[1996] 2 MLJ 494

CHIA SEE YIN & ORS v YEOH KOOI IMM

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HIGH COURT (JOHOR BAHRU)

ABDUL MALIK ISHAK J
ORIGINATING SUMMONS NO 24-915-OF 1995
12 January 1996
Land Law Restraints on dealings Caveats Application for removal of caveats
Termination of sale and purchase agreement Purchaser failed to pay balance purchase
price within completion period Vendor terminated contract and forfeited deposit
Purchaser lodged caveat subsequently Whether purchaser had caveatable interest in
land National Land Code 1965 ss 323 & 327
Land Law Restraints on dealings Caveats Application for removal of caveats
Whether onus of proof on caveator or registered owner of land
Contract Sale and purchase of land Delay in completion Request by purchaser to
extend completion date Vendor refused and terminated contract Time was essence
of agreement Whether any evidence to show waiver on part of vendor
The plaintiffs were the registered proprietors of a piece of land ('the land'). By an
agreement dated 6 January 1995 ('the agreement'), the plaintiffs agreed to sell a portion
of the land to the defendant for RM718,000. The defendant paid a sum of RM71,800 as
deposit and as part payment towards the purchase price. The completion date was
agreed to be three months from the date of the agreement, ie 5 April 1995, with an
extension of one month with interest at the rate of 10% per annum on the balance of the
purchase price. It was also stipulated in the agreement that time was of essence of the
agreement. On 18 April 1995, the defendant sought an extension of time, purportedly on
the ground that the subject property would be acquired by the Drainage and Irrigation
Department Johor. On 21 June 1995, the plaintiffs' solicitors rejected the defendant's
request for extension of the date of completion beyond 5 May l995, which was the
extended completion date, and gave notice that the deposit of RM71,800 was thus
forfeited by the plaintiffs. On 3 July 1995, the defendant lodged a private caveat against
the whole portion of the land ('the first caveat'). However, the defendant withdrew it
voluntarily two months later. On 21 September 1995, the defendant lodged another
caveat ('the second caveat') on the land on the same ground as the first caveat, as well
as a civil suit against the plaintiffs for specific performance. The defendant contended
that time as the essence of the agreement had been waived, as the third plaintiff had on
behalf of all the plaintiffs, agreed to the extension of the completion date on 20 April
1995. The plaintiffs denied the contention and filed an originating summons, inter alia,
for the removal of the second caveat and damages for the wrongful entry of the caveat
in this action.
Held, allowing the plaintiffs' application:

(1)
Since the plaintiffs were the registered proprietors of the land, the onus of
proof that the caveat should remain was on the
1996 2 MLJ 494 at 495

defendant caveator (see p 502A); Wong Kuan Tan v Gambut Development

Sdn Bhd [1984] 2 MLJ 113 followed.

(2)
When the second caveat was lodged on 21 September 1995, the defendant
had no caveatable interest on the land. The agreement which formed the
basis of the defendant's claim or registrable interest in the land was not valid
or subsisting at the time of the lodgement of the second caveat because the
agreement had been lawfully terminated by the plaintiffs on 21 June 1995
when the balance of the purchase price was not paid by 5 May 1995 (the
extended completion date) (see pp 502I and 503A-B).

(3)
In the absence of the declaration in Form D as envisaged in s 8(3) of the
Land Acquisition Act 1960, the conclusive evidence clause that the State
Authority had decided that the land was needed for the purpose specified in s
8(1) thereof being final, conclusive and could not be questioned was thus
missing in this case (see p 504D-F); Wijeyesekera v Festing 1919 AIR 155
distinguished.

(4)
The plaintiffs held the land as co-proprietors. There was no evidence at all to
show that the third plaintiff was appointed as the spokesman for the other
two proprietors of the land. Even assuming that the third plaintiff did give his
consent on his own behalf as well as on the behalf of the other co, such
consent has no force of law to bind the other co-proprietors of the land (see
pp 504I and 505A).

(5)
Throughout, the plaintiffs conducted themselves in such manner as to
indicate to the world at large that they meant to make time the essence of
the agreement. The time was never waived and remained active throughout
the whole episode (see p 506B-C); Wong Kup Sing v Jeram Rubber Estates
Ltd [1969] 1 MLJ 245 andWebb v Hughes (1870) LR 10 Eq 281 distinguished.

(6)
The notice given by the plaintiffs, though not a requirement under the
agreement, must be considered a proper and valid notice. Consequently, the
plaintiffs were entitled to treat the agreement as null and void (see p 506I).

(7)
There is no provision in the National Land Code 1965 ('the NLC') for the
caveator to obtain an extension of his private caveat beyond the original
statutory period of six years specified in s 328 of the NLC. Accordingly, to
ensure continued protection of his claim to an unregistered registrable
interest in the land, the caveator will normally enter a second caveat. But
here on the facts, the first caveat was removed voluntarily by the defendant
barely two months after it was lodged and was followed by the second caveat
which was lodged on the same ground as the first caveat. Since the

defendant had no caveatable interest at the time she lodged the second
caveat, the second caveat amounted to an abuse of caveat procedure and
this court must, in the circumstances, disallow its entry (see p 508D-F).
1996 2 MLJ 494 at 496

[ Bahasa Malaysia summary

Plaintif-plaintif adalah tuan punya berdaftar sebidang tanah ('tanah itu').

