A foreclosure action requires proof of 'cause to the contrary' by the appellant, while the limitation period for claims, including interest, is 12 years under the Limitation Act, not starting from the date of loan default.

[1] The appeals in Civil Appeal No: J-02-730-04-2012 (Appeal 730) and Civil Appeal No: J-02-765-04-2012 (Appeal 765) were taken together as they involved the same parties and issues. The grounds of appeal are similar.

[2] Both appeals are against the decisions of the learned judicial commissioner who granted the orders for sale in foreclosure proceedings pursuant to s 256 of the National Land Code 1965 (NLC).

[3] The appellant in Appeal 730 was originally granted a housing loan of RM319,183 on 29 December 1994 by Mayban Finance Bhd (MFB).

[4] In Appeal 765 the appellant was granted a term loan amounting to RM300,000 and a revolving credit facility amounting to RM200,000.

[5] As security for the loans, the appellant charged two properties to MFB which are the subject matter in the foreclosure proceedings.

[6] By a Vesting Order dated 17 August 2004 the assets, rights and powers of MFB were vested in Malayan Banking Bhd (MBB). Thereafter, by another Vesting Order dated 17 April 2008, the appellant's accounts with MBB were vested in the respondent.

[7] The appellant defaulted in the repayment of the loans sometime in March 1996.

[8] The solicitors for the respondent issued letters of demand dated 28 April 2011 demanding payment of the outstanding sums of RM910,480.14 as at 27 April 2011 in respect of Appeal 730 and of RM1,528,505.79 as at 27 April 2011 in respect of Appeal 765.

[9] The respondent's solicitors subsequently issued notices of default with respect to a Charge in Form 16D NLC dated 10 May 2011 in both cases pursuant to s 254 NLC to the appellant. As the appellant failed to remedy the breaches specified in the Form 16D Notices within the 30 days statutory period, the respondent filed the originating summonses for foreclosure on 28 June 2011.

[10] The learned judicial commissioner granted the orders for sale on 16 February 2012.

The Appellant's Grounds Of Appeal

[11] In his Memorandum of Appeal, the appellant relied on four grounds namely:

(i) as the respondent had delayed in the commencement of the proceedings by failing to issue the Form 16D Notice 7 days from the date of default of the said loans by the Appellant, there is "cause to the contrary" under s 256(3) NLC;

(ii) the cause of action in the originating summonses is time barred;

(iii) the claim for interest by the respondent is time barred; and

(iv) the respondent's claim is barred by res judicata.

[12] At the hearing of the appeals the appellant abandoned ground number (iv).

Decision Of The Court

[13] Upon reading the Record of Appeal, the written submissions of counsel for the appellant and the respondent and upon hearing counsel aforesaid, the Court unanimously held that there was no merit in the appellant's contentions and dismissed the appeals with costs and affirmed the decisions of the learned judicial commissioner.