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CAVEAT
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CONTENT
Learning Outcomes Introduction Statutory Provisions Definition Purpose of Caveats Effects of Caveats
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Learning Outcomes
At the end of the lecture students should be able to: 1) Explain in detail the nature of caveat 2) Discuss effects of caveat 3) Analyse the scope of caveatable interests 4) Discuss selected issues of caveat
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Introduction Caveat is essentially a type of restraint of dealings Under NLC, there are two main types of restraint of dealings: 1. Caveats i. Registrar Caveats ii. Private Caveats iii. Trust Caveats iv. Lien Holders Caveats 2. Prohibitory Order
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Introduction Caveat operates as a warning that the land is subject to a claim of interest or title. Caveat is created by an endorsement on the document of title lodged by the person having interest. The caveat prevents the Land Administrator from registering dealings. Registered owner can request for its release.
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Nature of Caveat
Eng Mee Yong & Ors v. Letchumanan [1979] 2 MLJ 212, 214. has often been likened to a statutory injunction of an interlocutory nature restraining the caveatee from dealing with the land pending the determination by the court of the caveators claim to the title (or interest). The caveat is Issued ex parte by the Registrar (or LA) acting in an administrative capacity without the intervention of the court and is wholly unsupported by any evidence at all.
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Functions of Caveat
Four main functions. 1. It restraints the registered proprietor from executing dealings with the land. *s. 322(2)+ 2. It temporarily protects the caveators interest until the final disposal of his claim. 3. It serves as a notice. 4. It freezes the land and maintains the status quo until final disposition of the case.
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Functions of Caveat
2. It temporarily protects the caveators interest until the final disposal of his claim.
Chin Cheng Hong v. Hameed & Ors [1954] MLJ 169. The whole system of caveat is founded on the principle that it exists for the protection of alleged as well as proved interest in the land
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Functions of Caveat
3. It serves as a notice.
Butler v. Fairclough & Anor (1917) 23 CLR 78, 91. operates as a notice to the world that the registered proprietors title is subject to the equitable interest alleged in the caveat.
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Functions of Caveat
to preserve the status quo pending the taking of timeous steps by the applicant to enforce his claim to an interest in the land by proceeding in the courts.
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Statutory Provisions Section 5 Part Nineteen Chapter1 (1) Rs Caveat (2) P Caveat (3) LHs Caveat (4) Ts Caveat Interpretation Restraint of Dealings Caveats (sections 319 333) Sections 319 - 321 Sections 322 - 329 Sections 330 - 331 Sections 332 - 333
Chapter2
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Definition
Section 5
Caveat means Registered Caveat a legal notice to stop some proceeding such as the making over of a property// a warning, a caution ... let him beware
Warning, usually in the form of an entry in a register intended to prevent some action being taken without notice being given to the person issuing the warning
Dictionary
Law Dictionary
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Definition A caveat is a warning to the world at large, usually in the form of an entry in the register of title, intended to prevent some action from being taken without notice being given to the person issuing the warning
Author
Caveator
Caveatee
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Purpose
1. To protect the interest of persons who have interest, or claiming title in relation to the land. 2. To preserve the status quo of the contending parties claims until resolution. RAP Nathan v. Hj. Abdul Rahman & Ors [1980] 1 MLJ 248 the whole principle of caveats is founded on the principle that they exist for the protection of alleged as well as proved interests and of interests that have not yet become actual interests in land.
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Effects So long as the caveat continues in force, it shall have the effect of prohibiting: 1. the registration, or 2. the endorsement, or
3. the entry
on the document of title: a. any instrument of dealing b. any claim to the benefit of a tenancy exempt from registration b. any lien holders caveat
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Effects
Peculiar to Registrars Caveat only: The prohibition applies to any instrument notwithstanding that it was presented for the registration before the caveat was entered. The Registrar may however, waive the prohibition if he is satisfied that it would be not inconsistent with the purpose for which the caveat was entered.
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Registrars Caveat
Statutory Provisions
Power to enter Registrars Caveat Purpose of Registrars Caveat
Procedure of Entry Registrars Caveat Effects of Registrars Caveat Termination of Registrars Caveat
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Statutory Provisions
Section 319
Section 320
Section 321
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Registrars Power
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Section 320(1) a) Prevent fraud or improper dealings b) Protect interest of Federation or State Temenggong Securities & Anor v. Registrar of Titles, Johor & Ors. [1974] 2 MLJ 45 c) Protect interest of minor, mental disorder, overseas
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Entry of Registrars Caveat Procedure of entry Registrars Caveat Sections 320 & 321(1) Form 19F Registrar issues Form 19F
Form 19A
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No specified duration
Continues in force until the Registrar withdraws it.
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Termination of Registrars Caveat Section 321(3) a) Registrar withdraws it on his own motion b) Application by proprietor or interested party
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Private Caveat
Role of Registrar
Caveatable Interest
Termination of Private Caveat
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Introduction Under the Torrens System, the registration is everything (Teh Bee v. Maruthamuthu). Title and interest vest and divest by way of registration. The NLC 1965 requires that all dealings be executed by way of registration. Once registration is executed, the principle of indefeasibility of title operates. Any interested person who is wronged by the registration will have to prove his case in the court of law. Private caveat is a legal mechanism that allows such a person to prevent the registration and thereby protects his interest.
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Section 323(2)
Bind the land itself. Prohibits registration, endorsement, entry.
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Form 19B
Prescribed Fee Section 323(3) & section 211 Nature of the claim (claiming title or any particular interest, such, charge, lease, tenancy, etc. Binding whole of the land or part only Particular portion in undivided share
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Role of Registrar
Section 324(1) Ensure applicant has caveatable interest Administrative not judicial
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Caveatable Interests
A private caveat is a caveat lodges by a private person or body who has caveatable interest in relation to the land.
Section 323 Person or body that may enter private caveat
i. Person or body claiming interest or title; ii. Beneficiary of a trust affecting land under trust or interest under trust. ; iii. Guardian or next of friend of minor who is a beneficiary to a trust. Registered proprietor may not caveat his own land except where he fears fraud or improper dealings.
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Caveatable Interests
Only persons with valid caveatable interest under section 323(1) may lodge caveat with respect to lands.
Section 329 Section 323(1) Compensation for wrongful caveat Person or body who may enter caveat:
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Caveatable Interests
Purchasers
Assignees Judgment Creditors Option Holders License Holders
Lessees
Tenants Beneficiary of Trust Co-Owners Administrators
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Caveatable Interests Purchasers Macon Engineers Sdn. Bhd. v. Goh Hooi Yin [1976] 2 MLJ 53
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Caveatable Interests Option Holders Sing Lian Express v. Soh Kim Tee [1974] 2 MLJ 24 License Holders with Permits Paramount Limestone v. Nader Minerals Development [1979] 1 MLJ 90 Chargees UMBC v. DCB [1983] 1 MLJ 165 (FC)16 Krishna Kumar v. UMBC [1983] 1 MLJ 106
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Caveatable Interests
Lessees Intercontinental Mining v. Societe [1974] 1 MLJ 145 Pok Kew Chai v. Yeoh Thian Seng [1975] 1 MLJ 220 Tenants Woo Yok Wan v. Loo Pek Chee [1975] 1 MLJ 156
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Duration
Section 235
Section 326
Section 327
Section 328 Section 329(2)
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