Chapter 5 - Land Dealing: Security Transactions - Charges Flashcards
CHARGES
Overview
1) Introduction
2) What can be charged
3) Powers to charge or grant charges
4) Does charge amount to an interest in the land
5) Difference between charges & mortgage
6) Unregistered charge
7) Equitable mortgage
8) Enforcement of charge by way of order for sale - Registry Title
9) Enforcement of by way of order for sale - Land Office Title
10) Effects of sale
11) Discharge
12) Rights of chargor
13) Sale by private treaty
14) Purchase money
15) Forfeiture of deposit
16) Order for possession
17) Miscellaneous
18) LACA
19) Third party charge
CHARGES
Introduction
R, F, E
1) R: Must be registered - S.206
2) F: Registration in form 14B - S.218
3) E: Charges take effect upon registration - S.243
CHARGES
What can be charged - overview
1) The law
2) Loan transaction
3) Turnkey contracts
4) Part of land
WHAT CAN BE CHARGED
The law
S.241
WHAT CAN BE CHARGED
Loan transaction
R&I Securities v Golden Castle Finance:
- charge can only be created pursuant to a loan transaction
- the essence of charge is to secure repayment of loan.
WHAT CAN BE CHARGED
Turnkey contracts
Hong Kew Holdings (M) Sdn Bhd v Hyundai Heavy Industries:
- S.241 also covers charge created to secure the repayment of instalment payments under a turnkey contracts to construct a building.
WHAT CAN BE CHARGED
Charge on part of the land
J. Raju v Kwong Yik Bank Bhd:
- part of land can only be charged by way of equitable charge;
- equitable charge is incapable of registration.
POWERS TO CHARGE OR GRANT CHARGES
Overview
1) Power to create second charge
2) Power to grant charge to two or more persons
POWERS TO CHARGE OR GRANT CHARGES
Power to create second charge
S.241(2):
- Registered proprietor has the power to create 2nd or subsequent charge.
POWERS TO CHARGE OR GRANT CHARGES
Power to grant charge to two or more persons
S.241(4):
- charges may be granted to two or more persons to bodies as trustees or representative to be held jointly.
WHETHER CHARGES AMOUNT TO INTEREST IN LAND
Overview
1) The law
2) Application
WHETHER CHARGES AMOUNT TO INTEREST IN LAND
The law
Duly registered charge amount to interest in land;
- i.e. S.215(1)(a)
WHETHER CHARGES AMOUNT TO INTEREST IN LAND
Application
Ho Giok Chay v Nik Aishah:
DIFFERENCE BETWEEN CHARGES & MORTGAGE
The difference
Bank Bumiputra Msia Bhd v Doric Development:
- Charge does not require transfer of ownership of the land;
- Chargee only acquire interest in the land with a statutory right to enforce his security by order for sale.
- Mortgage is recognised under equity & is not contradictory with NLC.
UNREGISTERED CHARGE
Overview
1) Effect - general
2) Effect - application
3) Example
4) Application
UNREGISTERED CHARGE
Effect - general
- amounts to creation of equitable charge;
- enforceable at equity under S.206(3)
UNREGISTERED CHARGE
Effect - application
Oriental Bank v Chup Seng (Restaurant) Butterworth Sdn Bhd:
- Unregistered chargee has no right to enforce charge under NLC;
- This is so unless & until the charge is registered.
UNREGISTERED CHARGE
Example
- Charge instrument not presented for registration;
- Erroneously attested charge.
UNREGISTERED CHARGE
Application
FC, 1984
Mahadevan S/O Mahalingam v Manilal & Sons:
- Equitable charge provides remedy in equity;
- NLC does not prohibit the creation of equitable charges or liens;
- The word “other charge on land” in S.21(1) LA include equitable charges & liens;
- Unregistered charge can be enforced as a contractual agreement by virtue S.206(3).
EQUITABLE MORTGAGE
Overview
1) Recognition of equitable mortgage
2) Enforcement of equitable mortgage
RECOGNITION OF EQUITABLE MORTGAGE
In NLC
Chuah Eng Khong v Malayan Banking Bhd (FC):
- NLC does not have any express provision that renders an equitable mortgage null & void.
