PUBLIC BANK BERHAD v 1. ) SOON SIEW CHIN 2. ) HOW WENG HONG (SOON SIEW CHIN adalah tuan punya 1/2 hartanah dan kedua-duanya adalah Pentadbir Harta Pusaka bagi HOW PENG KOOI(Si Mati)

Case Significance

Restates the narrow scope of the "cause to the contrary" defence under Low Lee Lian in foreclosure proceedings, holding that other securities, the property being a family home, and the chargors not benefiting from the loan do not defeat an order for sale, which is an action in rem.

This High Court decision concerns an application for an order for sale in a foreclosure and the narrow grounds on which a chargor may resist it. The plaintiff bank sought an order for the sale of a property that had been charged to it as security for a loan facility extended to a borrower company. The property was the family home of the defendants, one of whom owned a half share, both being the administrators of the estate of a deceased co-owner. The Court identified the predominant issue in an application of this nature as whether the defendants had succeeded in raising a "cause to the contrary" within the meaning of the authorities. The defendants argued, among other things, that other properties had been charged by third parties as additional security for the same loan facility, that the subject property was their family home, and that they had never benefited from the loan. The Court held that these matters did not amount to a cause to the contrary within the principle in Low Lee Lian v Ban Hin Lee Bank Bhd. The existence of other securities did not prevent the bank from proceeding against this charged property; the fact that the property was a family home, and that the defendants had not benefited from the loan, bore no relevance to the application, an order for sale being an action in rem against the charged land. The Court also held that any redemption sum would first have to be an amount agreed by the bank, taking into account related costs. Finding no cause to the contrary, the Court allowed the application and granted the order for sale, with costs. The judgment is significant for restating the narrow scope of the "cause to the contrary" defence in foreclosure proceedings. The decision is a firm restatement of the narrow scope of the defence to an order for sale, confirming that sympathetic personal circumstances, the availability of other securities and a chargor's lack of benefit from the loan do not amount to a cause to the contrary in an action that proceeds against the land itself.