Public Bank Berhad v 1. ) Soon Siew Chin (BA-24FC-783-08/2024)

SOON SIEW CHIN (No. K/P: 650606-10-6796)

HOW WENG HONG (No. K/P: 880916-14-5161) [SOON SIEW CHIN adalah tuanpunya ½ hartanah dan Kedua-duanya adalah Pentadbir Harta Pusaka bagi HOW PENG KOOI (Simati)] …DEFENDAN-DEFENDAN

This matter concerns a foreclosure application.

The subject matter of this case, that is, the property at No.149, Jalan Timah, Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan (“the said Property”) is the family home of the Defendants as well as the deceased, How Peng Kooi who passed away in year 2017.

The Property was charged to the Plaintiff as security for a loan facility given to the borrower, Pak Chun Construction Sdn Bhd.

This Court had allowed the Plaintiff’s application in Enclosure 1 on 29 July, 2025 and dissatisfied with this Court’s decision in granting an Order for Sale, the Defendants has filed an appeal against this Court’s decision in Enclosure 30.

These are the Court’s grounds of judgment in relation to Enclosure 1.

In an application of this nature, the predominant issue is whether the Defendants have succeeded in raising a cause to the contrary.

The Defendants highlighted the fact that besides the said Property, there were other properties that were charged by other third-party owners to the Plaintiff as additional securities S/N 106QdqCdvE2t2po8vg57tw for the loan facilities given by the Plaintiff to Pak Chun Construction Sdn Bhd and these properties include:

A unit of 3 storey shoplot held under HS(M) 6396, PT 12848, Mukim Ampang Daerah Ulu Langat, Negeri Wilayah Persekutuan Kuala Lumpur own by a company,

(ii) A unit of 3 storey office lot held HS(M) 9983, PT 15830, Mukim Empang, Daerah Hulu Langat, Negeri Selangor, own by a company, Indah Jati Sdn Bhd;

(iii) A unit of 3 ½ storey shop lot held under HS(M) 1476, PT 5928, Mukim Setapak, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan Kuala Lumpur, own by a company, Low Suan Choo Sdn Bhd; and

(iv) A piece of land held under Lot No.393, measuring 2014 square meter (21679 square feet) under Kayangan Heights project with postal address at No.32, Jalan U9/7A, Seksyen U9, 40150 Shah Alam, Selangor (“the said Land”) jointly own by How Peng Kooi/deceased, How Weng Hong and How Vi Vien.

It was contended by the Defendants that apart from the shop lot in item (iii) above, the Plaintiff had without justification refused to consent to the respective owners to dispose of the properties to purchasers even though the purchase price offered was as S/N 106QdqCdvE2t2po8vg57tw per the market price of the properties and henceforth the Plaintiff was said to have not been prejudiced by the proposed transactions.

It was further argued by the Defendants that the Plaintiff had insisted for the properties owners who are third parties to the loan transaction to settle the indebtedness of Pak Chun Construction Sdn Bhd despite the Plaintiff being fully aware that these owners did not receive any benefit from the loan facility purportedly given by the Plaintiff to the borrower, namely Pak Chun Construction Sdn Bhd.

The Defendants also averred that the Plaintiff has erroneously invoked the “cross default clause” in the facilities agreement and insisted that all outstanding loans by the borrower must be fully settled before the properties charged to them can be dispose of by the respective owners, and again underscoring the fact that “they are 3rd parties who did not benefit from the loans facilities”.

The Defendants also submitted that the sum claimed by the Plaintiff was indeed higher than the actual outstanding sum in the respective loan accounts.

On the issue of the redemption sum demanded by the Plaintiff for one of the properties, the Defendants relied on the cases of Visage Continental Sdn Bhd V Smooth Track Sdn Bhd [2008] 1 MLJ 10 (for the proposition that a chargee is estopped from S/N 106QdqCdvE2t2po8vg57tw demanding for a much higher redemption sum after having agreed earlier to a lower sum); Jalang Anak Paran & Anor v Government of the State of Sarawak & Anor [2007] 1 MLJ 412 (for the proposition that a party should not be allowed to approbate and reprobate) and Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Berhad [1995] 4 CLJ 283 on the doctrine of estoppel.

Apart from the aforesaid, the Defendants further submitted that at all material times, the Defendants never received the letter of demand dated 5 July, 2024 purportedly issued by the Plaintiff to the Defendants and thus Enclosure 1 has been rendered defective and/or unenforceable against the Defendants.

