Case Summary:
The plaintiff was a licensed
moneylender wholly owned by Loh, who was CC's managing director, owned a piece
of property. The applicant in the motion, Derrick had been in occupation of the
land and he claimed Loh orally agreed to sell him the land for RM60,000. In a
suit filed by Derrick, the HC ordered the sale agreement to be specifically
performed. On appeal by Loh, the CoA affirmed the HC’ s decision. His
application for leave to appeal to the Federal Court was dismissed. Immediately
thereafter, Derrick paid, and Loh accepted, the RM60,000 purchase price for the
land but Loh did not transfer the land to Derrick nor surrender the title deed
to him. During the currency of the 2000 Suit Derrick had entered a private
caveat on the land to protect his interests and when it expired, he entered a second
caveat on 4 June 2007, about a week after he paid Loh the RM60,000. The
following day, CC entered a lien holder`s caveat on the land claiming Loh had
deposited the title to the land with CC in 1998 as security for loans it had
granted him. CC had also obtained a judgment against Loh for the monies he owed
the company. In its OS, CC'sought, inter alia, a declaration that its lien
holder`s caveat was valid although it was lodged after the entry of Derrick's
private caveat; an order that the land be sold by way of public auction to
realise CC's judgment against Loh and an order that Derrick's private caveat be
cancelled. In his OM, Derrick sought, inter alia, an order that CC's lien
holder`s caveat be cancelled; a declaration that he was the beneficial owner of
the land; an order that CC deliver to him or to his lawyers the title deed to
the land and that Loh and CC pay him damages as assessed by the registrar as a
result of the entry of the lien holder`s caveat.
Issue:
Whether lien holder’s caveat is a
nullity.
Whether evidence showed party had no
right to lodge lien holder’s caveat.
Whether s.331 (4) of the NLC allowed
persons other than RP to apply to cancel lien holder’s caveat.
Held:
The entry of CC's lien holder`s caveat
on 2007 subsequent to the private caveat already entered by Derrick on breached
s 322(2) read with s 330(3) of the NLC and it was therefore in law invalid and
a nullity.
There could be no endorsement or entry
of the said lien holder`s caveat on 5 June 2007 and ('Consolidated Credit') is
prohibited from entering the said lien holder`s caveat over the property, as at
the material time, the property was already subject to the private caveat
entered by Derrick on 4 June 2007 (ie the second caveat).
Derrick had locus standi
to apply to have the lien holder`s caveat cancelled. Nothing in the language of
s 331(4) of the NLC supported the argument that only a registered proprietor
could apply to cancel a lien holder`s caveat which had been wrongly or
improperly entered. Section 331(4)(b), in fact, tacitly recognized that persons
other than the registered proprietor could make such an application as it
contemplated the grant of a remedy by way of compensation to 'any person or
body' who might have suffered loss and damage by the entry of the lien holder`s
caveat.
Since Derrick's rights as
a bona fide purchaser for value without notice of any earlier lien in equity
had crystallised and intervened, CC's lien in equity (if any) no longer had any
currency and could not be enforced
Conclusion:
Derrick's
application succeeds and ('Consolidated Credit') s application fails
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