Lien Case Study

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Definition of lien Lien is the act of depositing something valuable to the amount owed to the proprietor. And, the lien is not a registerable dealing. Under section 281(1) of the National Land Code 1965, it illustrated that “Any proprietor, or lessee, for the time being, may deposit with any other person or body, as security for a loan, his issue document of title or, as the case may be, duplicate lease.” (National Land Code (Act 56 of 1965)) In simple terms, a lien can be created in reference to any alienated land or any lease or sub-lease of alienated land. And, a lien is created when an individual who holds the property deposits with his issue document of title as security for a loan with the lender. Thus, the individual who deposited…show more content…
The second defendant had stood as a guarantor for the loan granted to the first defendant. And as security, the title of the said land had deposited with the plaintiff. The first defendant defaulted the loan and consequently judgment was entered against the second defendant as guarantor. As the judgment remained unsatisfied, the plaintiff made an application for sale of the land under section 281(2) of the National Land Code. The second defendant opposed the ground that there was no agreement between the parties that a lien holder’s caveat be entered. The issue was whether the plaintiff was entitled to be the holder of the…show more content…
The facts showed that Staghorn Sdn Bhd initially purchased the land from its registered proprietors and paid a 10% deposit in respect thereof. Subsequently, the land was transferred to its sister company, Teck Lay Realty Sdn Bhd, which paid the balance of the purchase on a loan taken with Bank Bumiputra Malaysia Berhad. The turn of events that followed led to Park Avenue, which was Teck Lay's holding company, depositing the document of title to the land to Hong Leong Bank Berhad for entry of a lien-holder's caveat for a loan taken with Hong Leong Bank Berhad by Park Avenue in the sum of RM5.5 million. When Park Avenue defaulted on the repayments thereof, Hong Leong Bank Berhad obtained a judgment that led to the order for

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