IN THE COURT OF APPEAL OF MALAYSIA AT PUTRAJAYA [APPELLATE JURISDICTION] CIVIL APPEAL NO. W Between

Transcription

1 IN THE COURT OF APPEAL OF MALAYSIA AT PUTRAJAYA [APPELLATE JURISDICTION] CIVIL APPEAL NO. W Between RHB BANK BERHAD (menggantikan Kwong Yik Bank Berhad menurut Perintah bertarikh ) APPELLANT And KWAN CHEW HOLDINGS SDN BHD RESPONDENT [In the matter of High Court of Malaya at Kuala Lumpur, Civil Suit No. D Between RHB BANK BERHAD (menggantikan Kwong Yik Bank Berhad Menurut Perintah bertarikh ) Plaintif And KWAN CHEW HOLDINGS SDN. BHD. Defendant] CORAM: Abdul Wahab Patail, JCA Balia Yusof Haji Wahi, JCA Tengku Maimun Tuan Mat, JCA Date of Judgment: 22 nd May

2 GROUNDS OF JUDGMENT 1. The Appellant RHB Bank Berhad appealed to this Court against the dismissal of its claim against the Respondent Kwan Chew Holdings Sdn. Bhd. to recover inter alia the total outstanding amount from the Facility of RM1,932, due as at The Respondent cross-appealed, seeking to vary the order of the High Court as follows: a. That part of the judgment allowing the Appellant s/plaintiff s claim against the Respondent/ Defendant for RM 2, with interest at the rate of 8% per annum from the date of judgment to date of realisation be set aside. b. That in addition to dismissal of the Appellant s/plaintiff's claim on the ground that the claim was time-barred under Section 6(1) Limitation Act 1953, the High Court ought to have held that the 2

3 Appellant s/plaintiff's claim was also time-barred arising from the letter dated which constituted a notice of demand and accordingly, the Plaintiff's cause of action against the Defendant arose at that time and the writ which was filed on was statute barred. 3. Having heard the parties on their respective appeal and cross-appeal, this Court - a. Allowed the appeal and set aside the order of the High Court; b. Entered judgement in terms of prayers a-c in the Statement of Claim; c. Dismissed the cross-appeal; d. Fixed costs RM20, here and below; and e. Ordered the deposit be refunded. 3

4 4. The reasons follow below. 5. The primary issue before the High Court and on appeal was whether the Appellant's claim is statute barred under section 6(1) of the Limitation Act 1953, in that the action has been brought after the expiration of six years from which the cause of action accrued. 6. A secondary issue was whether any expiry of the limitation period (if any, which was denied by the Plaintiff) has been revived by the Defendant's subsequent acceptance of further funds from the Plaintiff and by the Defendant's acceptance of the 5 th letter of offer dated on Section 6(1) of the Limitation Act 1953 (Revised 1981) Act 254 provides: "(1) Save as hereinafter provided the following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, that is to say - (a) actions founded on a contract or on tort; 4

5 (b)... " 8. In this case, the subject matter concerns outstanding sums for overdraft facilities granted to finance a housing project. 9. The writ was filed on The filing of the writ gave occasion for submissions in this case, not as to liability or quantum, but as to whether the action is time-barred. 10. For the Appellant, it was submitted that time began to run from for the reason that a. the letter of to the Appellant was an approval for an overdraft facility on the condition of repayment by redemption sum of RM10, per unit on the 40 units charged or to be fully settled within 2 years whichever is the earlier; and b. the letter of to the Appellant was for further bridging finance of RM45, to secure Certificate of Fitness for Occupation and the redemption sum is 5

6 the sale and purchase price of the relevant housing unit. 11. For the Respondent, it was submitted that time began to run from From that, the submission went on to refer to paragraph 8 of the Statement of Claim that the Respondent was given notices of default in 1985 (RR3:224) and 1986 (RR3:234). The latter giving notice that if the excess of RM113, as at were not settled within 7 days, the Appellant would not hesitate to institute appropriate legal action. The submission pursued with the argument that the letter of for further bridging finance of RM45, to secure Certificate of Fitness for Occupation had referred to the release of RM2, having been made on , and provided for the release of RM43, subject to conditions but the conditions imposed upon the Respondent was never met. Though it was accepted on and a copy returned with signature, the conditions were never met by the Respondent. Thus, it was submitted that time ran from , and 6

