Silveron Builders Sdn Bhd v YHL Property Sdn Bhd

Appellant(s): Silveron Builders Sdn Bhd

Respondent(s): Yhl Property Sdn Bhd

• YA Dato' Mohd Nazlan Bin Mohd Ghazali
• Dato' Dr. Choo Kah Sing
• YA Dato' Faizah Binti Jamaludin

• The respondent, as landowner, entered into a joint venture agreement (JVA) with a Developer for a project on its land.
• The appellant wrongfully lodged a second caveat on the respondent's land, which prevented the registration of third-party charges required by the Developer's financiers (Maybank and RHB Bank).
• As a result, the Developer had to obtain alternative short-term loans at higher interest rates, incurring "Additional Financing Costs" which the respondent subsequently indemnified.

• Whether the respondent was contractually obliged to indemnify the Developer for the Additional Financing Costs under the terms of the JVA.
• Whether the respondent was statutorily entitled to compensation under section 329(1) of the National Land Code (NLC) for the sum it had indemnified the Developer.
• Whether the damages suffered by the respondent were reasonably foreseeable and if the respondent had failed to mitigate its losses.

• The Court found that clause 3.1(a) of the JVA was merely facilitative and did not create an express or implied contractual obligation for the respondent to indemnify the Developer for losses arising from a third party's wrongful act.
• However, the Court held that the respondent was entitled to compensation under section 329(1) NLC, as the appellant's wrongful caveat caused actual and reasonably foreseeable damages to the respondent.
• The Court affirmed that the indemnification of the Additional Financing Costs was a necessary and foreseeable measure to mitigate losses caused by the wrongful caveat, upholding the High Court's award of RM748,931.37 to the respondent.