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Abdul Hamid Bin Mohamed Ismail and Others v Shaik Raheem s/o Abdul Shaik Shaik Dawood and Another Action
Abdul Hamid Bin Mohamed Ismail and Others v Shaik Raheem s/o Abdul Shaik Shaik Dawood and Another Action
[2005] SGDC 28

Suit No:    OS 366/2004, 371/2004, RAS 69/2004, 70/2004
Decision Date:    07 Feb 2005
Court:    District Court
Coram:    Tan May Tee
Counsel:    V Ramakrishnan (V Ramakrishnan and Co) for plaintiffs, B Uthayachanran (B Uthayachanran and Co) for defendants

Subject Area / Catchwords   


7 February 2005

District Judge Tan May Tee:

1          The plaintiffs in these two originating summonses are the joint owners of a Housing and Development Board (“HDB”) flat known as Block 138 Bukit Batok West Avenue 6 #02-389 Singapore 650138 (hereinafter “the Flat”).  The defendants had lodged caveats at different times against the title of the Flat pursuant to loans granted to the plaintiffs and the relief sought by the plaintiffs in these actions are for the removal of these caveats.  The two originating summonses were heard together as they involve the same issues of law and the parties were represented by the same set of solicitors.  After hearing the submissions of counsel, I dismissed the plaintiffs’ applications.  The plaintiffs have appealed to the High Court and I set out herein the reasons for my decision. 

Facts in OS 366 of 2004

2          In OS 366 of 2004, the defendant, Shaik Raheem s/o Abdul Shaik Shaik Dawood (hereinafter “Shaik Raheem”), is a housing agent operating under the name of Shaik Rassd Realty.  He had acted for the plaintiffs in the sale of a previous flat and in the purchase of the Flat.  There appeared to have been some difficulties arising out of the plaintiffs’ concurrent ownership of two HDB flats but these have not been explained by either party.  It appears from the affidavit of Shaik Raheem that pending the sale of the Flat, the plaintiffs had requested a loan of $45,000.  The loan is evidenced by several documents all signed by the plaintiffs. The documents also show that the plaintiffs had agreed to engage Shaik Raheem as their exclusive marketing agent to sell the Flat for a fee equivalent to 2% of the sale price. 

3          These documents which were disclosed by Shaik Raheem comprise the following:

(1)        a statutory declaration by all 3 plaintiffs made on 26 April 1999 acknowledging that they had taken a friendly loan free of interest from Shaik Raheem in the sum of $45,000

(2)        a Warrant to Act from the plaintiffs to M/s David Nayar & Vardan appointing them to act in the sale of the Flat

(3)        a letter of authorisation from the plaintiffs to HDB authorising them to pay over the balance sale proceeds to M/s David Nayar & Vardan

(4)        a letter of authorisation from the plaintiffs to M/s David Nayar & Vardan authorising them to take instructions from Shaik Raheem in relation to the sale of the Flat

(5)        a letter of authorisation irrevocably authorising M/s David Nayar & Vardan to pay to Shaik Raheem the sum of $45,000 plus 2% of the sale price as commission for the sale from the sale proceeds which M/s David Nayar & Vardan were to receive as solicitors acting for the plaintiffs in the sale of the Flat 

4          Shaik Raheem’s account of the transaction and the various documents exhibited in his affidavit were not challenged by the plaintiffs.  In fact, the plaintiffs admit that they had taken a loan from Shaik Raheem although the sum stated in the 1st Plaintiff’s affidavit is $40,000 not $45,000.  This sum was needed as the plaintiffs did not have enough money to cover the initial purchase price of the Flat.  The plaintiffs do not deny that they signed documents in which they had acknowledged the loan of $45,000 though they allege that these documents were prepared by Shaik Raheem’s solicitors and copies were not given to them. 

