BANK Kerjasama Rakyat (M) SDN BHD v Syarikat MAJU Perak PDF

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User Name: Yi Han Lee Date and Time: Friday, 12 July, 2019 3:46:00 AM MYT Job Number: 92689471

Document (1) 1. BANK KERJASAMA RAKYAT (M) SDN BHD v SYARIKAT MAJU PERAK BHD, [2003] MLJU 357 Client/Matter: -NoneSearch Terms: "New case number" "new action" Search Type: Natural Language Narrowed by: Content Type MY Cases

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BANK KERJASAMA RAKYAT (M) SDN BHD v SYARIKAT MAJU PERAK BHD [2003] MLJU 357 Malayan Law Journal Unreported · 11 pages

HIGH COURT (IPOH) BALIA YUSOF, JC GUAMAN SIVIL NO 22–151–95 10 July 2003

Case Summary Contract — Assignment — Assignment of debts — Whether assignment of contract constituted valid assignment under s 4(3) of Civil Law Act 1956 — Whether there was good notice of assignment to defendant — Whether defendant knew of assignment — Whether defendant bound by assignment of contract Shiv Dev (Mariadass Lock & Ainuddin), Asmuni Bin Awi (Awi & Co)

PENGHAKIMAN The plaintiff is a bank and is suing the defendant a company engaged in among others the building of houses. On or about the 12th September 1984 the defendant entered into two contracts with Ahmad bin Lazim and Faridah bt. Abu Johan both trading under the name and style of Syarikat Alfa (also referred to as the Borrowers). In the first contract, Syarikat Alfa agreed to supply materials and construct drains and roads in a housing scheme called Taman Keramat, Pasir Puteh Ipoh for a sum of RM624,638.50. In the second contract, Syarikat Alfa agreed to construct double storey terrace and double storey semi detached houses in the same housing scheme for a contract sum of RM4,489,187.00. The two contracts are hereinafter referred to as Contract Nos. 1 and 2. The plaintiff has agreed to finance Syarikat Alfa in the sum of RM1.6 million and by a deed of assignment dated 7th December 1984 referred to as Assignment of Contract [*2] between Syarikat Alfa and the plaintiff, Syarikat Alfa has assigned to the plaintiff all monies due and payable by the defendant to Syarikat Alfa in respect of the two contracts. The case of the plaintiff against the defendant is in respect of a sum totaling RM803,029.55 which according to the plaintiff has been paid directly to Syarikat Alfa on the following dates: Dates

Amount

1.

18.3.85

RM 555,823.05

2.

1.4.85

RM 162,206.50

3.

12.7.87

RM 70,000.00

4.

12.10.87

RM 15,000.00 Total: RM 803,029.55

Earlier, on 8.7.87 the plaintiff has obtained a judgment against Syarikat Alfa in Ipoh High Court Civil Suit No. 23508-86 for a sum of RM 2,005,361.28 for the amount owed by Syarikat Alfa up to 31.10.86. The plaintiff has also earlier sued the defendant in Ipoh High Court, Civil Suit No. 23-367-87 for the very same amount. However, this suit

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Page 2 of 5 BANK KERJASAMA RAKYAT (M) SDN BHD v SYARIKAT MAJU PERAK BHD was dismissed on 22.7.94 for want of prosecution. The present suit by the plaintiff against the defendant was filed on 21.9.95. The issues raised by the parties may be summarized as follows: (a) Whether the defendant is bound by the Assignment of Contract dated 7.12.84 and [*3] (b) Whether the plaintiffs claim is time barred. The first issue. By the Assignment of Contract dated 7.12.84 (Pages 2 -- 13 of Enclosure 35) between Ahmad b. Lazim and Faridah bt. Abu Johan both trading under the name and style of Syarikat Alfa (the borrower) on the one part and Bank Kerjasama Rakyat Malaysia Bhd (the plaintiff) of the other part, the borrower has agreed to absolutely assign to the plaintiff all moneys including the retention funds which become due and payable to the borrower under the two contracts which the borrower has earlier agreed with the defendant in respect of the Taman Keramat housing project as stated in the facts of this case. By Clause 13 of the said Assignment of Contract, the borrower has undertaken to notify the defendant, referred to as the Employer in the said Assignment of Contract about the assignment. For ease of reference, Clause 13 of the Assignment of Contract provides:

"13 The Borrower expressly undertakes to notify the employers of the assignment of all moneys which may become due and payable under the contracts Nos. 1 and 2 and arrangements to the Bank and for the consideration aforesaid the Borrower shall issue irrevocable letters of authority to the employer to pay all sums of moneys now or hereafter due and payable to the Borrower under the said contracts No. 1 and 2 to the Bank and all such payments made to the Bank shall be deemed to be payments made towards the credit of the Borrower's account with the Bank."

