High Court Refuses to Remove Private Caveat Pending Full Trial Over RM7.2 Million Property Dispute
In the case of Lian Hock Hardware Sdn Bhd v G-Mart Corporation Sdn Bhd, the High Court of Malaya in Johor Bahru dismissed an application to remove a private caveat lodged over a commercial property in Johor Bahru worth RM7.2 million.
The dispute arose from a Sale and Purchase Agreement (“SPA”) dated 9 April 2025 involving industrial land together with a factory building situated in Tebrau, Johor Bahru. The purchaser had paid a 10% deposit amounting to RM720,000 and had also taken further steps towards completion, including arranging bank financing and making payments connected to the transaction.
However, before completion of the transaction, the vendor alleged that the SPA had been validly terminated due to the purchaser’s failure to pay the balance purchase price within the stipulated timeline. The purchaser disputed the alleged termination and maintained that the SPA remained valid and enforceable.
To protect its claimed interest in the property, the purchaser lodged a private caveat over the land under the provisions of the National Land Code. The vendor then commenced proceedings under Sections 327 and 329 of the National Land Code seeking to remove the caveat.
The High Court held that the purchaser had successfully established a prima facie equitable interest capable of supporting the private caveat. The Court emphasised that the function of a caveat is to preserve the status quo pending the determination of competing claims.
Importantly, the Court found that there existed a genuine and bona fide dispute regarding whether the SPA had in fact been lawfully terminated. Such issues, including contractual compliance, validity of termination notices, waiver, estoppel, and the conduct of parties, required full trial determination and could not be summarily decided in caveat removal proceedings.
The Court further ruled that removing the caveat at this preliminary stage could expose the purchaser to serious prejudice, including the possibility of the property being transferred to third parties before the substantive dispute was resolved.
Accordingly, the High Court dismissed the vendor’s application, ordered that the private caveat remain in force, and awarded costs of RM8,000 to the purchaser.
Key Legal Analysis
This decision reinforces several important principles under Malaysian land law:
- A purchaser under a disputed SPA may still possess a sufficient equitable interest to support a private caveat;
- Caveat proceedings are not intended to conclusively determine the validity of the underlying contract;
- Malaysian courts are generally reluctant to remove caveats where there is a serious and bona fide dispute requiring full trial; and
- The preservation of the “status quo” remains a central consideration in caveat-related litigation.
At JY Ko Advocates & Solicitors, we regularly advise and represent clients in disputes involving:
- Private caveats;
- Land and property disputes;
- Sale and Purchase Agreement disputes;
- Specific performance claims;
- Injunction applications; and
- Commercial litigation matters.
If you are facing issues involving caveats, terminated property transactions, or disputed land dealings, early legal advice is often crucial to protecting your rights and preventing irreversible consequences.
Written on: 25th May 2026
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!