Date and Time: Thursday, 29 June 2023 10:04:00PM MYT

Job Number: 200322263

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1. (�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit
[2014] 10 MLJ 329
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 CONSOLIDATED CREDIT CO SDN BHD v GLADYS LOH & ORS (AS THE
EXECUTRIX OF THE ESTATE OF LOH HOOT YEANG, DECEASED) AND
ANOTHER SUIT
CaseAnalysis | [2014] 10 MLJ 329

(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix
of the estate of Loh Hoot Yeang, deceased) and another suit
[2014] 10 MLJ 329
Malayan Law Journal Reports

HIGH COURT (PULAU PINANG)

S NANTHA BALAN JC
ORIGINATING SUMMONS NOS 24 591 OF 2008 AND 25 60 OF 2008
9 September 2013

Case Summary
Land Law —Lien —Lien holder`s caveat —Lien holder`s caveat entered when private caveat already existed
on register document of title —Whether lien holder`s caveat a nullity —Whether s 322(2) read with s 330(3)
of the National Land Code ('NLC') breached —Whether evidence showed party had no right to lodge lien
holder`s caveat —Whether s 331(4) of the NLC allowed persons other than registered proprietor to apply to
cancel lien holder`s caveat —Whether wanton inequitable conduct caused party to lose claim to prior
equitable right to lien —Whether condoning of such claimed right would prejudice third party bona fide
purchaser for value without notice

In the originating summons ( 'the OS' ) herein, the plaintiff ('CC' ) was a licensed moneylender wholly owned by Loh
Hoot Yeang (�Loh�), his wife and two sons, all of whom were directors and shareholders of the company. Loh,
who was CC�s managing director, owned a piece of property (�the land�).. The applicant in the originating motion
(�the OM�) herein, Derrick Edwin David (�Derrick�) had been in occupation of the land since 1970 and he
claimed Loh orally agreed to sell him the land for RM60,000. In a suit filed by Derrick ( the 2000 Suit ), the High
Court ordered the sale agreement to be specifically performed. On appeal by Loh, the Court of Appeal affirmed the
High Court 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
ie 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. Loh died while the OS and OM proceedings were underway but at no
time whatsoever did Loh (or his estate following his death) or CC apply to remove any of the caveats Derrick had
lodged; nor did any of them ever intimate to Derrick at any time whatsoever that the title to the land had been in
CC�s possession since 1998. Derrick�s contentions were that (a) CC�s lien holder`s caveat was a nullity as it was
entered when his second private caveat was already on the register in contravention of s 322(2)(c) read together
with s 330(3) of the National Land Code (�the NLC�) (b) no satisfactory or credible evidence had been adduced to
show Loh had deposited the title to the land with CC in 1998 (c) even if such deposit of title was true, CC could only
 Page 2 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

claim a right to a lien in equity but Derrick, as a bona fide purchaser for value of the land, never had any prior notice
of such a right, and (d) even if CC claimed it had acquired a prior right to a lien in equity, that priority was lost as a
result of CC�s failure to assert and make known its rights at any time before Derrick became the beneficial owner
of the land when he paid Loh the full purchase price. CC, on the other hand, contended that Derrick had no locus
standi to apply to cancel the lien holder`s caveat as only the registered owner of the land could do so. CC also
submitted that, at the very least, its equitable right to enter a lien holder`s caveat at any time it chose to do so was
acquired prior in time and was never extinguished; hence, the argument that its delay in entering the caveat had
caused CC to lose that priority was untenable.

Held , inter alia, allowing the OM and dismissing the OS:

(1) The entry of CC�s lien holder`s caveat on 5 June 2007 subsequent to the private caveat already entered
by Derrick on 4 June 2007 breached s 322(2) read with s 330(3) of the NLC and it was therefore in law
invalid and a nullity (see para 111).

(2) The overall probabilities of the case showed it was more probable Loh did not deposit the title to the land
with CC in 1998. CC�s stand that it was entitled to lodge a lien holder`s caveat at any time was no answer
to the question why it did nothing before lodging the caveat after nine years, why it did not intervene to
assert its rights in the 2000 Suit or why it did not apply to remove Derrick�s first caveat entered in
February 2000. Loh�s statutory declaration when he applied for a replacement title stated he had the title
to the land with him all along and that he never charged it to any bank. CC failed to explain why its audited
accounts in 1998 and 2005, signed off by Loh and his son, declared that the loan to the director was
�unsecured� . In accepting the RM60,000 from Derrick, Loh did not say anything about the alleged
deposit of title with CC; neither did he nor CC�say anything about it in the 2000 suit or in the proceedings
before the Court of Appeal or the Federal Court (see paras 96, 97(a), (b), (c), (e), (f), (g), (h) & (i)).

(3) 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
recognised 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 (see paras 40 41 & 44).

(4) Derrick had been in occupation of the land since 1970. He had an order for specific performance of the
agreement for sale of the land in his favour; he had paid the full purchase price for the land to Loh who
thereupon no longer enjoyed any beneficial interest in the land and held it as bare trustee for Derrick who
became the proprietor in equity or beneficial owner of the land. All these gave Derrick the locus standi to
apply to have the lien holder`s caveat cancelled (see paras 38(a), (b), (d) & 39).

(5) Assuming the title to the land was deposited with CC as claimed and even if CC had a lien in equity which
accrued prior in time to Derrick�s acquisition of beneficial interest in the land, such priority was lost or
forfeited due to CC�s wanton inaction, omission and inordinate delay as CC delayed in lodging the lien
holder`s caveat for nine years and only after Derrick had obtained an order for specific performance and
his beneficial interest to the land had accrued with the payment of the full purchase price to Loh (see paras
133 134 & 139).

(6) CC�s lodging of the lien holder`s caveat prejudiced Derrick. If it had been lodged in 1998 or before the
start of the trial in the 2000 Suit, Derrick would have known about CC�s purported interest and could have
taken the appropriate legal action then. CC was guilty of inordinate and unexplained delay to say nothing of
inaction or omission vis- is notification to Derrick. Loh and CC were so closely intertwined it was farcical of
CC to disavow any knowledge of the 2000 Suit. As CC�s managing director it was incumbent upon Loh to
have taken the necessary action to protect CC�s interests. He should have put Derrick on notice that the
title (allegedly) had been deposited with CC as security for loans. Instead, CC and Loh turned a blind eye
and did nothing. Since Derrick�s rights as a bona fide purchaser for value without notice of any earlier lien
 Page 3 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

in equity had crystallised and intervened, CC�s lien in equity (if any) no longer had any currency and could
not be enforced (see paras 135 138 & 140).

Dalam saman pemula (�SP�) di sini, plaintif (' CC' ) merupakan pemberi pinjaman wang berlesen yang dimiliki
sepenuhnya oleh Loh Hoot Yeang (�Loh�), isteri dan dua orang anak lelakinya, kesemua adalah pengarah dan
pemegang saham syarikat. Loh, yang merupakan pengarah urusan CC, memiliki sebidang tanah (�tanah
tersebut�). Pemohon dalam usul pemula (�UP�) di sini, Derrick Edwin David (�Derrick�) telah menduduki tanah
tersebut sejak tahun 1970 dan dia mendakwa Loh�secara lisan telah bersetuju untuk menjual kepadanya tanah
tersebut untuk RM60,000. Dalam guaman yang difailkan oleh Derrick (�Guaman 2000�), Mahkamah Tinggi telah
memerintahkan perjanjian jualan dilaksanakan secara spesifik. Dalam rayuan oleh Loh, Mahkamah Rayuan
mengesahkan keputusan Mahkamah Tinggi. Permohonannya untuk kebenaran merayu ke Mahkamah Persekutuan
ditolak. Sejurus selepas itu, Derrick telah membayar, dan Loh telah menerima harga belian RM60,000 itu untuk
tanah tersebut tetapi Loh tidak memindahkan tanah tersebut kepada Derrick dan tidak menyerahkan surat ikatan
hak milik kepadanya. Sepanjang Guaman 2000 itu Derrick telah memasuki kaveat persendirian ke atas tanah
tersebut untuk melindungi kepentingannya dan apabila ia luput, dia telah memasuki kaveat kedua pada 4 Jun 2007
iaitu lebih kurang seminggu selepas dia membayar Loh RM60,000 itu. Pada keesokan harinya, CC telah
memasukkan kaveat pemegang lien ke atas tanah tersebut dengan mendakwa Loh telah mendepositkan hak milik
tanah tersebut dengan CC pada tahun 1998 sebagai cagaran untuk pinjaman-pinjaman yang telah diberikan
kepada CC. CC juga telah memperoleh penghakiman terhadap Loh untuk wang yang dia terhutang dengan syarikat
itu. Dalam SP itu, CC memohon, antara lain, deklarasi agar kaveat pemegang liennya adalah sah meskipun ia
dimasukkan selepas kemasukan kaveat persendirian Derrick; perintah agar tanah tersebut dijual melalui lelongan
awam untuk merealisasikan penghakiman CC terhadap Loh dan perintah agar kaveat persendirian Derrick
dibatalkan. Dalam Usul pemulanya, Derrick memohon, antara lain, perintah agar kaveat pemegang lien dibatalkan;
deklarasi bahawa dia adalah pemilik benefisiari tanah tersebut; perintah agar CC menyerahkan kepadanya atau
peguam-peguamnya surat ikatan hak milik tanah tersebut dan agar Loh dan CC membayar ganti ruginya
sebagaimana ditaksir oleh pendaftar akibat daripada kemasukan kaveat pemegang lien itu. Loh telah meninggal
dunia semasa prosiding-prosiding SP dan UP dijalankan tetapi Loh (atau harta pusakanya berikutan kematiannya)
atau CC tidak pernah pada bila-bila masa memohon untuk membatalkan mana-mana kaveat yang dimasukkan oleh
Derrick; dan tiada antara mereka telah memberitahu kepada Derrick pada bila-bila masa bahawa hak milik tanah
tersebut berada dalam milikan CC�sejak 1998. Hujah-hujah Derrick adalah bahawa: (a) kaveat pemegang lien CC
adalah terbatal kerana ia dimasuki apabila kaveat keduanya telah pun didaftarkan bertentangan dengan s 322(2)(c)
dibaca bersama s 330(3) Kanun Tanah Negara (�KTN�); (b) tiada keterangan meyakinkan atau boleh dipercayai
yang telah dikemukakan untuk menunjukkan Loh telah mendepositkan hak milik tanah tersebut dengan CC pada
tahun 1998; (c) jika pun deposit berhubung hak milik itu adalah benar, CC hanya boleh menuntut hak untuk lien
dalam ekuiti tetapi Derrick, sebagai pembeli bona fide untuk nilai tanah tersebut, tidak pernah mendapat apa-apa
notis terdahulu tentang hak tersebut; dan (d) jika pun CC mendakwa ia telah memperoleh hak terdahulu kepada
lien dalam ekuiti, keutamaan itu dilupuskan akibat daripada kegagalan CC untuk bertegas dan membuat hak-
haknya diketahui pada bila-bila masa sebelum Derrick menjadi pemilik benefisiari tanah tersebut apabila dia
membayar Loh harga belian penuh. CC, sebaliknya, berhujah bahawa Derrick tiada locus standi untuk memohon
membatalkan kaveat pemegang lien kerana hanya pemilik berdaftar tanah tersebut boleh berbuat demikian. CC
juga berhujah bahawa, sekurang-kurangnya, hak ekuitinya untuk memasukkan kaveat pemegang lien pada bila-bila
masa yang dipilihnya untuk berbuat demikian telah diperoleh terlebih dahulu dalam masa dan tidak pernah
dilupuskan; justeru, hujah bahawa kelewatannya memasuki kaveat yang menyebabkan CC untuk hilang keutamaan
tersebut tidak dapat dikekalkan.

Diputuskan , antara lain, membenarkan UP dan menolak SP:

(1) Kemasukan kaveat pemegang lien CC pada 5 Jun 2007 berikutan kaveat persendirian yang telah pun
dimasukkan oleh Derrick pada 4 Jun 2007 telah melanggar s 322(2) dibaca bersama s 330(3) KTN dan
oleh itu ia tidak sah dari segi undang-undang dan adalah terbatal (lihat perenggan 111).

(2) Keseluruhan kebarangkalian kes menunjukkan ia lebih berkemungkinan Loh tidak mendepositkan hak
milik tanah tersebut dengan CC dalam tahun 1998. Pendirian CC bahawa ia berhak untuk memasukkan
 Page 4 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

kaveat pemegang lien pada bila-bila masa tidak menjawab soalan kenapa ia tidak berbuat apa-apa
sebelum measukkan kaveat itu selepas sembilan tahun, kenapa ia tidak campur tangan untuk
menegaskan haknya dalam Guaman 2000 itu atau kenapa ia tidak memohon untuk membatalkan kaveat
pertama Derrick yang dimasuki dalam bulan Februari 2000. Deklarasi statutori Loh�semasa dia memohon
untuk menggantikan hak milik menyatakan dia sentiasa mempunyai hak milik ke atas tanah tersebut
dengannya dan bahawa dia tidak pernah mencagarkannya kepada mana-mana bank. CC gagal untuk
menjelaskan kenapa akaun-akaunnya yang diaudit dalam tahun 1998 dan 2005, yang ditandatangani oleh
Loh dan anak lelakinya, mengisytiharkan bahawa pinjaman kepada pengarah adalah �unsecured� .
Dalam menerima RM60,000 daripada Derrick, Loh tidak menyatakan apa-apa tentang deposit hak milik
dengan CC yang dikatakan itu; dia dan CC juga tidak menyatakan apa-apa tentangnya dalam Guaman
2000 atau dalam prosiding-prosiding di hadapan Mahkamah Rayuan atau Mahkamah Persekutuan (lihat
perenggan 96, 97(a), (b), (c), (e), (f), (g), (h) & (i)).

(3) Derrick mempunyai locus standi untuk memohon kaveat pemegang lien dibatalkan. Tiada apa-apa dalam
peruntukan s 331(4) KTN menyokong hujah bahawa hanya pemilik berdaftar boleh memohon untuk
membatalkan kaveat pemegang lien yang tersilap atau tidak betul dimasukkan. Seksyen 331(4)(b),
sebenarnya, secara tersirat mengiktiraf bahawa orang selain pemilik berdaftar boleh membuat
permohonan tersebut kerana ia mempertimbangkan pemberian remedi melalui pampasan kepada �any
person or body� yang mungkin mengalami kehilangan dan kerugian dengan kemasukan kaveat
pemegang lien itu (lihat perenggan 40 41 & 44).

(4) Derrick telah menduduki tanah tersebut sejak tahun 1970. Dia mempunyai perintah untuk pelaksanaan
spesifik berhubung perjanjian jualan tanah tersebut yang menyebelahinya; dia telah membayar penuh
harga belian untuk tanah tersebut kepada Loh yang tidak lagi menikmati apa-apa kepentingan benefisiari
atas tanah tersebut dan memegangnya sebagai pemegang amanah asas untuk Derrick yang menjadi
pemilik dalam ekuiti atau pemilik benefisiari tanah tersebut. Kesemua ini memberikan Derrick locus standi
untuk memohon agar kaveat pemegang lien dibatalkan (lihat perenggan 38(a), (b), (d) & 39).

(5) Dengan andaian hak milik tanah tersebut telah didepositkan dengan CC�sebagaimana didakwa dan jika
pun CC mempunyai lien dalam ekuiti yang terakru sebelum masa pemerolehan kepentingan benefisiari
Derrick ke atas tanah tersebut, keutamaan tersebut terlupus atau dirampas akibat daripada CC yang tidak
bertindak, peninggalan dan kelewatan melampau kerana CC melengah-lengahkan kemasukan kaveat
pemegang lien selama sembilan tahun dan hanya selepas Derrick mendapat perintah untuk pelaksanaan
spesifik dan kepentingan benefisiarinya ke atas tanah tersebut terakru dengan pembayaran harga belian
penuh kepada Loh (lihat perenggan 133 134 & 139).

(6) Kemasukan kaveat pemegang lien CC telah memprejudiskan Derrick. Jika ia telah dimasukkan dalam
tahun 1998 atau sebelum perbicaraan bermula dalam Guaman 2000 itu, Derrick mungkin telah
mengetahui tentang kepentingan yang dimaksudkan CC dan mungkin dapat mengambil tindakan undang-
undang yang sesuai pada masa itu. CC adalah bersalah kerana kelewatan yang melampau dan tidak
dijelaskan untuk tidak menyatakan apa-apa tentang ketiadaan sebarang tindakan atau peninggalan vis- is
pemberitahuan kepada Derrick. Loh dan CC begitu rapat dan saling berkaitan sehinggakan ia melucutkan
untuk CC menyangkal apa-apa pengetahuan tentang Guaman 2000 itu. Sebagai pengarah urusan CC
adalah wajib untuk Loh mengambil apa-apa tindakan yang perlu untuk melindungi kepentingan CC. Dia
patut memberi notis kepada Derrick bahawa hak milik (sepertimana dikatakan) telah pun didepositkan
dengan CC�sebagai cagaran untuk pinjaman-pinjaman tersebut. Sebaliknya, CC dan Loh tidak peduli dan
tidak berbuat apa-apa. Oleh kerana hak Derrick�sebagai pembeli bona fide untuk nilai tanpa notis tentang
apa-apa lien dalam ekuiti sebelum ini telah diperjelaskan dan dicampur tangan, lien dalam ekuiti CC (jika
ada) bukan lagi terkini dan tidak boleh dikuatkuasakan (lihat perenggan 135 138 & 140).

