THAMEEZ NISHA HASEEM (As the Administrator of the Estate of Bee Fathima, Deceased) v CHARIJAH BT AMEERDIN MOHAMED SHARIF & 1 LAGI (P-02(NCVC)(A)-912-05/2017)

CHARIJAH BT AMEERDIN MOHAMED SHARIFF

MAYBANK ALLIED BANK BERHAD (COMPANY NO: 306350-K) … RESPONDENTS [IN THE HIGH COURT OF MALAYA AT PENANG GUAMAN SIVIL NO. MT4-21-121-2004 ORIGINATING SUMMONS NO. PA-24 NCVC-30-01/2017 BETWEEN THAMEEZ NISHA HASEEM … PLAINTIFF (As the Administrator of the Estate of Bee Fathima, Deceased) AND 2

CHARIJAH BT AMEERDIN MOHAMED SHARIFF

MAYBANK ALLIED BANK BERHAD (COMPANY NO: 306350-K) … DEFENDANTS] CORAM: Hamid Sultan bin Abu Backer, JCA Yeoh Wee Siam, JCA Hanipah binti Farikullah, JCA Hamid Sultan Bin Abu Backer, JCA (Delivering Judgment of the Court) GROUNDS OF JUDGMENT [1] The appellant/administratix of the estate of Bee Fathima (deceased), appeals against the decision of the learned High Court judge. The appellant’s principal complain is that the 2nd respondent, in the capacity of chargee, has not enforced the charge and limitation had set in and wants the return of the title. [2] This judgment is delivered pursuant to section 42 of the Courts of Judicature Act 1964 (CJA) as our sister Yeoh Wee Siam has since retired. This is a unanimous decision by the remaining members of the panel. 3 [3] The appellant had relied on the following cases: (i) Malayan United Finance Bhd v. Tay Lay Soon [1991] 1 MLJ 504; (ii) Talam Corp Bhd & Anor v. Bangkok Bank Bhd & Anor [2016] 6 MLJ 61; (iii) PhileoAllied Bank (Malaysia) Bhd v. Bupinder Singh Avatar Singh & Anor [2002] 2 CLJ 621;

On 28.5.1984, the 1st Defendant applied for and obtained a personal loan of RM240,000.00 from the Co-operative Central Bank Limited (CCB) and other terms and conditions contained in the Letter of Offer dated 28.5.1984.

The 1st Defendant as the lawful attorney executed a charge over the property as a security for loan granted by the bank to the 1st Defendant. However, the 1st Defendant defaulted in repayment of the loan and the bank 4 commenced foreclosure proceedings against Bee Fathima vide Originating Summons No.24-547-1987.

The bank was granted an order for sale on 19.9.1991. Later, via vesting order dated 5.12.1994, all assets and liabilities of CCB was transferred to Allied Bank (Malaysia) Bhd. Then after on 28.4.1997, the bank's name was changed from AlliedBank (Malaysia) Bhd to PhileoAllied Bank (Malaysia) Bhd. On 8.1.2002, the bank's name was changed to Maybank Allied Bhd then on 28.3.2012, the bank's name was changed to Maybank Allied Berhad.

Bee Fathima died intestate on 23.2.1993 and the Plaintiff was appointed as the adminitratix of her estate on 18.3.2009. Subsequently after that, the Order For Sale was set aside by the Penang High Court.

Since then, the 2nd Defendant did not take any further steps to enforce the said charge and did not take any action against the 1st Defendant to recover the loan. Till to date, there is no settlement of the debt owed to the bank and the 1st Defendant alleging that the 2nd Defendant's cause of action is barred by limitation.

By Letter dated 26.3.2015 and duly served to the 2nd Defendant, the Plaintiff informed the 2nd Defendant that the estate of Bee Fathima did not owe the 2nd Defendant under the charge and requested the 2nd Defendant for information what actions have been taken against the 1st Defendant to recover the said loan. However, there was no response at all by the 2nd Defendant.

