The court ruled that a third party notice is valid if the original party is no longer involved in the suit, and distinct claims between parties warrant a full trial.

JUDGMENT

Quay Chew Soon J:

Introduction

[1] The Third Party ("TP") filed an application dated 20 March 2024 vide encl 149 to set aside a third party notice dated 24 January 2024 ("third party notice") issued by the 2nd Defendant ("D2") against TP. Enclosure 149 is made under O 16 r 6 and O 18 r 19(1) (b), (c) and (d) of the Rules of 2012.

[2] On 11 June 2024. I dismissed encl 149. Here are the grounds of my decision.

Background Facts

[3] The Plaintiff ("P") had entered into a sale and purchase agreement dated 7 August 1995 with TP for the purchase of a one and half storey semi-detached light industrial building to be erected on plot 14 of a land held under Advance Certificate of Title Holding No 1257, Mukim 12, Province Wellesley South, Penang ("property").

[4] Pursuant to a letter of offer dated 20 October 1995 issued by D2 (formerly known as Bank Bumiputra Malaysia Bhd) and accepted by P and a loan agreement dated 26 February 1996 ("loan agreement") executed between D2 and P, D2 had granted to P a fixed loan of RM100,000.00 and an overdraft facility of RM140,000.00 (collectively "loan") for the purchase of the property. The loan amount is equivalent to 80% of the purchase price of the property, which is RM300,000.00.

[5] P's indebtedness under the loan is secured by a deed of assignment dated 26 February 1996 ("deed of assignment") executed by P in favour of D2. Under the deed of assignment, P assigned all his interests over the property to D2.

[6] As a developer and vendor of the property, TP had vide a letter dated 9 November 1995 ("letter of undertaking") undertook to D2 to:

(a) consent to the assignment by P of all his interests over the property to D2;

(b) forward to D2 the separate issue document of title (together with a registrable transfer in favour of P), upon issuance of the same by the relevant authorities, provided that D2 shall remain as the chargee at that time;

(c) not create any further charge over the property without D2's consent in writing; and

(d) refund to D2 the loan amount of RM240,000.00 or any part thereof as may have been paid by D2 to TP pursuant to the above-mentioned sale and purchase agreement, in the event that the construction of the one and half storey semi-detached light industrial building on the property is not completed by TP.

[7] At the material point in time, as security for the repayment of a bridging loan facility of RM3 million granted by Southern Bank Bhd to TP, two legal charges executed by TP over a land held under Advance Certificate of Title Holding No 1257, Mukim 12, Province Wellesley South, Penang ("land") were registered in favour of Southern Bank Bhd Namely: (a) on 16 June 1994 vide presentation number 8315 / 94, jilid 602, folio 172; and (b) on 22 December 1994 vide presentation number 20306 / 94, jilid 625, folio 125 (collectively "legal charge").

[8] Pursuant to a vesting order dated 6 September 2006 obtained under Kuala Lumpur High Court Originating Summons No D4-24-316-2006, all of Southern Bank Bhd's titles in the charged assets (including the land), were vested in D2, which was still known as Bumiputra-Commerce Bank Bhd at that time.

[9] In May 2017, D2 received a letter dated 12 May 2017 from TP for the redemption of the land. Following therefrom, TP had through its solicitors, Messrs. Lee & YC Tan, dealt with D2 for the discharge of the legal charge.

[10] At that time, the land had already been subdivided and 15 separate titles (including the individual title of the property), had been issued by the relevant authorities. According to D2, it had no knowledge of the existence of the individual title of the property. As TP, in breach of its undertaking, had failed to inform D2 about this and forward the individual title of the property to D2.

[11] As such, P's interests over the property were not reflected in any of the documents of the property. It was not informed by TP to and cannot be detected by D2, as per the land search.

[12] The legal charge had been discharged based and in