Lecture Notes, Charge, Land Law 2 Hi, to those who decide to rely on these notes.

Please note that they were made in early 2009, so updates are required. I edited them and personalized them, but the core was still from the lecture notes, so much credit is to be gi en to the lecture notes. It may not be adequate, there were still some e!tra cases on my printed copy. p.s. this is based on "alaysian law. 4.1 Definition - Charge Definition Sec 5 #$%& ' charge is a (registered charge). *ypes of charge Differences between charge and mortgage. Mahadevan s/o Mahallingam v Manilal & Sons (M) Sdn Bhd +,9-./ , "$0 211 at 220 3ur land law does not recognize a mortgage if it means a mortgage in the sense of 4nglish land law whereby the legal estate, i.e. ownership of the land is transferred to the mortgagee and what is left with the mortgagor is only an equitable right to redeem, 5nown as equity of redemption. 6ut our land law certainly recognizes a mortgage in the sense of *orrens system, whereby the mortgagor retains the legal ownership whilst the mortgagee acquires a statutory right to enforce his security. 7or the purpose of a oiding confusion, our #ational $and %ode drops the word 8mortgage8 and uses the word 8charge8 in place of *orrens mortgage. Malayan United Finance Bhd v Tan Lay Soon +,99,/ , "$0 90. *his case basically says that equity of redemption in 4nglish and equity of redemption under the law of #ew :outh ;ales, 'ustralia which is closely similar to "alaysia are no equal. Interest in and Ho Giok Chay v ik !ishah +,91,/ "$0 .9

Here the land was a "alay reser e land and was charged by the <elantan $and 4nactment. Howe er, by the "alay =eser ations 4nactment, the esting of interest in a "alay reser e land cannot by transfer or transmission the interest be ested in a non

"alay. *he chargee was non>"alay. *he order for sale by public auction was dismissed and summons dismissed. T Ba"iam Singh v #ega$ai #entad%i" #esaka& Malaysia +,9-?/ , "$0 2?2 His $ordship said that a charge does not amount to interest in land because the charge is not g en any interest as to the en@oyment of the use of land. 'lso, he said that it was not the intention of the enactment to create charges in fa our of non>"alays in the e ent of default as the land can ne er be sold to a non>"alay. *he case of Ho Giok Chay which charge was registered under the <elantan $and 4nactment ,9?- no longer applicable as it had been repealed by the #$% and now a chargee can enforce a sale on the land. Malaysia B'ilding Society Bhd v (oho"e Mining !nd Stevedo"ing Com)any Sdn Bhd +200./ 9 %$0 -2 I! A, P' to A2 to obtain loan and subdi ide land. A2 obtain loan from P but IA* in $3 for subdi ision so charge not registered. :ubstituted P' made from A2 to P. Bnderta5ing between made between A2 and P that charge to be made once subdi ision complete. A2 got =" 20million and defaulted on repayment. A, re o5ed ,st P' and refused to e!ecute charges. P aggrie ed and applied for declaration for charge entitlement of subdi ided land. "! 't the time the :ubstituted Power of 'ttorney was e!ecuted, the second defendant was the first defendantCs lawful attorney. Hence, the assignment of the legal propriety interest in the parent land and the power to sell and enter possession into the ,0,9 parcels in the e ent of default was in fact granted to the plaintiff by the first defendant through its attorney, the second defendant. %onsequently, the plaintiff had a proprietary interest in the ,09, IA*s. *hat proprietary interest is more in the nature of a right in rem ta5ing the form of an equitable charge. #a$ %hat can be charged! s 241 Sec 241#1$! &owers of charging DaE the whole, but not a part only, of any alienated landF DbE the whole, but not a part only, of any undi ided share in alienated landF and

DcE any lease of alienated land, may be charged under this 'ct with> DaaE the repayment of any debt, or the payment of any sum other than a debtF or DbbE the payment of any annuity or other periodic sum. Sec 241#2$! *he powers conferred by sub>section D,E shall include power to create second and subsequent charges. Sec 241#'$! (estrictions *he said powers shall be e!ercisable in any particular case sub@ect to> DaE any prohibition or limitation imposed by this 'ct or any other written law for the time being in forceF DbE any restriction in interest to which the land in question is for the time being sub@ectF and DcE in relation to leases, the pro ision thereof, e!press or implied. Phuman Singh v Khoo Kwang Chong 'ny charge created in contradiction with stipulated restrictions and requirements will be oid ab ibnitio G held unenforceable. Sec 241#4$! ;ithout pre@udice to paragraph DaE of sub>section D?E, no charge may be granted to two or more persons or bodies otherwise than as trustees or representati es. Sec 244#1$! %hargee can be entitled to the IA* Dor in cases, the duplicate leaseE, in the e ent there is still liability in the charge. )*+es of and which can be charged! Sec 24,! Postponement of priority of a charge to a subsequent charge can be made by 7orm ,1%. Sec 245! =estriction on consolidation.

Sec 24-! *ac5ing on further ad ances.

#b$ %a*s of creating a charge .orm 1-/0 or .orm 1-1 7orm ,1'& for a charge to secure the repayment of a debt or the payment of any sum other than a debt. 7orm ,16& charges pro iding for payment of an annuity or other periodic sum Dplus required stampingE :ub@ect to Sec 241#'$ G #4$ ;hat if you use the wrong formH * Letch'manan v Cent"al Malaysian Finance Be"had +,9-0/ 2 "$0 91 I! *he loan was to be paid in installments until request made. 3n default, chargee sought to sell the land, chargor ob@ected on basis that 7orm ,1' should ha e been registered. "! 7% held that ,1' was correct as the statutory form is fle!ible enough. Dit was not to de iate or mislead, hence correct by irtue of the Interpretation 'ctE Tan +en +ee v ,-'ity Finance Co") Bhd +,99,/ , "$0 2?2 Instrument used should be appropriate but by the Interpretation 'ct, any instrument shall not be in alidated by reason of any de iation that has no substantial effect and that is not calculated to mislead. #c$ Creation of second charge and subse2uent charges Sec 241#2$! *he powers conferred by sub>section D,E shall include power to create second and subsequent charges.

Priorities to first registered charge Sec 244#2$! ' chargee ha ing the custody of any issue document of title or duplicate lease shall, on the written request of the proprietor or lessee, and within such reasonable period as is specified in the request, produce the same at any =egistry or $and 3ffice so specified for any purpose for which it is required under any pro ision of this 'ct. 2. 3ffect of a (egistered Charge

Sec 24'! registration is ImandatoryC and not a choice. . & / Sec'"ities v Golden Castle Finance +,929/ , "$0 .1 at .2. I! =equest and consent from first chargee required before second charge or any further security or encumbrance could be e!ecuted o er the land could be entered as in %lause 1 of the loan agreement. 'pplicant was requesting for an e!tension of ca eat on the said land of the registered proprietor. *he first chargee was not in agreement. "! *he registered proprietors had by %lause 1 of the first charge at their own instance disabled themsel es from creating further charges without consent of the first chargee. *he applicants were aware of the restrictions and in the circumstances the application must be dismissed. (ights of the +arties Im+ ied Sec 244! %ompliance with the sum secured for and interest and payment of any sum due to the :tate 'uthority or lessee Dif rele antE and perform in compliance to the conditions the land is sub@ect to. Sec 255! 'greement by chargor implied in absence of contrary intention& repair and 5eep all buildings, insure it to full alue against loss or damage by fire, permit chargeeCs agent to inspect upon notice, if failing, remedy may be ta5en.

