cl 2(g) of the
consent order, but the defendant refused to withdraw the caveat. The plaintiff then filed
the present application under Section 327 of the National Land Code for the removal of
the caveat entered by the defendant on the land. The plaintiff submitted that the caveat
ought to be removed because the defendant did not have any registrable interest and/or
caveatable interest in the land; and there was no serious question meriting trial. The case
that can be referred is Nanyang Development (1966) Sdn. Bhd. v. How Swee Poh
[1970] 1 MLJ 145 where it was held that when the registered proprietor applies for the
removal of a private caveat under Section 327, the onus of proof is on the caveator and it
is for the caveator to satisfy the court that it is just for the caveat to remain; the burden is
on the caveator to satisfy the court that he had good grounds for his alleged claim that he
has a registrable interest in the land.
THE ARGUMENTS BY THE DEFENDANT– support with statutory provisions and

case law;
The defendant entered caveat on the land. The defendant then commenced an action
against the plaintiff (‘the suit’) and subsequently they entered into consent order in
relation to the said action. On 20 December 2016, the plaintiff entered into a sale and
purchase agreement (‘the SPA’) with a third-party whereby the plaintiff agreed to sell
and the buyer agreed to buy the land for a purchase price of RM29m. The defendant
contended that the SPA did not conform to the terms of the consent order and that the
consent order accorded him the right to maintain the caveat on the land. The defendant
further submitted that he had a caveatable interest on the land, which interest originated
from the SPA 2013. The case that can be referred is Luggage Distributors (M) Sdn Bhd
v. Tan Hor Teng & Anor [1995] 1 MLJ 719 where this case had set-out the three stages
through which a caveator must pass in order to sustain his caveat. The principles in
Luggage Distributors as applied to this present case require the defendant to prove three
following matters. Firstly, whether the defendant, in the Application for Entry of Private
Caveat (Form 19B), had disclosed a caveatable interest. Second, if it has disclosed a
caveatable interest, whether the evidence he produced before this court in support of his
claim to the caveatable interest, discloses a serious issue to be tried. Lastly, if the first and
second questions are resolved in the defendant’s favour, whether on the balance of
convenience, lies in favour of the caveat remaining on the register pending the disposal of
the defendant’s suit.
OPINIONS AND JUDGMENTS OF THE JUDGES ON THE ARGUMENTS OF

THE PARTIES
It was held that the court allowing the order in terms of enclosure 1 with costs of
RM15,000 subject to allocator:
1. The law on removal of private caveat is well established. The plaintiff as the
registered owner of the land could rely on its registered title as prima facie
evidence of his interest in the land. The plaintiff did not have to prove that it was
an aggrieved person in seeking the removal of the caveat. The onus of proof was
on the defendant to persuade the court as to why the caveat should remain on the
land.
2. It is settled law that a consent order is like a contract and should be interpreted in
accordance with the rules of contractual construction. Like a binding contract, the
terms and conditions of the consent order were binding on the plaintiff and the
defendant.
3. There was nothing in the consent order that expressly stated that the ‘offer to
purchase’ must be an unconditional agreement. Moreover, it was usual
conveyancing practice that sales and purchase agreements for land and
immovable property were subjected to conditions precedent, which both the seller
and buyer must fulfill before the agreement could be completed. It would not be
possible to imply into the consent order, by custom or practice, the interpretation
that the phrase ‘offer to purchase’ meant an unconditional agreement.
4. Having found that the defendant has no caveatable interest in the Land, it is not
necessary for the court to consider the other two stages of the enquiry set out in
Luggage Distributors which the questions on whether there is a serious issue to be
tried and whether on a balance of convenience the Caveat should remain.
5. Based on the terms of the consent order, the defendant did not have any residual
rights and/or interests on the land under the 2013 SPA and the suit. The
defendant’s right under the consent order was to a refund of the sum of
RM2,050,000. Any right granted under the consent order for the defendant to
maintain caveat on the land was for a definite period, which ended 14 days after
the defendant’s receipt of the notice from the plaintiff. The right neither was a
right to the title of the land nor was it a right capable of registration on the land.
The right was of a pure monetary claims which it is a right in personam against
the plaintiff and it did not create any interest in the land. The defendant therefore,
did not have any caveatable interest in the land.
WHETHER THE JUDGMENT AND THE OPINIONS OF JUDGE ARE

ACCEPTABLE?
I agree that the judgment and the opinions of the judge on the argument of the
parties are acceptable. It was found that the defendant has failed to prove to the
court that he has a caveatable interest in the land. Based on the terms of the
Consent Order, the defendant does not have any residual rights and/or interests on
the Land under the 2013 SPA and the Suit. Paragraph 1 of the Consent Order
expressly states that the Consent Order constitutes a full and final settlement of all
claims by the Defendant against the Plaintiff and all counterclaims by the Plaintiff
against the Defendant. The parties also agreed for the defendant to withdraw the
Suit against the defendant without liberty to file afresh and without order as to
costs. The defendant also has failed to comply with the Consent Order by refusing
to withdraw the Caveat within 14 days of receiving the Notice. The Consent
Order expressly stipulates that the Defendant is to withdraw the Caveat within 14
days of receiving the Notice from the Plaintiff. Therefore, the plaintiff has right to
seek for the removal of the private caveat according to Section 327 of National
Land Code and the defendant has no right to the title of the land under National
Land Code.

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NUR SYUHADA BINTI ZULKAPLE (254586)

TUTORIAL CASE STUDY

THE ARGUMENTS BY THE PLAINTIFF

THE ARGUMENTS BY THE DEFENDANT– support with statutory provisions and

OPINIONS AND JUDGMENTS OF THE JUDGES ON THE ARGUMENTS OF

WHETHER THE JUDGMENT AND THE OPINIONS OF JUDGE ARE

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