7 "6.2 It is also to be noted that the Plaintiff's letter of November 5,1987 referred to in the said 5th letter of offer does not refer to the Defendant alone but companies in the Defendant's group of companies and the financing arrangements that those companies had with the Plaintiff (RR )." 12. The Respondent's cross-appeal is based upon the argument that time ran from Consideration and Conclusion 13. The cross-appeal seeking to set aside the order for the Respondent to pay the Appellant RM2, with interest at the rate of 8% per annum from the date of judgment to date of realisation be set aside may be dealt with shortly by reference to RHB Bank Berhad v Kwan Chew Holdings Sdn Bhd [2010] 1 CLJ 665 FC not brought to our attention by the Respondent but by the Appellant. At paragraph [45] of the judgment, the Federal Court held on the failure to release the full RM45,000.00: 7

8 "[45] It is not in dispute that the respondent did not comply with this. If this is the case then the appellant was not at fault for refusing to release the full amount. For this reason, we find no merit in this ground." 14. The second part of the cross-appeal was that the High Court ought to have held not only that the Appellant's civil suit was time-barred under Section 6(1) Limitation Act 1953, but also that the Appellant's claim was time-barred arising from the letter dated which constituted a notice of demand and accordingly the Plaintiff's cause of action against the Defendant arose at that time and the writ which was filed on was statute barred. 15. We deal with the second part of the Respondent's cross- appeal together with the Appellant's appeal as both concerns the Limitation Act. 16. The Limitation Act restricts the maximum time within which legal proceedings may be instituted. That maximum time is calculated from the time the cause of action accrued. It is trite 8

9 that a cause of action accrues at the earliest time when all the necessary or material facts that make up the elements of the cause have occurred or are in place. See Tan Kong Min v Malaysian National Insurance Sdn. Bhd. [2006] 1 MLJ 601; Credit Corporation (M) Bhd v Fong Tak Sin [1991] 1 MLJ 409; Nasri v Mesah [1971] 1 MLJ 32. Even if a person has a valid claim, that claim can no longer be validly filed once the period of limitation has passed. If one aspect of the principle of justice is that a person with a valid claim is entitled to litigate, the other aspect of the same principle is that there must be a limit to the time within which a person is exposed to the risk of being sued. But it is not intended to tie down the hands of parties that the only way to recover loss is by litigation, as that would defeat the benefit of the Limitation Act to reduce claims under litigation before the courts. Hence, understanding the accrual of a cause of action is key to the fair and just application of the principle. 17. A cause of action does not accrue the moment a loan amount or part thereof is received by the borrower or paid out on his account, although that is the amount he eventually has to pay back with interest and costs as applicable under the terms of 9

10 the loan. It does not accrue because there is a breach or default unless the agreement specifies that it accrues from the point of time of breach or default. But even so, if the parties mutually discuss and negotiate, it implicitly means that they are extending the date when payment becomes due and the cause of action accrues. There is no statutory or equitable limit within which a party can negotiate or to extend further any facilities. If parties are mutually willing to negotiate and to extend facilities notwithstanding a breach or default, it is a misapplication of the Limitation Act to limit the time for negotiations or to extend further facilities to the time allowed to file civil proceedings under the Act. 18. The High Court, in this case, allowed itself to be led by the submissions on accrual of cause of action from the issue of the notice(s) of demand. The High Court failed to appreciate - a. Although there were defaults, parties continued to deal with each other; 10

11 b. Banks do not hand out offers of facilities as businessmen hand out business cards or salesmen hand out sales promotion leaflets, but that the offers of facilities are issued after consideration of and in response to applications for facilities or further facilities by an applicant or borrower; c. The exchange of letters and issue of offers of facilities testify to ongoing negotiations as to settlement and extension of further facilities; d. It would be inequitable therefore to allow the respondent to turn around and to rely upon the defaults that led to further offers of facilities as the date of accrual of the cause of action for the purposes of limitation. 19. With respect, the error led the High Court to a decision it would not have made had it not been for the error. It was therefore a fit and proper case within the meaning of section 72 of the Courts of Judicature Act 1964 demanding appellate 11

12 intervention to correct the injustice. That being the case, the cross-appeal necessarily fails. 20. Accordingly, we allowed the appeal and dismissed the crossappeal on terms as above set out at paragraph 3. Signed (DATUK ABDUL WAHAB BIN PATAIL) Judge Court of Appeal of Malaysia Putrajaya Dated: 26 th January 2015 Counsels/Solicitors For the Appellant: For the Respondent: Mr. Lim Koon Huan & Ms Shaleni Sangaran Messrs Skrine Wisma UOA Damansara No. 50, Jalan Dungun Damansara Heights KUALA LUMPUR Mr. Ramdas Tikamdas Messrs Siva Ram & Kong No. A-12-2, Level 12 Menara UOA Bangsar No. 5, Jalan Bangsar Utama KUALA LUMPUR 12