Sec 251! Implied agreement by chargee as to consent to leases, etc& implied agreement on chargee that consent to grant lease or tenancy is not be withheld without reasonable cause. 36+ress agreement of +arties. Sec 217#2$! *ransfer of charge by the act by 7orm ,.6 Sec 215! 7orm, and effect generally, of transfer of land& title to est in the transferee. Sec 21-! 'dditional pro isions with respect to lands transferred sub@ect to leases, charges, etc& interests on land will continue etc. Sec 244! %ustody of IA*JAuplicate lease& ;ho 5eepsH 4.' 3ffect of an 8nregistered Charge 9 32uitab e Charge Koid So'the"n Bank Bhd v Ch'ah Beng Hock +,999/ 9 "$0 201 %harge created under %ode only ta5es effect upon registration, no charge effecti e unless registered. 4quitable charge Ch'ah ,ng 0hong v Malayan Banking Bhd +,99-/ ? "$0 92 4quitable mortgage DchargeE still can e!ist in the presence of the %ode. #$% did not include what :elangor =egistration of *itle =egulations ,-9,, :ec . which equitable mortgages. ..M !"'nasalam Chetty s/o Sitham%a"am Chetty v Teh !h #oh t"ading 'nde" the style o1 M'n Seng Hin 0ee & !no" +,9?2/ "$0 ?,2 4!pression of equitable mortgage >L 'ct of securing by deposit of title for a loan agreement, howe er you donCt get a protection on par with the #$%, but the equitable charge bring an equitable fa or to the creditor. Mahadevan s/o Mahallingam v Manilal & Sons (M) Sdn Bhd +,9-./ , "$0 211 oided

H& an agreement to secure a debt by land M create equitable charge, gi e rise to equitable right though not registered under #$%, so the remedy canCt be granted as per the #$%. If failed to register, lender may be able to see5 recognition 4ffects Tan See Hock v 2evelo)ment and Comme"cial Bank Bhd +,99?/ ? "$0 290 I! P and . other landowners entered into agreement with 6antar :dn 6hd whereby P agreed to transfer land to 6 as trustee for de elopment. 6antar charged the said land to the A, D,st %hargeE to secure financial facility. :ubdi ision was appro ed and 6antar was the new registered proprietor without any encumbrances such as the first legal charge of the first defendant thereon. P and A, lodged respecti e ca eats on the land. *he de elopment was not carried out and 6 failed to repay the loan granted by A,. *he registrar of titles ga e notice of 7orm ,9%, to P by A,Cs request of the registrarNs intention to remo e the P ca eats under s ?21 of the #$% unless e!tended by an order of the court. *he plaintiff applied to e!tend the pri ate ca eats lodged by him on the said land, contending that he had established an interest in the land and that there was a serious question to be tried with regard to the ownership of the land. *he plaintiff also asserted that 7orm ,9%, which was issued by the registrar of titles, was in alid as it was ultra ires. "! PCs application allowed. D,E $and had been freed and discharged from all titles upon re>alienation. *his e!tinguished (interest) of A, with the initial first legal charge. D2E :ec ?.0D,E #$% confers indefeasible title or interest to proprietor where at that time charge lease or easement is being registered under. It does not recognize the interest of a chargee which has not be registered. A, was not a registered chargee, they could not a ail themsel es of the indefeasibility of their interest in the said land. D?E A, was not registered chargee, hence no rights to proceed with :ec ?21 of #$%. *herefore, the notice by 7orm ,9% of the #$% was ultra ires. 'ny other category of persons aggrie ed should see5 relief by way of s ?22 of the #$%. 3"iental Bank v Ch') Seng .esta'"ant (B'tte"$o"th) Sdn Bhd +,990/ ? "$0 .9? Drights not by the #$%E

I! *he crucial issue was whether the plaintiffs who stepped into the shoes of %itiban5 #' by subrogation, can obtain an order for sale under s 291 of the #ational $and %ode ,919 despite not being the registered chargee of the said property. "! *hough all the documents had been e!ecuted and ready for registration DP was now an equitable chargeeE, the #ational $and %ode ,919 clearly requires the charge to be registered in its prescribed form before a chargee can enforce his right of foreclosure under the %ode though does not prohibit the creation of an equitable charge. Mahadevan s/o Mahallingam v Manilal & Sons (M) Sdn Bhd +,9-./ , "$0 211 7% +#ote& P% did not e!press any iew on the status of the equitable charge in the "alaysian *orrens system./ Dpage,E :32uitab e charge; used in the fo owing circumstances! a. where a charge instrument has been e!ecuted but not presented for registration Standa"d Cha"te"ed Bank v +a) Sing +oke +,9-9/ 2 "$0 .9 I! *he charge registered had not been affected as they had been returned due to inadequate documents supplied. *here had been no registration as the P did not 5now of its return. *here now was a pri ate ca eat lodged on land, so does it ha e priority. "! P had acquired a title in equity o er the land because the IA* was in the custody of P at all times, it had created a lien in equity o er the said land. *he equitable interest is not affect by absence of a ca eat. 3"iental Bank v Ch') Seng .esta'"ant (B'tte"$o"th) Sdn Bhd +,990/ ? "$0 .9? b. where no separate title has been issued and, instead of a charge, a loan agreement and a deed of assignment are entered into to secure a loan Malayan Banking Bhd v 4aha"i %in !hmad +,9--/ 2 "$0 ,?9 I! *he A owed the P a certain amount of money. Pursuant to the loan, a loan agreement and a deed of assignment were e!ecuted, and the A defaulted on the repayment of the loan. P applied for court order that they be at liberty to issue write of possession, and for

an order that they may sell and proceeds go to the repayment and interest owing to them. "! #$% did not prohibit creation of equitable charges, its recognizable, hence the loan agreement and deed of assignment created an equitable charge in form and substance. So'the"n Bank Bhd v Ch'ah Beng Hock +,999/ 9 "$0 201 7ailed to register 2nd charge for the o erdraft facility, but still disbursed O 200,000. 3rder for sale applied for upon default of payment, so the court said that :ec 2.? charges by #$% require registration. If abo e O ,,-00,000 wished to be reco ered from the O 2.9mil, then they ha e to obtain from other sources DI.e. @udgment debtE. %ourt did not allow application for order for sale as there was cause to contrary. Mastiara Sdn Bhd v Motorcycle Industries (M) Sdn Bhd +,99-/ ? %$0 -2.F +,999/ , '"= ?12 Chuah Eng Khong v MBB +,99-/ ? "$0 92F +,999/ 2 %$0 9,2 Phileo Allied Bank (M) Bhd v Bu inder Singh a!l Avatar Singh +,999/ ? "$0 ,92 4.4 Defau t and (emedies =eal right and personal right for chargee&

3rder for sale *a5ing possession of land 'ppointing recei er Dif chargor is a corporationE

56

3"de" 1o" sale

Sec 25'! =emedies of %hargee& :ale Dpurpose and scope of the chapterE M enables the chargee to obtain the order for sale by public auction the sale of the land or lease to which his charge relates in the e ent if thereCs a breach. Sec 254! :er ice of default notice, and effect thereof. 3ne month or alternati e period Das specified in chargeE. #otice in .orm 1-D specifying the required info and warning of order for sale.

