The Limitation Act 1953 bars recovery actions outside specified time frames, emphasizing that a lender's remedies may be pursued simultaneously without delay due to foreclosure proceedings.

Introduction

[1] This is an appeal against the decision of the Sessions Court which had, pursuant to O 18 r 19 of the Rules of 2012, struck out the claim filed by the appellant herein (the plaintiff in the Court below) for the recovery of the outstanding amount pursuant to a loan granted by the appellant bank to the respondent borrower.

[2] After having heard the appeal, I delivered my decision dismissing the same (with the broad grounds in support thereof) on 3 February 2016. This judgment, which contains the full reasons for my decision, discusses the law concerning the application of the limitation period to actions seeking to recover shortfall in indebtedness following foreclosure proceedings.

Key Background Facts

[3] The facts may be briefly stated in chronological fashion as follows:

(i) The appellant on 24 October 1990 granted a housing loan of RM117,000.00 to the respondent, enabling the latter to purchase a property ("the said property"), which facility was secured by way of a loan agreement cum assignment executed on 5 April 1991 ("LACA");

(ii) Following a default by the respondent, the appellant, through its solicitors, issued a letter of demand dated 19 October 2001 claiming for the payment of the outstanding debt as of 17 October 2001 which amounted to RM215,749.55;

(iii) As the default persisted, the appellant, through its solicitors on 5 December 2001 issued another letter demanding payment for the amount of RM275,210.42, stated to be outstanding as of 5 November 2001;

(iv) Given the continued failure of the respondent to settle the demand, the appellant filed an originating summons on 16 August 2002 for an order for sale of the said property;

(v) The appellant, however, withdrew the originating summons on 13 March 2003 after having been informed that separate strata title for the said property had been issued;

(vi) Following the availability of a separate title, the appellant thus arranged for a land charge to be created in its favour. The land charge (and its annexure) in respect of the said property was dated 27 April 2012. It is to be observed that this was close to ten years after the withdrawal of the application for an order for sale; (vii) Subsequently, the appellant, through its solicitors, issued a demand notice dated 13 August 2012, claiming the amount of RM532,419.49 as of 31 July 2012;

(viii) The appellant then pursued foreclosure proceedings of the said property and succeeded in selling the same by public auction on 21 November 2013 at RM230,000;

(ix) As the proceeds of the sale could not fully settle the outstanding debt, the appellant proceeded to issue another letter of demand through its solicitors on 23 January 2015 to recover the shortfall of RM330,725.36 as of 14 January 2015;

(x) Given the failure of the respondent to pay the difference, the appellant initiated a writ action on 27 March 2015 at the Sessions Court for recovery of the said shortfall; and

(xi) The Sessions Court struck out the claim under O 18 r 19 of the Rules of 2012 on the ground that the action was time barred under ss 6 and 21 of the Limitation Act 1953 . Hence this appeal.

Summary Of Contentions By Parties

[4] The principal issue for consideration previously at the Sessions Court and presently before this High Court is whether the claim by the appellant for the shortfall is barred by the Limitation Act 1953 . The Sessions Court, as mentioned earlier, ruled in the affirmative in holding that the claim should, as a result, be struck out.

[5] The appellant formulated the argument that as a chargee, it had two causes of action against the respondent borrower and chargor. The first was in respect of the foreclosure proceedings which sought to and did manage to dispose of the said property, and the second was the writ action to demand the outstanding debt still remaining (the shortfall) after the auction.

[6] The appellant submitted that the issue of limitation would be irrelevant to the first-mentioned cause of