Such a contention, according to the Defendants, “is supported by the fact that the letters of demand purportedly issued to the Defendants were never acknowledged by the Defendants”.

Based on the various reasons and grounds as raised above, the Defendants submitted that cause to the contrary has been established by the Defendant.

The Case for the Plaintiff is simply that first, it has complied with the requirements as set out in section 256 of the National Land Code.

Second, the Plaintiff strenuously argued that the issues and/or grounds raised by the Defendants were erroneous and/or without basis.

Last but not least, it was the Plaintiff’s contention that the Defendants have failed to show the existence of any cause to the contrary.

Section 256 of the National Land Code provides as follows: Application to Court for order for sale

(1) This section applies to land held under —

Registry title;

the form of qualified title corresponding to Registry title; or

subsidiary title, and to the whole of any undivided share in, or any lease of, any such land.

Any application for an order for sale under this Chapter by a chargee of any such land or lease shall be made to the Court in S/N 106QdqCdvE2t2po8vg57tw accordance with the provisions in that behalf of any law for the time being in force relating to civil procedure.

On any such application, the Court shall order the sale of the land or lease to which the charge relates unless it is satisfied of the existence of cause to the contrary.

Section 257 of the National Land Code then set out the “Matters to be dealt with by order for sale”.

(1) Every order for sale made by the Court under section 256 shall be in Form 16h and shall—

provide for the sale to be by public auction;

require the sale to be held on, or as soon as may be after, a date specified therein, being a date not less than one month after the date on which the order is made;

specify the total amount due to the chargee at the date on which the order is made;

require the Registrar of the Court to fix a reserve price for the purpose of the sale, being a price equal to the estimated market value of the land or lease in question;

specify that no bidder shall be allowed to bid in the sale unless the officer of the Court is satisfied that the bidder possesses, at the time of the sale, the sum equivalent to ten per centum of the reserve price specified under paragraph

(d);

specify that where the full amount of the purchase price is not paid after the fall of the hammer by the successful bidder, the sum specified in paragraph (e) shall be paid as deposit to the chargee and forthwith credited into the account of the chargor pending the settlement of the balance of the purchase price;

specify that the balance of the purchase price shall be settled on a date not later than one hundred and twenty days from the date of the sale and that there shall S/N 106QdqCdvE2t2po8vg57tw be no extension of the period so specified; and

specify that where the balance of the purchase price is not settled on a date specified under paragraph (g), the sum paid as deposit under paragraph (f) to the chargee shall be forfeited and disposed of in the manner specified under section 267A.

Any such order may contain such other directions with respect to the sale as the Court may think fit, and in particular (but without prejudice to the generality of the foregoing) may, where the charge in question relates to more lands or leases than one, direct—

that they be offered for sale individually, and in a specified order; and

that, in the event of the price fetched by one or more of them exceeding an amount specified in the order, or to be determined by the Registrar of the Court, the other or others shall be withdrawn from the sale, and shall cease to be subject to the order.

In specifying or determining any amount for the purposes of paragraph (2)(b), the Court or the Registrar, as the case may be, shall have regard not only to the liability of the chargor under the charge, but also to any liabilities which (under section 268) will fall to be discharged out of the proceeds of sale in priority thereto.

