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2021 MarsdenLR 1285
HIGH COURT MALAYA KUALA LUMPUR
RHB BANK BERHAD – Appellant
Versus
NUJADE GARDEN SDN BHD & ANOTHER CASE (ENCL 1) – Respondent
[Originating Summons No: WA-24FC-400-05/2021 & WA-24FC-402-05/2021]
The High Court possesses the authority to substitute an order for sale from the Land Administrator under the National Land Code, requiring rigorous adherence to procedural compliance by the chargee without receipt of objections.
Headnote:(A) National Land Code 1965 – Sections 254, 260, 261, 262, 263, 265, and 256 – Two originating summonses filed for orders of sale against unsecured land after multiple auction failures – The Court confirmed that the High Court could substitute the Land Administrator's order as per s 265(3A), emphasizing the precedence of compliance with statutory notice requirements defined under s 254. (Paras 6, 18, 19, 76)
(B) Foreclosure Action – Chargee merely enforces rights as a chargee, and not a formal initiating action – Application for an order of sale under s 256 does not require a comprehensive adjudication of substantive issues; the chargee's rights remain intact unless cause to the contrary is established. (Paras 22, 24)
Facts of the case: The Plaintiff filed originating summonses after the Defendant defaulted on several loans secured by land, subsequently leading to failed auctions. (Paras 1-5)
Findings of Court: Substitution of the initial order for sale was granted despite various objections from the Defendant, who failed to demonstrate valid cause to oppose the application. (Paras 19, 75)
Issues: Whether the Defendant could oppose the order for sale based on previous defaults and statutory compliance challenges. (Paras 19, 20)
Ratio Decidendi: It was determined that prior applications and orders made remained valid unless successfully contested, reinforcing the chargee's rights within foreclosure proceedings. (Paras 21, 76)
Result: Plaintiff's application allowed, and order for sale granted.
JUDGMENT
Introduction
[1] In Originating Summons No WA-24FC-400-05/2021 ("Suit 400"), the Plaintiff ("P") filed an originating summons dated 7 May 2021 ("Suit 400 encl 1") for an order substituting the order for sale issued by the Land Office of Wilayah Persekutuan Kuala Lumpur ("PTGKL") dated 6 October 2020 ("Suit 400 Order for Sale") against the land charged by the Defendant ("D") to P via Presentation No 11345/2014 ("Suit 400 Charge") on the land held under GM 4315, Lot No 56095, Mukim Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan ("Suit 400 Land").
[2] In Originating Summons No WA-24FC-402-05/2021 ("Suit 402"), P filed an originating summons dated 7 May 2021 ("Suit 42 encl 1") for an order substituting the order for sale issued by PTGKL dated 6 October 2020 ("Suit 402 Order for Sale") against the land charged by D to P via Presentation No 11344/2014 ("Suit 402 Charge") on the land held under GM 4314, Lot No 56094, Mukim Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan ("Suit 402 Land").
[3] I heard Suit 400 and Suit 402 together. The parties in both suits are the same and they are represented by the same set of solicitors. The facts in both suits are similar. Only the charge presentation number and the charged land are different. Both suits raised similar issues and arguments. I allowed the Suit 400 encl 1 as well as the Suit 42 encl 1. These are my grounds with respect to both decisions.
[4] The Suit 400 encl 1 and the Suit 42 encl 1 are collectively referred to as encl 1. The Suit 400 Order for Sale and the Suit 402 Order for Sale are collectively referred to as the Order for Sale. The Suit 400 Charge and the Suit 402 Charge are collectively referred to as the Charge. The Suit 400 Land and the Suit 402 Land are collectively referred to as the Land.
Background
[5] The brief facts of this matter may be conveniently set out by way of a chronology of events.
Date Event 17 July 2014 Letter of Offer issued by P to D for 4 banking facilities in the total sum of RM5 million under:
(a) Term Loan 1 Mortgage of RM2 million under Account No 71209500043658 to part finance the purchase of a vacant land held under GM 4313, Lot No 56093;
(b) Term Loan 2 Mortgage of RM1 million under Account No 71209500043666 to part finance the purchase of a vacant land held under GM 4314, Lot No 56094;
(c) Term Loan 3 Mortgage of RM1 million under Account No 71209500043674 to part finance the purchase of a vacant land held under GM 4315, Lot No 56095;
(d) Term Loan 4 Mortgage of RM1 million under Account No 71209500043682 to part finance the purchase of a vacant land held under GM 4316, Lot No 56096.
29 September 2014 Facilities Agreement entered into between P and D ("Facilities Agreement"). 11 December 2014 The Charge was created on the Land by D in favour of P. 6 February 2018 Letter of termination / recall / demand issued by P to D ("LOD"). 26 February 2018 Writ and Statement of Claim filed by P against D in Suit No WA- 22NCC-77-02/2018 ("Suit"). 28 March 2018 Letter of confirmation issued by P concerning D's payment in the sum of RM55,000 on 16 Mac 2018 and 17 Mac 2018 on a without prejudice basis. 17 May 2018 Summary judgment obtained by P against D in the Suit ("Judgment"). 25 May 2018 Appeal filed by D against the Judgment in the Court of Appeal ("Appeal"). 29 October 2018 Settlement scheme approved by P at D's request. 9 November 2018 Appeal withdrawn due to the settlement between the parties. 3 July 2019 Another settlement scheme approved by P at D's request ("Settlement"). 1 October 2019 Letter of reminder issued by P to D concerning default of the Settlement. 9 October 2019 Letter from P to D to proceed with legal action against D due to default of the Settlement. 16 October 2019 Form 16D issued by P to D ("Form 16D"). 18 August 2020 Form 16G ("Form 16G") filed by P at PTGKL. 3 September 2020 Summons to the chargor issued by PTGKL to D ("Summons"). 4 September 2020 Notice issued to D enclosing the Summons. 6 October 2020 Land en
