Foreclosure proceedings under the National Land Code are not subject to the Limitation Act, enabling ongoing enforcement rights for chargees regardless of defaults.

JUDGMENT

John Lee Kien How @ Mohd Johan Lee JC:

Introduction

[1] The Defendants are the registered proprietors of a property held under Hakmilik Sementara HS (D) 32640, PT 13867, Town of Kundang, District of Gombak, and State of Selangor (hereinafter referred to as "the said Property".

[2] In order to secure the repayment of banking facility granted by the Plaintiff to the Defendants, a charge was created in favour of the Plaintiff over the said Property via Charge dated 27 January 2005 registered on 16 March 2005 bearing Presentation No 14692/2005.

[3] As a result of the default in repayment of the banking facility, the Plaintiff had commenced foreclosure proceeding against the Defendants. An Order For Sale ("OFS") was then granted by Kuala Lumpur High Court on 28 November 2007.

[4] After obtaining the said OFS, several Summons for Direction and/or Notices of Application had been filed to fix auction date under Application for Execution No: 38-303-2008. The last auction fixed on 22 August 2016 was withdrawn as the Defendants were able to make partial repayment to the Plaintiff.

[5] However, the Defendants have once again defaulted in their repayment and the Plaintiff has filed the current Notice of Application ("NOA") on 29 March 2019 to fix auction date under the Application for Execution No WA-38-293-03/2019.

[6] An Order in Term was subsequently granted by the Deputy Registrar on 12 July 2019 ('the Order') and the said Property was fixed for public auction on 23 September 2019 at the reserve price of RM700,000.00.

[7] Unsatisfied with the Order, the Defendants filed the Notice of Appeal to Judge in Chamber (encl 13) on 26 July 2019 ('this Appeal').

The Defendants' Submission

[8] In the Affidavits filed (Defendants' Affidavit In Reply affirmed by D1 on 11 June 2019 (hereinafter referred to as "D1's AIR 1") and Defendants' Affidavit in Reply affirmed by D1 on 8 July 2019 (hereinafter referred to as "D1's AIR 2")) in opposing the NOA, the Defendants have alleged numerous grounds of irregularities to challenge the Order.

[9] However in the written submission filed, the Defendants offered 2 grounds of submission for this appeal. This was later increased with an additional ground during the oral submission. Hence, there are in total, 3 main grounds of submissions by the Defendants namely concerning:

1) The Reserve Price;

2) The Valuation Report; and

3) The Time Limitation.

[10] It is the Defendants' submission that the Order for Sale must be set aside because the reserve price for the said Property is not comparable with the Market value. The Defendants brought it to the attention of the Court that the valuation report had fixed the reserve price for the said Property for the amount of RM700,000.00 whereby the market price for the property nearby the said Property was valued at RM800,000.00 and above. It is their observation that the size of the said Property compared with the nearby property is around 10% different in size. Yet the differences in price set by the valuation report was around 15% which, to the Defendants, was not justifiable for a reduction of RM100,000.00.

[11] The Defendants also alleged that the valuation report was not in compliance with the stipulation of s 257(1)(d) of the National Land Code (' NLC '). In addition, the Order for Sale was obtained through a Substitute Service Order dated 14 May 2007 under the Originating Summons No S5-24-2332-2006 by the Plaintiff. The Defendants contended that the Plaintiff had abused the Court procedure as it was made outside of the Rules of Courts 2012 ('ROC 2012') and deemed to be unlawful thus became a nullity. The Defendants then brought it to the attention of the Court that they had filed an application to set aside the Order for Sale (encl 21) under the Originating Summons No S5-24-2332-2006. That application was yet to be heard. Bearing in mind that this is a dispute concerning another case, this is a non-issue to this case.

[12] Furthermore, the Defendants contended that when they