Melalui suatu perjanjian bertarikh 6 Januari 1995 ('perjanjian tersebut'),
plaintif-plaintif bersetuju menjual sebahagian tanah itu kepada defendan pada
harga RM718,000. Defendan telah membayar jumlah sebanyak RM71,800
sebagai deposit dan bayaran sebahagian daripada harga belian. Tarikh
penyempurnaan yang dipersetujui adalah tiga bulan dari tarikh perjanjian
tersebut, iaitu 5 April 1995, dengan perlanjutan selama sebulan dengan
faedah pada kadar 10% setahun atas baki harga belian. Adalah juga
disyaratkan dalam perjanjian tersebut bahawa masa adalah inti pati perjanjian
tersebut. Pada 18 April 1995, defendan meminta perlanjutan masa, kononnya
atas alasan bahawa hartanah itu akan diambil oleh Jabatan Pengairan dan
Saliran Negeri Johor. Pada 21 Jun 1995, peguamcara plaintif-plaintif telah
menolak permintaan defendan untuk perlanjutan masa tarikh penyempurnaan
melebihi 5 Mei 1995, yang merupakan tarikh penyempurnaan yang telah
dilanjutkan, dan memberi notis bahawa deposit sebanyak RM71,800 telah
dilucuthakkan oleh plaintif-plaintif. Pada 3 Julai 1995, defendan telah
memasukkan satu kaveat sendirian terhadap seluruh bahagian tanah itu
('kaveat pertama'). Namun demikian, kaveat pertama ini telah ditarik balik
oleh defendan secara sukarela dua bulan kemudian. Pada 21 September 1995,
defendan memasukkan satu lagi kaveat ('kaveat kedua') atas tanah itu
berdasarkan alasan yang sama seperti kaveat pertama, serta satu guaman
sivil terhadap plaintif-plaintif untuk pelaksanaan spesifik. Defendan berhujah
bahawa masa sebagai inti pati perjanjian tersebut telah diketepikan, oleh
kerana plaintif ketiga telah bersetuju kepada perlanjutan tarikh
penyempurnaan pada 20 April 1995 bagi kesemua plaintif. Plaintif-plaintif telah
menafikan hujah itu dan memfailkan satu saman pemula, antara lain, untuk
pembatalan kaveat kedua dan ganti rugi bagi kemasukan kaveat yang salah
dalam tindakan ini.
Diputuskan, membenarkan permohonan:

(1)
Oleh kerana plaintif-plaintif adalah tuan punya berdaftar tanah itu, beban
membukti bahawa kaveat harus terletak pada defendan, iaitu pengkaveat
(lihat ms 502A); Wong Kuan Tan v Gambut Development Sdn Bhd [1984] 2
MLJ 113 diikut.

(2)
Apabila kaveat kedua dimasukkan pada 21 September 1995, defendan tidak
mempunyai kepentingan boleh kaveat atas tanah itu. Perjanjian tersebut
yang membentuk asas tuntutan atau kepentingan boleh daftar defendan

tidak sah dan tidak wujud pada masa kaveat kedua dimasukkan sebab
perjanjian tersebut telah ditamatkan secara sah oleh plaintifpada 21 Jun
1995 apabila baki harga belian tidak dibayar oleh defendan pada 5 Mei 1995
(tarikh penyempurnaan yang dilanjutkan) (lihat ms 502I dan 503A-B).
1996 2 MLJ 494 at 497

(3)
Dalam ketiadaan deklarasi dalam Borang D seperti yang dinyatakan oleh s
8(3) Akta Pengambilan Tanah 1960, fasal bukti kukuh bahawa pihak
berkuasa negeri telah memutuskan bahawa tanah itu dikehendaki untuk
tujuan ditetapkan dalam s 8(1) adalah muktamad, tidak dapat dipertikaikan
dan tidak boleh disoal, tidak terdapat dalam kes ini (lihat ms 504DF); Wijeyesekera v Festing 1919 AIR 155 dibeza.

(4)
Notis yang diberikan oleh plaintif-plaintif, walaupun bukan satu keperluan di
bawah fasal 12 perjanjian tersebut, mestilah diambil kira sebagai notis yang
wajar dan sah. Ekoran itu, plaintif-plaintif berhak menganggap perjanjian
tersebut batal dan tak sah (lihat ms 504I dan 505A).

(5)
Sepanjang masa, plaintif-plaintif telah berkelakuan dalam cara yang
menunjuk kepada sejagat dunia bahawa mereka berniat menjadikan masa
inti pati perjanjian tersebut. Masa sememangnya tidak pernah diketepikan
dan tetap aktif sepanjang peristiwa itu (lihat ms 506B-C); Wong Kup Sing v
Jeram Rubber Estates Ltd[1969] 1 MLJ 245 dan Webb v Hughes (1870) LR
10 Eq 281 dibeza.