Notes

For a case on lien holder`s caveat, see 8(2) Mallal s Digest (4th Ed, 2013 Reissue) para 3779.

Cases referred to

Abigail v Lapin
[1934] AC 491, PC
 Page 5 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

Bhagwan Singh & Co Sdn Bhd v Hock Hin Bros Sdn Bhd
[1987] 1 MLJ 324

Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd

[1996] 2 MLJ 12, FC

Butler v Fairclough
(1917) 23 CLR 78, HC

Chua Hee Hung & Ors v QBE Supreme Insurance Bhd

[1990] 1 MLJ 480, SC

Chuah Eng Khong v Malayan Banking Bhd

[1998] 3 MLJ 97
[1999] 2 CLJ 917, FC

Hock Hua Bank (Sabah) Bhd v Yong Liuk Thin & Ors
[1995] 2 MLJ 213, CA

Hong Kong & Shanghai Banking Corporation v Hj Salam Hj Daud (Mohd Azni bin Sudin, Auction
Purchaser, RHB Bank Bhd Intervenor)
[2002] 3 MLJ 483
[2002] 4 CLJ 659, HC

Jasalam (M) Sdn Bhd v Wong Koon Yee

[2000] 3 MLJ 115
[2002] 2 CLJ 377, CA

Lee Chin Cheng Dengkil Oil Palm v Kaplands Sdn Bhd

[2003] 1 MLJ 177, CA

Loke Yew v Port Swettenham Rubber Co Ltd

[1913] AC 491, PC

Mercantile Bank Ltd v The Official Assignee of the Property of How Han Teh
[1969] 2 MLJ 196

Minang Bina Sdn Bhd v Yahya Mohd Said & Yang Lain
[1992] 1 CLJ 70, HC

Ng Hee Thoong & Anor v Public Bank Bhd

[1995] 1 MLJ 281, CA

Smith v Clay
(1767) 3 Bro C, CA
 Page 6 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

Standard Chartered Bank v Yap Sing Yoke

[1989] 2 MLJ 49
[1989] 2 CLJ (Rep) 500, HC

Syed Ibrahim bin Syed Abdul Rahman v Liew Su Chin (F)

[1984] 1 MLJ 160, FC

Temenggong Securities Ltd & Anor v Registrar of Titles, Johore & Ors
[1974] 2 MLJ 45, FC

United Malayan Banking Corporation Bhd v Goh Tuan Laye & Ors
[1976] 1 MLJ 169, FC

Vallipuram Sivaguru v PCRM Palaniappa Chetty Official Administrator as administrator of the estate
of Gan Inn, deceased
[1937] 1 MLJ 59

Wilkins & Others v Kannammal (F) & Anor

[1951] 1 MLJ 99, CA

Woon Kim Poh v Sa amah Bt Hj Kasim

[1987] 1 MLJ 400, SC

Yeong Ah Chee v Lee Chong Hai & Anor and other appeals
[1994] 2 MLJ 614, SC

Legislation referred to

National Land Code

ss 281 ,
281(1) ,
(2) ,
320(2) ,
322(1) ,
(2) ,
(6) ,
328(1) ,
330 ,
330(1) ,
(2)(c) ,
(3) ,
331 ,
331(4) ,
(4)(b)

Paari Perumal (MS Rajendran and Nurul Aliaa Azman with him) (Rajen and Lim) for the plaintiff.
 Page 7 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

Jenny Saw Lye Hong (Choy & Associate) for the first defendant.

Robert Lazar (Siti Hawa bt Ahmad Aani with him) (Shearn Delamore & Co) for the second
defendant.

Ooi Chooi Ghaik (Penang Legal Advisor Office) for the third defendant.

S Nantha Balan JC:

INTRODUCTION

1This case raises several issues pertaining to, inter alia, statutory rights and interest as may arise under the
National Land Code (�the NLC�) and equitable interests over land:

(a) specifically, the issues pertain to the creation of a statutory lien and/or a lien in equity and whether a lien in
equity may exist alongside and with priority over any statutory right or interest that may be acquired under
the NLC or any other equitable right or interest;

(b) next, the case examines the rule relating to priority of interest ie that in equity, all things being equal, the
first in time prevails and whether priority of any equitable interests may be lost or forfeited due to any act or
omission or indolence of the claimant of the prior equitable interest which might have had the effect of
inducing a claimant later in time to act to his prejudice;

(c) a significant aspect of the case is whether a lien holder`s caveat which was entered whilst there is already
a private caveat on the register of titles contravenes
ss 322(2) and
330(3) of the
NLC and is invalid and a nullity;

(d) the other issue that arose for consideration is whether any person (not being a registered proprietor of
land) but directly affected by and who had suffered loss and damage as a result of a lien holder`s caveat
which had been improperly entered has locus standi and may apply to have the lien holder`s caveat
cancelled; and
(e) the case also considers the nature and quality of evidence necessary to qualify as credible evidence to
persuade the court as a matter of probabilities that there was a deposit of title as security for a loan for the
purposes of fulfilling the statutory pre-requisite under
s 330(1) of the
NLC .

THE PARTIES

2The parties to these consolidated proceedings are (�(�Consolidated Credit�)�) Co Sdn Bhd (as the plaintiff in
the originating summons) and Gladys Loh (IC No: 250922 07 5052) dan Loh Wei Leng (IC No: 480129 07 5448) (as
the executrix of the estate of Loh Hoot Yeang, deceased), Derrick Edwin David and the pendaftar hak milik tanah
as the first, second and third defendants respectively:

(a) in the originating motion, Derrick Edwin David is the plaintiff and all other parties in the originating
summons are the defendants;

(b) the dominant parties to the dispute arising under these proceedings are (�(�Consolidated Credit�)�) Co
Sdn Bhd ( (�(�Consolidated Credit�)�) ) and Derrick Edwin David (�Derrick�) but the entire factual
 Page 8 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

substratum of this case revolves around the conduct and/or knowledge of the late Loh Hoot Yeang
(�Loh�) whose estate is now a party to but remained passive in these proceedings; and
(c) Loh was the managing director of (�Consolidated Credit�) and resigned from that position on 22 May
2007. The dispute pertains to property known as Lot 1064 held under Geran No Perserahan 3158,
Seksyen 2, Daerah Timur Laut, Bandar Georgetown, Pulau Pinang which was also known as No 13 Jalan
Brook, 10450 Pulau Pinang ('the property').

THE DISPUTE BETWEEN DERRICK AND LOH

3The property was at all times owned by Loh. The legal battle started off initially between Derrick and Loh over the
property:

(a) Derrick has been in occupation of the property since 1970. He claimed that Loh had orally agreed to sell
the property to him for RM60,000. A dispute arose between Derrick and Loh over the property and
Derrick�sued Loh by way of Penang High Court Suit No 22 246 of 2000 (MT4) ( the 2000 Suit ) for an
order of specific performance to enforce the oral agreement;

(b) on 13 November 2003 judgment was given in favour of Derrick in the 2000 suit. That judgment essentially
declared that Derrick has been in occupation of the property since 1970 and that Loh had agreed to sell the
property to Derrick for RM60,000 and ordered that that agreement be specifically performed. In pith and
substance it was an order for specific performance of an oral agreement between Derrick and Loh;

(c) Loh appealed to the Court of Appeal and the appeal was dismissed on 25 January 2006;

(d) on 21 March 2007, Loh�s application for leave to appeal to the Federal Court was dismissed. Loh was
stuck with the judgment of the High Court in the 2000 Suit;

(e) immediately thereafter, on or around 26 March 2007 Derrick duly tendered payment of RM60,000 being the
full purchase consideration for the property which was unconditionally accepted by Loh. Despite
exhausting all legal avenues and challenges, and after having accepted the sum of RM60,000 from
Derrick, Loh did not transfer the property to Derrick;

(f) during the currency of the 2000 Suit, and in order to protect his interest over the property, Derrick entered a
caveat in respect of the property on 26 February 2000 ( (�the first caveat�) );

(g) under s 328(1) of the NLC, a private caveat is valid for six years only and automatically lapses at the end of
that period.
Section 328(1) of the
NLC reads as follows: '(1) A private caveat shall, if not
sooner withdrawn under section 325 or lapsing pursuant to sub-section (1B) of section 326 or removed by
the registrar pursuant to an order of the court under s 327, , and the entry thereof may be cancelled
accordingly by the Registrar, either of his own motion or on an application in that behalf by any interested
person or body ';

(h) hence, by virtue of s 328(1) NLC, (�the first caveat�) lapsed on 25 February 2006. Then, after he obtained
judgment in the 2000 Suit, Derrick entered a further caveat on 4 June 2007 ( the second caveat );

(i) the second caveat was predicated on the fact that Derrick had obtained an order for specific performance
and that he had paid the purchase consideration to Loh and that the latter had failed to transfer the
property to him; and
(j) the second caveat lapsed on 3 June 2013. However, shortly before the second caveat lapsed, Derrick
entered yet another caveat on 16 May 2013 ( the third caveat ). The third caveat still remains in force. It is
significant that at no time did Loh (and after he died, his estate) apply to remove any of the caveats lodged
by Derrick.

EMERGENCE OF (�Consolidated Credit�) AS A

CLAIMANT
 Page 9 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

4After Derrick entered the second caveat on 4 June 2007, (�Consolidated Credit�) reared their head and surfaced
for the first time as a party which claimed to have a lien over the property. They entered a lien holder`s caveat over
the property on 5 June 2007:

(a) the entry of (�Consolidated Credit�) changed the equation of the legal battle as they claimed that in 1998
Loh had deposited the original title to the property with them as security for loans granted by them to Loh;

(b) to that end, in 2007, (�Consolidated Credit�) filed a suit against Loh and obtained judgment in default
against him. They now seek to obtain an order for sale of the property as provided for under the NLC. They
are also seeking to have Derrick�s second caveat removed; and
(c) it is significant that after (�the first caveat�) was entered on 26 February 2000 (�Consolidated Credit�)
did not apply to have it removed.

5On 16 April 2008, (�Consolidated Credit�) filed an Originating Summons No 24 591 of 2008 ( 'the OS' ) whereas
Derrick filed an Originating Motion No 25 60 of 2008 on 4 June 2008 (�the OM�). Both the OS and OM were
consolidated by the order of court dated 23 June 2009. During the currency of the OM and OS, Loh died and was
and still is the registered owner of the property. These consolidated proceedings are essentially between Derrick
and (�Consolidated Credit�). Neither Loh (when he was alive) nor his estate have filed any affidavits in these
proceedings. They remained passive.
WHETHER THE NG HEE THOONG PRINCIPLE
APPLIES

6Relying on the fact that neither Loh (when he was alive) nor his estate have filed any affidavits in these
proceedings, Mr Paari Perumal, learned counsel for (�Consolidated Credit�) urged me to apply the principle
enunciated by the Court of Appeal in Ng Hee Thoong & Anor v Public Bank Bhd
[1995] 1 MLJ 281 ( Ng Hee Thoong�s principle ) and rule that as the
averments by (�Consolidated Credit�) stand uncontradicted by Loh (and his estate), they are deemed admitted
and this therefore precludes any suggestion to the contrary by Derrick who sought to repudiate all of
(�Consolidated Credit�) s averments particularly with regards to the alleged deposit of title to the property in 1998
by Loh to (�Consolidated Credit�) as security for loans by the latter to the former. ( Ng Hee Thoong�s principle )
and rule that as the averments by (�Consolidated Credit�) stand uncontradicted by Loh (and his estate), they are
deemed admitted and this therefore precludes any suggestion to the contrary by Derrick who sought to repudiate all
of (�Consolidated Credit�) s averments particularly with regards to the alleged deposit of title to the property in
1998 by Loh to (�Consolidated Credit�) as security for loans by the latter to the former.

7Of course, ordinarily I might have been persuaded to take that route and make the necessary inferences and
assumptions/conclusions as a natural consequence of a failure by the opposite side to file an affidavit responding to
and replying to all of the material aspects of the averments in the first party s affidavit, but in the present case it
would be naive to regard this as an ordinary case as the relationship between the parties is relevant and significant
in that there is a closeness of relationship or consanguinity between Loh (and his family) and (�Consolidated
Credit�) of such a magnitude that it would be artificial and unreal to treat them as separate parties.

8In my view, they are one and the same. My conclusion in this regard is predicated on the incontrovertible fact that
(�Consolidated Credit�) is essentially a family owned company with Loh as its managing director and shareholder,
and his wife (Gladys Loh Yeap Chin Joo) and children (Laurence Loh Kwong Yu and Nigel Loh Kwong Weng) as
directors and shareholders. Loh was initially the director primarily responsible for the financial affairs of the
company for the purposes of the declarations made with respect to the audited accounts of (�Consolidated
Credit�). Later, Nigel Loh Kwong Weng became the director primarily responsible for the financial affairs of the
company. As such, it is no surprise that neither Loh (when he was alive) nor his estate had filed any affidavit to
repudiate the averments made by (�Consolidated Credit�).
 Page 10 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

9In my view, if the Ng Hee Thoong s principle is applied across the board without exception, then there is a
possibility that such indiscriminate application of that very sound principle is liable to produce manifest injustice. As
such, in appropriate circumstances and situations, a departure from the Ng Hee Thoong s principle may be
warranted. In such a situation, the court should not rush to draw conclusions merely because of the non-reply by
affidavits by any party, particularly where there may be active or passive or implicit cooperation between the maker
of the averment of the one side and the non-reply by the other party on the other side.

10In this case, in any which way one looks at it, the Loh family and (�Consolidated Credit�) are inseparable.
Hence, whether the property remains with Loh or his estate or falls into the hands of or is disposed of by
(�Consolidated Credit�), it still remains as part of the assets of the Loh estate either directly or indirectly through
the shareholding and complete control of (�Consolidated Credit�). It was for these exceptional reasons that I
declined the invitation to apply the Ng Hee Thoong s principle and instead tested the averments made by
(�Consolidated Credit�) on the one side with the diametrically opposite averments made by Derrick on the other
side.
SYNOPSIS OF THE POSITIONS TAKEN BY THE
PARTIES

11Although it is alleged that in 1998 Loh had deposited the original title to the property with (�Consolidated
Credit�) as security for loans granted by (�Consolidated Credit�) to Loh, it is material to note that the former never
lodged any lien holder`s caveat until 5 June 2007 (almost nine years later). In fact, (�Consolidated Credit�) did
absolutely nothing from the time the title to the property was allegedly deposited with them until the lien holder`s
caveat was lodged on 5 June 2007. But by the time (�Consolidated Credit�) entered the lien holder`s caveat on 5
June 2007, Derrick�s first caveat had lapsed but the second caveat was already on the register of title for the
property. One of the critical issues that arose for consideration in this case is whether the lien holder`s caveat
lodged by (�Consolidated Credit�) is valid in view of the express prohibition in
s 330(3) read with
ss 322(1) and
(2)(c) of the
NLC which clearly provides that no lien holder caveat shall be entered if
there is already a private caveat on the register of title.

12Apart from contending that there was no deposit or that there could not have been any deposit of title by Loh to
(�Consolidated Credit�) in 1998, Derrick is also relying chiefly on the abovementioned statutory provisions in order
to impugn the lien holder`s caveat whereas (�Consolidated Credit�) maintain that they have a valid lien holder`s
caveat, or alternatively that they have a lien holder`s caveat in equity, which they say arose earlier in point of time
and which prevails over Derrick�s alleged rights in and over the property. Loh passed away on 18 January 2011
and has been substituted by Gladys Loh and Loh Wei Leng as the executrix of the estate of Loh via court order
dated 13 September 2012.

