The without prejudice rule does not apply if there is an ongoing dispute about settlement terms, and the limitation period begins from the loan disbursement date.

The Appeal

[1] This is an appeal by the defendant against the decision of the learned sessions judge who on 31 December 2018 allowed the plaintiff's application for summary judgment with costs of RM4,000.00. The plaintiff's claim was for the repayment of a loan allegedly given in 2004 for Singapore Dollars $85,000.00 and a further loan in 2008 for RM30,000.00.

[2] This appeal concerns the scope of the without prejudice rule.

Salient Facts

[3] The facts relevant to this appeal are set out in the written submissions of the parties and I gratefully adopt them here. The plaintiff and the defendant were married in 2002.

[4] In 2017, the marriage broken down. Following that, the defendant and plaintiff appointed their respective solicitors to negotiate and finalise the terms of settlement towards the filing of a divorce petition and a global settlement of all other claims

[5] By a letter dated 13 July 2017, Messrs HM Wong and Associates ("Messrs HMW "), who were the solicitors for the plaintiff wrote to the defendant's solicitors, Messrs YH Boo and Partners ("Messrs YHB") ("the demand letter") demanding, inter alia, that the defendant repay a loan of Singapore dollars $85,000.00 and RM30,000.00 ("the loan") he had taken from the plaintiff.

[6] Messrs YHB replied to Messrs HMW vide a letter dated 17 July 2017 marked "without prejudice " that the defendant denied the loan and requested the plaintiff to provide evidence of the loan.

[7] By a without prejudice letter dated 12 September 2017, Messrs HMW forwarded to Messrs YHB 2 statements of proof signed by the defendant as proof of the said loans. By the first statement of proof the defendant acknowledged having taking a loan of Singapore Dollars $75,000.00 and in the second a loan of Singapore Dollars $10,000.00. There was no statement of proof in respect of the loan of RM30,000.00.

[8] On 26 September 2017, Messrs YHB wrote to Messrs HMW in a letter marked "without prejudice" proposing a sum in settlement of the loan (" the letter of 26 September 2017"). The letter stated that the defendant proposed to settle the loan by making a payment of RM250,000.00 in 5 yearly instalments of RM50,000.00.

[9] In response, by a without prejudice letter dated 13 February 2018, Messrs HMW informed Messrs YHB that the plaintiff was not agreeable to the proposed manner of settlement and counter proposed that the RM250,000.00 be settled by way of payment RM100,000.00 at the time of execution of the cause papers for the joint divorce petition and the balance of RM150,000.00 be paid in 3 yearly instalments of RM50,000.00, and that in the event of any default, the whole sum would become payable.

[10] The defendant thereafter appointed Messrs HY Mah & Associates ("Messrs HYM") to replace Messrs YHB. At the request of Messrs HMW, the plaintiff's solicitors resent to them a copy of their previous letter to Messrs HYM vide a letter dated 8 March 2018.

[11] On 3 March 2018 the defendant lodged a police report alleging that his signature in the statements of proof had been forged.

[12] By a letter dated 27 March 2018 marked "without prejudice ", Messrs HYM informed Messrs HMW that the defendant was not agreeable to the plaintiff's proposed manner of settlement.

[13] A divorce petition was filed at the Kuala Lumpur High Court via Petition No: WA-33-515-08/2018. The Kuala Lumpur High Court granted a Decree Nissi on 15 February 2019.

[14] On 14 August 2018, the plaintiff issued proceedings against the defendant in the sessions Court to recover the debt. The plaintiff made reference to the without prejudice letters including the letter of 26 September 2017. In his Defence, the defendant denied having taken the