Registrar's caveat

04/11/23 Ainul Jaria Maidin 1

REGISTRAR’S CAVEAT


Outline

•Examine the features & important concepts related to RC•Effect of RC•Procedure for entry & removal of RC


– A specific type of caveat where power to enter caveat lies with Registrar.


Nature & Scope

– RC is entered to protect and inhibit dealings with land

– Entry or lodgement of RC does not create or enhance any existing claim to title or interest or give rise to any claim to title or interest


Functions of Registrar

• S.319(a) NLC: “A caveat may be entered by the Registrar on the register document of title of any land.”


• Issue: Whether Registrar has discretion to enter caveat or refuse entry of Caveat

• AR. PL. Palaniappa Chettiar v PL. AR. Letchumanan Chettiar & Anor[1982] 1 MLJ 232 – discretion is with Registrar as to whether to enter a caveat.

• discretion of Registrar must be exercised judiciously and reasonably without any element of mala fide (bad faith)


Registrars Powers

RC entered in circumstances specified in S.320(1) NLC whenever it appears necessary or desirable to Registrar.

• Registrar performs quasi-judicial

function


• Court can remove RC if entry is misleading and no longer necessary or desirable - Lim Ah Hun v Pendaftar Hakmilik Tanah, Pulau Pinang & Anor [1990] 3 MLJ 34 p.37


• Issue: Can Court order Registrar to enter caveat pursuant to s.417(1) NLC?


• S. 417 (1) NLC • “The court may make an order directing

Registrar or LA to do all such things as may be necessary to give effect to any judgment or order of given or made in any proceedings relating to land, and it shall be the duty of the registrar or collector to comply with the order forthwith.”


• Palaniappa Chetty v Letchumanan Chetty [1982] 1 MLJ 232 - Ct have no jurisdiction to order entry of RC since Registrar was not made a party to proceedings


• Seet Soh Ngoh v Venkateswara Bhd. [1976] 1 MLJ 242, - power to order Registrar to enter RC since Registrar was before court.


• prudent to include Registrar as a party to action,

• however no provisions in NLC preventing or restricting courts powers if it deems just to order Registrar

• HC –Ct has powers pursuant to s.417(1) NLC to order Registrar to enter RC pursuant to s.320 NLC for prevention of fraud, or improper dealings, whether or not Registrar is a party to proceedings


• In Tan Soo Bing v Tan Kooi Fook [1996] 3 MLJ 547 at 557 (the decision in the above cases were overruled), per Wan Adnan FCJ:

“… it is clear that a person who desires to have a RC entered in respect of any land must apply to Registrar. If registrar refuses his application, his remedy is to appeal to court against such refusal. He cannot go straight to court… the court has no jurisdiction to entertain such applications. The court only has appellate jurisdiction under S.418 NLC.


• Under S.418 NLC - court may reverse decision of Registrar and direct him to enter RC.

• aggrieved party cannot disregard appeal provisions under S.418 and go to High Court for an order that Registrar enters a RC.

• court can only direct Registrar to enter RC if court do not agree with decision of Registrar when exercising the appellate jurisdiction under S.418 NLC.”


• Effect of Registrars Caveat - S.319(1)(b)is to prevent:

• a. Any Dealings on disputed land• b. Claim for tenancy exempt from

registration on disputed land• c. Entry of a Lien-Holders caveat on

disputed land.


• RC takes retrospective effect. • It has the effect of preventing

registration of any dealing, which was presented for registration and yet to be registered when RC was entered.

• RC will not have any effect on a prior registered dealing.


• Lim Ah Hun v Pendaftar Hakmilik Tanah Pulau Pinang & Anor [1990] 3 MLJ 34

• Development and Commercial Bank Bhd v Govt of Malaysia & Ors [1989]3 MLJ 359

• Temenggong Securities Ltd. v Registrar of Titles [1974] 2 MLJ 45

READ


• Overseas Chinese Banking Corp.Ltd. v PHT Negeri Kedah [1990] 2 MLJ 478; [1991] 2MLJ 177

• Development and Commercial Bank Bhd. v Land Administrator WP [1991] 2 MLJ 180

• MUI Finance Bhd. v Pendaftar Hakmilik Shah Alam & Anor [1993] 1 AMR


Circumstances where Registrars Caveat Can be

Entered S.320(1)


• RC can be entered in respect of any land wherever it appears to Registrar to be necessary or desirable.

• (a) for the prevention of fraud or improper dealing; or


• (b) for protecting interests of the followings:– (i) federation or State Authority– (ii) any person under:

-disability of minority; or - mental disorder or unsound mind;

or- absent from the Federation


• (ba ) to restraint the land from being dealt with in order to ensure that the land is available to satisfy the whole or any part of debt due to the Federation or the State Authority, irrespective if judgment has been obtained or nor; or

• (c) due to an error on the register document of title to land or any related instrument


Prevention of Fraud or Improper Dealing S 320 (1)(a) NLC


• Registrar can enter RC on application of persons or representatives of persons in s.320(1)(a)(b) NLC to prevent fraud or improper dealing with land.

