DALAM MAHKAMAH RAYUAN MALAYSIA
(BIDANG KUASA RAYUAN)
RAYUAN SIVIL NO: N-02(MUA)(A)-1568-09/2014
ROHAYA BINTI ALI HAIDAR ...PERAYU
AMBANK (M) BERHAD ...RESPONDEN [dahulunya dikenali sebagai "MBf Finance Berhad")
(Dalam Mahkamah Tinggi Malaya di Seremban
Dalam Negeri Sembilan Darul Khusus, Malaysia
Saman Pemula No. 24M-1170-07/2011
Ambank (M) Berhad (dahulunya dikenali sebagai MBf Finance Berhad) ...PLAINTIFF
1. Rohaya Binti Ali Haidar [No. K/P: 680427-11-5280]
2. Bank Pertanian Malaysia Berhad [No. Syarikat: 811810-U]
3. Pentadbir Tanah Negeri Sembilan, Negeri Sembilan
4. Syarikat Sri Semujong Sendirian Berhad [No. Syarikat: 11978]
5. Twinsprings Development Sdn Bhd [No. Syarikat: 344742-W]
6. Supinah Binti Asrif [No. K/P: 610214-10-5624]
7. Md Shah Bin Sulaiman [No. K/P: 511209-05-5147]
8. Shamsudin Bin Ahmad [No. K/P (Lama): 5593477]
9. Azaime Bin Othmen [No. K/P (Lama): 4767162]
10. Nasharuddin Bin Abd Aziz [No. K/P (Lama): 6241441]
11. Takseyah Binti Mahmud [No. K/P (Lama): 3993650]
12. Abd Ghafar Bin Abd Rahman [No. K/P: 620430-01-5999/6756553] ...Defendan
13. Noor Habibbah Binti Arshad [No. K/P: 620322-10-6738 / 6776034] ...Defendan
Kamaruddin @ Mamat Bin Endut
[No. K/P: 600108-11-5053] ...PENCELAH
KORUM: ABDUL AZIZ BIN ABD RAHIM, JCA; ROHANA BINTI YUSUF, JCA; PRASAD SANDOSHAM ABRAHAM, JCA
Date of Decision: 4th August 2015
GROUNDS OF JUDGMENT
 We heard and disposed of this appeal on 4th August 2015 wherein we allowed the appeal and the High Court's decision was set aside. We shall refer to the parties as appellant and respondent.
 The respondent was a Licensed Financial Institution and at all material time was the registered chargee of the land held under Issue Document Title No. C.T. 7979, C.T. 7980, C.T. 7981, Lot 1086, 1087 and 1088, Mukim Pantai, Negeri Sembilan ("land"). In 2006, the respondent exercised its rights under the charge and applied for an order for sale of the land by way of public auction (the said order for sale). The respondent obtained an order for sale from the Seremban High Court. The land was subsequently auctioned off and sold on 25th November 2008.
 The appellant was the successful bidder of the land at the public auction carried out pursuant to the order for sale.
 Through MBf Finance Berhad's letter dated 17th January 1997, the respondent granted a mortgage loan of RM1,120,000.00 to Twinsprings Development Sdn Bhd ("borrower"). As a security for the repayment, the registered proprietor of the land, one Syarikat Sri Semujong Sendirian Berhad ("chargor") created a third party charge over the land in favour of the MBf Finance Berhad on 17th March 1997.
 On 3rd April 2002, MBf Finance Berhad changed its name to AmFinance Berhad and it was subsequently changed to its current name AmBank (M) Berhad on 1st June 2005.
 The borrower Twinsprings Development Sdn Bhd failed to comply with the repayment terms of the loan. By reasons of the said default, the respondent instituted a charge action through Seremban High Court Originating Summons no. 24-770-2006 against the registered proprietor Syarikat Sri Semujong Sendirian Berhad.
 On 26th June 2007, the Seremban High Court allowed the charge action and ordered for the land to be sold by way of public auction. On 25th November 2008, the land was successfully auctioned off to the appellant for a sum of RM615,000-00.
