The substantial question raised in this case is the liability of a purchaser of immovable property at a public auction held pursuant to an order of court under s 256(3) of the National Land Code 1965 ('the NLC 1965') to persons claiming to be in occupation of the property with an equity.

THE FACTS

Lim Low Tiew ('LLT') was the registered proprietor of land held under Geran Mukim 77, 78 and 11987 Mukim Batu Berendam, Melaka formerly known as Holding Nos 181, 184 and 185 Interim Register, Mukim Batu Berendam, Daerah Melaka Tengah, Melaka ('the lands'). She created two charges over the lands in favour of the Hongkong and Shanghai Banking Corp ('the bank') in 1978 in return for a loan and they were duly registered on 12 October 1978 vide presentation no 3753/78, vol 106, folio 28 and presentation no 3754/78, vol 106, folio 29 ('the charges'). As LLT defaulted in the repayment of the loan, the bank commenced foreclosure proceedings against her and obtained an order for sale on 2 February 1989 to sell the lands by public auction pursuant to s 256(3) vide Originating Summons No 31–338–86 (High Court, Melaka). The public auction was held on 21 June 1989 and the plaintiff was the successful bidder of the lands at a price of RM361,000. On 26 August 1989, LLT applied for and obtained an order from the High Court to set aside the order for sale. The bank then took the order to the (then) Supreme Court on appeal, which set it aside and confirmed the order for sale and the sale of the lands to the plaintiff. The plaintiff then paid the balance of the purchase price and a certificate of sale in Form 16F was duly issued to it on 13 September 1990 by the senior assistant registrar of the High Court. The plaintiff was then registered as the proprietor of the lands on 19 September 1990.

However, the plaintiff was confronted with several claims to rights over the lands. By notices to quit dated 7 December 1994, the plaintiff asked the first defendant and the second defendant — a temple called 'Ti Fang Fu' — to deliver vacant possession of the portion of the lands occupied by them on or before 1 March 1995. They refused to comply with the notices. The plaintiff then ascertained that 'Ti Fang Fu' was not a registered body under the Societies Act 1966 and filed an originating summons (later converted into a writ) against both defendants. The third to sixth defendants were added as parties on their intervention.

The first defendant affirmed in his affidavit that as a result of his long friendship with LLT and her husband, he was allowed to occupy a portion of Lot 184 Interim Register, Mukim Batu Berendam, Melaka and to build a house on it in 1957. He had expended money in putting up the house and had planted fruit trees on the portion of the lands occupied by him. Two of his children were born in that house.

The second defendant did not file any affidavit in support of its case. As its role in the proceedings was effectively taken over by its trustees, the third, fourth and fifth defendants, its position would depend on the determination of their case.

The third defendant affirmed in his affidavit that he started working as a caretaker of the lands for Tan Seck Chee — the husband of LLT — in 1979. Around 1986, he started hearing voices asking him to build a temple at the portion of the lands that he occupied. Tan Seck Chee and his wife encouraged him to put up the temple and gave him permission to do so. With their consent, agreement and encouragement, he put up the temple at a cost of RM3,000 and became its caretaker. It was opened in August 1986. Many people came to pray there. He said that they told him that the portion of the lands on which the temple stood shall always remain the property of the temple and that if they sold the lands the rights of the temple shall not be affected. A house on the portion was allowed to be used by the third, fourth and fifth defendants. In 1989, the temple was expanded to an area of 120 feet by 15