Harun bin Mahmud Hashim SCJ: In 1983, the plaintiff (Bank) granted to the defendant (Developer) banking facilities exceeding RM1 million which were secured by legal charges over two properties known as the Anson Apartments and No: 30 Rose Avenue, both in Georgetown, Pulau Pinang.

Upon default, the Bank applied for an order for sale of the two properties under s. 256 of the National Land Code 1965 . At the same time, the Bank also filed a civil claim for recovery of the amount owing under the account secured by the Rose Avenue property. On 8 May 1991 they obtained judgment for RM763,409.21 with further interests and costs.

The order for sale of the Anson Apartments was settled out of Court on 29 July 1991. There are 31 units of apartments built by the Developer on this property. On 2 August 1991, Toto Wiguna purchased Apartment No: 160/7-2 and on 3 August 1991, Hon Ho Wah purchased Apartment No: 160/4-3. They executed sale and purchase agreements and paid 10% of the purchase price. On 8 and 9 August 1991 the purchasers paid the Developer the balance of the full purchase price of RM250,000 and RM240,000 respectively.

On 14 August 1991, the Bank was granted a prohibitory order over the two apartments purchased by Hon and Toto pending their sale to realise the judgment debt of RM763,409.21. The said prohibitory order was registered in the Registry of Titles Pulau Pinang on 21 August 1991 followed by the registration of the discharge of charge of the Anson Apartments on 23 August 1991.

On 29 November 1991, Hon and Toto filed an application to intervene in the proceedings and for setting aside the prohibitory order on the ground that as equitable owners of the two apartments they have priority as against the said prohibitory order. On 30 June 1992, the learned Judge dismissed the interveners' application with costs. Hence this appeal.

The Anson Apartments were built on lands owned by the Evangelical Lutheran Church in Malaysia and

Singapore (the Church). On 23 March 1981 the Church entered into a principal joint venture agreement with the Developer to build the 31 units of apartments on the lands. This was followed by a supplemental agreement on 26 April 1983. The Church, as registered owners of the lands, executed third party charges on 29 March 1985 and 20 September 1985 respectively to the Bank to finance the Developer. These were the charges the subject-matter of foreclosure proceedings between the Bank and the Church in Penang High Court O.S. No: 24-308-1989 which was settled out of Court on 29 July 1991. By letter dated 1 August 1991 the Church wrote to the Developer as follows:

Dear Sirs,

Re: Land held as security for UMBC A/C No. 2535073532 namely lands held under lot 56, 1212, 1213, 1214 & 1215 Bandar George Town, DTL, Penang.

We refer to the above matter.

We write to inform you that we have paid a sum of RM1,525,046.80 on 29 July 1991 to UMBC being a full and final payment to redeem the above properties charged to the said UMBC.

Yours faithfully,

Sgd. (Julius D. Paul) Bishop.

Encl. (1) Letter of acknowledgment of Asbir, Hira Singh & Co. (2) Banking Slip.

By another letter of the same date, the Bishop wrote to the Developer as follows:

Dear Sirs,

Re: Letter of Disclaimer/ Waive of Proprietary Interest

We write to irrevocably confirm that our Church being the landowners of Lot No. 002125 Sek. 12, Bandar Georgetown, Daerah Timur Laut, Pulau Pinang held under Grant No. 18852 (formerly known as Lots 56, 1212, 1213, 1214 and 1215, Sek. 12 Bandar Georgetown, Daerah Timur Laut, Pulau Pinang) on which the apartment block known as Anson Apartments at Anson Road, Penang is built, we do not have any proprietary interest on the following Apartments:

(a)Unit No. 160/4-3 (b)Unit No. 160/7-2

This letter of confirmation is pursuant to the Settlement Agreement dated 1 August 1991 between your company and our Church.

Yours faithfully,

Sgd. (Julius D. Paul) Bishop.

It will be observed from these two letters that:

(a)the Bank has been paid in full the outsta