Edgar Joseph Jr FCJ:

[1] This was an appeal from the judgment of the High Court at Kota Kinabalu, Sabah arising from a priority dispute concerning certain immovable properties.The contest was between a chargee under a charge registered in the form prescribed under s 104 of the Sabah Land Ordinance Cap 68, (the Land Ordinance) and a purchaser under an agreement of sale and purchase in writting of a single unit, being a proposed 2-storey light industrial building to be built on one of the four pieces of land the subject matter of the charge.

[2] The essential facts which led up to the litigation the subject of this appeal may be shortly stated.

[3] On or about 1 March 1982, United Lands Development Sdn Bhd (the Developer Chargor) had applied to Borneo Housing Mortgage Finance Berhad (the Finance Company Chargee) for a bridging loan of RM15,000,000 to finance the development of its proposed industrial development project on certain lands situated in the State of Sabah, comprised in Country Leases Nos 015271360, 015271388, 015087117 and 015271388 (the Project Lands).

[4] By a sale and purchase agreement in writing dated 2 November 1982, entered into by Time Engineering Berhad (the purchaser under the agreement) and the developer chargor, the former had agreed to buy from the latter, a single unit, being a proposed industrial building to be built on the Project Lands identified as Lot No 6 Block A Kolombong Industrial Development, to wit, a 2 storey light industrial building to be erected on one of the Project Lands, later comprised in Country Lease No 015454967 ("the disputed property") for a consideration of RM295,000.

[5] Upon execution of the sale and purchase agreement, that is to say, on 2 November 1982, the purchaser under the agreement had paid a sum of RM29,500 to the developer chargor, by way of a 10% deposit to account of the purchase price aforesaid, having previously paid a booking fee equivalent to 5% of the purchase price. On 28 May 1983, the developer chargor had created a charge over the Project Lands duly registered under s 104 of the Land Ordinance, on 21 June 1983 ("the charge") in favour of the Finance Company chargee to secure the repayment of the bridging loan of RM15,000,000 aforesaid.

[6] By 23 May 1986, the purchaser under the agreement had made due payment of the entire purchase price so that completion had been effected on that date.

[7] Unfortunately for the purchaser under the agreement, the developer chargor had committed default in repayment of the bridging loan, and thereby committed a breach of the provisions of the charge, which led to the Finance Company Chargee commencing proceedings under the Land Ordinance to enforce the charge, and which in turn led to the Assistant Collector of Land Revenue, Kota Kinabalu, making an order for sale on 17 August 1991, pursuant to which the disputed property was sold to Karamusing Jaya Sdn Bhd ("the purchaser at the judicial sale") at a price of RM180,000 at a public auction sale held on 30 November 1991, in consequence of which, a certificate of sale dated 26 February 1992, was duly issued.

[8] Then on 7 December 1991, the purchaser under the agreement as plaintiff had commenced proceedings by way of originating summons citing the developer chargor, the Finance Company chargee, the Assistant Collector of Land Revenue, Kota Kinabalu and the purchaser at the judicial sale, as the first, second, third and fourth defendants, respectively, praying for the following reliefs:

1. A declaration that as between the plaintiff and the 1st defendant, the 1st defendant is a bare a trustee for the plaintiff in connection with the sale of Lot No 6, Block A Kolombong Industrial Development together with a 2 storey light industrial building erected thereon or otherwise now known as Country Lease No 015454967 (hereinafter referred to as "the said property") by virtue of a written agreement dated the 2nd day of November 1982 with effect from the 2nd day of November 1982;

2. A decla