ORDER 83- CHARGE ACTIONS

In the case of Yee Sin Cheang v. UMBC, 1 it was emphasized that the purpose of a charge is to
secure the repayment of a debt, or the payment of any sum other that a debt and in any default of
the payment, the parties can proceed for a foreclosure proceeding. Order 83 of the Rules of Courts
2012 was the main procedural rules which the parties to a foreclosure action of a charged property
need to comply. In the case of UMBC v. Chong Bun Sun & Anor2, it rules out that in any
foreclosure proceedings of a charged property, the charge must comply with the procedural rules
set out in Order 83 of the Rules of High Court.

Under this Order, rule 1 stipulated the application of this order where it applies to any action which
begun by originating summons by a charge or charger or by any person having the right to
foreclose or redeem any charge which includes a legal charge and equitable charge,3 being an
action in which there is a claim for any of the following reliefs: 4

(a) payment of moneys secured by the charge;

(b) sale of the charged property;
(c) foreclosure;
(d) delivery of possession (whether before or after foreclosure or without foreclosure) to the
chargee by the chargor or by any other person who is or is alleged to be in possession of
the property;
(e) redemption;
(f) reconveyance of the property or its release from the security;
(g) delivery of possession by the chargee.

By referring to this, it important to be noted that this rules only can be applies to a charge action
and not for the mortgage action as both are security transactions which may be confused. 5 In the
case of Gan Khor v. Soan b. Pelita6 the judges stated that “It must be remembered that a charge
is a very different transaction to a mortgage. There is no such thing as a mortgage of land known

1
[1992] 2 CLJ 1298, refer Section 242 of the National Land Code
2
(1994) 2 MLJ 221
3
“charge” is defined as registered charge under Section 5 of the National Land Code
4
Order 83, rule 1(1) and (2)
5
[1935] FMSLR 39
6
[1935] FMSLR 39
to the law of the Federated Malay States and only charges are recognized”. While in the latter
case of Phileo Allied Bank (Malaysia) Bhd v Bupinder Singh Avatar Singh & Anor7 the Federal
Court held that the assignee bank was entitled to foreclose the property by way of public auction
pursuant to Order 83 of the Rules of High Court as the security was not in the form of an absolute
assignment which creates an equitable mortgage.

Next, the claims for the delivery of possession or payments of moneys was mentioned under rule
2 of the Order 83. Under this rule, sub-rule (2) and (3) clearly stated that the plaintiff shall serve
on the defendant the originating summons and a copy of the affidavit in support of the summons
in not less than four clear days before the day fixed for the first hearing of the originating summons
and where the plaintiff claims delivery of possession there shall be endorsed on the outside fold of
the copy of the affidavit served on the defendant a notice informing the defendant that the plaintiff
intends at the hearing to apply for an order to the defendant to deliver up to the plaintiff possession
of the charged property as the plaintiff intends to apply for at the hearing.

Furthermore, for an action for delivery of possession or payment of moneys secured by the charge
it was stated under Order 83, rule 3 where it was rules out that the affidavit in support of the
originating summons shall comply with the requirement in which the affidavit shall exhibit a copy
of the charge.8Referring back to the old legislation of the Rules of the High Court 1980, the
affidavit must exhibit a true copy of the charge and the original charge or in the case of a registered
charge, the charge certificate must be produced at the hearing of the summons.9

In the case where the plaintiff claims delivery of possession the affidavit shall show the
circumstances under which the right to possession arises and the particulars of the amount
remaining due under the charge as at the hearing date of the originating summons and to give
particulars of every person who to the best of the plaintiff’s knowledge is in possession of the
charged property.10 The affidavit shall also prove that the money is due and payable and give the

7
[2002] 2 MLJ 513
8
Sub-rule (2)
9
Order 83, rule 3(2), Rules of the High Court 1980
10
Order 83, rule 3(3) and (4)
particulars for the claims on payment of moneys secured by the charge.11 In compliance with the
procedural requirement of rule 3 as ruled in the case of Public Bank Bhd v. Teck Huat Bricks and
Tiles Factory Sdn Bhd, 12 this includes the amount of the advance, the amount of repayments, and
the amount of any interest as at the date of the issue of the originating summons and as at the date
of the affidavit and also the amount of the remaining due under the charge. Thus, in our opinion,
the rule requires that where the plaintiff seeks for the delivery of possession of the security, his
affidavit in support of the originating summons must show the circumstances by which the right
of the possession arises and one of the objectives of this requirement for the particulars to be stated
in the affidavits is to let the chargor know the exact sum that he is bound to pay the chargee.

However, these rules should not be rendered ineffective by highly technical objection as decided
in the case of Standard Charted Bank Malaysia Bhd v. Ting Kah Kuong13 , where Clement
Skinner J held that the plaintiff’s failure to state the particulars as required under Order 83 rule
2(3), 3(3) and rule 3(4) was not fatal to its application as the defendants was not substantially
prejudiced.

Lastly, where foreclosure has taken place by reason of the failure of the plaintiff in a charge action
for redemption to redeem, the defendant in whose favors the foreclosure has taken place may apply
by notice of application for an order for delivery to him of possession of the charged property, and
the Court may make such order thereon as it thinks fit as rules out under Order 83, rule 5.

Based on this procedural details of Order 83, we observed that in order to execute a foreclosure
proceeding of a charged immoveable property by way of public auction, the parties not only have
to comply with the requirement of section 256 of the National Land Code but also needs to comply
with the requirements of Order 83 of the Rules of Court 2012 and it must be clear that compliance
of the various requirement is strict that render the order for sale will not be allowed where there is
non-compliance of the Rules of Court 2012. In the case of Low Lee Lian v. Ban Hin Lee Bank
Bhd,14 the Federal Court also emphasized that a judge hearing an application under Section 256

11
Order 83, rule 3(6)
12
[2004] 3 MLJ 88
13
[2008] 7 MLJ 508
14
[1997] 1 MLJ 77
of the National Land Code must ensure that the procedural requirements prescribed by Order 83
have been complied with. The Federal Court Judge, Yang Arif Abdul Malek Ahmad once stated
that the function of procedural provisions like Order 83 is to provide the machinery, the manner
or means, by recourse to which legal rights and duties may be enforced or recognized by a court
of law seized with jurisdiction to adjudicate on a dispute before it.15 In fact, the rules of court and
of practice and procedure regulate the machinery of litigation.

15
Bhupinder v Philleoallied Bank (M) Bhd v. Bupinder Singh Avatar Singh & Anor [2002] 2 CLJ 621