The plaintiff sued the defendant for $44,250.72 being the amount due and payable to the plaintiff on a current account. The defendant was on or about October 2, 1963 granted overdraft facilities by the plaintiff bank and the amount then granted to the defendant was up to $25,000.

The account became dormant since 1965 and interest at the rate of 10.8% per annum began to accumulate. The overdraft was secured by a charge executed by the defendant's father, since deceased, of a piece of land up to the limit of $25,000 and interest.

On September 26, 1974, the plaintiff obtained an order for sale of the properties charged. On June 15, 1975 the plaintiff filed these proceedings against the defendant for the balance of the amount due after deducting the amount due from the estate of the defendant's father, the guarantor. The estate of the guarantor was administered by the Official Administrator and in compliance with the order of court aforesaid the Official Administrator paid on November 13, 1975 to the plaintiff the sum of $25,000 being the principal guaranteed on the charge and on February 23, 1976 a further sum of $8,562 being the interest due. These payments were made after the issue of the writ by the plaintiff against the defendant. The amount claimed by the plaintiff being the balance due to the plaintiff has been agreed by both parties and the issue before me is whether the plaintiff's claim is statute-barred. The earlier plea of res judicata was abandoned by the defendant.

The plaintiff's counsel argued that time starts running from the date of demand i.e. on January 3, 1973 when the plaintiff sent a notice to the defendant demanding the repayment of the amount due. He quoted Halsbury's Laws of England, 3rd Edition, page 217 which referred to the case of Joachimson v Swiss Bank Corporation [1921] 3 KB 110 where in that case the customer had a credit balance to the bank, it was held that a previous demand was necessary before an action could be maintained and it was held that action in that case was not statute-barred. Counsel argued that applying the principle of that case in reverse, the bank's cause of action will only accrue after demand.

However, it appears that in the case of a loan by the bank it is being treated as any other loan and time starts running after such loan is granted (see Bradford Old Bank v Sutcliffe [1918] 2 KB 833 and Parr's Banking Co Ltd v Yates [1898] 2 KB 460. On the other hand, it would appear that the amount in the credit account of a bank customer cannot be treated as a loan as the customer never intended to hand the money to the bank (see also Bian Chiang Bank Bhd v Kwong Hing Cheong [1978] 2 MLJ 193.

Counsel for the plaintiff also submitted the case of The Kwong Yik (Selangor) Banking Corporation Ltd v Malayan Daily Express (1926) Ltd & Ors; [1933] MLJ 198 where it was held that time does not run against a guarantor until demand is made by the bank. That case is distinguished from the Parr's Bank case as there was a deed of guarantee executed where the guarantor undertakes to pay "of all moneys which may at any time be due to you from the firm on the general balance of its account with you". In the instant case the defendant had not executed any agreement that advances are payable on demand. Counsel's submission on this point therefore fails.

He, however, submitted the alternative if time runs from default then there was acknowledgement on the part of the defendant vide the defendant's letter dated January 14, 1974 (Exhibit P7). The letter is addressed to the plaintiff's solicitors written and signed by the defendant with the heading of Originating Summons No. 109/73 and the parties consisting of the plaintiff and the beneficiaries of the guarantor in which the defendant was one of them. The letter reads as follows:—

"I am one of the respondents abovenamed. I write to request for a postponement of the application to a date sometime in the middle of March 1974 so as to enabl