RECOGNITION OF EQUITABLE MORTGAGE
By LACA
Phileoallied Bank (M) Bhd v Bupinder Singh a/l Avatar Singh (FC):
- LACA is recognised as an equitable mortgage.
ENFORCEMENT OF EQUITABLE MORTGAGE
When there is no IDT
Phileoallied Bank (M) Bhd v Bupinder Singh a/l Avatar Singh (FC):
- The assignee bank is entitled to enforce & sell the assigned property w/o court order for sale.
- i.e. agreement may be enforced w/o the need to resort to NLC.
ENFORCEMENT OF EQUITABLE MORTGAGE
When IDT is issued subsequently
Damai Freight (M) Sdn Bhd v Affin Bank Bhd:
- lender may proceed to sell the property under the assignment w/o the need to create the charge under NLC & obtain order for sale from the court;
- lender is empowered to realise its security for the loans by way of private sale of the land.
- S.206(3) NLC recognises the contractual operation of any transaction relating to land & interest therein.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Overview
1) What is Registry title
2) Letter of demand
3) Statutory notice
4) Application for OFS
5) Cause to contrary
6) Whether LA applies & when does COA arise
7) Computation of time & when does COA arise
8) Fixing new auction date
9) Procedures at sale
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
What is Registry title
S.77
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Letter of demand
Multi-purpose Bank Bhd v Maimoon Abd Razak:
- LoD is not a pre-requisite;
- There is no requirement to serve LoD before serving a notice.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Statutory notice - overview
1) Default of repayment
2) Default on demand
3) Issue on statutory notice
STATUTORY NOTICE
default of repayment - the law
S.254 + Form 16D
STATUTORY NOTICE
default of repayment - sum lumped together
Syarikat Kewangan Melayu Raya v Malayan Banking Bhd:
- notice that cited two sums together is not defective;
- this is so provided that the chargor is not misled or prejudiced by any defect in the notice.
STATUTORY NOTICE
default on demand - the law
S.255 + Form 16E
STATUTORY NOTICE
issue on statutory notice - wrong number of days for breach
BBMB v Hj Mohd Din:
- Such error unless prejudiced to the chargor, is not fatal.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Application for an order for sale - overview
1) The law
2) Duty of judge
3) Procedures
APPLICATION FOR AN ORDER FOR SALE
The law
S.256
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Duty of judge
Low Lee Lian v Ban Hin lee Bank:
- the procedure is speedy & summary in nature;
- thus, considerations for judges are:
1) whether chargee has given the appropriate statutory notice;
2) whether procedural requirements under O.83 have been complied with;
3) whether material produce by chargor constitute CTC;
- if he is satisfied with CTC: refuse OFS;
- otherwise: grant OFS.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Procedures - overview
1) The law
2) Affidavit requirement
3) Cause to contrary
PROCEDURES OFS REGISTRY TITLE
The law
O.83, r.3
- procedures for charge actions.
PROCEDURES OFS REGISTRY TITLE
Affidavit requirement - the law
O.83, r.3:
- shall quantify the amount repayment & interest;
- shall exhibit the copy the charge;
- shall give particulars the amount due as at the hearing date.
PROCEDURES OFS REGISTRY TITLE
Affidavit requirement - non-compliance
Perwira Habib Bank v Lum Choon Realty Sdn Bhd:
MAJORITY:
- Failure to comply with the requirements of the rule will render the order granted defective & liable to be set aside.
DISSENTING:
- When the order is made, the order shall state the amount due as on the date the order is made.
- Failure to comply with the rule does not render the OFS defective.
