Mohd Azmi FCJ:

The historical and factual background leading to this appeal has been fully supplied in the other judgments of my learned brothers which I have had the opportunity to read in draft. Suffice it is to state that the appellants at all relevant times were the registered co-owners of a piece of Malay reservation land in Tampin. When their business associate, one Ismail bin Omar was in need of a loan of RM400,000, he was required by the respondent finance company (hereinafter referred to as 'the respondent' or 'the respondent/ chargee') to furnish security for the personal loan. To assist Ismail, the appellants charged their land to the respondent. After the loan was approved and disbursed, Ismail committed a breach of the loan agreement, and whereupon the respondent in the normal course of financing business, foreclosed the third party security and obtained an order of sale of the property under the National Land Code. To cut the story short, it was then discovered that the third party charge on the Malay reservation land was null and void as at all material times the respondent was never specified a "Malay" under s. 17 read together with the Second Schedule to the Malay Reservations Enactment, and as such the dealing in the said land was illegal. Consequently, on the application of the appellants/chargors, Mustapha Hussain J granted an order dated 21 March 1988 (the March 1988 order) the relevant part of which declared the charge of the appellants' reserve land and as well as the order of foreclosure by the Land Administrator invalid. The illegality of the charge and the order of sale seem obvious enough, and understandably the respondent/ chargee did not even care to appeal, but from subsequent events it is fair to assume that the respondent must have received legal advice to seek redress against the appellants/chargors under the provision of s. 66 of the Contracts Act 1950 , as a way out of its predicament, consequent upon the secured loan becoming unsecured as a result of the third party charge being declared null and void. Hence on the respondent's application before the same judge, an order was obtained dated 8 October 1990 (the October 1990 order) declaring that the appellants/chargors had received an advantage or benefit from the respondent (ostensibly under the Loan Agreement) and simultaneously the learned judge also made an order of sale of the Malay reservation land either by public auction or by private treaty, and that the proceeds of sale be utilized to pay the balance outstanding on the loan made to Ismail (which came to

RM300,000) notwithstanding the invalidity of the charge and order of sale decreed by His Lordship himself more than two years earlier, by his March 1988 order.

It was in these extraordinary circumstances whereby s. 66 of the Contracts Act was invoked by the respondent/chargee to impose liability on the appellants/chargors independently of the illegal third party charge that the appellants were forced to apply and had obtained from Mohd. Noor Abdullah J an order dated 22 September 1995 (the subject matter before the Court of Appeal) to set aside the October 1990 order, on the basis that they were entitled to the said remedy ex debito justitiae, without the need to comply with appeal procedure. Unfortunately, in setting aside the order of Mohd. Noor Abdullah, J the Court of Appeal, with respect, missed completely to appreciate the central argument on the availability of the inherent jurisdiction of the High Court to exercise its discretion to set aside what was obviously an illegal attempt by the respondent/chargee to subvert and effectively reverse the original March 1988 final and perfectly legitimate order of Mustapha Hussain, J as a special exception to the doctrine governing the finality of court orders notwithstanding the absence of any appeal. Relying principally on the principle laid down by Chang Min Tat, FJ (as he then was) in the Federal Court case of Hock Hua Bank