Amar Mohd Jemuri Serjan CJ (Borneo):

[1] At the hearing of this appeal on 18 May 1993 we allowed the appeal with costs here and below and ordered the deposit to be refunded to the appellant, and indicated that we would give our reasons later. These are the grounds of our judgment.

[2] In this case the 1st and 2nd defendants (the Respondents), Jong Tze Khiok @Yong Tze Kiok @ Jong Tsz Khiok and Yong Ng Fah, the registered proprietors of the land described as Lot 535, Block 9, Miri Concession Land District, charged the said land as security for banking facilities granted by Citibank N.A., the plaintiff (the Appellant), at the request of the defendants, to Yong Tze Kiok Co Sdn Bhd., the customer, up to an aggregate total amount not exceeding Brunei Dollars Two Million (BD2,000,000) only (the principal sum). According to the terms of the charge the defendants promised to pay the principal sum upon and only upon demand, and similarly the balance, which at the date of such demand was still owing to the plaintiff by the customer together with interest at the rate of 2% above the prime rate, was also to be paid upon and only upon demand.

[3] The customer having defaulted the plaintiff took out an originating summons for an order for sale of the charged land under s 148(2)(c) of the Land Code (Cap 81). In support of the originating summons the Vice- President of Citibank N A, Encik Cheng Hock Kian, by an affidavit affirmed on 12 September 1989 asserted that the appellant advanced by way of letters of credit a total sum of BD222,716.53 and granted and/ or continued to grant overdraft facilities as well. The principal amount outstanding on the letters of credit as at the 28 February 1989 was BD195,596.03 and the amount of interest in arrears was BD30,462.59, making a total outstanding of BD226,058.62 and the amount of interest charged on the said facility per day is BD38.84. The principal amount outstanding in respect of the overdraft facility as at the 28 February 1989 was BD2,696,534.29 while the amount of accrued interests on the overdraft facility was BD570,147.83. The total amount of the principal sum with accrued interest outstanding is BD3,492,740.74.

[4] The 1st defendant, on behalf of himself and the 2nd defendant, filed two affidavits in opposition and raised several issues some of which were irrelevant. What clearly emerged from his affidavits was the admission by the 1st defendant that he and the 2nd defendant were shareholders of Yong Tze Kiok Company Sdn Bhd and that the 1st defendant was the Managing Director of that company. At the hearing in the High Court, Counsel for the parties, however, agreed to submit for the determination of the Court only three issues which they contended to be relevant to the application for the order under s 148(2)(c). The three issues are:

(1) that the Notice Ex CHK - 3 failed to comply with s 148 of Cap 81;

(2) that there was failure to serve such notice in accordance with s 208 of Cap 81; and,

(3) that such notice was confusing, that is to say, whether it was meant for the customer or for the chargors.

[5] Having heard and considered the submissions of Counsel for both parties, his Lordship dismissed the application on the grounds that the plaintiff had not established that the defendants defaulted in payment of the principal sums, interests and other monies secured by the said charge, and that the notice to the defendants was not a good notice in law on account of non compliance with the proviso to s 148(3) of the Land Code. The learned Judge found favour with the defendants' contention and so ruled accordingly. The relevant passage of the judgment for the purpose of convenience is hereby reproduced:

... The proviso must be read as fixing a minimum statutory period of 30 days' notice to be given, and if more (but not less) than 30 days' notice to be given, it must be expressly stipulated as a term of the charge in which case the notice to be given shall comply with the terms of the charge as