PROCEDURES OFS REGISTRY TITLE
CTC - overview
1) How to show CTC
2) CTC in collateral proceedings
PROCEDURES OFS REGISTRY TITLE
CTC - how to show CTC
Low Lee Lian v Ban Hin Lee Bank:
- Show that the charge is defeasible due to one of the grounds under S.340(2) & (4)(b);
- Show that the chargee has failed to meet the conditions precedent for the making of an application for an order for sale, such as failure to make a demand or service of a notice in Form 16D, or that the notice demands sums not lawfully due from the charge;
- example: Co-operative Central Bank v Meng Kuang Properties [1991] 2 CLJ 1144, the court submit that there was a cause to contrary when the notice of demand and form 16D were invalid as they did not disclose the correct amount of money and interest to be claimed.
- Show that the grant OFS would be contrary to the rule of law or equity.
- example: Kuching Plaza Sdn Bhd v Bank Bumiputra Malaysia Bhd [1991] 3 MLJ 163, the application for Order of Sale was set aside by the court as it was against rule of equity because if the Order of Sale was granted, it would cause the unfairness to the other parties who had interest on the land.
PROCEDURES OFS REGISTRY TITLE
CTC - CTC in collateral proceedings
FC, 2014
CIMB Investment Bank Bhd v Metroplex Holdings Sdn Bhd:
- Unless the order is a nullity in Baddiadin sense, CTC could not be raised in collateral proceedings;
- Issue relating to CTC could only be raised in charge action;
- An OFS, unless set aside or appeal against, is a final order.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Whether LA applies & when does COA arise
FC, 2020
CIMB Bank Bhd v Sivadevi Sivalingam:
- Default in repayment of loan does not make ‘the right to receive the money accrued’ for the chargee to initiate an action in court for order for sale.
- The chargee must serve on the chargor a notice in Form 16D specifying the breach in question, requiring the chargor to remedy the breach within one month from the date of service of the notice, and warning the chargor that if the notice is not complied with, the chargee will take proceedings to obtain an order for sale.
- Only if, at the expiry of the period specified in the notice in Form 16D, the breach in question has not been remedied, then the ‘whole sum secured by the charge shall become due and payable to the chargee’ & in such a case, limitation period of 12 years will begin to run.
- It is on this date that ‘the right to receive the money accrued’ and the cause of action arises for an action pertaining to order for sale.
- Therefore, even if the Form 16D is issued after the period of 12 years, any Originating Summons filed by the chargee thereafter will not be barred by limitation under s. 21(1) of the Limitation Act.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Computation of time & when does COA arise
CA, 2019
Sivadajadatcham P. Sethuram v CIMB Bank Bhd:
- Meaning of 4 clear days: Exclude Sat & Sun.
- When does COA accrue: when chargee approach court for arise.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Fixing new auction date
FC, 2020
RHB Bank Bhd v Dato’ Hj Muhammad Hamzah:
- “Action” in S.21 mean fresh actions & exclude procedurally filed applications or executions;
- Therefore it does not apply to fixing new auction date.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE
Procedures at sale - overview
1) The law
2) When is the sale concluded
3) Order for sale made by court
PROCEDURES AT SALE - REGISTRY TITLE
The law
S.257-259
PROCEDURES AT SALE - REGISTRY TITLE
When is the sale concluded
M&J Frozen Food v Siland Sdn Bhd:
- Sale is concluded at the fall of hammer;
- Contract of sale is formed, bidder is not allowed to retract his acceptance;
- Proprietary rights do not pass to the purchaser until registration.
PROCEDURES AT SALE - REGISTRY TITLE
Order for sale
Maimumah Megat Montak v Maybank Finance:
- Order for sale made by court must be in Form 16H;
- Must contain all particulars set out in S.263;
- Compliance is mandatory;
- Failure will render the OFS invalid.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - LAND OFFICE TITLE
Overview
1) What is LO title
2) Jurisdiction to grant OFS
3) Letter of demand
4) Statutory notice
5) Application for OFS
6) Making OFS
7) Prior to sale
8) Procedures at sale
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - LAND OFFICE TITLE
What is LO title
S.77
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - LAND OFFICE TITLE
Jurisdiction to grant OFS
Tan Teng Pan v Wong Fook Shang:
- For land held under LO title, the court has no jurisdiction to order for sale of the land.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - LAND OFFICE TITLE
Letter of demand
Multi-purpose Bank Bhd v Maimoon Abd Razak:
- LoD is not a pre-requisite;
- There is no requirement to serve LoD before serving a notice.
ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - LAND OFFICE TITLE
Statutory notice - overview
1) Default of repayment
2) Sums lumped together
3) Default on demand
4) Wrong form used
STATUTORY NOTICE
Default of repayment
S.254
- Form 16D
STATUTORY NOTICE
Sums lumped together
Syarikat Kewangan Melayu Raya v Malayan Banking Bhd:
- notice that cited two sums together is not defective;
- this is so provided that the chargor is not misled or prejudiced by any defect in the notice.
STATUTORY NOTICE
Default on demand
S.255
- Form 16E
STATUTORY NOTICE
Wrong form used
Jacob v OCBC Banking Corporation:
- Wrong form is not fatal;
- Form 16D is a general form & may be used as well.
APPLICATION FOR OFS
Overview
1) The law
2) Inquiry by LA
3) Procedures at inquiry
4) Absence of parties at inquiry
APPLICATION FOR OFS
The law
S.260
- made to LA;
- in Form 16G
APPLICATION FOR OFS
Inquiry by LA
S.261
APPLICATION FOR OFS
Procedures at inquiry - overview
1) The law
2) CTC
PROCEDURES AT INQUIRY
The law
S.261 - S.265
PROCEDURES AT INQUIRY
CTC
1) Low Lee Lian v Ban Hin Lee Bank - how to show CTC
2) CIMB Investment Bank Bhd v Metroplex Holdings Sdn Bhd - whether LA applies & when does COA arise
3) CIMB Bank Bhd v Sivadevi Sivalingam - computation of time & when does COA arise
4) Sivakadatcham P. Sethuram v CIMB Bank Bhd - computation of time & when does COA arise
5) RHB Bank Bhd v Dato’ Hj Muhammad Hamzah - fixing new auction date.
ABSENCE OF PARTIES AT INQUIRY
Absence of chargee
S.262(2):
LA shall dismiss the application
ABSENCE OF PARTIES AT INQUIRY
Absence of chargor
S.262(3):
- satisfied: proceed the hearing ex parte
- not satisfied: adjourn
MAKING AN ORDER FOR SALE
The law
S.263
MAKING AN ORDER FOR SALE
Application
Maimumah Megat Montak v Maybank Finance:
- Order for sale made by court must be in Form 16H;
- Must contain all particulars set out in S.263;
- Compliance is mandatory;
- Failure will render the OFS invalid.
PRIOR TO SALE
The law
S.264
PROCEDURES AT SALE
Overview
1) The law
2) When no bid received
3) Still unsuccessful
PROCEDURES AT SALE
the law
S.265
PROCEDURES AT SALE
when no bid received
1) S.265(2)
2) NKM properties v Rakyat First Merchant Bankers:
- LA shall fix new date for subsequent sale either at the same or new reserve price.
3) RHB Bank Bhd v Dato’ Hj Muhammad Hamzah:
- “Action” in S.21 mean fresh actions & exclude procedurally filed applications or executions;
- Therefore it does not apply to fixing new auction date.
PROCEDURES AT SALE
Still unsuccessful
1) S.265(3) & (3A)
2) Lee Ghee Phang v RHB Bank:
- it is a continuation of transforming LA’s OFS to court’s OFS;
- fresh form of 16D is NOT required.
CHARGES
Effect of sale - overview
1) Effect on charge
2) Effect on sum left outstanding & due for subsequent charge
3) Effect on tenancy exempt from registration
EFFECT OF SALE
On charge
1) S.267(1)(a)
2) Holee Holdings (M) Sdn Bhd v Chai Him:
- liability refers to obligation of chargor towards chargee in respect of the charge;
- NOT any other obligation attached to the title.
EFFECT OF SALE
On sum left outstanding
Jones v Palianappan:
- Any sums left outstanding under the charge in question can be recovered by way of personal loan.
