Business Case: Lim Chui Lai V. Zeno Ltd

Transfer of title by non-owners is defined as the buyer does not obtain a better title than the seller had when the goods are sold by a person who is not the owner and sells the goods without authority or consent of the owner in s. 27 of SGA 1957. In short, it can be said as no one can sell the goods and transfer the ownership of the goods to other unless he is the owner. This rule is further enshrined in the maxim ‘Nemo Dat Quod Non Habet’. It is a Latin phrase meaning that no one can transfer a better title to the buyer of the goods than he himself has or in other word, no one can give what he does not have.
For instance, Anson purchase goods from Billy. The good is acquired by a thief. Cindy, who is also the true owner of the goods. Anson
Zeno Ltd [1964] 30 MLJ 314. Initially, Zeno Ltd, the respondent company entered into an agreement with a contractor named Ahmad, who had also secured contracts from the Petaling Jaya Authority for the construction of culverts. Under the contract, Zeno Ltd was the supplier of construction materials to Ahmad. They bought the materials and delivered to the construction site. Afterward, Ahmad’s contracts with Petaling Jaya Authority were cancelled due to the conflicts between them. Zeno Ltd informed the authority that the materials delivered to the construction site were belonged to them and they would sell it. However, they found out the materials had been sold by Ahmad to Lim Chui Lai, the
The property in goods is then transferred to the person who buys the goods from the joint owner in good faith and is unaware of the sellers’ lack of authority to sell in s. 28 of SGA 1957.
In other words, it can be said as the goods is only possessed by one of the joint owners and it is agreed by all the co-owners. The joint owner then sells the goods to a buyer who intentionally purchases for value with honesty and sincerity. The transaction will be valid and the buyer will obtain a goods title provided that the buyer do not know that the seller has no right to deal with the transaction.
For instance, Ali, Bob and Carter jointly purchased and owned a car. Ali and Bob agreed to place the car at Carter’s place and allow Carter to drive it since they did not drive. However, Carter sold the car to Dave without getting permission from the other co-owners, Ali and Bob. Dave also did not notice that Carter had no authority to sell it. Thus, Dave would have obtained a good title to the