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 fat