(6)
Notis yang diberi oleh plaintif-plaintif, walaupun bukan satu keperluan di
bawah perjanjian tersebut, mesti dianggap sebagai suatu notis yang betul
dan sah. Lantaran itu, plaintif-plaintif berhak menganggap perjanjian
tersebut tak sah dan terbatal (lihat ms 506I).

(7)
Tidak terdapat peruntukan dalam Kanun Tanah Negara 1965 ('KTN') bagi
pengkaveat memperolehi perlanjutan kaveat sendirian melebihi tempoh
statutori asal selama enam tahun seperti yang ditetapkan dalam s 328 KTN.
Ekoran itu, bagi memastikan perlindungan yang berterusan tuntutannya ke
atas kepentingan boleh daftar yang tidak didaftar dalam tanah, pengkaveat
biasanya akan memasukkan kaveat kedua. Tetapi berdasarkan fakta di sini,
kaveat pertama telah dibatalkan secara sukarela oleh defendan dua bulan
selepas ia dimasukkan diikuti oleh kaveat kedua yang dimasukkan atas
alasan yang sama seperti kaveat pertama. Oleh kerana defendan tidak
mempunyai kepentingan boleh kaveat pada masa dia memasukkan kaveat
kedua, kemasukan kaveat kedua merupakan suatu penyalahgunaan prosedur
kaveat dan mahkamah ini mestilah, dalam keadaan begini, melarang
kemasukannya (lihat ms 508D-F).]

Notes
For cases on caveats, see 8 Mallal's Digest(4th Ed, 1996 Reissue) paras 2241-2428.
For cases on the sale and purchase of land, see 3 Mallal's Digest (4th Ed, 1994 Reissue)
paras 2063-2136.
1996 2 MLJ 494 at 498
Cases referred to
Damodaran v Vasudeva [1974] 1 MLJ 128
Eastham (Inspector of Taxes) v Leigh London and Provincial Properties Ltd [1971] 1 Ch
871
Hiap Yiak Trading Sdn Bhd & Ors v Hong Soon Seng Sdn Bhd [1990] 2 MLJ 155
Hock Hin Bros Sdn Bhd v Low Yat Holdings Sdn Bhd [1984] 1 MLJ 92
Luggage Distributors (M) Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLJ 719
Murugappa Chettiar Lakshmanan v Lee Teck Mook [1995] 1 MLJ 782
National Land Finance Co-operative Society Ltd v Sharidal Sdn Bhd [1983] 2 MLJ 211
Property and Bloodstock Ltd v Emerton [1967] 2 All ER 839
Sim Chio Huat v Wong Ted Fui [1983] 1 MLJ 151
Stocks & Holdings (Imperial Arcade) Ltd v Fink [1965] NSWR 504
Thevathason v Kwong Joon [1990] 3 MLJ 49
Trans Trust SPRL v Danubian Trading Co Ltd [1952] 1 All ER 970
Webb v Hughes [1870] LR 10 Eq 281
Wijeyesekera v Festing 1919 AIR default 155
Wong Kuan Tan v Gambut Development Sdn Bhd [1984] 2 MLJ 113
Wong Kup Sing v Jeram Rubber Estates Ltd [1969] 1 MLJ 245
Legislation referred to
Land Acquisition Act 1960 ss 8(1),(3)
National Land Code 1965 ss 326(2),(3) 327(1) 328 329(2)
AG Danaraj (Gana Muthusamy & Co) for the plaintiffs.
Hong Chin Heng (Gulam & Wong) for the defendant.
ABDUL MALIK ISHAK J
This was an application by the plaintiffs in encl 3 for the following prayers:
(1) that the private caveat lodged by the defendant on 21 September 1995 vide Presentation No 1953/95, Jilid
17, Folio 191 on the land known as EMR 1450, Lot 1948 in the Mukim of Plentong, Johor ('the land') be
removed;

(2) damages for the wrongful entry of the caveat to be assessed by the senior assistant registrar;
(3) an interlocutory injunction to restrain the defendant from entering any further caveats;
(4) any further order or relief as the court may deem fit and proper; and
(5) costs to be borne by the defendant and payable to the plaintiffs.

