The limitation period for a claim based on fraud does not stop running unless the plaintiff demonstrates reasonable diligence in discovering the fraud, which the plaintiffs failed to do.

Introduction

[1] This is an appeal against the decision of the learned Magistrate that dismissed the Plaintiffs Writ and Statement of Claim with cost, after a full trial.

[2] The Plaintiffs claim was for the outstanding bills amounting to RM97,302.65 with interest and damages as follows-

(a) Jumlah wang keseluruhan bil tertunggak berjumlah RM97,302.65;

(b) Faedah ke atas bil tertunggak berjumlah RM97,302.65 dikira dan tarikh pemfailan saman ini sehingga penyelesaian penuh;

(c) Faedah dan kos atas atas dasar ganti rugi berdasarkan bil-bil yang telah diisukan;

(d) Ganti Rugi Teladan berasaskan daripada:

(i) Defendan Pertama melanggar dan mengingkari kewajipan beliau sebagai Rakan Kongsi Pengurusan dan/atau Legal Asssociate yang berkhidmat untuk Plaintif Kedua pada waktu yang material; dan

(ii) Bahawa penipuan dan konspirasi untuk menipu yang dilakukan oleh Defendan-Defendan adalah bertujuan untuk menyebabkan kerugian kepada Plaintif Kedua pada waktu yang material.

(e) Suatu Akuan bahawa semua bayaran yang telah dibuat oleh Defendan Kedua dan/atau Defendan Ketiga dan/atau Defendan Keempat kepada Defendan Pertama untuk fail-fail dibawah kendalian Defendan Pertama merupakan amanah konstruktif terhadap Plaintif Kedua pada waktu yang material;

(f) Segala bayaran yang dibuat oleh Defendan Kedua dan/atau Defendan Ketiga dan/atau Defendan Keempat kepada Defendan Pertama diberikan kepada Plaintif Kedua bersama faedah;

(g) Taksiran Ganti Rugi Am (akan ditaksirkan oleh Mahkamah); dan

(h) Lain-lain relif yang dianggap sesuai oleh Mahkamah yang Mulia ini.

[3] This Court dismissed the appeal with cost.

[4] For ease of reference, the respective parties shall be referred to as they appear in the Magistrate' s Court.

Brief Facts Of The Case

[5] The First Plaintiff (P1) and the First Defendant (D1) were founders and partners of the Second Plaintiff (P2). D1 had been the Managing Partner of P2 from 1997 until 2005 and thereafter as a legal assistant until 2012 while P1 became the Managing Partner of P2 in 2005. The Second Defendant (D2), Third Defendant (D3) and Fourth Defendant (D4) were clients of P2 managed by D1. D3 and D4 are subsidiaries of D2.

[6] An internal audit was conducted in 2017 (audit exercise) pursuant to a "hostile take-over' of P2 from 27 December 2016 - 30 December by two (2) partners namely Dato' Yong Lay Keow and Susie Lim Chuan Tin at which time, P1 was on leave. Both the partners have resigned since then.

[7] Accordingly, through the audit exercise, the Plaintiffs discovered discrepancies in the financial records of P2' s clients files where fraudulent activities occurred in the management for the files of BH-15940-00-HY- WCF, BH-15940-00-HYWCF, BH-16037-2001-SPA-SV and BH-16082- 2001-SPA-SV (Files) which were the basis of the Plaintiffs' claim in this suit.

[8] Subsequently, demand letters were sent to D2, D3 and D4 demanding payments for the Files which they replied that "all payments had been fully settled as agreed by the firm' (referring to P2). These payments were disputed by the Plaintiffs. Details of the relevant bills of the Files are listed under paragraph 27 of the Statement of Claim as Jadual A, B, C and D.

[9] During the trial, four (4) witnesses were called by the Plaintiffs and five (5) witnesses by the Defendants.

Plaintiffs' Contentions

[10] It was the Plaintiff' s contention that the fraud and conspiracy to defraud were only discovered in 2017, after a hostile take-over by the 2 former partners. Hence the Plaintiffs employed s 29 of the Limitation Act 1953 (Act 254) that time does not run until they discovered the conspiracy to defraud.

Defendants' Contentions

[11] The Defendants contended that the occasioned claimed by t