 Post-auction, the respondent had on 11th October 2010 received a letter from solicitors acting for one Supinah Binti Asrif, the 6th Defendant in the court below, requesting clarification of the sale of the land through the public auction.
 After receiving the letter, the respondent discovered a loan agreement dated 22 August 1996 executed between the 6th Defendant and the respondent and a Letter of Disclaimer & Undertaking dated 2nd September 1997 issued by the respondent to the effect of "disclaiming" interest in the lot purchased by the 6th Defendant and excluding that lot from the Respondent's charge.
 Thereafter, the respondent conducted further internal enquiries and discovered a separate Letter of Disclaimer & Undertaking dated 29th July 1997, which listed eight (8) other third party purchasers/borrowers who were in the same position as the 6th Defendant. The common trait among these third party purchasers/borrowers is that they had purchased their respective individual lots in the land directly from the developer and they had obtained end-financing from the respondent to finance their purchases.
 On 15th July 2011, the respondent filed an action through Seremban High Court Originating Summons No. 24-1170-07/2011 ("application"). Through the application, the respondent applied for the Order for Sale dated 26th June 2007 and the auction sale of the land on 25th November 2008 to be declared null, void and to be set aside. The respondent had also sought to return to the appellant (the successful bidder) the deposit and the payments received by the respondent in connection with the sale of the land through the public auction.
 The High Court granted the orders sought by the respondent hence this appeal.
FINDINGS OF THE COURT
 It is our view that in a situation where an order for sale was granted by the High Court in favour of the Appellant and a certificate of sale issued in favour of the Appellant in accordance with the provision of National Land Code ("NLC"), the court is "functus officio" in respect of all proceedings under the order for sale and the court has no power to set aside the said order for sale by way of a separate application or otherwise.
 We refer to the decision of the Supreme Court in Mui Bank Berhad v Cheam Kim Yu (Beh Sai Ming, Intervener)  1 CLJ (Rep) 222 where it was held:
" The application for an order for sale by the chargee appellant/bank was properly made under s. 256(1) and (2) and the Court correctly granted the order on 29 August 1988 under ss. 256(3) and 257 of the National Land Code. The procedure prior to the sale under s. 258 of the National Land Code was also complied with.
 The learned Judge was clearly functus officio after he made the order for sale on 29 August 1990. In this case, the order for sale was made, drawn up and perfected and the learned Judge was functus officio and therefore had no power to set aside the order for sale which was a final order."
We refer to the judgment of Harun Hashim SCJ found at page 228 to 229 and we quote:
"Under the National Land Code, there is nothing to prevent a chargor with the consent of the chargee to sell the charged property by private treaty. There are no specific provisions in the Code for such a sale but if such a sale is concluded as a purely business arrangement, it is for the chargee to discharge the charge to give full effect to the sale. That was not done here, although the bank must have been aware that it had instructed solicitors to apply to the Court for an order for sale of the land by public auction and yet subsequently had given approval for the land to be sold by private treaty to Beh. The sale by private treaty here however did not confer any superior interest in the land in Beh against the indefeasible interest of the bank conferred by s. 340(1) unless such interest is made defeasible on account of fraud, forgery or illegality on the part of the bank under s. 340(2). If Beh wishes to press on with his claims, then he should do so in a separate action: see Hock Hua Bank Bhd. v. Sahari bin Murid  1 LNS 92.
The application to intervene in the present proceedings was not made until a week after the issue of the certificate of sale by which time the auction sale was completed. The learned Judge was clearly functus officio by then. Indeed, following Hock Hua Bank Bhd. v. Sahari b. Murid  1 LNS 92 (supra ) the learned Judge was functus officio after he made the order for sale on 29 August 1988. In the Hock Hua case, the allegations of fraud and forgery were made after the Judge had made the order for sale but before the auction sale and the Federal Court held that the Judge was functus officio after he made the order for sale in foreclosure proceedings when the order had been drawn up and perfected. True, after making an order for sale, the Judge has the power to make other orders including changes in the reserve price and the auction sale dates but such orders are consequential to the order for sale. The point here is that the order for sale is a final order unless appealed against. Once the order for sale is made, drawn up and perfected, as here, the learned Judge is functus officio and therefore has no power to set aside the order for sale." (emphasis added)
 It is to be observed in this case, the facts were fairly similar to ours in that there was a buyer who had attempted to purchase the land from the owner and therefore attempted to intervene to set aside the public auction of the land. The Supreme Court however maintained the position in law as we had set out earlier.
