A charge on land of public, religious or charitable trust requires Attorney General's consent; failure to comply invalidates charge.

A. Introduction

[1] This appeal concerns, among others, a novel question of whether a chargee of land under the National Land Code ( NLC ) is required by s 9(1) of the Government Proceedings Act 1956 ( GPA ) to obtain the Attorney General's (AG) written consent before executing and registering the charge over the land which is:

(1) the subject matter of public, religious and charitable trust; and

(2) used as a Hindu burial ground.

B. Background

[2] We shall refer to the parties as they were before the High Court .

[3] By an indenture dated 12 March 1896 (Indenture), a public, religious and charitable trust (Trust) over three lots of land in Jelutong, Penang (3 Lots) was created for the benefit of the "Hindu Community of Jelutong". The 3 Lots are lot nos 64, 83 and 84.

[4] The 3 Lots are managed by a Hindu "Temple Committee" (Committee).

[5] A Hindu temple was built on lot no 64 while lots no 83 and 84 were used as a Hindu burial ground (2 Burial Lots).

[6] Mr S Muthiah A/L Vellasamy (Muthiah) was the sole surviving trustee of the Trust. Muthiah refused to cooperate with the Committee and secretly (without the Committee's knowledge) obtained a High Court order on 10 February 1993 to appoint Mr Subramaniam A/L Muthusamy (Subramaniam) as a co-trustee of the Trust.

[7] Muthiah passed on and without the Committee's knowledge, on 1 November 1995, Subramaniam applied to the High Court for an order to appoint Subramaniam's wife, Madam Lalidah A/P Sinnasamy (2nd Defendant), as a co-trustee of the Trust.

[8] This judgment shall refer to Subramaniam and the 2nd Defendant collectively as the "Chargors".

[9] On 6 September 1999, the AG gave written consent pursuant to s 9(1) GPA for the Chargors to file an application to the High Court for leave to develop the 3 Lots [AG's Written Consent (6 September 1999)].

[10] Following the AG's Written Consent (6 September 1999), the Chargors filed an originating summons (OS) in the High Court on 2 November 1999 for leave to develop the 3 Lots [Chargors' OS (Leave to Develop 3 Lots)].

[11] On 8 December 1999, the High Court allowed the Chargors' OS (Leave to Develop 3 Lots) [High Court 's Leave (8 December 1999)].

[12] The Chargors entered into a joint venture agreement dated 1 January 2005 (JV Agreement) with Sumita Development Sdn Bhd (Developer). With regard to the Developer:

(1) the Chargors owned 60% of the shares in the Developer and were its directors; and

(2) two children of the Chargors were directors of the Developer and held 40% of its shares.

[13] On 9 March 2005, the Chargors rejected the Committee's nomination for 3 additional co-trustees of the Trust.

[14] The Developer applied for the following banking facilities from the plaintiff bank (Plaintiff):

(1) an overdraft facility in a sum of RM800,000.00 (OD Facility); and

(2) a bridging loan of an amount of RM2.4 million ( Banking Facilities).

[15] The Developer's repayment of the Banking Facilities to the Plaintiff was secured by the Chargors' execution of a third-party charge over the 2 Burial Lots in favour of the Plaintiff (Third Party Charge). The Third Party Charge was registered under the NLC on 29 December 2010.

[16] On 3 June 2011, at the request of the Plaintiff, the Chargors and Developer jointly filed an OS in the High Court [OS (Chargors-Developer)]. The OS (Chargors-Developer) prayed for leave of the High Court for the following matters:

(1) leave for the Chargors and Developer to transact any dealing under the NLC with regard to the 2 Burial Lots;

(2) leave of the High Court for the registration of the Third Party Charge;

(3) leave for the JV Agreement; and

(4) the Registrar of Titles of Penang (RT) and all relevant authorities shall give effect to the order of t