Arwin Shant A/L Murali Krishnan v Misc Berhad (WA-11ANCvC-50-10/2025)

ARWIN SHANT A/L MURALI KRISHNAN

VIGNESWARY A/P SIMMACHALAM

S. VIJAYALACHEMY A/P R. SUBRAMANIAM (NRIC NO: 660128-10-5746) …APPELLANTS AND MISC BERHAD [COMPANY NO: 19681000580 (8178-H)] …RESPONDENT IN THE MAGISTRATE COURT AT KUALA LUMPUR IN FEDERAL TERRITORIES OF KUALA LUMPUR WRIT SUMMONS NO.: WA-A72NCvC-5626-11/2024 BETWEEN MISC BERHAD [COMPANY NO: 19681000580 (8178-H)] …PLAINTIFF AND 01/04/2026 11:34:44 WA-11ANCvC-50-10/2025 Kand. 33 S/N sy/KVfaICkeb39ANRaf09g

ARWIN SHANT A/L MURALI KRISHNAN

VIGNESWARY A/P SIMMACHALAM

S. VIJAYALACHEMY A/P R. SUBRAMANIAM (NRIC NO: 660128-10-5746) …DEFENDANTS

This appeal turns upon the proper construction of a cadetship agreement and, in particular, the consequential question of when a cause of action for breach of that agreement accrued for the purposes of the Limitation Act 1953.

The appellants, who were the defendants in the court below, appeal against the decision of the learned Magistrate dismissing their application to strike out the respondent's statement of claim pursuant to Order 18 rule 19(1) (b) and (d) of the Rules of Court

It is contended that the learned Magistrate erred in law in permitting the action to proceed notwithstanding that, on the face of the pleadings, it is plainly statute-barred and discloses no reasonable cause of action. S/N sy/KVfaICkeb39ANRaf09g

The respondent commenced the present action on 13 November

The pleaded cause of action is founded upon an alleged breach of contract which, on the respondent’s own case, occurred on 17 October 2017.

The appeal therefore raises a narrow, but important, point of law. The question is whether, as the learned Magistrate held, the respondent was entitled, by deferring the issuance of a demand, to postpone unilaterally the accrual of its cause of action until 28 December 2023; or whether, on the pleaded facts, the cause of action accrued at the point of the admitted contractual breach in October 2017, with the result that the claim was already statute-barred when proceedings were commenced.

The material facts are not in dispute and are apparent from the statement of claim itself. On 10 November 2011, the respondent, MISC Berhad, entered into a cadetship agreement ("the Agreement") with the first appellant. Under the Agreement, the respondent undertook to sponsor and fund the first appellant's maritime training. In consideration of that sponsorship, the first appellant agreed to complete the prescribed training and thereafter serve the respondent for a stipulated period. The second and third appellants executed the Agreement as joint and several sureties.

Clause 3.1.2 of the Agreement required the first appellant to complete the training programme and obtain the Class 1 Certificate of Competency. The first appellant commenced training but, after S/N sy/KVfaICkeb39ANRaf09g proceeding on approved leave on 19 July 2017, failed to report for duty upon the expiry of that leave on 17 October 2017, without obtaining any extension. On the respondent’s own pleaded case, that failure constituted a breach of the Agreement.

Despite that alleged breach, the respondent took no immediate steps to enforce its contractual rights. No demand was issued at the material time. It was only some six years later, by a letter dated 28 December 2023, which was deemed served on 2 January 2024, that the respondent issued a formal demand for reimbursement of the training costs.

Following the non-payment of the demanded sum, the respondent commenced these proceedings on 13 November 2024 by the filing of a writ of summons and statement of claim. The statement of claim pleads expressly that the first appellant failed to report for duty on 17 October 2017, failed to complete the training programme, and thereby acted in breach of the Agreement. Those allegations are set out at paragraphs 10 to 12 of the statement of claim. It is further pleaded that, as a direct consequence of that breach, the respondent suffered loss in the form of the training costs expended on the first appellant. No subsequent or continuing breach is pleaded. The pleaded cause of action is founded squarely and exclusively upon the alleged breach said to have occurred in October 2017.

