JUDGEMENT

Alauddin Mohd Sheriff FCJ:

Background Facts

The respondent had, on 28 March 1984 approved a housing loan application by the appellant, who is a Life Policyholder of the respondent, for the amount of RM142,000 with interest thereon at 12% per annum.

By way of security, the appellant, had among others created a first legal charge over his land held under Title No. G.M. 1984, Lot No 11393, Mukim of Kuantan, District of Kuantan, Pahang ('the said land') in favour of the respondent.

The appellant had defaulted in the repayment of the housing loan and respondent thereafter exercised their statutory rights and foreclosed the said land by way of a public auction on 16 March 1992.

The said land was sold for RM80,100 leaving a balance of RM336,012.52 still due and owing from the appellant to the respondent.

Pursuant to cl. 7 of the Annexure to the charge, the appellant, as chargor, had agreed that he shall pay to the respondent the difference between the amount due and the amount realised from the sale and, until such payment, will also pay interest on the balance due at the prescribed rate with monthly rests.

Relying on cl. 7 of the Annexure to the charge, the respondent had through their solicitors, Messrs Azim Ong & Krishnan, demanded for the principal sum and interest remaining due from the appellant by letters dated 18 August 1994 and 11 November 1994. The appellant failed to make payments of the amount demanded thus resulting in the commencement of a suit vide Kuala Lumpur High Court (Commercial Division) Suit No. D5-22-40-95 by the respondent on 17 January 1995.

The respondent's claim was dismissed by the learned Judicial Commissioner, on 15 May 1996. The respondent appealed to the Court of Appeal. The appeal was allowed.

Dissatisfied with the decision of the Court of Appeal, the appellant applied to this court for leave to appeal which was granted on 23 September 2003.

The Order Granting Leave

The order granting leave, posed the following questions for the determination of this court.

Question (1): Whether a claim for balance after sale is a claim founded on contract and therefore subject to the limitation period of six years under s. 6(1)(a) of the Limitation Act 1953 ('the Act') or a claim for money secured by charge on land and thereafter subject to the limitation period of 12 years under s. 21(1) of the Act?

Question (2): If a claim for balance after sale is a contractual claim and therefore subject to the limitation period of six years under s. 6(1)(a) of the Act, when does the cause of action accrue and the limitation period begin?

Question (3): If a claim for balance after sale is a claim for money secured by a charge on land and therefore subject to the limitation period of 12 years under s. 21(1) of the Act:

(i) when does the cause of action accrue and the limitation period begin?

(ii) is the interest component of the claim subject to s. 21(5) of the Act?

(iii) for s. 21(5) of the Act, when does the cause of action for interest in arrears accrue and the six years limitation period begin?

(iv) if the claim for the balance after sale consists of mixture of both principal sum and interest and the claim for interest is barred by s. 21(5) of the Act, is the claim barred altogether?

Question (1)

The primary issue in this appeal concerns the provisions of the Act. It is the appellant's contention that the respondent's claim for the balance after sale is a claim founded on contract and therefore subject to the limitation period of six years under s. 6(1)(a) of the Act whilst the respondent contends that the claim is a claim for money secured by charge on land and therefore subject to the limitation period of 12 years under s. 21(1) of the Act.

Section 6 provides as follows:

6. Limitation of actions of contract and tort and certain other actions.

(1) Save as hereinafter provided the following actions shall not be brought after the expiration of six years from the date on which the cause of action accru