13As stated earlier, the NLC prohibits the entry of a lien holder`s caveat if there is already a private caveat on the
register. Strictly speaking, the pendaftar hak milik tanah ought to have rejected the application by (�Consolidated
Credit�) for entry of a lien holder`s caveat. But that did not happen. Instead the lien holder`s caveat was registered
notwithstanding the express statutory prohibition. The entry of the lien holder`s caveat was obviously a mistake on
the part of the pendaftar hak milik tanah as they ought to have rejected it because of the presence of Derrick�s
second caveat. It therefore came as no surprise that the pendaftar hak milik tanah admitted their mistake and said
in their letter dated 29 May 2008 that the lien holder`s caveat should not have been registered and should
accordingly be set aside , and that an order of court should be obtained to set aside the lien holder`s caveat (see p
126 (�bundle B�)). In keeping with that position, Ms Ooi Chooi Ghaik, senior federal counsel who appeared on
behalf of the pendaftar hak milik tanah agreed with Mr Robert Lazar (learned counsel appearing for Derrick) and
said that the lien holder`s caveat was wrongly entered and ought to be set aside.

14It was Mr Lazar�s primary argument, that there was no basis for a lien holder`s caveat as there is no satisfactory
or credible evidence of Loh having deposited the original title to the property with (�Consolidated Credit�) in 1998.
He said that if all the affidavits are analysed and subjected to critical analysis then it would be apparent that the
 Page 11 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

suggestion by (�Consolidated Credit�) that Loh had deposited the original title to the property in 1998 would be an
inherently incredible one.

15Secondly, he said that in any event, the lien holder`s caveat was in law, a nullity having regard to the provisions
of the NLC and that, consequently, the said lien holder`s caveat ought to be set aside.

16Thirdly, he said even if Loh had deposited the title in 1998 and there is only a lien in equity, it had no bearing on
Derrick who was a bona fide purchaser for value without notice of any earlier lien in equity.

17Then, Mr Lazar�said that any priority based on the lien in equity was lost due to Derrick�s beneficial interest
crystallising in March 2007 when he paid the full purchase consideration to Loh�s solicitors and which was duly
accepted.

18Mr Lazar concluded by submitting that any priority created by the alleged lien in equity was in any event lost due
the inaction or failure or indolence on the part of (�Consolidated Credit�) to enter the lien holder`s caveat at any
time prior to 5 June 2007 and their failure to intervene in the 2000 Suit commenced by Derrick against Loh and to
assert their rights as the holders of a lien in equity.

19He emphasised that (�Consolidated Credit�) knew about the 2000 Suit and had stood by and allowed the legal
action to take its course and remained passive throughout the journey of the suit and did nothing even after
judgment was entered against Loh in 2003. He said that as Loh was Managing Director of (�Consolidated Credit�)
all along, the knowledge that Loh possessed as regards Derrick�s claim over the property and the 2000 Suit etc
must necessarily be imputed to (�Consolidated Credit�).

20It was only on 5 June 2007 that (�Consolidated Credit�) s lien holder`s caveat came to be registered which is
one day after Derrick�s private caveat had been entered on 4 June 2007. So it was just before 5 June 2007 that
(�Consolidated Credit�) took steps to lodge a lien holder`s caveat. By that time, Derrick had already obtained
judgment for specific performance in the 2000 Suit, and paid the purchase consideration to Loh�s solicitor who
accepted the same unconditionally. Also and very significantly, Derrick�s second caveat had already been
registered on 4 June 2007.

21On the other hand, Mr Paari Perumal took a preliminary point and contended that Derrick had no locus standi to
impeach the lien holder`s caveat. According to him, only the registered owner can apply to have the lien holder`s
caveat cancelled. It was also argued for (�Consolidated Credit�) that in any event, even if there is no valid lien
holder`s caveat, they still have a lien in equity and there were entitled to enter a lien holder`s caveat at any time. It
was also contended that with the lapse of Derrick�s second caveat, the argument about the lien holder`s caveat
being invalid due to the presence of Derrick�s second caveat no longer holds water. Hence, the lien holder`s
caveat must be regarded as valid and given full effect and enforced as such. It was also contended that as Derrick
had admitted during cross-examination on his affidavits that he could not prove any fabrication and conspiracy
between Loh and his family members to defeat the judgment that he had obtained against Loh, this court ought not
to entertain the invitation to impeach the assertion of a deposit of the title by Loh in 1998 as that would only be
feeding the fraud or fabrication theory which cannot be taken up in a contest of affidavits.

22I will now proceed to set out the factual narrative and highlight various parts of the submissions that were made
in respect of the issues that arose for consideration. For the purposes of easy identification and quick referencing,
the parties herein had filed a core bundle of cause papers (�bundle A�) and a core bundle of documents (
(�bundle B�) ).The documents in bundle A are all the cause papers relating to the applications filed by
(�Consolidated Credit�) Company Sdn Bhd (the OS) and Derrick (the OM). The documents in (�bundle B�) are all
the exhibits to the affidavits filed in the OS and OM respectively. As such, wherever necessary I shall refer to the
cause papers or documents by the page number in bundle A or B respectively. For ease of reference and to avoid
confusion, I shall refer to the parties as Loh, (�Consolidated Credit�) and Derrick respectively.
 Page 12 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

THE PREVIOUS SUITS AND THE OS/OM

23Before the OS and OM were filed, there were two civil actions:

(a) a civil action by Derrick against Loh via Penang High Court Civil Suit No 22 246 of 2000 ( the 2000 Suit )
wherein the High Court granted a declaration that Derrick is and has been in occupation of house No 13,
Brook Road, 10450 Penang pursuant to an agreement made sometime in August 1970 between Derrick as
purchaser and Loh as vendor, whereby Loh had agreed to sell and David had agreed to purchase the said
house for a purchase price of RM60,000 ( the 2003 judgment ); and
(b) a civil action brought by (�Consolidated Credit�) against Loh via Penang High Court Suit No 22 346 of
2007 to recover an outstanding sum of RM7,378,695 whereby a judgment in default was entered on 20
July 2007 ( 2007 debt recovery judgment ).

RELIEFS SOUGHT IN (�Consolidated Credit�) S OS

24These are the reliefs sought by (�Consolidated Credit�) in their OS:

(a) a declaration that the lien holders caveat lodged under Presentation No 7819/2007 against Lot No 1064,
Section 2 held under Geran Perserahan No 3158, Daerah Timur Laut, Bandar Georgetown, Pulau Pinang
bearing address No 13, Jalan Brook, 10450, Pulau Pinang ('the property') is valid notwithstanding that it
had only been lodged after the lodgment of Derrick�s private caveat on 4 June 2007 under Presentation
No 7777/2007;

(b) that pursuant to the order of the High Court dated 20 July 2007 under Penang High Court Civil Suit No 22
346 of 2007 (between (�Consolidated Credit�) as the plaintiff (the creditor) and Loh as the defendant (the
debtor)), the property under the lien holder`s Caveat Presentation No 7819/2007 be sold by way of public
auction;

(c) that the private caveat lodged on 4 June 2007 by the Derrick against the property under Presentation No
7777/2007 be cancelled;

(d) that the Registrar�s caveat lodged on 15 January 2008 by the pendaftar hak milik tanah against the
property under Presentation No 602/2008 be cancelled; and
(e) that the Derrick and the or their agent/or representative be restrained from lodging any further caveats on
the property.

RELIEFS SOUGHT IN Derrick�s OM

25These are the reliefs sought in the OM filed by Derrick:

(a) an order that the shall forthwith cancel and remove the lien holder`s Caveat Presentation No 7819/2007
lodged by (�Consolidated Credit�) Company Sdn Bhd against all that piece of land known as Lot 1064,
Section 2, Town of Georgetown, North East District, Penang held under Geran No Pendaftaran 3158 from
the register document of title;

(b) a declaration that Derrick is the beneficial owner of the land known as Lot No. 1064, Section 2, Bandar
Georgetown, Daerah Timur Laut, Pulau Pinang held under Geran No Pendaftaran 3158 ('the property') in
pursuant to the order of the High Court dated 13 November 2003 under Penang High Court Civil Suit No
22 246 of 2000;

(c) an order that (�Consolidated Credit�) Co do deliver the issue document of title in respect of the property
free from encumbrances to Derrick as beneficial owner of the property or to his solicitors, Messrs Shearn
 Page 13 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

Delamore & Co, 6th Floor, Wisma Penang Garden, No 42, Jalan Sultan Ahmad Shah, 10050 Penang
within seven days from the service of the order of court herein;

(d) an order that Loh Hoot Yeang and (�Consolidated Credit�) do pay damages to Derrick as a result of the
entry of the said lien holder`s Caveat Presentation No 7189/2007 to be assessed by the senior assistant
registrar of the High Court; and
(e) that the be directed to take all necessary steps and to make such necessary memorials or vesting order
to give effect to the order herein.

THE ISSUES

26The following are the issues that were formulated by the parties or which necessarily arose in the course of the
submissions that were taken before this court:

(a) whether Derrick, not being the registered proprietor of the property had the requisite locus standi to make
the application for cancellation of the lien holder`s caveat

(b) whether Loh did in fact lodge the issue document of title to the property with (�Consolidated Credit�) on
29 March 1998 as security for loans granted by the latter to the former

(c) whether (�Consolidated Credit�) s lien holder`s caveat which was entered one day after Derrick�s private
caveat contravenes
ss 322(2) and
320(2) of the
NLC and is invalid and a nullity;

(d) whether Derrick�s second caveat which lapsed by operation of law (ie
s 328(1) of the
NLC ) on 3 June 2013, had subsequent to that date
become a non-issue or irrelevant vis-a-vis the lien holder`s caveat and/or was no longer an impediment to
the validity of the lien holder`s caveat entered on 5 June 2007 and

(e) alternatively, whether (assuming there was a deposit of title in 1998) (�Consolidated Credit�) acquired a
lien in equity
(f) whether priority of any equitable interests by way of a lien in equity was lost or forfeited due to any act or
omission or indolence of (�Consolidated Credit�) which might have had the effect of inducing Derrick in
time to act to his prejudice. Hence, the question is whether the priority created by the lien in equity, if any,
was lost to Derrick�s beneficial interest that crystallised upon full payment of the purchase consideration
for the property (RM60,000) on or about March 2007 or was lost due to any act or omission or indolence on
the part of (�Consolidated Credit�)

CHRONOLOGY OF EVENTS

27The long history of the main events that transpired between the parties are as set out in chronology of events
prepared by Derrick�s solicitors and which were filed as part of the submissions. For ease of references, I have
duly reproduced and incorporated the chronology of events in this judgment.

C
h
r
o
n
o
l
o
g
 Page 14 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

o
f

E
v
e
n
t
s

A Oral agreement between Loh and Derrick for Order of High Court dated 13 November 2003, exh DED3 to affidavit of
u purchase of property at 13, Brook Road, Derrick affirmed on 4 June 2008 (encl 2)(B) in OM 25 60 of 2008
g Penang
u
s
t

1
9
7
0

2 Loh purportedly pledges title to No 13, Brook Exhibit LL1 to affidavit of Laurence Loh Kwong Yu (encl 7)(G) in OM 25 60 of
9 Road to (�Consolidated Credit�) Co Sdn 2008
Bhd ( (�Consolidated Credit�) ) for credit
M facilities
a
r
c
h

1
9
9
8

2 Derrick lodges private caveat over property Property search dated 17 January 2008, exh DED1 to affidavit of Derrick
6 affirmed on 4 June 2008 (encl 2)(B) in OM 25 60 of 2008

F
e
b
r
u
a
r
y

2
0
0
0

1 Order of High Court ordering Loh to transfer Exhibit DED3 to affidavit of Derrick affirmed on 4 June 2008 (encl 2)(B) in OM
3 property (the 2003 judgment) 25 60 of 2008
 Page 15 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

N
o
v
e
m
b
e
r

2
0
0
3

2 Court of Appeal dismisses Loh�s appeal Exhibit DED4 to affidavit of Derrick affirmed on 4 June 2008 (encl 2)(B) in OM
5 25 60 of 2008

J
a
n
u
a
r
y

2
0
0
6

1 Loh affirms statutory declaration to support Exhibit DED1 to affidavit of Derrick affirmed on 3 July 2008 (encl 10)(H) in
5 application for issue of replacement title OM 25 60 of 2008

M
a
r
c
h

2
0
0
6

2 Land office issues duplicate title property Property search dated 17 January 2008, exh DED1 to affidavit of Derrick
2 affirmed on 4 June 2008 (encl 2)(B) in OM 25 60 of 2008

J
u
n
e

2
0
0
6
 Page 16 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

2 Federal Court refuses leave on Loh�s Exhibit DED4 to affidavit of Derrick affirmed on 4 June 2008 (encl 2)(B) in OM
1 application 25 60 of 2008

M
a
r
c
h

2
0
0
7

2 Derrick�s solicitors tender payment Exhibit DED5 to affidavit of Derrick affirmed on 4 June 2008 (encl 2)(B) in OM
6 25 60 of 2008

M
a
r
c
h

2
0
0
7

1 Loh accepts cheque which is cleared for Paragraph 10 of affidavit of Derrick affirmed on 4 June 2008 (encl 2)(B) in OM
1 payment 25 60 of 2008

A
p
r
i
l

2
0
0
7

1 Loh�s solicitors write to Derrick�s solicitors Exhibit DED7 to affidavit of Derrick affirmed on 4 June 2008 (encl 2)(B) in OM
7 to say our client is still trying to come to 25 60 of 2008
terms with the dismissal of his application for
A leave
p
r
i
l

2
0
0
7

4 Derrick lodges private caveat over property Property search dated 17 January 2008, exh DED1 to affidavit of Derrick
 Page 17 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

affirmed on 4 June 2008 (encl 2)(B) in OM 25 60 of 2008

J
u
n
e

2
0
0
7

5 (�Consolidated Credit�) lodges lien holder`s Property search dated 17 January 2008, exh DED1 to affidavit of Derrick
caveat over property affirmed on 4 June 2008 (encl 2)(B) in OM 25 60 of 2008
J
u
n
e

2
0
0
7

2 (�Consolidated Credit�) enters judgment Exhibit LL4 to affidavit of Laurence Loh Kwong Yu (encl 7)(G) in OM 25 60 of
0 against Loh 2008

J
u
l
y

2
0
0
7

1 Registrar�s caveat entered over property Property search dated 17 January 2008, exh DED1 to affidavit of Derrick
5 affirmed on 4 June 2008 (encl 2)(B) in OM 25 60 of 2008

J
a
n
u
a
r
y

2
0
0
8

28Derrick�s claim to the property arises from an oral contract adjudged to have been entered into in August 1970,
and so adjudicated by the 2003 judgment and affirmed by the order of the Court of Appeal dated 25 January 2006.
 Page 18 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

The order for specific performance has been performed by Derrick but the late Loh had failed to hand over the issue
document of the title and a registrable memorandum of transfer. As stated earlier, Derrick lodged caveats which
were registered on 26 February 2000, 4 June 2007 and finally on 16 May 2013. So in all Derrick had lodged three
private caveats. The significance of the private caveats vis-a-vis the lien holder`s caveat and /or the lien in equity
and/or the priority of the lien in equity over Derrick�s beneficial interest in and over the property will be dealt with
more comprehensively in the subsequent parts of this judgment.

29Derrick duly complied with the term of the 2003 judgment and paid the purchase consideration of RM60,000 to
Loh�s solicitors who duly and unequivocally and unconditionally accepted the monies and the only thing that was
left outstanding was the delivery up of the issue document of title.

30As for the execution of the requisite transfer forms, it appears that Court of Appeal had ordered the registrar of
the High Court to execute the memorandum of transfer if Loh refused to do so. During the hearing of this matter, Mr
Robert Lazar confirmed to this court that the registrar had duly executed the transfer forms and the only matter that
was outstanding was the delivery of the issue document of title, which was not at all forthcoming from Loh and later
his estate.

31It is appropriate at this juncture to consider (�Consolidated Credit�) s claim in respect of the property which is
said to arise out of:

(a) an alleged deposit of title on 29 March 1998 by Loh allegedly to secure a borrowing by Loh (see p 1
(�bundle B�));

(b) a judgment in default in respect of the loan amount entered on 20 July 2007 (see p 83 (�bundle B�)); and
(c) a lien holder`s caveat lodged on 5 June 2007, one day after the private caveat lodged by Derrick.

32(�Consolidated Credit�) s position is that they have either a valid statutory lien or a lien in equity and are not at
all obliged to deliver up the title to Derrick. They have asked for an order for the sale of the property in order that the
proceeds of sale may be utilised to settle the amounts that are due and owing under the 2007 debt recovery
judgment. Derrick�says that there is no valid statutory lien or a lien in equity as there is no credible evidence of a
deposit of title in 1998 and that the lien holder`s caveat entered on 5 June 2007 is in any event a nullity and that
any priority in respect of the lien in equity was lost due to inaction by (�Consolidated Credit�).
ISSUE: Derrick�s LOCUS STANDI

33It was submitted by Mr Paari Perumal that Derrick does not have the requisite locus standi to cancel the lien
holder`s caveat as only a registered proprietor can apply to court to cancel a lien holder`s caveat which had been
improperly entered. He referred to
s 331(4) of the
NLC . I have reproduced the whole of
s 331 of the
NLC which read as follows:

Determination of lien holders caveats

(1) A lien-holder`s caveat may be withdrawn at any time by a notice in writing given to the Registrar by the person or
body for the time being entitled to the benefit of the lien, and the Registrar�shall cancel the entry of the caveat as
soon as may be after the notice is received.
 Page 19 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

(2) Where any land or lease subject to a lien-holder`s caveat is sold pursuant to an order of the Court made by virtue
of sub-section (2) of section 281

(a) any certificate of sale presented for registration by the purchaser thereof shall be deemed for the purposes of
this Chapter to have been presented with the consent of the lien-holder; and
(b) upon the registration of the certificate, the caveat shall lapse, and the entry thereof be cancelled accordingly
by the Registrar.