5          There is no evidence from either party as to what happened to the transaction after April1999.  In his affidavit, there was some allegation by Shaik Raheem that the 1st Plaintiff had been cheating many housing agents by this scheme of putting his Flat as security for loans and that the loan had been sought by the 1st Plaintiff while the latter was an undischarged bankrupt.  What is clear however is that Shaik Raheem did on or about 11 February 2003 lodge a caveat against the Flat through his present solicitors, B Uthayachanran & Co.  Chronologically, it appears that this caveat was lodged after demands were made to the defendant in OS 371 of 2004 to remove their caveat which had been lodged in August 2000.   The claim made by Shaik Raheem in the caveat was described as follows:

“Claiming an interest in the property pursuant to Section 115(3)(a) of the Land Titles Act Chapter 157 and by virtue of an Agreement dated 26th April 1999 whereby the Registered Proprietor has agreed to repay the loans rendered by the Caveator to the Registered Proprietor, and the Caveator’s agents’ commission from the sale proceeds of the registered land”

The loan remains unpaid and Shaik Raheem has indicated that he is fully prepared to withdraw the caveat upon repayment by the plaintiffs.

Facts in OS 371 of 2004

6          The caveat which is the subject matter of OS 371 of 2004 was filed by Trans-Assets Credit Pte Ltd (hereinafter “Trans-Assets”), a licensed moneylender.  The facts giving rise to the caveat as recounted by Trans-Assets are not disputed by the plaintiffs.  Sometime in May 2000, the 1st Plaintiff applied to them for a loan of $20,000.  Chew Lay Seong, a director of Trans-Assets who attended to the 1st Plaintiff refused to grant him the loan as searches revealed the history of the 1st Plaintiff as having been a bankrupt before.  Subsequently, however, the 1st Plaintiff managed to convince them of his ability to repay the loan out of the sale proceeds of the HDB flat by 16 February 2001.  The 1st Plaintiff, together with his wife and son, the 2nd and 3rd Plaintiffs respectively, were required and did sign a loan agreement as well as a promissory note in favour of Trans-Assets.

7          The relevant clauses of the agreement made on 16 August 2000 between the three plaintiffs named therein as “the Borrowers” and Trans-Assets named as “the Company” are as follows:

‘Covenant to give notice

3.         The Borrowers covenant with the Company that at all times before full payment of the loan and interest not to sell or transfer or otherwise dispose of their interest in the flat at Block 138 Bukit Batok West Avenue 6 #02-389 Singapore 650138 (hereinafter referred to as “the Flat”) without giving prior notice of at least seven (7) days of the date of such sale transfer or otherwise to the Company.

Assignment of sale proceeds

4.         The Borrowers agree that the sale proceeds of the sale of the Flat that the Borrowers may become entitled or receive from the purchaser of the Flat have been assigned to the Company for the repayment of all monies due to the Company under the Terms and conditions of this Agreement.

Consent to Caveat

5.         The Borrowers hereby consent to the Company lodging a Caveat with the Singapore Land Registry against the title of the Flat and confirm that the Company has an interest in the sale proceeds of the sale of the Flat PROVIDED THAT the Company shall on receipt of all monies due and owing to the Company by the Borrowers withdraw the Caveat.

Further Assurance

6.         The Borrowers shall at all times if and required by the Company execute such further charges or assignments or other documents as may be necessary to effect the assignment of the sale proceeds of the Flat to the Company or the due payment of the Loan to the Company.

8          On 18 August 2000, Trans-Assets through their solicitors lodged a caveat which was accepted by the Registrar of Titles on 22 August 2000 and registered as Caveat No. CV/HB 66068.  In the caveat, Trans-Assets as caveator stated the grounds of their claim thus:

‘Pursuant to an Agreement dated 16 August 2000 made between the Caveator and the Registered Proprietor, the Registered Proprietor agreed to pay and settle all debts due and owing from the Registered Proprietor to the Caveator, out of the sale proceeds of the sale of the property above described.  Pending the sale of the property the Registered Proprietor agreed to the lodgement of this caveat to secure the Caveator’s interest in the sale proceeds, thereby creating an equitable interest in the said property.’ 