The appellants accordingly applied to strike out the statement of claim under Order 18 rule 19(1) (b) and (d) of the Rules of Court 2012 on the grounds that it was scandalous, frivolous, vexatious and S/N sy/KVfaICkeb39ANRaf09g an abuse of the process of the court, and, in any event was statute-barred. The respondent resisted the application by relying on clause 7.3 of the Agreement, which provides that reimbursement of training costs is payable “upon demand”, and contended that the cause of action accrued only upon the issuance of the demand letter deemed served in January 2024. The learned Magistrate accepted that contention and dismissed the striking-out application. It is against this decision that the appellants now appeal.

The respondent's case is predicated on a specific interpretation of clause 7.3 of the Agreement, which provides that any reimbursement of training costs is payable "upon demand". The respondent argues that this clause renders liability contingent rather than immediate. On this footing, the respondent submits that no enforceable right to sue arose unless and until a formal demand was issued. As the demand was only made by letter dated 28 December 2023, deemed served on 2 January 2024, it is said that the limitation period under section 6(1) (a) of the Limitation Act 1953 could not have commenced earlier. The proceedings commenced in November 2024 are therefore said to be well within time.

To support this position, the respondent relies on a line of authority beginning with the Federal Court decision in The Pacific Bank Bhd (sued as guarantor) v Kerajaan Negeri Sarawak [2013] MLJU

The respondent submits that the case establishes the principle that where a contract requires the occurrence of a specific event, such as the making of a prior demand before liability arises, S/N sy/KVfaICkeb39ANRaf09g compliance with that requirement is a necessary precondition to the accrual of action. The respondent relies in particular on the following passages: “[88] Firstly, the language of the letter of guarantee is vital; that should a guarantee prescribes that a certain event must happen before a cause of action accrues, for example, the making of a prior demand, then that has to be complied with before a cause of action can arise and a right to sue accrues; in other words, it is our view that whether a prior demand is a condition precedent to the creation of liability in a guarantee, depends on the precise terms of the contract. (see YM Orang Kaya Menteri Paduka Dato’ Wan Ahmad Isa Shukri Wan Rashidi v. Kwong Yik Bank Bhd (2) [1989] 2 CLJ 1288; [1989] 1 CLJ (Rep) 187; [1989] 3 MLJ 155). (emphasis added) [89] Thus in the instant appeal if the language of the letter of guarantee is clear ie, where the said clause only prescribes a time limit for a demand to be made before a cause of action can arise, so be it. Its plain and ordinary meaning must be given.” [Emphasis is mine]

The respondent further submits that this approach has since been applied in cases involving materially identical cadetship agreements. In particular, reliance is placed upon the High Court decision in MISC Berhad v Anandaraj a/l S Thavaraj & Ors [2024] MLJU 3389. In that case, it was held that upon the cadet’s resignation, no obligation to reimburse training costs arose unless and until a demand was made by the plaintiff. The respondent relies on the following passage: S/N sy/KVfaICkeb39ANRaf09g "[21] Upon his resignation, in this Court's considered view, neither of the Respondents were obligated to pay any compensation sum unless and until it was so demanded by the Appellant. The condition of 'upon demand' or 'upon MISC making demand' meant that the Appellant must undertake that action before any of the Respondents were obligated to fulfil its contractual duties of according payment of the compensation sum." [Emphasis is mine]

Finally, the respondent submits that where limitation is a defence, the appellants therefore bear the burden of establishing that the claim is time-barred. It is argued that the appellants have failed to discharge that burden, particularly in circumstances where the existence and date of the demand letter are not in dispute. The respondent further contends that limitation is a mixed question of law and fact which is generally unsuitable for determination on a striking-out application, and that the issue ought properly to be left for determination at trial after the evidence has been fully ventilated.

The appellants' case proceeds from the settled principle of the common law that, in an action founded on contract, a cause of action accrues at the date of breach. They submit that the "upon demand" wording in clause 7.3 of the Agreement does not operate as a condition precedent to the existence of liability. At most, it governs the timing of payment or the procedural enforcement of an obligation that has already arisen. On the appellants’ case, the respondent’s right to sue crystallised the moment the first appellant failed to report S/N sy/KVfaICkeb39ANRaf09g for duty on 17 October 2017. From that date, all the elements of a complete and enforceable cause of action were present.

