CF Macher Sdn Bhd v 1. ) Atoosa Naeimi Zaker 2. ) Mohammad Delshad Farimani

Case Significance

Illustrates the removal of a private caveat under section 327 of the National Land Code: the caveator bears the onus of showing a real and genuine caveatable interest and a serious question to be tried, and a bona fide dispute over the validity of the title — such as allegations of fraud and forgery — is central to whether the caveat is maintained pending the substantive suit.

This High Court decision concerns an application to remove a private caveat under section 327 of the National Land Code, in a dispute over company land between CF Macher Sdn Bhd and two individual respondents (natural persons referred to here by their roles) who had lodged the caveat as directors to protect the land. The case is a useful illustration of the threshold a caveator must meet to sustain a private caveat against an application for its removal.

Under section 327 of the National Land Code, a person aggrieved by a private caveat may apply to have it removed, whereupon the burden falls on the caveator to justify its continuation. The caveator must show a "caveatable interest" — that is, a claim to title to, or a registrable interest in, the land — and the court asks whether the caveator has established a "real and genuine interest" supported by a serious question to be tried, so as to warrant maintaining the caveat until the substantive dispute is resolved. Here the respondents had lodged the caveat in their capacity as directors to protect the company's land, and a substantive suit alleging fraud and forgery had been filed.

The issues the court framed were whether the respondents had established a "real and genuine interest" in the land, whether the case was to be distinguished from the leading authority of Hew Sook Ying, and whether there was a bona fide dispute affecting the validity of the title. These questions engage the settled two-stage inquiry on a removal application: whether the caveator has a caveatable interest, and, if so, whether the balance of convenience favours keeping the caveat in place pending trial of the underlying dispute — here, one turning on allegations of fraud and forgery going to the validity of the title.

The judgment is a useful illustration of the principles governing the removal of a private caveat under section 327 of the National Land Code: the caveator bears the onus of showing a real and genuine caveatable interest and a serious question to be tried, and the existence of a bona fide dispute over the validity of the title — such as allegations of fraud and forgery — is central to whether the caveat should be maintained pending resolution of the substantive suit.