(3) The Registrar may cancel any lien holder`s caveat upon proof to his satisfaction that all sums due under the lien
have been duly paid.
(4) Where the Court is satisfied that any lien-holder`s caveat ought not to have been entered, or ought to have been
withdrawn, it may order

(a) the cancellation thereof by the Registrar; and

(b) if the entry or failure to withdraw has caused damage or loss to �any person or body�, the payment of
compensation by the person or body at whose instance the entry was made or, as the case may be, by whom
the withdrawal ought to have been effected.

(5) On cancelling the entry of any caveat pursuant to this section, the Registrar�shall note on the register document
of title the reason for the cancellation and the date thereof; and where any such entry is cancelled by reason of
the withdrawal of the caveat, the Registrar�shall give notice of the withdrawal to the person or body for the time
being entitled to the land or lease formerly affected.
(6) Every cancellation under sub-section (5) shall be signed and sealed.

34Then counsel also referred to an article titled as The National Land Code a commentary by Judith Sihombing
LexisNexis 2011 at para 5703, where the author says that, An improperly entered lien holder`s caveat, or one
entered properly but no longer needed, can be cancelled by court order on the application of the proprietor of the
land, lease or undivided share. It is only in these circumstances that the proprietor of the land or interest affected
can seek compensation if the caveat has been entered improperly. However, to do so he must prove that he has
suffered actual loss for the gist of the action is not the maliciously and falsely setting up of a title to property, but the
damage that arises from it.

35It was submitted by learned counsel that

s 331(4) of the
NLC and the commentary by Judith Sihombing support the argument that
only a registered proprietor may apply to cancel a lien holder`s caveat.

36Counsel said that Derrick lacks locus standi as he is not the proprietor of the land and is not even a beneficial
owner of the land. It was further submitted that Loh did not become a bare trustee for Derrick when the latter paid
him RM60,000. In this regard, counsel said that the manner and the circumstances in which a vendor becomes a
bare trustee of the land for the purchaser has been explained by the Federal Court through Edgar Joseph Jr, in
Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd
[1996] 2 MLJ 12 where it was held that, the contractual events which result
 Page 20 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

in the vendor becoming a bare trustee of the land for the purchaser, is on completion of the sale and purchase
agreement, that is to say, upon receipt by the vendor of the full purchase price, timeously paid and when the vendor
has given the purchaser a duly executed, valid and registrable transfer of the land in due form in favour of the
purchaser, for it is then that the vendor divests himself of his interest in the land . where it was held that, the
contractual events which result in the vendor becoming a bare trustee of the land for the purchaser, is on
completion of the sale and purchase agreement, that is to say, upon receipt by the vendor of the full purchase price,
timeously paid and when the vendor has given the purchaser a duly executed, valid and registrable transfer of the
land in due form in favour of the purchaser, for it is then that the vendor divests himself of his interest in the land .

37In the present case it is said that Derrick does not have in his hand a duly executed valid and registrable transfer
of the property and that what Derrick has by virtue of the 2003 judgment is merely a right in personam for a
contract but not a right in rem . In conclusion, counsel said that the 2003 judgment is only binding vis-a-vis Derrick
and Loh and does not affect or bind (�Consolidated Credit�) in any way. In the circumstances counsel suggested
that Derrick is not the beneficial owner of the land and so lacked the requisite locus standi to apply to have the lien
holder`s caveat removed.
FINDINGS (ON LOCUS STANDI)

38On the issue of locus standi, it is my considered opinion that the following factors are sufficient to clothe Derrick
with the requisite locus standi to mount a challenge and impugn the lien holder`s caveat:

(a) first, Derrick is not a mere busy body with no interest in and over the property and is in fact the holder of an
order of specific performance (the 2003 judgment) in his favour with respect to the property;

(b) secondly, he had paid the purchase consideration of RM60,000 and the same was duly and unconditionally
accepted by Loh;

(c) thirdly, Derrick�s second caveat was based on grounds which are unimpeachable as it incontrovertibly
disclosed a caveatable interest over the property; and
(d) fourthly, Derrick�s beneficial interest or ownership over the property may be predicated on the principle
crystallised in Temenggong Securities Ltd & Anor v Registrar of Titles, Johore & Ors
[1974] 2 MLJ 45 (FC), which was reaffirmed by the
then Supreme Court in (FC), which was reaffirmed by the then Supreme Court in Yeong Ah Chee v Lee
Chong Hai & Anor and other appeals
[1994] 2 MLJ 614 that when the purchaser under a sale
and purchase agreement of a piece of land has paid the purchase price in full to the vendor, the vendor
henceforth holds the land as a bare trustee for the purchaser and the vendor no longer enjoys any
beneficial interest to the land. As such, following that principle, after receipt of the full purchase
consideration, Loh ceased to have an interest in and over the property and held it in trust for Derrick. In this
regard, I should also mention that in that when the purchaser under a sale and purchase agreement of a
piece of land has paid the purchase price in full to the vendor, the vendor henceforth holds the land as a
bare trustee for the purchaser and the vendor no longer enjoys any beneficial interest to the land. As such,
following that principle, after receipt of the full purchase consideration, Loh ceased to have an interest in
and over the property and held it in trust for Derrick. In this regard, I should also mention that in Chua Hee
Hung & Ors v QBE Supreme Insurance Bhd
[1990] 1 MLJ 480 the Supreme Court had observed as
follows: the Supreme Court had observed as follows:

In Peninsular Malaysia the law is clear, viz the vendor after receipt of the full purchase price and surrender of
possession of the lands to the purchasers are deemed to be bare trustees for the purchasers (see
Temenggong Securities Ltd & Anor v Registrar of Titles, Johore & Ors ). In that case Ong Hock Sim FJ,
speaking for and on behalf of the Federal Court, stated:
 Page 21 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

We are in agreement with the majority view in Karuppiah Chettiar v Subramaniam

[1971] 1 MLJ 116 where it was
Held (1) in this case Mohamed Sharjudin having sold his entire interest in the land and received
payment in full held the legal estate only as a where it was Held (1) in this case Mohamed
Sharjudin having sold his entire interest in the land and received payment in full held the legal
estate only as a for the respondent (purchaser) who was the equitable owner.

39As such and based on the principles that may be distilled from the abovementioned cases, it is clear that once
full purchase consideration has been received by the vendor, the vendor becomes bare trustee for the purchaser.
Further, Derrick has been in occupation and possession of the property since 1970. On that analysis, and even if I
were to accede to the view advanced by counsel for (�Consolidated Credit�) that only a registered proprietor may
apply for cancellation of a lien holder`s caveat, I am of the view that Derrick may be regarded a proprietor in equity
or a beneficial owner of the property, which gives him the requisite locus standi to apply to have the lien holder`s
caveat cancelled.

40In any event, my primary view is that there is nothing in the language of
s 331(4) of the
NLC which supports the submission made by counsel for (�Consolidated
Credit�) that only a registered proprietor may apply for cancellation of a lien holder`s caveat which had been
wrongly or improperly entered.

41In fact, it appears to me that

s 331(4)(b) of the
NLC tacitly recognises that persons other than the registered proprietor
may apply for cancellation of the lien holder`s caveat as it contemplates the grant of a remedy by way of
compensation for �any person or body� who may have suffered loss and damage by the entry of the lien holder`s
caveat and the court may order such compensation as may be necessary in the circumstances. Section 331(4)(b)
reads as follows:

4) Where the Court is satisfied that any lien-holder`s caveat ought not to have been entered, or ought to have been
withdrawn, it may order

(a) the cancellation thereof by the Registrar; and

(b) if the by the person or body at whose instance the entry was made or, as the case may be, by whom the
withdrawal ought to have been effected (Emphasis added.)

42Thus, I do not agree that only a registered proprietor can avail himself of the remedy under
s 331(4) of the
NLC for the cancellation of a lien holder`s caveat which ought not to have
been entered. As for the commentary by Judith Sihombing, I do not read it as suggesting that only a registered
proprietor is entitled to apply for the cancellation of a lien holder`s caveat which ought not to have been entered.
The author was merely emphasising that a registered proprietor can apply to cancel a lien holder`s caveat if it had
 Page 22 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

been improperly entered or one entered properly but no longer needed and that the registered proprietor must
prove that he suffered actual loss. The author did not go so far as to say that others may not apply to have the lien
holder`s caveat cancelled.

43To my mind, the writer of the article has not expressly or implicitly suggested that others who are adversely
affected by the presence of a lien holder`s caveat may not apply to have it cancelled. Also, it is obvious that she has
not considered
s 331(4) of the
NLC and the possibility of the court making an order for payment of
damages against the party who entered the lien holder`s caveat in favour of �any person or body� affected by the
presence of the lien holder`s caveat. I am therefore unable to accept the argument that
s 331(4) of the
NLC is only available as a remedy for registered proprietors.

44In the result, I was not convinced that there was any merit in the argument that only a registered proprietor is
entitled to apply to court to have the lien holder`s caveat cancelled. As such, I had no hesitation in dismissing the
objection raised and ruled that, for the reasons as above stated, Derrick had the requisite locus standi to make the
application to have the lien holder`s caveat cancelled.
ISSUE: WHETHER THERE WAS A DEPOSIT OF
TITLE BY LOH IN 1998

45As was rightly submitted Mr Robert Lazar, counsel for Derrick, the onus was on (�Consolidated Credit�) to
prove satisfactorily to this court that Loh had indeed deposited the title with (�Consolidated Credit�) in 1998 as
security for loans granted by the latter to the former. The starting point in this analysis is the statutory provision
which gives rise to the creation of the statutory lien in the first place. In so far a creation of a lien is concerned, it
was submitted by counsel for Derrick that the requirements under s 281 of the NLC in respect of the creation and
entry of a valid lien holder`s caveat had not been complied with by (�Consolidated Credit�).
Section 281(1) of the
NLC reads as follows:

281 Creation and effect, of liens.

(1) Any proprietor or lessee for the time being 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 lien-holder`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.

46It is relevant to observe that that section deals with not just the entry of a lien holder`s caveat but is in fact the
enabling statutory provision which gives rise to the coming into force of a statutory lien. It is the section, which if
complied, creates a statutory lien. Hence, following that section, the party holding the title as security for a loan
obtains a statutory lien, only upon entry of a lien holder`s caveat. Paradoxically, this point becomes acutely relevant
when considering the remedies available to a person claiming to have a lien in equity. For now, I would say quite
emphatically that the single most essential fact that must be established by (�Consolidated Credit�) is that there
 Page 23 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

was a deposit of title by Loh (the registered proprietor) to the lender ((�Consolidated Credit�)) coupled with an
intention on the part of the registered proprietor (Loh) when depositing the title that it be held as security for a loan.
In this regard, the factual narrative relied upon by (�Consolidated Credit�) in order to prove that there was a
deposit of the title to the property is as follows:

(a) (�Consolidated Credit�) is a company incorporated under the Companies Act 1965 and licensed money
lender under the Moneylender s Act 1951. (�Consolidated Credit�) had from 1998 2006, given loans for a
total sum of RM7,378,693 ( the said loan ) to Loh. Loh had through his letter dated 29 March 1998 (p 1
(�bundle B�)) deposited the original title to the property as a security for the said loan;

(b) (�Consolidated Credit�) had on 3 May 2007, through their solicitors, Messrs Rajen & Lim issued a notice
of demand against Loh demanding for a sum of RM7,378,695 being the outstanding amount due and
owing under the said loan. I should add at this juncture that when the letter of demand was sent to Loh, he
was still managing director of (�Consolidated Credit�);

(c) as a result of Loh�s refusal to comply with the notice of demand dated 3 May 2007, (�Consolidated
Credit�) entered a lien holder`s caveat vide Presentation No 7819/2007 on 5 June 2007 on the property in
order to protect their interests;

(d) Thereafter, (�Consolidated Credit�) filed a civil suit against Loh in the High Court of Malaya at Penang via
Civil Suit No 22 346 of 2007 to recover the outstanding sum of RM7,378,695 and had on 20 July 2007
entered a judgment in default against Loh (p 83 (�bundle B�)); and
(e) Derrick had admitted during cross-examination on 13 September 2012 on the contents of his affidavits that
he has no proof to support his allegations that there is a conspiracy between the (�Consolidated Credit�)
and Loh to defraud. This is how he answered during cross-examination:

(�Consolidated Credit�) s counsel: I put it to you that in your affidavit affirmed on 2 June 2008, you have not
produced any proof of conspiracy to defraud

Derrick Edwin David: Yes. I agree.

47On the other hand it was submitted by counsel for Derrick that (�Consolidated Credit�) had not complied with
the requirements under
s 281 of the
NLC and hence, were not entitled to lodge the said lien holder`s caveat
against the property, having regard to the following:

(a) both Loh (through his letter dated 29 March 1998 at p 1 (�bundle B�)) and (�Consolidated Credit�) say
that the title to the property was deposited by Loh with (�Consolidated Credit�) on 29 March 1998;

(b) (�Consolidated Credit�) was and is a family company, the shareholders of which are the children and wife
of the late Loh. At that material time, Loh was the managing director and he only resigned from that
position on 22 May 2007 (see p 123 (�bundle B�));

(c) Derrick�s counsel submitted that, there is no independent evidence or any judicial determination that Loh
did in fact deposit the title with (�Consolidated Credit�). The letter dated 29 March 1998 at p 1 (�bundle
B�) could not have enclosed the issue document of title found at pp 2 6 of the same bundle, as that title (in
computerised form) was only issued on 7 July 2006;
 Page 24 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

(d) it is pertinent to note that Laurence Loh in his affidavit in reply of 23 June 2008 at para 4(b) (pp 137 138
bundle A) suggests that that very document was deposited under cover letter of 29 March 1998 (p 1 of
(�bundle B�)) but the title which allegedly accompanied that letter was never produced;

(e) the title that was produced in (�bundle B�) is a replacement title which is a computerised version and
issued on 7 July 2006 (see pp 2 6 of (�bundle B�)); and
(f) indeed, a copy of the title existing as at March 1998 (when the title was allegedly handed over by Loh to
(�Consolidated Credit�)) was never produced in these proceedings. As such, the title at pp 2 6 of the core
bundle cannot be the title that was allegedly deposited in 1998.

48In this regard, it was emphasised by counsel for Derrick that the trial of the High Court action by Derrick against
Loh (the 2000 Suit) commenced on 8 January 2003 and judgment was delivered on 13 November 2003 and Loh
made no mention whatsoever during his testimony that the title to the property had been deposited with
(�Consolidated Credit�) in 1998 as security for loans. Also the fact as to the deposit of the title as security for loans
was not all alluded to in the defence filed by Loh in those proceedings.

49In the circumstances, counsel for Derrick made the point that it is highly unlikely and inherently incredible for the
title to the property to have been deposited with (�Consolidated Credit�) as security as this was not referred to
either in the pleadings and neither did Loh allude to this when he gave evidence in 2003.

50The next piece of telling evidence that was referred to by counsel for Derrick in his attempt at persuading the
court to hold that there was no deposit of the title in 1998 was the balance sheet for the accounts of (�Consolidated
Credit�) for the year ending 31 December 1998 (see p 29 of (�bundle B�)) which showed an amount of
RM7,345,840 owing by a director (having been reduced from RM8,400,840 of the previous year) and the note 8 (p
36 of (�bundle B�)) which clearly says:

The amount owing by a director is , interest-free and has no fixed terms of repayment. (Emphasis added.)

51Significantly, Loh had signed the statement by directors confirming the accounts as giving a true and fair view of
the state of affairs of the company as at 31 December 1998. Loh also signed the statutory declaration as the
director primarily responsible for the financial management of (�Consolidated Credit�), (see p 27 (�bundle B�)).

52The importance of this lies in the fact that Loh himself had attested to the fact that the loan to the director was
�unsecured� and this therefore repudiates any suggestion that the title to the property was deposited as security in
March 1998 in which case the loan would be a secured loan rather than an �unsecured� loan.