Sec 255! :pecial pro ision with respect to sums payable on demand& .orm 1-3, related to monthly repayment. Sec 25-! 'pplication to %ourt for 3rder for sale. Sec 25,! "atters to be dealt with by order for sale& 7orm ,1H& information required Dplease readE. Sec 257! Procedure prior to sale& notice, ad ertisement, conditions of sale, IA* deposition etc. Sec 254! Procedure at sale Dplease readE Sec 2-5& 'pplication to $and 'dministrator for order for sale. Sec 2-1! $and 'dministrator to hold enquiry. Sec 2-2! Pro isions as to enquiry. Sec 2-'! 3rder for sale, and matters to be dealt with thereby. Sec 2-4! Procedure prior to sale. Sec 2-4/! Postponement or cancellation of an order for sale by $and 'dministrator. Sec 2-5! Procedure at sale. Sec 2--! =ight of chargor to tender payment at any time before sale. Sec 2--/! :tatement of payment due. Sec 2-,! 4ffects of sale. Sec 2-,/! 'pplication of deposit upon failure to settle purchase price etc.. Sec 2-7! 'pplication of purchase money. Sec 2-7/! 'pplication of purchase money by chargee who is a financial institution. Sec 2-4! Protection of purchasers. .orm 1-D < 1- 3! *wo sets of procedures for the chargee to enforce his remedy by way of sale on the ground of the chargorCs default depending on the type of title.

=*& Sec 25-, 3rder -? =H% M High %ourt. $3*& Sec 2-5 $and 'dministrator. 76768 Taking )ossession o1 land Sec 2,5! $imitation of powers to certain lands, and to first chargees only. Sec 2,1! Power of chargee to ta5e possession on any default by chargor. Sec 2,2! Procedure for ta5ing possession, 7orm ,10, 7orm ,1<. %ourt order. Sec 2,'! Auration of right to possession. 's long as liability continues. Sec 2,4! Position of chargee in possession M profits from land and rent etc. Sec 2,5! Power of chargee in possession to grant leases and accept surrenders. Sec 2,-! Pro isions as to notices by chargees to recei e rents. Sec 2,,! 'pplication of rents and profits by chargees in possession. Sec 2,5#1$<#2$! *o registrar title, and to first chargees, only Sec 2,1#1$#a$! Power of chargee to ta5e possession on any default by charger Malaysia C"edit Finance Bhd v +a) Hock Choon +,9-9/ 2 "$0 ?1? *he learned @udge said that it seemed that :ec 22, and 222 seemed to unmista5ably gi e a right to the chargee to oust the chargors from their possession of the charged land. =ight to possession *he chargee has been conferred with power to ta5e possession of land sub@ect to lease or tenancy on default by chargor. Howe er :ec 220D,EDaaE seems to ha e restricted this from sub@ect matters that in ol e an undi ided share in the land. Procedure for ta5ing possession .orm 1-= M :er e notice on lessee or tenant and a copy on chargor where he will collecting rental from the rent to the chargor under any lease or tenancy. *his will lead the rights of the chargor to be passed to the chargee.

.orm 1-> M :er e this when chargor wishes to go into occupation. If within a chargor on whom a notice in 7orm ,1< is ser ed fails within the period specified in that behalf in the notice to admit or secure the admission of the chargee into occupation of the land, chargee can apply for a court order. Auration of right to possession ' chargee can remain in possession until the loan remains unpaid. ' chargee in possession by his rights in :ec 229 has right to lease the land or obtain the rent payable under the lease. 7orm ,10 pursuant to :ec 222D2E or :ec 229D2E of #$% shall be in force and bind the lessee or tenant on whom it is ser ed and any subsequent transferee of the lease or tenancy in question, until it is withdrawn by the chargee or cancelled by the chargor or by the purchaser of the land. %ancellation of notice of possession must be made by ser ing on the e!isting lessee or tenant with a notice in 7orm ,1$ or ,1". 4ffects of ta5ing possession %hargee can ta5e all the profits accrued from the land. 6ut chargee is liable to the chargee is liable to the chargor for any act whereby the capital alue of the land is impaired or the chargor is otherwise put to other loss. 'rticle& Challenges to Charges" Princi le and Precedent, == :ethu +,99?/ ? "$0 !c 76769 !))ointing "eceive" #o pro ision in #$%. 3nly happens when the chargor is a company registered under %ompanies 'ct ,919 which land is charged to the financial institutions as security for loans granted to them. :uch right arises out of contract and not by irtue of the statutory powers conferred by #$%. 4.5 ?rder for Sa e Kimlin #ousing $evelo ment Sdn Bhd (a ointed receiver and manager (In li%uidation)

v Bank Bumi utra +,992/ 2 "$0 -09. #ot a @udgment debt. 3rder for sale is not a @udgment or decree& Kandiah Peter v Pu&lic Bank Bhd +,99./ , "$0 ,,9. 76:65 otice o1 2emand

#a$ .orm of notice! .orm 1-D or 1-3 *here are two types on notices prescribed by the %ode& #otice of default D,1AE or #otice of demand D,14E. .orm 1-D! ser ed to defaulter to notify intention to commence proceedings for sale as in the #$% in respect of any breach of the terms of the charge Dincluding failure to pay the money as agreed. ' duration of one month Dor agreed durationE is gi en to correct the breach, if notF there will be application for sale by public auction. %ourt will e!amine stipulated time to determine if the notice in ,1A was gi en prematurely. %ourt can also gi e an alternati e minimum period which is not less than what stated in ,1A .orm 1-3! issued n respect of a debt where the principal sum is payable on demand whereby the condition is that the payment will ha e to be made within a month from ser ice or order for sales will be applied, the duration under ,14 cannot be reduced by chargee Sya"ikat 0e$angan Melay' .aya v Malayan Banking Be"had +,9-1/ 2 "$0 29? ;hen two charges are lumped together in a notice of 7orm ,1A, the court held it was not defecti e because it did not pre@udice or mislead. ;hether the :A was defecti e in respect of its contents is a question of fact. (aco% v 3ve"seas Chinese Banking Co")& /)oh +,92./ 2 "$0 ,1, 7% Issue 1! *he chargee had used 7orm ,1A when the principal sum was payable on demand within :ec 299. *he chargee had not made demand by 7orm ,14 and the chargor argued that it was the usage of the wrong instrument as the letter sent by the chargee had been worded that it the payment was not made, (no alternati e but to reco er the o erdraft from you). :ec 299 D,E does states chargee (shall) ma5e demand by :ec ,14 and not compels the chargee to in the e ent of reco ery of principal sum. It seems that if the chargee had made a demand using 7orm ,14, he did not need to use 7orm ,1AF and if he did not use 7orm ,14, it would be o5ay to use 7orm ,1A. *he main concern of the legislature is for there to be sufficient notice gi en to the chargor before coming to court. Issue 2! Principal and interest would be mean for 7orm ,1A, and principal would be for 7orm ,14, is this argumentation trueH *he learned @udge said that this is not true, as

