SUPREME COURT IPOH
KANDIAH PETER KANDIAH – Appellant
Versus
PUBLIC BANK BHD – Respondent
[Civil Appeal No: 02-534 Of 1991]
[1] This appeal raises a short but important point. At the conclusion of arguments, we allowed the appeal and ordered a re-trial. We now give our reasons for doing so.
Facts
[2] The facts so far as are relevant to this appeal are as follows:
[3] The appellant had charged certain lands to the respondent in circumstances which we do not propose to elaborate in view of the order for re-trial we have made. Those circumstances sufficiently appear in the judgment of the learned trial Judge.
[4] By two originating summonses (which, for convenience, we will refer to in this judgment as "the foreclosure proceedings") taken out by the respondent (as Chargee/Plaintiff) against the appellant (as Chargor/ Defendant) the respondent applied for orders for sale of the appellant's lands. The applications were made pursuant to the provisions of s 256 of the National Land Code, 1965 (hereinafter, "the Code"). Orders for sale were granted by the Court. The appellant had unsuccessfully applied to set aside one of these orders for sale and had with equal lack of success resisted the making of the other order.
[5] Having failed, the appellant, on 23 November 1989, took out the writ in the present action claiming, inter alia, for a declaration that the charges and annexures relating to the appellant's lands are null and void, and for consequential relief. In his statement of claim, the appellant raised and relied upon facts and issues which the learned Judge found to be identical to those raised by the appellant in the foreclosure proceedings under s 256 of the Code. In the circumstances the learned trial Judge, after hearing oral evidence and submissions, dismissed the appellant's claim mainly, if not solely, on the ground that the matter was covered by the doctrines of estoppel and res judicata.
[6] Having read the cause papers in the foreclosure proceedings and having compared them with the statement of claim, all of which are contained in the record of appeal, we are in agreement with the learned Judge on his finding that the issues raised by the appellant in the foreclosure proceedings and in the present action are indeed identical. The only question that remains is whether the doctrines of issue estoppel or cause of action estoppel or res judicata are applicable in these circumstances to bar the appellant's present action.
The Law
[7] The principles governing the matter are well settled by authority and are not open to question. A chargee who makes an application for an order for sale in foreclosure proceedings under s 256 of the Code does not commence an action. He merely enforces his rights as a chargee by exercising his statutory remedy against the chargor in default. The chargee, therefore, does not sue for a debt. It is also clear that his claim for an order for sale is not based upon a convenant but under the registered charge. The order for sale when made under s 256 of the Code is not a judgment or a decree. The Court hearing the application for foreclosure does not make, and in any event ought not to make, any adjudication upon any substantive issue. These principles are culled from several decisions of our Courts which have correctly stated the law upon the subject. In V R K R S Chettaippah Chetty v. Raja Abdul Rashid Ibni Almerhum Sultan Idris, [1933] MLJ 18, the appellant (chargee) had taken a summons under s 149 of the Land Code 1926 for an order of sale of the charged premises. The respondent pleaded that he could not be sued because there was an order in Council dated 8 January 1988 which stated:
No Member of the royal family of Perak (Waris Negeri) is liable to be sued for debt in any of the Courts of the State, except by permission previously obtained from Her Majesty's Resident.
[8] Apparently no permission had been obtained as required by the order in Council. Thorne Ag CJ in the Court of Appeal held:
1It is to be noted that the legislature in its wisdom has provided that the chargee may not exercise his
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