It is the contention of the defendant that at no time at all did the defendant was ever notified by the Borrower in respect of this Assignment of Contract and as [*4] such any undertaking given by the defendant to the plaintiff was wrongly given and thus not binding on the defendant. I pause here to note that by a letter dated 7.11.84 in Enclosure 35, the agreed Bundle of Documents, the plaintiff has notified the defendant about the loan approved by the plaintiff to the borrowers and further notifying them of the need on the part of the defendant to forward the undertaking in the terms of Clause 13 above stated. This notification was no doubt sent to the defendant by the plaintiff and not by the borrower as stipulated under Clause 13 of the Assignment of Contract, but for the foregoing reasons stated herein, I hold that there was a good notice of the assignment to the defendant. In response to this letter, the defendant had by a letter dated 8.12.84 acknowledged the Assignment of Contract dated 7.12.84 and undertook to pay to the plaintiff by agreeing to "menyalurkan terus bayaran kemajuan bagi kerjakerja kontrak yang dijalankan oleh Syarikat Alfa kepada akaun pinjaman syarikat tersebut kepada tuan, yang mana jumlahnya tidak melebehi RM5,113,825.50 seperti"Assignment of Contract" bertarikh 7hb. Disember 1984 yang ditandatangani oleh Encik Ahmad Lazim dan puan Fridah bt. Abu Johan dengan Bank Rakyat". Again by a letter dated 11.12.84 (Pg. 15 and 16 of Enclosure 35) Messrs Azman Davidson & Co., solicitors for the defendant wrote to the plaintiff informing them that the Assignment of Contract between Ahmad b. Lazim and Faridah bt. Abu Johan with Bank Kerjasama Rakyat Malaysia Bhd has been made known to the defendant and has been registered with the Ipoh High Court. [*5] The said letter was also copied to the defendant enclosing with it a copy of the Assignment of Contract for the defendant's safekeeping. Such is the evidence of the defendant's acknowledgment and awareness of the Assignment of Contract at or around the period of the execution of the said document. The defendant's subsequent conduct in relation to the subject matter further indicates that the undertaking which they have given clearly binds them as evidenced from two further documents at pages 22 and 26 of the Agreed Bundle of Documents. These two letters written by the defendant is a clear admission on their part of their responsibility arising from the undertaking referred to in clause 13 of the Assignment of Contract. From the aforesaid evidence, not only that the defendant has knowledge about the assignment but they have also given an undertaking as per the term of Clause 13 and has Yi Han Lee

Page 3 of 5 BANK KERJASAMA RAKYAT (M) SDN BHD v SYARIKAT MAJU PERAK BHD gone even further by their conduct to indicate that they are bound by the same. There is ample evidence before this court that the defendant has full knowledge about the assignment and bound by the undertaking given. It is certainly too late in the day for the defendant to say through its witness that the letter of undertaking given by the Pengurus Besar was unauthorized and that the Board of the defendant has no knowledge whatsoever about the same. In the same vein, I find that it is beyond comprehension to suggest that whatever payment that has been made by the defendant to the plaintiff arising out of the undertaking was made without the authority of Syarikat Alfa. From the evidence led by the witness, there were two payments made by the defendant to the plaintiff and those payments were made in satisfaction of and pursuant to the undertaking by the defendant. These two [*6] payments for a total sum of RM289,777.84 were made on 10.5.84 and 16.3.87. The sum of RM803,029.55, the subject matter of the plaintiff's claim in the present suit was paid by the defendant to Syarikat Alfa and it is the contention of the plaintiff that this amount was paid in breach of the defendant's undertaking and should rightly have been paid to the plaintiff. These payments were admitted by the defendant in an affidavit filed in respect of Ipoh High Court Civil Suit No. 23-367-87 in an action filed by the plaintiff against them (Pgs. 37 -- 43 Enclosure 35) which sufficiently proves that they were paid in consequence of and arising out of the defendant's obligations pursuant to the undertaking given to the plaintiff. Having perused the Assignment of Contract (Pg. 2 -- 13 of Enclosure 35) I am convinced that the document constitutes a valid assignment under s.4 (3) of the Civil Law Act 1956. Chong Siew Fai CJ in UMW Industries Sdn Bhd v Ah Fook [1996] 1 MLJ 365 commenting on s.4 (3) of the Civil Law Act 1956 has this to say at pg. 370 -371:

