Back
2021 MarsdenLR 1941
COURT OF APPEAL PUTRAJAYA
LIFE PARADISE SDN BHD – Appellant
Versus
EXPORT-IMPORT BANK OF MALAYSIA BERHAD & ANOR AND ANOTHER APPEALS – Respondent
[Civil Appeal Nos: N-01(NCVC)(A)-646-11-2019 & W-02(NCVC)(A)-2115-11-2019]
The creation of lien holder caveats does not require the express consent of the proprietor; the intention behind depositing titles as security satisfies statutory requirements for establishing a lien.
Headnote:(A) National Land Code – Section 281 – Malay Reservations Enactment FMS Cap 142 – Lien holders caveats – Appellant appealed against the High Court's dismissal of its summons to nullify caveats entered by the respondent, contesting validity under sectoral laws. The High Court affirmed the validity of lien caveats based on the statutory authority provided within the laws cited. No merit was found in the arguments regarding consent or alleged prohibitions based on Malay holdings. (Paras 8, 9, 19, 22, 26)
(B) Right of Lien – The court established the criteria for establishing lien holders, affirming the intention behind depositing titles as security suffices to create such rights under the national framework and relevant statutory exceptions. (Paras 11, 13, 17)
Facts of the case: Two appeals were filed by Life Paradise Sdn Bhd against decisions of the High Court regarding lien holder caveats on land used for securing loans to a third-party entity that defaulted, amidst claims of invalidity based on existing land legislations.
Findings of Court: The High Court correctly identified the statutory authority allowing the creation of lien holder caveats, and the factual context supported the respondent's actions. All conditions for statutory lien creation were fulfilled. (Paras 26 and 28).
Issues: The court addressed whether the lien holder caveats were valid under Sections 281 and 10 of the Malay Reservations Enactment, and whether consent from the appellant was necessary for their registration. (Paras 8, 9)
Ratio Decidendi: The court ruled that the legislative provisions unambiguously permitted the creation of lien under stated conditions and did not require express consent from title owners, thus the caveats upheld were lawful. (Paras 21, 25)
Result: Appeals dismissed with costs.
JUDGMENT
Introduction
[1] The two appeals before us were heard together for sake of convenience as they involve the same parties and are related. This judgment is in respect of both appeals. The appellant in both appeals is Life Paradise Sdn Bhd in Appeal N-01(NCVC)(A)-646-11-2019, it has appealed against the decision of the High Court sitting in Seremban which dismissed its originating summons to nullify the lien holder caveats entered by the Export Import Bank of Malaysia which was 1st respondent. As the second respondent, ie the Pengarah Tanah Dan Galian was a nominal party, we shall refer to the Export Import Bank of Malaysia as the respondent in this judgment. In Appeal W-02(NCVC)(A)-2115-11-2019, Life Paradise Sdn Bhd has appealed against the decision of the High Court sitting in Kuala Lumpur which granted the respondent's originating summons for an order for sale.
Background Facts
[2] The appellant is the registered owner of eight parcels of land in Rembau, Negeri Selangor. The respondent had granted financing facility for a sum of USD 4,000,000.00 via a Term Loan Facility Agreement in 2004 to a third party, namely, PT Eden Capital Indonesia which is a company incorporated in the Republic of Indonesia. As part of the securities for the said loan, the appellant deposited with the respondent the title to each of the eight parcels of land in question, namely:
1. State Lease 31931, Lot 4512, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan;
2. State Lease 31935, Lot 4516, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan;
3. State Lease 31936, Lot 4517, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan;
4. State Lease 31931, Lot 4512, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan;
5. State Lease 31938, Lot 4519, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan;
6. State Lease 31940, Lot 4521, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan;
7. State Lease 31941, Lot 4523, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan; and
8. State Lease 31943, Lot 4527, Mukim Titian Bintangor, Daerah Rembau, Negeri Sembilan.
[3] A third party charge was also executed by the appellant in favour of the respondent on 20 July 2005 over the same lands. On 6 February 2013 and 24 July 2017, the respondent entered a lien-holder's caveat in respect of the eight parcels of land.
[4] PT Eden Capital Indonesia defaulted in repaying the loan facility and the respondent entered judgment against it on 19 May 2019. As at 25 June 2019, the total sum that remained unpaid was USD 6,517,745.70. On 20 December 2016, the third-party charges executed in favour of the respondent were declared to be null and void by the High Court sitting in Seremban.
[5] However, the lien-holder's caveats in respect of the eight parcels of land that were entered by the respondent were not set aside. On 9 April 2019, the respondent proceeded to apply at the High Court sitting in Kuala Lumpur for an order for sale of the said lands under s 281 of the National Land Code which reads as follows:
Section 281
(1) Any proprietor or lessee for the time being may deposit with any other person or body, as security, his issue document of title or, as the case may be, duplicate lease; and that person or body-
(a) may thereupon apply under Chapter 1 of Part Nineteen for the entry of a lienholder's caveat; and
(b) shall, upon the entry of such a caveat, become entitled to a lien over the land or lease.
(2) Where the holder of any lien has obtained judgment for the amount due to him thereunder, he shall be entitled to apply to the Court for, and obtain forthwith, an order for the sale of the land or lease.
[6] Before the originating summons of the respondent for sale of the lands was heard, the appellant filed an originating summons at the High Court sitting in Seremban to declare the lien-holder's caveats null and void. The prayers sought in the appellant's originating summons are as follows:
(a) A declaration that the Lien-Holder's Caveats are
