W-02-683-11

DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANG KUASA RAYUAN)
RAYUAN SIVIL NO: W-02-683-11
Dalam Perkara Gadaian Pertama ke atas
harta pegangan H.S. [D] 11375 No.
P.T.36552 Mukim dan Daerah Kuala
Lumpur Negeri Wilayah Persekutuan di
bawah Bil. Perserahan No. 581/86 Jilid
410, Folio 80 di dalam Pendaftar Hakmilik
Tanah Negeri Wilayah Persekutuan.
Dan
Dalam Perkara Seksyen-Seksyen 256[2]
Kanun Tanah Negara, 1965
Dan
Dalam Perkara Aturan 83, Kaedah-kaedah
Mahkamah Tinggi 1980

ANTARA

EON BANK BERHAD (92351-V)

PERAYU

(sebelum ini dikenali sebagai Malaysian International Finance Berhad

DAN
OH CHAR HONG (NO.K/P: 1845323)

RESPONDEN

(Dalam Mahkamah Tinggi Malaya Di Kuala Lumpur

Dalam Wilayah Persekutuan, Malaysia
(Bahagian Sivil)
Saman Pemula No.S24-253-2009)
Dalam Perkara Gadaian Pertama ke atas harta
pegangan H.S. [D] 11375 No. P.T.36552
Mukim dan Daerah Kuala Lumpur Negeri
Wilayah Persekutuan di bawah Bil. Perserahan
No. 581/86 Jilid 410, Folio 80 di dalam
Pendaftar Hakmilik Tanah Negeri Wilayah
Persekutuan.
Dan
Dalam Perkara Seksyen-Seksyen 256[2]
Kanun Tanah Negara, 1965
Dan
Dalam Perkara Aturan 83, Kaedah-kaedah
Mahkamah Tinggi 1980
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Antara
EON Bank Berhad (92351-1v)

Plaintiff

Defendan

Dan
Oh Char Hong (No.K/P: 1845323)

CORAM

CLEMENT SKINNER, JCA

LIM YEE LAN, JCA
ROHANA BINTI YUSUF, JCA

GROUNDS OF DECISION
[1]

We had earlier allowed the appeal of EON Bank Berhad (the

Appellant) against the decision of the learned High Court Judge who
had dismissed the Appellants application for an order for sale of a
piece of land held under HS (D) 11375 PT 36552, Kuala Lumpur (the
said land) that was charged to it by Oh Char Hong (the Respondent).
The Appellant had applied for the sale of the said land under section
256(2) of the National Land Code (the NLC). The learned High Court
Judge held on 9.2.2011 that the Respondent had shown cause against
the making of an order for sale. We now give our reasons for allowing
the appeal.
[2]

To appreciate the issues raised in the appeal, it will be necessary

to refer to the facts leading up to the application for sale.

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[3]

On 30.12.1985 the Appellants predecessor in title, Malaysian

International Finance Berhad, granted a term loan facility of

RM250,000.00 to a borrower named Wayahead Sdn Bhd. As security
for the loan, the Respondent charged her said land in favour of the
Appellant. The Annexure of Charge stipulates that the term loan was
repayable six (6) months from date of draw-down. It is not in dispute
that the loan was disbursed on 26.9.1985. The Charge was registered
on 21.1.1986.

About 2 years after the Charge was registered, the

Respondent was adjudicated a bankrupt on 4.3.1988. And on 6.3.1992

Wayahead Sdn Bhd was wound-up.
[4]

On 18.8.1999 the Appellants solicitors made a demand on the

Respondent for repayment of the outstanding loan. When no payment

was received, the Appellant caused a statutory notice dated 3.9.1999 in
Form 16D under s 254 NLC to be issued and served on the
Respondent.

When the statutory notice was not complied with the

Appellant commenced proceedings against the Respondent on

7.7.2000 at the High Court, Kuala Lumpur under Order 83 Rules of the
High Court 1980 (RHC) for sale of the charged land vide OS 24-16892000 (the 2000 OS). The Respondent contested the 2000 OS.
[5]

The 2000 OS was heard before Justice Yaacob Bin Haji Ismail

who on 5.5.2003 dismissed the 2000 OS as the learned Judge found

that the Respondent had shown cause to the contrary i.e. against the
making of an order for sale on the following grounds:
(a)

the Appellant had failed to comply with the mandatory

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provisions of O 83 r 8(3) RHC by not stating the amount of

interest or instalments in arrears;
(b)

the Appellant had continued to impose interest even after

the Respondent was adjudicated a bankrupt, which
according to the learned Judge, was in breach of section
8(2A) of the Bankruptcy Act 1967 thereby rendering the
Form 16D defective;

(c)

that since the term loan was repayable within 6 months of

disbursement, the Appellants cause of action had accrued
from 30.6.1986, but the Appellant had commenced its 2000
OS only some 14 years 7 months later, (instead of within 12
years) in breach of section 21(2) of the Limitation Act 1953.

