AR PL Palaniappa Chettiar

- vs -

PL AR Letchumanan Chettiar

Judgment

K.F. Wong JC

1. The application of the plaintiff made by summons-in-chambers was dismissed by me on 24 November 1981. Learned counsel for the plaintiff indicated that he had instructions to appeal against my decision in chambers to the Federal Court. I said I would give my written judgment and I do so now.

2. In this case, the plaintiff sues the first defendant, who is the executor of the estate of one PL AR Arunasalam Chettiar Palaniappa Chettiar (the late father of the plaintiff) for a declaration that the transfer executed by the first defendant in favour of the second defendant in respect of the undivided 1/2 share of a land held under CT 4252 for Lots 905 and 906 (“the land”), Town and District of Port Dickson, to be null and void and of no effect.

3. The plaintiff in his statement of claim also seeks the following reliefs:

   1. specific performance of an alleged agreement between the plaintiff and the first defendant contained in the letters dated 23 July 1981 and 29 July 1981 relating to the land;

   2. an injunction against the Registrar of Titles restraining him from registering the transfer of the land in favour of the second defendant; and

   3. an order that the Registrar do enter a Registrar’s caveat against the title to the land. In the alternative, the plaintiff claims damages for breach of contract against the defendants. Particulars of the alleged fraud by the first defendant are given in the statement of claim.

4. After filing the writ and statement of claim in the Registry of this Court, the plaintiff filed an ex parte summons-in-chambers supported by his affidavit affirmed on 16 November 1981. In view of what his counsel said that this was an urgent matter, I decided to hear the ex parte application early, on 23 November 1981 and it was adjourned for further hearing the following day. Just before the hearing on 23 November the writ and statement of claim were served on both the defendants. They entered appearance immediately and their counsel appeared before me in chambers to oppose counsel for the plaintiff. The summons-in-chambers therefore proceeded on an inter partes basis.

5. From the affidavit of the plaintiff and submissions of learned counsel, the following material facts are relevant to the consideration of the plaintiff’s application.

6. It appears that by a consent order of this court dated 23 December 1980 made in Originating Summons No 132 of 1980, the first defendant was granted leave to sell certain pieces of land, including the land in question, at stipulated reserved prices.

7. The order to sell contained a condition that before the first defendant could sell the land to a prospective buyer, the first defendant should give the plaintiff or his solicitor 14 days’ notice in writing enquiring whether or not the plaintiff would be interested to buy the land upon the same terms and conditions of the offer made by the prospective buyer, and if the plaintiff failed to buy the land within the period, the first defendant would then be at full liberty to sell the land to the prospective buyer or to another party.

8. On 23 July 1981 the solicitors for the first defendant wrote to the plaintiff’s solicitors offering the plaintiff the option to buy the land at $182,000 and warning that the offer would expire on 6 August 1981. On 29 July 1981 the plaintiff’s solicitors replied by letter that the plaintiff agreed to buy the land at $185,000, ($3,000 higher than the price offered) and enclosed his cheque for $46,250, stating that “the balance of $138,750 will be paid later”, which words gave rise to major differences of opinion between the two parties.

9. By letter dated 5 August 1981 the first defendant’s solicitors returned the cheque of $46,250 “because of the simple reason that the balance of $138,750 ‘will be paid later’ and not within the said ten days of acceptance”.

10. In reply to this letter, the plaintiff’s solicitors by letter dated 7 August 1981 sent his two cheques totalling $182,000 for the purchase of the land. They also stated that the cheque for $46,250 was in excess of the deposit required and explained that the plaintiff meant to pay the balance within “the ten day period”. The plaintiff also insisted that a sale agreement should be drawn up.

11. By letter dated 17 August 1981 the first defendant’s solicitors returned the two cheques to the plaintiffs solicitors, alleging that the letter of 7 August 1981 was in fact posted at 6.30pm on 10 August 1981 as evidenced by the postmark, and that the offer had not been accepted by 6 August 1981.

