JUDGMENT

Abdul Malek Ahmad FCJ:

The facts are not exactly in dispute. The respondents entered into a sale and purchase agreement with the developer on 12 November 1994 to purchase a shop unit, No. D-7/08, 8th Floor, Block D, measuring 1,497 square feet in the Phileo Promenade, the Corporate Park in Kuala Lumpur, at RM449,100. To finance the purchase, the respondents obtained a term loan of RM359,000 from the appellant.

The loan agreement cum assignment was entered into on 3 January 1996 under which the respondents' rights, title and interest under the sale and purchase agreement were absolutely assigned to the appellant. On the same date, the two respondents executed a joint power of attorney in favour of the appellant which was registered in the High Court on 15 January 1996.

The individual strata title has not been issued since and although the loan was fully disbursed by the appellant, the respondents had defaulted on the monthly payments. Consequent to the default, the appellant demanded repayment of the balance of the loan amount on 11 November 1997.

As there was no response from the respondents, the appellant's solicitors sent a letter dated 31 December 1997 terminating the respondents' licence to occupy the relevant property. At the same time, they notified the respondents on the appellant's intention to sell the property. The advertisement to sell the property indicated that the public auction would be held on 9 April 1998.

One day before the scheduled public auction, the respondents filed an originating summons and obtained an ex parteinjunction to restrain the holding of the said public auction of the property. The order was subsequently confirmed by the High Court on 14 October 1998 after hearing both parties. The appeal to the Court of Appeal was dismissed on 7 April 1999.

Leave was granted by this court on 8 May 2000 on the following question:

whether a lender may, without obtaining an order of sale from the Court, realise his security consisting of immovable property in respect of which there is no issue document of title and no registered charge.

Three clauses in the loan agreement cum assignment stand out for consideration. The first is cl. 8 which reads as follows:

8. ASSIGNMENT

For the consideration aforesaid the Borrower hereby absolutely assigns to the Bank the full and entire of the Borrower's benefits rights title and interest in and to and under the Sale Agreement and in the said Property together with the Borrower's right of enforcement thereof or thereunder PROVIDED ALWAYS that notwithstanding the Assignment hereinbefore contained or any other provision of this Assignment the Borrower shall and hereby undertakes to continue to observe perform and be bound by all whatsoever conditions covenants and stipulations therein on the part of the Borrower expressed and contained in the Sale Agreement.

The second is cl. 23.4 which reads:

23. POWERS ON DEFAULT

The Bank may at any time after an event of default or in making demand be entitled to exercise all or any of the rights and powers following:

23.1 xxx;

23.2 xxx;

23.3 xxx;

23.4the right and power to sell and assign the said Property as the absolute unencumbered owner thereof at such price or prices and in such manner as the Bank shall in its absolute discretion think fit free from any interest of the Borrower hereunder or otherwise and to apply the proceeds of sale in or towards the satisfaction of the amount hereby secured and all the principal and interest and other monies due to the Bank hereunder, the payment to the relevant authorities of all quit rent, assessment, drainage, rates and other outgoings payable in respect of the said Property, the payment to the Developer or the Management Corporation constituted under the Strata Titles Act 1985/the Land Ordinance (Sabah Cap 68) and the Land (Subsidiary Title) Enactment, 1972 (Sabah) the Land Code of Sarawak and the Strata Titles Ordinance 1972 (Sarawak), as the case may be, of all service charges and main