A chargor is barred from bringing a new civil suit against a chargee to raise issues showing a 'cause to the contrary' if these issues were not previously raised in a foreclosure proceeding.

[1] The question upon which leave was granted to appeal against the order of the Court of Appeal in respect of the matter decided by the High Court in the exercise of its original jurisdiction, reads:

"Whether a chargor is barred from bringing a fresh civil suit against a chargee in order to raise issues which show a 'cause to the contrary' in circumstances where the chargor had not raised any such issues when it opposed the chargee's application to Court for Order for Sale of the charged property under s 256 of the National Land Code ."

[2] The background facts are as follows. The respondent, a wholly owned subsidiary of Metroplex Berhad, was the registered proprietor of land held under Geran 10012 Lot 38, Seksyen 51, Bandar Kuala Lumpur (hereinafter referred to as Putra Place). In August 1993, the respondent created a third party charge over Putra Place in favour of Bank Bumiputra Malaysia Berhad (BBMB) as Security Agent for a syndicate of banks, in consideration of credit facilities granted by the said syndicate of banks to Metroplex Berhad. On 5 April 2002, the charge was transferred to Commerce International Merchant Bank (CIMB, as the appellant was formerly known) who had assumed the role of Security Agent for the said syndicate of banks.

[3] Metroplex Berhad defaulted on the loan. In October 2005, CIMB filed a charge action (Kuala Lumpur High Court S1-24-2394-2005) against the respondent, pursuant to s 256 of the National Land Code ( NLC ). The charge action was resisted by the respondent. On 16 July 2007, Wahab Patail J, as he then was, ordered the sale of Putra Place by public auction. The respondent appealed, but the appeal was dismissed by the Court of Appeal. Putra Place was put on the auction block. Judicial sale was initially not successful. But on 30 March 2011 (that is, the fourth occasion that it was up for auction), Putra Place was successively sold to OSK Trustee Berhad (as Trustee for Sunway REIT) for RM513,945,000.00, who was registered as proprietor of Putra Place on 19 April 2011.

[4] Meantime, on 19 May 2009, that is, before auction sale of Putra Place to OSK Trustee Berhad, the respondent filed an action (the action below) against the appellant for the following reliefs.

(a) a declaration that the charge is not indefeasible within the meaning of s 340(2) of the National Land Code ;

(b) a declaration that the charge is null and void;

(c) a declaration that the charge, the instrument and the memorial are invalid;

(d) an order that the charge, the instrument and the memorial be set aside;

(e) an order that the order for sale dated 16 July 2007, the auction and other related orders in respect of the land made in the Kuala Lumpur High Court OS Proceedings (Suit No: S-24-2394-2005) be set aside;

(f) an order that the Registrar of Titles cancel the entries from the register in respect of the charge, the instrument and the memorial;