EFFECT OF SALE
Effect on tenancy exempt from registration
S.267(1)(a)
- Granted after registration of charge: does not bind unless it was granted with consent of chargee;
- Granted before registration of charge: does not bund unless it was indorsed prior to date of registration.
CHARGES
Discharge - overview
1) What is discharge
2) The need for discharge
3) Who has the right to discharge
4) Ways to discharge
5) Equitable right to discharge
6) Right to discharge before sale is concluded
DISCHARGE
What is discharge
- process to redeem Original Title from the Bank upon the settlement of the housing loan with the financier.
DISCHARGE
Need for discharge
S.215(3):
- w/o discharge, registration of the transfer of the property will subject to the charge.
DISCHARGE
Who has the right to discharge
Malayan United Finance v Tan Lay Soon:
- rights to discharge of a charge is available at the instance of chargor & no other.
- upon proof of discharge, the charge is cancelled.
DISCHARGE
ways to discharge - overview
1) Otherwise than by payment
2) By payment
WAYS TO DISCHARGE
Otherwise than by payment
S.278:
- Form 16N;
- Discharge shall take effect from the date the instrument was registered.
- Discharge shall not release chargor from personal liability under the charge.
WAYS TO DISCHARGE
By payment
S.279:
- Chargor may be discharged by payment to Registrar;
- e.g. when the chargee disappeared, unable to be found, evaded payment.
DISCHARGE
Equitable right to discharge
Eng Ah Mooi & Ors v OCBC:
- where chargee refuses to take payment, chargor is still entitled to be discharged;
- this is so as long as the right of the chargee was protected under a sale.
DISCHARGE
Right to discharge before sale concluded
Lee Ah Chin v Wong Yoon Chai:
- Chargor may tender the full amount before sale is concluded;
- Chargor would then be entitled to discharge before conclusion of sale.
- Right to tender would last until signing the contract of sale.
RIGHTS OF CHARGOR
Overview
1) To discharge
2) To set aside OFS
3) To appeal
4) To ensure sale is proper
5) To the balance of purchase money
6) To have land sold at market value
RIGHTS OF CHARGOR
To discharge
- S.266
- Lee Ah Chin v Wong Yoon Chai
- Eng Ah Mooi & Ors v OCBC
RIGHTS OF CHARGOR
To set aside OFS - improper conduct of sale
M&J Frozen Food v Siland Sdn Bhd:
- Any variation of T&C of the sale made in the absence of chargor requires notice to the chargor;
- Failure to give notice is ultra vires of the NLC;
- Chargor may apply to set aside OFS if the sale has been conducted fradulently, improperly or in contravention of T&C of the sale.
RIGHTS OF CHARGOR
To set aside OFS - Ex parte order
Ker Chee Chuan v Katlyn Enterprise:
- Chargor may set aside OFS if it is made ex parte.
RIGHTS OF CHARGOR
To set aside OFS - nullity order
Muniandy v D&C Bank:
- Order is a nullity if it is made when there is non-compliance with an essential provision;
- e.g. non-compliance with service of process;
- on this ground alone, an order for sale may be set aside.
RIGHTS OF CHARGOR
To appeal
S.418
- Chargor shall have the right to appeal against the order.
RIGHTS OF CHARGOR
To ensure the sale is carried out in proper manner - rights to object to variation of T&C
M&J Frozen Food Sdn Bhd v Siland Sdn Bhd:
- chargor has the right to object to any variations of T&C of the sale;
- even if the title is registered subsequently, it is liable to be set aside.
RIGHTS OF CHARGOR
To ensure the sale is carried out in proper manner - fraudulent, collusive & improper conduct of sale
KL Finance Bhd v Yap Poh Khian:
- chargor has the right to interfere if the sale is conducted fraudulently, collusively or improperly to the prejudice of the chargor.
RIGHTS OF CHARGOR
To the purchase money
S.268(3):
- chargor has the right to the balance of purchase money after all payments have been made in accordance with S.268.