9          It is not disputed that the plaintiffs failed to repay the loan by the agreed date of 16 February 2001 and even up to the date of the hearing before me, the loan had not been repaid to Trans-Assets.  The plaintiffs had through their present solicitors demanded the removal of the caveat but this was refused as the defendants required an assurance that payment would be made from the sale proceeds.  


10        The questions which I had to determine were:

(1)        whether the defendants’ interests as claimed in the 2 caveats lodged against the Flat fell within the ambit of section 115 (3) Land Titles Act (hereinafter “the Act”)

(2)        if so, pursuant to section 127 of the Act, have the defendants shown sufficient cause for the caveats to remain    

Plaintiffs’ case

11        Mr Ramakrishnan, counsel for the plaintiffs contended that the defendants who had granted monetary loans to the plaintiffs have no caveatable interests in the Flat.  He relied on section 115 of the Act which requires that a caveat may only be lodged by a person “claiming an interest in land”.  The defendants who are owed debts by the plaintiffs based on the loan agreements have only claims founded in contract.  These loans do not give rise to an estate or interest in land and cannot support the caveats lodged against the Flat.  The defendants’ recourse is to sue the plaintiffs on the loan agreements. 

12        Counsel also placed reliance on section 51(1) and 51(3) Housing & Development Act which prohibits the creation of a security of an HDB flat by deposit of title deeds and any attachment of such a flat upon execution of a decree of any court.  Had the defendants obtained judgment against the plaintiffs, they would be precluded from attaching the Flat as a means of enforcement of the judgment.  It was therefore argued that all the more the defendants should be prohibited from filing the caveats on the Flat based on the loan agreements.  The loan agreements do not create any legal or equitable interests.

13        Mr Ramakrishnan further submitted that if caveats are permitted to be filed for loan agreements which are not caveatable interests, not being interests   in land, then the “flood gates would be opened for thousands and thousands of caveats to be indiscriminately filed against HDB flats which is not the intention of the legislature when section 115 Land Titles Act came into force.”   Since the defendants do not have caveatable interests, the court should exercise its powers under section 127 Land Titles Act (Cap 157) and order their removal. 

Defendants’ case

14        Counsel for the defendants, Mr Uthaychanran, argued that the defendants were entitled to lodge and maintain the caveats on the Flat pursuant  to section 115(3)(a) of the  Act.  A person claiming an interest in land is defined therein to include one “who has an interest in the proceeds of sale of land” –   this

clearly includes the defendants who have an interest in the proceeds of sale of the Flat.  In both transactions, the plaintiffs had promised in writing to pay the loan, interest and costs from the proceeds of sale of their property. 

15        In OS 371 of 2004, in particular, the defendants had taken pains to ensure that they would eventually be paid from the proceeds of sale of the Flat by the clear written terms of the agreement signed between the parties.  They would never have agreed to lend money to the plaintiffs had it not been for the latter’s promise that they would pay from the proceeds of sale.  It was patently obvious to both parties from the outset of the transaction that apart from the proceeds of sale of the Flat, the plaintiffs had no means to satisfy the debt owed to the defendants.  The defendants’ primary consideration for extending the loan of $20,000 was the availability of the proceeds of sale to meet the repayment.  The plaintiffs had made no protests when the caveat was lodged on 18 August 2000 when a notice would invariably be sent to them immediately after the lodgment of the caveat.  Todate, the plaintiffs have made no payment of the amounts owed by them and their conduct by remaining incommunicado after receiving the money from the defendants indicate that they have no intention to honour their part of the agreement signed between the parties.

16        Similar arguments were proffered by counsel with regard to the caveat in OS 366 of 2004.  The plaintiffs had used the money from Shaik Raheem and had signed an irrevocable undertaking to have the entire loan deducted from the sale proceeds they would receive.  Valuable consideration had been provided to the plaintiffs who were now reneging on the deal.

