⚖️Court Decisions
Caveats have been consistently removed by the Malaysian courts when it is found that the caveator lacks a valid caveatable interest/ has non-caveatable interest.
🛡️What is Non-Caveatable Interest?
- Incomplete/Unascertainable Interests
- Delays & Inaction
- State Authority Permission Not Obtained
- Personal Claims (In Personam—Not Land Claims (In Rem)
- Company Shareholdings (Not Property Interests)
- Profit-Sharing Only (No Land Share)
- Negotiations & Preliminary Agreements
- Options Not Yet Exercised
- Contractual Provisions to Create Caveats
- Specific Contractual Arrangements
- Lienholder’s Caveat Specific Grounds
Read more on Non-Caveatable Interests from our last week’s article:
🔗How to Save a Property from Wrongful Caveats
5) Vendor Claiming Unpaid Purchase Price Balance
Wong Kuan Tan v Gambut Development Sdn Bhd [1984] 2 MLJ 113 (Federal Court)
📋FACTS: After selling land, the vendor lodged a caveat claiming the unpaid balance of the purchase price. The vendor argued this claim arose from a land transaction and should be caveatable to protect the unpaid balance.
⚖️ COURT’S DECISION: Caveat REMOVED. The Federal Court held that a claim for unpaid purchase price balance is NOT a caveatable interest—it’s only a monetary claim to protect money owed. Registration of caveat cannot be used as a means of recovering unpaid balance. This is a personal claim against the purchaser, not an interest in the land.
🔑 KEY PRINCIPLE: Cannot use caveat to recover debt/money. Unpaid price claim = personal monetary claim, not land interest. Caveat protects land interests, not payment obligations.
6) Residuary Beneficiary of Incomplete Estate
Tan Heng Poh v Tan Boon Thong & Ors [1992] 3 CLJ 1340 (Supreme Court)
📋FACTS: A residuary beneficiary of a deceased’s estate lodged a caveat on land forming part of the estate. However, at the time of lodging the caveat, the administration of the estate was INCOMPLETE. The estate had not been fully administered, debts not settled, and the exact value of the residue was uncertain and unascertainable.
⚖️ COURT’S DECISION: Caveat REMOVED. The Supreme Court held that where estate administration is incomplete, a residuary beneficiary has NO caveatable interest because the value of the residue is uncertain. The beneficiary’s interest is still unascertainable. The beneficiary can only compel proper administration of the estate or sue the executor, but cannot lodge a caveat while the interest remains uncertain.
🔑 KEY PRINCIPLE:Cannot caveat when interest is uncertain or not yet crystallized. Interest must be ascertainable and present, not contingent on future events (estate completion).
7) Still Negotiating, No Concluded Contract (Despite Part Payment)
Balakong Development Sdn Bhd v Loo Kok Yuen & Anor [1999] 2 MLJ 646 (High Court)
📋FACTS: A prospective purchaser was in negotiations to buy land. During these negotiations, the prospective purchaser made PART PAYMENT toward the purchase. However, no formal concluded contract had been executed yet—the parties were still negotiating terms. The prospective purchaser lodged a caveat, arguing the part payment and ongoing negotiations gave them an interest.
⚖️ COURT’S DECISION: Caveat REMOVED. The High Court held that negotiations for a contract, regardless of how advanced, do NOT amount to a concluded contract. A prospective purchaser has NO caveatable interest while negotiations are ongoing, EVEN IF part payment has been made. Part payment during negotiations doesn’t create a caveatable interest.
🔑 KEY PRINCIPLE: Must have binding concluded contract, not just negotiations or discussions. Part payment alone without concluded contract = NO caveatable interest.
8) 21-Year Delay Without Taking Action
Tan Shiang Shong v Tan Lee Choon & Anor [1985] 2 MLJ 369 (Supreme Court)
📋FACTS:A transferee/beneficiary under an agreement for exchange or transfer of lands lodged a caveat. However, the caveator had: (1) NOT executed any formal contract, (2) NOT paid any purchase money, (3) NOT taken possession of the land, (4) NOT acquired title, and (5) DELAYED taking any action for 21 YEARS. Despite this massive delay and inaction, the caveator attempted to maintain the caveat.
⚖️ COURT’S DECISION:Caveat REMOVED. The Supreme Court held that this person had NO caveatable interest. The excessive 21-year delay without taking ANY steps to protect or formalize the alleged interest demonstrated there was no genuine claim to the land. Failure to act for such an extended period defeats any caveat claim.
🔑 KEY PRINCIPLE: Balance of convenience requires timeous action. Excessive delay without protecting interest = no right to caveat. Must actively pursue claim, not sit on rights for decades.
Read Part 1 of this Article: 🔗8 Times Court Orders for Caveat Removal (Part 1)
For further information, please contact us at Miranda & Samuel:
- Dato’ George Miranda (george@mirandasamuel.com)
- Joy Sam Jia Qian (joy@mirandasamuel.com)
- Alisyah Maisarah (alisyah@mirandasamuel.com)
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– By George Miranda, Joy Sam Jia Qian, Alisyah Maisarah –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
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