RIGHTS OF CHARGOR
To have the land sold at market value
Asia Commercial Finance (M) Bhd v Development Realtor Sdn Bhd:
- Chargor has the right to have the land sold at the market value prevailing at the date of the sale.
SALE BY PRIVATE TREATY
Overview
1) General rule
2) Private treaty by chargor
3) Private treaty by chargee
SALE BY PRIVATE TREATY
General rule - previous position
Chartered Bank v Packiri Maideen:
- no right to sell via private treaty once an application for OFS is made;
- h/ever it is open to make private treaty before any proceedings commence in court.
SALE BY PRIVATE TREATY
General rule - current position - private treaty permitted
Kimlin Housing Development v Bank Bumiputra:
- Rights to discharge under S.266 even after OFS has been made permits sale by way of private treaty.
SALE BY PRIVATE TREATY
General rule - current position - consent required
Malaysia Credit Finance Bhd v Yap Hock Choon:
- notwithstanding an application for OFS has been made, sale by way of PT is permitted provided that consent from the court is obtained.
SALE BY PRIVATE TREATY
By chargor - right to discharge
Chung Khiaw Bank Ltd v Lau Ah Yen:
- right to discharge connotes that chargor has the right to sell via private treaty.
SALE BY PRIVATE TREATY
By chargor - consent needed
UMBC v Chong Bun Sun:
- as a matter of prudence, the consent of the chargee should be obtained before exercising right to sell via private treaty.
SALE BY PRIVATE TREATY
By chargor - before commencement of OFS
MUI Bank v Cheam Kim Yu:
- chargor has the right to sell via PT with consent of chargee;
- consent will be given if the chargee is satisfied that the charge will be redeemed or discharged.
SALE BY PRIVATE TREATY
By chargee - whether allowed
1) Kimlin Housing Development v Bank Bumiputra:
- no power of sale could conferred by a chargor on a chargee by way of a debenture or PoA.
2) Re Sama Corp Sdn Bhd v Jabatan Pemegang Harta:
- The only remedy open for chargee was to apply for OFS under NLC.
PURCHASE MONEY
Procedures to apply for purchase money
S.268 - S.268A
PURCHASE MONEY
Failure to comply
S.269
- does not render the purchaser liable for any loss thereby;
- the receipt of purchase money constitute a sufficient discharge for the purchaser.
FORFEITURE OF DEPOSIT
Overview
1) Balance of purchase price - the law
2) Whether time can be extended - power of court
3) Whether time can be extended - agreement to extend time
4) Forfeiture of deposit
FORFEITURE OF DEPOSIT
law on balance of purchase price
1) Registry title - S.257(1)(g):
- within 120 days
2) LO title - S.263(1)(g):
- within 120 days
FORFEITURE OF DEPOSIT
whether time can be extended - power of court
1) M&J Frozen Food v Siland Sdn Bhd:
- Court has the power to extend but must give notice to chargor;
- Otherwise, the order to extend time is ultra vires & void.
cf.
2) Chiu Liung Holdings Sdn Bhd v L&T Realty Sdn Bhd:
- if the conditions of sale expressly allowed for extension of time, an order of court to approve such extension of time is valid.
FORFEITURE OF DEPOSIT
whether time can be extended - agreement to extend time
United Malayan Banking Corp. Bhd v Pentadbir Tanah Daerah Hulu Langat:
- Once OFS has been made, it is final order.
- It can only be varied by the Court.
- Bank & buyer cannot bilaterally amend the sale conditions.
- Where the sale is aborted by failure to complete payment, payments under S.268 still needed to be made.
LACA
Overview
1) Conditions
2) Enforcement
LACA
What & conditions
What is LACA:
- LACA is a loan agreement cum assignment under which a borrower assigns absolutely his rights, title & interest under an SPA.
- It is a form of equitable mortgage.
Conditions to qualify as LACA - Chuah Eng Khong v Malayan Banking Bhd:
- there must be a loan;
- there must be an assignment of all rights, title & interest in the land as a security for the repayment of the loan;
- there must be contractual right to repay & redeem the land that had been assigned.