The facts garnered from the affidavits filed by the parties thereto can be stated thus.
1996 2 MLJ 494 at 499
The plaintiffs are the registered proprietors of the land measuring 8 acres 1 rood 9 poles.
By an agreement dated 6 January 1995, the plaintiffs agreed to sell a portion of the land
measuring three acres, delineated in the plan annexed to the agreement, at RM718,000.
Certain terms were expressed in the agreement and these included:
(a) that the sum of RM71,800 paid by the defendant shall be construed as a deposit and as part payment
towards the purchase price.
(b) that the completion date shall be three months from the date of the agreement with a provision for
extension of time by a further period of one month with interest at the rate of 10% per annum on the balance
of the purchase price.
(c) that the defendant will undertake to secure the issuance of the new individual titles categorized under
industry in accordance with the plan annexed thereto on or before 31 October 1995 at her own costs and
expense together with the other expenses incidental thereto (as reflected in cl 2 of the special conditions to the
agreement).
(d) in the event the defendant failed to secure the issuance of new individual titles to the land, the plaintiffs
shall be entitled to forfeit a sum equivalent to 15% of the purchase price absolutely and thereafter the
agreement shall be terminated and be of no effect (this appears in cl 3 of the special conditions to the
agreement).
(e) the defendant will agree to reimburse the plaintiffs for the defendant's portion of premiums paid to the land
office by payment of a D & C cheque No 006407 dated 23 December 1994 for RM56,250 in favour of Messrs
Lee Chai Eng Haris & Co, as stakeholder to be paid to the plaintiffs, in the event the said cheque was
dishonoured upon presentation the plaintiffs shall be entitled to forfeit the 10% purchase price absolutely and
terminate the agreement (cl 4 of the special conditions).
(f) that 'time wherever mentioned shall be of the essence of this agreement' (cl 15 of the agreement).

Looking at the agreement, it is the duty of this court to determine whether the
conditions as enumerated above affect the formation of the contract of sale of three
acres out of the whole portion of the land so as to render the contract conditional or
whether it is merely a term of the contract (see the approaches adopted by UngoedThomas J in Property and Bloodstock Ltd v Emerton [1967] 2 All ER 839 and that of
Danckwerts LJ in the Court of Appeal [1968] 1 Ch 94 at pp 112 and 118). Buckley LJ
in Eastham (Inspector of Taxes) v Leigh London and Provincial Properties Ltd [1971] 1
Ch 871 distinguished these two types of conditions as (at p 891):
That is not, in my judgment, a condition precedent to the contract at all, it is part of the terms of the contract.
You may call it a condition if you please, but it does not make it a condition precedent to the existence of a
contract, it merely indicates what is part of the terms of the bargain, just as in all contracts for sale the terms
of the bargain are customarily described as conditions of sale.
1996 2 MLJ 494 at 500

Denning LJ in Trans Trust SPRL v Danubian Trading Co Ltd [1952] 1 All ER 970 on the
same subject matter put it rather well and this was what his Lordship said (at p 976):
Sometimes it is a condition precedent to the formation of a contract, that is, it is a condition which must be
fulfilled before any contract is concluded at all. In those cases the stipulation 'subject to the opening of a letter
of credit' is rather like a stipulation 'subject to contract'. If no credit is provided, there is no contract between
the parties. In other cases a contract is concluded and the stipulation for a credit is a condition which is an
essential term of the contract. In those cases the provision of the credit is a condition precedent, not to the
formation of a contract, but to the obligation of the seller to deliver the goods. If the buyer fails to provide the
credit, the seller can treat himself as discharged from any further performance of the contract and can sue the
buyer for damages for not providing the credit.

Back home in Malaysia, Salleh Abas CJ (Malaya) (as he then was) in the Federal Court
case of National Land Finance Co-operative Society Ltd v Sharidal Sdn Bhd [1983] 2 MLJ
211 differentiated these two types of conditions in the following terms (at p 219):
A contingent condition, as we have already referred it, is a provision in a contract to the effect that the contract
shall not take effect unless and until the condition is fulfilled, and the non-fulfilment of the condition does not
render either party liable in damages to the other; whilst a promissory condition, on the other hand, is an
essential term of the contract, the breach of which entitles the innocent party to break itself as discharged
from the contract and to sue for damages.

In my view, on the authorities, it is a correct statement of the law to say that a condition
which affects the formation of a contract of sale, as in a conditional contract is therefore
referred to as a contingent condition whereas one which relates to the performance of a
term of a contract is described as a promissory condition (Chitty onContracts General
Principles, vol 1, 25th Ed at para 752). Clearly, therefore, the conditions attached to the
agreement in the present case are contingent conditions and I so hold accordingly.
Reverting back to the mainstream of the case, the facts will now be continued and be
stated thus.
Since the agreement was dated 6 January 1995, the completion date (on the basis of
three months' calculation from the date of the agreement) falls on 5 April 1995. But on
18 April 1995, the defendant sought an extension of time purportedly on the grounds
that the subject property would be acquired by the Drainage and Irrigation Department
('the DID'). Through Messrs R K Menon & Co, the defendant sought to show by letter
addressed to Messrs Lee Chai Eng & Co dated 18 April 1995 at paras 5 and 6 thereof
that:
It has now transpired that the Drainage and Irrigation Department Johor, wishes to acquire a part of the land
concerned to accommodate the existing stream that flows within the said parcel of land.
Our client (the defendant) does not, at this point in time know the exact area that the DID wishes to acquire.
For that matter, the area
1996 2 MLJ 494 at 501
acquired might or might not be substantial. Our client has, in fact, been told of the intended acquisition by a
very senior officer in DID ie one Mr Bala and in the circumstances, our client is in the process of negotiating
with the DID the exact area that is to be acquired. To date this has not been finalized.

