Chapter 5 - Land Dealing: Security Transactions - Charges Flashcards

Question

ENFORCEMENT OF CHARGE BY WAY OF ORDER FOR SALE - REGISTRY TITLE Overview

Answer 1

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

Answer 2

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.

Answer 3

1) Default of repayment 2) Default on demand 3) Issue on statutory notice

Answer 4

S.254 + Form 16D

Answer 5

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.

Answer 6

S.255 + Form 16E

Answer 7

BBMB v Hj Mohd Din: - Such error unless prejudiced to the chargor, is not fatal.

Answer 8

1) The law 2) Duty of judge 3) Procedures

Answer 9

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.

Answer 10

1) The law 2) Affidavit requirement 3) Cause to contrary

Answer 11

O.83, r.3 - procedures for charge actions.

Answer 12

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.

Answer 13

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.

Answer 14

1) How to show CTC | 2) CTC in collateral proceedings

Answer 15

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.

Answer 16

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.

Answer 17

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.

Answer 18

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.

Answer 19

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.

Answer 20

1) The law 2) When is the sale concluded 3) Order for sale made by court

Answer 21

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.

Answer 22

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.

Answer 23

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

Answer 24

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.

Answer 25

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.

Answer 26

1) Default of repayment 2) Sums lumped together 3) Default on demand 4) Wrong form used

Answer 27

S.254 - Form 16D

Answer 28

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.

Answer 29

S.255 - Form 16E

Answer 30

Jacob v OCBC Banking Corporation: - Wrong form is not fatal; - Form 16D is a general form & may be used as well.

Answer 31

1) The law 2) Inquiry by LA 3) Procedures at inquiry 4) Absence of parties at inquiry

Answer 32

S.260 - made to LA; - in Form 16G

Answer 33

1) The law | 2) CTC

Answer 34

S.261 - S.265

Answer 35

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.

Answer 36

S.262(2): LA shall dismiss the application

Answer 37

S.262(3): - satisfied: proceed the hearing ex parte - not satisfied: adjourn

Answer 38

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.

Answer 39

1) The law 2) When no bid received 3) Still unsuccessful

Answer 40

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.

Answer 41

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.

Answer 42

1) Effect on charge 2) Effect on sum left outstanding & due for subsequent charge 3) Effect on tenancy exempt from registration

Answer 43

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.

Answer 44

Jones v Palianappan: - Any sums left outstanding under the charge in question can be recovered by way of personal loan.

Answer 45

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.

Answer 46

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

Answer 47

- process to redeem Original Title from the Bank upon the settlement of the housing loan with the financier.

Answer 48

S.215(3): - w/o discharge, registration of the transfer of the property will subject to the charge.

Answer 49

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.

Answer 50

1) Otherwise than by payment | 2) By payment

Answer 51

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.

Answer 52

S.279: - Chargor may be discharged by payment to Registrar; - e.g. when the chargee disappeared, unable to be found, evaded payment.

Answer 53

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.

Answer 54

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.

Answer 55

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

Answer 56

- S.266 - Lee Ah Chin v Wong Yoon Chai - Eng Ah Mooi & Ors v OCBC

Answer 57

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.

Answer 58

Ker Chee Chuan v Katlyn Enterprise: - Chargor may set aside OFS if it is made ex parte.

Answer 59

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.

Answer 60

S.418 - Chargor shall have the right to appeal against the order.

Answer 61

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.

Answer 62

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.

Answer 63

S.268(3): - chargor has the right to the balance of purchase money after all payments have been made in accordance with S.268.

Answer 64

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.

Answer 65

1) General rule 2) Private treaty by chargor 3) Private treaty by chargee

Answer 66

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.

Answer 67

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.

Answer 68

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.

Answer 69

Chung Khiaw Bank Ltd v Lau Ah Yen: - right to discharge connotes that chargor has the right to sell via private treaty.

Answer 70

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.

Answer 71

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.

Answer 72

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.

Answer 73

S.268 - S.268A

Answer 74

S.269 - does not render the purchaser liable for any loss thereby; - the receipt of purchase money constitute a sufficient discharge for the purchaser.

Answer 75

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

Answer 76

1) Registry title - S.257(1)(g): - within 120 days 2) LO title - S.263(1)(g): - within 120 days

Answer 77

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.

Answer 78

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.

Answer 79

1) Conditions | 2) Enforcement

Answer 80

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.

Answer 81

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.

Answer 82

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.

Answer 83

1) The law | 2) Wrong charge created, whether instrument is defective

Answer 84

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.

Answer 85

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.

Answer 86

1) Limits of power 2) Powers to take possession 3) Powers to manage the land & take profit

Answer 87

S.271 - in the form of going to physical occupation; or - receiving the rent payable under the lease or tenancy.

Answer 88

S.274-277 - must be done in accordance with the manners provided.

Answer 89

1) Functus officio 2) Order for sale 3) Powers of Land Admin 4) Powers of court

Answer 90

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.

Answer 91

S.418: - party may appeal against the order under S.418.

Answer 92

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.

Answer 93

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.

Answer 94

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.

Answer 95

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.

Answer 96

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.

Answer 97

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.

Chapter 5 - Land Dealing: Security Transactions - Charges Flashcards

(129 cards)