In support of this proposition, the appellants rely on the classic exposition of the concept of a cause of action by the Federal Court in Nasri v Mesah [1970] 1 LNS 85. In that case, Gill FJ (as he then was) explained that a cause of action comprises the entire set of facts which a plaintiff must prove in order to succeed, and that time begins to run from the earliest date on which the action could have been brought. His Lordship stated: "A 'cause of action' is the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact which, if traversed, the plaintiff must prove in order to obtain judgment (per Lord Esher M.R. in Read v Brown). In Reeves v Butcher Lindley L.J. said: This expression, ‘cause of action’, has been repeatedly the subject of decision, and it has been held, particularly in Hemp v Garland, decided in 1843, that the cause of action arises at the time when the debt could first have been recovered by action. The right to bring an action may arise on various events; but it has always been held that the statute runs from the earliest time at which an action could be brought.” [Emphasis is mine]

Applying that principle, the appellants submit that time began to run on 17 October 2017, being the date on which the pleaded breach occurred and the earliest point at which the respondent could have commenced proceedings. The "upon demand" clause, they argue, cannot be construed as conferring upon the respondent a unilateral S/N sy/KVfaICkeb39ANRaf09g discretion to postpone indefinitely the accrual of its cause of action. In another word, clause 7.3 does not defer the coming into existence of the cause of action, but merely regulates the machinery of enforcement or the timing of payment after liability has arisen.

This distinction between the accrual of liability and the taking of procedural steps to enforce that liability is, the appellants submit, well supported by authority. Reliance is placed upon the English decision in Coburn v Colledge [1897] 1 QB 702, where it was held that, in the case of a solicitor’s costs, the cause of action arises when the work is completed, and therefore the Statute of Limitations begins to run from that time, and not from the expiration of a month from the delivery of the bill of costs. By analogy, the appellant submits that time runs from the earliest date on which the respondent could have brought the action, and not from the later issuance of a demand.

The appellants further submit that the respondent has failed to discharge its legal burden in relation to limitation. Although limitation is pleaded as a defence, the authorities establish that the burden of proving that a claim falls within the statutory limitation period rests upon the claimant. In Pang Yeow Chow v Advance Specialist Treatment Engineering Sdn Bhd [2015] 1 MLJ 490, the Court of Appeal stated: "[13] It is trite that judgment must reflect the pleadings and more so when 'limitation' is taken as an issue. Learned authors of Clerk & Lindsell on Torts, 20th edn at p 2064 had this to say: S/N sy/KVfaICkeb39ANRaf09g As limitation is a defence, one might have expected the burden of proof to lie with the defendant. But the authorities established that the burden of proving that the case falls within the limitation period is on the claimant." [Emphasis is mine]

In the present case, the appellants point to the respondent’s failure, notwithstanding its reliance on clause 7.3 and the alleged issuance of a letter of demand, to exhibit either the Agreement or the demand letter in its affidavit filed in reply to the striking-out application. In the absence of any evidential material to support the respondent’s asserted postponement of accrual, the pleaded facts must be taken at face value. On those pleaded facts alone, the appellants submit, the claim is manifestly time-barred.

The appellants also seek to distinguish the authority relied upon by the respondent. They submit that MISC Berhad v Anandaraj (Supra) is a decision of coordinate jurisdiction and is not binding on this Court. More fundamentally, in that case, the relevant agreement was placed before the court and subjected to detailed contractual construction. By contrast, in the present case, the learned Magistrate was asked to determine the legal effect of a contractual clause which had not been exhibited or proved. That, the appellants contend, constituted an error of law.

Finally, the appellants invoke the public policy underpinning limitation statutes. As observed in Lim Ban Hooi & Anor v. Malayan Banking Berhad [2018] MLJU 510, such statutes are S/N sy/KVfaICkeb39ANRaf09g intended to promote certainty and finality, and to protect defendants from the injustice of stale claims. To construe an "upon demand" clause as deferring the commencement of the limitation period until a plaintiff chooses to issue a demand would, the appellants argue, permit unilateral and potentially indefinite extension of limitation of time. Such an interpretation would undermine the very purpose of the Limitation Act 1953 and leave the defendants exposed to prolonged and indeterminate uncertainty.