On 21 June 1995, the plaintiffs' solicitors took the necessary steps and:
(a) rejected the defendant's request for an extension of the date of completion beyond 5 May 1995.
(b) notified the defendant to the effect that the alleged intended acquisition by the DID was outside the
purview of the Land Acquisition Act 1960.

(c) gave notice that as a result of the breach of the essential term of the agreement, the sum of RM71,800 was
forfeited.
(d) refunded the sum of RM56,250 being the contribution made by the defendant in regard to the premiums
imposed by the land office.

On 3 July 1995, the defendant lodged a private caveat against the whole portion of the
land ('first caveat') and this prompted the plaintiffs to file an Originating Summons No
24-661-1995 to have the first caveat removed. On 12 September 1995, approximately
two weeks before the hearing of Originating Summons No 24-661-1995, the defendant's
solicitors informed the plaintiffs' solicitors that the defendant would be withdrawing the
first caveat. This piece of startling information made the plaintiffs withdraw the
Originating Summons No 24-661-1995 which was, in due course, done subject to the
defendant paying the necessary costs.
On 21 September 1995, the defendant filed another caveat ('second caveat') on the land
on precisely the same grounds as the first caveat. The defendant also took a drastic
measure by filing a civil suit in the Johor Bahru High Court vide Civil Suit No 22-1971995 for specific performance of the agreement. It was the defendant's contention that
sometime on 20 April 1995, her agent personally met the third plaintiff to discuss the
issue of the intended acquisition by the DID and to seek the consent of the third plaintiff
who was allegedly acting on behalf of himself and the other plaintiffs for an extension of
the completion date. It was also the defendant's contention that the third plaintiff on
behalf of himself and the other plaintiffs agreed to the extension. The plaintiffs
vehemently denied these contentions. While the third plaintiff admitted that the
defendant's agent met him in his office on 20 April 1995, yet the third plaintiff denied
that he agreed to grant any extension of time although requested for by the defendant's
agent. It is germane to mention here that the defendant's agent is an undischarged
bankrupt by the name of Chua Lai Seng with an exceedingly huge liability to the tune
exceeding RM5,000,000 and the Official Assignee confirmed that he cannot be traced. In
the course of the submission, it transpired that Chua Lai Seng was an advocate and
solicitor who had the misfortune of being struck off the roll and he is currently said to be
in Johor Bahru.
I now propose to discuss the several issues that have cropped up in the present case.
1996 2 MLJ 494 at 502
Has the defendant a caveatable interest?
Since the plaintiffs are the registered proprietors of the land, the onus of proof that the
caveat should remain lies on the defendant caveator. In this regard, reference may be
made to the case of Wong Kuan Tan v Gambut Development Sdn Bhd [1984] 2 MLJ 113,
where Hashim Yeop Sani FJ (as he then was) in explaining the nature of the onus said
(at p 115):
If an applicant is the registered proprietor of the land he need only show that he is the registered proprietor.
His registered title is prima facie evidence of his unfettered right to deal with the land as he pleases. It is then
for the caveator to satisfy the court that there are sufficient grounds in fact and in law for the caveat to be
extended. The caveator must satisfy the court that on the evidence presented his claim to an interest in the
land raises a serious question to be tried and having done so he must go on to show that on the balance of
convenience it would be better to maintain the status quo until the trial of the main action.

His Lordship Hashim Yeop Sani FCJ (as he then was) proceeded further to say that (at
the same page):

To put it more simply, the caveator in this case must first satisfy the court that he has a 'caveatable interest' in
the land. Only if he has such an interest can he qualify to lodge a caveat under s 323 of the National Land
Code.

Recently, the Court of Appeal in Murugappa Chettiar Lakshmanan v Lee Teck

Mook [1995] 1 MLJ 782 adopted the principles as enunciated in Luggage Distributors (M)
Sdn Bhd v Tan Hor Teng & Anor [1995] 1 MLJ 719 in an application for removal of caveat
under s 327 (1) of the National Land Code 1965 ('the NLC'). Gopal Sri Ram JCA,
delivering the judgment of the Court of Appeal in Murugappa Chettiar Lakshmanan, had
this to say (at pp 788-789):
First, whether the respondent, on the material set out by him in his application under s 323(1) of the Code,
has disclosed a caveatable interest. Secondly, if he has established a caveatable interest, then, whether the
evidence he produced before the learned judicial commissioner in support of his claim to that caveatable
interest discloses a serious question to be tried. Lastly, if the first two questions are resolved in the
respondent's favour, then, whether the balance of convenience, or more appropriately, the balance of justice,
lies in favour of the caveat remaining on the register pending the disposal of his suit.

In another part of his judgment, his Lordship Gopal Sri Ram JCA said (at pp 789-790):
Until and unless a purchaser has an enforceable contract for the sale of land, he can lay no claim to the title to
registered land. A fortiori, he has no interest that is capable of protection by the entry of a caveat. As we have
said, the application for the entry of the caveat in the instant case contains no assertion of a concluded
contract.

