JUDGMENTBY: WAN HAMZAH SCJ

(delivering the judgment of the court): In December 1981 the appellant, Lesco Development Corporation Sdn. Bhd. (hereinafter referred to as Lesco), charged its land to the respondent, Malaysia Building Society Bhd. (hereinafter referred to as MBS), on the terms and conditions contained in an agreement attached to the document of charge as an annexure to secure a loan of $ 5,000,000 which MBS had agreed to grant to Lesco. A document dated November 30, 1981 which was purported to be a document of guarantee in respect of the loan was signed by five persons (hereinafter referred to as the guarantors).

On December 13, 1985, MBS filed a suit in the Commercial Division of the High Court at Kuala Lumpur (Civil Suit C8369/1985) against Lesco and the five guarantors, in which it is alleged that Lesco owed MBS a sum of $ 4,688,863.70 as at October 31, 1985, in breach of the terms and conditions of the charge. MBS claims that sum from Lesco and the guarantors. A few days later, i.e. on December 17, 1985, MBS filed in the Family and Property Division of the High Court at Kuala Lumpur an originating summons (Originating Summons F2652/1985) to initiate foreclosure proceedings against Lesco in respect of the same charge.

On January 31, 1986, MBS obtained judgment in default of appearance against Lesco in Civil Suit C8369/1985. On April 15, 1986, Lesco filed summons-in-chambers asking for an order to set aside the default judgment and took steps to show that it has a good defence. In this regard it is alleged by Lesco, inter alia, as follows:

(a) MBS had breached the agreement (particulars of the breach are

stated).

(b) By letter dated July 13, 1985, MBS had terminated the agreement.

(c) MBS has not released the loan of $ 5,000,000 in full, and under

the terms of the agreement MBS can recover the loan only after it

has released the loan in full.

(d) MBSs claim for compound interest is in contravention of section

11 of the Civil Law Act.

The application to set aside the default judgment is still pending in the Commercial Division. In opposing the foreclosure proceedings Lesco raised the same issues as stated in (a) to (d) above. Lesco also contended that the notice of default in Form 16D issued by MBS was defective and invalid for the reasons stated in the affidavit in opposition. The fact that the MBS had obtained the default judgment was disclosed by Lesco in its affidavit. On September 19, 1986, the originating summons came up for hearing before Siti Norma Yaakob J. and after hearing submissions of counsel for the respective parties she decided on all the issues and granted an order of sale. The present appeal before the Supreme Court is brought against that order.

It is undesirable to allow a situation where two different courts would try and determine the same issues arising between the same parties relating to the same subject matter. As MBS had chosen to sue Lesco in the Commercial Division before filing the originating summons and there was already default judgment in the suit and the application to set aside the default judgment is still pending, in our opinion the hearing of the originating summons should have been postponed until final disposal of the suit in the Commercial Division. Therefore we order that the order of sale be set aside. We further order that the originating summons be dealt with after the final disposal of the suit, and that appropriate orders should be made on the originating summons taking into consideration the result of the suit.

The appeal is allowed with costs here and in the court below. The deposit should be refunded to Lesco (appellant).

Appeal allowed.

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