HONG LEONG BANK BHD V STAGHORN SDN BHD [2008] 2 MLJ 622

SEMENYIH LAND

RPs (also act as VENDORS)

27/2/1981 SPA - STAGHORN (the Respondent) agreed to purchase for RM 3, 024, 110 IDT 6/7/1981 (at time of execution paid RM 302, 411 (10%) VENDORS) Cl. 5 of SPA - upon payment of the full purchase price, the vendors were to execute a valid and registrable memorandum of transfer in favour of STAGHORN or its nominee. 5/3/1981 reg. private caveat

Loan

TECK LAY REALTY (sister company of STAGHORN) 1/7/1981 Charged the Semenyih land + a land in KL belongs to PARK AVENUE (TLRs holding company) as security of loan of RM 2, 720, 000 (to pay balance price of RM 2, 721, 699 VENDORS)

BBMB (Bank Bumiputra Malaysia Berhad)

PARK AVENUE 2/11/1981 IDT obtained from TLR was given to HL for purpose for HL to enter lien holders caveat 28/10/1981 Charged the Semenyih land as third party legal charges + another land Loan as security of loan of RM 5.5mil

HONG LEONG (the Appellant)

2/11/1981 STAGHORN applied for withdrawal of private caveat + HL applied for entry of lien holders caveat *withdrawal - to enable HLs lien holder caveat to be registered

CREATION AND EFFECT OF LIENS S 281 of NLC (1) Any proprietor may deposit with any other person or body, as security for a loan, his issue document of title and that person or body (a) may thereupon apply for the entry of a lien-holders caveat; and (b) shall, upon the entry of such a caveat, become entitled to a lien over the land (2) Where the holder of any lien has obtained a judgment for the amount due to him thereunder, he shall be entitled to apply to the court for, and obtain forthwith, an order for sale of the land (3) Any such application shall be made in accordance with any law for the time being in force relating to civil procedure; and the provisions of ss 257 to 259 and ss 266 to 269 shall apply, mutatis mutandis, where any such application has been made as they apply where a chargee applies for an order under s 256.

S 330 of NLC (1) Any person or body with whom the issue document of title to any land, or any duplicate lease, has been deposited as security for a loan may, as provided in s 281, apply to the Registrar under this section for the entry of a lien holder's caveat in respect of the Land or lease in question.

8/11/1981 JONG ANG & JEGA(acting for PARK AVENUE)

MOT

HL

9/11/1981 Pending presentation and registration of MOT, TLR executed a charge-inescrow HL

12/11/1981 BBMB lodged private caveat v the Semenyih land (because TLR not yet executed the charge in its favour as security of loan RM 2, 720, 000) EFFECT OF BBMBS CAVEAT transfer of land from VENDORs TLR + charge of land by TLR to HL = cdnt be registered (VENDORs remains as RPs) + HL only had lien for a loan to PARK AVENUE

13/9/1983 HL obtained Judgement v PARK AVENUE (defaulted in repayment of loan) = by virtue of s 281(2) entitled to apply for ORDER FOR SALE