Therefore, the Plaintiff filed this action so that the Court may determine and decide the right of the parties.

The High Court dismissed the Plaintiff's application with costs of RM6000.00 to each defendant. 5

Dissatisfied with the decision, the Plaintiff appealed to Court of Appeal.

It is undisputed fact that the 1st Defendant is indebted to the 2nd Defendant for her failure to repay the loan because it is not that she refused to pay but she had no money to pay.

The loan agreement is between the 1st and 2nd Defendant so in this circumstances the Plaintiff has no cause of action to compel the 1st Defendant to repay the loan to the 2nd Defendant. Therefore, the Plaintiff's claim against the 1st Defendant must fail.

In charge action, the bank as the chargee is entitled to receive direct payment from the chargor for the discharge of a charge. Therefore, the Plaintiff's alternative prayer (3) which seeks to order the 1st Defendant to make payment into court is a curtailment of the bank's right and is contrary to the terms of the charge itself.

The chargor or any interested person who wants to discharge a charge needs to do is to get a redemption statement from the bank and settle the redemption sum direct with bank. There is no such thing as the chargor is required to pay the redemption sum into court. The Plaintiff's request for the 1st Defendant to pay the redemption sum into court not only took away the bank's right to receive payment but also is an abuse of the court process.

It is a trite law that even though the bank is barred by limitation to foreclose the charged property, equity and common sense dictate that the bank cannot discharge the chargee until the debt is fully settled. To rule otherwise will cause unjust enrichment to the Plaintiff. 6

The fact remained the same that the 1st Defendant must settle her debt to the 2nd Defendant and therefore the 2nd Defendant cannot discharge the charge.

For the aforesaid reasons, the Court dismissed the Plaintiff's application with costs.” [5] The Memorandum of Appeal reads as follows: “1ST RESPONDENT

The learned Judge erred in law and in fact in holding that the Appellant had no cause of action against the 1st Respondent in Penang High Court, Originating Summons No: PA-24-NCVC-30-01/2016 (the said Originating Summons) for the following reasons:-

(a) that the 1st Respondent had no money to repay the loan of RM240,000.00 together with the interest due thereon to the 2nd Respondent which was granted by the 2nd Respondent to the 1st Respondent pursuant to the letter of Approval of the Loan dated 28.05.1984;

(b) that the Appellant is not a party or privy to the Loan Agreement made between the 1st Respondent and the 2nd Respondent;

(c) that, even if the court granted the order directing the 1st Respondent to repay the said loan to the 2nd Respondent, such an order cannot be enforced against the 1st Respondent because the 1st Respondent is entitled to raise the defence of limitation and that there is no demand for the repayment of the said loan by the 2nd Respondent. 7

The learned Judge ought to have held that, it is the implied terms of the creation of the third party charge of the Appellant's property in favour of the 2nd Respondent as security for the said loan taken by the 1st Respondent from the 2nd Respondent that, the 1st Respondent is under legal obligation to repay the said loan and discharge the third party charge and exonerate the Appellant from the said third party charge regardless of whether the 2nd Respondent's cause of action against the 1st Respondent to recover the said loan is barred under section 6(l)(a) of the Limitation Act 1953 (Act 254) or otherwise.

In the circumstances, the learned Judge ought to have held that the Appellant is entitled for an order to compel the 1st Respondent to repay the said sum of RM240,000.00 together with the interest due thereon as determined by the court to the 2nd Respondent and cause the third party charge to be discharged and for the return of the issue document of title of the Appellant's property by the 2nd Respondent. 2nd RESPONDENT

Further and/or in the alternative, the learned Judge erred in law and in fact in holding that the Appellant is not entitled to require the 2nd Respondent to discharge the third party charge and return the issue document of title of the Appellant's property without the payment of the debt due from the 1st Respondent to the 2nd Respondent, even though the 2nd Respondent's right to enforce the third party charge is barred under Section 21 of the Limitation Act 1953 (Act 254) as this would cause unjust enrichment to the Appellant.