Interest in the proceeds of sale of the Flat  

17        As the primary issue concerns the proper construction of section 115 of the Act, it would be convenient to set it out in full below:

Caveats may be lodged

115. —(1) Any person claiming an interest in land (whether or not the land has been brought under the provisions of this Act), or any person otherwise authorised by this Act or any other written law to do so, may lodge with the Registrar a caveat in the approved form which shall include the following particulars:

(a) the name of the caveator and the caveatee;

(b) an address in Singapore at which notices may be served on the caveator and the caveatee;

(c) particulars of the estate or interest claimed by the caveator;

(d) the grounds in support of the claim;

(e) the nature of the prohibition of the dealing in land;

(f) the lot affected by the caveat and, where that lot is comprised in a folio, the folio;

(g) where the caveat relates to only part of the land, such description of that part as will enable it to be identified to the satisfaction of the Registrar;

(h) if the caveator is a purchaser or sub-purchaser of the interest in the land, the amount of the purchase price and the date of the caveator’s contract or the date on which he exercised the option to purchase the interest in the land, as the case may be; and

(i) the particulars required by section 19 of the Residential Property Act (Cap. 274).

(2) A caveator may, according to the extent of his interest, forbid the registration under this Act of any dealing affecting the land against which the caveat is directed, either —

(a) unless the dealing is expressed to be subject to the interest claimed by the caveator; or

(b) unless the caveator or some person nominated by him in the caveat has consented in writing to such registration.

(3) For the purposes of this Part, and without limiting its generality, a reference to a person claiming an interest in land shall include a reference to any of the following persons:

(a) any person who has an interest in the proceeds of sale of land, not being an interest arising from a judgment or order for the payment of money; and

(b) a person who has obtained an injunction in respect of an estate or interest in land

18        Section 115(3)(a) had been amended only in 2001 vide the Land Titles Amendment Act 25 of 2001 to include the words “not being an interest arising from a judgment or order for the payment of money”.  There is unfortunately no record in Hansard as to the background or reasons for the amendment being made.  Nor are there any reported cases touching on the construction of this provision.  Counsel for Plaintiff had no submissions with regard to section 115(3)(a) nor their applicability to the case at hand.  His arguments had focused primarily on the general understanding of the law on caveatable interests.  I understood the main point of his arguments to be that the “interest” as used in section 115(3)(a) still had to be subject to the general interpretation in section 4 of the Act in which "interest” in relation to land is defined to mean “any interest in land recognised as such by law, and includes an estate in land.”  Hence, a caveator who claims an interest in the proceeds of sale of land must first have a claim to an interest in the land.  No cases were referred to by counsel for plaintiffs which dealt with a caveat lodged to protect an interest in proceeds of sale derived from a recognised interest in land.   

19        On principles of statutory interpretation, I could not agree with the plaintiffs’ submissions.  The wording of section 115(3)(a) read in their plain and literal sense clearly intended to widen the scope of “interest in land” for purposes of caveats to include a person who has an interest in the proceeds of sale of the land which may not necessarily arise from recognized categories of interests in land.  It should be noted that the interpretations in section 4 are prefaced with the words “unless the context otherwise requires”.   The opening words of section 115(3)(a) – “For the purposes of this Part”- in themselves already set a different context altogether to require a different meaning to be accorded to the word “interest”.   This preamble to section 115(3)(a) must surely signify a legislative intent to import a wider interpretation to the definition of “interest in land” in the part of the Act dealing with caveats than those appearing in the other parts of the Act.  If the plaintiffs’ contentions viz that these words should be restricted to the definition of “interest” as in section 4, reflect the true intent of Parliament, section 115(3)(a) would, in my view, be rendered otiose. 

