A claim for debt may be barred by limitation despite previously acknowledged debt if the claim is not pursued within the statutory period.

S Nantha Balan JCA:

Introduction

[1] This is an appeal by the plaintiffs against the decision of the learned judge of the High Court ("the judge") dated 11 June 2018 dismissing their claim (after a full trial) in Civil Suit No: TWU-22-18-5-2013 ("the 2013 suit"). The 2013 suit was filed on 10 May 2013 and has been deliberately described as such so as to distinguish it from an earlier suit, which was registered as High Court at Tawau Civil Suit No: T-22-12 of 1997 ("the 1997 suit") involving the same parties and which dealt with the same subject matter. The judge's decision in the 2013 suit is reported as Lin Wen-Chih & Anor v. Pacific Forest Industries Sdn Bhd & Anor, [2019] 9 MLJ 227.

[2] For convenience and brevity, we shall refer to the parties according to their respective capacities in the High Court. Hence, the 1st and 2nd appellants shall be referred to individually as "1st plaintiff " and "2nd plaintiff " respectively, and collectively as "the plaintiffs". The 1st and 2nd respondents shall be referred to individually as "1st defendant" and "2nd defendant" respectively, and collectively as "the defendants".

[3] The plaintiffs' claim in the 2013 suit was for the sum of RM16,859,186.65 (RM6,223,241.00 + RM10,635,945.65) (as at 10 May 2013) against the 1st defendant based on the 1st defendant's letter of acknowledgement dated 12 November 1996 and against the 2nd defendant, as guarantor based on the 2nd defendant's letter of undertaking dated 12 November 1996.

[4] In their defence, the defendants raised, inter alia, the issue of limitation and res judicata. According to the defendants, the judge ought to have ruled that the 2013 suit was barred by limitation and res judicata. However, the judge ruled against the defendants on both these issues. The judge found against the plaintiffs on almost all the other issues. Hence, the end result was that the plaintiffs' claim (per the 2013 suit) was dismissed. But the defendants nevertheless proceeded to lodge a Notice of Cross-Appeal dated 3 September 2018 ("the cross-appeal") on the issue of limitation and res judicata.

[5] The defendants' plea of res judicata was predicated on the fact that the plaintiffs had previously filed the 1997 suit and that the issues raised in the 2013 suit were either raised or subsumed in the 1997 suit or at any rate, were issues which could have been, but were not raised in the earlier action. As for limitation it was contended that even if the plaintiffs are entitled to sue for the balance of the outstanding sum either on the basis of breach of a written contract or unjust enrichment, these cause(s) of action are time-barred as the limitation period for the cause of action based on a breach of a contract in writing or for unjust enrichment is six years.

[6] Thus, it was argued that on the facts here, the plaintiffs' action was time- barred either by October 2003 or latest, by 9 November 2003. The significance of these dates are elaborated in the later part of this judgment.

[7] We heard the plaintiffs' appeal (and defendants' cross-appeal) on 23 October 2020. We agreed with some of the judge's findings. However, we disagreed with the judge's findings on the issue of limitation and res judicata. In the result, the defendants' crossappeal was allowed, and the plaintiffs' appeal was dismissed. These are the reasons for our decision.

The Background

[8] The 1st defendant is a private limited company incorporated in Malaysia and operated a sawmill. The 1st defendant was formerly known as Veramex Sdn Bhd The plaintiffs are brothers of Taiwanese nationality. The plaintiffs and their two other brothers were previously the shareholders of the 1st defendant. The plaintiffs were also directors of the 1st defendant. The 2nd defendant was a shareholder of the 1st defendant. The plaintiffs ceased to be directors of the 1st defendant on 12 February 1997.

[9] By a share sale agreement dated 12 November 1996 ("the SSA"), the plaintiffs sold and transferred their shares in