RELIEF FR THE CHARGOR AND THIRD PARTIES

While pending foreclosure period, the chargor has at time

resorted to various strategis to save himself and his
property.Some of these has been accepted by the court and
the others were rejected.
Phuman Singh v Kho Kwang Choon
The FC held that an order for sale will not be granted if the
provision of the Moneylenders rd is not complied with.
Public Finance vh! v Na"a#ana$am#
FC held that it is fraudulent for the chargee to act in collusion
with the chargor to defeat the rights of purchasers in the land.
!n this case the " #new that some of the land had been
subdivided and sold to $
rd
parties yet he granted the loan. %e
later commenced order for disclosure.
Tai &ee Finance Co. Sdn.'hd. v fficial (ssignee ) rs.
!n this case th FC held that in order to render the interest of
the registered owner of the charge defeasible,the fraud must
have been committed prior to or at the time of registration.!t
must be proved that the circumstances in which the chargee
obtained registration of the charge were constituted fraud.
Kheng Soon Finance v Re%nam
" applied for an order of sale of land u*s. +,- but FC rejected
on the gr of unreasonable conduct of the (ppelant and the
e.uity of the purchaser.!t was further held that default of the
chargor will not automatically entitle for order for sale. The
court must consider which would amount to a /cause to the
contrary0 within the meaning of s. +,-1$2 which will be
sufficient for the court to refuse order for sale.
S#a"i&a% Kewangan 'ela#u Ra#a h!( ) 'ala#an
an&ing h!(
The chargor raised the issue of defective procedure.!n this
case the chargee issued a notice of default in Form 3-4 citing
two charges therin and lumoing together the outstanding
sums from the two loans granted to the chargor.!t was held
that whther such notice is defau#t or not depends whther the
chargor were mislead by any defect in the notice. So as to
render the granting of an order of sale unjust.
PO*ERS OF THE LAND AD'INISTRATI)E
!n Suppiah v "onnampalam
!t was held that the Collector5s duty is to see whether the
charge was ion register or not.!f registered he only have to
see whether or not there have been any default if so he may
ma#e an order.(ccording to the court he has no power to
investigate whether there is fraud or not.
Gu"+al Singh v Kanana#e" , Ano"
!t was held that the &( in e6ercising his power of enguiry u*s.
+-3 must be limited and must not go beyond to search of
fraud et u*s. $78132.
!f any chargor wants to challenge on the ground of fraud
,misrep , forgery or insufficient or void instrument must bring
to %C.
The issue of a charge on &and ffice title where the court has
no jurisdiction can the matters stated in s. $78132 be brought
to court. !t was held in Sun!"am v Chew Choo Khoon that
the issue may be raise in %C meanwhile the &( shall wait
pending the court order.
FOR' -. D an! FOR' -.E
$( /01
Where the chargor breach any condition and
the breach continues for 3 month or such
other period as may be specified, the chargee
may serve on the chargor a 9otice in Form
3-4.
19otice of 4efault With :espect To ( Charge2
$( /00
Where the principal sum secured by any
charge is payable by the chargor on demand,
the chargee may ma#e the demand by a
notice in Form 3-; 14emand For "ayment f
( "rincipal Sum2
!f the said sum not paid within 3 month, he
may see# an order for sale w*out being
re.uired to serve a notice in Form 3-4.
The I$$ue i$ whe%he" $e"ving a !i22e"en%
2o"m i$ ma%e"ial o" no%(
Elia%hamb# v Shei& 'ohame! ( Sai!
The chargor challanged theuse of Form 3-;
by the Chargee see#ing 4emand for"ayment
of "rincipal Sum due to the default of
Chargor.The issue was whether the Form
3-; issued was valid.
%eld<!t was held as not valid beco6 since the
demand was for principal sum F3-4 u*s. +,7
must be issued
)(A('( Hu$$ain v (P( 'ala#$ia
The owner of a piece of land had entered into
an agreement with the : to turn it into a petrol
filling station.Monies were advanced by : to
the owner 1(pp2 with an undertanding that
(pp must return bac# the money if the
application was not approved.Finally it was
not approved.: gave a 9otice to recover in
Form 3-;.!t was argued that the correct form
to be used is Form 3-4.FC hel#d that Form
3-; had been properly used to sought
monies =payable on demand>
S#a"i&a% &ewangan 'ela#u Ra#a h!( )
' 1:efer side2
3acob v Ove"$ea$4Chine$e an&ing Co"+(
?pon default to pay the debt, Chargee served
anotice of demand payment and interest in
Form 3-4 on failure chargee applied to court
for order of sale.This was challanged by the
Chargor .%e argued that the correct form is
Form 3-; as re.uired by 9&C.
: argued that Form 3-4 is for demand of
principal ) interest but Form 3-; is demand
for principal only.
Suffian &"<
The Court refered to s. -+ of !ntepretation (ct
whichstates that if there is a diviation in the
use of the form as re.uired by law and if the
deviation does not effect or was not intended
to mislead then it cannot be invalidated.
%eld that where there was a demand for
payment of principal and interest , Form 3-;
could be used as well as Form 3-4.The
demand may be made by either forms.
.
5NREGISTERED CHARGE
!f the charge is not registered then it become unregistered
charge.The chargee only has remedy in contract or
e.uity.!f there is an agrement between the parties, then
contract will be applicable. !f not the e.uitable
redemption.@s. +8-1$2 A
5'C v Pemungu% Ha$il Tanah K(Tinggi
!t was held that 9&C is a complete and comprehensive code of
law governing tenure of land in MalaysiaBthere is no room
whatsoever for the importation of ;nglish e.uitable principle.
'ala#an an&ing h!( ) 6aha"i Ahma!
!t was held that 9&C does not prohibit the creation of e.uitable
charges and our land law recognised it.
'aha!evan $7o 'ahalingam v 'anilal , Son$ 8'9 S!n(h!(
Salleh (bbas CC held that the decision in %j. (bd.:ahman5s
case does not prevent the creation of an e.uitable charge.T*fore
e.uitable charge and &ien are permitted under 9&C.
Develo+men% , Comme"cial an& h!( ) Che *an
Develo+emen% S!n(h!(
This case is about the claim of priority of interest made by the
e.uitable interest holder against registered interest holder u*s.
$78 9&C.
The 4 was the registered proprietor of a piece of land and had
e6ecuted $ separate charges over the land in favour of " as
consideration of loan. The charge was registered in (ug D$, Feb
DD and (pr.DD.
!n 3EDF four years later the registration of the first charge, the
intervenor bought the piece of charge land from the defendants
chargor.The 4 then breach of the termsthe charge and the "
brough an action for foreclosure.
The intervenor applied to the court to intervene the proceeding.
The issue is on the indefeasibility of prior registration i.e. whether
the intervener can claim priority over the land as she bought the
land after the charge has been registered.
9&C re.uires all dealings to be registered. nce it is registered
the registered proprietor or interest has a priority and
indefeasibility over the land.%*ever this right is not conclusive
and can be challanged under s. $781+2.
!ntervenor argued that since she had bought the land she had
built a house as such enhance the value.
%eld<as the intervenor5s interest was ac.uired some 7 years
after the charge was registered, 9&G provides that a registered
interest is an indefeasibly title unless there had been allegation
of fraud or misrep or, forgery, etc to which the chargee was
privy.
The could held that the registered chargee had priorityand
indefeasibility of interest because it was registered. The
intervenor only has e.uitable interest and ran# ne6t.
' v 'ahmu! b H:( 'ohamme! ;-<=> it was held that the
registered interest will have the priority over the e.uitable
interest eventhough the interest has been registered after the
creation of e.uitable interest.