This document discusses the concept of lien under Malaysian law. It provides definitions and elements of a lien based on case law. A lien is the right of one person to retain possession of property belonging to another person until a debt owed by that person is discharged. The key elements of a valid lien discussed are intention and depositing the title documents of the property with the lien holder. The effects of registering a lien holder's caveat and remedies available to the lien holder in the event of default are also summarized.

1. Lien(takmasukexam),masukmidsemtest
-takperludidaftarkan- terpakai sek206(2)(b)-perlindunganekuiti,noproperinstrumentutk
lien
-lienhanyasatukepentinganterhadaphartatersebut
-satuhak utk pegang
-tiadahak untukmenjual/bertransaksi
Kes:Palaniappa Chettyv Dupire brothers [1919]
-“rightinone man to retainpossessionuntil certaindemandsare satisfied”
-“retain the title documentuntil the loanwasrepaid”
-kesni beri definisi trhdplien.
-sek281(1)- kaedahliendilakukan
-mention206(2)(b)
Olehsiapadankepadasiapa?
-281(1), any proprietor..anyperson,body
-sbgjaminanutkpinjaman
-orangtersebutbolehmasukkankaveatpemeganglien
-bilakaveatdimasukkan,berhakkpdsuatulienke atastanah/pajakan (lease)-orgygada
kepentingan,bukanpemilik
ELEMEN LIEN
-Niat
-Niatberkaitdgntindakanpeminjam, cth:serahIDT kpdpemeganglienatauwujud
satu hutang
-- Hong LeongFinance Bhd v Staghorn Sdn Bhd [2005]- IDT PENTING
-itwas decided thatit ismaterial in the creationof a lien-holder’scaveatunder
section 281 of NLC to have the registered proprietor who deposit the
documentoftitle tothelender for itis the proprietorwhointendstosurrender
his rights to the lender to deal with the said land in the event of default in
repayment of the loan which he obtained from the lender. As borrower, no
this task of depositing the document of title with the lender for the creation
of thisstatutory instrument. Toallowthiswoulddefeattheconceptoftheright
of the registered proprietor to deal with his own land. Section 281 NLC is
intended for a registered proprietor to raise money on loan, speedily, by

2. depositing the document of title registered in his name with the lender as
compared with the more complex process of registering a legal charge over
the land. Butas the law demands, itis only available to a registered proprietor
who borrows money and deposits his title with the lender. It does notextend
to a beneficial owner who is yet to become a registered proprietor. Since this
facility is only available to the registered proprietor, in the event of default in
repayment of the loan, judgment must be obtained against the registered
proprietor, as borrower. The wordings in section 281(2) of the National Land
Code 1965 ofa ‘holderof any lien has obtainedjudgmentfor the amountdue
tohim’ is clear to thiseffect for there canbe noone else other thanregistered
proprietor who is the borrower. In Master Strike Sdn Bhd v Sterling Heights
SdnBh[2005]itwas agreed thatNationalLandCode1965 doesnottoprohibit
the creation of third party lien holder's caveat. However, the court held that
the hen-holder'scaveatby way of third party security, would long as it will not
be prejudicial to the landowner.
-PARAMMOV ZENO LTD (1968) 2MLJ 295 (siapa dapat priorty)
-defanggap dia dah execute satucharge tapi dia tak registercharge dia
-dia argue,walaupun dia tak reg NLC (lien),diadaftar bawah sek 80,
company ordinance (charge).
-siapa yang daftar secara statuori sepatutnya dapat priorty.
-MahkamahputuskandgndepositkanIDTtdkmemadai.
-sebabCompanyOrdinance takrequire charge didaftarkanbawahdia,tapi
NLC require liendaftarbawahNLC
-Mesti terdptniatolehpihakygterbabit
-Niatdlmkesni merujukkpd clause 6 of the agreement,agreement
mentioned,“anintentiontocreate lien”,danperluadabendalainselain
intention,iaitu..plaintiff jugatelahdaftarkanlien.
-NALLAMAL A/P MUTHUSAMY(MW) & ANOR. V. KURUPPANANA/L MUTHUSAMY
& ANOR. [1993] 4 C.L.J. 454
-Mahkamahmemutuskanbahawaelemenniattidakdapatdipenuhi jika
pemilikandokumenhakmilikkeluaranitudiperolehisecarafraudatau
salahnyatadanpendepositantersebuttidak mendapatkebenarandari
pemunyatanahberdaftar.
-DepositkanIDT/pajakanpenduakpdpemeganglien
-HONG KONG & SHANGHAIBANKING CORP [2002] 3 MLJ 483
-Onlya proprietor/a lessee maydeposithisIDT/duplicate
-Readtogetherwiths.5 “Proprietor”means registeredproprietor