12. The plaintiff alleged in his affidavit (para 9) that refusal on the part of the first defendant to accept the said cheques was wrongful, fraudulent, and in breach of the terms of the consent order dated 23 December 1980.

13. After 6 August 1981 the first defendant sold the land to the second defendant by agreement dated 7 August 1981 which had been duly completed and the transfer had thereafter been presented to the Registrar of Titles for registration (but not registered as yet on 24 November 1981 vide Mr. Vadiveloo’s affidavit affirmed on that morning). From the proceeds of sale of the land to the second defendant, the plaintiff had received his 1/3 share of $57,588.34 which he stated in his affidavit was received without prejudice, the remaining 2/3 share being the entitlement of the first defendant.

14. In reply to my question, counsel for the plaintiff stated that the plaintiff had not entered any private caveat against the land to protect his claim or interest.

15. From the above facts, I was urged by counsel for the plaintiff to issue an injunction restraining the Registrar of Titles from registering the transfer and also to order him to enter a Registrar’s caveat against the title to the land to prevent registration of the transfer of the land in favour of the second defendant, Cheok Brothers Realty Sdn Bhd.

    THE INJUNCTION

16. Although in a proper case the court has the discretionary power under Ord 29 of the Rules of the High Court, 1980, to issue an injunction for the preservation of property (see Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509; [1980] 1 All ER 213), the question here has to be viewed differently in the light of s 29(2) of the Government Proceedings Ordinance, 1956, which reads as follows:

    The court shall not in any civil proceedings grant any injunction or make any order against an officer of the Government if the effect of granting the injunction or making the order would be to give any relief against the Government which could not have been obtained in proceedings against the Government.

17. In Seet Soh Ngoh v Venkateswara Sdn Bhd [1976] 1 MLJ 242, the plaintiff obtained an order for injunction against the developer and the Registrar of Titles. Counsel for the plaintiff conceded that in view of s 29 of the Government Proceedings Ordinance, an order for injunction could not lie against the Registrar of Titles. Accordingly, the injunction was discharged in that case by the learned judge with whom I respectfully agree.

18. In the present application before me, in the light of the clear provisions of s 29(2) of the Ordinance, I hold that an injunction does not lie against the Registrar of Titles, who has a statutory duty under the National Land Code, 1965 (“the Code”), to register a transfer of land properly presented in his registry for registration.

    THE REGISTRAR'S CAVEAT

19. On the question of the entry of a Registrar’s caveat, counsel for the plaintiff submitted that the High Court had the power to order the Registrar of Titles to enter his caveat and urged me to make the order accordingly for the prevention of fraud. In answer to my question, counsel said that he had seen the Registrar and his request to the Registrar to enter a Registrar’s caveat was unsuccessful. Counsel for the defendants submitted that, since the Registrar was not made a party before the court, the court had no jurisdiction to order him to enter his caveat.

20. In considering the question, I was requested by counsel to consider the judgment of Chang Min Tat J (as he then was) in the Seet Soh Ngoh case. The learned judge held in that case that the court had the power to order the Registrar, since he was before the court, to enter a Registrar’s caveat to prevent the fraud and improper dealing. With respect, I am in agreement with the decision of the learned judge. I would go further to consider (whether or not the Registrar is a party to the proceedings before the court) the question whether the court has the power to order him to enter his caveat under the provisions of s 417(1) of the Code, reading as follows:

    The court or a judge may by order direct the Registrar or any Collector to do all such things as may be necessary to give effect to any judgment or order given or made in any proceedings relating to land, and it shall be the duty of the Registrar or Collector to comply with the order forthwith.

21. In my judgment, the provisions of s 417(1) are clear and unambiguous. It vests the power in the High Court to direct by order the Registrar to carry out or give effect to any judgment or order given or made in any proceedings relating to land.

22. It is clear that under the Code the Registrar may act on his own motion or upon information or request made to him. The word “may” indicates a discretion on the part of the Registrar. He is not bound to act on such information or request in every case. Thus in the case of an entry of a Registrar’s caveat, the Registrar is said to perform a quasi-judicial function in the exercise of that discretion, but the discretion must always be exercised judiciously or reasonably and in good faith, not arbitrarily nor in bad faith. By contrast, in the case of an application for the entry of a private or lien-holder’s caveat, his function is purely ministerial or administrative. In other words, in the last two categories of cases, he must enter the caveats, provided the applications are in the proper forms and accompanied by the prescribed fees.