[6]

The Appellant appealed against Yaacob Js decision. The appeal

came up before the Court of Appeal on 18.8.2008 when the Appellant

decided to withdraw its appeal for the reason that it apparently
conceded the mandatory provisions of O 83 r 3 had not been complied
with. In dismissing the Appellants appeal the Court of Appeal made an
order in the following terms:
DAN AKHIRNYA DIPERINTAHKAN bahawa pihak Perayu tidak
terhalang untuk mengemukakan tindakan gadian yang baru
terhadap pihak Responden.
[7]

On 15.1.2009 the Appellant issued a fresh statutory notice in

Form 16D under s 254 NLC, against the Respondent. Thereafter on

16.2.2009 the Appellant commenced the present proceedings at the
High Court, Kuala Lumpur for sale of the charged land.

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[8]

On 9.2.2011 the learned High Court Judge dismissed the

Appellants application.

In essence the learned Judge held that the

Appellants application was barred by res judicata (by the decision in

the 2000 OS), limitation and laches. This is what the learned Judge
said in paragraph 7 of his judgment:
Y.A. Dato Yaacob b. Hj. Ismail J wrote a well-reasoned judgment
when he handed down his decision in the 2000 suit. I have no
reason not to agree with his judgment.

And at paragraph 10 of his judgment he said:

The fact that the Plaintiff withdrew that appeal against the decision
of Y.A. Dato Yaacob J in the 2000 suit means that there is no more
an appeal against this judgment in the 2000 OS. Since therefore
this judgment in the 2000 OS is deemed final and conclusive, the
Plaintiffs claim in the present suit in Enclosure 1 which is based
upon the same set of facts and the same proposition of law is res
judicata.

And at paragraph 12 of his judgment he said:

The Court of Appeal did in its order state Dan akhirnya pihak
perayu tidak terhalang untuk mengemukakan tindakan gadaian
yang baru terhadap Responden. However I read this order as
neither ousting nor excluding the applicable doctrine of res judicata
for clearly the Court of Appeal has no jurisdiction to do so.
Therefore the doctrine of res judicata would apply in the present
suit.

At paragraph 13 of his judgment he said:

The Charge stated expressly and explicitly that the loan was for 6
months. The Charge was registered in 1986 and the loan sum
should be repaid in July 1986. Enclosure 1 was filed on 16.2.2009.
The Plaintiffs claim 22 years later is for RM4.725 million in regard to
an initial loan of RM250,000.00. In light of this I rule that laches
apply and that it would be unjust to allow the Plaintiff at this very
late stage to proceed with his (sic) claim when its conduct is
equivalent to waiver. See Alfred Templeton & Ors v Low Yat
Holdings Sdn Bhd & Anor [1989] 2 MLJ 202.

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[9]

Having considered the submissions and contentions of the

parties, we decided to intervene and allow the appeal for the following
reasons.
Res judicata
[10] With regard to the issue whether the Appellants present
application for sale is caught by the doctrine of res judicata in the light
of the decision in the 2000 OS, we did not think it was. In Low Lee Lian
v Ban Hin Lee Bank Bhd [1997] 1 MLJ 77 the Federal Court explained
that an application for sale of charged land under s 256 NLC is a
proceeding in rem and not an action in personam. The Federal Court
further pointed out that a chargee who applies for an order for sale is
exercising his statutory remedy under the provisions of the NLC and
any resultant order for sale when made pursuant to s 256 of the NLC is
not a judgment. The Federal Court also referred to the judgment of the
Supreme Court in Kandiah Peter v Public Bank Bhd [1994] 1 MLJ 119
which held that the making of an order for sale did not bar a subsequent
action in personam brought by the chargor based upon the same facts
which did not avail him in opposing an application for sale under s 256
NLC. The reason for this was given in that passage of the judgment in
Kandiah Peter v Public Bank Bhd (supra) where Eusof Chin SCJ
speaking for the Federal Court said:
It is equally settled law that in order for the doctrines of res
judicata, cause of action estoppel or issue estoppel to apply, the
earlier proceedings must have resulted in a final judgment or
decree: 16 Halsburys Laws of England (4th Ed) para 1519. This
requirement is not met by foreclosure proceedings which, as we
have observed earlier, do not result or terminate in a final judgment
or decree.

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[11] Reverting to the facts in our case, even though the Appellant
withdrew its appeal in the 2000 OS, such withdrawal did not have the
effect of the judgment in the 2000 OS being deemed final and
conclusive so as to attract the doctrine of res judicata as the learned
High Court Judge held.

