A.F.S. Engineering (Malaysia) Sdn. Bhd. v Ng Chin Kong (BA-11ANCvC-37-07/2021)

This is an appeal from the decision of the Learned Magistrate of the Petaling Jaya Magistrate’s Court dated 05.07.2021 which allowed the Respondent’s Application under Order 18 Rule 19 (1) (a), (b), and/or (d) of the Rules of Court 2012 (the Application), to strike out the Writ and Statement of Claim dated 01.02.2021 filed by the Appellant.

I am reminded that an appeal from a decision of Subordinate Court shall be by way of a re-hearing as provided under Order 55 rule 2 of the Rules of Court 2012.

The Respondent is the owner of the shop office known as No 18, 18A, 18B, and 18C, Jalan Kenari 11, 47100 Bandar Puchong Jaya, Selangor (the Shop Office). Pursuant to a Tenancy Agreement (the Agreement) between the Appellant and the Respondent, the Appellant agreed to rent the Shop Office with a monthly rental of RM15,000.00 for 3 years from 01.07.2007 till 30.06.2010 with a renewal option for further 2 years from 01.07.2010 till 30.06.2012 (exhibit “NCK-1”).

Clause 2 of the Agreement states that the tenant shall pay a security sum as a deposit immediately upon signing the Agreement and upon the termination of the said Agreement or any renewal(s) thereof the said deposit, interest-free shall be repaid within 14 days by the landlord to the tenant (exhibit “NCK-1”).

Vide letter dated 30.04.2012, the Appellant terminated the Agreement and requested the Respondent to refund the said deposit amounting to RM35,000.00. The Respondent failed to pay the said deposit despite several reminders by the Appellant and/or its representative (exhibit “NCK-2”). 3 6. On 09.10.2018 the Respondent and/or its Representative in replying to the Appellant’s Representative’s telephone message, informed the Appellant’s Representative via WhatsApp messages that the Respondent has to verify the amount to be refunded as there was an outstanding amount from Tenaga Nasional Berhad (TNB), Indah Water Konsortium Sdn Bhd (IWK) and Syarikat Bekalan Air Selangor Sdn. Bhd (SYABAS) (exhibit “NCK-3” and “YKS-1”).

Vide letter dated 01.08.2019, the Appellant claimed the said deposit with compounded interests of 12% per annum from the Respondent for the amount of RM83,181.66 (exhibit “NCK- 4”)

The Respondent vide letter dated 05.08.2019 informed the Appellant that the Appellant was not entitled to charge any compounded interest as claimed and as for the security deposit the Respondent required more time to check with the IWK about the outstanding sewerage charges when the Appellant vacated the Shop Office, and in the meantime, the Respondent requested the Appellant to provide him with the unpaid amount or receipts showing the payments made towards the sewerage charges (exhibit “NCK-5”).

However, the Respondent to date has failed to provide the answer regarding the alleged outstanding amount to the IWK and/or to refund the said deposit to the Appellant, which resulted in the claim filed by the Appellant against the Respondent for the full payment of the deposit with interests thereof.

The Respondent thereafter filed the Application to strike out the Appellant’s Writ and Statement of Claim on the basis that the Appellant’s claim was time-barred under section 6(1) of the Limitation Act 1953. The Respondent contended that the cause of action arose when the Respondent failed to refund the said deposits within 14 days from the date of the termination letter, i.e. 14.05.2012 (14 days from 30.04.2012).

The grounds for the learned Magistrate’s decision can appropriately be condensed as follows:

(a) Having perused the Application and the affidavits filed thereto, the learned Magistrate made a finding that the action was time-barred as the Appellant had terminated the Agreement on 30.04.2012 and pursuant to clauses 2 and 3 of the Agreement the Respondent ought to have refunded the deposits within 14 days from the date of the termination, i.e. on/before 14.05.2012. The Respondent had failed to make the refund within the stipulated time and therefore the learned Magistrate found that the cause of action has accrued since 15.05.2012.

(b)

(c) The learned Magistrate agreed with the Respondent’s submission that when an issue of limitation is raised, the burden will now shift to the Appellant to prove that the Appellant’s claim is within the time stipulated by the law. The learned Magistrate made a finding that the Appellant had failed to discharge the said burden.

(d) The learned Magistrate referred to sections 26 and 27 of the Limitation Act 1953 and pursuant to the case of Tenaga Nasional Berhad v EPE Wilson Transformers Sdn. Bhd. (2010) 1 LNS 1647, found that an acknowledgement of debt has to be clear and specific in its terms. A general statement in the sense of acknowledging a claim is being made against a party is insufficient.