The principles governing striking-out applications are well settled. Although the jurisdiction is to be exercised sparingly, the Court is not only entitled but duty-bound to intervene where a claim is plainly unsustainable in law. Where it is apparent on the face of the pleadings that an action is statute-barred, to permit it to proceed to trial would serve no legitimate purpose and would constitute a misuse of judicial resources. In such circumstances, early termination is not merely permissible but necessary.

The determinative issue in this appeal is the date upon which the respondent’s cause of action accrued. Resolution of that question requires the Court first to ascertain the general rule governing accrual in actions founded on contract, and thereafter to consider whether the particular terms of the Agreement displace or modify that rule. S/N sy/KVfaICkeb39ANRaf09g

Section 6(1) (a) of the Limitation Act 1953 provides that an action founded on contract shall not be brought after the expiration of six years from the date on which the cause of action accrued. The statutory focus is therefore not upon when a demand is made or proceedings are commenced, but upon when, as a matter of law, the cause of action accrued. The material provision states: 6 Limitation of actions of contract and tort and certain other actions

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 accrued, that is to say –

actions founded on a contract or on tort;

actions to enforce a recognisance;

actions to enforce an award;

actions to recover any sum recoverable by virtue of any written law other than a penalty or forfeiture or of a sum by way of penalty or forfeiture [Emphasis is mine]

Accordingly, the critical inquiry is not when the respondent elected to issue a demand, but when all the facts necessary to entitle it to sue had come into existence.

It is a fundamental principle of law that a cause of action founded on contract accrues on the date of breach. It is the occurrence of S/N sy/KVfaICkeb39ANRaf09g breach that renders an action possible. The right to sue arises at that moment. The classic formulation of this principle appears in Nasri v Mesah (Supra), where Suffian FJ stated: “A cause of action is complete as soon as there is in existence a person who can sue and another who can be sued, and when all the facts have happened which are material to be proved to entitle the plaintiff to succeed.”

That being the default position, it is nevertheless open to contracting parties, by clear and unambiguous contractual language, to modify the ordinary rule as to accrual. However, any such departure from the general principle is not to be lightly inferred merely from the presence of an “upon demand” or similar provision. Absent express words postponing the coming into existence of the right itself, such clauses are ordinarily construed as regulating the timing or manner of enforcement of an accrued right, and not as deferring the accrual of the cause of action. To hold otherwise would permit the limitation period to be suspended at the unilateral election of one party, a result which the law does not readily countenance.

This proposition is consistent with the decision in The Pacific Bank, which affirms that parties are, in principle, free to regulate the accrual of causes of action and thereby alter the ordinary operation of the Limitation Act 1953. However, the court must be astute to distinguish between provisions which postpone the coming into existence of a legal right and those which merely regulate the enforcement of that right. As Zainun Ali FCJ observed: “[96] In this connection there is a need to distinguish between limiting a right and limiting the enforcement of that right. S/N sy/KVfaICkeb39ANRaf09g [109] It is commonplace for parties to a contract to regulate or modify their rights in the event of breach and the rights of accrual of any cause of action in any way they deem fit. This trite principle is best illustrated in the Privy Council decision of Loh Wai Lian v. SEA Housing Corporation Sdn Bhd [1987] 1 LNS 37; [1987] 2 MLJ 1, which was approved by the Federal Court in Insun Development Sdn Bhd v. Azali Bakar [1996] 2 CLJ 753; [1996] 2 MLJ 188 and subsequently in the Court of Appeal case of NVJ Menon v. The Great Eastern Life Assurance Company Ltd [2004] 3 CLJ 96; [2004] 3 MLJ 38.” [Emphasis is mine]

Against this legal backdrop, the Court must determine whether clause 7.3 of the Agreement, which provides for payment "upon demand", operates to postpone the accrual of the cause of action itself, or whether it merely regulates the manner or timing of enforcement.

