A202 BWBB3043 BANKING SECURITIES

Issue 1

The issue in caveat is about fraud. The fraud can be made in any type of land or property. Fraud is an issue that always occured in Malaysia and it also is one of the main issues in the caveat. The fraud can be made through forgery which includesforge signature of the owner, forge identity and forge the document.The caveat can make a person fraudulent the land or property of the owner even though never sold the land to other people. The fraudster can fraud through pretending the identity of the owner and doing the transaction as an owner without the consent of the actual owner. It could make other people believe that the fraudster is the owner without any doubt.It will bring a negative impact to the real owner due to the owner might not know the identity, signature or document has been forged or fraud by someone.For example, the fraud can be found in the case that happened in Malaysia in which Liputan Simfoni Sdn Bhd v Pembangunan Orkid Desa Sdn Bhd. This case is about the imposter company fraudulently transferring a piece of land to another party by forging the identity of the owner which claims it is the owner and needs to replace the original document of the land that has been lost. Therefore, the imposter company entered the private caveat of the land and caused other people unable to register as the proprietor. The court held that all the transactions made by the imposter company are void and the transfer of land to Liputan Simfoni also accordingly invalid. In this case, it can know that the identity will be forged by the fraudster even though did not do the any transactions.The fraudster can easily copy a document and can enter a caveat easily without any permission of the actual owner. Hence, it will bring a lot of problems and issues to the society especially for the owner of the land and it could make the owner become flustered and uneasy.

Issue 2

Caveat has the issue that can enter without sufficient proof to support the claim of caveat. According to Section 323(2) of the National Land Code 1965, caveat needs the caveator to fulfill the requirement which needs to specifically mention what nature of the caveat on the land or property. The caveat can be entered or registered without meeting the requirement of the law because the caveat has inappropriate or insufficient proof to support the caveat that it creates. It could make the caveat become invalid or can be removed due to inability to fulfill the term and condition by the law in Malaysia. Besides that, although the people who registered the caveat do not fulfill the requirement, it also can apply or enter the caveat and it will make some issues or problems appealing. It means that the caveat can be registered without any sufficient information on the nature of the property or land. For instance, the case of Yeap Joo Kim v. Ong Choo Ean is about the plaintiff suing the defendant due to the defendant not being the beneficiary of the land but she already registered the caveat for four years without meeting the requirement of law. The defendant, who is one of the beneficiary's wife stated that she had lent some money to her husband and the husband was verbally admitting trust in his inheritance. In this case, the defendant does not fulfill the requirement when entering the caveat in which she does not mention the nature of claim for the land and not clearly stating the caveat is binding for the land or in particular interest. Therefore, the court removes the caveat that the defendant does not fulfill the requirement.

Issue 3

In addition, another issue that appeals in caveat is the registrar did not have caveatable interest in the land or property it registered. Caveatable interest is an interest or right that the registrar can register the title to the land or property. The caveatable interest can help the registrar to protect its right of the specific land or property in order to avoid other parties dealing the assets. Therefore, the caveatable interest will become an issue in the caveat because someone who registered the land might be invalid or does not have the caveatable interest for the assets. This problem will be occured in certain situations which included the land or property purchase from the fraudster, purchase on an oral agreement and so on. According to the Section 340(2) of the National Land Code, the title or interest of the land can be defeasible if getting any fraud, misrepresentationor insufficient instrument. In the caveat, most of the caveatable interest will become invalid or void is due to purchasing a land or property from the fraudster and it causes the purchaser unable to to register the caveat or the caveat has been registered will be removed by the actual owner. For this issue, the example of the case is An Visalatchi & Ors v. Mines Heights Development which is about removing a piece of land of the defendant in Johor Bahru. The plaintiff with his joint member has the land and the fraudster forge the identity of the joint member and sell to the land to the Oon Saw Chin in few times on different date. The defendant was buying the land from the Oon Saw Chin and went to register the caveat. In this case, the court held that the defendant has no caveatable interest on this land and the caveat needs to remove.

Question 1: Based on the THREE issue above, identify THREE SOLUTION to solve the issue . (50 marks)