DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: W-02-161-2008
VICTOR GLAMOUR SDN BHD … PERAYU
TAN KIM CHENG
DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
SAMAN PEMULA NO: S1-24-1183-2007
VICTOR GLAMOUR SDN BHD … PEMOHON
TAN KIM CHENG
(1) LOW HOP BING, JCA
(2) SYED AHMAD HELMY SYED AHMAD, JCA
(3) ZAHARAH BINTI IBRAHIM, JCA
JUDGMENT OF THE COURT
The appellant’s appeal herein is against the decision of the learned High Court Judge given on 8/1/08 dismissing the appellant’s application in Enclosure 1 to set aside/remove the eight (8) caveats lodged on the land held under Geran 50086, Lot 51630 Mukim and Daerah Kuala Lumpur (hereinafter called the “said land”).
The appellants in challenging the learned Judge’s grounds of decision submits that the learned Judge fell into error in holding in his written grounds that the appellant had no sufficient interest to set aside the private caveats lodged when in pronouncing his decision on 18th January 2008 he confirmed that the appellant was an aggrieved party; that the learned Judge failed to consider and take into account the Respondent’s lack of interest in commencing any proceedings following the entry of the caveats.
Upon scrutinising the memorandum of appeal and the grounds of appeal we are of the view that the critical issue for determination is whether the appellant is an aggrieved party having sufficient interest over the said Land to entitle the appellant to apply for the removal of the caveats on the said land pursuant to Section 327 of the National Land Code (NLC).
In determining the critical issue aforesaid it is only appropriate to set out briefly the salient background facts.
The said land is registered in the name of one Magasu Sundram a/l T. Magasu who is also the beneficial owner of ^ undivided share in the said land and holds the other ^ share as trustee for M. Sivapathy a/l Magasu.
On 10th January 2003 vide a written sale & purchase agreement the appellant purchased the said land from the registered proprietor Magasu Sundram a/l T. Magasu with the consent of the trust beneficiaries Magasu Sundram a/l T. Magasu and M. Sivapathy a/l Magasu.
The appellant in their supporting affidavit affirmed by their Director Ho Swee Ming on 25/5/07 averred that the full purchase price had been paid on 5/4/05 whereupon the original grant and the duly executed Memorandum of Transfer in Form 14A of the said Land was handed by the registered proprietor to his solicitors Messrs. Yew Hock and Loh. In support of the averment aforesaid the letter dated 5/4/05 and the duly executed Memorandum of Transfer was tendered as exhibit “HSM2”.
In further support of their interest over the said Land the appellant averred that on 13/4/05 on instruction from the beneficiaries the registered proprietor executed a Deed of Trust in favour of the appellant which Deed of Trust was exhibited as “HSM 3”.
By reason thereof the appellant avers that the caveats lodged by the respondent has prevented and prohibited the registration of the said land in their favour.
The respondent in disputing the appellant’s claim avers in his affidavit in reply affirmed on 14/6/07 that the lodgement of the caveats was made with the express consent of the registered proprietor and that the appellant was fully aware of the respondent’s various rights over the said Land as specifically set out in the caveats and also in the recitals in the sale & purchase agreement of 10th January 2003.
Reverting to the application herein since it is made pursuant to Section 327 National Land Code (NLC) the wording thereof does not confine it to the caveatee (i.e. registered owner) but to any other person aggrieved by the existence of caveat. Unlike Section 326 which is available only to the caveatee the procedure under Section 327 covers a wider category of persons and the approach to be adopted varies as was lucidly laid down by the Privy Council in Eng Mee Yong & Ors v V. Letchumanan  2 MLJ 212 where Lord Diplock at page 212 stated:-
“Whereas the procedure under section 326 for obtaining the removal of a caveat is available only to the caveatee, the procedure for applying directly to the court for an order of removal is available not only to the caveatee but also to any other person aggrieved by the existence of the caveat – typically a purchaser to whom the registered proprietor has contracted to sell the land but the sale has not yet been completed by a proper instrument of transfer duly registered. In their Lordships’ view a distinction must be drawn between cases where the applicant is the registered proprietor of the land (i.e. the caveatee) and cases where the applicant is some other person who claims a right to an interest in it. In the former case the caveatee can rely upon his registered title as prima facie evidence of his unfettered right to deal with the land as he pleases; it is for the caveator to satisfy the court that there are sufficient grounds in fact and
law for continuing in force a caveat which prevents him from doing so.
