registrar's caveat

REGISTRAR’S CAVEAT

THE FIRST TYPE OF A CAVEAT

BASICS

FUNCTION OF A REGISTRAR

• It is under the discretionary power of a registrar to approve/disapprove the application of a caveat.

• However it must be accordingly done with good faith and the absence of mala fide.

• If the court founds out that there’s mala fide in approving the registrar’s caveat, thus the court will have the power to set aside the caveat - Palaniappa Chettiar v PL AR Letchumanan Chettiar & Anor

• Power of a registrar to enter into a caveat - Section 319(2)(a) NLC

ISSUE : WHETHER COURT CAN MAKE ORDER FOR REGISTRAR TO ENTER CAVEAT

FUNCTION OF A REGISTRAR

• Palaniappa Chettiar - Court has no jurisdiction to compel Registrar to enter into a caveat since the Registrar is not the party to the dispute.

However; • Seet Soh Ngoh v Venkateswara Bhd - The court has the power to compel Registrar to do so since

the Registrar was before the court. However, there are no provisions in NLC that prevents the court’s power if it looks just in ordering so.

• Thus, the High Court has the power to order Registrar to enter into a caveat (under Sect 320 of NLC) pursuant to Section 417(1) of NLC for the purpose of preventing any fraud/ improper dealings from happening.

• This is because it involves a ministerial power which the Registrar can only execute the instructions and cannot decide over the matter.

• In cases where the Registrar refuses the application, the applicant may appeal to the court as the court has the appellant jurisdiction (Sect 418 NLC). Applicant may not go direct to the court in applying for the caveat as court has no jurisdiction over the matter - Boonsom Boonyayit v Adorna Properties S.B

• Registrar’s caveat is superior to the private caveat. • Registar has no power to determine whether if there’s fraud.

BASICS

EFFECT OF REGISTRAR’S CAVEAT

• Prevents the following dealings on the disputed land; • Registration of all dealings including transfer, charge, lease,

sub-lease, easement on disputed land by anyone including registered proprietor.

• claim for tenancy exempt • entry of lien-holders caveat

• Registrar’s caveat will not prevent from other caveats - Private,trust caveat & prohibitory orders.

• It takes effect retrospectively • Preventing any dealing but not affect any prior registered dealings. • It will lasts until it is withdrawn by the Registrar itself.

ALSO KNOWN AS CIRCUMSTANCES WHERE THE RC MAY BE ENTERED

FUNCTION OF REGISTRAR’S CAVEAT

1. For the prevention of fraud/ Improper dealings; or 2. For protecting the interest of the followings;

1. The Federation/ State Authority 2. Any person under;

1. Disability of minority; or 2. Unsound mind; or 3. Absent from the Federation.

3. (ba) To restraint the land from being dealt with any order. Ensuring the land is available in satisfying the whole/any part of debt due to the Federation/State Authority; irrespective order has been obtained/not.

4. Error in the document registered/ any related instrument.

1. PREVENTION OF FRAUD/IMPROPER DEALINGS - S.320(1)(A) NLC


• Registered proprietor prohibited from caveating it’s own land, UNLESS can show the existence interest that arising beyond the legal proprietorship.

• If a person losses it’s IDT, either stolen or lost, thus he has no right to seek for Private Caveat & may apply for Registrar’s caveat for the purpose of preventing fraud/improper dealings.

• Has two opinions/decisions; • Firstly to decide whether the registered proprietor comes within section 323(1)(a) of NLC which

whom is entitled for private caveat. • Re An Application by Haupiri Courts Ltd.

• The registered mortgagee (C Ltd) has brought land at a sale conducted by the Registrar. However, the land transferred could not be registered as the land is under a caveat.

• Haupiri alleged that the sale was void under section 223 & 226 of the NZ Companies Act as there’s a failure to comply with the requirements of the Property Law.

• C Ltd later applied for caveat to be removed. Which was relevant to the NZ Land Transfer Act.

• The court held that - Assuming he could be the person to claim the land, founding on the fact that he wanted to claim for a private caveat over his own land could not be said to claim an interest in the land under an unregistered documents. He must establish some set of circumstances over & above his status as the registered proprietor.



• Berry v Heider - Since the company does not do any more other than alleged a series of invalid acts by the mortgagee, the act of caveating own’s land will not subsequently help to protect themselves.

• Eu Finance Bhd v Siland S.B & Frozen Food S.B

• The Registered chargee had applied & was granted the application for order of sale. Defendants had defaulted in payment in respect of loan granted by the Plaintiff which was secured over a land.

• However land was sold to the intervener at a public auction & a memorandum of contract was entered between auctioneer & intervener.

• The intervener was required to pay the balance amount at a specified time however failed to do so bcs of lacking in money. Later wrote to the Registrar to extend the time given. The registrar however did not replied the letter but had received it.

• As the balance was not paid, the defendant entered into a private caveat. Owing a caveat upon the land, the bank loan was not granted. In the meantime, the auctioneer & defendant had brought a civil action against the intervener for rescission of contract, forfeiture of deposit paid, & declaration that intervener was not entitled to claim for extension of time.

• Defendant contended that since the intervener did not observed the condition of the sale w regards to the balance payment of the purchase price, thus the land will remained under the defendant’s name. It acquired the right & to maintain caveat.