"The subsection lays down conditions for absolute legal assignments.It is clear that the conditions are:

(1) that the assignment must be in writing under the hand of the assignor;

(2) that the assignment must be absolute and not by way of change only; and

(3) that express notice in writing must have been given to the person liable to the assignor under the assigned chose in action.

If the assignment fulfills all the above conditions, it would transfer absolutely the chose in action and the right to sue upon it in the assignee's own name."

[*7] Based on the foresaid reasons, I hold that there was a proper and valid notice to the defendant of the assignment subsequent to which an undertaking was duly given to the plaintiff and accordingly I hold that there was an assignment of the borrower's rights to the payments under Contract Nos. 1 and 2 to the plaintiff. The second issue. It is contended by the defendant that the plaintiff's action is time barred and as such the plaintiff is estopped by the provisions of the Limitations Act 1953. The affidavit sworn on behalf of the defendant in respect of Ipoh High Court Civil Suit 23-367-87 was sworn on 1.12.88 which gave an indication to the plaintiff of the defendant's breach of the undertaking. Accordingly the defendant submits that the plaintiffs cause of action against the defendant commences from that date and would expire in December 1994. The suit against the defendant in the instant case was filed on 22.9.95 slightly more than nine months after the limit prescribed under Section 6 of the Limitations Act 1953. In response to this, the plaintiff argues that there was an acknowledgment of the debt by the defendant via two letters dated 30.1.92 and 31.1.92. By the letter dated 30.1.92 (Pg. 44 of Enclosure 35) Messrs Azman Davidson & Co. acting for the defendant, wrote to the plaintiff acknowledging its indebtedness to the plaintiff and proposing for an amicable settlement of the matter. By another letter dated 31.9.92 (Pg. 53 -- 54 of Enclosure 35) the defendant's director one Dato' Syed Azman b. Syed Mohd, wrote to the plaintiff acknowledging its indebtedness to the plaintiff and very much in a similar tone as the earlier letter referred to above. It is pertinent [*8] Yi Han Lee

Page 4 of 5 BANK KERJASAMA RAKYAT (M) SDN BHD v SYARIKAT MAJU PERAK BHD to note that both these letters refer to the Ipoh High Court Civil Suit No. 23-367-87 which was dismissed for want of prosecution. It is further to be noted that both letters acknowledged that the defendant's indebtedness to the plaintiff is in the sum of RM312,984.32 which arises from the Assignment of Contract dated 7.12.84. The dismissal of an action for want of prosecution is no bar to a new action, and it amounts to nothing. (Halsbury Laws of England Vol. 15 pg. 210). Further, such an order is not a decision on the merits and hence it does not operate as res judicata which means that the plaintiff may bring a similar action against the defendant. It is therefore open to the plaintiff to start a fresh action against the defendant which they have accordingly done so by filing the instant suit against the defendant on 22.9.95. (See: Palaniappan v Ramanathan & Ors [1972] 1 MLJ 227) Relying on the provisions of Section 26 (2) of the Limitations Act 1953, the plaintiff submits that the present action is well within time and they are not statute barred under Section 6 of the same Act. For convenience it would be useful to reproduce Section 26 (2) of the Limitations Act 1953 which provides as follows: "26 (2) Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment:

Provided that a payment of a part of the rent or interest due at any time shall not extend the period for claiming the remainder of the rent or interest then [*9] due, but any payment of interest shall have effect, for the purposes of this subsection only, as if it were a payment in respect of the principal debt."