That question falls to be resolved by construing the Agreement as a whole. The governing approach was authoritatively restated by the Federal Court in The Pacific Bank (Supra). The Court here emphasised that whether a prior demand constitutes a condition precedent to the accrual of a cause of action depends entirely upon the precise language and structure of the contract. The relevant passages below are instructive: “[88] Firstly, the language of the letter of guarantee is vital; that should a guarantee prescribes that a certain event must happen before a S/N sy/KVfaICkeb39ANRaf09g cause of action accrues, for example, the making of a prior demand, then that has to be complied with before a cause of action can arise and a right to sue accrues; in other words, it is our view that whether a prior demand is a condition precedent to the creation of liability in a guarantee, depends on the precise terms of the contract. (see YM Orang Kaya Menteri Paduka Dato’ Wan Ahmad Isa Shukri Wan Rashidi v. Kwong Yik Bank Bhd (2) [1989] 2 CLJ 1288; [1989] 1 CLJ (Rep) 187; [1989] 3 MLJ 155). (emphasis added) [89] Thus in the instant appeal if the language of the letter of guarantee is clear ie, where the said clause only prescribes a time limit for a demand to be made before a cause of action can arise, so be it. Its plain and ordinary meaning must be given. [94] Thus the liability of the guarantor depends very much on the language of that instrument and the nature of the liability it creates.” [Emphasis is mine]

A guarantee is, by its nature, a secondary obligation. The guarantor’s liability does not arise from his own default, but from the default of the principal debtor, and only in the manner and to the extent stipulated in the guarantee instrument. It is therefore well established that, in the context of guarantees, parties may legitimately provide that liability itself shall arise only upon the occurrence of a specified event, such as the making of a prior demand.

It is this feature of guarantee liability which explains the reasoning in The Pacific Bank. The Federal Court was careful to frame its analysis by reference to “the language of the letter of guarantee” S/N sy/KVfaICkeb39ANRaf09g and repeatedly emphasised that whether demand was constitutive of liability depended upon the nature of the secondary obligation thereby created.

Properly understood, The Pacific Bank does not lay down a general proposition that an “upon demand” clause postpones the accrual of a cause of action in all contractual contexts. Rather, the decision affirms a narrower and more classic principle that in the specific context of guarantees, where liability is secondary and wholly dependent on the terms of the instrument, the making of a demand may, if the language so provides, be constitutive of liability itself. Outside that context, and absent clear contractual language indicating that no legal right arises until demand, an “upon demand” clause is ordinarily to be construed as regulating the enforcement of an accrued obligation, not as deferring the accrual of the cause of action.

Accordingly, the Court must identify the true nature of the obligation created by the present Agreement. If the parties had clearly agreed that no liability, and hence no cause of action, would arise unless and until a demand was made, the Court would be bound to give effect to that bargain. Conversely, absent such clarity, the general rule applies.

Clause 7.3 of the Agreement, as pleaded, provides that upon the respondent making a demand, the cadet and/or the sureties shall S/N sy/KVfaICkeb39ANRaf09g immediately pay the compensation sum demanded. The clause reads:

7.3 Upon the COMPANY making a demand to the CADET and/or the SURETIES to pay the COMPENSATION SUM and/or any other costs as provided for under Clause 7.2 above, pursuant to any provision of this AGREEMENT, the CADET and/or the SURETIES shall immediately pay to the COMPANY the full COMPENSATION SUM as well as such other costs, as the case may be, as demanded by the COMPANY. [Emphasis is mine]

The respondent did not, however, exhibit the Agreement in response to the striking-out application. The only other pleaded provision is clause 6. This clause reads:

MISCONDUCT AND/OR NEGLIGENCE AND/OR DEFAULTS BY CADET IN COLLEGE OR OTHER INSTITUTIONS AND/OR SEA

6.1 During the period of the CADET’s COURSE OF TRAINING, if the CADET shall at any time be guilty of any one or more of the following:

6.1.4 Abandon the COURSE OF TRAINING before completion without the consent of the COMPANY;

6.1.5 Shows indifference and/or lack of diligence and/or is negligent in his studies at college or other institutions and/or in his assigned duties at sea;