• The court had then rejected the D’s contention & held that Defendant was not entitled to caveat his own land bcs in his view a person who relies on his status as registered owner must necessarily be a person already possessing the title/interest in land & not merely a person claiming title.



• The decision differs from the cases mentioned. • Hiap Yiak Trading S.B

• Defendants was the registered proprietors of land. First four plaintiff claimed that they were the purchasers of the land however it has been sold to the 5th plaintiff. Defendants denied the selling.

• It was the contention of D that the transaction was only for borrowing money from 1st Plaintiff so as to obtain discharge of an existing land.

• They had entered into a sale agreement - where Defendants will have the option to buy back the land by a certain date. Failing would cause the land to be transferred to plaintiff.

• D had failed to exercise the option to repurchase the land as they did not have money to do so. No transfer had been executed yet & thus the Defendants had entered into a private caveat.

• Plaintiff applied for the removal of the caveat. • Court held that, since there is misleading in the amount price for the land

valued, the court held the land should be remain as the defendant’s had succeeded in proving their claim.

2. ENTRY OF REGISTRAR’S CAVEAT TO PROTECT THE INTEREST OF FEDERATION


• ‘Interest’ - interests in the land that are capable to register / entitled to protection. • Thus interest must be proprietor as such an unsecured creditor of the proprietor of land

has no interest. thus caveat must be removed bcs interest did not represent the interest over the land.

• Amendment made after the decision of Temenggong Securities Ltd & Anor v Registrar of Titlesm Johore & Ors.

• App purchased a land from a Singaporean Company in Johor. Payment was made. • On 14 Sept, They had presented a MOT • On 19 Sept, The govt had obtained a judgment against the seller bcs the seller unable

to pay the tax. • LHDN applied a registrar’s caveat upon the land since the Singaporean comp failed

to pay tax. • Since Temenggong’s name did not appear on the DOT, he appeals for the court to

remove the caveat. • Issue? - Should the caveat be removed? Does the LHDN has the capacity to freeze over

someone’s land? Thus the court held that since the interest is only to secure the unpaid income tax, then it cannot be one of the interest mentioned in the law. This is because the Singaporean company is only a bare trustee.



• Due to the dissatisfaction on part of the government on the decision made, the government had inserted (ba) so that the govt has the right to apply for caveat prior to settle the claim by the govt. • Even in circumstances where debt is unsecured/judgment has yet

to be obtained against the registered proprietor. • Effects - Caveat can be set aside to give way to the bank. However

must pay certain amount which is paid by the government. • Caveat will not override the existing interest holders. • Eg : If land has been charged & caveat entered due to default.

Can the chargee sell the land even the land has been caveated? However in (ba) it gives the right of chargee (bank) to sell land.

• This is bcs bank is a registered chargee under section 340 of NLC in making dealings upon a land.



• Overseas Chinese Banking Corp. LTD v PHT Negeri Kedah

• Registrar wished to apply RC upon the specified land. It was entered by receiving a letter from LHDN. Thus the entering of RC had ultra vires as; • The land would be enough to pay both parties & the fact that RC can be

entered under section (ba). • The court then , held that it must be exercised it properly without mala fide.

Which, before entering into RC there are few steps listed out by the courts • 1. Look at the value of the land; • 2. to look at the debts on both parties; • 3. Then, if the value of the land is enough to pay for both parties, then caveat

may be applied. • However, in this case, Registrar did not exercise his power accordingly to the

accepted dealing thus there’s mala fide. • Section 286 NLC - states that any extra money occurred from the selling of land

will go back to it’s owner. • If only the amount of money does not provide for both then RC will be removed.

BASICS

THE REGISTRAR’S CAVEAT

• Who can apply? Section 320(1)(b) • The Federation/ State • Person under;

• Disability of minority; 18 years @ Age of Majority Act • Unsound mind; • Absent from Federation.

• Duration for Registrar’s Caveat - Section 321(3) NLC • Continue in force until it is taken back by the registrar itself

• Procedure to enter - Using Form19F, affected by endorsement under hand and seal of Registrar. • And section 321(2) NLC - A notice to be serve to th registered proprietor.

• Removal - Done in 3 ways • Section 321(3)(a) - Own motion; • Section 321(3)(b) - Application by proprietor to court of caveated land; IF only the

caveat cannot be removed then can apply to court - Section 148 NLC. It must be made within 3 months after the letter has arrived - Section 418 NLC.

• Section 321(3)(c) - Court Order.

REMEDY TO AGGRIEVED CHARGEE

THE REGISTRAR’S CAVEAT

• Commercial Bank v Land Administrator Wilayah Persekutuan

• Issue - Whether chargee is aware of the entry of RC/ who has not objected the entry of RC upon the land?

• In this case, the applicant did not know that RC had been entered thus that a removal application has not been made.

• Since there is no appeal for removal of RC, thus it is impossible for the applicant to go to court for appeal as it is only for aggrieved party.

• While, under Section 321(3) read with 418, In the absence of the right to apply for cancellation as well as the absence of express appeal provision, chargee can only appeal against the decision of Registrar to enter caveat. but not against the decision for refusing to cancel caveat.

• A declaratory relief should be available to the appellant chargee where there’s absence on the right to apply for cancellation & absence of express appeal provision by chargee for the refusal of Registrar to remove caveat. • However it must be first made an application to the court.