 This position in law was further emphasised in the Supreme Court's decision in Scotch Leasing Sdn Bhd v Chee Pok Choy & Ors  2 MLJ 105 where it was held:
"An order of sale of charged land was a final order unless appealed against and once it was made, drawn up and perfected, the judge was functus officio and therefore had no power to set aside the order of sale. Thus, the judge in the court below had no power to hear the application to set aside and make the second order (see p 108H-I); MUI Bank Bhd v Cheam Kim Yu (Beh Sai Ming, Intervener)  2 MLJ 642 followed and Muniandy a/l Thamba Kaundan & Anor v D & C Bank Bhd & Anor  1 MLJ 374 distinguished.
To allow the judge in the court below to reopen the matter nine months after it was decided by himself would bring absolute chaos to the judicial system. A jurisdiction point is no less an issue than other issues in civil litigation. If not raised at the hearing in the court of first instance or on appeal, it could not be raised thereafter, for the doctrine of res judicata sets in (see p 11OD-F); MUI Bank Bhd v Cheam Kim Yu (Beh Sai Ming, Intervener)  2 MLJ 642 and Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd  3 MLJ 189 followed and Muniandy a/l Thamba Kaundan & Anor v D & C Bank Bhd &Anor [1996) 1 MLJ 374 distinguished."
We refer to the judgment of Peh Swee Chin CJ at page 109 to 110 and we quote:
"On the point that the High Court had no jurisdiction to make an order of sale in the case of land held under a Land Office title, the point seems to be wellfounded, see United Asian Bank Bhd. v. Elgi Marka Sdn. Bhd.  1 AMR 244 and Tan Teng Pan V. Wong Fook Shang  1 LNS 150.
This point of jurisdiction can be raised on appeal, of course, and it goes without saying a fortiori it can be raised in a Court of first instance. This point was raised before us, and it was in fact also raised before the learned Judge in the Court below. However, in the circumstances of this case as set out below, one cannot yet say cadit quaestio.
In so far as it was raised before the learned Judge, it was not raised before the order of sale was made on 3 September 1991. That order of sale, in fact has never been appealed against.
It was raised in a subsequent summons in the same case as an afterthought, filed on 8 June 1992, thus offending the general rule stated in the MUI Bank case, supra, and also not coming within the exception to such general rule as in Muniandy, supra.
We do not think it could be so raised and acted on by the Judge. It could have, of course been raised on appeal if an appeal was filed against the order of sale made on 3 September 1991. If before such an appeal was filed and before the said order of sale was perfected, it could be also reviewed by the Court in exercise of its inherent jurisdiction; see Re Harrison's Settlement,  1 All ER 185; and Syarikat Marak Jaya, supra.
To allow the learned Judge in the Court below to re-open the matter nine months after it was decided by himself, (and for that matter any other Judge), a Court would have to allow, equally, another Judge exercising an co-ordinate jurisdiction to set it aside on the same jurisdiction point after, say, twenty years, in the same case, for food for a goose is also food for geese. This would bring absolute chaos to our judicial system which does not carry on in such fanciful way as contended by learned Counsel for the chargors.
Such chaotic condition is prevented by several things.
First, a jurisdiction point is no less an issue than other issues in civil litigation. If not raised at the hearing in the Court of first instance or on appeal, it cannot be raised thereafter, for the doctrine of res judicata sets in."