20        If the interpretation of section 115(3)(a) has to be circumscribed in the manner advocated by the plaintiffs, it would not have been necessary for Parliament to introduce the amendment in 2001 to delimit the categories of interests to those “not being an interest arising from a judgment or order for the payment of money”.  It must have been contemplated that the category of caveatable interests in section 115(3)(a) would include interests other than proprietary interests or what we traditionally understand as interests in land.  If a caveator’s interest in the sale proceeds of land came about only by way of an attempt to enforce a monetary judgment with no other connection whatsoever to the property, such an interest would be outlawed by the delimiting words in section 115(3)(a).  It would appear from these words that you cannot seek to encumber the titles of registered land by lodging caveats when all that you have against the registered proprietor is a judgment or order for payment of money.  The judgment creditor can however seek enforcement of his judgment against the property of the judgment debtor by applying for a writ of seizure and sale pursuant to Order 47 Rule 4 of the Rules of Court and the order made thereon  would then be registered with the Land Titles Registry.  A judgment creditor would therefore have no necessity to lodge a caveat as he already has the means to attach the property of the debtor and to have his interest to the property notified on the register.  

21        Considering the way section 115(3)(a) has been drafted, it leads to the irresistible conclusion that there would be categories of interests in proceeds of sale of land which would not come within the general understanding of an interest in land.  It has been recognized by textbook writers that the rights covered by section 115(3)(a) are not really interests in land.[1]

22        Accordingly, I had to find that the interests of both the defendants in the sale proceeds of the Flat qualified as  caveatable interests under section 115(3)(a) of the Act.  The various authorities cited by counsel for the plaintiffs were of no assistance as they merely espoused the fundamental principles on caveats on registered land and did not deal with the interpretation of the words “a person claiming an interest in land shall include a reference to …   person who has an interest in the proceeds of sale of land  ..” which are peculiar to our Act.

23        In OS 366 of 2004, Shaik Raheem’s interest in the proceeds of sale of the Flat arose from a loan given to the registered proprietors which was used to finance the purchase of the Flat.  The documents evidencing the transaction evinced the plaintiffs’ clear intention to discharge their liability for repayment of the loan out of the proceeds of sale of the Flat.  Up to the time of the plaintiffs’ attempted sale of the Flat, they had made no other arrangements to discharge their liability to the defendant.  It was clear that they had no other means to do so and were simply trying to renege on their legal obligation to the defendant.  I was not able to find any justification why the interest claimed by Shaik Raheem and which had been expressly admitted by the plaintiffs could not come within the wording of section 115(3)(a) of the Act. 

24        In OS 371 of 2004, in relation to Trans-Assets’ caveat, the plaintiffs had conducted themselves in blatant disregard of the clear terms of the written agreement.  They had all categorically consented to a caveat being lodged against the title of the Flat.  They had expressly assigned their rights to the sale proceeds of the Flat to Trans-Assets in discharge of their repayment obligation.  Their written agreement had in fact provided that the caveat would be withdrawn upon the plaintiffs’ repayment of the loan and interest.  It is not disputed by the plaintiffs that the loan remains unpaid and no attempts have been made by the plaintiffs to discharge their liability to Trans-Assets since the lodgment of the caveat over four years ago todate.  

Cause shown

25        The plaintiffs’ applications were made pursuant to section 127 of the Act.  This states as follows:               

Remedies of caveatee

127. —(1) At any time after the lodgment of a caveat, the caveatee may summon the caveator to attend before the court to show cause why the caveat should not be withdrawn or otherwise removed, and the court may make such order, either ex parte or otherwise, as seems just.

(2) A caveatee who contends that a caveat has been lodged, or is being allowed to remain, vexatiously or frivolously or not in good faith may lodge with the Registrar a statutory declaration to that effect, whereupon the Registrar shall give notice to the caveator that he intends to cancel the notification of the caveat, and he shall cancel it unless within 30 days from the date of the service of the notice —

(a) an order by the court to the contrary is served on the Registrar; or

(b) the caveator furnishes to the Registrar satisfactory evidence to show that the cancellation should be withheld or deferred.