So where, as in the instant case, the only parties to an application under section 327 are caveatee and caveator there is no difference between what the caveator must establish to obtain an extension of the caveat under section 326 and what he must establish to defeat the caveatee’s application for removal of the caveat under section 327.
It is otherwise when the applicant under section 327 is someone other than the caveatee. He has no registered title to rely upon as prima facie evidence of his interest in the land. It is for him to begin by satisfying the court that there are sufficient grounds in fact and law for treating him as a person claiming such an interest in the land as would, if it were established, make him aggrieved by the existence of the caveat.”
It is thus incumbent for an applicant under Section 327 NLC to satisfy the Court that there are sufficient grounds in fact and in law for treating him as a person claiming such an interest in the land as would, if it were established, make him aggrieved by the existence of the caveat.
Only upon the applicant under Section 327 NLC satisfying the Court that there are sufficient grounds in fact and law for treating him as an aggrieved party would an inquiry on whether the caveat of the respondent should be removed be proceeded upon.
The Court of Appeal in Luggage Distributors (M) Sdn. Bhd. v Tan Hor Tang  1 MLJ 719 laid down the procedure to be adopted at page 723 thereof:-
“In considering an application for the removal of a caveat, the procedure to be adopted should be a simple and summary one. At the
first stage, the court will examine the grounds expressed in the application for the caveat to see whether they show a caveatable interest. Once the court is satisfied that the caveator’s claim amounts in law to a caveatable interest, it must then go on to consider whether the claim discloses a serious question meriting a trial. After these two stages have been crossed, the court must decide where the balance of convenience lies”.
The question arises whether the applicant/appellant herein has adduced sufficient evidence to satisfy the Court that it falls within the category of aggrieved persons entitling it to remove the caveats lodged.
Turning to the Appeal Record herein it is noted from the grounds of judgment that the learned Judge dismissed the appellant’s application on the ground that “the applicant failed to establish he had sufficient interest on the land to found a basis to seek to set aside the caveats filed thereon so as to be registered on the title as owner,” even though he had in pronouncing the judgment on 8/1/08 held that the appellant was an aggrieved party. The reasoning of the learned judge was based on his interpretation that there are two limbs to Section 327 (1) NLC namely aside from ascertaining that the appellant is an aggrieved party the Court has also to consider whether it is just to grant the order.
Though we are not oblivious that a S.327 NLC application involves an exercise of discretion by the trial Judge nevertheless such discretion must be exercised judiciously and appellate interference is warranted if the exercise of discretion was based on erroneous principles not supported by the evidence adduced.
Whether the learned Judge was justified in his finding that the appellant had insufficient interest over the land and had exercised his
discretion judiciously in not granting the appellant the relief sought would invariably entail an assessment of the evidence adduced.
Upon a scrutiny of the evidence presented we are of the view that the learned Judge failed to exercise his discretion judiciously as there is more than ample evidence to conclude that the appellant herein falls within the category of “aggrieved persons” as envisaged by Section 327 NLC and had sufficient interest to set aside the caveats filed by the respondent.
In Wu Shu Chen (Sole Executrix of the Estate of Goh Keng How, deceased) & Anor v Raja Zainal Abidin bin Raja Hussin 
2 MLJ 487 it was held that though the National Land Code contains no definition of an aggrieved person nevertheless the word “aggrieved” must be given its ordinary meaning. To be aggrieved means one is dissatisfied with or adversely affected by a wrongful act of someone. An aggrieved person is therefore a person whose legal right or interest is adversely affected by the wrongful act or conduct of another person or body. The category of aggrieved persons is never closed.
We say so because the appellant’s status is that of a purchaser as evident by the Sale & Purchase Agreement dated 10th January 2003 entered into between the appellant’s as purchaser and Magasu Sundram a/l T. Magasu as registered proprietor as vendor. The Sale and Purchase Agreement which appears at pages 549 to 588 of the Appeal Record is entered into with the consent of the trust beneficiaries.
