Mokhtar Sidin JCA:

Briefly, the facts of the case are; the appellants are the registered proprietors of the land known as Lot 729, Town Section 11W, North East District, Penang. In 1983, The Central Co-Operative Bank Ltd (CCB) granted a loan to one Mutuerulan s/o Irulandi (after this to be referred to as "the borrower") on the security of the said land by way of a third party charge. The third party charge was executed by the appellants/defendants in favour of CCB under presentation No. 11365/83 Jilid: 278, Folio: 87. The borrower defaulted in the repayment of the loan resulting with CCB issuing a notice of default in Form 16D dated 8 December 1983 to the appellants to remedy the breach within one month which the appellants failed to do. On 12 April 1984, CCB filed an originating summons in the High Court for the sale of the said land. On 24 January 1987, the respondent obtained the order of sale under s. 256 of the National Land Code 1965. The appellants appealed against that order and on 14 September 1987 the appellants' appeal was dismissed. Apparently, after the appeal was dismissed, Bank Negara obtained a court's order for the appointment of a receiver to take care of the affairs and the assets of CCB. On 5 December 1994, Allied Bank (Malaysia) Berhad took over the assets and liabilities of CCB. Sometime in 1995/1996, there were negotiations between the parties to settle. While this was going on the respondent's solicitors passed away. The respondent then appointed Messrs Cheong Wai Meng & Van Buerle as their solicitors. At the same time, the original file in respect of the present appeal was found missing and the new solicitors appointed by the respondent had to reconstruct the file. Later, Allied Bank (Malaysia) Bhd changed its name to Phileo Allied Bank (Malaysia) Berhad and as a result of that the respondent had to apply to the court to have the name of CCB changed to Phileo Allied Bank as the successor-in-title of CCB. On 22 December 1999 the respondent filed its summons for directions, inter alia, to fix an auction date of the said land and the reserve price. The matter came up for hearing on 16 November 2000 before the deputy registrar.

The appellants raised their objection on the summons for directions on the following grounds:

(a) the summons for directions was filed after more than 12 years from the date of the order for sale dated 24 January 1987 and therefore the said application is barred under s. 21 of the Limitation Act 1953; and

(b) in the alternative, the summons for directions is barred by delay and laches.

The deputy registrar dismissed the appellants' objection and granted the order as prayed for by the respondent in their summons for directions. Being dissatisfied with that decision the appellants appealed to the judge in chambers who dismissed the appeal on 23 March 2001. Being dissatisfied with that decision the appellants now appeal to this court.

The learned counsel for the appellants submitted that the summons for directions was filed out of time and therefore is barred under s. 21 of the Limitation Act. According to the appellants' counsel the word 'action' which appears in s. 21 must necessarily include an application for summons for directions to fix an auction date having regard to the definition of 'action' in the Limitation Act 1953 and the definition of 'proceeding' in s. 3 of the Courts of Judicature Act 1964. The relevant provisions of s. 21 of the Limitation Act are as follows:

21. Limitation of actions to recover money secured by a mortgage or charge or to recover proceeds of the sale of land.

(1) No action shall be brought to recover any principal sum of money secured by a mortgage or other charge on land or personal property or to enforce such mortgage or charge, or to recover proceeds of the sale of land or personal property after the expiration of twelve years from the date when the right to receive the money accrued.

(2) ...

(3) ...

(4) ...

(5) No action to recover arrear