 The next decision we would refer to would be the Supreme Court's decision in Gondola Motor Credit Sdn Bhd v Almurist Holdings Sdn Bhd  2 MLJ 650 where it was held:
"(1) SFL, as chargee, held an indefeasible interest in the land (by virtue of s 340(1) of the Code) upon registration of the charge in its favour. Under s 256(3) of the Code, on an application to the court for an order for sale by the chargee, it is mandatory on the court to order the sale unless it is satisfied of the existence of cause to the contrary. No such cause to the contrary arose in this case when the order for sale was made. A successful purchaser at the public auction pursuant to an order for sale under s 256(3) was entitled to a certificate of sale under s 259(3) of the Code. Such a certificate was issued to the appellant. Accordingly, all the requirements of the law have been complied with for the appellant to be registered as the new owner of the land.
(2) The purported revival of the agreement in January 1986; the entry of the caveat in March 1986; the filing of the Suit in September 1986 and allowing the judgment in default in February 1987, smacks of collusion between Tg Petri and the respondent to protect the personal interests of the directors of Tg Petri, past and present.
(4) At all material times the option to purchase and the agreement were subject to the registered charge. Shaikh was a director of Tg Petri and in turn a director of the respondent and was well aware of the existence of the charge on the land. Any dealing subsequent to the charge and with notice of the charge, as here, cannot defeat the indefeasible interest of the registered chargee and through him the purchaser at a judicial sale."
We refer to the judgement of Harun Hashim SCJ at page 658-659 and we quote:
"At all material times, the option to purchase and the sale and purchase agreement were subject to the registered charge. Shaikh Mohamad was a director of Tg Petri and in turn a director of the respondent and was well aware of the existence of the charge on the subject land. In any event, the fact of registration of the charge is notice to all the world of its existence.
Any dealing subsequent to the charge and with notice of the charge, as here, cannot defeat the indefeasible interest of the registered chargee and through him the purchaser at a judicial sale. The error in this case was to ignore the indefeasible title of the chargee and the continuous legal operation of the charge from the moment of its registration up to the completion of the judicial sale and the issue of the certificate of sale." (emphasis added)
In our present case the earlier purchaser of the said land based on the letters of disclaimers issued by the respondent had their interest (if any) subject to the respective charges on the said lands. What the respondent should have done was to take immediate steps to redeem the land in question or part of it but had failed to do so. Therefore it follows that the interest of the purchasers would be subject to the registered charge and to the appellant who acquired the registered and indefeasible interest in the said land when they had paid the said purchase price after the public auction and the certificate of sale was issued to them by the court.
 The learned Judge in her grounds of judgment failed to address the question of "functus officio" and the fact that this disentitled her to grant an order setting aside the said order for sale. In our view this by itself would be a sufficient ground to allow the appeal.
 The learned Judge also erred in her grounds of judgment where it is said that the indefeasible position of the appellant after having been registered as a registered proprietor vide certificate of sale can be set aside or rendered defeasible by virtue of mistake of fact on the part of the respondent. Having looked at section 340 of NLC which was relied on by the learned Judge we are of the view that clearly the respondent would not be able to avail itself of section 340(2) of the said section based on the facts of this case.
 We find that the respondent having made a mistake in not addressing the interest of this earlier purchasers and the letters of disclaimers that the respondent has issued cannot now come to court to set aside the order for sale so as to protect their own shortcomings. These purchasers rights (if any) are against the respondent (if at all) based on the letters of disclaimers that the respondent has issued. That certainly cannot constitute a basis to defeat the registered interest of the appellant under section 340(1) of the NLC.
 For all the aforesaid reasons we allowed this appeal with costs.
Dated: 7th March 2016
DATUK DR. PRASAD SANDOSHAM ABRAHAM
Court of Appeal Malaysia
Cases Referred To:
1. Mui Bank Berhad v Cheam Kim Yu (Beh Sai Ming, Intervener)  1 CLJ (Rep) 222 (referred)
2. Scotch Leasing Sdn Bhd v Chee Pok Choy & Ors  2 MLJ 105 (referred)
3. Gondola Motor Credit Sdn Bhd v Almurist Holdings Sdn Bhd  2 MLJ 650 (referred)