• Registrar does not have to take part in any examination of severity of fraud or improper dealing


• If there is evidence that raises suspicion of such dealing, should be adequate for Registrar to decide to enter RC.

• Registrar must make adequate inquiries but not required to make a decision that alleged act of fraud has actually been committed.


Caveating one’s own land

• Landowner is prohibited from caveating own land, unless can show existence of an interest to that arising beyond legal proprietorship.

• This is difficult to prove • However, in instances where IDT to land is

lost or stolen owner since cannot enter a Private Caveat can apply to Registrar to enter a RC for prevention of fraud or improper dealings


• Re An Application by Haupiri Courts (No.2) [1969] NZLR 358

• Eu Finance Berhad v Siland S.B.& (M&J) Frozen Food S.B. [1989]1 MLJ 195

• Boonsom Boonyanit v Adorna Properties [1990] 3 MLJ 444

• Lim Ah Hun v Pendaftar Hakimilik Tanah Pulau Pinang & Anor [1990] 3 MLJ 34


• Ss-320(1)(b)(i) NLC provides that interest of Federation or SA can be protected using RC

• Registrar usually enter a caveat even before an interest in land in favour of Federation or State Authority arises.

• Temenggong Securities Ltd. v Registrar of Titles [1974] 2 MLJ 45 registrar entered a Caveat to protect interest of IRD in respect of a claim for unpaid income tax.


• Privy Council - interests, which can be protected are those ‘in land that are recognised by NLC as being either registerable or otherwise entitled to protection.

• interest must be proprietary as such an unsecured creditor of proprietor of land has no such interest in the land.

• Caveat must be removed because interest did not represent an interest in land


• Government dissatisfied with decision in Temenggong Securities inserted sub-sec (ba)

• In circumstances where debt is unsecured or judgment has yet to be obtained against registered proprietor, Govt reserves right to apply to enter a RC to prevent dealing with caveated land prior to settlement of Government’s claim.

Amendment to NLC to Insert

Subsection(ba)


Effect of RC entered by govt

• Though Registrar is permitted to enter caveat on behalf of Govt, caveat will not have effect of overriding interests of existing interest holders.

• Thus prior registered chargee’s rights will never be affected by subsequent entry RC on behalf of Govt.


• Development & Commercial Bank Bhd v Govt. of Malaysia &Ors.[1989]3MLJ 359

• Overseas Chinese Banking Corp. Ltd. v PHT Negeri Kedah [1990]2 MLJ 478; [1991]2 MLJ 177

• Development and Commercial Bank Bhd. v Land Administrator WP [1991] 2 MLJ 180

• MUI Finance Bhd. v Pendaftar Hakmilik Shah Alam & Anor [1993]1 AMR


• (i) Federation or State Authority• (ii) any person under the

– (a) disability of minority; or – (b) mental disorder or unsound mind; or – (c) absent from the Federation.

Who can apply for RC -S.320(1)(b) NLC


(a) disability of minority

• Registrar can enter RC to protect interest in land or a right to such an interest for a minor.

• Age of Majority Act 1971 (Act 21) provides in S.2 that age of majority is 18 years old.


• (b) mental disorder or unsound mind; or

• Registrar can enter RC to protect interest in land or a right to such an interest for a person who is unsound mind.

• Mental Disorders Ordinance 1952.


(c)absent from Federation

• Registrar can enter RC to protect interest in land or a right to such an interest for a person who is absent from Federation


• Form 19F, endorsed & sealed by Registrar:

“Registrars Caveat Entered” together with statement of time and entry.

Entry of RC S.321 NLC


• No fixed duration or specific life span for RC

• s.321(3) - RC shall continue in force until cancelled by Registrar.

• RC does not lapse with the effluxion of time.

Duration -S.321(3) NLC


• Once RC entered - serve notice on registered proprietor in Form 19A - s.321(2) NLC


• RC continue in force until cancelled by Registrar:

• a.S.321(3)(a) - of his own motion; • b.S.321(3)(b)- application by proprietor

of caveated land; or• b.S.321(3)(c) - pursuant to Court Order.


Questions

• Who can apply to enter RC

• What are the functions/discretionary powers of Registrar in RC

• What are the functions of RC

• Can a RC affect prior registered interests to give effect to subsequent unsecured interests/claims


REMOVAL OF REGISTRARS CAVEAT


• RC continue in force until cancelled by Registrar:

• a.S.321(3)(a) - of his own motion; • b.S.321(3)(b)- application by proprietor

of caveated land; or• b.S.321(3)(c) - pursuant to Court Order.


Removal by Registrar s.321(3)(a) NLC

• Registrar can remove caveat when he is of view that there is no need for caveat to remain as it has served its’ purpose.


Removal by landowner-s.321(3)(b)

• Registered proprietor (Caveatee) of land, upon receiving Notice of Entry of Caveat Form 19A can apply to Registrar to remove caveat.


• Registrar can remove or reject application for removal.

• Registrar removes RC, matter will be resolved

• Registrar refuses to remove RC, Caveatee can appeal to Court against decision of Registrar not to remove RC.