The evidence further shows that the trust beneficiaries Magasu Sundram a/l T. Magasu and M. Sivapathy a/l Magasu consented to the
sale when they instructed the registered proprietor Magasu a/l Sundram vide letter dated 5/4/05 to execute a Declaration of Trust in favour of the appellant which was duly complied with by the registered proprietor vide Declaration of Trust dated 13/4/05 – see pages 603 and 599 to 603 of the Appeal Record respectively.
As regards the payment of the full purchase price we are satisfied that there is ample evidence that it had been paid as evident by the acknowledgment and confirmation of receipt of the full purchase price in the letter of 5/4/05 by the solicitors Messrs. Yew Hock & Loh (see page 590 of Appeal Record). It must be stressed that the particulars of the cheques and the amount thereof were expressly stated in the letter aforesaid.
The divestment of the proprietary rights over the said land by the registered owner is concretised by the duly executed Memorandum of Transfer and the original issue of document of title being handed over and surrendered to the appellant – see pages 591 – 593 and 594 – 597 respectively.
The existence of the respondent’s caveats had invariably adversely affected the appellant’s interest herein.
The respondent’s challenge that the appellant being aware of the several caveats lodged by the respondent when it purchased the said land as reflected in the Sale & Purchase Agreement had notice of the respondent’s rights over the land and cannot now complain and/or dispute the respondent’s interest over the said land is untenable to say the least.
In our view the challenge aforesaid cannot be sustained and is without merits for the reason that the respondent if at all he has an interest over the said land as averred would surely prosecute/preserve his interest through civil proceedings but up to date has not initiated any action to preserve his interest. Surely had he such an interest the respondent would have initiated legal proceedings to compel the registered proprietor to sell the property to him or prevent the registered proprietor from selling the said land to the appellant. In the context of the facts herein the averment that no action was filed/initiated up to date remains unrebutted. In Institute Teknologi Federal Sdn. Bhd. v IIUM Education Sdn. Bhd.  7 MLJ 23 the Court of Appeal held that in the absence of any rebuttal the caveat lodged must be removed. The fact that they have not done so shows the hollowness of their purported “interest” and is the death knell of their case.
It is also pertinent for us to emphasise that knowledge of an existing caveat does not and cannot prevent a purchaser from being an aggrieved person or body of persons – see Punca Klasik Sdn. Bhd v Abdul Aziz bin Abdul Hamid  1 MLJ 135.
The whole scheme of the respondent’s affidavit relates to his grievance against the registered owner for breach of the several agreements dated 27/6/90, 17/10/90 and 7/1/92 entered into between them and in our view does not tantamount to a caveatable interest to bind the said land vis-a-vis the appellant herein. The respondent’s reliefs (if any) is contractual in nature against the registered owner and does not bind the appellant who is not a party to the several agreements entered into by the respondent with the registered owner.
For the reasons aforesaid we allow the appeal with costs. The order of the High Court is set aside. Order in terms of the application in Enclosure 1 with costs of RM5000/=. The deposit is to be refunded to appellant.
(DATUK SYED AHMAD HELMY BIN SYED AHMAD)
Court of Appeal,
Dated this 29th day of November 2010
Counsel for the Appellant:
1. Tetuan Yew Hock & Loh Peguambela & Peguamcara No. 19B, 1st Floor, Jln. Desa Jaya 58100 KUALA LUMPUR.
Counsel for the Respondent:
1. Tetuan Atma Singh Veriah & Co., Peguambela & Peguamcara No. 54, Jalan SS21/1 Damansara Utama 47400 Petaling Jaya.
Cases referred to:
1. Privy Council in Eng Mee Yong & Ors v V. Letchumanan  2 MLJ 212.
2. Wu Shu Chen (Sole Executrix of the Estate of Goh Keng How, deceased) & Anor v Raja Zainal Abidin bin Raja Hussin  2 MLJ 487.
3. Institute Teknologi Federal Sdn. Bhd. v IIUM Education Sdn. Bhd.  7 MLJ 23.
4. Punca Klasik Sdn. Bhd v Abdul Aziz bin Abdul Hamid  1 MLJ 135.
5. Luggage Distributors (M) Sdn. Bhd. v Tan Hor Tang  1 MLJ 719.