In the seminal case of Low Lee Lian v Ban Hin Lee Bank [1997] 1 AMR 1036; [1997] 2 CLJ 36; [1997] 1 MLJ 77; [1996] 2 MLRA 491 (“Low Lee Lian”), the apposite principle on this aspect of the law was stated by the apex court in the following terms: In our judgment, ‘cause to the contrary’ within s 256(3) may be established only in three categories of cases. First, it may be taken as settled that a chargor who is able to bring his case within any of the exceptions to the indefeasibility doctrine housed in s 340 of the Code establishes cause to the contrary. … … In other words, a chargor who is able to demonstrate that the charge, the enforcement of which is sought, is defeasible upon one or more of the grounds specified S/N 106QdqCdvE2t2po8vg57tw under sub-ss (2) and (4)(b) above will be held to have established cause to the contrary under s 256(3). … … Secondly, a chargor may show cause to the contrary within s 256(3) of the Code by demonstrating that the chargee has failed to meet the conditions precedent for the making of an application for an order for sale. For example, failure on the part of the chargee to prove the making of a demand or service upon the chargor of a notice in Form 16D would constitute cause to the contrary. So too, where the notice demands sums not lawfully due from the chargee. See Co-operative Central Bank Ltd v Meng Kuang Properties Bhd [1991] 2 MLJ 283. However, in such a case, it would be open to the chargee to subsequently serve a notice or a proper notice (as the case may be) before commencing proceedings afresh as the cause shown to the contrary does not in substance affect the chargee's right to apply for an order for sale. Thirdly, a chargor may defeat an application for an order for sale by demonstrating that its grant would be contrary to some rule of law or equity. This principle finds its origins in the judgment of Aitken J in Murugappa Chettiar v Letchumanan Chettiar [1939] MLJ 296 at p 298 where he said: S/N 106QdqCdvE2t2po8vg57tw I agree that equitable principles should not be invoked too freely for the purpose of construing our Land Code, but surely a chargor, who shows that there would be no need to sell his land if the chargee paid up in full what is due from himself in another capacity, has shown good and sufficient cause why the land should not be sold. Section 149 of the Land Code obviously contemplates that there may be cases in which charged land should not be sold, even though there has been a default in payment of the principal sum or interest thereon secured by the charge; and it seems to me that a chargor may ‘shew cause’ either in law or equity against an application for an order for sale, and that the courts should refuse to make an order in every case where it would be unjust to do so. By ‘unjust’ I mean contrary to those rules of the common law and equity which are in force in the Federated Malay States. … Digressing for a moment, it is to be emphasized that here, as in other areas of our land law, it is important to distinguish between rights ad rem and rights in personam. … … S/N 106QdqCdvE2t2po8vg57tw In the present context, an action brought to set aside a charge upon one or more of the grounds of defeasibility specified under s 340 of the Code is an action in rem. For when it succeeds, the consequence is to set at naught the chargee's rights under the registered charge as against the whole world. On the other hand, a chargor who is able to demonstrate that the chargee is under a personal obligation that binds his conscience not to enforce the charge, though not in a position to bring his case within one or more of the exceptions to the indefeasibility provision may nevertheless proceed to enforce that obligation against the chargee. This is an action in personam. The consequences of succeeding in such an action will have the effect of getting the chargee to defeat his own title or of depriving him of some or all of his rights under the registered charge, including the right to obtain an order for sale. … The Decision of this Court

The primary question for determination is whether the reliefs sought in Enclosure 1 ought to be granted. This hinges on the key issue of whether the Defendants have successfully established the existence of any cause to the contrary.

There is no dispute as to the validity of the charge, notwithstanding that it is a third-party charge. The Plaintiff’s interest is therefore indefeasible.

The Defendants contended that, although this foreclosure proceeding was initiated pursuant to Section 256 of the National Land Code, that provision does not preclude them from raising other relevant issues to establish the existence of a cause to the contrary in order to resist the foreclosure.

This Court has carefully considered the various arguments advanced by the Defendants.

On the issue of service of the Notice of Termination and the Originating Summons, this Court finds that service was duly effected.

The issues concerning whether the sum claimed by the Plaintiff exceeded the actual debt owing under the loan facility, and whether the Form 16D Notice was defective, have also been considered. This Court finds these grounds to be without merit.

As for the argument that the Plaintiff unjustifiably refused to grant consent for the Defendants to dispose of the properties, this Court agrees with the Plaintiff that any redemption sum must first be an amount agreed upon by the Plaintiff, taking into account all related costs and expenses.

The Defendants’ contention that the subject property is their family home and that they never benefitted from the loan bears no relevance to the present application.

Upon consideration of all the circumstances, this Court finds merit in the Plaintiff’s submission that the Defendants have failed to raise any cause to the contrary, as outlined in Low Lee Lian. The Court further agrees with the Plaintiff that this is an action in rem.

Accordingly, Enclosure 1 is allowed, with costs awarded to the Plaintiff in the sum of RM5,000.00. Dated: 09 September, 2025 sgd (CHOONG YEOW CHOY) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR S/N 106QdqCdvE2t2po8vg57tw Counsel: For the Plaintiff : Nor Nabilatul Hasanah (Messrs Che Mokhtar & Ling) For the Defendants : Sabrina Chu (Messrs Paul Ong & Associates)