Sharifah Zubaidah Syed Abdul KaderLAW 3111 – Section 3 (09/10)

Let’s Look at the NLC

S.319: Nature and effect of RC S.320: Circumstances for entry of RC S.321: Procedure for entry of RC

Why Registrar’s Caveat?

Who Can Apply for Registrar’s Caveat?

When you fear fraud.improper dealings on

your land, apply for a RC

A registered proprietor may apply for a RC on his own

land As a registered proprietor may not

apply for a private caveat on his own land (Eu Finance v Siland), if, for example his IDT was stolen and he fears that it will be misused, he may apply under s.320(1)(a) NLC for the entry of a RC.

(See s.323(1) NLC – ‘claiming title to’)

Boonsom Boonyanit v Adorna Prop. [1990]

In this case, Mdm Boonsom sought entry of a Registrar’s Caveat where she complained that her title had been used with a forged transfer to obtain the registration of Adorna Prop.

Lim Ah Hun v Pendaftar Hakmilik Tanah P. Pinang & Anor. [1990] The Registrar, in this case had

entered a RC on the land based on a letter sent by the 2nd Df. and a police report alleging a fraudulent transfer of the land.

How is a Registrar’s Caveat Created?

S.321: Registrar will fill in Form 19F and

endorse the entry in the RDT “Registrar’s Caveat Entered”.

Then Registrar will notify the proprietor of land in Form 19A.

Nature and Effect of Registrar’s Caveat

It prohibits the registration, endorsement or entry on the RDT of any instrument of dealing on the land even though the instrument was presented prior to the time the Registrar’s Caveat takes effect.

Thus, it can apply retrospectively as opposed to a private caveat that only applies to future dealings.

See s.319(2).

Registrar’s Power to Enter a RC

S.319(a) NLC. How must this power be exercised? The Registrar must be satisfied that

the info.or material supplied to him in support of the request for the entry must be credible on the face of it.

He must act reasonably acc: to the circumstances of the case.

Issue: Whether the court can order the Registrar to enter a RC? Seet Soh Ngoh v Ventkateswara

Bhd. [1976] High Court: Yes, under s.417(1) NLC, the court

may order the Registrar to enter a RC to prevent fraud/improper dealing.

In this case, the Registrar was present during the proceedings.

Palaniappa Chettiar v Letchumanan Chettiar [1982]

The court can order the Registrar to enter a RC even if the Registrar is

not a party to the proceedings.

Wong Kim Fatt, JC interpreted the word ‘may’ in s.319:

“It is clear…the Registrar may act on his own motion or upon information/request made to him. The word ‘may’ indicates a

discretion on the part of the Registrar. …Thus in the case of the entry of a

Registrar’s Caveat, the Registrar is said to perform a quasi-judicial function in the exercise of that discretion..but the discretion must always be exercised

judiciously and not arbitrarily…”

Cont.:

“..by contrast, in the case of an application for the entry of a private or lien-holder’s caveat, his function is purely ministerial or administrative.”

Tan Soo Bing & Ors.v Tan Kooi Fook [1996]

Federal Court held: A person who desires to have a

Registrar’s Caveat entered in respect of any land must first apply to the

Registrar. If the Registrar refuses the application, his remedy is to appeal to the court under s.418 of the Code

against such refusal.

Effect of Registrar’s caveat? S. 319(1)(b): prohibits the

registration/entry of: -any instrument of dealing; - any tenancy exempt from registration; - any lien-holder’s caveat. Note: A RC does not prohibit the entry

of a private caveat or a trust caveat. Reason: Neither of these caveats

create an interest in land.

Protecting the Interests of the Federation

A Registrar’s Caveat can be used by the Inland Revenue Department to prevent any dealings on land belonging to a person or body who owes tax to the government.

Thus, a RC can be entered under s.320(1)(ba) to protect any secured or unsecured debt due to the Federation or State Authority.

See cases discussing this at pp. 364-367 of your text. MBF Finance Bhd. V Pendaftar

Hakmilik N. Perak & Anor. [1990] D& C Bank Bhd. V Land

Administrator, WP & Anor. [1991] Pendaftar Hakmilik Nageri Kedah v

OCBC [1991] MUI Finance Bhd. V Pendaftar

Hakmilik Shah Alam & Anor. [1993]

Who has Priority? Prior Registered Chargee or Government under a RC?

Let’s say a land owner has borrowed money from a bank and creates a charge on his land. Then, a few years later, it is found he owes tax to the government and the government enters a RC on his land.

Is the chargee bank’s right adversely affected by the RC on the land?

D&C Bank Bhd. V Land Administrator, WP & Anor.

[1991] Supreme Ct. held: The indefeasible interest of the

chargee takes priority over the subsequent Registrar’s Caveat.

Nevertheless, there is nothing unlawful in the entry of a RC merely because there is an existing charge.

Pendaftar Hakmilik N. Kedah v OCBC Ltd.[1991]

Supreme Ct. held: Before exercising his discretion under s.

320(1)(ba) to enter a RC, the Registrar must first find out the market value of the land, the debt due under the prior charge and the debt due to the government.

If the debt due under the charge is more than the market value of the land, the Registrar should not enter the RC as the debt due to the government cannot be satisfied from the land.

MUI Finance Bhd. v Pendaftar Hakmilik, Shah Alam & Anor.

[1993] Issue: Whether the court can under s.320(1)(ba) NLC grant the DGIR

orders for sale and dispositions of a taxpayer’s property to settle

outstanding liabilities of a taxpayer ?

Held: (Mahadev Shankar,J.)

Neither s.320(1)(ba) of the NLC nor the Income Tax Act empower the

court to order that the land be sold to satisfy the debt to the

government. The court also cannot order that the

land cannot be charged to another party until the tax is settled.

Duration of Registrar’s Caveat

S.321(3): A RC shall continue to be in force

until it is cancelled by the Registrar.

Removal of Registrar’s Caveat

A RC can be removed by 3 ways: 1) By the Registrar of his own

motion. (s.321(3)(a)) 2) On an application by the

proprietor of the caveated land. (s.321(3)(b))

3) Pursuant to a Court Order granted to the proprietor against the refusal of the Registrar to remove the caveat under s.418 NLC.. (s.321(3)(c))

Can a Chargee Apply to Remove a Registrar’s

Caveat? MUI Finance Bhd. V Pendaftar

Hakmilik Shah Alam & Anor. [1993] Held: Under s.321(3) NLC, a chargee does

not have any right to apply for cancellation of a RC as this can only be done by a registered proprietor.

FINISH.

Questions?