JUDGMENT

Lord Bridge of Harwich:

The respondent was a customer of the appellant bank who, in October 1963, applied for and was granted the facility to overdraw on his account up to a limit of RM25,000. On 21 January 1964 the respondent's father charged certain property, the site of a cinema hall, as security for the son's overdraft up to the agreed limit of RM25,000 and interest thereon. The last transaction on the account by the respondent was on 8 September 1965. The material before the Board does not disclose the precise sum by which the account was then overdrawn, but it was evidently substantially in excess of the agreed limit. The account thereafter remained dormant save for the continuing accrual of interest.

The bank took no steps to effect recovery until their solicitors wrote to the respondent on 3 January 1973 demanding repayment of RM69,250.72, the amount outstanding as at 26 December 1972. This evoked no reply. On 26 December 1973 the bank commenced foreclosure proceedings under the charge by originating summons against the Official Administrator as administrator of the estate of the father, who had since died, to which the respondent and other beneficiaries of the father's estate were made parties. As a result of these proceedings the bank in due course received from the estate RM25,000 due in respect of capital and RM8,562 interest thereon.

Meanwhile on 14 June 1975 the bank commenced proceedings by writ against the respondent. These proceedings came on for hearing before Mohamed Zahir J on 10 January 1980. The amount of the debt as at 26 December 1972, as claimed in the letter of 3 January 1973, had never been disputed by the respondent, and at the outset of the hearing his Counsel specifically agreed the amount of the debt as at that date, subject to liability, in the sum of RM44,250.72 after taking credit for the RM25,000 recovered by the bank in the foreclosure proceedings. The proceedings were then adjourned to 23 January 1980 when the effective hearing took place. The only defence relied on was that the claim was statute-barred.

The basic provisions of the Malaysian Limitation Ordinance 1953 correspond to those in force in England. In particular s. 6 provides a limitation period of six years from the date on which the cause of action accrued in contract, but s. 26(2) provides, so far as material:

Where any right of action has accrued to recover any debt or other liquidated pecuniary claim ... and the person liable or accountable therefor acknowledges the claim ... the right shall be deemed to have accrued on and not before the date of the acknowledgment ... .

In the action the Limitation Ordinance had been pleaded in defence, but neither in the statement of claim nor in the reply had the plaintiff bank pleaded any acknowledgment of the debt. However, in the course of the trial, in re-examination of the only witness called for the bank, there was put in evidence a letter from the respondent dated 14 January 1974 addressed to the solicitors acting for the bank in the foreclosure proceedings in the following terms:

Dear Sirs,

Re: In the High Court in Malaya at Kota Bharu Originating Summons No. 109/73 Oversea-Chinese Banking Corpn. Ltd.

v.

1. The Official Administrator, Malaya (as the administrator of the estate of Wee Sidk Hor, deceased)

2. Wee Choo Luan @ Wee Chui Luan

3. Wee Choo Hong @ Wee Chui Hong

4. Philip Wee Kee Puan @ Wee Kee Phuan

5. Teh Eng Bee @ Tay Eng Bee.

I am one of the respondents above-named. I write to request for a postponement of the application to a date sometime in the middle of March 1974 so as to enable me to raise as initial payment to O.C.B.C. Ltd., Kota Bharu a sum of about $25,000 from the sale of a rubber estate amounting to about 29 acres.

I hope to arrange to sell the property comprised in the charge and from the proceeds thereof the official administrator will be able to pay the balance owing to O.C.B.C. Ltd. I shall be able to disclose to the Court at the next date of heari