1. PROHIBITORYPROHIBITORY
ORDERORDER

2.  A type of restraint on dealings
available to a judgment
creditor who does not come
within category of persons
having caveatable interest
pursuant to s.323(1) NLC

3. Definition-s.334 NLCDefinition-s.334 NLC
where land or an interest in land held
by a judgment-debtor is to be sold in
execution proceedings, an order made
pursuant to rules of court by a court of
competent jurisdiction prohibiting
judgment debtor from effecting any
dealing as specified in order.

4. PO cannot be granted in respect of
land or interest held by a
registered proprietor who is not a
judgment debtor or where
judgment debtor is no longer
holding title or any interest in land.
Hon Ho Wah & Anor v United
Malayan Banking Corp. [1994] 2
MLJ 393

5. Judgment creditor can take
whatever interest judgment debtor
has in land and not those that he
has already parted with to other
persons.
Karuppiah Chettiar v Subramaniam
[1971] 2 MLJ 116 (FC)

6. PO - is EFFECTIVE on entry in
RDT by Registrar – s.335 NLC.
After entering PO on RDT
seizure & sale of land can be
carried out - Ord.47 rule 6(3)
RHC
SA Andavan v Siow Meow Choi
[1976] 1 MLJ 147 at 148.

7. PO cannot empower sale of
land/interest until ENTERED on
RDT
But its entry will not necessarily
ensure priority to judgment
creditor,
PO does not give judgment creditor
interest in land

8. No sale until after expiry of 14
days from date of ENTRY of PO on
RDT - Ord. 47 r 7(a) RHC.
Failure to comply with condition –
sale is irregular & can be set aside.

9. order declaring sale made pursuant
to PO can be made absolute after
expiration of one month from date
of sale - Ord. 47 rule 7(g) RHC
Rationale - to enable any objection
to be made during this period.

10. Where PO is in contest with a prior
uncaveated interest in land, the absence
of the caveat will not defeat the prior
interest for general legal principles will
determine priority.
However, priority of first in time can be
lost by negligence
Standard Chartered Bank v Yap Sing
Yoke & Ors [1989] 2 MLJ 49
UMBC Bhd v Goh Tuan Lye [1976] 1 MLJ
169.

11. Similar to private caveat, PO does not
create an interest in land nor does it
defeat an existing interest but merely
temporarily inhibits dealings with land
or interest in land.
Entry of PO has effect of attaching
land or interest that can be sold in
execution
Raman Chetty v Muthiah Chetty (1922)
3 FMSLR 177.

12. Effect of Prohibitory OrderEffect of Prohibitory Order
s.336 NLC 1965s.336 NLC 1965

13. EFFECT of PO entered on RDT & expressed to
relate to land prohibit:
(a) REGISTRATION of all instrument of dealing
executed by or on behalf of proprietor EXCEPT
certificate of sale
(b) ENDORSEMENT of claim to benefit of
tenancy exempt from registration granted by
proprietor
© ENTRY of lien-holder's caveat

14. Exceptions to prohibition – ss. (2)
(a) any instrument of dealing, other than a
certificate of sale, directly affecting that
interest;
(b) where that interest is a lease or sub-
lease-
◦ (i) any claim to benefit of any tenancy exempt from
registration granted directly
◦ (ii) lien-holder's caveat

15. Time PO EffectiveTime PO Effective
PO CANNOT prohibit
registration, endorsement or entry
of any instrument, claim or lien-
holder's caveat where instrument
was presented, or application for
endorsement or entry received, prior
to time from which order takes
effect.

16. Registration of any instrument, or
endorsement or entry of any claim
or lien-holder's caveat, is
prohibited by PO, Registrar MUST
REJECT instrument

17. Procedure on rejection of
Instrument
On rejecting any instrument or
application for endorsement,
Registrar must take similar steps
as if he had rejected it pursuant to
s.298 / s.317

18. Sale of land or interest subject
to PO –s.337 NLC
Rules & regulations for carrying
out sale of land is subject to -
Order 47 RHC

19. Ker Chee Chaun v Katlyn Enterprise (M)
Sdn Bhd [1991] 1 MLJ 98 (SC) at 100.
Land had been sold to a purchaser who
failed to pay purchase price but
Purchaser was registered as proprietor.
Vendor obtained a judgment against
purchaser and land was sold to satisfy
amount owed.
Appellant bought land, received a
certificate of sale issued by registrar
of court

20. Former purchaser/proprietor applied to
set aside judgment and sale & caveated.
Appellant applied to have caveat
removed.
SC dismissed appeal for on balance of
convenience it was preferable to
maintain status quo pending settlement
of action by former purchaser/
proprietor as RHC 1980 had not been
followed in conduct of sale.

21. CT - RHC Ord 47 r 7, required conditions of sale
to be approved by court, and that sale be
confirmed by court.
On confirmation sale would become absolute,
subject to proviso in r 7(g).
In this case, this rule was not observed nor was
certificate of sale in appropriate form.
Thus there is serious questions to be tried
-whether auction of land is absolute having
regard to RHC 1980 and whether registration
was effected by sufficient instrument to vest
indefeasible title on appellant under NLC.

22. 6 months - RHC 1980 Ord 47 r 6(4)
Extension of PO must be entered on RDT
prior to expiry - RHC 1980 Ord 47 r 6 (5).
IF PO expired or extended - extensions have
lapsed, creditor has no right to seize & sell
land.
Strict compliance with RHC & terms of NLC
are necessary to authorize & legalize seizure
& sale.
DURATION of PO - s.338 NLC

23. Ban Hin Lee Credit Sdn Bhd v Utama Computer
Centre Sdn Bhd [1991]2 MLJ 327
on four occasions, applications for extension of
PO was granted by a senior assistant registrar,
but no sale took place.
Finally when creditor applied to set date, time
and venue for auction of land, proprietor (as
judgment-debtor) applied to set aside PO.

24. Court granted proprietor's application and
observed that because PO is in nature of a
caveat, and interferes with rights of owner
of land against which it is registered from
dealing with it, Court 'can only make an order
for renewal of PO upon proof of existence of
"special circumstances".

25. Existence of special circumstances, is a
condition precedent to exercise by court of its
jurisdiction to renew PO.
Court must be satisfied that there exist good
reasons before exercising its discretion to
extend PO.

26. Extension is ordinarily not to be granted.
General ground which creditor had relied in its
applications was that it had been unable to take
necessary steps for sale of the lands within 6
months but no explanation on delay.

27. methods of determination – s.339methods of determination – s.339
PO can be withdrawn at any time by
CT order
Registrar on receiving a copy of
order of withdrawal, MUST cancel
entry on RDT, note reason & date
for cancellation

28. Normal rule – first in time will
be given PRIORITY.
Lien holder first in time
compared to a judgment creditor
will have priority.
See Paramoo v Zeno Ltd.
[1968] 2 MLJ 230