Acknowledgment by a debtor of statute barred debt may be made either expressly or impliedly and all that is required of a debtor is that he should recognize the existence of the debt. Again, if a debt is acknowledged, it is immaterial that the amount of the debt is not expressed in the acknowledgment or that the correctness of the amount claimed is disputed in the acknowledgment. The amount of the debt must be proved at the trial (Halsbury's Laws of England, Third Edition Vol. 24 Pg. 116.) In my view, the two letters sent to the defendant by the solicitors and the defendant itself is sufficient acknowledgment of debt by the defendant. Having perused the content of the said two letters, I have no hesitation in holding that there was an unequivocal admission of a subsisting debt at the time when the same were sent to the plaintiff. The English Court of Appeal in Good v Parry [1963] 2 ALL ER 59 held that for there to be an acknowledgment of a claim within the English provision, there must be an admission that there is a debt or other liquidated amount outstanding and unpaid and in Consolidated Agencies Ltd v Bertram Ltd [1965] AC 470, the Privy Council at pg. 482 approved the following statement of an author on the law of limitations: "To take a demand out of the Statute of Limitation on the ground of an acknowledgment, the language of the debtor must amount to an unequivocal admission of a subsisting debt, that is subsisting at the time of the acknowledgement."

[*10] In holding that the letter was not an unequivocal admission of a debt subsisting at the time of the acknowledgment in Wee Tiang Teng v Ong Choong Hooi & Anor [1978] 2 MLJ 54, Suffian LP referred to a passage in the judgment of Lord Denning MR in Good v Parry (Supra) wherein it was stated: "A person may acknowledge that a claim has been made against him without acknowledging any indebtedness. It is clear that what the limitations Act, 1939 means is 'acknowledges the debt or other liquidated amount'... there must be an admission that there is a debt or other liquidated amount outstanding and unpaid. Even though the debtor says in the same writing that he will never pay it, nevertheless it is a good acknowledgment. In order to be an acknowledgment, however, the debt must be quantified in figures, or, at all events, it must be liquidated in the sense that it is capable of ascertainment by calculation, or by extrinsic evidence, without further agreement of the parties...

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Page 5 of 5 BANK KERJASAMA RAKYAT (M) SDN BHD v SYARIKAT MAJU PERAK BHD

No doubt a promise in writing by a debtor to pay whatever sum is found due on taking an account is a good acknowledgment today... provided always that the amount is a mere matter of calculation from vouchers, or can be ascertained by extrinsic evidence, and is not dependent on the further agreement of the debtor."

Turning to the two letters again, the acknowledgment of a debt to the tune of RM312,984.32 by the defendant at the time of the acknowledgment at the date of the said two letters, triggers the operation of Section 26 (2) of the Limitations Act 1953. These two letters were admitted in evidence and is material in determining whether or not there was an acknowledgment of the debt in this case. (Overseas Chinese Banking Corpn Ltd v Philip Wee Kee Puan [1984] 2 MLJ 1.) An acknowledgment of a statute barred debt does not raise a new claim or a new cause of action but constitutes the accrual of right of action to recover the debt: (Busch v Stevens [1962] 1 ALL ER 412.) The plaintiff has earlier sued [*11] the defendant vide Ipoh High Court Civil Suit 23-367-87 which was dismissed for want of prosecution. This does not preclude the plaintiff from proceeding against the defendant again and with the application of s. 26 (2) of the Limitations Act 1953, there has accrued a right of action to the plaintiff against the defendant. Accordingly, I hold that the plaintiff's action is not time barred and as stated earlier in the preceding paragraphs, res judicata does not apply. In the plaintiff's pleading, allegations of fraud were made against the defendant, however no evidence was ever led in the course of the hearing. Similarly no submissions were made by the counsel for the plaintiff. Be that as it may, I find that the plaintiff has failed to prove any fraud and the onus is on the plaintiff to prove it beyond reasonable doubt (Saminathan v Pappa [1981] 1 MLJ 121, Boonsom Boonyanit v Adorna Properties Sdn. Bhd [1997] 2 MLJ 62). Besides fraud, the plaintiff has also pleaded breach of constructive trust, misrepresentation and negligence upon which this court finds no evidence at all being led by the plaintiff and it is evidently clear to me that the plaintiff has abandoned these issues. Counsel for the plaintiff has certainly in my view adopted and taken the right stand in submitting before me that the main issues involved in the subject matter would be on the assignment and the issue of limitation and res judicata to which I respectfully agree. [*12] Accordingly and for the reasons above stated, I give judgment for the plaintiff with costs and with interest at 8% per annum on the judgment sum from the date of judgment until date of realization.

End of Document

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