LACA
Enforcement - when no DT issued
Phileoallied Bank (M) Bhd v Bupinder Singh:
- the assignee bank was fully entitled to sell such assigned property w/o need for court order for sale.
LACA
Enforcement - when DT issued subsequently
Damai Freight (M) Sdn Bhd v Affin Bank Berhad:
- lender may proceed to sell the property under assignment w/o the need to create charge under NLC.
- lender may proceed without obtaining OFS from the court.
THIRD PARTY CHARGE
Overview
1) The law
2) Wrong charge created, whether instrument is defective
THIRD PARTY CHARGE
the law
The Co-Operative Central Bank Ptd v Y&W Development Sdn Bhd:
- principles of law governing guarantees does not apply to charge;
- a registered 3rd party charge is not a contract;
- it is a statutory instrument, a dealing which NLC authorises;
- the enforcement of charge is therefore an assertion of a statutory right.
THIRD PARTY CHARGE
wrong charge created
Malaysian Building Society Berhad v KCSB Konsortium Sdn Bhd:
- wrong charge created won’t render the charge defeasible, especially when all other requirements are complied with.
ORDERS FOR POSSESSION
Overview
1) Limits of power
2) Powers to take possession
3) Powers to manage the land & take profit
ORDERS FOR POSSESSION
Power to take possession
S.271
- in the form of going to physical occupation; or
- receiving the rent payable under the lease or tenancy.
ORDER FOR POSSESSION
Powers to manage the land & take profit
S.274-277
- must be done in accordance with the manners provided.
MISCELLANEOUS
Overview
1) Functus officio
2) Order for sale
3) Powers of Land Admin
4) Powers of court
FUNCTUS OFFICIO
When
Bank Bumiputra Bhd, ex parte:
- Once an OFS is made, LA or court is functus officio.
- There is no power to cancel the order but order may be set aside on grounds.
- Exception: power to postpone sale under S.264(3) for max 3 times.
FUNCTUS OFFICIO
Recourse
S.418:
- party may appeal against the order under S.418.
FUNCTUS OFFICIO
Appeal against refusal to postpone sale
Lim Yoke Foo v EU Finance Bhd:
- can only succeed if it can be shown that discretion exercised by Land Admin was unjudiciously exercised.
- such appeal does not operate as a stay of execution.
ORDER FOR SALE
when cease to have effect
Bank Bumiputra Bhd, ex parte:
- when the chargor tenders full amount of the debt, costs & expenses as specified in S.266(2);
- tender of payment must be made to Land Admin, not chargee.
ORDER FOR SALE
whether bar personal claim
1) Previous position: Kandiah Peter v Public Bank Bhd:
- claim in personam is allowed.
2) Current position: CIMB Investment Bank Bhd v Metroplex Holding Sdn Bhd:
- any issue regarding the charge must be raised during the proceeding.
POWERS OF LAND ADMINISTRATOR
Limitation of power at enquiry
1) S.261
2) Gurpal Singh v Kannayer:
- power of LA is limited & he should not go beyond register.
- LA does not exercise judicial or quasi-judicial powers at the enquiry;
- LA does not have power to consider or hear pleadings and defence raised.
POWERS OF LAND ADMINISTRATOR
Limitation of power at enquiry
1) S.261
2) Gurpal Singh v Kannayer:
- power of LA is limited & he should not go beyond register.
- LA does not exercise judicial or quasi-judicial powers at the enquiry;
- LA does not have power to consider or hear pleadings and defence raised.
3) Suppiah v Ponnampalam:
- Once LA is satisfied that charge is at the register, the only issue to decide is on the default payment;
- LA has no power to investigate allegation of fraud or misrepresentation.
POWERS OF COURT
Additional powers of the court
M&J Frozen Food v Siland Sdn Bhd:
- to postpone the date of the sale for unlimited number of times;
- to make consequential orders such as varying reserve price;
- to vary the order for sale and t&c of the sale;
- h/ever, chargor must be given rights to be heard before exercising such power.