6.1.7 Commits any breach of the provisions of this AGREEMENT; S/N sy/KVfaICkeb39ANRaf09g the COMPANY shall be entitled to demand that the CADET withdraw from the COURSE OF TRAINING and thereupon he shall cease to have any claim to any benefit of this AGREEMENT or under any term or condition of the COMPANY applicable to the CADET and the CADET shall be deemed to have breached this AGREEMENT and the CADET and the SURETIES shall be jointly and severally liable for themselves, their heirs, executors or assigns to pay the COMPENSATION SUM to the COMPANY upon demand. [Emphasis is mine]

Clause 6 defines the acts and omissions constituting misconduct, negligence, or default on the part of the cadet. Of particular significance is the provision that upon the occurrence of such events, the cadet “shall be deemed to have breached this Agreement”, and that the cadet and the sureties shall thereafter be jointly and severally liable to pay the compensation sum.

Clause 6 therefore performs two critical functions. It defines the event of breach and it identifies the source of liability. The deeming language is clear and operative. Once the specified defaults occur, breach is complete by operation of the contract itself.

Clause 7.3, which provides for payment “upon demand”, must be read consistently with this contractual architecture. It does not purport to redefine the event of breach, nor does it postpone the coming into existence of liability. Rather, it presupposes an accrued liability and regulates the manner in which payment may be called for following demand. S/N sy/KVfaICkeb39ANRaf09g

Read together, clauses 6 and 7 do not support the respondent’s contention that liability itself is contingent upon demand. Rather, they reveal a contractual structure in which liability arises upon breach, while demand operates as the means by which payment of that liability is called for. Importantly, there is no express language in clause 7.3 postponing the accrual of the cause of action until demand, nor any formulation of equivalent effect. As the Federal Court cautioned in The Pacific Bank, such an intention must be stated clearly and unambiguously. It cannot be inferred from silence or implication.

This conclusion accords with the observation of the Privy Council in Loh Wai Lian v SEA Housing Corporation Sdn Bhd [1987] 2 MLJ 1, that the accrual of a cause of action depends not upon labels, but upon the true nature of the obligation as revealed by the contract properly construed. This relevant passage is thus instructive “…depends not upon the label which was put upon the sums which the respondent became obliged to pay, but upon what, on the proper construction of the contract, was the true nature of the respondent’s obligation”.

Applying that approach here, clause 6 is decisive. Liability is not stated to arise upon demand. It arises upon breach, which is deemed to occur once the specified acts of default take place. The reference to payment “upon demand” appears only after liability has already crystallised. S/N sy/KVfaICkeb39ANRaf09g

To accept the respondent’s submission would be to invert this contractual logic and to treat clause 7.3 as retroactively controlling the accrual of liability already defined in clause 6. Such a construction would do violence to the plain wording of the Agreement.

Accordingly, the Court is satisfied that the Agreement does not evince any intention to depart from the general rule. Demand is a condition precedent to enforcement, not to liability or to the accrual of the cause of action. Once the cadet committed the pleaded acts of abandonment or default under clause 6, the cause of action accrued at that point in time. The limitation period began to run from the date of breach, not from the date of any subsequent demand. Any demand made thereafter could not suspend, interrupt, or reset the running of the time under the Limitation Act 1953.

For these reasons, the respondent’s action, having been commenced more than six years after the date of breach, is statute-barred.

Even if, contrary to my findings on limitation, the respondent were correct in contending that the action was brought within time, the claim would in any event face a further and insurmountable difficulty in equity. The equitable doctrine of laches may operate to bar relief notwithstanding that an action is brought within the statutory limitation period. That jurisdiction is expressly preserved by section 32 of the Limitation Act 1953, which provides: S/N sy/KVfaICkeb39ANRaf09g [32] Acquiescence Nothing in this Act shall affect any equitable jurisdiction to refuse relief on the ground of acquiescence or otherwise.

The authorities established that where delay is inordinate and unexplained, and where it would be unjust to permit enforcement, the Court is entitled to refuse relief. The focus of the inquiry is not the mere lapse of time, but whether the claimant’s conduct, viewed in all the circumstances, renders it inequitable to grant the relief sought.