53Also, I was referred to the balance sheet for the accounts of (�Consolidated Credit�) for the year ending 31
December 2005, wherein the amount owing by a director (see p 48 of (�bundle B�)) is RM7,712,102 and note 7 is
in the same terms (see p 63 of (�bundle B�)). The directors who signed the statement by directors were Nigel Loh
Kwong Weng and Laurence Loh Kwong Yu. Nigel Loh also signed the statutory declaration as the director primarily
responsible for the financial affairs of (�Consolidated Credit�) (see p 45 of (�bundle B�)).

54According to counsel for Derrick, even going by (�Consolidated Credit�) s own documents, an inference may be
safely made that there was no deposit of the title to the property in 1998 as security for any loan that may have
been granted by (�Consolidated Credit�) to Loh.
 Page 25 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

55Next, no good reason, indeed no reason whatsoever, has been advanced as to why it took (�Consolidated
Credit�) over nine years (after the title was allegedly deposited with (�Consolidated Credit�)) to lodge the lien
holder`s caveat.

56In response to this, it was submitted by counsel or (�Consolidated Credit�) that there was no inaction on their
client s part and that they are They said that the nine year delay is only a factor to substantiate Derrick�s
argument that there cannot be deposit of title. In short, it was urged upon me that I should not draw any adverse
inference by reason of the inaction or non-action by Consolidated from about March 1998 5 June 2007, when
(inexplicably) the lien holder`s caveat came to be registered one day after Derrick�s second caveat was entered on
4 June 2007. I say inexplicable because it puzzled me as to what had impelled (�Consolidated Credit�) to enter a
lien holder caveat on 5 June 2007 exactly one day after Derrick�s second caveat had been registered. Mr Rajen,
co-counsel for (�Consolidated Credit�) said that the date was a matter of pure coincidence, whereas Mr Robert
Lazar�said that the timing was rather curious .

57Next, in 2006, Loh applied for a replacement title for the property and other properties on the grounds that the
titles had all been lost. In his statutory declaration affirmed on 15 March 2006 in support of the application for a
replacement title, Loh�said that the titles (see p 16 of (�bundle B�)). This is what Loh�said in his statutory
declaration.

(1) Saya adalah tuan punya tanah yang tersebut dibawah:

(a)

(b)

(c)

(d)

(e) Geran (1st Grade) No. 3158 Lot No 1064 Seksyen 2 Bandar Georgetown Daerah Timur Laut Pulau Pinang

(f)

(g)

(h)
(i)

(2) Saya sesungguhnya mengatakan bahawa

(3) (Emphasis added.)

58In this regard, it is also significant that in a letter dated 12 November 2007 (see p 130 of (�bundle B�)) Messrs
Rajen & Lim (solicitors for (�Consolidated Credit�)) said that, We are instructed by our clients to state that on 29/3/
1989 Loh Hoot Yeang has delivered the original Grant for Lot No 1064, Seksyen 2, Geran No Hakmilik 3158,
Georgetown DTL, Pulau Pinang (hereinafter referred to as the title deed ) to (�Consolidated Credit�) Company
Sdn Bhd as security for a loan. Somewhere in March 2006, (�Consolidated Credit�) Company Sdn Bhd informed
 Page 26 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

Loh Hoot Yeang that they have misplaced the title deed and requested Loh Hoot Yeang to obtain a replacement
title deed as security for the loan obtained.

We are further instructed by our clients that somewhere in July 2006, Loh Hoot Yeang delivered the replacement
title deed to (�Consolidated Credit�) Company Sdn Bhd. On 3 May 2007, (�Consolidated Credit�) Company Sdn
Bhd. made a demand to Loh Hoot Yeang for the sum of RM7,378,695 being the outstanding loan but he failed to
settle the said sum. On 5 June 2007, (�Consolidated Credit�) Company Sdn Bhd lodged a lien-holder`s caveat
over the property to effect a statutory lien pursuant to s 281(1) of the National Land Code (1965).

We are also instructed by our clients that on 15 June 2007, (�Consolidated Credit�) Company Sdn Bhd.
Commenced a suit against Loh Hoot Yeang claiming inter alia the sum of RM7,378,695. On 20 July 2007, the High
Court of Malaya at Penang entered a judgment in default of appearance against Loh Hoot Yeang for the sum of
RM7,378,695 and interest at 8%per annum from the date of judgment until the realization of the said sum and costs
of RM22500.

We are now instructed by our clients to state that since the title deed was all the material times in the custody of
(�Consolidated Credit�) Company Sdn Bhd, it had acquired a lien in equity over the property. Our clients equitable
interests are not affected by the private caveat lodged by your client. Moreover, whether your clients rights have
priority over (�Consolidated Credit�) Company Sdn Bhd s rights is an issue which has not been determined by the
court. In the circumstances, (�Consolidated Credit�) Company Sdn Bhd, is not agreeable to deliver the title deed
to your client .

59I would observe at this juncture that there is no paper trail to show that (�Consolidated Credit�) actually had the
title and they misplaced it and then asked Loh to apply for a replacement. Instead what we have is Loh�s statutory
declaration saying that the titles for the property and other properties were with him all along and they were not
charged to any bank and that he had lost them.

60Next, after the 2000 Suit (and all appeals arising therefrom) between Derrick and Loh came to an end with the
refusal of leave by the Federal Court on 21 March 2007, Derrick proceeded to perform his part of the order for
specific performance by tendering payment as ordered by the court. It is not without significance that Loh
unconditionally accepted payment and when pressed for delivery up of the title, his solicitors wrote a letter dated 17
March 2007 to Derrick�s solicitors to say this:

We refer to your client s request for the document of title to the subject property. with the dismissal of his application for
leave (see p 74 of (�bundle B�)). (Emphasis added.)

61To my mind, the letter from Loh�s solicitors was very probably closer to the truth, in that it gave the impression
that Loh was sulking or licking the proverbial wounds sustained in the legal battle-field and needed time to get over
the defeat that he had suffered in the litigation. In other words, it is inconceivable that if the title had been deposited
with (�Consolidated Credit�) in 1998 that in 2007, Loh could unequivocally and unconditionally accept the
purchase consideration as ordered by the court (pursuant to the 2003 judgment) and when pressed for delivery of
the title, say nothing about the deposit of the title which had allegedly occurred about nine years prior to that date.

62It was accordingly submitted by counsel for Derrick that taking all of the above pieces or strands of evidence
cumulatively and after making all the necessary and reasonable inferences, the singular or irresistible conclusion
that ought to be reached is that the claim by (�Consolidated Credit�) that there was a deposit of title in 1998 is
inherently incredible and ought to be rejected.
 Page 27 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

63On the other hand, Mr Paari Perumal said that a Registrar�s caveat had been entered and this was premised on
Derrick�s allegation of fabrication, fraud, conspiracy all of which has been demolished when Derrick was cross-
examined. Derrick�s allegation of fraud and fabrication are contained in his police report dated 26 November 2007
(see pp 107 109 (�bundle B�)) wherein he had stated, inter alia, that:

I have recently discovered that after accepting the payment of RM60,000.oo the said Loh Hoot Yeang had conspired with
his children, namely Laurence Loh Kwong Yu and Nigel Loh Kwong Weng to fabricate documents so as to show that the
title of the said property had been deposited with the family company known as (�Consolidated Credit�) Company Sdn
Bhd and had caused the entry of a lien-holders caveat on the said property on 5 June 2007.

64Subsequently, the court had allowed limited cross-examination and Derrick was cross-examined on this
allegation and he admitted that he could not prove these allegations. Hence, it was submitted for (�Consolidated
Credit�) that the Registrar�s caveat ought to be removed as there was no basis for its entry in the first place and
that it was entered based on Derrick�s fears, which have been proven as being unfounded. As far as Loh�s
statutory declaration on the loss of title and the contents of the audited accounts which state that the loans were
�unsecured�, it was submitted that this court is not in a position to make any adverse findings because this can
only be answered through viva voce evidence as there would be a need to go into the mind of the makers of the
documents.

65Mr Paari Perumal rounded off by saying that allegations of fraud cannot be dealt with on affidavit evidence and
that the fabrication of documents, as is being suggested by Derrick amounts to fraud, which cannot be determined
on affidavit evidence.

66Mr Robert Lazar then said that the documents which his client is trying to impeach are documents generated by
Loh and (�Consolidated Credit�) and that these are their own documents and Derrick is entitled to focus on the
inherent infirmities which are unanswered in the affidavits.

67In the main, the documents in question are Loh�s statutory declaration and audited accounts of (�Consolidated
Credit�). In particular, it was pointed out that even after litigation between Loh and Derrick was resolved by refusal
of leave by Federal Court and tendering of RM60,000 to Loh�s solicitor who encashed the cheque and when
pressed for transfer documents, they said, their client was coming to terms which created the impression that he
(Loh) needed time to accept the reality and right up to that point in time, there wasn t even a faint whisper that he
had deposited the title with his own family run company which is an exempt money lending company.

68He added that (�Consolidated Credit�), being an exempt money lending company, are not novices and they
should have known how to protect their interest instead of waiting nine years to register lien holder`s caveat
(assuming the title was indeed deposited in 1998).

69Mr Lazar also emphasized that (�Consolidated Credit�) did not intervene in the 2000 Suit which culminated in
the 2003 judgment, albeit that Loh was managing director at that time. In fact he remained as managing director of
(�Consolidated Credit�) until 22 May 2007. He did not inform the court in the 2000 Suit, that there was a lien in
favour of (�Consolidated Credit�). It was not even raised in the pleading. If raised it would have been a defence to
a claim for specific performance. Apparently, the lien holder`s issue arose only during execution proceedings when
Derrick tried to compel Loh to hand over title deed with an executed transfer form.

70According to counsel for Derrick, the only act that had to be performed is delivery up of the issue document of
title ( IDT ) (ie replacement title). Counsel informed the court that the Court of Appeal had ordered the registrar of
 Page 28 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

the court to sign the relevant transfer form or memorandum of transfer ( MOT ) and that that has already been
done.

71Counsel submitted that in the current proceedings the court is only being asked to look at documents to
determine the issue of deposit of title. He said that this does not give rise to the issue of fraud, which is separate.

72Derrick�s previous grievance on that score is that looking at sequence of events, an inference may be made that
it is an attempt to deprive him of the benefit of the fruits of the judgment. But the issue now is that whether it is on
affidavit evidence or in documents, the fact remains that the documents are there and are unchallenged and the
court is both entitled to and obliged to make a finding one way or the other, whether there was indeed a deposit of
the title to the property by Loh in 1998.
FINDINGS: WHETHER THERE WAS A DEPOSIT OF
TITLE IN 1998

73In my view, if there was a deposit of title in 1998, then it is curious as to why (�Consolidated Credit�) did nothing
to protect their interest by ensuring that a statutory lien is created in accordance with the provisions of the NLC
particularly as they are a moneylending company and ought to have known of the procedures necessary for the
creation of a statutory lien and had ample opportunity to do so at various points in time when there was no caveat in
place or during the window period when the caveat had lapsed and before the next one was filed.

74It is also curious as to why (�Consolidated Credit�) took no steps to remove Derrick�s first caveat. If the title
was with (�Consolidated Credit�) since 1998, then why did they not intervene in the 2000 Suit between Derrick
and Loh, when they knew or ought to have known (since Loh was Managing Director of (�Consolidated Credit�))
that the whole subject matter of the 2000 Suit was the property and that any order in the suit in favour of Derrick
would necessarily affect their rights as the holder of a lien in equity.

75I find it particularly telling that nothing was mentioned by Loh about the deposit of the title in the 2000 Suit as that
may or would have changed the whole equation of the suit in that Derrick may well have changed his litigation
strategy and amended his claim and asked for damages instead of specific performance of the oral contract when
the subject matter of the contract no longer existed. By remaining silent on this issue both during testimony and in
the pleadings, Loh (and by extension (�Consolidated Credit�) as well) have misled Derrick and the court hearing
the 2000 suit that the subject matter of the suit was intact or at any rate that there was no impediment to the
property being transferred to Derrick if he were to succeed in the suit.

76It is also curious that Loh�said nothing about the deposit of title when Derrick had tendered payment of
RM60,000 in March 2007. Also, since Loh had unconditionally accepted the purchase consideration in March 2007,
it must mean that he intended for the sale and the transfer (as per the 2003 judgment) to go through. It is not
without significance that the issue of deposit of title only surfaced when Derrick�started proceedings to compel Loh
to deliver the title to the property.

77Also, I note that (�Consolidated Credit�) has feigned ignorance of the 2000 suit by Derrick against Loh. They
say via paras 6(a) and 15 of the affidavit of Laurence Loh Kwong Yu (see pp 183 and 185 bundle A) that they only
came to know of the proceedings when they received a letter dated 23 October 2007 from Derrick�s solicitors.

78To my mind this is wholly disingenuous especially when the person sued as defendant in the 2000 Suit is non-
other than Loh who was at all material times the managing director of (�Consolidated Credit�). It would be
incredulous for (�Consolidated Credit�) to suggest that they were unaware of the proceedings between Derrick
and Loh when the defendant in the suit was Loh, who was at the material time the managing director of
(�Consolidated Credit�). In the affidavits, (�Consolidated Credit�) appeared to suggest that they and Loh are
separate legal entities. Presumably they took that position so that Loh�s knowledge is not imputed to them. In my
view, in such a situation such as this, one cannot automatically employ the separate legal entity principle and treat
them as separate such that the knowledge of Loh cannot or is not to be imputed to (�Consolidated Credit�).
 Page 29 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

79This underscored by the fact that (�Consolidated Credit�) is a family run company and Loh�s knowledge of
Derrick�s claim as arising under the 2000 Suit, must in the circumstances of this case be necessarily imputed to
(�Consolidated Credit�). It is obvious enough that the reason why (�Consolidated Credit�) took the position in
their affidavit that they had no knowledge of the legal proceedings between Derrick and Loh, is to first, distance
themselves from the loop of knowledge of the proceedings as between Derrick and Loh and secondly and more
importantly, to deflect any suggestion of inaction and/or dilatoriness on their part for almost nine years since the
alleged deposit of title in 1998.

80Next, in so far as the audited accounts of (�Consolidated Credit�) are concerned I note that in para 6(vii) of
Derrick�s affidavit (p 164 of bundle A) and para 6(ix) (p 165 of bundle A) the issue as to the loans being described
as �unsecured� was clearly raised by Derrick. But the response that came from (�Consolidated Credit�) on this
issue hardly qualifies as an explanation and was meekly couched as follows:

I deny paragraph 6(vii) of the Applicant s Affidavit in Reply and state that the 2nd respondent had taken a loan from 1998 to
2006 in the sum of RM7,378,695 from the third respondent and that the issue document of title had been deposited with the
second respondent as security for the loan (see p 184 of bundle A).

81In my view, there is nothing in that paragraph which explains why the audited accounts of (�Consolidated
Credit�) had treated the loan to a director as �unsecured� . I do not know whether (�Consolidated Credit�) had
an explanation to offer as regards the audited accounts. For present purposes, I can only deal with the documents
and the affidavits as they have been presented to the court. From what I could gather, they have not offered any
credible or any explanation as to why the audited accounts which had been signed off by Loh (for the 1998
accounts) and later by Nigel Loh Kwong Weng (for the 2005 accounts) declared the loan to a director as
�unsecured� , which can only mean that there was no security provided for the loan and by parity of reasoning that
there was no deposit of title as claimed by (�Consolidated Credit�).

82I might add that the audited accounts are all documents which form part of statutory filings under the Companies
Act 1965 and related rules and regulations thereunder and as such, the contents of the documents that have been
filed with the statutory authority must be accepted as being true and accurate. If there is any mistake or error then
there must be efforts or steps taken to file corrective documents to reflect the true state of affairs. Otherwise it will
be a situation where the statutory filing says one thing and other documents (not being part of the statutory filing)
saying quite the opposite thing. So in this case, (�Consolidated Credit�) s affidavits which assert that in 1998 there
was a deposit of title as security for loans by them to Loh is patently contradicted by their own statutory filing by way
of the audited accounts.

83It is axiomatic that the contents of statutory filings such as audited accounts must be true and accurate in every
respect and therefore taken as the gospel truth as regulatory authorities, creditors, investors, shareholders and the
public in general will be relying upon the correctness of what is stated therein for the own specific and particular
purposes. It goes without saying that one of the essential purposes of statutory filings is to ensure transparency and
openness of the financial affairs of the company. It follows that it would be in the most exceptional of circumstances
that the company would or should be allowed (particularly in legal proceedings) to take a position which is different
from that which has been stated in the statutory filing. Even then one would expect that a satisfactory and credible
explanation is proffered in respect of the discrepancies in the statutory filing so as to explain any obvious
disconnect between what has been stated in the statutory filing and what has been asserted in other documents,
including but not limited to court documents. As I said, in the present case, there is no explanation whatsoever by
those who are running (�Consolidated Credit�) as to why the so-called loan to a director as reflected in the 1998
and 2005 audited accounts were declared as �unsecured� .

