JUDGMENT

Abdul Hamid Mohamad FCJ (dissenting):

To appreciate what had transpired in this case, it is important that the chronology of events be given.

On 27 July 1982, the first charge was created.

On 28 October 1983, the second charge was created.

On 29 November 1986, the appellant issued a letter of demand to the respondent (chargor) demanding payment within seven days of the "outstanding sum of M$47,884,178.68 as at 26 November 1986 together with interest thereon at the aforesaid rate from 27 November 1986 to date of full settlement."

On 6 December 1986, Form 16D was issued, reciting the breach as follows:

Whereas you have committed a breach of the provisions of these charges by defaulting in payment on demand made by us through our solicitors puRs uant to their letter dated November 29 1986 of the sum of M$47,884,178.68 due to us and outstanding as at November 26 1986 on your overdraft of M$10,000,000.00 and two (2) Bank Guarantee facilities of the principal sums of US$6,000,000 and M$14,000,000.00 respectively together with interest thereof at a rate per annum which is 6% above our Base Lending Rate of 10.3% per annum on monthly rests basis from November 27 1986 till date of full payment and secured by these Charges.

On 10 January 1987 the appellant filed an originating summons for an order for sale "to satisfy the sum of $47,884,178.68 due and owing to the plaintiff (appellant - added) under the first charge and second charge as at 26 November 1986 together with interest thereon at a rate per annum, which is 6% above the plaintiffs (appellants - added) Base Lending Rate currently at 10.5% per annum on monthly rests with effect from 27 November 1986 until date of full settlement;"

On 25 February 1987, the respondent entered a memorandum of appearance through its solicitors , MessRs . Choo, Yeang & Co.

On 9 April 1987, the notice of appointment to hear originating summons was filed by the appellant and it was served on the respondent's solicitors on 12 August 1987.

On 15 October 1987, the originating summons was heard and the order for sale was granted in the absence of the respondent or its solicitors .

On 17 December 1987, a summons for direction was filed. It was heard on 15 January 1988 and the order prayed for were given. Again, neither the respondent nor its solicitors appeared.

On 13 June 1988 the respondent filed a notice of change of solicitors appointing MessRs . Harjit Singh Sangay in place of its Form er solicitors .

On 8 May 1992, the appellant filed an application for a new auction date. It was heard on 25 June 1992 and the respondent's solicitor appeared at the hearing of the application.

On 26 August 1992 the respondent filed an application to set aside the order for sale dated 15 October 1987.

On 20 April 1996, the High Court dismissed the application.

On 11 Jun 1998, the Court of Appeal allowed the respondent's appeal.

On 23 September 2003 the Federal Court granted the appellant leave to appeal.

It is to be noted that, even though the respondent, a company, entered appearance by its solicitors and was served with the notice of appointment to hear originating summons, neither the respondent nor its solicitors appeared on the date the originating summons was heard and the order for sale granted. Neither the respondent nor its solicitors appeared at the hearing of the summons for directions. However, when the application for a new date for auction was heard, the respondent's new solicitors appeared. Three months later and, almost five yeaRs after the order for sale was made, the respondent applied to set aside the order for sale.

It is also interesting to note and that in 1991, ie, about a year before the application to set aside the order for sale was made, Abdul Razak J delivered his judgment in Malayan Banking Bhd. lwn. Dagang Bina Sdn. Bhd. [1991] 3 CLJ 1739; [1991] 1 CLJ (Rep) 678 which will be referred to later. Prior to that, the Supreme Court in Ghazali bin Mat Noor v. Southern Bank Berhadand Four O