JUDGMENT

Syed Ahmad Helmy J:

[1] The declarations sought by the plaintiff as per encl 2 is for the following reliefs:

a. A declaration that the defendant has absolutely assigned to the plaintiff all rights and interest in that piece or parcel of property known as PTD 117952 in the Mukim of Pulai, District of Johor Bahru, State of Johor (hereinafter referred to as 'the said property') pursuant to the deed of assignment dated 12 September 2002;

b. A declaration that the issuance of individual title for the said property does not effect the validity and continuance of the aforesaid absolute assignment and that the rights and privileges of the plaintiff as the assignee under the deed of assignment dated 12 September 2002 are intact and preserved regardless of the issuance of individual title for the said property; and

c. A declaration that the absolute assignment referred to in para 1 above constitutes an equitable mortgage of the said property to the plaintiff and by reason thereof, the plaintiff is at liberty to dispose of the said property in accordance with the agreed terms and conditions in the facilities agreement and deed of assignment, both dated 12 September 2002, regardless of the issuance of an individual title in respect of the said property.

[2] The declarations sought had in fact been answered by two High Court decisions in ; [2003] 1 CLJ 548 and ; [2004] 6 CLJ 497 where the Court held that once strata title is issued the property must be transferred to the purchaser and the financier must register a National Land Code charge and thereafter apply to Court for an order for sale pursuant to the National Land Code and . Learned counsel's submission is that the reasoning of the High Court decision is flawed and is not in accord with the ratio of the Federal Court decision in ; [2002] 2 MLJ 513; [2002] 2 CLJ 621; [1999] 3 AMR 3086 and ought not to be followed.

[3] Before delving into a critical analysis of the aforesaid High Court decisions it is important to emphasize that the question of law that was posed to the Federal Court in Phileoallied')s case and answered affirmatively by them was 'whether a lender may, without obtaining an order of sale from the Court, realize his security consisting of immovable property in respect of which there is no issue document of title and no registered charge'. In affirmatively answering the question the Federal Court reasoned that an absolute assignment to a financier of the rights and interest of a purchaser under a sale and purchase agreement as security for the repayment of a loan creates an equitable mortgage which enables a mortgagee to exercise his common law power of sale without the necessity of a Court order

[4] Hence a proper appreciation of the reasoning of the Federal Court would lead to the inevitable conclusion that the Federal Court never adjudicated on the issue and is no authority for the proposition that once the issue document of title has been issued the assignee loses the power of sale he has at common law.

[5] I shall now embark to critically examine the reasoning behind the two High Court decisions aforesaid.

[6] Ooi Chin Nee's case involved a purchaser who bought a property from a developer through a loan taken from a financier As security for repayment of the loan the purchaser absolutely assigned all his rights in the property to the financier The purchaser defaulted and the financier proceeded to put up the property for sale by public auction. Before the property could be sold strata title was issued and registered in the developer's name. The purchaser applied to Court for an injunction to restrain the financier from disposing off the property at the auction.

[7] The purchaser contended that as strata title had been issued, the financier could no longer proceed with the auction. The learned Judge agreed with the purchaser and held that once strata title is issued, the property must be transferred to the purchaser and the financier must register a Natio