84Of course, I am mindful of the fact that any ruling that I make as regards the non-existence of a deposit of title to
 Page 30 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

the property in 1998 would mean that I have rejected (�Consolidated Credit�) s averments to the effect that there
was such a deposit by Loh in 1998. Also it would mean that the letter dated 29 March 1998 (p 1 of (�bundle B�))
has been impugned. All of these would cumulatively mean that I have arrived very dangerously close to the
allegation of fabrication, which Derrick has said under cross-examination that he has no proof.

85But the question ultimately is whether I can or should nevertheless proceed to determine the issue of whether
there was in fact, a deposit of title to the property by Loh in 1998. In my view, there is no impediment for this court
to arrive at an appropriate conclusion after scrutinising and making a qualitative analysis of all the materials
(affidavits and exhibits) that have been presented to the court. Hence, merely because Derrick has said under
cross-examination that he has no proof of fabrication by Loh and his children and/or because the issue is
contentious and has been taken up via affidavits instead of viva voce evidence, does not mean that in every case,
the court should refrain from making a determination of an issue, regardless of whether the evidence is compelling
and/or conclusive or otherwise.

86Hence, if there is compelling and conclusive evidence touching upon a particular issue, then it would not be
inappropriate for a court to make a determination on that issue. In fact, I would go so far as to say that if a court
refrains from dealing with and/or from making an assessment and conclusion on that issue, then it may be
bordering on abdication of judicial duty, responsibility and function. In this regard, it would be appropriate to quote
from the case of Hock Hua Bank (Sabah) Bhd v Yong Liuk Thin & Ors
[1995] 2 MLJ 213 (CA) where Justice Gopal Sri Ram said, Now, nothing
that was said by this court in Keet Gerald is to be taken as detracting from the right, and indeed the duty, of a judge,
in appropriate cases, to undertake a qualitative analysis of the affidavit evidence presented before him. In a case
like the present, I can do no better than to adopt the words of Lee Hun Hoe CJ (Borneo) in (CA) where Justice
Gopal Sri Ram said, Now, nothing that was said by this court in Keet Gerald is to be taken as detracting from the
right, and indeed the duty, of a judge, in appropriate cases, to undertake a qualitative analysis of the affidavit
evidence presented before him. In a case like the present, I can do no better than to adopt the words of Lee Hun
Hoe CJ (Borneo) in Syed Ibrahim bin Syed Abdul Rahman v Liew Su Chin (F)
[1984] 1 MLJ 160 where he said (at p 163 col 2G H): where he said (at p
163 col 2G H):

The onus of the caveator, prompted by the analogy with interlocutory injunction, is that before any question of balance of
convenience can arise the party seeking the injunction must satisfy the court that his claim is neither frivolous nor vexatious
in other words that the evidence before the court discloses a serious question to be tried. Not all disputes of fact necessarily
raise serious questions to be tried. It is of course quite right to say that it is undesirable to resolve disputes on affidavit
evidence.

Although the views expressed by His Lordship the Chief Justice of Borneo were in the context of an application to remove a
caveat, they are, I think, of general application. (Emphasis added.)

87Also, there is judicial precedent to demonstrate that a court can determine on affidavits, the issue as to whether
there was a deposit of title with the intention that it was to be held as security for a loan. In this context it is relevant
to highlight the following observation made by His Lordship Hj Mohd Noor bin Hj Ahmad H in Minang Bina Sdn Bhd
v Yahya Mohd Said & Yang Lain
[1992] 1 CLJ 70 (Rep) p 503: (Rep) p 503:

Juga, jelas bahawa kaveat pemegang lien itu dimasukkan oleh Plaintif-plaintif lebih kurang 11/2 tahun selepas geran tanah
diserahkan kepada plaintif-plaintif iaitu selepas defendan-defendan memberitahu cadangan mereka hendak membatalkan
perjanjian itu. yang sepatutnya dibuat bagi memeliharakan kepentingan mereka (see p 507 of the judgment). (Emphasis
added.)
 Page 31 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

88His Lordship continued:

pinjaman wang dan tidak wujud niat bagi mengujudkan satu lien. Sebaliknya, kaveat pemegang-lien itu dimasukkan,
apabila Plaintif-plaintif mengetahui yang perjanjian akan ditamatkan oleh Defendan-defendan, bertujuan untuk
membantutkan rancangan Defendan-defendan selanjutnya di atas tanah tersebut Oleh yang demikian, say a berpuashati
bahawa Plaintif-plaintif gagal membuktikan yang kemasukan kaveat pemegang-lien itu telah dibuat betul-betul mengikut
kehendak-kehendak undang-undang (see p 507 of the judgment)(Emphasis added.)

89In the abovementioned case the court ruled that the title had not been deposited with the intention that it be held
as security. In the present case, my task is to determine whether there was a deposit of title. What I also find
interesting and helpful from that case is that the learned judge had come to the conclusion that the titles to the
property were not handed over as security for a loan and he reached this conclusion based on affidavit evidence
and the documentary evidence tendered by way exhibits to the affidavits that were placed before him. This is what
he said at p 505 of the judgment,

, atas imbangan kemungkinan, saya rasa versi defendan-defendan kecuali tentang amaun bayaran yang telah dibuat oleh
plaintif-plaintif kepada defendan 1, boleh dipercayai, atas alasan-alasan berikut. (Emphasis added.)

90I have touched on this only because counsel for (�Consolidated Credit�) placed much emphasis on Derrick�s
testimony during cross-examination on his affidavits where he had said that he could not prove that (�Consolidated
Credit�) had committed fraud. Hence, it was suggested during submissions that in light of Derrick�s answers
during cross-examination, this court should not see anything sinister in the assertion by (�Consolidated Credit�)
that the title to the property was handed over to them by Loh and to be held by them as security for the loans
granted by them to Loh.

91On the other hand, counsel for Derrick�stayed clear of the fraud issue as that was obviously a perilous course to
take in an application of this nature where the issues are to be determined on affidavits. Of course, in this case,
Derrick was cross-examined and he gave his answer on the fraud/fabrication issue. Basically he admitted that he
was not able to prove that Loh had conspired with his children to defeat his claim by virtue of the 2003 judgment
that was made in his favour. But the question that Derrick has raised is this: whether there was indeed a deposit of
title in 1998. It is a factual question.

92(�Consolidated Credit�) say that I should not enter into that question as the issue is foreclosed by the answer
that Derrick had given previously during cross-examination. However, I was not convinced that I cannot deal with
the issue merely because Derrick had given an answer that eliminates conspiracy and fraud/fabrication from the
equation. The issue here is a simple one. As Mr Robert Lazar for Derrick puts it, the issue with regards to whether
there was a deposit of title is different and separate from the fraud and conspiracy issue. Mr Lazar�says that he
has stayed clear of the fraud issue and is focusing on the issue of whether factually there was a deposit of title by
Loh in 1998.

93Of course, I accept that fraud cannot be determined on affidavit evidence unless perhaps there is an unequivocal
admission of it by the fraudster. But here, I am not dealing with fraud and am confining this curial exercise to the
factual question as to whether Loh had in fact deposited the title to the property with (�Consolidated Credit�) in
1998.
 Page 32 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

94The view I take is that this court is not precluded from determining the question as to whether there was indeed a
deposit of title in 1998. To me it is a threshold issue and an evidential one at that. To conclude on this point, it is my
opinion that Derrick�s answers during cross-examination that he is unable to prove fraud against Loh does not
prevent this court from determining the factual question as to whether Loh did indeed deposit the title with
(�Consolidated Credit�) as security for loans granted by the latter to the former.

95I therefore took the view that ultimately it all boils down to the quality and credibility of the evidence that is
presented to the court. In this case, the evidence was presented by way of affidavits. And so my task was to
determine as best as I could and to reach a conclusion as to whether (�Consolidated Credit�) s assertion of there
being a deposit of title in 1998 is a credible one. Put in another way, the task of the court was to critically examine
and analyse the various affidavits and determine whether (�Consolidated Credit�) s assertion, on affidavit, that
there was a deposit of title was a credible one or whether it was inherently incredible. If I am convinced that there
was no deposit of title in 1998, then the entire lien holder argument falls.

96So the critical question that remains is whether there was a deposit of title by Loh to (�Consolidated Credit�) in
1998. In my view, there are enough strands of evidence which when taken together and examined cumulatively and
critically analysed, negates or vitiates the probability of a deposit of title to the property by Loh to (�Consolidated
Credit�) in 1998. The strands of evidence may be recapitulated as follows:

(a) (�Consolidated Credit�) s inaction, meaning failure to enter a lien holder`s caveat, from about March 1998
5 June 2007 and in particular during the window period when there was no private caveat in place, is
curious apart from being unexplained. The response or position taken by (�Consolidated Credit�) that
they are entitled to lodge a lien holder`s caveat at any time is no answer to the question as to why they did
nothing until the date when the lien holder`s caveat was entered on 5 June 2007. Also, their inaction
includes but is not limited to their failure to apply to remove Derrick�s first caveat, which was entered on
26 February 2000;

(b) if the title was deposited with them in 1998, then I would have expected (�Consolidated Credit�) to
intervene in the 2000 Suit when they would have known (through Loh) about the nature of Derrick�s claim
and the impact that it would have on their rights as a holder of a lien in equity (assuming the title was with
them);

(c) the statutory declaration by Loh when he applied for replacement titles unequivocally states that the title to
the property was with him all along and that he had never charged it to any bank;

(d) the letter from Messrs Rajen and Lim dated 12 November 2007 (solicitors for (�Consolidated Credit�))
(see p 130 of (�bundle B�)) which purports to explain that the title was with (�Consolidated Credit�) since
1998 and went missing when it was in their custody and that it was their client who had asked Loh to apply
for a replacement title, is not at all backed by any contemporaneous documents and in fact contradicts
Loh�s statutory declaration;

(e) the audited accounts for (�Consolidated Credit�) (1998 and 2005) which had been signed off by Loh and
his son Nigel Loh respectively as the directors primarily responsible for the financial affairs of the company,
clearly and unequivocally state that the loan to the director is �unsecured� which can only mean that the
title was never deposited with (�Consolidated Credit�) in 1998;

(f) although Derrick had referred to the audited accounts in his affidavit and pointed out that the loan to the
director was declared therein to be �unsecured�, there was no explanation whatsoever from
(�Consolidated Credit�) in its reply affidavit. As such, the declaration in the audited accounts for the years
1998 and 2005 that the loan to the director was �unsecured� remains intact and extant;

(g) Loh (whilst managing director of (�Consolidated Credit�)) unconditionally accepted the payment of
RM60,000 which was made by Derrick in March 2007 being the full purchase consideration for the
 Page 33 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

purchase of the property, without saying anything about the alleged deposit of title in 1998. All he said was
that he was coming to terms with the Federal Court s refusal of his application for leave to appeal;

(h) Loh (although he was managing director of (�Consolidated Credit�)) as the defendant in the 2000 Suit,
said nothing about any deposit of title either in his evidence or in his defence; and
(i) throughout the currency of the 2000 Suit and the appeal to the Court of Appeal and the leave application to
the Federal Court, (�Consolidated Credit�) (and/or Loh as its managing director) did not give any notice to
Derrick as to any deposit of title by Loh in 1998.

97In the result, it is my view that based on all of the above facts and circumstances and having due regard to the
overall probabilities of the case, it is more probable than not that there was no deposit of title in 1998. With this
ruling, the whole substratum of the application by (�Consolidated Credit�) falls. However, for completeness ( ), I
have gone on to consider all the other issues on the assumption that there was a deposit of title by Loh. Hence, all
further issues that are discussed hereinafter are premised only on an assumption of deposit of title, whilst my ruling
itself is that there was no deposit of title.
ISSUE: WHETHER THE LIEN holder`s CAVEAT
ENTERED BY (�Consolidated Credit�) ON 5 JUNE 2007 IS VALID

98It is not in dispute that the second caveat by Derrick was registered on 4 June 2007 and the lien holder`s caveat
registered on 5 June 2007. The relevant statutory provision under the NLC relevant to the issue as to validity of the
lien holder`s caveat are
s 322(2) of the
NLC which read with
s 330(3) of the
NLC which expressly prohibits the endorsement or entry on the register
document of title of any lien holder`s caveat, and that the Registrar is expressly prohibited from entering a lien
holder`s caveat on the register document of title by any Registrar�s caveat, private caveat, trust caveat or
prohibitory order . The relevant sections of the NLC are reproduced as follows:

Section 322 NLC

(1) A caveat under this section shall be known as a private caveat , and

(a) may be entered by the Registrar on the register document of title to any land at the instance of any of the
persons or bodies specified in section 323;
(b) shall have the effect specified in sub-section (2) or (3), according as it is expressed to bind the land itself or an
undivided share in the land or merely a particular interest therein.

(2) subject to sub-sections (4) and (5),

(a) any instrument of dealing executed by or on behalf of the proprietor thereof, and any certificate of sale relating
thereto;

(b) any claim to the benefit of any tenancy exempt from registration granted by the said proprietor; and

(c) (Emphasis added.)

 Page 34 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

99Also
s 322(6) of the
NLC is relevant as it directs the pendaftar hak milik or registrar of land
titles to reject any lien holder`s caveat if there is already a private caveat which had been lodged in respect of the
property.
Section 322(6) of the
NLC reads as follows: Where the registration of any instrument, or the
endorsement or entry of any claim or or, as the case may be, application for endorsement or entry.

100Next, it is necessary to consider

s 330 of the
NLC . It reads as follows:

Section 330 and effect of lien-holders caveats.

(1) �any person or body� with whom the , or any duplicate lease, may, as provided in section 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.

(2) Any such application shall be in Form 19D, duly attested in accordance with the provisions of section 211, and
shall be accompanied by the prescribed fee, and the issue document of title or, as the case may be, duplicate
lease.
(3) The Registrar�shall note on any such application the time at which it was received (being, in the case of any
application sent by post, the time at which it was withdrawn from its cover in the Registry or, as the case may be,
Land Office) and, Registrar�s caveat, trust caveat or prohibitory order, shall as soon as may be thereafter.
(Emphasis added.)

101Hence, it is clear from the abovementioned statutory provisions that 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).

102In Woon Kim Poh v Sa amah Bt Hj Kasim

[1987] 1 MLJ 400 , His Lordship Hashim Yeop A Sani had, in delivering
judgment for the Supreme Court, explained the effect of the entry of a private caveat as follows: , His Lordship
Hashim Yeop A Sani had, in delivering judgment for the Supreme Court, explained the effect of the entry of a
private caveat as follows:

Under Section 322 of the National Land Code so long as a caveat is in force registration, endorsement or entry on the
register document of title of any instrument of dealing shall be prohibited. The effect of a private caveat expressed to bind
the land itself is to prevent any registered disposition of the land except with the caveator s consent until the caveat is
removed In the Torrens system where registration is the very basis of the system (Emphasis added.)
 Page 35 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

103The Court of Appeal had, in Lee Chin Cheng Dengkil Oil Palm v Kaplands Sdn Bhd
[2003] 1 MLJ 177 , applied the rationale of His Lordship Hashim Yeop A
Sani in the , applied the rationale of His Lordship Hashim Yeop A Sani in the s case, and had further added that
the effect of a private caveat is to freeze the register at least until the caveat is removed .

104More relevantly, in Hong Kong & Shanghai Banking Corporation v Hj Salam Hj Daud (Mohd Azni bin Sudin,
Auction Purchaser, RHB Bank Bhd Intervenor)
[2002] 3 MLJ 483
[2002] 4 CLJ 659 ( ( HSBC s case ), which was a a case involving a ,
His Lordship Justice Ramli Ali (as he then was), applied the rationale of His Lordship Hashim Yeop A Sani, and
said:

lien-holder`s caveat is also

In fact, under s 322(6) of the NLC, the registrar is required to reject the lien holder`s caveat where
there is a private caveat in force. Section 331(4) of the NLC further provides that the court, if satisfied that any lien-holder`s
caveat ought not to have been entered, may order the cancellation thereof by the registrar. (Emphasis added.)

105As I mentioned earlier, Derrick had lodged a total of three private caveats. The relevant caveat which became
the focus of the submissions is the second caveat which was entered on 4 June 2007 and lapsed on 3 June 2013. It
was submitted by Mr Paari Perumal for (�Consolidated Credit�) that second caveat was the only impediment and
with the lapse of Derrick�s second caveat on 3 June 2013 whatever shroud of doubt surrounding the lien holder`s
caveat is clear and the lien holder`s caveat is unimpeachable.