3. -Memasuki kaveatpemeganglien[s.330]- DR.NADIA
HEAP HUAT RUBBER CO. V. UOB [1992] 3 CLJ 1589
» Mahkamah memutuskanbahawalienhanyamulaberkuatkuasasecarasah
apabilakaveatdimasukkan.
» Sebelumkaveatdimasukkan,lienbelum dianggapwujud.
» Kaveatjugatidaksemestinyadimasukkansebaiksahajadepositdibuat,malahia
bolehdilakukanbila-bilamasaselepasitu.
» Sebelumkaveatdimasukkan,hakpemiutang(pemeganglien) dilindungi oleh
prinsipekuiti.
-EFFECT OF LIEN HOLDER CAVEAT
-A lien-holder's caveat shall, so long as it continues in force, have effect of, preventingthe
registrationof any dealings,entryof tenancyexemptfromregistrationandsubsequent lien-
holdercaveat.The entryof alien-holder'scaveat,undersection330National LandCode 1965,
perfects a lien where the lien-holder has possession of the instrument document of title or
the duplicate lease.The caveatisimportantasit protectsthe non-registerable interestof the
Lien-holder (lender) in the land.The lien-holders caveat is effective from the time of receipt
of the applicationbythe landoffice ratherthat from the time of endorsementonthe title or
lease, the lien itself would seem to have priorty from the time of possession of the issue
document of title, the duplicate lease, or copy issue document of title
-FAILURE TO CAVEAT LAND
-Despite the right given by the Code to enter a caveat to protect the security, however, to
create the statutory interest, it should be borne in mindthat the main value of caveating is
that of givingthe lien-holderthe rightto seeka court order forsale.By contrast, if the lienis
uncaveated and the borrower defaults, the process of recovery of the unpaid loan is very
expensive and time consuming. The lender is required to obtain judgment, and if the
judgement remains unsatisfied, the lender can commence action for sale. It has been held
thatretentionof possessionof the issuedocumentoftitleorduplicatelease bythelien-holder
allowsthe lien-holdertoentera lien-holder'scaveatat any time,withoutlosingpriorityover
subsequentpurchasersof thelandorleasethe subjectmatterof the lien (MercantileBankLtd
v The Official Assignee [1969]. However,adepositalone doesnotcreate alien,there mustbe
an intention to create a security interest.
-Kegagalanmemasukkan kaveat
• MERCHANTILE BANK V OFFICIALASSIGNEE (1969) 2 MLJ 196
– Kegagalanmemasukkankaveatpemeganglientidaksemestinyaakan
mengakibatkanpemberi hutangkehilangan haknyadibwhekuiti