It is my judgment that when the second caveat was lodged on 21 September 1995, the
defendant had no caveatable interest on the land for the following salient reasons:
1996 2 MLJ 494 at 503
(a) the agreement which formed the basis of the defendant's claim or registrable interest
in the land was not valid or subsisting at the time of the lodgement of the second caveat
because the agreement had been lawfully terminated by the plaintiffs on 21 June 1995
when the balance of the purchase price had not been paid by 5 May 1995 (the extended
completion date).
(b) the defendant has not fulfilled her obligations by 5 May 1995 or at any time
thereafter. The defendant seems unwilling to perform her side of the contract and desires
to make a substantial modification so as to amount to a new contract. The defendant
seems to blame the DID for the intended acquisition of the land but surprisingly in encl 6
of exh YKI 3 the purported acquisition was entirely based on the letter dated 18 May
1995 by one Balasingam. For convenience, that letter is reproduced hereinunder:
Jabatan Pengairan Dan Saliran Negeri Johor
Aras 3, Bangunan Sultan Ibrahim
Karung Berkunci 712
80990 Johor Bahru
Ruj Tuan: LSS 10/93/3
Ruj Kami: JPSJ 203/1/3 (71) (13)
Tarikh: 18 Mei 1995
Tetuan Jurukur Berlesen

Lee Swee Siang

27A, Jalan Kuning Satu, Taman Pelangi
80400 Johor Bahru

Permohonan Pecah Sempadan Tanah Lot 1948

EMR 1405 Mukim Plentong Kerana Perusahaan
Oleh Encik Chia See Yin & Rakan-Rakan
Berhubung dengan perkara di atas, setelah lawatan tapak serta semakan dibuat, simpanan JPS selebar 20
meter (1 rantai) hendaklah diuntukkan dari tebing cabang Sungai Tiram yang mengalir melalui lot tersebut.
Sila kemukakan pelan permohonan baru yang telah diuntukan simpanan JPS tersebut.
'Berkhidmat Untuk Negara'
(Sgd)
(IR Balasingam A/L CK Velu)
b/p Pengarah Pengairan dan Saliran Negeri Johor
BV/mss
sk Pentadbir Tanah Johor Bahru
Ruj (4) dlm (PT) 2/95

1996 2 MLJ 494 at 504

It is a sad observation to make that the name of Mr Bala as adverted to by Messrs RK
Menon & Co in the letter dated 18 April 1995 is none other than IR Balasingam a/l CK
Velu, the writer of the above-mentioned letter. It must be noted that Mr Bala had
revealed the intended acquisition to the defendant as adverted to by Messrs RK Menon &
Co, even on 18 April 1995. If it is true as alleged by Messrs RK Menon & Co, this state of
affairs should stop. Government officers must be tight-lipped about government matters.
Be that as it may, two initial observations must be made in regard to this letter. Firstly, it
was not addressed to the plaintiffs or to the defendant; instead it was addressed to the
third party. Secondly, it was not a declaration in the prescribed form published in
the Gazette as required under the provisions of the Land Acquisition Act 1960. In fact,
no gazette in regard to the purported acquisition of the land was ever exhibited by the
defendant. In the absence of the declaration in Form D as envisaged in s 8(3) of the
Land Acquisition Act 1960, the conclusive evidence clause that the decision of the State
Authority that the land is needed for the purpose specified in s 8(1) thereof being final,
conclusive and cannot be questioned is thus found wanting and missing here. In the
circumstances, the decision of the Privy Council inWijeyesekera v Festing 1919 AIR 155
(PC) cannot be applied to the facts of the present case.
(c) it was argued that since the agreement gave the defendant the right to lodge the second caveat, that
agreement becomes the catalyst that would give the defendant a caveatable interest to the land. However,
when the agreement was terminated on 21 June 1995, the defendant had no leg to stand onto and,
consequently, she had no registrable interest to the land to enable her to lodge the second caveat on the land.
As Chang Min Tat FJ (as he then was) said in Paramount Limestone v Nader Minerals[1979] 1 MLJ 90,
especially at p 92:

On the evidence before me, the right of the respondents sprang from the agreement of 9
October 1975, which had not been extended. Even if it had not been determined
effectively by valid notice on 1 March 1976, it had now been determined by effluxion of
time. The respondents can have no title or registrable interest to the land under such an
expired agreement.
(d) reverting back to the question of the purported acquisition of the land, if indeed there was such an
eventuality as the defendant sought to say, then agreement would come to an end. This is clearly spelt out in
cl 16 of the agreement.