The learned Judge failed to appreciate that, the liability of the Appellant under the third party charge is predicated by liability of the 1st Respondent and as the 2nd Respondent had admitted that their cause of action to recover the said loan from the 1st Respondent is barred by law of limitation, the 2nd 8 Respondent's right to enforce the said third party charge also ceased and/or extinguished by operation of law.

The learned Judge erred in law and in fact when the learned Judge failed to realize that the doctrine of limitation is said to be based on two broad considerations, that is to say, firstly, there is a presumption that a right not exercised for a long time is non-existent and secondly, that it is necessary to have matters of right in general ought not be left too long in a state of uncertainty or suspense to the financial detriment of the person affected. In the instant matter, the learned Judge failed to comprehend that the registered proprietor is entitled to remove the clog on the title of the Appellant's property because the right of the 2nd Respondent to enforce the third party charge is now non-existent or ceased.

In the circumstances, the learned Judge ought to have held that, the Appellant is entitled to the statutory remedy to file a "charge action" as defined under Order 83(1) of the Rules of Court 2012 to move the court for the determination of the 2nd Respondent's title or interest under the third party charge of the Appellant's property pursuant Section 340(4) (b) of the National Land Code 1965 and to obtain consequential relief to give effect to the finding of the court in respect of the aforesaid issue.

Having regard to the admission of the 2nd Respondent that, they have no intention to enforce the said third party charge pursuant to Chapter 3, Part Sixteen of Division IV (Sections 253 to 277) of the National Land Code 1965 (which is the only remedy available to the 2nd Respondent), the learned Judge ought to have made an order that the said third party charge be discharged by the 2nd Respondent and return the issue document of title of the Appellant's property to the Appellant pursuant to Order 83(l)(f) of the Rules of Court 2012. 9

The learned Judge further erred in law and in fact in holding that, there would be unjust enrichment to the Appellant if the order of discharge of the third party charge is made without any payment by the Appellant to the 2nd Respondent because the Appellant did not receive any benefit whatsoever under the said third party charge as the money was borrowed and solely used by the 1st Respondent. The learned Judge's aforesaid finding of the unjust enrichment issue is clearly wrong in law.

In the circumstances, the learned Judge's decision to dismiss the Appellant's claim with costs is contrary to the law and the facts of this case and therefore, the learned Judge's decision ought to be set aside forthwith by this Honourable Court and an order be made in terms of the said Originating Summons and/or such other order be made as the justice of this case may require.

In the further alternative, even though the liability under the third party charge is denied by the Appellant, the learned Judge ought to have ordered an inquiry to ascertain the amount due by the 1st Respondent to the 2nd Respondent as at the date of the filing of the said Originating Summons and allow the Appellant to pay such sum as ascertained by the court to the 2nd Respondent (without admission of any liability) for the discharge of the third party charge and for the return of the issue document of title of the Appellant's property by the 2nd Respondent with liberty for the Appellant to recover the said sum from the 1st Respondent by way of right of subrogation.

Accordingly, the Appellant respectfully prays that this appeal be allowed with costs here and below and the Appellant's application in terms of the said Originating Summons be allowed with necessary modification as the Honourable Court may deem fit and proper.” 10 [6] We have read the appeal records and further submissions of the parties. We have taken some time to read the novel submission as submitted by the appellant. After giving much consideration to the submission of the appellant, we take the view that the appeal must be dismissed. Our reasons inter alia are as follows:

(i) In the instant case, the appellant based on technical arguments, wants back the title without payment of what is due and owing to the 2nd respondent. In the recent case of the Federal Court in RHB Bank Bhd (previously known as United Malayan Banking Corp Bhd and then as Sime Bank Bhd) v Wong Kok Leong (as executor and trustee of the estate of Wong Kwong Wah, deceased) & Ors [2017] 4 MLJ 281, the court did not entertain such a request. [See Wong Kok Leong & Anor v RHB Bank Bhd [2015] 2 MLJ 385].