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ORIENTAL BANK BHD v. TAN SU CHENG AND THIRD PARTYHIGH COURT [KUCHING]

[ORIGINATING SUMMONS NO. KG.205-93-I]

7 AUGUST 1997

STEVE L.K. SHIM, J

JUDGEMENT

This is an application by way of summons in chambers dated 29.6.1996 taken out by the

defendant for an order that the order made by the Senior Assistant Registrar (SAR) on27.3.1996 and the consequent sale of the defendant's land by public auction on 10.6.1996

be set aside. The application is supported by the defendant's affidavit affirmed on 25.6.96and his affidavit in reply affirmed on 2.8.1996. The plaintiff in opposing the application,

has filed an affidavit in opposition affirmed by Abg. Taha b. Abg. Hj. Majid, its areamanager, affirmed on 22.7.1996.

The factual background giving rise to the application can be briefly stated herein. On5.8.1993, the plaintiff took out an originating summons seeking an order to have the

defendant's land situate at Tabuan, 3rd mile, [2] Pending Road. Kuching, containing anarea of 157.0 square meters more or less and described as Lot 6027 Section 64 Kuching

Town Land District sold by public auction. The originating summons was duly served onthe defendant on 8.12.1993. As the defendant did not enter appearance, the plaintiff

obtained a Certificate of Non-appearance on 21.2.1994. Subsequently on 5.3.1994, theplaintiff took out a Notice of Appointment to hear Originating Summons against the

defendant. There were numerous attempts to serve the said Notice on the defendant and itwas only on 23.3.1995 that it was successfully served on him. At the hearing on 5.6.1995

in which the defendant did not appear, the Court granted the order for sale of thedefendant's land by public auction. On 13.7.1995, the plaintiff took out Summons for

Directions which was duly served on the defendant by way of substituted service.Hearing of the said Summons for Directions was heard on 2.12.1995 by the learned SAR

who ordered the auction to be held on 25.3.1996. However, on 20.3.1996, an ex partesummons in chambers was taken out by the plaintiff seeking postponement of the said

auction sale. The matter came before the learned SAR on 27.3.1996 and he granted thesaid ex parte application postponing the auction sale to 10.6.1996. During the auction on

10.6.1996, the defendant's property was sold to one Chiew Liong Kiat. On 29.6.1996, thedefendant applied to set aside the Order dated 27.3.1996 made by the learned SAR as

well as the auction sale effected on 10.6.1996.

[3] The central issue in dispute is whether the learned SAR could hear the plaintiff'sapplication for postponement of the auction sale on an ex parte basis and consequently fix

another date for the said auction sale in the absence of the defendant. It is the defendant'scontention that the application should have been made by way of an inter parties

summons in chambers instead of ex parte and that therefore it would be incumbent on theplaintiff to serve the said summons on the defendant; that no such service was effected in

this case thereby depriving the defendant of the opportunity of being heard and therefore

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the order arising therefrom was a nullity and ought to be set aside. ft is further contendedthat the auction sale on 10.6.1996 held pursuant to the said order was also a nullity and

ought to be set aside. In response, the plaintiff has contended that the Order dated27.3.1996 was made consequential to the Order of Sale dated 5.6.1995 which must be

regarded as a final order made by the learned SAR and which order was made upon the

plaintiff's originating summons dated 5.8.1993 alter the same had been properly and dulyserved on the defendant.

Now the duties of the Court in cases where it has made an order for sale of land subject toa charge are clearly stipulated in S. 150(1) of the Land Code Cap. 81) which reads:

"Where any competent court orders the sale of any land subject to a charge, it

shall notify the Superintendent of its decision and shall serve a notice of theintended sale upon the chargor and upon the registered proprietor of every other

estate or interest in the land. It shall also give notice of the intended sale byadvertisement in the Gazette and by such other means as it may deem sufficient.

The sale [4] shall be by public auction or tender or such other mode of sale asmay be directed by the court subject to such conditions of sale as shall be

approved by the court. The court shall also fixthe date of the sale. which shall benot less than thirty days from the date of the order of sale, and shall authorize

such other acts as may be necessary for the conduct of the sale. A reserve priceshall be put on the land which shall be approximately equal to its estimated fair

market value"

Clearly therefore, there is a legal obligation on the part of the Court to, among other

things, serve a copy of the intended sale of any land subject to a charge to the chargor andto fix a date of the sale. In practice, the date of the auction sale is usually fixed during

summons for directions by the SAR. Here there is dispute as to the effect or effects ofsuch a sale if the requirements under 5. 150(1) aforesaid have not been complied with. In

this connection, I think the Supreme Court case of J. Raju V. Kwong Yik Bank Bhd.(1994) 2 MLJ 408 provides some revelation. There, the plaintiff had written to the SAR

seeking a new auction date for the sale of a parcel of land but the letter was not extendedto the chargor. Wan Yahya, SCJ, in delivering the judgment of the Court said inter alia:-

"The chargor's first complaint is that as he was not notified of the date of the

auction sale, he was deprived from exercising his right to redeem the property aright which was open to him until the fall of the hammer. The requirement to

serve a copy of the order of the court on the chargor is provided initially bys.258(l)(a) of the National Land Code. The provision in s. 259(2)(c) as regards

subsequent sale however was silent on this particular requirement although thereis a specific requirement for the sale to be publicly advertised in the same manner

as previously directed. To our minds, the mere omission by the legislature tomention a specific procedure will not detract from the principle that such

'direction by an officer of the court has to be exercised judiciously after giving theparties the opportunity of being heard."

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[5] Although the pronouncements of his Lordship related to the provisions of theNational Land Code, I am of the view that the same principles could be applied in the

instant case. As S. 150(1) of our Land Code specifically imposes certain mandatoryobligations upon the Court in matters relating to the conduct of an auction sale of land

belonging to the chargor, any direction or order of the Court made pursuant to those

obligations must, in order to have any semblance of fairness or equity, be exercisedjudiciously. In the context of this case, it must surely mean that the defendant chargor hadto be notified as regards the plaintiff's application to vary the date of the auction sale of

his land. Such an application by way of an ex parte summons in chambers would have theobvious effect of denying the defendant chargor of the opportunity of being heard and

consequently of depriving him from exercising his right to redeem the property, even atthe last minute. Here, there is no dispute that the Order of the learned SAR dated

27.3.1996 to postpone the auction sale was made in the absence of the defendant chargor.He was not given the opportunity of being heard when the application came before the

learned SAR. Under those circumstances, it could not be said that the learned SAR hadexercised his powers judiciously. The Order of Sale dated 27.3.1996 was irregularly

obtained and therefore void. The same fate must necessarily be attached to the publicauction sale of 10.6.1996 held pursuant to the said order. This I so hold.

[6] For the reasons given, I will allow the defendant's application and order in terms

thereof with costs to be taxed unless agreed.

(STEVE L.K. SHIM)

JUDGE

Date. 7th August. 1997

Hearing on 19th June, 1997.

[Appeal allowed with costs to be taxed ]