Back
2024 MarsdenLR 2177
MAGISTRATE COURT TEMERLOH
PACIFIC & ORIENT INSURANCE CO BERHAD – Appellant
Versus
ROSNI ZAHARI & ORS – Respondent
[CB-A72NCvC-4-01/2022]
A claim for recovery of trust property is time-barred if not filed within six years from the date the right of action accrued, as per the Limitation Act 1953.
Headnote:(A) Limitation Act 1953 – Section 22 – Claim for recovery of trust property – Plaintiff sought recovery of RM41,000.00 from Defendants, who were stakeholders of the amount – Court found claim time-barred as it was filed beyond six years from the date the right of action accrued – Defendants acted reasonably in releasing funds to rightful claimants after appeal was struck out. (Paras 15-22)
(B) Stakeholding – Defendants held 30% of judgment sum as stakeholders pending appeal – Upon striking out of appeal, Defendants' role as trustees ceased, and they were correct in releasing funds to clients. (Paras 24-36)
Facts of the case: The Plaintiff, an insurance company, sought recovery from the Defendants, partners in a law firm, for a judgment sum paid to them on behalf of their clients following a motor accident claim. (Paras 1-12)
Findings of Court: The Plaintiff's claim was dismissed as time-barred, and the Defendants acted within their rights in releasing the funds to their clients. (Paras 37)
Issues: Whether the Defendants were stakeholders for the balance 30% of the judgment sum, whether they were trustees for the Plaintiff, and whether the Plaintiff's claim was time-barred. (Paras 13)
Ratio Decidendi: The court ruled that the Plaintiff's claim was time-barred under the Limitation Act 1953, and the Defendants were justified in releasing the funds to their clients after the appeal was struck out. (Paras 15-22)
Result: Claim dismissed with costs awarded to the Defendants.
JUDGMENT
[1] The Plaintiff, an insurance company, sought for the recovery of a sum of RM41,000.00 from the Defendants jointly as partners of a law firm.
[2] A full trial was held. The Plaintiff called Shoba a/p Manickam (No K/P: 811101-07-5634), the Plaintiff's Claims Manager, while Rosni binti Zahari (No K/P: 610411-03-5338) as the first Defendant took the stand as the Defendants' sole witness ("SD1").
Background
[3] A motor accident claim in the Sessions Court of Temerloh ("Sessions Court") was filed by one Mohd Sani bin Abdul Mubin ("Mohd Sani") and Aryanto Daruis bin Ahmad ("Aryanto Daruis") against one Mohd Farid bin Mohd Alif ("Mohd Farid") for a motor vehicle accident on 28 October 2010.
[4] The Plaintiff was the insurer for Mohd Farid.
[5] The Defendants, being partners in a law firm known as Messrs Rosni, Francis Tan & Ho, represented Mohd Sani and Aryanto Daruis.
[6] The Sessions Court judgment dated 7 December 2007 awarded damages to Mohd Sani and Aryanto Daruis for the sum of RM173,676.89 with costs of RM9,149.00, amounting to a total sum of RM182,825.89 (hereinafter referred to as "the judgment sum"). An appeal was filed by the Plaintiff.
[7] Nevertheless, in complying with the said judgment, the Plaintiff being the insurer of Mohd Farid paid the judgment sum to the Defendants being the solicitors of Mohd Sani and Aryanto Daruis on 30 May 2008 on the following conditions:
i. that 70% of the judgment sum is to be released to Mohd Sani and Aryanto Daruis; and
ii. that 30% of the judgment sum to be held in an interest bearing account held by the Defendants as stakeholders pending "all avenues of our (the Plaintiff's) appeal" for the case (hereinafter referred to as "the said 30%").
[8] Not long after, the appeal was struck out by the High Court on 27 March 2009 due to the failure of the Plaintiff to file written submissions as instructed.
[9] The Defendants claim that on the same day, a letter was written to the solicitors of the Plaintiff informing them that the said 30% will be released to Mohd Sani and Aryanto Daruis. As the Defendants did not receive a response, the said 30% was released to Mohd Sani and Aryanto Daruis.
[10] The Plaintiff filed an application to reinstate the appeal via a notice of motion dated 14 April 2009. However, according to SD1, the Defendants were only given notice of this application on 27 April 2009, 1 month after the initial appeal was struck out. The appeal was successfully reinstated on 19 June 2009.
[11] The appeal against the decision of the Sessions Court was finally heard in the High Court on 29 July 2009. The High Court reduced the quantum of damages by RM26,000.00 and RM15,000.00 for Mohd Sani and Aryanto Daruis respectively (accumulated sum of RM41,000.00).
[12] The Plaintiff did not take any action for the return of the accumulated sum of RM41,000.00 from the Defendants until a first letter of demand was sent to the Defendants on 15 February 2019. Subsequently the claim before this Court was filed, not against Mohd Sani and Aryanto Daruis, but against their solicitors, the Defendants in this case.
The Issues
[13] The agreed issues to be tried are as follows:
i. Whether the Defendants are stakeholders for the balance 30% for the judgment sum dated 7 December 2007?
ii. Whether the Defendants are trustees for the Plaintiff?
iii. Whether the Plaintiff's claim is time-barred?
[14] I will first deal with the issue of whether the Plaintiff's claim is time-barred before dealing with the First and Second issues together.
Limitation Period
[15] The Plaintiff is of the view that the Defendants are holding the said 30% as trustees for the Plaintiff. Hence, by virtue of para 22(1)(b) Limitation Act 1953 [Act 254], there is no period of limitation that applies to the Plaintiff's claims towards the Defendants as trustees.
[16] On this issue, I do not agree with the Plaintiff's submission that para 22(1)(b) Limitation Act 1953 applies here. Subsection 22(1) states:
"(1) No period of limitation presc
