KENG SOON FINANCE BHD. V. MK RETNAM HOLDINGS SDN. BHD.; BHAGAT SINGH SURAIN SINGH & ORS. (INTERVENERS)

KENG SOON FINANCE BHD. V. MK RETNAM HOLDINGS SDN. BHD.; BHAGAT SINGH SURAIN SINGH & ORS. (INTERVENERS)

The registered charge was void ab initio because it was created in furtherance of an unlicensed housing development contrary to the HDA 1966; the plaintiff had notice of purchasers' rights and participated in the unlawful transaction; registration could not confer a valid charge where the underlying instrument was void under National Land Code s.340(2)(b); accordingly the court must refuse the order for sale, cancel the memorials of the void charges and transfer titles to the interveners.

Citation
KENG SOON FINANCE BHD. V. MK RETNAM HOLDINGS SDN. BHD.; BHAGAT SINGH SURAIN SINGH & ORS. (INTERVENERS)
Parties
Plaintiff/chargee: Keng Soon Finance Bhd.; Defendant/chargor: M.K. Retnam Holdings Sdn. Bhd.; Interveners/purchasers: Bhagat Singh s/o Surain Singh & Ors.
Court
Malaysian court
Jurisdiction
Malaysia
Judgment Date
1996
Procedural Posture
Originating Summons / Judgment on Remission to High Court After Privy Council and Supreme Court Proceedings
Outcome
Application for order for sale dismissed; charge declared void and cancelled; titles to specified lots to be transferred to interveners; costs awarded as ordered.
Legal Topics
Caveats, Creation and Enforceability of Charge, Indefeasibility of Title, Illegality Under Housing Developers Act 1966, Specific Performance, Fraud on the Act, Restraints on Dealings, Consumer Protection Under Housing Legislation
Source Language
en
Land Law Property Law Contract Law Equity Housing Law Caveats Creation and Enforceability of Charge Indefeasibility of Title +5 more

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Parties

Keng Soon Finance Bhd.

Plaintiff/chargee

M.K. Retnam Holdings Sdn. Bhd.

Defendant/chargor

Bhagat Singh s/o Surain Singh & Ors.

Interveners/purchasers

Procedural Posture

Originating Summons / Judgment on Remission to High Court After Privy Council and Supreme Court Proceedings

Legal Issues

  1. 1 Whether a charge created by an unlicensed housing developer contravenes the Housing Developers (Control and Licensing) Act 1966 and is void ab initio
  2. 2 Whether a financier/chargee with notice of purchasers' interests can enforce a registered charge
  3. 3 Whether registration cures a void instrument under the National Land Code s.340

Ratio Decidendi

The registered charge was void ab initio because it was created in furtherance of an unlicensed housing development contrary to the HDA 1966; the plaintiff had notice of purchasers' rights and participated in the unlawful transaction; registration could not confer a valid charge where the underlying instrument was void under National Land Code s.340(2)(b); accordingly the court must refuse the order for sale, cancel the memorials of the void charges and transfer titles to the interveners.

Court Disposition

Application for order for sale dismissed; charge declared void and cancelled; titles to specified lots to be transferred to interveners; costs awarded as ordered.

Orders

  • Application of the plaintiff for order for sale dismissed with costs
  • Plaintiff to pay costs to the first intervener for the Privy Council hearing in London and for the Supreme Court proceedings pursuant to the Supreme Court order dated 24 September 1990