FOTOPOP (M) SDN BHD v LOW SHU NYOK

Case Significance

Illustrates the limits of a section 329(1) National Land Code claim for a wrongful private caveat: expenses borne by third parties and the costs of removing the caveat are not recoverable, and a claimant who proves no genuine foreseeable loss of its own recovers only nominal damages.

This High Court decision at Shah Alam concerns the assessment of damages for the wrongful entry of private caveats under section 329(1) of the National Land Code, and the requirement that a claimant prove actual, recoverable loss. Having established an entitlement to damages for the wrongful lodgement of private caveats over the properties, the plaintiff company sought to quantify its losses. Because the defendant is a natural person named only as a party, this analysis refers to that party by role, while the plaintiff company is named.

Section 329(1) of the National Land Code renders a person who wrongfully lodges a private caveat liable to compensate any person who sustains damage as a result. But the entitlement to compensation does not dispense with proof: the claimant must still establish loss that is causally connected to the caveat, reasonably foreseeable, and actually its own. The court rejected several heads of the plaintiff's claim on precisely these grounds. Costs and expenses — such as a valuation report, loan-documentation fees and the fees of solicitors — were disallowed because they had been incurred by third parties, including a financing bank, rather than by the plaintiff itself, and had no direct nexus to the private caveats.

The court also disallowed the legal fees claimed for the removal of the caveats. Following the Federal Court's decision in Golden Star v Liang Peek Hoe, solicitor-and-own-client fees incurred in removing the caveats are not recoverable as damages, since they arose from the same proceedings in which the court had already dealt with costs. Having found that the plaintiff failed to prove any actual loss, the court's assessment pointed toward no more than nominal damages. The judgment is a useful illustration of the limits of a section 329(1) claim: the statutory liability for a wrongful caveat is not a licence to recover expenses borne by others or the costs of removal, and a claimant who cannot prove genuine, foreseeable loss of its own recovers only nominal damages.