neither :ec 29. nor :ec 299 used the word (interest), so interest could be claimed by either form. :ec 12 of the Interpretation 'ct too states that in the e ent of de iation from forms, the form shall not be in alidated if it does not ha e substantial effect to mislead. *he @udge sees that there is no reason why the word (and interest) cannot be added to the heading of 7orm ,14. 'CBC Bank (M) Bhd v (ean Seng Pottery )actory Sdn Bhd +,999/ 2 "$0 .02. Central Malaysian )inance Bhd v *reat Paci+ic $evelo ment Sdn Bhd +,9-?/ , %$0 ,?. Malayan ,nited )inance Bhd v -an Ah Moi . -an /yor Pong ()) 0 Satu (agi +,9??/ 2 %$0 .22 Co;o)e"ative Cent"al Bank Ltd v Mengk'ang #"o)e"ties 1hd +,99,/ 2 "$0 2-? #otice of demand of payment which does not specify the precise sum owing is not in alid if the chargor is gi en a reasonable opportunity to comply with the notice by the chargee. In alidation only of the precise sum is mista5en. *!M H'ssain v B# Malaysia +,920/ 2 "$0 19 It was held that the proper notice to issue where the principal sum secured by a charge is payable on demand should be in 7orm ,14. It was also held that inclusion of interest in 7orm ,14 did not ma5e the notice defecti e. Malayan Banking Bhd v PK 1a2amani +,99./ , "$0 .09 Perwira A++in Bank Bhd (+ormerly known as Perwira #a&i& Bank Malaysia &hd) v 3(ow 0 /g 1ealty Sdn Bhd +,992/ 9 "$0 ,-9 Citi&ank /A v 3ong /gai Poh +,9-?/ MIMB v $hanoa Sdn Bhd +,9--/ , "$0 292 Citi&ank Bhd v Mohamad Khalid )ar4alur 1ahaman 0 'rs +2000/ ? %$0 2?9 Kekatong Sdn Bhd v BBMB +,99-/ 2 "$0 ..0. Khor Kim 5ong v Pu&lic Bank Bhd 0 Anor +,99-/ , %$0 11-. Cem aka )inance Bhd v A&&as &in 5aako& +,999/ 2 "$0 .,,.

Multi ur ose Bank Bhd v Maimoon Bte A&dul 1a4ak +,999/ 1 "$0 2,9. Bank Kera2aan 1akyat Malaysia Bhd v Emcee Cor oration Sdn Bhd +200?/ 2 "$0 .0(ee *ee Pheng v 1#B Bank Bhd +200?/ . %$0 1?9F +200./ , "$0 1,Alliance Bank Malaysia Bhd v MCK $evelo ment Sdn Bhd +2009/ 9 %$0 22 -he #ong Kong 0 Shanghai Banking Cor n (td v -an Sock *in +,999/ 2 %$0 .90. c. Contents of Notice of Demand Sec 254#1$#a$ < #b$! :pecifying breach in question, requiring it to be remedies within one month or any other alternati e period with warning if notice not complied with, proceedings to obtain an order for sale will be ta5en. Sec 254#2$! 'fter the ser ice of notice, the charge land is ested in any other person or body, the notice is alid unto the person as though it was ser ed against to. Sec 245#'$! ;hat happens if breach occursH ;hole some charge will be payable to the chargee. Sya"ikat 0e$angan Melay' .aya Bhd v Malayan Banking Bhd +,9-./ , "$0 ,,9 7% ;hen two charges are lumped together in a notice of 7orm ,1A, the court held it was not defecti e because it did not pre@udice or mislead. ;hether the :A was defecti e in respect of its contents is a question of fact. Co;o)e"ative Cent"al Bank Ltd v Meng 0'ang #"o)e"ties Bhd +,99,/ 2 "$0 2-?. ' notice of demand which does not state the precise sum owing is not in alid if the chargor is gi en a reasonable opportunity to comply with the notice and if the notice does not demand payment of something to which the chargee is not entitled. Here, the plaintiff ban5 was found to not be prima facie entitled to the remedies sought by them in the originating summons, hence the matter had to go to trial. Standa"d Cha"te"ed Bank Malaysia Bhd v T'nk' M'd<a11a" Bin T'nk' M'sta)ha +2009/ , "$0 10.

:er ice of notice is mandatory Powers and requirements for issuing of notices are pro ided under s 29. G 299 #$% Issue ,& is one month period a mandatoryH :ec 29.D,E allows one month or otherwise agreed. Mohamad Khalid & )ar4ular 1ahaman 0 'rs v Citi&ank Bhd +2000/ 9 "$0 .2, M can be shorter than one month. Issue 2& ;ill ser ice of wrong notice be a bar to the chargeeCs application for order for saleH 6aco& v 'versea Chinese Banking Cor D7%E. 'ccepted by 'CBC Bank (M) Bhd v #otel 1asa Sayang Sdn Bhd +2009/ 2 "$0 ?0,. Issue ?& whether the chargee can impose other charges Dnot pro ided in the charge agreementEH Co7o erative Central Bank (td v Meng Kuang Pro erties Bhd +,99,/ 2 "$0 2-? M not prima facie entitled. I ega it* -an Ah -ong v Perwira A++in Bank Bhd 0 3rs +2002/ 9 "$0 .9 Malayan Banking Bhd v PK 1a2amani 0 Anor +200./ ? %$0 29 Perwira A++in Bank v -an Ah -ong +200?/ 9 "$0 ,9? 76:68 #o$e"s o1 Co'"t =egistry title M Sec 25- NLC0 ?rder 7' ("C Sec 25,! "atters decided by the court, 7orm ,1H Sec 257-254! Procedure at sale. ?rder 7' (u es of the "igh Court 1475! #on compliance will cause the case to be struc5 off.

Citi&ank /A v I&rahim &in 'thman +,99./ , "$0 10Bank Pertanian Malaysia v 8ainal A&idin &in Kassim 0 Anor +,999/ 2 "$0 9?2 Phileo Allied Bank (Malaysia) Bhd v Bu inder Singh Avatar Singh 0 Anor +2002/ 2 %$0 12, Chang Keat 1ealty Sdn Bhd v Ban #in (ee Bank Bhd +200?/ ? %$0 9?2 a. Circumstances where the order for sa e is not granted

S 25-! :cause to the contrar*;. Lo$ Lee Lian v Ban Hin Lee Bank Bhd +,992/ , "$0 22 M Popal :ri =am %'0 has stated that if (cause to contrary) could be established by the charger, it would defeat the application for order of sale. *he case di ided (cause to contrary) into three parts that were& DiE when chargor brings any e!ception to indefeasibilityF DiiE when chargor could demonstrate that the chargee failed to meet conditions precedent to ma5ing the applicationF and DiiiE when a chargor could demonstrate that the grant of an order for sale would be contrary to some rule of law or equity. Keng Soon )inance Bhd v MK 1etnam #oldings Sdn Bhd 0 Anor +,9-9/ , "$0 .92, .10 P% It was cautioned here that any attempt to refuse relief merely on the ground that the court felt sorry for the borrower that it regarded the lender as arrogant, boorish and unmannerly. *herefore, if there is #3 cause to the contrary that could be pro ed to be in e!istence, the court is obliged to ma5e an order for sale on the application of the chargee. i. Defecti@e or Im+ro+er Notice of Demand

Procedural defect in application Co;o)e"ative Cent"al Bank Ltd v Meng 0'ang #"o)e"ties Bhd +,99,/ 2 "$0 2-?

