A defense of limitation under the Limitation Act 1953 must be expressly pleaded; otherwise, it cannot bar an action, and the court may not entertain applications to strike out claims based on time barring without this condition being met.

Introduction

[1] This appeal involves the striking out of the plaintiff's action under O 18 r 19(1)(b), (c) and (d) of the Rules of High 1980 (RHC) on the ground that it was instituted after the limitation period stipulated by the Limitation Act 1953 (Limitation Act).

Background

[2] The pleaded case of the plaintiff is basically this. The plaintiff was engaged by the defendant to undertake certain construction works in a particular project. This appointment was in writing which we shall refer to as the "construction contract". Under this contract, a firm of engineers was appointed as the consultant. It is a term in this construction contract that the defendant would have to pay to the plaintiff within 30 days after the consultant has issued to the plaintiff an interim valuation certificate certifying the work completed and the amount due. There were five such certificates dated 20 March 1997, 29 April 1997, 10 September 1997, 6 November 1997 and 12 February 1998 respectively amounting RM1,316,783.76. The plaintiff claims that this was not paid and gave the following particulars in its statement of claim:

[3] The plaintiff alleged that the defendant had admitted to the amount outstanding in a letter dated 24 March 1998, but due to financial constraint was unable to satisfy this debt resulting in the plaintiff having to stop work.

[4] The statement of claim then proceeded to say that due to the defendant's breach of contract and the defendant's declaration of its financial predicament they were finally forced to stop work on the project and on 7 August 1998 forwarded to the defendant another claim for RM1,895,905.02. Particulars of this are as follows:

[5] In para 11 of the statement of claim, the plaintiff asserted that the defendant was wound-up on 12 June 2000 and it was only in 2005 that the Court of Appeal allowed the defendant's appeal for a permanent stay of the winding up order For this reason the plaintiff was only able to file this action on 31 May 2005 claiming a total sum of RM3,212,688.78 with interest and costs.

[6] On 12 August 2005, after the plaintiff's statement of claim was served on the defendant, the defendant filed an application by way of summons-in-chamber to strike out the plaintiff's claim under O 18 r 19(1)(b), (c) and (d) RHC on ground that the plaintiff's claim is statute barred under s 6(1)(a) of the Limitation Act.

[7] The plaintiff in its affidavits opposing the application disclosed that subsequent to the non-payment following the issuance of the interim valuation certificates, the parties entered into a written agreement terminating the construction contract. We shall refer to this agreement as the "termination agreement". It provides inter alia for the plaintiff's completed works on the project to be inspected and assessed within a specific time and the amount due shall be settled by the defendant by way of monthly installments of RM100,000 each commencing from 1 February 1998. There is also a provision for the defendant to contra part of the outstanding amount by transferring to the plaintiff, certain number of the defendant's bungalow lots in the project valued at RM1 million. Though there were certain payments made by the defendant and that the bungalow lots were transferred to the plaintiff, they only occurred in 1988. Further, since the defendant had renegaded on certain installment payments, this action was brought. As for this application, the plaintiff asserted that the defendant is not entitled to claim limitation since the defendant has not filed its defence pleading limitation as required by s 4 of the Limitation Act.

[8] The High Court allowed the defendant