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2024 MarsdenLR 531
HIGH COURT MALAYA PULAU PINANG
GAN CHAW FONG & ANOR – Appellant
Versus
SUBRAMANIAN MUTHIAH – Respondent
[Originating Summons No: PA-24FC-314-07/2023]
The court must order a sale under the National Land Code unless the defendant establishes cause to the contrary, which was not proven in this case.
Headnote:(A) National Land Code 1965 – Sections 256 and 257 – Moneylenders Act 1951 – The Plaintiff sought an order for the sale of property due to the Defendant's failure to repay a loan secured by a charge on the property. The Court confirmed that under ss 256 and 257, the Court must order a sale unless there is cause to the contrary. (Paras 12-14)
(B) Locus Standi – The Court found that the Plaintiffs, as heirs of the deceased lender, had the necessary locus standi to initiate proceedings for the sale of the charged property. (Paras 22-23)
(C) Compliance with Moneylenders Act – The Court held that the agreement was validly executed and complied with the requirements of the Moneylenders Act, dismissing the Defendant's claims of non-compliance. (Paras 25-30)
(D) Proper Notice – The Court ruled that the Form 16D notice issued was appropriate and sufficient, rejecting the Defendant's arguments regarding its validity. (Paras 31-36)
(E) Interest Calculation – The Court determined that the interest charged did not constitute compound interest and was lawful under the Moneylenders Act. (Paras 39-45)
Facts of the case: The Defendant borrowed RM 1,600,000.00 from the deceased, secured by a charge on the property. After defaulting on payments, the Plaintiffs sought an order for sale. (Paras 4-11)
Findings of Court: The Court found no cause to prevent the sale of the property and ordered it to be sold by public auction. (Paras 46)
Issues: The main issues included the Plaintiffs' locus standi, compliance with the Moneylenders Act, validity of the notice, and legality of the interest charged. (Paras 19-20)
Ratio Decidendi: The Court emphasized that the statutory framework mandates a sale unless cause to the contrary is established, which the Defendant failed to do. (Paras 12-14)
Result: The application for sale was granted, and the property was ordered to be sold by public auction. (Paras 46)
JUDGMENT
Introduction
[1] This is the Plaintiff's application seeking an Order for the sale of a property held under Geran No Hakmilik 2925, No Lot 1609, s 5, Bandar Georgetown, Daerah Timor Laut, Negeri Pulau Pinang together with the premises erected thereon bearing the address of No 41, Persiaran Besi, 11600 Georgetown, Pulau Pinang (hereinafter referred to as the "said land") under ss 256 and 257 of the National Land Code 1965 and O 83 of the Rules of 2012.
[2] Having perused the affidavits and heard learned Counsel with the aid of their written submissions, I had allowed the Plaintiff's application and granted the orders sought. I will in this judgment set out the detailed facts and the reasons for allowing the application.
Background Facts
[3] The Defendant is the owner of the land known as Geran No Hakmilik 2925, No Lot 1609, s 5, Bandar George Town, Daerah Timor Laut, Negeri Pulau Pinang together with the premises erected thereon bearing the address of No 41, Persiaran Besi, 11600 Georgetown, Pulau Pinang.
[4] Upon the Defendant's request, the late Gan Yong Hin (the deceased), a licensed moneylender, trading as Ling Chian Fong Enterprise agreed to lend a sum of RM 1,600,000.00 to the Defendant and an agreement pursuant to Schedule K of the Moneylenders Act 1951 and the Moneylenders (Control and Licensing) Regulations 2003 was entered into on 11 May 2016 by the deceased and the Defendant.
[5] A charge on the land was also executed by the Defendant in favour of the deceased. The charge in Form 16Awas dated 11th May 2016 and the registration of the charge was effected by the land office on 27 May 2016. The loan was disbursed to the Defendant on 13 May 2016 (see Messrs Shen & Associates' letter dated 13 May 2016 at Exhibit "C" of the Affidavit in Reply and the admission by the Defendant that he received the loan disbursed on 13 May 2016 at para 8 Affidavit in Reply).
[6] The terms of payment in monthly instalments (clause 1 of the Schedule K Agreement), the rate of interest imposed on the loan amount (section 5 of the First Schedule of the Schedule K Agreement), late payment interest and the rights of the deceased to dispose of the land by way of auction in the event that the Defendant failed to pay the outstanding loan amount (clause 5 of the Schedule K Agreement) are all clearly spelt out in the agreement.
[7] After paying several instalments totalling RM232,326.70 and thereafter failing to pay further monthly instalments, the deceased caused a Notice of Demand dated 30 March 2017 to be issued by his solicitors, Messrs Allen & Associates, to the Defendant to remedy the default in payment failing which the Plaintiffs shall obtain an order for sale of the land.
[8] Upon the death of the deceased on 16th September 2017, the Plaintiffs had then obtained a Court Order dated 5th July 2019 via Originating Summons No PA-24NCvC-477-05/2019 to vest absolutely in them all holdings in respect of the deceased's holdings in Ling Chian Fong Enterprise which included all rights, interest, securities, charges, claims, special rights, contracts, accounts whether directly or contingently held beneficially or in the fiduciary capacity of the deceased trading as Ling Chian Fong Enterprise.
[9] Prior to this Originating Summons, the deceased had commenced an application and obtained an order for the sale of the said property via Saman Pemula No PA-24FC-443-08/2017 (hereinafter referred to as "OS 443") in the Penang High Court. However, upon appeal to the Court of Appeal, the Court of Appeal had allowed the Defendant's appeal on the ground that the Originating Summons was not effectively served on the Defendant. The Court of Appeal directed the deceased to serve the Originating Summons and cause papers on the Defendant's solicitors who agreed to accept service.
[10] As directed by the Court of Appeal, copies of the Originating Summons and the Affidavit affirmed by Gan Yong Hin on 22nd June 2017 were then again served on the Defendant's