Here the ban5 had sent a notice of demand which included the charge of default interest. *he court held that the plaintiff ban5 was not entitled to charge default interest since they had not gi en any notice pursuant to clause 9 of the charge anne!ure which required that a notice that default interest was to be imposed, before it was actually could be imposed. *he courts mentioned that on the issue of whether the plaintiff ban5 is not entitled to claim for default interest, the issue stood on a different footing for if the plaintiff had in their notices of demand as5ed for something to which they were not entitled then the notice would be rendered ineffecti e and in alid. Hence, the defendant had included the more than prescribed interests, which was definitely contrary to what had been agreed between parties D20Q instead of ,9QE. *he $earned @udge, decided that by this circumstance, the plaintiff ban5 was not entitled to the remedy they sought for in the originating summons. .HB Bank Bhd l$n Sya"ikat S'ngei 912 %ourt was to decide the position in 7orm ,1A on the basis that DiE it was not ser ed, DiiE no specific details of the breach and DiiiE amount claimed was more than allowed. %ourt held that DiE the breach in 7orm ,1A is sufficient for the purpose of :ection 29.D,EDaE of the #$%, DiiE the notice in the 7orm ,1A is in relation to the breach or failure to pay the amount demanded in their earlier letter of demand, as such the P was correct in stating in 7orm ,1A that the said breach was as a result of failure to pay the amount demanded in the said letter of demandF DiiiE and details of the breach that resulted in the facilities being recalled and the later demand, is sufficient for it to be stated in the letter of demand sent earlier to the A. ii. .raud al Tim%e" /nd'st"ies Sdn Bhd +2002/ . "$0

Tai Lee Finance Co Sdn Bhd v 311icial !ssignee +,9-?/ , "$0 -, 7% 'n application for order for sale of land in question will not be granted by the courts in cases where the chargee has been fraudulent or where the chargee and the chargor ha e acted in collusion to defraud third parties. I! ' land had been double charged and upon default in repayment, the default order for sale was set aside by 2nd and 2th =. the 'Cs application was subsequently heard for

order for sale but set aside. *he chargor had entered an agreement with =s to de elop the land. = opposed 'Cs application due to him failing to ma5e proper inquiries as in regards to the land before e!ecuting the charges and shouldnCt ha e solely relied on titles search in the =egistry and the trial @udge agreed. Inquiries would ha e led to 5nowledge of the sale, hence there was constructi e notice and chargor bound to sell to =. 'Cs demand for sale of the land was held to be unconscionable and constituted a fraud on the respondents. He accordingly dismissed the application. *he appellant appealed. "! D.E in this case in the light of the affida it e idence, at the ery most the appellant had constructi e notice of the respondentNs prior beneficial interests. *here was no e idence to satisfy the court that there was fraud to which the appellant was a party. *he respondents had not pro ed beyond reasonable doubt that the appellant had acted dishonestly, wilfully and consciously disregarding or iolating the right of the respondents or in any way in collusion with the chargorF D9E the appeal must therefore be allowed and the application of the appellantNs for sale of the land allowed. 3ve"seas Chinese Co")o"ation Ltd v Lee Tan H$a & !no" +,9-9/ , "$0 21, *he inter eners Dbona fide purchasersE successfully pre ented the chargee from selling the charged land on the basis that, one firm of solicitors had acted for all the parties, and the chargees were aware to the registration of that the chargor retained only a limited interest in the land due to the sale of most of it to the inter eners. Eng Ah Mooi v 'verseas Chinese Banking Cor oration +,9-?/ , "$0 209 7%

iii.

Contra@ention of Statutes

Aefeasible under Sec '45#2$& #on>compliance with the requirements of the "oneylenders 3rdinance ,99, Phuman Singh v Kho Kwang Choon +,919/ 2 "$0 ,-9 7%

3rder for sale will not be granted in cases of non>compliance with the pro isions of the "oneylenderCs 3rdinance ,99,. *rial @udgeCs decision upheld, that the registration of the charges under the "oneylenders 3rdinance after an application had been commenced for an order for sale was out of time, and by reason of want of registration, they were consequently unenforceable. !ssociated Finance Co")o"ation Ltd v #oomani +,922/ , "$0 ,,2 High %ourt of Ipoh held that non compliance to the "oneylenders 3rdinance ,99, Dnow the "oneylenders 'ct ,99,, re ised ,9-9E would render the contract unenforceable. 0eng Soon Finance Bhd v M0 .etnam Holdings Sdn Bhd & !no" +,9-9/ , "$0 .92 P% *he court refused an application by the chargee for an order for sale, stating that there is a duty on the part of the chargee to enquire if the housing de eloper DchargorE has a alid housing de eloperCs license. In the instant case, the chargor was not in possession of a alid de eloperCs licence. *he being so, the court held that the charge was oid ab initio. United Malayan Banking Co") Bhd v Sya"ikat #e"'mahan L'as ( o 8) +,9--/ ? "$0 ?92 %harge ha ing been registered in breach of an e!plicit statutory prohibition imposed on the title to the charged land pursuant to the pro isions of :ec ,20 Drestrictions towards the landE, the title or interest of the charge is defeasible since registration thereof had been obtained by means of insufficient or oid instrument. 'lso =egistrar of *itles is registering charge ultra ires to his power D:ec ?.0D2EDcEE. If the terms of a statute are absolute and do not admit of any rela!ation or e!emption, anything done in contra ention thereof, will be ultra ires and no person can be estopped from putting forward the contention that what was done was illegal or oid. 4ffect& oid and unenforceable& Co7o erative Central Bank (td (In receivershi ) v )eyen $evelo ment Sdn Bhd +,999/ ? "$0 ?,?. 3n allowing the appeal for a third party charge that was initially held to be oid, the court stated that the though the general rule is that where a contract is prohibited by

statute e!pressly or impliedly, and the statute stipulates penalties for those entering into it, the contract shall be oid and unenforceable Dunless sa ed by the statute itself or if there are contrary intentionsE, howe er, the trend of the courts seem to be that they are less ready to consider it illegal or unenforceable simply because it contra enes with a statute.