23. If the Registrar refuses on request by a party, as in the present case, to enter a Registrar’s caveat, that party in my opinion is not without any legal remedy. The interested or aggrieved party may apply to the High Court for an order that the Registrar enter a Registrar’s caveat as directed. It is of course prudent to cite the Registrar as a party. Although the Registrar has a discretion, there is nothing in the Code to prevent or restrict the exercise of the power by the High Court as it deems just. It may be noted that under the provisions of s 321(3)(c), the court (in a case where the Registrar is a party) has the power on appeal under s 418 to order the cancellation of a Registrar’s caveat, as in Registrar of Titles, Johore, Johore Bahru v Temenggong Securities Ltd [1976] 2 MLJ 44; [1976] 2 WLR 951; [1977] AC 302.

24. The Registrar has no interest in the land in question. He is subject to the authority of the court under the provisions of ss 417 and 418 of the Code. He merely obeys the order of the court for the entry of a Registrar’s caveat and must not in such a case cancel it on his own motion unless subsequently ordered to do so by a court of competent jurisdiction. Indeed, failure by the Registrar to comply with the order of court will render him liable to be punished for contempt of court. It may be observed that from the wording of s 417(1), the words “any proceedings” need not necessarily be confined to legal proceedings of a civil nature as they are wide enough to include proceedings of a criminal nature (for example involving criminal breach of trust or forgery relating to land). All these on true construction point in the direction of an unfettered discretionary power conferred on the court by the Code.

25. I therefore hold that the High Court has the power under s 417(1) of the Code to order the Registrar to enter a Registrar’s caveat under s 320 of the Code for the prevention of fraud or improper dealings, whether or not the Registrar is a party to the proceedings.

    BALANCE OF CONVENIENCE

26. I now proceed to consider whether in my discretion I should make the order applied for by the plaintiff. The plaintiff, a citizen and resident of India and having not disclosed in his affidavit his address in Malaysia or India, had failed or neglected to enter a caveat to protect his claim to or interest in the land when he had ample time to do so. If he had a valid contract, he had not completed it, as against the second defendant who had duly completed his contract and who had also presented the transfer for registration, so that in equity the first defendant held the legal title of the land in trust for the benefit of the second defendant, who had become the beneficial owner. Further, the plaintiff had received his share of the proceeds of the sale of the land from the first defendant, notwithstanding without prejudice, while the first defendant’s share of the proceeds of sale had (as disclosed by counsel for the first defendant) been remitted to India, a country strict with its foreign exchange control. The effect of the entry of a Registrar’s caveat under s 319(1)(b)(i) and s 319(2) of the Code was the rejection of the transfer by the Registrar. No useful purpose would be served by recalling the transfer from the Registry of Titles, an act which would cause great inconvenience if not hardship to the defendants and which would further lead to more litigation and costs.

27. In the circumstances, the balance of convenience clearly lay in not ordering the Registrar to enter a Registrar’s caveat against the title to the land. The application was therefore dismissed, with costs in the cause. This does not mean that the plaintiff is totally without remedy. He can recover damages against the defendants if he can prove his claims. It must also be made clear that in coming to my decision on this interlocutory application, I have not gone into the merits of the plaintiffs suit, nor am I in any way prejudging his case as pleaded in his statement of claim.

Cases

Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509; [1980] 1 All ER 213; Seet Soh Ngoh v Venkateswara Sdn Bhd [1976] 1 MLJ 242; Registrar of Titles, Johore, Johore Bahru v Temenggong Securities Ltd [1976] 2 MLJ 44; [1976] 2 WLR 951; [1977] AC 302

Representations

G Vadiveloo for the plaintiff/applicant.

Atma Singh Gill for the first defendant.

Joseph Chia En Tet for the second defendant.