Introduction: When a Caveat Becomes a Legal Obstacle
In Malaysia, the entry of a private caveat can instantly freeze dealings over your property. Whether you are selling, transferring, or refinancing your land, a caveat on title can stop any registration or sale until it is removed.
At JY Ko Advocates & Solicitors, based in Bangsar, Kuala Lumpur, we regularly assist property owners, liquidators, and businesses in removing wrongful caveats under the National Land Code 1965 (NLC). Our recent experience in handling complex land disputes—including those similar to SKS Foam (M) Sdn Bhd (in liquidation) v Gan Bee San [2025] CLJU 496—demonstrates how the law protects property owners from abusive caveats filed without legal basis.
What Is a Caveat and Why Does It Matter?
A private caveat is a notice lodged at the Land Office under Section 323 of the National Land Code (NLC) by any person claiming an interest in a piece of land. Once entered, the caveat prohibits any dealing—sale, transfer, charge, or registration—over the land.
However, if the caveat is filed without lawful interest, it becomes a wrongful encumbrance, severely affecting your ability to sell or use the land. That’s when you need a removal of caveat lawyer.
Legal Grounds to Remove a Caveat in Malaysia
Under Section 327(1) NLC, any person aggrieved by the existence of a caveat can apply to the High Court for its removal.
A successful removal usually requires showing that:
- The caveator has no caveatable interest under Section 323(1);
- There is no serious issue to be tried; and
- On the balance of justice, the caveat should not remain.
In other words, if the person who lodged the caveat cannot show a genuine legal or equitable interest in the property, the court can order it removed with costs and even award damages.
Case Study: SKS Foam (M) Sdn Bhd (in Liquidation) v Gan Bee San [2025] CLJU 496
In this case, the High Court in Shah Alam clarified the law on wrongful caveats and the damages payable to affected property owners.
Background Facts
- SKS Foam (M) Sdn Bhd was the registered owner of a factory land in Klang.
- The Defendant, Gan Bee San, lodged a private caveat over the land on 2 September 2021.
- She was a director and shareholder of SKS Integrated Group Sdn Bhd, which occupied the land.
- However, she filed the caveat in her personal capacity, not as a company representative.
The Court’s Ruling
The High Court found:
- The Defendant had no caveatable interest since she was not the registered owner, nor did she hold any registrable or beneficial interest under Section 323(1)(a) NLC.
- Her act of filing the caveat was an abuse of process, meant to obstruct the liquidator’s duty to sell the land.
- The court therefore ordered the removal of the caveat and awarded damages to SKS Foam.
Damages Awarded
The Court recognized three types of damages under Section 329(1) NLC:
- Loss of opportunity – RM 1,793,750 for the inability to sell the land during the 1,000 days the caveat was in force.
- Aggravated damages – RM 200,000 for lodging the caveat maliciously.
- Exemplary damages – RM 400,000 for abusing the caveat process to gain commercial advantage.
This case sets a strong precedent that a wrongful caveat can result in substantial financial liability.
What Is a “Caveatable Interest”?
The term caveatable interest refers to a legitimate legal or equitable right to land. The courts have consistently held that:
- A shareholder or director of a company does not have a personal interest in company-owned property.
- Only a person who has a registrable interest, such as a purchaser under a sale and purchase agreement, tenant with registered lease, or equitable owner, may file a caveat.
If a person files a caveat without such interest, it becomes wrongful, and the aggrieved party may seek removal and damages.
When Should You Engage a Removal of Caveat Lawyer?
You should immediately consult a property litigation lawyer if:
- Your land title is suddenly marked with a private caveat;
- You are unable to sell, refinance, or transfer your property;
- You suspect someone has filed a caveat without your consent or legal right.
Prompt legal action is crucial. A delay could affect property transactions, loan approvals, and even the market value of your land.
Our Legal Process for Caveat Removal
At JY Ko Advocates & Solicitors, our removal process typically includes:
- Land search and verification – Checking details of the caveat under the Carian Rasmi or Carian Persendirian.
- Demand notice – Writing to the caveator demanding voluntary withdrawal.
- Court application (Originating Summons) – Filing under Section 327(1) NLC if the caveator refuses.
- Hearing before the High Court – Presenting legal arguments and evidence to prove wrongful entry.
- Application for damages – Seeking compensation under Section 329 NLC for losses suffered.
Our lawyers ensure that your property rights are restored quickly and effectively, minimizing financial loss.
Damages for Wrongful Caveat: Your Right to Compensation
Section 329(1) of the NLC provides that a person who lodges a caveat without reasonable cause is liable to pay damages to anyone suffering loss as a result.
Examples of recoverable damages include:
- Loss of opportunity to sell the property;
- Delay in refinancing or development;
- Aggravated damages for bad faith;
- Exemplary damages to deter abuse of caveat laws.
In SKS Foam v Gan Bee San, the High Court reaffirmed that wrongful caveats can result in over RM 2 million in damages, depending on the circumstances.
Why Choose JY Ko Advocates & Solicitors
At JY Ko Advocates & Solicitors, we represent property owners, companies, and liquidators in all types of land and caveat disputes throughout Malaysia.
Our firm offers:
- Proven courtroom experience in the High Court and Court of Appeal;
- Swift legal strategy to remove caveats and restore title rights;
- Transparent fees and practical advice on protecting your property.
We operate from Bangsar, Kuala Lumpur, and are easily accessible by car or LRT (Kerinchi Station). Our team of dedicated lawyers ensures prompt attention to every inquiry.
Conclusion: Protecting Your Property Rights
A wrongful caveat can block millions in potential transactions and cause prolonged legal headaches. The High Court’s decision in SKS Foam (M) Sdn Bhd v Gan Bee San proves that property owners have strong legal remedies against baseless caveats.
If you are facing such an issue, don’t delay. Contact us JY Ko Advocates & Solicitors, your Removal of Caveat Lawyer in Kuala Lumpur, for professional legal advice and representation.
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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!