In Saad Marwi v Chan Hwan Hua [2001] 3 CLJ 98, the Court of Appeal dismissed a claim on the ground of laches notwithstanding that it was not statute-barred. The Court reaffirmed the principle that the equitable jurisdiction is engaged where the delay is both inordinate and unexplained, and where it would be unjust to the defendant to allow the claimant to enforce his rights after such delay. Significantly, the Court held that even relatively short periods of delay may suffice, depending on the circumstances. The Court observed: “Returning to the factual narrative, there is only one last event that calls for mention. It is that the writ in these proceedings was issued out on 22 May1981. Now, if one takes the one-year period prescribed by the agreement as the commencement point, it means that the respondents did nothing to enforce their rights, if any, against the appellant for more than four years after the accrual of a cause of action. If one takes the later date of 23 October 1979, when the appellant returned the deposit, then nothing was done about 19 months. S/N sy/KVfaICkeb39ANRaf09g If in M Ratnavale v S Lourdenadin (supra) delay of fourteen months was fatal, it must come as no surprise to the respondents that I find their conduct most dilatory. The appellant’s conduct of returning the deposit was the clearest evidence of an intention to repudiate his obligations, if any, under the agreement. The respondents’ continued inaction thereafter necessarily attracts the inference of disinterestedness. In my judgment, it would be positively unjust to permit the respondents to succeed in their action against the appellant. The appellant was accordingly entitled to have the claim dismissed on the ground of the respondents’ laches.” [Emphasis is mine]

More recently, in Yeoh Weoi Leong & Ors v BM City Realty & Construction Sdn Bhd [2023] MLJU 2338, the High Court struck out the plaintiffs’ actions on the ground of laches where there had been delays of between five years four months and five years eleven months. The Court held that such delays were sufficient to justify refusal of relief under section 32 of the Limitation Act 1953, notwithstanding that the actions were brought within time, in the following passage: “[26] There was a delay of at least 5 years and 11 months by the Remaining Plaintiffs (except the 34th and 35th Plaintiffs) in bringing this action. With regard to the 34th and 35th Plaintiffs, there was a delay of at least 5 years 4 months by them in bringing this action. This is sufficient ground, in my view, to refuse the Remaining Plaintiffs’ claim pursuant to section 32 of the Limitation Act 1953. [27] section 32 of the Limitation Act 1953 reads: ‘32 Acquiescence S/N sy/KVfaICkeb39ANRaf09g Nothing in this Act shall affect any equitable jurisdiction to refuse relief on the ground of acquiescence, laches or otherwise.’ [28] section 32 of the Limitation Act 1953 “permits the equitable defence of laches to defeat the common law remedy of damages”. By reason of laches, the equitable relief (i.e. specific performance) as prayed for by the Remaining Plaintiffs at paragraphs 36(b) to (g) of the Amended Statement of Claim ought to be disallowed.” [Emphasis is mine]

The underlying rationale of laches is well settled. Equity does not intervene merely because time has passed, but because delay has rendered it inequitable to grant relief. As the authorities consistently emphasise, equity aids the vigilant and not those who sleep on their rights. The inquiry is necessarily fact-sensitive and directed to whether the claimant’s delay has been inordinate and inexcusable, and whether it has caused prejudice to the defendant or rendered the grant of relief unjust.

In the present case, the cause of action accrued upon the cadet’s abandonment of the course of training, at which point liability crystallised under clause 6 of the Agreement. From that moment, the respondent was fully entitled to assert its rights. Yet, it took no steps to do so for a prolonged period thereafter.

This was not a case where the respondent was unaware of the breach, nor one in which liability was contingent upon the occurrence of further events. The Agreement itself deemed the cadet to have breached upon the occurrence of the specified S/N sy/KVfaICkeb39ANRaf09g defaults. The respondent was therefore in a position to act promptly but elected not to do so.

This delay assumes particular significance given the involvement of sureties. With the passage of time, memories fade, documents may be lost, and the ability of sureties to protect their interests may be materially impaired. Equity is astute to guard against such prejudice, especially where a claimant has slept on its rights despite being fully aware of the factual basis of its claim.

