Dhanji v. Machani. Misc. Civ. Case 34-D-69; 1/12/69; Georges C. J.

 

Dhanji v. Machani. Misc. Civ. Case 34-D-69; 1/12/69; Georges C. J.

The applicant applied under s. 78(4) of the Land Registration Ordinance Cap. 334 for the removal of a caveat registered against the property owned by him. The caveat had been filed by the respondent, on estate agent fees. He said that the certificate a sale. Later, the owner gave him a cheque and he returned the certificate, but the cheque was dishonoured. Under s. 78(4) of the Land Registration Ordinance the burden is on the coveator to show cause why the caveat should remain on the Register. The Law Contract Ordinance Cap 433 section 173 reads as follows: - “In the absence of any contract to the contrary, an agent is entitled to retain goods, papers and other property, whether moveable or immovable, of the principal, received by him, until the amount due to himself for commission, disbursements and services in respect of the same has been paid o accounted for to him.” It was argued that possession was not necessary for the continuance of the lien, or if it was, it had not been lost by the certificate being retaken by a trick.  

            Held: ”The right conferred by section 173 is a right of retention of things received by the agent. There can be no retention unless there has been possession in the first place. I would hold that under section 173, as under the English Law, a lien cannot exist unless the lien holder is in possession.” In Halsbury’s Laws of England (Simonds Ed) Vol. 24 page 170-1 Para 320 the position in England is stated thus: - “A legal lien is lost if possession is lost, so that redelivery of goods to the owner or his agent destroys the lien and when once made cannot be recalled, even if made by mistake; but if redelivery is induced by fraud or is otherwise wrongfully obtained the lien revives if possession is recovered, even though the recovery is affected by a stratagem. There is no such thing as a notional lien and the court has no power to allow an applicant to part with possession while retaining his rights as holder of a legal lien.” It would appear that a lien can be based only on possession of the property over which it is claimed and the right to retain it. It confers no right to sell the property. If the owner retakes possession by fraud the lien holder would have the right to retake possession and, if successful, could not be sued in detinue

by the owner.” Where property is actually conveyed to a purchaser and the purchase price remains unpaid the purchaser holds the legal estate as a trustee for the vendor, who holds a beneficial interest until the purchase price is paid. This is a right in equity. If the vendor in addition still holds the title deeds he would have a legal lien in respect of the deeds. In equity his lien would continued even where he had parted with the deeds. There can, however, be no question of a lien in equity arising in this case since the caveator as an agent never had any other right except that of retaining the deed in his possession. Unlike the vendor he had no beneficial interest in the property itself which required protection until the purchase price had been paid.” (4) “Where title deeds are deposited with an agent to negotiate a sale of the property, it cannot be said in the absence of any other agreement between the parties that an equitable mortgage by deposit of title deeds arises in respect of any commission earned by the estate agent with regard to the sale of that land. His lien is a legal lien attaching to the title deeds alone and not to the land possession of which he does not have. If he loses possession of the title deeds then he loses his lien though it would revive if he did manage to regain possession.” (5) It follows from this that I hold that such a lien is not an “interest in registered land” within the meaning of the Land Registration Ordinance Cap. 334 section 78(1). Unless a person holds such an interest he cannot present a caveat for registration.” (6) Direction that the caveat be removed from the Registrar.