FINSOURCE CREDIT (M) SDN BHD v 1. ) PENGARAH TANAH DAN GALIAN SELANGOR 2. ) PENDAFTAR HAKMILIK NEGERI SELANGOR 3. ) Lembaga Hasil Dalam Negeri (LHDN) 4. ) Kerajaan Malaysia

Case Significance

Illustrates the procedural preconditions to challenging a Registrar's caveat under the National Land Code, the court holding that without an application to the land authorities and an appealable decision under section 418 it lacked jurisdiction, and that a Registrar's caveat validly entered under section 320 remains in force under section 321(3).

This High Court decision concerns an application by a lien-holder to cancel a Registrar's caveat (Kaveat Pendaftar) entered against a piece of land in Klang, Selangor, and turns on the jurisdictional preconditions under the National Land Code. The plaintiff, a credit company, had extended a loan facility to a company that was the registered proprietor of the land, said to be secured by a personal guarantee and a charge, and had earlier entered a lien-holder's caveat to protect its interest. After the Registrar entered a Registrar's caveat over the land, the plaintiff applied to the court to cancel it, invoking sections 320, 321, 417 and 418 of the National Land Code. The court accepted the defendants' preliminary objection that it had no jurisdiction to hear the application because the procedure prescribed by the National Land Code had not been followed: there had been no application to the Registrar of Titles or the Land Administrator, and no decision capable of being appealed under section 418, and that absence of an appealable decision was a jurisdictional defect preventing the court from entertaining the application. Without prejudice to that finding, and for completeness, the court also held that the Registrar's caveat had been validly entered under section 320. Citing the Privy Council's explanation that in entering a Registrar's caveat the Registrar asserts no interest of his own but acts solely in discharge of a statutory duty to preserve the status quo pending proper determination under the Code, and noting that under section 321(3) such a caveat continues in force until cancelled in the manner provided by law, the court found that the caveat remained valid and in force, no cancellation having been made by the Registrar and no order having been made by the court on a valid appeal. It accordingly dismissed the application, awarding costs to the first and second defendants and to the third defendant, the claim against the fourth defendant having been withdrawn. The judgment illustrates the procedural preconditions to challenging a Registrar's caveat under the National Land Code, and confirms that a party aggrieved by such a caveat must first exhaust the statutory route through the land authorities before invoking the court's jurisdiction.