106Mr Paari Perumal submitted that the statutory lien became good and effective because the impediment which
existed as at 4 June 2007 (ie the second caveat) had extinguished. He said that his client had cleared the threshold
by virtue of the lapse of the 4 June 2007 caveat. In response, Mr Robert Lazar�said that
s 331(4) of the
NLC uses the words ought not to have been entered or ought to have
been withdrawn and that this a threshold issue ought not to have been entered. According to counsel, whatever
happened after that date does not affect Derrick�s position unless he did something to prejudice his private caveat
and there was no suggestion that Derrick had done anything to prejudice his private caveat and that it is only by
operation of law and because of passage of time that the second caveat lapsed.

107Counsel for Derrick�said that if the other side are right in the point they have raised then every time a case
takes more than six years to be disposed off, various legal proceedings will be affected by sheer passage or
effluxion of time. He said that parties have to confine themselves to the position that obtained as at 5 June 2007
when the statutory lien was created contrary to
s 330(3) of the
NLC . He said that because of the words ought not to have been entered ,
the lien holder`s caveat was a nullity as at 5 June 2007 and that Derrick�s application via the OM must necessarily
relate back to the state of affairs as at 5 June 2007. He concluded by saying that the effect of Derrick�s private
caveat which was entered on 4 June 2007 as per
s 322(2) of the
NLC is to prohibit any subsequent registration or entry of lien holder`s
caveat and that
s 330(3) of the
NLC has to be read in harmony with
 Page 36 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

s 322(2) of the
NLC .

108I am inclined to agree with counsel for Derrick. The matter has to be determined on the basis of the facts as
obtaining as at 5 June 2007 and should not be based on subsequent events such as the lapse of the private caveat
on 3 June 2013. It is material to note that this case was initially heard before another judicial commissioner on 23
January 2013 and judgment was due to be delivered thereafter. However, before the judicial commissioner could
deliver a decision he resigned and the case had to be heard afresh on 9 September 2013 by which time the second
caveat had lapsed. Therefore, it was through no fault of the parties that this case came to be concluded only on 9
September 2013.

109But, if the argument advanced by counsel for (�Consolidated Credit�) is to be accepted then that would mean
that if the case were disposed off before 3 June 2013, then the factual considerations (and by extension the
outcome) would or should be different.

110With all due respect, I am unable to agree with the submission made that the lapse of the second caveat on 3
June 2013 had wiped the slate clean and validated the lien holder`s caveat as at 5 June 2007. As such, we are
back to the point about the lien holder`s caveat having been improperly entered. As I said earlier, by virtue of
s 322(6) of the
NLC the registrar ought to have rejected the lien holder`s caveat.
Somehow, the lien holder`s caveat came to be registered on 5 June 2007.

111In my view, what matters is whether in view of the presence of Derrick�s second caveat which had been
registered on 4 June 2007, the lien holder`s caveat registered on 5 June 2007 is invalid and a nullity. To me the
point is unarguable and the principle that was elucidated in the s case to the effect that the presence of a private
caveat vitiates the entry of a lien holder`s caveat entered subsequently, applies with equal force to the present
case. In the circumstances, following the HSBC case, it is plain that the entry of the said lien holder`s caveat on 5
June 2007 subsequent to the private caveat entered on 4 June 2007 on the registered document of title is clearly in
breach of
s 322(2) of the
NLC read with
s 330(3) of the
NLC , and is therefore in law a nullity. I am accordingly impelled to the
view that in the present case, (�Consolidated Credit�) s lien holder`s caveat which was registered on 5 June 2007
contravened
s 330(3) of the
NLC read with
s 322(2) of the
NLC . In the result, I am of the opinion that the lien holder`s caveat lodged
by (�Consolidated Credit�) was improperly entered or ought not to have been entered and was invalid and a
nullity.
FINAL ISSUE: WHETHER THERE WAS A LIEN IN
EQUITY

112I will now deal with the final issue and that is, whether notwithstanding that there is no valid statutory lien,
(�Consolidated Credit�) acquired a lien in equity based on the (assumed) fact that there was a deposit of title in
1998. This point was argued by counsel for (�Consolidated Credit�) as an alternative to the main argument and it
was accordingly submitted that even if the lien holder`s caveat dated 5 June 2007 is impugned, they nevertheless
had a lien in equity over the property which overrides and takes precedence over the interest of Derrick as a holder
of an order for specific performance or as a party who had paid the full purchase consideration to the vendor.

113Counsel for (�Consolidated Credit�) submitted that the NLC did not abrogate rights or interests in equity. Of
course this submission (on lien in equity) can only be sustained if there is a finding of fact that the title was
deposited with (�Consolidated Credit�) in March 1998. As I have said earlier in this judgment, the view that I have
 Page 37 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

taken is that there was no deposit of title by Loh in March 1998. However, I am compelled to consider the issue of
lien in equity in the event that my conclusion of no deposit of title is found to be erroneous. It is on that premise that
I am now considering the issue of lien in equity.

The starting point in counsel s submission was the case of Vallipuram Sivaguru v PCRM Palaniappa Chetty Official
Administrator as administrator of the estate of Gan Inn, deceased
[1937] 1 MLJ 59 ( ( Sivaguru s case) where the facts were that in 1931,
G deposited his issue document of title to land with the first defendant/respondent as security for a loan and in 1932
sold the same land to N explaining the absence of the issue document of title by a false statement that it was lost.
On account of the absence of the issue document of title N could not obtain registration of the transfer on sale and
in consequence lodged a caveat against the land under s 166 of the Land Code. G died in 1932, shortly after
executing the transfer in favour of N, and in 1933 the first defendant/respondent lodged a caveat under s 134 of the
Land Code claiming a lien by deposit with him of the issue document of title. At the end of 1933, N executed a
transfer of this land in favour of the plaintiff/appellant and N died in June 1934. In August 1934, this land was
transmitted to the second defendant-respondent as administrator of G s estate. The court held that the first
defendant-respondent had acquired, by the deposit with him of the issue document of title, an under s 134 of the
Land Code (Cap 138).

114The court further went on to hold that . This is how the court specifically dealt with the creation of an equitable
right to a lien subsisting outside of the Land Code:

It is true that section 134(i) of the Land Code states specifically that no lien is created until a caveat is registered. Before
the amending Enactment No. 31 of 1928, the lien was created by the mere fact of deposit, and it may have been the
intention of the legislature to put an end to equitable liens such as had hitherto been recognised. But, in the absence of
express words, the Courts will not be precluded from doing justice between parties by giving effect to equitable rights by
way of contract. I take it therefore that the only effect of the amendment is that , and such right is as stated above (see p
60 of the judgment). (Emphasis added.)

115Next counsel relied upon the case of Mercantile Bank Ltd v The Official Assignee of the Property of How Han
Teh
[1969] 2 MLJ 196 . In that case, the late How Han Teh deposited the
documents of title of two lots of lands to Mercantile Bank Ltd for the purpose of securing a loan. Mercantile Bank
never entered a lien holder`s caveat over the two lots of lands until the filing of a bankruptcy proceedings against
the late How Han Teh. The official assignee argued that Mercantile Bank are not lien holders of the property at the
time of the act of bankruptcy as the caveat was entered subsequently after the act of bankruptcy. The court held
that Mercantile Bank had a prior interest over the land despite the non-filing of a lien holder`s caveat which
precedes the official assignee s right. In that case the court speaking through Raja Azlan Shah (as His Royal
Highness then was) held that: . In that case, the late How Han Teh deposited the documents of title of two lots of
lands to Mercantile Bank Ltd for the purpose of securing a loan. Mercantile Bank never entered a lien holder`s
caveat over the two lots of lands until the filing of a bankruptcy proceedings against the late How Han Teh. The
official assignee argued that Mercantile Bank are not lien holders of the property at the time of the act of bankruptcy
as the caveat was entered subsequently after the act of bankruptcy. The court held that Mercantile Bank had a prior
interest over the land despite the non-filing of a lien holder`s caveat which precedes the official assignee s right. In
that case the court speaking through Raja Azlan Shah (as His Royal Highness then was) held that:

It is settled law that when the said How Han Teh was adjudged a bankrupt on 19 November 1966, the Official Assignee
stepped into his shoes, and the latter s title relates back to and commences at the time of the act of bankruptcy, that is, on
17 June 1966. At that time what is the nature of the bankrupt s property There are the two pieces of land but the Official
Assignee claims that the applicants are not the lien holders on this property as at the time of the act of bankruptcy there is
no caveat entered under the National Land Code.
 Page 38 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

For the applicants it is submitted that at the time when the act of bankruptcy was committed the applicants with whom the
issue document of titles were deposited had equitable rights to a lien in contract. He relied on the case of Vallipuram
Sivaguru v Palaniappa Chetty, Official Administrator as Administrator of the Estate of Gan Inn, deceased
[1937] MLJ 59 . In that case the first defendant as depositee of the
document of title acquired the first right to present a caveat and so entitled to create a lien under section 134(i) of the Land
Code, as against the rights of a subsequent assignee who had lodged a caveat prior to the first defendant s. In my view that
case is authority for the proposition that . In that case the first defendant as depositee of the document of title acquired the
first right to present a caveat and so entitled to create a lien under section 134(i) of the Land Code, as against the rights of
a subsequent assignee who had lodged a caveat prior to the first defendant s. In my view that case is authority for the
proposition that In other words, although failure to lodge a caveat does not entitle the depositee with whom the issue
document of title is deposited, to a lien under the Code, he still possesses a right to it in equity. He can exercise that right
by registering the caveat under section 134 at any time. In dealing with such equitable rights the courts in general act upon
the principles which are applicable to equitable interests in land which are not subject to the statutes.

It therefore follows that at the time when the act of bankruptcy was committed the applicants had an equitable right to a
lien and the trustee in bankruptcy who steps into the bankrupt s shoes, takes a title no better than him. He takes subject to
the same equities as affected the property in the bankrupt s hands (see p 198 of the judgment). (Emphasis added.)

116Mr Robert Lazar�sought to distinguish Sivaguru s case by submitting that equitable rights are of value only in
relation to the immediate parties to the equity and that equitable rights must give way to third party rights. In the
present case, it was said that Derrick is a third party who had absolutely no knowledge and was not put on notice
that the proprietor (Loh) had allegedly deposited his title as security to a lender ((�Consolidated Credit�)). He also
said that these cases do not in any way address the question as to the practical effect of such an equitable lien as
s 281(2) of the
NLC only permits an order for sale upon the holder of the lien having
obtained judgment for the amount due to him and the holder of the lien is only entitled to a lien upon the entry of the
lien holder`s caveat. Mr Lazar however, very properly conceded that he could not argue that there is no such thing
as a lien in equity under Malaysian land/equity jurisprudence.

117In the circumstances, it was submitted for (�Consolidated Credit�), that even being treated as a lien holder in
equity with an imperfect lien they still retained the right to the property over Derrick. This is predicated on the
principle that the courts have recognised that the NLC did not exclude an equitable lien and that a lien holder`s
caveat was construed as relevant only for the purpose of creating a statutory legal lien. It was also submitted that
(�Consolidated Credit�) as the lien holder in equity does not need to enter a lien holder caveat to perfect the
statutory lien and that the possession of the title deposited for security will give priority to the lien holder and that the
lien holder ((�Consolidated Credit�)) can enter a lien holder`s caveat at any time.

118In this regard, I was also referred to an article written by Judith Sihombing National Land Code A Commentary
at para 5604 LexisNexis 2011 and an article titled The Concept and Nature of Liens and the Legal Effect of
Imperfect Liens under the Peninsular Malaysian Land Law by Yong Chiu Mei in The Law Review 2007 in support
of the propositions made by counsel for (�Consolidated Credit�).

119Counsel also referred to the Federal Court in the case of Chuah Eng Khong v Malayan Banking Bhd
[1998] 3 MLJ 97
[1999] 2 CLJ 917 which had also decided that the NLC does not preclude
the operation of equity. Next the case of which had also decided that the NLC does not preclude the operation of
equity. Next the case of Standard Chartered Bank v Yap Sing Yoke
[1989] 2 MLJ 49
[1989] 2 CLJ (Rep) 500 was cited for the proposition that the depositee of
an issue document of title acquires an equitable interest over the land immediately upon the such deposit and that
 Page 39 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

the depositee has the right to lodge a caveat over the land at any time under the provision of the NLC. As such, it
was submitted in the present case that (�Consolidated Credit�) had acquired a lien in equity over the said land as
soon as the issue document of title was deposited with the (�Consolidated Credit�) as security for loan on 29
March 1998. was cited for the proposition that the depositee of an issue document of title acquires an equitable
interest over the land immediately upon the such deposit and that the depositee has the right to lodge a caveat over
the land at any time under the provision of the NLC. As such, it was submitted in the present case that
(�Consolidated Credit�) had acquired a lien in equity over the said land as soon as the issue document of title was
deposited with the (�Consolidated Credit�) as security for loan on 29 March 1998.

120Counsel emphasised that the fact that (�Consolidated Credit�) had entered the lien holder`s caveat a day later
than Derrick�s second caveat is immaterial and does not affect the equitable right of the (�Consolidated Credit�)
as they acquired an equitable right over the subject land on 29 March 1998.

121Reference was also made to the case of United Malayan Banking Corporation Bhd v Goh Tuan Laye & Ors
[1976] 1 MLJ 169 where His Lordship Tun Suffian, the Lord President said:
where His Lordship Tun Suffian, the Lord President said:

possession of the title gives them an equitable interest in the land, which is not affected by the absence of a caveat, as a
caveat in itself does not create an interest but merely gives notice to the world of the presence of an interest belonging to
someone other than the registered proprietor.

122On the other hand, Derrick�s contention is that he had obtained a court order to compel Loh to sell and transfer
the subject land to him. Derrick had entered the second caveat on the said land on 4 June 2007.However, it was
argued for (�Consolidated Credit�) that the deposit of the issue document of title with (�Consolidated Credit�)
occurred on 29 March 1998 and therefore they had obtained a lien in equity over the land on 29 March 1998,
whereas Derrick obtained the court order compelling the Loh to sell the said land to him on 13 November 2003 and
made full payment of the purchase consideration on 26 March 2007 which was well after (�Consolidated Credit�)
had obtained a lien in equity.

123It was argued for (�Consolidated Credit�) that by virtue of the deposit of the issue document of title with them
on 23 March 1998 they are entitled to priority in interests over the property and their equitable right or lien in equity
arose earlier in point of time and thus had priority being the first in time. As such, Derrick�s contention that his
private caveat was lodged a day earlier than (�Consolidated Credit�) s lien holder`s caveat does not affect the
rights of the (�Consolidated Credit�) as the holder of an equitable interest over the subject land. Consequently it
was said that registration of a private caveat Derrick on 4 June 2007 (the second caveat) does not confer a
proprietary right over the property. In this regard, counsel relied upon the case of Mercantile Bank Ltd v The Official
Assignee of the Property of How Han Teh
[1969] 2 MLJ 196 where the court had held that, where the court had held
that, the registration of the caveat does not confer priority nor does it create new right. It temporarily protects such
rights in anticipation of legal proceedings .

124Similarly, in the present case, it was argued that even assuming that Derrick has an equitable interest in the
subject land by virtue of the order of 2003 judgment and payment of the full purchase consideration on or around 26
March 2007, (�Consolidated Credit�) s equitable interest in the form of a lien in equity being first in time, must
necessarily prevail over the rights of Derrick.

125The decision of Taylor J in Wilkins & Others v Kannammal (F) & Anor
[1951] 1 MLJ 99 , at p 100 (CA), was referred to by counsel for
(�Consolidated Credit�) where he said the Torrens law is a system of conveyancing; it does not abrogate the
principies of equity . Also, reference was made to , at p 100 (CA), was referred to by counsel for (�Consolidated
 Page 40 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

Credit�) where he said the Torrens law is a system of conveyancing; it does not abrogate the principies of equity .
Also, reference was made to Butler v Fairclough
(1917) 23 CLR 78 , at p 91, which was approved by the Privy Council in , at
p 91, which was approved by the Privy Council in Abigail v Lapin
[1934] AC 491 where Griffith CJ had said, It must now be taken to be well
settled that under the Australian system of registration of titles to land the Courts will recognise equitable estates
and rights except so far as they are precluded from doing so by the Statutes. This recognition is, indeed, the
foundation of the scheme of caveats which enable such rights to be temporarily protected in anticipation of legal
proceedings. where Griffith CJ had said, It must now be taken to be well settled that under the Australian system
of registration of titles to land the Courts will recognise equitable estates and rights except so far as they are
precluded from doing so by the Statutes. This recognition is, indeed, the foundation of the scheme of caveats which
enable such rights to be temporarily protected in anticipation of legal proceedings.