(e) Therefore, the learned Magistrate decided for the Appellant’s Writ and Statement of Claim to be struck off under Order 18 rule 19 (1)(a), (b), and/or (c) with RM2000.00 as costs. THE LAW

The principles of law on striking out of pleadings are trite and well settled. The Court’s power to strike out a claim should be exercised sparingly. The test for striking out is laid down in the case of Bandar Builder Sdn Bhd v United Malayan Banking Corporation (1993) 3 MLJ 36, the Supreme Court held that this summary procedure can only be exercised when it can be clearly seen that a claim or answer is on the face of it is plain and obviously unsustainable. The Court must be satisfied that there is no reasonable cause of action; that the claims are frivolous or vexatious; or that the defences raised are not arguable. This principle has been re-stated in many cases. (see: Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor (2016) 1 CLJ1; Sivakumar a/l Varatharaju Naidu v Ganesan a/l Retanam

The Respondent’s main ground for striking out the Appellant’s Writ and Statement of Claim is that the Appellant’s claim was time-barred under section 6(1) of the Limitation Act 1953 since the Appellant’s claim had exceeded the 6 years limitation period from the date the said cause of action had accrued, i.e.

15.5.2012.

The Appellant’s main contention was that the conduct of the Respondent has given an impression that the Respondent will refund the said deposit to the Appellant. The Appellant said the Respondent had never denied owing the Appellant the said refund but only informed the Appellant’s representative that the Respondent needed time to check and verify the outstanding amount for utilities. Therefore, it will be unconscionable and inequitable for the Respondent to now change his position and claim that the Appellant’s claim is time-barred.

The Respondent contended that the Respondent has never admitted to owing the Appellant the said sum of RM35,000.00 or the deposits in any form of communications. Instead, the Respondent has always maintained that the Respondent needed to check and verify the amount for the utilities owed in respect of the premises. It is also the Respondent’s pleaded defence that the Appellant’s claim was time-barred.

This Court finds that it is undisputed that the Agreement was terminated on 30.4.2012 and that the Respondent did not refund the said deposit to the Appellant within the 14 days stipulated in the Agreement, i.e. on or before 14.05.2012; and that it is still unpaid till to date. The Respondent also did not dispute the fact that the Respondent has to refund the said deposit pursuant to clauses 2 and 3 of the Agreement.

It is also undisputed that there was correspondence between the Appellant and the Respondent about the pending refund. The WhatsApp messages at exhibits “NCK-3” and “YKS-1” and the letters dated 01.08.2019 at “NCK-4” and 05.08.2019 at “NCK-5” are also undisputed.

Based on the factual matrix of this case, this Court finds that the issue of whether the Respondent had admitted or had acknowledged owing the Appellant the deposit sum of RM35,000.00 is the essential issue, as it will determine whether there was a fresh accrual of the action. Therefore, this Court is of the view that the question of whether exhibits at “NCK-3 and YKS-1” and the letters dated 01.08.2019 at “NCK- 4” and 05.08.2019 at “NCK-5” are tantamount to acknowledgement and/or admission of debt owing by the Respondent to the Appellant is a question of fact which requires witnesses to testify and are not appropriate to be resolved by way of affidavit evidence. These are triable issues.

This Court agrees with the learned counsel for the Respondent’s submission that it is trite law when the defence of limitation is raised, the burden of proving that the action was brought within the limitation period shifts to the Appellant (see: Ong Ah Bee v Hii Chung Siong, Robin [1993] 1 CLJ 504). However, in order to decide whether the burden has shifted, the Court will have to evaluate the facts in question and therefore it is an issue that ought to be tried.

On the face of the pleadings in this case, this Court is not prepared to say that the cause of action in the Appellant’s claim is ‘obviously unsustainable’. For the above-mentioned reasons, I am of the view that the Application to strike out the Appellant’s Writ and Statement of Claim ought not to be allowed by invoking the summary power of the Court. The Court finds that the learned Magistrate had misdirected herself in facts and law.

In the premise of the foregoing, this Court allowed the Appellant’s appeal, and the decision of the Magistrate Court is hereby set aside. The matter is reverted for trial in the Magistrate’s Court.

This Court also orders that costs of RM5000.00 be paid by the Respondent to the Appellant. Dated: 21st day of February 2022 sgd JAMHIRAH ALI JUDICIAL COMMISSIONER High Court of Malaya at Shah Alam (NCVC 1) To the parties’ solicitors: For the Appellant : Wan Zhi Lam (Messrs Ming, Yee & Co.) For the Respondent : Simon Hong (Messrs Simon Hong)