:ee also the %ourt of 'ppeal decision in #arta Em at Sdn Bhd v Ko erasi 1akyat Bhd +,992/ , "$0 ?-, for a different opinion from )eyen case, and the e!planation by 7ederal %ourt in Co7o erative Central Bank (td (In 1eceivershi ) v )eyen $evelo ment Sdn Bhd +,992/ 2 "$0 -29. In Harta 4mpat case, the court was not absol ed by : ,?? D,EDaE of the 'ct from the restriction against pro iding the security for the loan made to its director by the respondent merely made it because the loan was for the benefit of the appellant. In the case, the funds were not meant to meet the disbursements of the director so that the prohibition against the appellant company pro iding the security would still be applicable. i@. 36istence of Cause to the Contrar* 9s 25-#'$

%ontrary to the rule of law or equity M limited application. %ourt may not refuse relief merely because it feels sorry for the borrower or because it regards the lender as arrogant, boorish or unmannerly or because of the e!istence of prior unregistered claims& 0eng Soon Finance Bhd v M0 .etnam Holdings Sdn Bhd & !no" +,9-9/ , "$0 .92 P%. 4!amples& Bu9ton v Su reme )inance (M) Bhd +,992/ 2 "$0 .-, 'CBC v (ee -an #wa +,9-9/ , "$0 21, 4!cluding& the submission that there is a breach of contract 7or e!ample, (ow (ee (ian v Ban #in (ee Bank Bhd +,992/ , "$0 22 #b$ &osition of 1ona .ide &urchasers

*he interest of a bona fide purchaser with or without notice of the charge cannot pre ail, in the absence of section n ?.0D2E, o er that of a registered charge. *his was held in the cases Keng Soon )inance Bhd v MK 1etnam #oldings Sdn Bhd 0 Anor +,9-9/ , "$0 .92 P% and Bu9ton v Su reme )inance (M) Bhd +,992/ 2 "$0 .-, :%, howe er, 3%6% $ee *an Hwa G 'nor differed. B'=ton v S')"eme Finance (M) Bhd *here were purchasers who had obtained end>financing from the chargee. *he properties of those purchasers were not included in the chargeeCs application for the order for sale. It had been stated in %lause ?0 that a separate account be 5ept for the monies from the purchasers but this was held to not apply. *he indefeasibility of the chargeeCs registered interest is not affected by the chargorCs conduct, howe er unconscionable or deceitful it may be. *he :% by way of obiter, would seem to suggest that such a measure could ha e protected the other purchasers. ;hether this would ha e constituted (cause to contrary) in the sense that the chargee would be estopped from denying the rights of the purchasers, howe er was not discussed. 3CBC v Lee Tan H$a Parts of the land in question were sold and subsequently, a charge was created o er the whole of transactions. It was held by the H% that 5nowledge of the solicitor as to the e!istence of the prior claims of the purchasers could be imputed to the chargee. 's a charge could not be created o er land which the chargor did not own and as the chargee had notice of the purchaserCs claim, the charge was not alid. Hence, the grant of order for sale would be un@ustifiable. Note! this was decided before <eng :oon and e en so, H%Cs decision made no reference to <eng :oon, hence it has been submitted that this has been o erruled by <eng :oon and 6u!ton. 7or the position under $and %ode D%ap -,E, :arawa5, s ,.-D2EDcE, see also Kuching Pla4a Sdn Bhd v Bank Bumi utra Bhd v0 Anor +,99,/ ? "$0 ,1? :% *he application of (cause to the contrary) under s 291D?E is different from the Islamic financing& Ara&7Malaysian Merchant Bank Bhd v Silver Conce t Sdn Bhd +2009/ 9 "$0 2,0

3ther cases& 'riental Bank v Santhnavakey +,99-/ . %$0 :upp .,2 Phileo Allied Bank (M) Bhd v /arendran s!o 8ham&imuthu +,999/ ? '"= ?22, 'CBC Bank (M) Bhd v Astano Electric Sdn Bhd +,999/ ? "$0 1,Ban #in (ee Bank Bhd v Pang (ai #in +,999/ 2 "$0 2?. 'verseas ,nion Bank (M) Bhd v (0# Pro erties Sdn Bhd +,999/ 2 "$0 1?2 Phileoallied Bank v Saddhona Indran Seva ragasan +,999/ ? %$0 1.9 Perwira A++in Bank Bhd v Saad &: A&dullah 0 Anor +,999/ 1 "$0 .,#ong Kong Bank (M) Bhd v /or #ari4an &inti Mohd Ali +,999/ 2 '"= 2.9? #c$ ?ther im+ortant issues! Sec 25'! Purpose and scope of this %hapter& 3rder for sale Sec 25-#2$! =egistry titleF procedure 3rder -? =ules of High %ourt ,9-0. 0andiah #ete" v #'%lic Bank Bhd +,99./ , "$0 ,,9 7ailure of the chargee to obtain order for sale does not prohibit the chargee from ta5ing action in personam against the chargor. I! *he appellant had charged certain lands to the respondent. *he respondent later obtained orders for sale of the appellantNs land. *he appellant unsuccessfully applied to set aside the orders and subsequently brought an action for a declaration that the charges and anne!ures relating to the land were null and oid and for consequential relief. In his statement of claim, the appellant raised and relied on facts and issues which the trial @udge found to be identical to those raised by the appellant in the foreclosure proceedings. *he trial @udge therefore dismissed the appellantNs claim on the

ground that the matter was co ered by the doctrines of estoppel and res @udicata. *he appellant appealed. "! D,E ' chargee who ma5es an application for an order for sale in foreclosure proceedings does not commence an action. He merely enforces his rights as a chargee by e!ercising his statutory remedy against the chargor in default. In order for the doctrines of res @udicata, cause of action estoppel or issue estoppel to apply, the earlier proceedings must ha e resulted in a final @udgment or decree. *his requirement is not met by foreclosure proceedings which do not result or terminate in a final @udgment or decree. D2E ;here a chargor raises issues and relies upon facts to show Ncause to the contraryN in proceedings brought against him by the chargee, he is not barred from bringing a fresh action against the chargee Dnotwithstanding that an order of sale has been madeE and raising in that action the same or similar facts and issues as those raised by him in the foreclosure proceedings. #either res @udicata nor cause of action estoppel nor issue estoppel are a ailable to the chargee to meet the chargorNs action. D?E *he trial @udge was in error when he held that the appellant was estopped by res @udicata from raising in the subsequent action the identical issues which he had raised in the foreclosure proceedings. *he appeal was therefore allowed and a retrial of the action was ordered. #e"$i"a !11in Bank Bhd v >T Lo$ & 3ther cases& Malayan Banking Bhd v 5ong Chao )oo +,992/ 2 %$0 -.2 Ara&7Malaysian Bhd v 1a4shah Enter rise Sdn Bhd +,99?/ , %$0 ., ,nited Malayan Banking Cor Bhd v Chong Bun Sun and another a "$0 22, Bank Pertanian Malaysia v Mohd *a44ali Mohd Ismail +,992/ ? %$0 :upp. 299 E'/ Bank Bhd v $e& Brata $as *u ta 0 Anor +,999/ 1 "$0 2,. )oo 5oke )oon v Pu&lic Bank +2000/ ? %$0 .09 lication +,99./ 2 g .ealty Sdn Bhd +,992/ 9 "$0 ,-9.