To permit a claim to be pursued more than seven years after breach on the basis that the respondent only belatedly elected to issue a demand would be to undermine the policy of finality that underpins both limitation statutes and equitable doctrine. It would leave defendants in a state of perpetual limbo, exposed indefinitely to the revival of stale claims, never knowing when the claim might be resurrected. That cannot be correct. In this respect, the observations of the Court of Appeal in Lim Ban Hooi (Supra) are instructive: “[66] The laws of limitation are intended to protect the rights of all parties concerned. These laws lend certainty and confidence to the enforcement and safeguarding of rights and remedies and recourse to the Courts, preventing abuse through the principle of laches. This was discussed in the Supreme Court decision in Credit Corporation (M) Bhd v Fong Tak Sin [1991] 1 MLJ 409: “The doctrine of limitation is said to be based on two broad consideration. Firstly, there is a presumption that a right not exercised for a long time is non-existent. The other consideration is S/N sy/KVfaICkeb39ANRaf09g that it is necessary that matters of right in general should not be left too long in a state of uncertainty or doubt or surprise. [67] The Supreme Court further opined that the laws on limitation are ‘promulgated for the primary object of discouraging plaintiffs from sleeping on their actions and more importantly, to have a definite end to litigation. This is in accord with the maxim interest reipublicae ut sit finis litum that in the interest of the state there must be an end to litigation. The rationale of the limitation law should be appreciated and enforced by the Courts.” [Emphasis is mine]

Viewed in that light, the respondent’s delay was both inordinate and unexplained. To grant relief in these circumstances would be inequitable. Accordingly, even if the claim were not statute-barred, it would in any event be refused on the ground of laches.

There is a further difficulty with the respondent’s case which reinforces the conclusion already reached. Where a limitation defence is raised, the claimant bears the burden of establishing that the action was brought within the prescribed period. That burden rests squarely upon the respondent in the present case.

The respondent’s attempt to discharge that burden depended entirely upon its assertion that a demand was issued on 28 December 2023, from which date, it contended, the limitation period began to run. Yet neither the alleged demand letter nor the S/N sy/KVfaICkeb39ANRaf09g Agreement itself was exhibited in evidence. This was not a mere technical omission. It was a failure to prove a material fact essential to the respondent’s case on limitation.

In these circumstances, the learned Magistrate erred in proceeding on the basis of unproven assertions contained in the pleadings. A court is not entitled to construe contractual provisions that have not been placed in evidence, still less to accept the existence or legal effect of a document which has not been produced.

The authorities relied upon by the learned Magistrate, in particular MISC Berhad v Anandaraj (Supra), are distinguishable on this basis. In that case, the relevant agreement was before the court, enabling a proper construction of its terms. Here, by contrast, the court was asked to construe a clause which existed only in the pleadings and not in evidence. That approach cannot be sustained.

For the reasons set out above, the Court finds that the cause of action accrued on 17 October 2017, being the date of breach. The six-year limitation period prescribed by section 6(1) (a) of the Limitation Act 1953 therefore expired on 16 October 2023. The writ of summons filed on 13 November 2024 was consequently issued out of time.

It follows that the claim was plainly statute-barred on the face of the pleadings and ought to have been struck out. S/N sy/KVfaICkeb39ANRaf09g

The appeal is therefore allowed. The order of the Magistrate's Court dated 26 September 2025 is set aside. The respondent’s writ and statement of claim are struck out. The respondent shall pay the appellants’ costs in this appeal and of the proceedings in the court below, in the sum of RM8,000, subject to allocatur. Dated the 30th day of January 2026 … SGN … ……………………………………………….. MOH KOK WAI JUDICIAL COMMISSIONER OF THE HIGH COURT HIGH COURT (CIVIL DIVISION NCvC14) HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF MALAYSIA Counsel for the Appellants : Prakash Chandrakant and Shashikala Anne Messrs Prakash & Co Counsel for the Respondent : Nur Syafina Nasir Messrs Ariff & Co S/N sy/KVfaICkeb39ANRaf09g