CIMB BANK BERHAD v SONATA CREST SDN BHD PENCELAH MEGAFEST SDN. BHD. (DALAM LIKUIDASI)

Case Significance

Illustrates the threshold a third party must meet under Order 15 rule 6 of the Rules of Court 2012 to intervene in, and to stay, a chargee bank's foreclosure and execution proceedings under the National Land Code.

This High Court decision at Johor Bahru concerns an application by a company in liquidation to intervene in, and to stay, foreclosure and execution proceedings brought by a chargee bank. The plaintiff, CIMB Bank Berhad, had commenced an originating summons under the National Land Code (Kanun Tanah Negara) to enforce a charge registered in 2020 over land in the Mukim of Simpang Kanan, District of Batu Pahat, together with the building erected on it, against the chargor and registered proprietor, the defendant Sonata Crest Sdn Bhd, and it had obtained an order for sale and taken out execution proceedings. The proposed intervener, Megafest Sdn Bhd (in liquidation), applied under Order 15 rule 6 of the Rules of Court 2012 to intervene in both the originating summons and the execution proceedings and to obtain a stay or suspension of the execution, asserting an interest in the charged property, including by reference to a private caveat lodged in 2013. The court considered the principles governing intervention, including whether the applicant was a person whose presence was necessary to enable the court effectually and completely to adjudicate on the questions in the cause, applying authorities such as Pegang Mining Company Ltd v Choong Sam and Hong Leong Bank Berhad v Staghorn Sdn Bhd, and the separate question whether a stay of the chargee's statutory remedy was warranted. Concluding that the proposed intervener had not made out a sufficient basis to be joined or to halt the enforcement of the registered charge, the court dismissed the application to intervene and stay, with costs of RM8,000. The judgment is a useful illustration of the threshold a third party must meet to intervene in and stay a chargee's foreclosure and execution proceedings under the National Land Code. The court's approach reflects the strength of a registered chargee's statutory remedy under the National Land Code, which the courts will not lightly suspend at the instance of a stranger to the charge, and the corresponding need for a would-be intervener to demonstrate a genuine and sufficient interest before it will be permitted to disrupt enforcement proceedings that are otherwise regular.