Pu&lic Bank Bhd v /oor Ehsannuddin &in Mohd #arun +200,/ 9 "$0 2.1 ,nited Merchant )inance Bhd v Chang Miau Sin +200,/ , %$0 110 Phileo Allied Bank (Malaysia) Bhd v Koahish Credit 0 (easing Sdn Bhd +2000/ . %$0 2-Ara&7Malaysia )inance Bhd v Chan Sai Mee +200,/ 1 %$0 , Malaysian Building Society Bhd v ,nivein Sdn Bhd +2002/ 2 %$0 -, Bumi utra Commerce v -engku /gah Putra &in -engku Ahmad -a2uddin +2002/ . "$0 1? (um Choon 1ealty Sdn Bhd v Perwira ha&i& Bank Malaysia Bhd +200?/ . "$0 .09 E'/ Bank Bhd v #otel )lamingo Sdn Bhd +2009/ 9 %$0 29? 'CBC Bank (Malaysia) Bhd v Au Kee Sian 0 A/or +2001/ . %$0 992 76:69 #o$e"s o1 Land !dminist"ato" Sec 2-5! /++ ication to Land /dministrator for order for sa e. 'pplicable to $and 3ffice title, form qualified title under the $3, subsidiary title, whole or undi ided share or lease. 4ffected by 7orm ,1P Sec 2-1! 3n2uir* Bpon recei ing such application, $' will appoint a time and place to hold an enquiry, will notify the chargee of the time and place of the enquiry and cause a summons to be ser ed on the chargor, requiring him to appear at the enquiry. Sec 2-2! &ro@isions as to en2uir* Persons allowed to adduce e idence as appointed by chargor or chargee, chargor and chargee allowed to apply for postponement or change of enue. If chargee fails to appear, application dismissed. If chargor isnCt there, they $' shall decide if it is to be held e! parte or at a

later date Dwith fresh summons ser edE. If many chargees or chargors, and only some or one appear, it may be ad@ourned. A! ;hat is the $and 'dministratorCs @urisdictionH S'))iah v #onnam)alam +,91?/ "$0 202 't the enquiry to determine whether an order for sale should be made, the $' should not go behind the register. If he is satisfied that the charge in question is on the register, he has only to decide whether or not there has been a default in the payment pro ided for and if so, he is obliged to ma5e an order for sale. Gove"nment o1 Malaysia v 3ma" %in H? !hmad +,9-?/ , %$0 2.2 't the conclusion of the enquiry, the $', where he is satisfied that there is no e!istence of any cause to contrary, is obliged to ma5e an order for sale. In this case, the chargor paid in monthly installments that were by deduction from his salary, but upon change of wor5 D$embaga *emba5au #egara to Information AepartmentE, a possible technical error occurred which caused the monthly deduction to stop. %hargee requested for an order for sale under :ec 210. 4usoff %hin 0 said in his @udgment that :ec 21?D,E imposes a duty on the %ollector to order the sale of land which the charge relates unless he is satisfied that there is no e!istence of the charge or that there is no breach by the chargor of the agreement complained of, or if the breach was not caused by the chargor. G'")al Singh v 0ananaye" +,921/ 2 "$0 ?. $earned @udge in this case said that the 'ssistant %ollectorCs duty is not to ad@udicated pleadings usually heard in %ourt. *he $and 3ffice is not a court under :ection ? of the :ubordinate %ourts 'ct ,9.-. *he duty of a %ollector is limited and does not in ol e going behind the charge in iew of :ec ?.0D,E. He quoted S'))iah v #onnam)alam +,91?/ "$0 202 which stated that the %ollector was bound to accept the register and once he was satisfied that the charge with which he was concerned was on the register then the only question for him to decide was whether or not there had been a default in payments pro ided for and if he was so satisfied to ma5e an order for sale.

:ee also the powers of $' under :ec 2?>?9. *he power to enquiry is limited and not as wide as the %ourt. 4 imitations! i. Sec ''! No a terations to decisions made b* an L/ e6ce+t circumstances mentioned under Sec '4. New e@idence! admitted b* Sec ', a++ea , not more than ' *ears after such decision made. Lim +oke Foo v ,' Finance Bhd +,9-9/ , "$0 ,2 It is only at the conclusion of the enquiry that the $' has @urisdiction to order a sale. *he $' has no power whatsoe er to cancel such an order once made, although he may postpone the sale, if e!pedient, or correct erbal errors or remedy accidental defects or omissions if not matters of substance. ii. ?rder for sa e to be made if no e6istence of cause to contrar*.

Gove"nment o1 Malaysia v 3ma" Bin H? !hmad +,9-?/ , %$0 2.2 't the conclusion of the enquiry, the $', where he is satisfied that there is no e!istence of any cause to contrary, is obliged to ma5e an order for sale. iii. Sec 414! &ower of L/B(egistrar to refer 2uestions to the court.

G'")al Singh v 0ananaye" +,921/ 2 "$0 ?. i@. Sec 2-5#2$! &rocedure at sa e! L/ ma* de a* the sa e if no bids or andB ease withdrawn from sa e

/KM Pro erties Sdn Bhd v 1akyat )irst Merchant Bankers Sdn Bhd +,992/ 2 "$0 ?.9 :%. *he power of $' under s 21?D,E is to order for sale of the charged land or lease. *he order can only be set aside if there is cause to the contrary. :ee s 21,D,EDcE. 76:67 3the" matte"s )e"taining to o"de" 1o" sale Sec 2-'! 3rder for sale, and matters to be dealt with thereby >L ,1H

Sec 2-4! Procedure prior to sale >L notice to chargorJchargeeJpublic Sec 2-4/! Postponement or cancellation of an order for sale by $' Sec 2-5! Procedure at sale Sec 2--! =ight of chargor to tender payment at any time before sale. Sec 2--/! :tatement of payment due %ases& Bank Bumi utra Malaysia Bhd v Pentad&ir -anah $aerah; *om&ak +,992/ , "$0 2Perwira A++in Bank Bhd v (im 3eo Co +,99-/ ? "$0 91 Bank Pertanian Malaysia v Bakar . Ismail &: Pelan +,999/ , '"= 22Procedure safeguarding the public auction Eon Bank Bhd v $e& Brata $as *u ta 0 Anor +,999/ 1 "$0 2,. 'riental Bank Bhd v Sykt 8ahidi Sdn Bhd +,999/ , %$0 -,0 (ee Phet Boon v #ock -hai )inance Cor Bhd +,999/ ? "$0 90, ,nited Merchant )inance Bhd v $iamond Peak Sdn Bhd +,999/ ? %$0 29, 76:6: #o$e"s o1 Co'"t/ Land !dminist"ato" a1te" the G"anting o1 an 3"de" 1o" Sale MU/ Bank Bhd v Cheam 0im +i (Beh Sai Ming& /nte"vene") +,992/ 2 "$0 1.2 :% 3nce an order for sale has been granted, drawn up and perfected, the court is funtus officio. M06 )ro4en )ood Sdn Bhd v Siland Sdn Bhd +,99./ , "$0 29. :%. Malayan ,nited )inance Bhd v (iew 5et (an +,990/ , "$0 ?,2F Siland Sdn Bhd v M06 )ro4en )ood Sdn Bhd +,990/ 2 "$0 902. Chi (iung #oldings Sdn Bhd v (0- 1ealty Sdn Bhd +2000/ ? "$0 ,2, %'. Maimunah Bt Megat Montak v May&ank )inance Bhd +,991/ 2 '"= 2.2?.

