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2022 MarsdenLR 571
HIGH COURT MALAYA SHAH ALAM
UNIVERSITI PUTRA MALAYSIA – Appellant
Versus
HOE CHEE LIANG & ORS – Respondent
[Civil Appeal No: BA-12ANCVC-24-03/2021]
The cause of action in breach of contract claims regarding scholarship agreements accrues upon demand for payment, not at the time of breach, allowing claims to proceed to trial.
Headnote:(A) Limitation Act 1953 – Section 6(1)(a) – Breach of scholarship cum study leave agreements – Plaintiff's claim against defendant for repayment of scholarship expenses struck out by Sessions Court due to time bar – Appellate Court finds claim not unsustainable; action remitted for trial – Principle established that cause of action accrues upon demand made under the contract. (Paras 21, 22, 25)
(B)
Evidence Act 1950 – Section 101 – Burden of proof on the plaintiff for limitation defense raised by defendants must be proved at trial. (Paras 23, 25)
(C)
Scholarship agreements – Legal enforceability and rights under contract clarified. (Paras 9, 10, 18)
Facts of the case:
Plaintiff awarded scholarships to defendant for studies in the USA; defendant breached agreements by not returning to serve as per terms; plaintiff initiated suit after significant delay.
Findings of Court:
Below court erred in striking out writ; parties must present evidence at trial to ascertain validity of claims.
Issues
: Primary issue involved determination of when cause of action accrued and the implications of delay in action.
Ratio Decidendi:
The court emphasized demands for payment initiate the cause of action under the agreements; established that timing of initiating suit must align with contractual terms.
Result:
Appeal allowed; case remitted for trial.
JUDGMENT
Background Facts
[1] Case is about Ho Chee Liang, the first defendant (D1) who had breached two scholarship cum study leave agreements. With the scholarship, D1 had pursued his post graduate studies at the United States of America (USA), fully funded by plaintiff, Universiti Putra Malaysia (UPM). Plaintiff, a tertiary institution has then sued D1 and his guarantors, second to forth defendants (D2 to D4) for breach of the scholarship agreements, vide writ of summons at the Sessions Court, Shah Alam.
[2] An application to strike out the writ and statement of claim (SOC) by plaintiff was made by all defendants. The sessions Court judge (SCJ) who heard the application had allowed the writ dated 10 November 2020 and SOC to be struck out with an order of costs of RM3000. It was allowed pursuant to summary procedure under O 18 r 19 of the Rules of 2012 (ROC).
[3] This judgment would trace facts of case, bearing in mind mantle of the dispute, if UPM had overstepped the time frame allowed by law to recover monies expended on D1 resulting from breach of the two scholarship agreements.
[4] D1 was an ex-tutor of UPM. He was awarded two scholarships, one to pursue his post graduate Master degree at USA for 18 months from 20 January 1995 to 20 July 1996. He completed it and reported for work at UPM on 20 January 1997. In July 1997, he was awarded another scholarship to pursue Doctor of Philosophy (PhD) also at USA for three years from August 1997 to July 2000.
[5] D1 was to pursue MSc in physics theory at University of Connecticut, USA for a period of 18 months from 20 January 1995 to 19 June 1996. D2 and D3 were his guarantors for the scholarship agreement signed on 7 January 1995.
[6] The second agreement on 22 July 1997 was signed by D1 and plaintiff, together with D2 and D4 as guarantors. The 1997 agreement was for a PhD scholarship for D1 to pursue his doctoral studies on "Condensed Matter Theory" at Duke University, USA for the period from 1 August 1997 to 31 July 2000. Terms of the 1997 agreement were similar to the 1995 agreement.
[7] However, D1 did not complete his PhD and failed to return and serve UPM as provided for in the 1997 agreement. The condition stipulated in the scholarship agreement is for him to return and work for UPM for five years or twice of the period of the study leave.
[8] Consequently, on 16 July 2002 his tenure with UPM was terminated. He was to pay back UPM, the amount expended on him, adding up to RM341,465.41, comprising RM160,000 for the 1995 agreement and RM181,465.41 for the 1997 agreement.
Case Of Plaintiff
[9] According to plaintiff, several letters were sent to D1 and his guarantors D2 to D4, to update D1's progress of study but there was no response. Due to inaction by defendants, a notice of demand was issued by plaintiff on 23 September 2020, claiming monies expended on D1 for the scholarship cum study leave agreements, pursuant to cl 7 of both 1995 and 1997 agreements. Yet, no response and payments were not forthcoming. Thus, plaintiff proceeded with the suit against all defendants on 10 November 2020.
[10] Plaintiff asserted, defendants had violated cl 7 of the agreements which render, defendants have to pay back monies expended by plaintiff on D1 during his study leave period. In fact, cl 7 clothes the plaintiff with the right in law to make the demand for an amount of RM341,465.41.
Case Of Defendants
[11] Defendants had refused to pay and proceeded to strike out the writ and SOC by plaintiff premised on two issues, viz.
(i) Claim by plaintiff is time barred by virtue of the Limitation Act 1953 (Act 254).
(ii) Failure by the plaintiff to provide details on the total amount claimed, to wit RM160,000 and RM181,465.41.
[12] D1 claimed the notice of demand was sent 18 years after he was terminated of his services with UPM. He further claimed, the plaintiff did not bother to initiate the requisite action against him, when he first breached the scholarship agreement, thus implying pl
