LIA2009/LXEB2112

LAND LAW II
TUTORIAL QUESTIONS

LIEN

1. How does a charge differ from a lien? Elaborate your explanation with the relevant statutory
provisions and case law.

2. With reference to the relevant statutory provisions and case law, discuss the following issues:-
(a) Does the National Land Code 1965 allow a third party lien to be created?
(b) Would a deposit of issue document of title by a party other than the registered proprietor
affect the validity of a lien?

3. Hero is the landowner of Lot 555, a piece of land located in Seremban. His daughter, Julie,
applied for a loan from Big Bank which requires security for the loan. Julie obtained the issue
document of title for Lot 555 from Hero, telling him that it was needed for the purposes of
property evaluation. However, Julie gave the issue document of title to Big Bank to secure her
loan instead. A lien holder’s caveat was entered by Big Bank over Lot 555.

Two years later, Julie failed to repay the loan to Big Bank despite some notices of demand from
the latter. Lately, Big Bank has obtained a judgement for the amount due against Julie. This came
to the knowledge of Hero who just realized that the issue document of title for Lot 555 was
never returned to him. Julie finally confessed to her father that she had deposited the issue
document of title with Big Bank to secure her loan. Hero comes to you seeking your advice on
the matter. Advice him.

4. Zero is the owner of a piece of land, Lot 222. To secure a loan granted by Big Bank to him, Zero
agreed to charge Lot 222 to Big Bank. The issue document of title and the charge instrument
were prepared by Ricky, the solicitor acting for Big Bank. The documents were presented to the
land office for registration but were rejected due to a typo in the charge instrument. Ahsu, the
clerk working for Ricky, kept the documents and did not bring it to the attention of Ricky. Five
years later, Ricky discovered the documents after Ahsu had left the employment at his firm.

Discuss the legal position of Big Bank in the above circumstances.