Abdul Malik Ishak JCA:

The Undisputed Facts

[1] The appellant (Perwira Affin Bank Berhad) granted an overdraft facility of RM130,000 to the second respondent (Mohd Nor Rahmat) on the strength of a letter of offer dated 25 August 1984 between the appellant and the second respondent. It was this overdraft facility that led to the filing of these proceedings in the High Courts at Kuala Lumpur and Shah Alam which culminated in this appeal before us.

[2] Now, the first respondent (Selangor Properties Sdn Bhd) was the registered proprietor of a piece of land known and identified as HS(D) No: 14830, Lot No: 3859, P.T. 1712, Mukim Ulu Klang (hereinafter referred to as "the land"). In 1985, the first respondent transferred the land to the second respondent and the third respondent (Azizam bte Hashim). Legally speaking, the transfer of the land to both the second and the third respondents made them to be the beneficial owners of the land.

[3] Acting in abundance of caution and for the purpose of securing the overdraft facility, both the second and the third respondents then proceeded to deposit the original title deeds of the land with the appellant so that the appellant could create a lien over the land. True enough, the appellant then proceeded to lodge a lien-holder's caveat on the land at the land office and this was done on 4 January 1985.

[4] Somehow, the second respondent defaulted in settling the outstanding sums to the appellant under the overdraft facility. The appellant through its solicitors then issued a letter of demand to the second respondent. This letter of demand was dated 25 February 1987.

[5] The second respondent failed to comply with the appellant's letter of demand. This prompted the appellant to institute legal action against the second respondent in the Kuala Lumpur High Court vide civil suit number D2-23-1662-87. The appellant succeeded, on 12 September 1987, to obtain a default judgment against the second respondent in the sum of RM101,001.80 together with interests and costs.

[6] Armed with this default judgment, on 22 December 1987, the appellant's solicitors served a letter of demand on the second respondent's solicitors demanding that the second respondent to settle the judgment sum.

[7] Again the second respondent failed to settle the judgment sum. This time the appellant filed an originating summons on 13 December 1996 at the Shah Alam High Court seeking for certain reliefs, inter alia, a declaration that both the second and the third respondents are the proprietors of the land and for an order that the land be sold by public auction pursuant to ss. 257 and 281 of the National Land Code 1965 (hereinafter referred to as the "NLC").

[8] At the Shah Alam High Court, the first respondent did not file any affidavit to oppose the appellant's originating summons. Indeed during the hearing of the originating summons, the first respondent's counsel confirmed that the first respondent was not opposing the originating summons on condition that the appellant would not ask for costs against the first respondent. To this request, the appellant agreed.

[9] Unfortunately, on 11 February 2002, the Shah Alam High Court dismissed the appellant's originating summons with costs. Aggrieved by that decision, the appellant now appeals to this court.

Analysis

[10] We have anxiously read the written grounds of judgment of the learned judge of the Shah Alam High Court and we are compelled to conclude that the learned judge was in error and had failed to adequately consider the facts and the law surrounding the whole case. We say that the land title to the land need not be deposited by the first respondent as the registered proprietor in order to create a lien. We categorically say that there is no general rule of law that says that the issue document of title need to be deposited by the registered proprietor himself and that would be the first respondent in order to create a lien and to enter a lien-holder's caveat under