Pursuant to Court order -S.321(3)(c)

• Caveatee, can appeal against decision of Registrar not to remove caveat pursuant to S.418 - S.321(3)(c) NLC


Appeal pursuant to

s.418 NLC

• registered proprietor is required to appeal to High Court within 3 months from time of communication of decision of Registrar rejecting the application to remove Registrars Caveat - S. 321(3)(b) NLC


• Any other person who is not registered proprietor but aggrieved by decision of Registrar must appeal to H Ct within 3 months from date on which decision was communicated to him.


Removal of Registrars’ Caveat by Aggrieved

Chargees


• registered Chargee aggrieved by entry of Registrars Caveat has right to seek to remove the Registrars Caveat from time entry of Caveat is communicated to them.

• appeal can be made pursuant to S 418 NLC


• Aggrieved chargee cannot apply to Registrar to remove caveat –s.321(3)(c)

• S.321(3)(C) NLC–provides for registered proprietor whose application to remove caveat to registrar is rejected.


Remedy to aggrieved chargee


• Development & Commercial Bank v LA WP [1991] 2 MLJ 180

• SC -considered issue whether chargee who is not aware of entry of Registrars Caveat or who has not objected to entry of caveat in first instance has a right to appeal pursuant to S.418 NLC


Azmi SCJ at p.185 …,

• “… firstly there is no express provision in s 321 NLC to enable a chargee on its own right to apply to Registrar or Land Administrator to cancel or remove the registrars caveat, thereby making it quite impossible for the chargee to obtain a decision of the registrars caveat, for the purpose of an appeal under s. 418


• Secondly, under s 321(3) read with s.418, a in the absence of the right to apply for cancellation and as well as the absence of express appeal provision chargee can only appeal against the decision of the registrar to enter the caveat but not against a decision refusing to cancel the caveat.


• In absence of right to apply for cancellation and as well as the absence of express appeal provision by a chargee relating to refusal of Registrar to remove caveat entered under s 320(1)(ba) declaratory relief should be available to chargee.


• power to grant a declaratory judgment must be exercised with great care and judiciously and in appropriate cases


• Pendaftar Hakmilik Negeri Kedah v Overseas Chineese Banking Corp. Ltd. (1991) 2 MLJ 177 at 179 (SC)

• sale of charged land by chargee was disrupted by existence of RC entered by Registrar to protect interest of unsecured debt of the federation.

• Gunn Chit Tuan SCJ - … Registrar had failed to take into consideration several material factors in entering RC on application of IRD.

• Reg has not acted judiciously or reasonably within ambit of NLC.

• He has exceeded his powers and acted ultra vires and his act is invalid.


… cont….• court - before exercising his discretionary

power under subsection (ba) Registrar must first check market value of disputed land & amount of debt due to government.

• If debt due on any prior charge or charges exceeds market value of land, RC cannot be entered against land as it can be reasonably inferred that debt due to Federation can never be satisfied from sale of land.


Public Bank Berhad v Pengarah Tanah & Galian & Anor.[1990] 2 MLJ 510

• Ct - rights of a prior registered interest-holder would enable him to defeat rights of Federation or State Authority.

• Ct - willing to allow entry of RC on behalf by unsecured Federal or state government.

• Interest of Federation can be upheld only if there are no prior registered interest of a third party which would have been adversely affected by existence of caveat.


• Development and Commercial Bank Bhd v Government of Malaysia & Ors [1989] 3 MLJ 359

• Overseas Chinese Banking Corpn. Ltd. v PHT Negeri Kedah [1990] 2 MLJ 478; [1991] 2 MLJ 177

• MUI Finance Bhd v Pendaftar Hakmilik Shah Alam & Anor [1993] 1 AMR

• Lim Ah Hun v Pendaftar Hakimilik Tanah Pulau Pinang & Anor [1990] 3 MLJ 34


Summary Procedure of Removal of RC

by Registered Proprietor


• i. Communication of entry of caveat by Registrar to proprietor

• ii. Proprietor appeal to registrar against entry of caveat

• Registrar refuse to remove caveat• Appeal to court –s.418 within 3

months from decision of Registrar to remove RC.


Procedure of Removal of RC

Registered Interest Holder


• Communication of entry of RC by registrar.

• Within 3 months from decision of Registrar to enter RC must apply to court to remove RC.


Registered Interest Holder

• D&C Bank v Govt. of M’sia [1989] 3 MLJ 359 – time to seek to remove RC by any person having registered interest on land begins from time of communication of entry of RC.

• registered interest holder has no right to apply for removal of RC to the registrar

• He must act expeditiously under s.418.


• Public Back Bhd. v Pengarah Tanah & Galian JB [1990] 3 MLJ 100 – right of appeal for others with registered interest is pursuant to s.418.


Cancellation of Registrars Caveat

S.321(4) NLC


• Registrar shall give effect to any order of court by making a note under his hands and seal the date of cancellation of Caveat entered – s.417

• If Registrar acts on his own motion to remove Caveat, he shall notify registered proprietor of affected land.


Any questions?

Law

Registrar's caveat