Whether time, as the essence of the agreement, has been waived by the plaintiffs
This is indeed an important and pivotal issue to the whole case. For fear of repetition it
was sought to argue that the third plaintiff had, on 20 April 1995, consented to the
defendant's agent's request for an extension of the date of completion on behalf of
himself as well as the other plaintiffs. The defendant further contended that as a result
of that consent, time as the essence of the agreement had been waived. One must not
lose sight of the fact that all the plaintiffs held the land as co-proprietors. There was no
evidence at all to show that the third plaintiff was appointed as the
1996 2 MLJ 494 at 505
spokesman for the other two co-proprietors of the land. Even assuming that the third
plaintiff did give his consent on his own behalf as well as on behalf of the other coproprietors, such consent has no force of law to bind the other co-proprietors of the land.
Now, for the sake of argument, even assuming that there was such a discussion between
the third plaintiff and the defendant's agent for an extension of the date of completion,
at best such a discussion was made in the course of negotiating towards a contract
collateral to the agreement. One must not forget that negotiations for a contract, no
matter how advanced, cannot amount to a contract.
There are three situations wherein time can be said to be the essence of the contract:
(a) Where the contract expressly stipulates that time shall be the essence of the
contract. This basic statement of the law can be distilled from the following
cases:Steedman v Drinkle & Anor [1916] 1 AC 275; Brickles v Snell [1916] 2 AC
599; Mussen v Van Diemen's Land Co [1938] 1 Ch 253 and Harold Wood Brick Co Ltd v
Ferris[1935] 2 KB 198.
(b) Where time was not incorporated as the essence of the contract but in due course it
has been made as part and parcel of the contract by one party giving a notice to the
other. That notice can only be given after the party has been guilty of unreasonable
delay and it follows, as the night the day, that the time mentioned in the notice must be
reasonable: Green v Sevin (187980) 13 Ch D 589; Compton v Bagley [1892] 1 Ch
313; Stickney v Keeble (1915) AC 386; Smith v Hamilton & Anor [1951] Ch 174and Re
Barr's Contract [1956] 1 Ch 551. Authorities show that what is reasonable is a question
of fact, and like the case of Ajit v Sammy [1967] AC 255, six days may be said to be
reasonable.
(c) where from the nature of the contract, time may be said to be the essence of the
contract. Example of these kind of contracts are abound. By way of examples reference
may be made to mercantile contracts (Reuter v Sala (1879) 4 CPD 239 at p 249),
contracts for the sale of leaseholds (Hudson v Temple (1860) 29 Beav 536 at 543), an
option to buy shares which fluctuate in value (Hare v Nicoll [1966] 2 QB 130), a colliery
business (MacBryde v Weekes (1856) 22 Beav 533) and a public house as a going
concern (Lock v Bell [1931] 1 Ch 35).
The question to ask is this: whether the conduct of the third plaintiff in meeting the
defendant's agent as stated earlier would amount, in law, as a waiver that time should

no longer be the essence of the contract? The facts in the present case are unlike that
of Wong Kup Sing v Jeram Rubber Estates Ltd [1969] 1 MLJ 245, where Raja Azlan Shah
J (as he then was) held that 'once time for completion was allowed to pass and parties
went on negotiating time was no longer of the essence of the contract .' It is my
judgment that time, in the present case, remains the essence of the contract from the
beginning to the end. If the allegation by the defendant was indeed true that
1996 2 MLJ 494 at 506
time had been extended by the negotiations between the third plaintiff and the
defendant's agent, why then did the plaintiffs reject the defendant's request for an
extension of the date of completion beyond 5 May 1995! Why then did the plaintiffs give
notice that as a result of the breach of the essential term of the agreement, the sum of
RM71,800 was forfeited? Throughout, the plaintiffs conducted themselves in such a
manner as to indicate to the world at large that they meant to make time the essence of
the agreement. It is also my judgment that time was never waived and remained active
throughout the whole episode. The present case is unlike that of Webb v Hughes (1870)
LR 10 Eq 281 at p 286, where Sir R Malins VC observed:
But if time be made the essence of the contract, that may be waived by the conduct of the purchaser; and if
the time is once allowed to pass, and the parties go on negotiating for completion of the purchase, then time is
no longer of the essence of the contract. But, on the other hand, it must be borne in mind that a purchaser is
not bound to wait an indefinite time; and if he finds, while the negotiations are going on, that a long time will
elapse before the contract can be completed, he may in a reasonable manner give notice to the vendor and fix
a period at which the business is to be terminated.

See also the observations of Salleh Abas FJ (as he then was) in Sim Chio Huat v Wong
Ted Fui [1983] 1 MLJ 151 at p 153.
Whether proper notice is required to terminate the agreement and forfeit the sum of
RM71,800
Clause 12 of the agreement is worded in this fashion:
In the event of the purchaser (referring to the defendant) failing, refusing and/or neglecting to pay the balance
(of the) purchase price on the date of completion a sum equivalent to ten per centum (10) of the purchase
price shall be forfeited by the vendor (referring to the plaintiffs) forthwith without any further notice and
balance of the moneys received by the vendor (referring to the plaintiffs) shall be refunded to the purchaser
(referring to the defendant) forthwith without interest whereupon this agreement shall be treated as null and
void and of no further effect and neither party shall have any claim whatsoever against the other.

