(delivering the Judgment of the Board): On April 7, 1978 the appellant, the Kong Ming Bank Berhad ("the bank"), issued a specially indorsed writ claiming from the respondent, Sim Siok Eng, the sum of Malaysian dollars $380,172.17, the balance of money lent and interest thereon. The figure was later amended to $421,173.70, being the total of principal and interest owing on March 31, 1978. The only defence of any substance raised by the respondent was the plea that the claim was statute-barred under the provisions of the Limitation Ordinance of Sarawak. The judge in chambers ruled against the plea and gave judgment for the appellant. The Federal Court of Malaysia allowed the respondent's appeal, holding the claim to be barred. The bank now appeals to His Majesty the Yang di-Pertuan Agong.

The respondent was for many years a customer of the appellant bank. On July 25, 1970 his current account was overdrawn in the sum of $3,671.61. Desiring to increase his overdraft facility, the respondent on August 20, 1970 executed a memorandum of charge in favour of the bank to secure a fluctuating overdraft to a limit of $90,000. The security given consisted of two parcels of land in Kuching. The memorandum included not only the charge but the personal promise by the respondent to repay on demand whatever by way of principal and interest was at the date of demand then owing to the bank. The agreed rate of interest was 12% per annum with a provision enabling the bank by notice to increase or reduce the rate at its discretion.

The respondent drew heavily on the account, the bank allowing the overdraft to exceed the limit of the charge. By June 28, 1971 he was overdrawn in the sum of $259,957.12 inclusive of interest. From that date until November 4, 1974 the account remained dormant, the only activity being the regular periodic debit by the bank of accruing interest.

In October 1974 the bank released upon the respondent's request a parcel of land from charge; and on November 4, 1974 the respondent made a payment of $65,000, thereby reducing the overdraft to $194,957.12.

After November 4, 1974 nothing occurred to the account other than the regular addition by the bank of accrued interest. The respondent neither drew on the account nor paid anything in. On April 4, 1978 the bank's lawyers demanded payment of the balance owing: and three days later, April 7, the bank's writ was issued.

When the appeal was opened, counsel for the appellant informed the Board that he was confining his argument to two submissions:—

(1) that the period of limitation did not begin to run against the bank until April 4, 1978, the date of the demand for payment: alternatively

(2) that, if it should be held that the period of limitation began to run against the bank from November 4, 1974, the date of the last payment by the respondent into the account, the relevant period prescribed by the Ordinance was six years.

If he should succeed on either submission, he succeeds in the appeal and the bank is entitled to judgment for the amount claimed.

The Limitation Ordinance of Sarawak, which is similar to other limitation enactments in Malaysia, is based not on the English Statute but on the Indian legislation, the structure of which it follows closely. Argument by analogy from the English law may result, therefore, in error, whereas the Indian and Malaysian case law is a useful guide to the interpretation of the Ordinance. Section 3 provides that every suit instituted after the period of limitation prescribed for it by the Schedule shall be dismissed, if limitation is set up as a defence. Section 20 provides that when a payment on account of interest or principal is made by a debtor, a new period of limitation, according to the nature of the original liability, shall run from the time of the payment. It is this provision which makes November 4, 1974 a critical date: it has to be substituted for the date when the loan was made.

The schedule to the Ordinance sets out