4. – Ini terjaminasalkankeperluankpd niatutkmewujudkanlienbersekalidgn
pendepositanIDTwujud.
– Adakahkalaumasukkankaveat,kepentingandia(applicant) tidaklagi
dilindungi?
-BwhNLC,lienmasihlindungi bawhsek206
-tapi kalautanah itudijual,jumlahwangitu
-tarikh-tarikhjugapenting,bilaliendibuat,bilanotice bankrupt,notice
kaveatetc…
-mahkamahtgokbilaTarikhidttu deposited.
• Rationale MasukkanKaveat
– WalaupunIDT telahdideposittuanpunyatanahmasihboleh bertransaksi
secara fraud
– KTN kehendakipemberi pinjamanutkmasukkankaveatutkhalangsebarang
urusniagake atas tanah tersebut
REMEDI
 S. 281(2) memperuntukkanhakpemeganglienutk mendptkanperintahjualan
sebagaimanaygbolehdilakukandi dlmkesgadaian.
 Namundemikianpemeganglienperlumendptkanpenaltyutkjumlahwangyg
terhutangterlebihdahulusebelummemohonkpdmahkamahbagi perintahjualan
 S. 281(3) memperuntukkanygpermohonanperlulahmenurut prosedursivil dan
segalaperuntukanygterpakai utkgadaian terpakai di dlmkesliensecara mutatis
mutandis
UJIAN- LIEN 10M
-NIAT, 2 KES, PARAMORE,NALAMAL
-KEGAGALAN MEMASUKKAN CAVEAT-APAREMEDY,PRIORTY, EQUITABLE PROTECTION?-
KES MERCANTILE

5. JUAL JANJI
• -What?
– “ a sale (jual) withapromise (janji)”
– Malay word,means“conditional sale”,resemblesthe commonlaw of
‘mortgage’.
– Customarydealingthat widelypracticed amongstthe nativecommunity
before the interventionof the modemstatutorylandsystem(NLC).
– Tanah itudijual kepadaorgyang beri pinjaman.Diahanyatransaksi bukan
pindahmilik.
–
• CharacteristicsJJ
– Land usedas securityusuallysmall
– Amountof loanis usuallysmall
– Flexible timeforrepaymentof loan
– Loan isusuallyfixeddependingonneedsbutnot
– the value of the land
– JJ oftenpracticedamongfriendsorrelatives
– No interestimposed –howeversharingprofitfromthe productionof the
landmust be shared.Eg : padi,fruits(seperti bayaransewa)
– Writtencontract – sukar untukmemahami klausa/niatpihak-pihakterlibat
– Penghuluasarbitrator
• JJ V MORTGAGE (LAG)
– Transaksi sekuriti,utktujuanjaminanshj
– Bukanownership,lebihkpdpropriertyrights,surrenderthe landtopemberi
hutang,transferwiththe condition,bilapinjamanselesaidibayar,retransfer
kpdpeminjam semula
– Withina certaintime/anytime akantimbul isukalaudalamtempohtertentu,
diagagal bayar,breach contract, hilangtanahdia.(time isthe essence)
• JJ vsMortgage
– Modus Operandi JJ?
– The Malay who raisesmoneyonhisholdingbythe transactioncalledjua!
janji,sellshisproprietary right fora sumthenand there advancedtohim,

6. and surrendersthe landto the vendee,coupling;however,the transferwith
the conditionthat if,at any time,or withina certain time,he shall repayto
the vendee the sumsoadvanced,he (the vendor) shall be entitledtotake
back hisland. Thistransactiondiffersfromourmortgage?inthe facts: - (1)
that no propertyinthe soil passes,butmerelyproprietaryright;"(2) that
possessionisactuallygiventothe personwhoadvancesthe money.
– If a termis mentionedwithinwhichthe moneymustbe repaid,andthe
conditionof repaymentis notfulfilledwithinthe appointedperiod,the sale
becomes absolute (putus) andthe vendee takesthe full rightsof
proprietorship.
-A BOOK BY, WE Maxwell,1984
• 2 PendekatanJJ (1stbox,jj yg ori) (2nd
box,jj seperti mortgage)
-Tanahmasihdlmnama peminjam
(borrower)
-pemberi pinjam(lender) pegang
hakmiliktanah
-peminjammenduduki tanah
tersebutdgnbayaransewa
sebagai refleksi satuinterest
-jikapeminjamgagal bayarwang
yg terhutangdlmtempoh
ditetapkan,tanahdipindahmilik
kpdlender
• Tanah tersebut
dipindahmilikkpdnama
lender
• peminjamdiberi hakutk
mendptkanpindahmilik
semulasetelahsemua
hutangdibayardlmtempoh
yg ditetapkandlmperjanjian
koleteral
Nature of JJ
-jj adakahkontrakutk menjual shj atautransaksi sekuriti adat?
5 JUDICIALVIEWSON JJ
1. Purelycontract+ Time
2. Purelycontract= NoTime
3. Equitable principle
4. PengiktirafanJJsebagai jaminansekuriti
5. Hanya transaksi adat

