Kong Ming Bank Bhd. v Sim Siok Eng
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1982 |
| Date | 1982 |
| Year | 1982 |
| Court | Privy Council |
Sarawak - Limitation of action - Contract - Bank granting overdraft facility on written promise to repay on demand - Limitation period applicable - Whether claim for “compensation” for breach of contract - Computation of time -
The defendant was a customer of a bank. In July 1970 desiring to increase his borrowing from the bank he negotiated a fluctuating overdraft facility to a limit of $90,000 and executed a memorandum of charge on two parcels of land as security. In addition to the charge the memorandum contained the defendant's personal promise to repay on demand whatever was owing to the bank by way of principal and interest at the date the demand was made. In June 1971 the overdraft had reached $259,957 exclusive of interest. In 1974 the bank released one of the parcels of land from charge and on November 4, 1974, the defendant made a payment to the bank reducing the overdraft to $194,197. Thereafter the account was dormant except for the regular addition to the debt by the bank of accrued interest. On April 4, 1978, the bank demanded payment of the debt then owing. On April 7 it issued a specially indorsed writ claiming $380,172. In its statement of claim the bank described the sum claimed as the balance of money payable by the defendant to the bank for money lent by the bank to the defendant at his request plus interest. The judge in chambers gave judgment for the bank. On the defendant's appeal the Federal Court, allowing the appeal, held that the bank's claim was statute barred because, the money having been lent under an agreement that it should be payable on demand, article 40 of the Schedule to the Limitation OrdinanceF1 applied and, under that article and the provisions of section 20 of the Ordinance, the period of limitation was three years from the date of the defendant's last payment on November 4, 1974.
On the bank's appeal to the Judicial Committee: —
Held, allowing the appeal, that, although article 40 of the Schedule to the Ordinance considered in isolation would cover the present case, the application of article 94 was not excluded and under its provisions a six-year period of limitation was substituted for any lesser period of limitation where the claim was one for compensation for breach of a contract in writing; that “compensation,” as used in article 94, was a general term denoting the payment to which a party was entitled to claim on account of loss or damage arising from a breach of contract; that, accordingly, the bank's claim was one for compensation for the failure of the defendant to pay the debt in breach of a written contract to which article 94 applied and, therefore, under the provisions of section 20 and articles 40 and 94, the period of limitation was six years from November 4, 1974, and the bank's claim was not statute barred (post, pp. 541D–E, F–H, 542A–D).
The following cases are referred to in the judgment of their Lordships:
Bradford Old Bank Ltd. v. Sutcliffe [
Kwong Yik (Selangor) Banking Corporation Ltd. v. Malayan Daily Express (1926) Ltd. (
Lloyds Bank Ltd. v. Margolis [
Norton v. Ellam (
Tricomdas Cooverji Bhoja v. Gopinath Jiu Thakur (
Vythilinga Pillai v. Thetchanamurti Pillai (
The following additional cases were cited in argument:
Arab Bank Ltd. v. Barclays Bank [
Bian Chiang Bank Bhd. v. Kwong Hing Cheong [
Joachimson (N.) v. Swiss Bank Corporation [
Parr's Banking Co. Ltd. v. Yates [
Rouse v. Bradford Banking Co. Ltd. [
APPEAL (No. 42 of 1980) by Kong Ming Bank Bhd. with leave of the Federal Court of Malaysia from an order (September 5, 1979) of the Federal Court at Kuching (Chang Min Tat and Salleh Abas F.JJ. and Ho J.) by which that court allowed an appeal by Sim Siok Eng, the defendant, from a decision (February 24, 1979) of Seah J. in the High Court in Borneo at Kuching giving judgment for the bank in the bank's action against the defendant by specially indorsed writ claiming payment of $380,172.17 which in its statement of claim the bank specified as:
“… being the balance of money payable by the defendant to the [bank] for money lent by the [bank] to the defendant and for money paid by the [bank] to the defendant as banker for the defendant at his request, and for interest ….”
The facts are stated in the judgment of their Lordships.
Robert Gatehouse Q.C. and Peter Mooney (advocate of Sarawak) for the bank.
Nicholas Lyell Q.C. and Lee Chuan Eng (advocate of Sarawak) for the defendant.
June 14. The judgment of their Lordships was delivered by LORD SCARMAN.
On April 7, 1978, the plaintiff, the Kong Ming Bank Bhd. (“the bank”), issued a specially indorsed writ claiming from the defendant, Sim Siok Eng, the sum of Malaysian dollars $380,172.17, the balance of money lent and interest thereon. The figure was later amended to $421,173.70, being the total of principal and interest owing on March 31, 1978. The only defence of any substance raised by the defendant was the plea that the claim was statute-barred under the provisions of the Limitation Ordinance of Sarawak. The judge in chambers ruled against the plea that the claim was statute barred under the provisions of the Malaysia allowed the defendant's appeal, holding the claim to be barred. The bank now appeals to His Majesty the Yang di-Pertuan Agong.
The defendant was for many years a customer of the bank. On July 25, 1970, his current account was overdrawn in the sum of $3,671.61. Desiring to increase his overdraft facility...
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