Anuar Zainal Abidin J:

The Nature of These Proceedings

This is very exceptional case.

It is one of the rare occasions upon which their Lordships of the judicial committee of the Privy Council have been persuaded by a Counsel to present his arguments to the board of the Privy Council by way of remission.

Mr Hira Singh who was the Counsel appearing before their Lordships was given the honour to present his arguments on the following grounds:-

... the broader point of illegality stemming from the unlicensed nature of the first respondent's (developer's) business was not one of which he could have reasonably been aware until after the decision of the Federal Court [1985] 2 MLJ 212) when the matter came to light, as their Lordships have been given to understand, as a result of an admission of the first respondent's director in the course of his cross-examination in the specific performance action.

But secondly, and more importantly, the point is a substantial one which raises directly the question of the legality of the charge.

It is well-established as a general principle that the illegality of an agreement sued upon is a matter of which the Court is obliged, once it is appraised of facts tending to support the suggestion, to take notice ex proprio motu and even though not pleaded (see eg Edler v. Auerbach [1950] 1 KB 359) for clearly, no Court could knowingly be party to the enforcement of an unlawful agreement.

(Keng Soon Finance Berhad v. M.K. Retnam Holdings [19891] SCR 291 at 303 b5)

The judicial committee of Privy Council concluded at p 303 g4 that:-

...there is clearly a substantial issue of fact which may have a material bearing upon the matter and upon which neither Mr William Stubbs QC (for the plaintiff) nor Mr W.S.W. Davidson, for the first respondent (defendant), have any present instructions, as to the extent to which the appellant (Keng Soon Finance Berhad) was aware or must be deemed to have been aware of the terms of the sale agreements and of the unlicensed nature of the first respondent's business

It does not appear to their Lordships, therefore, that the difficulty can be met simply by adjourning the matter in order to enable the parties to prepare further arguments, for there are substantial questions both of law and fact which are

best determined, and, as far as issues of fact are concerned, can only be determined by the Courts of Malaysia. (Emphasis supplied)

The issues for the determination of this Court are:-

restricted to the points arising out of the Rules and the unlicensed nature of the first respondent's (defendant's) business... ([1989] 1 SCR 304C)

which had been canvassed before the Privy Council, and to make the appropriate orders for costs The Proceedings Prior to the Hearing Before Datuk Wan Hamzah Salleh J (as he then was)

This action was commenced by the plaintiff in the High Court by originating summons issued on 27 June 1981.

In the originating summons, the plaintiff sought an order that the lands held under HS(D) Ka. 2448/78 to HS(D)Ka. 2506/78, Lots No 13507 to 13565, all in the Mukim of Ulu Kinta, Perak and charged to the plaintiff vide Charge Presentation No 1730/79 Vol. 775 Folio 19 (hereinafter referred to as "the lands") be sold by public auction under ss 256 and 257 of the National Land Code 1965 to satisfy the total sum due to the plaintiff at the date of such order and interest thereon to the time of sale, and consequential relief.

The plaintiff claimed to be the chargee under the charge.

By a Summons-in-Chambers dated 1 July 1982 Bhagat Singh s/o Surain Singh (hereinafter referred to as "the first intervener") applied for an order that he be allowed to intervene and be added as an intervener in the action.

This application was supported by an affidavit affirmed by him on 1 July 1982.

In this affidavit, he stated, inter alia, that he had entered into a sale and purchase agreement dated 3 November 1978 with the defendant under which he had agreed to purchase from the defendant one of the lots co