JUDGMENT

Narkunavathy Sundareson J:

Introduction

[1] On 29 July 2025, this Court dismissed the Plaintiffs application in Enclosure 1. The following are the reasons for the decision.

Background Facts

[2] Briefly, the background facts leading to encl 1 are as follows. The Plaintiff entered into a consent judgment with one Chan Kok Leong (NRIC No: 530304-02-5169) (Chan), a bankrupt, and other defendants in suit no: KB-22NCVC-14- 04/2021 on 28 August 2022.

[3] The terms of the consent judgment included that Chan and the other defendants agreed to be jointly and severally liable to pay the Plaintiff a sum of RM300,000.00 within 12 months of the date of the consent judgment. In the event of default, the Plaintiff would be entitled to enforce their lien-holder's caveats over properties held under the description of:

(i) Lot 14328, Geran No 59913 (dahulunya dipegang di bawah Geran No. 10400), Bandar Sungai Petani, Daerah Kuala Muda, Negeri Kedah Darul Aman bearing address No: 578, Lorong 12, Taman Bandar Baru, 08000 Sungai Petani, Kedah Darul Aman (Property 578);

(ii) Lot 9154, Geran No 79167, Bandar Sungai Petani, Daerah Kuala Muda, Negeri Kedah Darul Aman bearing address No: B42, Jalan Baiduri 1, Taman Baiduri, 08000 Sungai Petani, Kedah Darul Aman (Property B42); and

(iii) Lot 9155, Geran No 79185, Bandar Sungai Petani Daerah Kuala Muda Negeri Kedah Darul Aman bearing address No: B43, Jalan Baiduri 1, Taman Baiduri, 08000 Sungai Petani, Kedah Darul Aman (Property B43).

[4] On the Plaintiffs application, the consent judgment was amended to omit Property B43 from the default clause.

[5] Needless to say, Chan and the other defendants failed to comply with the terms of the consent judgment. The Plaintiff sought to enforce the lien they hold over Property B43.

[6] The reliefs the Plaintiff sought in encl 1 included:

(i) a declaration that the Defendant does not administer Property B43 as part of Chan's bankruptcy estate;

(ii) an order that the Defendant's consent is not required to deal with Property B43;

(iii) an order that Property B43 does not vested in the Defendant under s 8 of the Insolvency Act 1967 (Act 360);

(iv) an order that the Plaintiff be allowed to enforce the lien-holder's caveat over Property B43 by effecting a transfer of the property into their name or that of their nominees;

(v) an order that the Defendant execute all documents necessary to effect the transfer of Property B43 within 7 days of a request by the Plaintiff's solicitors to do so; and

(vi) in default an order that the Senior Assistant Registrar be empowered to execute the documents for the Defendant.

Plaintiff's Contention

[7] The Plaintiff contended that the lien they hold over Property B42 is an equitable interest; that prevailed over the Defendant's rights to Chan's estate as it was created before his bankruptcy.

[8] In support of this argument, the Plaintiff cited the case of Perwira Affin Bank Bhd v. Selangor Properties Sdn Bhd & Ors; [2010] 3 MLJ 43; [2010] 3 CLJ 45 wherein Abdul Malik Ishak JCA held at 55:

"A lien is said to be similar to an equitable mortgage where the lien-holder retains the issue document of title together with the duplicate of the registered lease or a copy of the issue document of title issued under s 343(3) of the NLC. And in such a situation, the interest secured would be akin to that of a co-proprietor. The deposit of the issue document of title must have been made with the intention that the deposited document would serve as a security for the loan and that the loan must not be a registered charge but rather an unregistered interest recognised by the NLC. It is at this point of time that the iien creates what is known as an "equitable" interest in the land or lease and that would legally give the lien-holder the right to enter a lien-holder's caveat which would definitely trigger a statutory interest.

Once a lien-holder's caveat is entered, the lien-holder becomes a secured creditor. This is a very important factor to be reckoned with in the su