126In an attempt at diluting or repudiating any priority of interest that may have arisen in favour of (�Consolidated
Credit�), it was argued on behalf of Derrick that he had lodged a caveat as early as 26 February 2000 and Loh
would have had notice of the entry of the caveat and yet chose not to even apply to remove the caveat. Likewise,
(�Consolidated Credit�) as the holder of the alleged equitable lien should have applied to remove that caveat but
did not do so. Apart from saying that Loh was the managing director of (�Consolidated Credit�), Derrick has also in
his affidavits testified to the presence of other directors in court during the proceedings and they would definitely
have known that Derrick was pursuing his claim for specific performance against Loh.

127Counsel for Derrick maintained that if at all (�Consolidated Credit�) did have possession of the document of
title since 29 March 1998, then they had not asserted their alleged interest in the property at any time in the course
of the proceedings in respect of Derrick�s claim to the property via the 2000 Suit and before the 2003 judgment or,
for that matter, before the Court of Appeal under Civil Appeal No P-02 989 of 2003 and before the Federal Court
under Civil Application No 08 14 of 2006 (P) ( the original proceedings ). As for (�Consolidated Credit�) s
knowledge, it was said that they would have been fully aware of the original proceedings, having regard to the
following:

(a) Loh was the managing director and shareholder of (�Consolidated Credit�) until his resignation as
managing director on 22 May 2007; and
(b) Loh�s wife (Gladys Loh Yeap Chin Joo) and sons (Laurence Loh Kwong Yu and Nigel Loh Kwong Weng)
are and were at all material times the directors and shareholders of (�Consolidated Credit�).

128It was argued for Derrick, that if at all (�Consolidated Credit�) had possession of the document of title since 29
March 1998, then they are guilty of dilatoriness and indolence in as much as they had only lodged the lien holder`s
caveat against the property after some nine years later, and well after Derrick had become the beneficial owner of
the said land on 26 March 2007 ie the date of payment of the purchase price of RM60,000 in pursuance of the 2003
judgment. In any case, Mr Robert Lazar�submitted that even if (�Consolidated Credit�) had a lien in equity which
had priority over Derrick�s beneficial interest in and over the property by virtue of the 2003 judgment and the
payment of the full purchase consideration of RM60,000 on 26 March 2007, such priority which they have had was
lost due to gross inaction/omission and/or delay on the part of (�Consolidated Credit�) to timeously assert their
rights and interest in and over the property. This therefore brings me to the next issue, ie the loss of priority.
EQUITY WILL NOT ASSIST THE INDOLENT/LOSS
OF PRIORITY

129The last but decisive point in this discussion is about the loss or forfeiture of priority of equitable interest. In this
regard it is useful to refer to Snell s Equity , where the author cited the observation made by Lord Camden LC in
Smith v Clay
(1767) 3 Bro Ch , who had this to say: , who had this to say:
 Page 41 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

In the words of Lord Camden LC, a court of equity has always refused to aid stale demands, where a party has slept upon
his right and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith,
and reasonable diligence; where these are wanting, the Court is passive, and does nothing . Delay which is sufficient to
prevent a party from obtaining an equitable remedy is technically called laches

130Next, His Lordship Ahmad Fairuz JCA (as he then was) when delivering judgment for the Court of Appeal in
Jasalam (M) Sdn Bhd v Wong Koon Yee
[2000] 3 MLJ 115
[2002] 2 CLJ 377 ( ( Jasalam s case ) said:

The Respondent, although being the first in time in acquiring the equitable ownership to the said portion, This conduct of
the respondent certainly had caused prejudice to the appellant, for, if the appellant had known about the respondent s
equitable interest in the said portion, the appellant might have not bought the land or might have bought the land at a
cheaper price. The appellant is entitled to priority and the caveat should be removed. (Emphasis added.)

131In Sivaguru s case the court said:

In dealing with conflicting equities, the fundamental maxim that applies is qui prior est tempore, potior est jure, unless the
party having the prior right in point of time, has done anything to forfeit his priority (see p 60 of the judgment).

In the same case it was said that:

The case turns admittedly upon a question of priority of equities. By the deposit with him of the issue document of title the
first defendant undoubtedly acquired certain valuable rights, inter alia the right to retain the deeds and the right to acquire a
lien over the land under the Land Code by registering a caveat under section 134. He can exercise this latter right at any
time. As between himself and the plaintiff he admittedly has the prior equity and in the absence of other factors that priority
in point of time must prevail. Has he done anything which will postpone his prior equity to the plaintiff s subsequent equity
Mr Jeff on behalf of the plaintiff/appellant argued that the neglect to put on a caveat was such an omission on the part of the
first defendant as to cause him to lose his priority. The system of registration of titles to land in the Federated Malay States
being based upon the Australian Torrens System, the judgment of the Privy Council in the case of Abigail v Lapin
[1934] AC 491 on appeal from the High Court of Australia affords a valuable
guide as to the principles to be applied in considering such a question. Lord Wright, at page 501, quotes with approval the
following passage from the judgment of an Australian Chief Justice in an earlier case: on appeal from the High Court of
Australia affords a valuable guide as to the principles to be applied in considering such a question. Lord Wright, at page
501, quotes with approval the following passage from the judgment of an Australian Chief Justice in an earlier case:

It must now be taken to be well settled that under the Australian system of registration of titles to land the Courts will
recognise equitable estates and rights except so far as they are precluded from doing so by the statutes. This recognition
is, indeed, the foundation of the scheme of caveats which enable such rights to be temporarily protected in anticipation of
legal proceedings. In dealing with such equitable rights the Courts in general act upon the principles which are applicable to
equitable interests in land which is not subject to the Acts. (Emphasis added.)
 Page 42 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

(see pp 62 63 of the judgment).

FINDINGS (LIEN IN EQUITY AND PRIORITY)

132The principles of law/equity that may be culled from the cases that were adverted to by counsel may be
summarised and restated as follows:

(a) the NLC does not abrogate rights in equity affecting land;

(b) no statutory lien is acquired under the NLC until the lien holder`s caveat is registered but that does not
prevent the depositee of the document of title from having some equitable right outside the NLC;

(c) a lien in equity or equitable lien or imperfect lien may be said to exist as a right alongside and with priority
over any statutory right or interest that may be acquired under the NLC or any other equitable right or
interest;

(d) the registration of a caveat only gives notice to the world at large of a claim to title to land or an interest in
and over the land but does not of itself create any interest in land nor does it accord priority;

(e) the rule relating to priority of interests is that in equity, all things being equal, the first in time prevails; and
(f) priority of any equitable interests may be lost or forfeited due to any act or omission or indolence of the
claimant of the prior equitable interest which might have had the effect of inducing a claimant later in time
to act to his prejudice.

133Next, having regard to the factual matrix as discussed above and the principles of law that are to be gathered
from the cases alluded to by counsel and summarised above, and proceeding on the assumption that the title to the
property was in fact deposited with (�Consolidated Credit�) in or around March 1998, I am of the view that
notwithstanding their failure to enter a lien holder`s caveat timeously, they would have acquired a lien in equity or
interest in the property which has priority over any other interest legal or equitable that may arise subsequently
thereafter.

134However, it is also necessary to consider whether the priority in respect of the lien in equity was lost or forfeited
due to any act or omission or indolence on the part of (�Consolidated Credit�) which caused Derrick to act to his
prejudice. In this regard, having given the matter my most anxious consideration, I am impelled to the conclusion
that based on the principles as may be gleaned from the cases such as Jasalam and Sivaguru , and applying
those principles to the facts of the present case, the priority that was acquired, if at all, out of the equitable interest
or lien in equity was lost or forfeited, as (�Consolidated Credit�) had only lodged the lien holder`s caveat on 5 June
2007 ie nine years later and subsequent to the conclusion of the original proceedings in favour of Derrick, and the
accrual of Derrick�s beneficial interest in the said land on 26 March 2007 ie the date of payment of the purchase
price of RM60,000 in pursuance of the 2003 judgment and its unconditional acceptance by Loh.

135In this regard, I am also in agreement with counsel s submissions when he said that the conduct on the part of
(�Consolidated Credit�) in lodging the lien holder`s caveat subsequent to the conclusion of the original
proceedings and the accrual of Derrick�s beneficial interest in the property caused prejudice to Derrick, for if the
said lien holder`s caveat had been entered against the property on or about 29 March 1998 or prior to
commencement of the trial in the 2000 Suit, Derrick would have known about (�Consolidated Credit�) s purported
equitable or legal interest as the holder of a statutory lien over the property and, consequently, could have either:

(a) made the necessary application to cancel or remove the lien holder`s caveat prior to the commencement of
the trial in the 2000 Suit; or
 Page 43 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

(b) included (�Consolidated Credit�) as a co-defendant to the said proceedings before the High Court to
enable an effectual and complete determination of the issue over Derrick�s claim to the property vis-a-vis
the issue over (�Consolidated Credit�) s purported equitable interest in the property; or
(c) amended his claim in the 2000 Suit to seek appropriate monetary compensation from Loh in lieu of specific
performance for the purchase of the property.

136Hence assuming that there was a deposit of title to the property by Loh in March 1998, then by having lodged
the lien holder`s caveat on 5 June 2007, (�Consolidated Credit�) are guilty of inordinate and unexplained delay to
say nothing of inaction or omission vis-a-vis notification to Derrick. Of course, I am aware of the observation of the
court in Sivaguru s case, that the mere failure to lodge a lien holder`s caveat does not cause the party to lose its
lien and that the lien in equity remains extant. Also the court had held in that case that the depositee may lodge a
caveat at any time. That was clearly the theme of the submission by counsel for (�Consolidated Credit�) who said
that they are entitled to lodge a lien holder`s caveat at any time and that they are not guilty of any inaction.

137However, on the facts of the present case, I am unable to agree that there has been no inaction/omission or
indolence by (�Consolidated Credit�). The facts are compelling. Also the relationship between Loh and
(�Consolidated Credit�) is so closely intertwined that it would be farcical for (�Consolidated Credit�) to disavow
any knowledge of the 2000 Suit. Loh was managing director of (�Consolidated Credit�) at the material time and
was at the heart of the 2000 Suit filed by Derrick against him. As such, Loh knew everything about Derrick�s claim
against him and the impact that it would have on (�Consolidated Credit�) s interest in and over the property. Thus,
it was wholly incumbent upon Loh as managing director of (�Consolidated Credit�) to protect the interest of the
company of which he was a shareholder, director, managing director and the director primarily responsible for its
financial affairs to take appropriate steps to timeously enter a lien holder`s caveat, or to intervene in the 2000 Suit.
At the very least, Loh either as defendant in the 2000 Suit or as managing director of (�Consolidated Credit�)
should have ( but did not) put Derrick on notice of the fact that the title had (allegedly ) been deposited with
(�Consolidated Credit�) as security for loans by the latter.

138Therefore, assuming there was indeed a deposit of title in 1998, then it would appear that (�Consolidated
Credit�) (through Loh as its managing director) had turned a blind eye to the events that were unfolding via the
2000 suit (and the appeals to the Court of Appeal and the Federal Court) and did nothing notwithstanding that
Derrick had succeeded in obtaining an order of specific performance with respect to the property.

139In all the circumstances, it is my view that even if (�Consolidated Credit�) had a lien in equity which accrued
prior in time to Derrick�s beneficial interest over the property, such priority as they may have had was lost or
forfeited due to their wanton inaction, omission and inordinate delay.

140I may add that, since March 1998 (when the deposit of title allegedly took place), third party rights ie Derrick�s
rights had crystallised under the 2003 judgment and the accrual of beneficial ownership of the property as at 26
March 2007 when he paid the full purchase consideration to Loh, which, coupled with the fact that Derrick knew
nothing whatsoever of (�Consolidated Credit�) s alleged lien in equity, entitles the court as a matter of discretion
and in the exercise of its equitable jurisdiction not to lean in favour of (�Consolidated Credit�) as a party asserting
rights in equity. In this regard, it is apposite to quote from the case of Bhagwan Singh & Co Sdn Bhd v Hock Hin
Bros Sdn Bhd
[1987] 1 MLJ 324 where Justice Edgar Joseph Jr J (as he then was) said,
the Torrens system does not prevent the court from doing equity where the rights of third parties have not
intervened: where Justice Edgar Joseph Jr J (as he then was) said, the Torrens system does not prevent the court
from doing equity where the rights of third parties have not intervened: Loke Yew v Port Swettenham Rubber Co Ltd
[1913] AC 491 . Hence, the position I take is that since Derrick�s rights as a
bona fide purchaser for value without notice of any earlier lien in equity had crystallised and intervened,
(�Consolidated Credit�) s lien in equity (if any) no longer has any currency and may not be enforced. . Hence, the
position I take is that since Derrick�s rights as a bona fide purchaser for value without notice of any earlier lien in
 Page 44 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

equity had crystallised and intervened, (�Consolidated Credit�) s lien in equity (if any) no longer has any currency
and may not be enforced.

141There is one final point which has been raised but which is not necessary for me to deal with and it has to do
with the point whether the holder of a lien in equity can apply for the remedies available under the NLC without
lodging a statutory lien holder`s caveat. I am of the tentative view that if the remedies under the NLC are to be
pursued then a statutory lien holder`s caveat must be in place as a pre-requisite before the remedies of an order for
sale etc can be made in favour of the holder of the lien. But as this point was alluded to in passing and not fully
argued, I will leave it to the parties if they so desire to have it ventilated in another forum provided the occasion and
opportunity presents itself.

142In any event, the tentative view that I hold is no different from the view advanced by Yong Chiu Mei in an article
published in (p 579) titled The Concept and Nature of Liens and the Legal Effect of Imperfect Liens under the
Peninsular Malaysian Land Law where she said that:

Thus far it appears that there has not been any reported case which deals with an application for sale by an un-caveated
lien-holder for sale under the National Land Code. It is suggested that, so long as a lien holder`s caveat is still to be entered
so as to create a lien over land, the lender is not entitled to the remedy of sale under the National Land Code. His only
option would seem to be to attach and sell the land as an �unsecured� creditor. This would further support the suggestion
that what is recognized and protected by the court in equity is the right to create a statutory lien over the land, rather than
an equitable version of a statutory lien (see p 586 of the article).

The view advanced by the author seems to be supported by the following observation made by Raja Azlan Shah (as His
Royal Highness then was) in Mercantile Bank Ltd v The Official Assignee of the Property of How Han Teh
[1969] 2 MLJ 196 where he held that where he held that the court in the
absence of express words in the statute is not preventing from doing justice between parties by giving effect to equitable
rights by way of contract. In other words, although failure to lodge a caveat does not entitle the depositee with whom the
issue document of title is deposited, to a lien under the Code, . In the result, it would appear that the equitable lien-holder
would have to register the lien-holder`s caveat as provided for under the NLC in order to obtain the statutory reliefs of an
order for sale of the property.

THE ORDERS

143For the reasons as stated above and conclusions that I have reached on each of the issues that were raised in
these proceedings above, Derrick�s application succeeds and (�Consolidated Credit�) s application fails. I
therefore allowed prayers (a), (b), (c), (d) and (e) of Derrick�s application in OM 25 60 of 2008 and dismissed OS
24 591 of 2008. I ordered (�Consolidated Credit�) to pay a sum of RM40,000 to Derrick as total costs for both
applications (OM and OS). I made no order of costs in respect of pendaftar hak milik tanah, D1 in OM 25 60 of 2008
and the estate of Loh or D2. I also ordered that Derrick will have liberty to apply. Counsel for (�Consolidated
Credit�) intimated that he had instructions to appeal and made an oral application for stay. I held that since Derrick
is in possession and occupation of the property, there is therefore no status quo that needs to be preserved
pending any appeal, but as regards the original title deed ie the replacement title (pp 2 6 (�bundle B�)), it should
be handed over to Derrick�s solicitors, Messrs Shearn Delamore within 14 days of service of the sealed order or its
extraction, if taken out by solicitors for (�Consolidated Credit�) on the condition that the issue document of title for
the property is to be kept by Messrs Shearn Delamore pending disposal of the appeal to the Court of Appeal and it
is not to be transferred in the name of Derrick or any of his nominees. I ordered that there be a stay of that part of
the order herein relating to assessment of damages, pending disposal of the appeal. However, there is no stay in
respect of the order of costs made against (�Consolidated Credit�). I directed that a single order be taken out by
Messrs Shearn Delamore. In the event that (�Consolidated Credit�) failed to deliver the title as part of the
conditional stay granted herein, then the entire stay order will lapse and Derrick is entitled to enforce the terms of
the order/judgment made today.
 Page 45 of 45
(�Consolidated Credit�) Co Sdn Bhd v Gladys Loh & Ors (as the executrix of the estate of Loh Hoot Yeang,
deceased) and another suit ....

144Lastly I wish to place on record my gratitude to both counsel for assisting me with their in-depth research and
eloquent submissions on the multifarious issues that were inherent in this case.

Order accordingly.

OM allowed and OS dismissed.

Reported by Ashok Kumar

End of Document