Gopal Sri Ram FCJ:-

[1] These are two applications for leave to appeal against the decision of the Court of Appeal which (by a majority) dismissed the applicants' appeal to it. Ordinarily this court does not give reasons when allowing or dismissing applications of this nature. This is encapsulated in the following observation by Edgar Joseph Jr FCJ in Datuk Syed Kechik Syed Mohamed & Anor v. The Board of Trustees of the Sabah Foundation [1999] 1 CLJ 325, 330:-

It is not the practice of this court, nor as we understand it, the practice of the House of Lords, when sitting in its judicial capacity hearing application for leave to appeal, to give explicit reasons for granting or refusing leave, save in circumstances where their Lordships considered that they had no jurisdiction to entertain the application.

But there are some cases in which this has been done. See, for example, Beatrice Fernandez v. Sistem Penerbangan Malaysia & Anor [2005] 2 CLJ 713; Allied Capital Sdn Bhd v. Mohamed Latiff Shah Mohd & Another Application [2001] 2 CLJ 253. We consider this an appropriate case to give reasons because it raises an issue of construction of certain clauses in an annexure to the charge that appeared with frequency in the 1980's and 1990's but no longer do. The common factual matrix upon which these applications are based is as follows.

[2] The respondent is a bank. It lent monies to the applicants. The loans were secured by two registered charges. Each charge has an annexure. It contains the following clause which is numbered as 8 in one annexure and as 16 in the other:-

If the amount realised by the Bank on a sale of the Said Land under the provisions of the National Land Code after deduction and payment from the proceeds of such sale of all fees dues costs rents rates taxes and other outgoing on the Said Land is less than the amount due to the Bank and whether at such sale the Bank is the purchaser or otherwise the Chargor(s) shall pay to the Bank the difference between the amount due and the amount so realised and until payment will also pay interest on such balance at the Prescribed Rate as aforesaid with monthly rests.

[3] The applicants' case before the High Court was based on this clause. According to them, this clause on its true construction precludes the respondent bank from bringing an action on the covenant to repay the loan until it has sold off the charged lands and then only in the event of a shortfall. In other words, the respondent bank agreed take foreclosure proceedings to have the lands sold off before enforcing the applicant's promise to repay the loan. In the present case, the bank commenced an action against the applicants' on their personal covenant before proceeding under the charges. This it was not entitled to do.

[4] The applicants resisted the respondent bank's action on the above amongst other grounds. The High Court however agreed with the applicants on the foregoing ground and dismissed the action without touching upon the other points. The bank appealed and the Court of Appeal by a majority allowed the appeal and reinstated the suit. The applicants have now come before us seeking leave to appeal principally on the ground that the decision of the Court of Appeal is contrary to established precedent. Two decisions were relied upon. The first is Hong Kong & Shanghai Banking Corp v. Wan Mohd Wan Ngah [1991] 1 CLJ 821; [1991] 2 CLJ (Rep) 732 where the facts were these. The plaintiff bank in that case sought the determination of the question whether being also the chargee of property it is "entitled at law and in equity to proceed by way of a civil suit before first realising the security under the charge and if so, whether the plaintiff is entitled to proceed concurrently on all his remedies". The High Court answered that question in the negative and stayed the plaintiff's suit on the ground that it was an abuse of the court's process. In doing so Lamin J (as he then was) relied on cl. 8 of the cha