Bankruptcy actions do not invoke limitations under section 6(3) of the Limitation Act 1953 regarding execution of judgments.

Mokhtar Sidin JCA:

Perwira Affin Bank Berhad (formerly known as Perwira Habib Bank Malaysia Berhad), the respondent in the present appeal, was the judgment creditor in the court below whilst the appellant, Lim Ah Hee, was the judgment debtor. On 28 March 1996, the respondent issued a bankruptcy notice against the appellant claiming the sum of RM6,388,344.68. This sum represented the amount due on a final judgment obtained by the respondent against the appellant in the High Court at Kuala Lumpur on 23 October 1987 vide Civil Suit No. C-23-905-86. The appellant made an application to set aside the bankruptcy notice. On 19 March 1997 the senior assistant registrar dismissed the appellant's application with costs. The High Court dismissed the appellant's appeal. The appellant then appealed to this court.

In the court below, counsel for the appellant raised two issues, namely:

(1) the respondent did not obtain leave of the court to execute the judgment after more than six years had lapsed from the date of the judgment pursuant to O. 46 r. 2(1)(a) of the Rules of the High Court 1980;

(2) the respondent had incorporated in the bankruptcy notice statute barred interest and under s. 6(3) of the Limitation Act 1953 , (Act 254), the bankruptcy notice is void ab initio.

Before us, the same two issues were raised by the learned counsel for the appellant although he had in the High Court abandoned the first issue when he was satisfied that leave had been obtained under O. 46 r. 2(1)(a) of the Rules of the High Court. As such the learned judge only decided on the second issue.

Before us, counsel for the appellant submitted on both issues. We are not sure why counsel changed his stance. He went on to address us on the second issue first. He submitted that the interest claimed in the bankruptcy notice is barred by s. 6(3) of the Limitation Act. As such the bankruptcy notice is void ab initio because the amount claimed exceeded the actual amount due. Section 6 (3) of the Limitation Act makes the following provisions:

6. Limitation of actions of contract and tort and certain other actions

(3) An action upon any judgment shall not be brought after the expiration of twelve years from the date on which the judgment became enforceable and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.

Counsel for the appellant relied on English authorities. The English provision equivalent to s. 6(3) of the Limitation Act is s. 24 of the English Limitation Act 1980 which provides as follows:

(1) An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.

(2) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.

The learned judge in the court below considered the case of W.T. Lamb & Sons v. Rider [1948] 2 KB 331. In that case the Court of Appeal in its decision made a distinction between suing on a judgment and enforcing it. Relying on the judgment of Scott LJ at pp. 337-338 in that case, the learned judge in the court below came to the following conclusion:

The matter before me relates to bankruptcy action taken by the judgment creditor. In my view, going by the meaning of "writ of execution" in Order 46 rule 1 of the Rules of the High Court 1980, bankruptcy actions do not come within the meaning of writ of execution and there may be no need even to get leave under Order 46 r. 2 to proceed with the bankruptcy actions.

The issue of a bankruptcy notice is not a form of execution (see Re A Bankruptcy Notice (1898) at page 387). (Page 764 of the Supreme Court Practice 1997, vol. 1).

As seems clear to me that "action" under section 6(3)