3ther cases& Association )inance Cor oration (td v Poomani +,922/ , "$0 ,,2 -an -eng Pan v 3ong )ook Shang +,92?/ , "$0 ?, Asia Commercial )inance v $ev 0 1ealtor +,992/ 2 "$0 90. (um Choon 1ealty Sdn Bhd v Perwira ha&i& Bank Malaysia Bhd +2000/ ? %$0 ,,9 Pan 3ai Mei v Sam 3eng 5ee 0 Anor +2001/ , %$0 9,. 4.- (ights B(e ief for the Chargor and )hird &arties Bntil the registration and notwithstanding the conclusion of the sale, the chargor is not di ested of his proprietary rights. He has the right to inter ene to set aside any sale on the ground of fraud, impropriety or any breach of any statutory or contractual terms of the sale. Sec 2--! =ight of chargor to tender payment any time before sale. =ights of chargor Malayan ,nited )inance Bhd; 6B v (iew 5et (an +,990/ , "$0 ,?2 *he rights of a chargor may still remain to an e!tent. M&( F"o<en Food Sdn Bhd v Siland Sdn Bhd +,99./ , "$0 29. :% *he right of discharge of a charge is a ailable at the instance of a chargor and no other. Bntil registration of purchaser G notwithstanding the conclusion of the sale, the creditor is not di ested of his proprietary rights. He has the right to inter ene to set aside any sale on ground of fraud, impropriety, or any breach of statutory or contractual term of sale. DIn the e ent where the new purchaser fails to pay, the subsequent chargee can inter ene before the new order for sale and try to obtain the property by paying the price owed plus the necessary costs incurredE Kimlin $evelo ment Sdn Bhd v Bank Bumi utra Malaysia Bhd Rou can still discharge of the charge as long as its before the auction is successful.

Malayan ,nited )inance Bhd v -an (ay Soon +,99,/ , "$0 90.. 4., 3ffect of order for sa e Sec 2-,#1$! 4ffect of :ale :ale gi en under :ec 299 or 219 in respect of charge land or lease will be registered with DaE a title discharged of all liabilities DbE as if the chargor had transferred the land or lease to the purchaser as if under Part ,. Dtransfer of landE Position after the registration of certificate of sale& *he position before the registration but after the payment of full purchase price& M06 )ro4en )ood Sdn Bhd 0 Anor v Siland Sdn Bhd +,99./ , "$0 29.. 4ffect on the tenancy without endorsement& #otel Am&assador (M) Sdn Bhd v Sea ower (M) Sdn Bhd +,99,/ , "$0 .0. :%. 4ffect on the interest other than the method created under the #$%, see #olee #oldings (M) Sdn Bhd v Chai #im 0 'rs +,992/ . "$0 10,. 3ther cases& Malayan ,nited )inance Bhd; 6ohore Bahru v (iew 5et (an +,990/ , "$0 ?,2 Perdana Pro erties Bhd v 5ong Chon +,990/ , "$0 .?? K( )inance v 5a Poh Khian +,992/ , "$0 .22 Puah Bee #ong 0 A/or v P-$ 3ilayah Persekutuan Kl 0 Anor (-eo Keng -uan 1o&ert; Intervener) and another a eal +,99./ 2 "$0 10,

(ee Kim *uan v Malayan Produce Co Sdn Bhd +,99?/ 2 '"= 29&,299 #a$ &urchase +rice obtained from the sa e Sec 2-,/! 'pplication of deposit upon failure to settle purchase price etc >L as what required in :ec 21Sec 2-7! 'pplication of purchase money >L :tate 'uthority whate er required, payment for administration etc.

#b$ Sa e 9 &ri@ate )reat* 0imlin Ho'sing 2evelo)ment Sdn Bhd v Bank B'mi)'t"a Malaysia Bhd +,992/ 2 "$0 -09 %ourt held that remedy of chargee of the land charged is only limited to the pro isions of the #$%. *his 5ind of sale can be done outside the #$% Di.e. debentureE If you want to follow #$%, its only by public auction, but if thereCs not title charge, then you can go through a pri ate auctionJtreaty. Ch'ng 0hia$ Bank v La' !h +en +,9-9/ 2 "$0 2.2 ;here it was held that the pro isions of section 210 of the #$% contemplates a sale by public auction only and as such the court has no power to order sale by pri ate treaty under the %ode. 6ut ;an 'dnan 0 noted that the court may allow a sale by P* in circumstances where the court is satisfied that the proceeds of such sale are not less than the amount due to the chargee under the charge and that the chargee will be duly paid in full out of the proceeds. 'lso, it was noted that the court refused permission for sale by P* referring to e!press terms of :ec 299D2EDcE of the #$% which require the land to be put for public auction, but on terms of :ec 211D,E, it seemed to support the right to fall bac5 on P* when attempts to sell by public auction ha e been e!hausted. Priyamas E9 ort Cor Sdn Bhd v Bank Buruh (M) Bhd +,99-/ ? "$0 22?. Kimlin case has criticized Chartered Bank v Pakiri Maidin +,91?/ "$0 221 :ee also& Malaysia Credit )inance Berhad v 5a #ock Choon +,9-9/ , "$0 2?2: Malayan ,nited Bank v Cheah Kim 5u +,99,/ , "$0 ?,? Malaysia Credit )inance v 5a #ock Choon +,9-9/ , "$0 2?2 Inter71ally Motor Sdn Bhd v Karu iah a!l Palaniasamy +,992/ 2 "$0 190 Mui Bank Bhd v Cheam Kim 5u (Beh Sai Ming Intervener) +,992/ 2 "$0 1.2 ,MBC v Chong Bun Sun and /or A 4.7 Discharge of Charge lication +,99./ 2 "$0 22,

%hargee is obliged to discharge the charge upon full and final settlement of the loan amount secured by the charge. #$% pro ides that Sec 2,7 pro ides that by .orm 1-N charge of the land or lease and release the land from all further liability. *he discharge is effecti e from the date on 7orm 1-N as registered at rele ant land office. In the sale of a pri ate treaty, the chargee should discharge the charge so as to gi e full effect to the sale. In this case, if the partial discharging of the charge also means not obtaining a security o er the remainder of the debt, the ris5 is to be borne by the chargee. In some occasions, the debt is protected outside the #$%, perhaps by a third party, which may co er the rest of the debt. *hough the charge is discharged, the guarantee will remain in force. In the full discharge, it is doubtful whether the guarantee which is lin5ed to the debt remains in force, in this case, when a primary debt is discharged, so will the accessory obligation. :o nowondays they use the word (guarantor and principal debtor). *his means that e ent there is a discharge, the chargor is not released from his personal liability. Aischarge by payment to =egistrar in %ases of Aeath, 'bsence or Aisability =elief can be applied to the =egistrar by Sec 2,4#1$ if he is entitled to pay off the charge but chargee is unable or unwilling to accept the payment&> a. b. %hargee dead, or cannot be found, or e adeJrefuses to recei e payment Bnable to trace anyone who can recei e on his behalf

*he money recei ed by the =egistrar for such discharge can be&> a. b. c. Played in custody of Public officer =egistrar feels fit 6e claimed by person or body entitled within 1 years of date of deposit If not claim, paid to the %onsolidated 7und of the :tate

If landJlease discharged from liability under any charge by payment to the =egistrar under Sec 2,4, the registration of the charge shall be cancelled by the =egistrar pursuant to Sec '14. Malayan ,nited )inance Bhd v -an (ay Soon +,99,/ , "$0 90..

Eng Ah Mooi v 'verseas Chinese Banking Cor oration +,9-?/ , "$0 209 7%.