7. 1. Contract where time is an essence
a. Hj Abdul Rahman Hassan (1917) AC 209
Lord Dunedin:-
“…the learned judges has been too much swayed by the doctrine of
English equity and not paid sufficient attention to the fact that they
were dealing with a totally different land law, namely, a system of
registration of title contained in a codifying enactment.”
2. Contract where time is not an essence
a. Ismail Hj Embong v Lau Hong Kan [1970] 2 MLJ 213 HC
-Held: time for repayment is not an essence as not stated in the
agreement
-Inferred from the conduct of the parties (borrower continue paying
rent)
-Borrower’s contractual to repurchase the land can still be exercised
even after of it’s expiry
b. Ahmad Omar v Hj Salleh Shaik Osman [1987] 1 MLJ 338
-Court : transaction is JJ transaction
-time is originally as essence to the contract, but it has been allowed to
pass.
-Conduct of the parties showed time was no longer an essence.
3. Equitable Principle
a. Yaacob Lebai Yusoh v Hamisah Saad (1950) MLJ 255
i. Facts : appellant transfer land to secure loan RM 2,000
ii. Agreement to resell the land within 3 years
iii. Appellant failed, respondent retransfer the land.
iv. Court held:
1. Real intention of parties to create a mortgage and
collateral agreement is in
v. nature of an equitable security transaction. The right to redeem
remain irrespective if the duration expired.
b. Nawab Din v Mohamed Sharif (1953) 19 MLJ 12
i. Judge treated JJ as being in the nature of a mortgage / rights to
redeem not affected.
c. Halijah v Morad [1972] 2 MLJ 166
i. Court held of respondent took possession of property as a
creditor not as a purchaser as such she is not entitled to the land
4. Recognition of JJ as Security
a. Abdul Hamid Saad v Aliyasak Ismail [1998] 4 CLJ 429
i. Court held time is no longer an essence
ii. Transfer of the land was merely conditional transfer and not an
outright sale
iii. Defendant titled is defeasible by reason of Sect 340 (4) (b)
NLC as there was an obligation on the defendant to retransfer
the land back to the plaintiff.

8. b. Wong See Leng v Sarawasthy Ammal (1954) 20 MLJ 141
i. Court (COA) held transaction is Jual Janji.
5. JJ as a Malay customary transaction
a. Kanapathi Pillay v Joseph Chong (1981) 2 MLJ 117.
i. Salleh Abbas : parties were not Malay but recognized as JJ.
ii. The option to repurchase contained in the collateral agreement
in a jual janji transaction does not create any equitable interest
in the land for the borrower.
iii. The option only creates a contractual right which can defeated
by the effluxion of time or the statute of limitation.
Evolutionary Status of JJ in Malaysia
1st stage – recognitionof JJas an incidentof Malaycustomarytenure/
2nd stage – Hj AbdulRahman case,premature demise of JJ(PrivyCouncilascontract of sale)
3rd stage – judicial avoidance of PCdecisioneg: Ahmad Omarcase where courtheld
transactionas jual janji,toplace JJon a soundstatutorybasis – Sect 4(2) of NLC