This must be so because whatever was

decided in the 2000 OS which was a foreclosure proceeding, did not

result in the making of a final judgment or decree. Therefore, applying
what was held in Low Lee Lian v Ban Hin Lee Bank Bhd (supra), the
Appellant here was not estopped from commencing fresh proceedings
for sale of the charged land in this proceeding.
Section 8 (2A) Bankruptcy Act 1976
[12] With regard to the question whether the Appellant was in breach
of s 8(2A) of the Bankruptcy Act 1967, we find that the provisions of s
8(2A) have no application to the facts of this case. The section was
considered by the Court of Appeal in RHB Bank Berhad v Yaacob
Mohd Khalid [2008] 1 CLJ 80. In that case it was held that under s 8(2)
of the Bankruptcy Act a chargee acquires a right as a secured creditor
against the land on the date the land is charged. The Court of Appeal
held that Section 8(2A) which was introduced into the Bankruptcy Act
by an amendment which came into force on 17.7.1992 had no
retrospective effect and was incapable of defeating an accrued right.
This is what Hasan Lah JCA (as he then was) said in that case at pg
86:
By virtue of subsection (2) of s8 of the Act, the plaintiff had
acquired a right as a secured creditor to realize its security when
the land was charged to the plaintiff on 29 December 1986. As such
the law applicable to the plaintiff was the law as it was on 29
December 1986. Subsection (2A) which was introduced by the
Bankruptcy (Amendment) Act 1992 (Act A 827) came into force on
17 July 1992. It could not, therefore, take away the plaintiffs
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accrued right under s 8(2) as the amending Act did not clearly and
specifically provide that subsection (2A) would have retrospective
effect. It was therefore not intended to have a retrospective effect.
If read otherwise, it would produce an unjust result as that
subsection deals with a substantive right.

[13] Reverting to the facts here, the Appellants charge was registered
against the said land on 21.1.1986, which was well before subsection
(2A) of s8 came into force on 17.7.1992. Accordingly, since subsection
(2A) does not have retrospective effect, the Appellants accrued rights
as a secured creditor remained unaffected.
Limitation and Laches
[14] On the issue of whether the Appellants application is time barred,
the learned Judge said the charge expressly stated that the loan was
for 6 months and therefore should have been repaid in July 1986. But
since the present application for sale was filed on 16.2.2009, which is
some 22 years later, the learned Judge held that the action is caught by
limitation and laches.
[15] The relevant provisions in the Limitation Act 1953 relating to
foreclose actions are s 21(1) and (2) which both lay down a limitation
period of 12 years to bring an action from the date when the right to
receive the money accrued(s 21(1)) or from the date when the right to
foreclose accrued (s 21(2)).
[16] In Peh Lai Huat v MBF Finance Bhd [2009] 5 CLJ 69, the Court of
Appeal held that s 21(1) and (2) of the Limitation Act 1953 did not apply
to the facts of the case there because the chargee there was exercising
its statutory remedy of sale under the provisions of the NLC and was
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not bringing an action to recover a debt owed. The Court of Appeal

further held that in a case where a chargee is enforcing its statutory
remedy by applying for an order of sale of charged land, the cause of
action does not arise until after the chargor had failed to remedy the
default specified in the Form 16D notice.
[17] The Appellant here was applying to exercise its statutory remedy
of sale under the provision of the NLC and had not brought an action to
recover a debt. The Form 16D in respect of the present proceedings
were issued on 15.1.2009. The present Originating Summons was filed
on 16.2.2009 which was well within the 12 years period prescribed by s
21(2) of the Limitation Act.

[18] With regard to the question of laches, from the above facts we do
not think it can be said that the Appellants conduct had indicated that it
was waiving its rights against the Respondent. The Appellant has been
pursuing its statutory remedy of sale well within the 12 years period
after it had issued out its Form 16D notice under the provisions of the
NLC, both in the 2000 OS and in the present proceedings.
[19] It was for all the above reasons that we allowed the appeal and
granted the order for sale as we were satisfied that in respect of the
fresh application for sale, cause to the contrary had not been shown
within the meaning of that term as explained in Low Lee Lians case. In
so doing we also ordered that the amount payable at the date of the
order should be recalculated so that interest payable during the period
of the Respondents bankruptcy from 17.7.1992 until 19.2.2002 when
she was discharged of her bankruptcy, is deducted when calculating the
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amount due under the charge. We did so as this was not a case where
the Respondent had become a bankrupt and continued to remain so till
today.

Here, by the time the fresh Form 16D was issued out on

15.1.2009, the Respondent had already been discharged of her

bankruptcy but it is our view that for the purposes of calculation of
interest due under the Charge, the period of her bankruptcy should be
taken into account.

[20] We also ordered the Respondent to pay costs of RM5,000.00

DATUK CLEMENT SKINNER

Judge
Court of Appeal, Malaysia
Dated: 24th September 2013

PARTIES:
For Appellant

Mr Satish Vasudevan Nair

Messrs Satish Alli & Associates
Advocates & Solicitors,
Kuala Lumpur

For Respondents

Mr Chandran Nair
Messrs Thevin, Chandran & Nair
Advocates & Solicitors
Petaling Jaya

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