On 5 May 1995, the defendant failed to pay the balance of the purchase price to the
plaintiffs and when the plaintiffs forthwith forfeited RM71,800 being ten per centum of
the purchase price after issuing a notice dated 21 June 1995 to the defendant's solicitor,
that notice though not a requirement under cl 12 of the agreement must in my judgment
be considered a proper and valid notice and it is also my judgment that when the
plaintiffs returned RM56,250 to the defendant being the defendant's contribution for the
land conversion premiums without interest on the same letter dated 21 June 1995, the
plaintiffs had complied with that part of the requirement of cl 12 of the agreement.
Consequently, the plaintiffs were entitled to treat and they did treat the agreement as
null and void.
1996 2 MLJ 494 at 507
Whether the second caveat is valid and proper
The Registrar of Titles under s 329(2) of the NLC shall not entertain any application for
the entry of a further caveat in respect of the same land in three circumstances:

(a) where the court has ordered the removal of an earlier private caveat under s 327 of the NLC; or
(b) where the court has refused an application under s 326(2) of the NLC for an extension of time with respect
to such a caveat; or
(c) where the Registrar of Titles has removed the earlier private caveat pursuant to s 326(3) of the NLC.

All the authorities show that the three circumstances as enumerated above are not
exhaustive and the courts have held that second caveats to be good in law and should be
allowed to continue until the disposal of the main suit, on the one hand, and the courts
too have held to the contrary that where the entry of the second caveats were made
mala fides it would be struck down as being an abuse of the caveat procedure.
In Damodaran v Vasudeva [1974] 1 MLJ 128, Syed Agil Barakbah J (as he then was)
said (at pp 129-130):
The provisions of s 329(2) require scrutiny. It disallows the registrar to entertain any application for the entry
of a further caveat if it is based on the like claim as that on which the former was based in cases where the
court has ordered the removal of the former or has turned down an application for extension of time. The
subsection may be construed as to enable another caveat to be entered provided it is based on different
grounds from the former and after the former caveat has ceased to exist. In other words, it is not a renewal,
revival or continuance of the former; it speaks of an entirely separate caveat distinct from the other. In the
light of the above, and construing the relevant provisions of the Code as a whole as regards the subject, the
only natural and logical construction that can be given by way of analogy is that they do not envisage the issue
of a caveat when one is still in existence and the more so, on the same grounds. To construe otherwise will
contravene the real intention of Parliament and tend to oust the jurisdiction and power of the court under s 326
which arise in this case. If the law is allowed to be circumvented by recognizing the second caveat the result
will undoubtedly be an overlapping of caveats on the same land, on the same ground and by the same
caveator.

Damodaran 's case seems to follow the Australian trend as envisaged in Stocks &
Holdings (Imperial Arcade) Ltd v Fink [1965] NSWR 504, where the Australian courts
would intervene by way of an injunction in cases where the caveat procedure was
abused by the entry of not only vexatious but successive caveats which cannot be
sustained.
In Hiap Yiak Trading Sdn Bhd & Ors v Hong Soon Seng Sdn Bhd [1990] 2 MLJ 155,
Richard Talalla JC (as he then was) followed the decision of Edgar Joseph Jr J (now FCJ)
inHock Hin Bros Sdn Bhd v Low
1996 2 MLJ 494 at 508
Yat Holdings Sdn Bhd [1984] 1 MLJ 92 and held, in dismissing the appeal, that the
caveat ought to remain as the defendants had succeeded in showing that their claim to
the land raised a serious question to be tried. It was further held that the fact that the
defendants had entered an earlier caveat which they subsequently withdrew voluntarily
did not prevent them from entering a second caveat.
In Thevathason v Kwong Joon [1990] 3 MLJ 49, LC Vohrah J (as he then was) said (at p
51):
I did not think that both these authorities (KI Muhiudeen Rawther v KEP Abdul Kassim & Ors [1959] MLJ
257 and Lim Kiat Moy v Hamzah [1966] 2 MLJ 175) which were cited in Damodaran v Vasudeva [1974] 1 MLJ
128 to support the proposition that a second caveat may not be entered at the instance of the same applicant
in respect of the same land and on precisely the same grounds under the National Land Code in any way
prohibited the entering of a fresh caveat even after the lapse of the first caveat based on a different ground or

even on the same grounds if it is for the bona fide purpose of protecting the caveator's interest in respect of
the same land.

It is germane to mention that there is no provision in the NLC for the caveator to obtain
an extension of his private caveat beyond the original statutory period of six years
specified in s 328 of the NLC. Accordingly, to ensure continued protection of his claim to
an unregistered registrable interest in the land, the caveator will normally enter a second
caveat. But here on the facts, the first caveat was removed voluntarily by the defendant
barely two months after it was lodged and this was followed by the second caveat which
was lodged on the same grounds as the first caveat. Since I have held that the
defendant had no caveatable interest at the time she lodged the second caveat for the
reasons set out in the early part of this judgment, it is my considered view that the
second caveat amounts to an abuse of the caveat procedure and this court must, in the
circumstances, disallow its entry.
For the reasons adumbrated above, I allowed prayers (1), (2), (3) and (5) of encl 3.
Application allowed