26        It is pertinent to note that the plaintiffs had not at any time upon notification by the Registrar of Titles of the presence of the caveats contended that the caveats had been lodged vexatiously, frivolously or not in good faith.  They had not availed themselves of their rights under section 127(2) notwithstanding that they would in the normal course have been notified by the Registrar of Titles of the caveats.  By these applications they were requiring the defendants to show cause why the caveats should not be withdrawn.  From the affidavits filed by Shaik Raheem and Trans-Assets, which have not been challenged, I have no doubt that both caveators have indeed shown good cause for their respective caveats to remain. 

27        Under section 127(1), the court is required to make such order as seems just.  Despite admitting their indebtedness to both defendants, the plaintiffs had refused to make any proposals for their repayment.  Their objections to the caveats were made without regard to the merits of the defendants’ claims and the equities of the situation.  Counsel for the defendants had suggested that the plaintiffs could be ordered to make payment of the sums owed to the defendants into court in order for the caveats to be withdrawn.  I did not think it necessary to make such an order.  By the affidavits filed, there was already an admission from the plaintiffs of their indebtedness to both the defendants.  I would think that upon payments being made direct to them, the defendants would immediately withdraw their caveats.  The agreement of Trans-Assets with the plaintiffs expressly provides for this.    There were no issues as such to be tried between the caveators and caveatees that would necessitate an order for payment to be made into court.  The liability of the caveatees to the caveators was not disputed.  Upon discharge of their liabilities there would be no cause for the caveats to remain.  In the event, upon satisfaction of these liabilities and should the defendants refuse to withdraw their caveats, the plaintiffs are at liberty to apply.  

Section 51 Housing and Development Act

28        Counsel for plaintiffs had also invoked section 51(1) and 51(3) of the Housing and Development Act (Cap 129) to seek the removal of the caveats.  A plain reading of these sections will show they are of no assistance.  The section states as follows:

51. —(1) No lien by deposit of the title deeds, as security for a debt, of any flat, house or other building that has been sold by the Board under the provisions of this Part shall be capable of being created in favour of any person and no caveat in support of any such lien by deposit shall be capable of being registered under the provisions of the Registration of Deeds Act (Cap. 269) or the Land Titles Act (Cap. 157).

(2) No such flat, house or other building shall vest in the Official Assignee on the bankruptcy of the owner thereof.

(3) No such flat, house or other building shall be attached in execution of an order of any court unless the order of the court is obtained by —

(a) a mortgagee in exercise of his rights under a mortgage created with the prior written consent of the Board; or

(b) a chargee in exercise of his rights under a charge under any written law, over that flat, house or other building

29        Section 51(1) prohibits any lien being created by way of a deposit of title deeds as security for a debt.   Any caveat purported to support such a lien would be outlawed.  On the present facts, neither of the caveators has custody of the title deeds.  The interests claimed by them in their respective caveats are not prohibited by section 51(1).  Section 51(3) was also not relevant to the plaintiffs’ situation.  The caveators were not seeking to attach the Flat by way of execution of any court order or decree by the lodgement of their caveats.  The caveats merely served as notification in respect of their interests to the sale proceeds of the Flat in accordance with the agreement reached between the parties.


30        The caveat has been said to act as a statutory injunction to protect the bona fide claims of third parties who have interests in registered land.  By section 115(3)(a) of the Act, the category of interests in land which may be protected by the mechanism of a caveat had been widened to include persons who have an interest in the proceeds of sale of the land.  In both OS 366 of 2004 and OS 371 of 2004, the parties had expressly contracted for the defendants to have an interest in the proceeds of sale of the land, ie the Flat.  The plaintiffs had furnished no good reasons in law as to why they should not be held to their obligation.  The defendants had shown that the caveats were lodged in accordance with their respective agreements with the registered proprietors of the Flat and until the plaintiffs are prepared to fulfil their part of the bargain, the caveats should be allowed to remain.  There was no other just order for the Court to make save to dismiss both applications with costs. 

[1]See N Khublall Law of Real Property & Conveyancing 3rd Edition, 1996, at page 646