JUDGMENT

JUDGMENT Gopal Sri Ram JCA:

This appeal raises several interesting points of law. In the main, it has to do with the role of equity in adjectival law. At the heart of the appeal is the scope and application of the doctrine of res judicata.

This case has a long and chequered history. But it must be told. Otherwise the arguments of counsel cannot be understood. I will try and tell it as briefly as possible.

The respondent, Scotch Leasing Sdn. Bhd., is a private limited company over which receivers and managers have been appointed. But its name is misleading. It is not a leasing company at all. It is, in fact, a licensed moneylender. Its business is therefore regulated by the provisions of the Moneylenders Act 1951 ("the Act").

The story begins as long ago as January 1983. In that month, the appellants borrowed a sum of money from the respondent. It was a loan of RM150,000. Interest was charged. But the transaction was disguised in the form of an agreement to lease a fictitious item of moveable property. Additionally, the respondent took a charge over a piece of land. That land belonged to the appellants. In the language of the National Land Code 1965 ("the Code") they are its "registered proprietors". The land is held under a Land Office title. That fact has important consequences in this case.

From time to time the appellants made payments to the respondent. After some time, they fell into arrears. The respondent then proceeded to enforce the charge. On 11 January 1986, it took out an originating summons for foreclosure. That summons came on for disposalinter partesbefore the High Court on 3 September 1991. The High Court made an order of foreclosure under which the land in question was to be sold by public auction.

Now, that was quite wrong. Being a Land Office title, the application for foreclosure should have been made to the Land Administrator. Section 260(2) of the Coderequires that to be done in mandatory terms. The section is jurisdictional. In other words the High Court had no jurisdiction over the matter. The point is well settled. There are many decisions upon it. See, Tan Teng Pan v. Wong Fook Shang Re Sama Corp Sdn Bhd; CI Holdings Bhd v. Jabatan Pemegang Harta[1992] 1 CLJ 109p; [1992] 2 CLJ 218 (Rep); [1992] 2 MLJ 251; United Asian Bank Bhd v. Elgi Marka Sdn Bhd[1995] 1 CLJ 407; Bank Islam (M) Bhd v. Ainin Abdullah & Anor[1998] 4 CLJ 27.

To resume the narrative, sometime after the order for foreclosure was made, the appellants applied to set it aside on the jurisdictional ground. On 17 September 1992, the High Court set aside its order. The respondent then appealed to the Supreme Court. That court allowed the appeal. Peh Swee Chin SCJ who delivered the judgment of the Supreme Court held that the judge was functus officioas the summons for foreclosure had been determined inter partesafter a contest. He found merit in the instant appellants' argument that the High Court had no jurisdiction to make the order for foreclosure. But he held the point to be no longer open to the appellants because of res judicata.

His judgment has been reported in [1997] 2 CLJ 58. I will refer to that case as Scotch Leasing (No. 1).This is how Peh Swee Chin SCJ dealt with the jurisdictional point:

First, a jurisdiction point is no less an issue than other issues in civil litigation.

If not raised at the hearing in the court of first instance or on appeal, it cannot be raised thereafter, for the doctrine of res judicatasets in.

Res judicatahas been explained before, eg see Asia Commercial Finance (M) Bhd v. Kawal Teliti Sdn Bhd[1995] 3 CLJ 783.

When the jurisdiction point in question was not raised before the learned judge before he made the first order, when he heard the matter inter partes, or at any rate, if it was not raised for review before the said order was perfected, the requirements of a proceeding in an adversarial system were complied with and satisfied, unless the learned judge exceptionally took the jurisdiction point