D-22NCC-590-2009

AZIVEST SDN BHD (Company No.: 77597-T)

AHMED TAUZAN BIN ABDUL GHANI (NRIC No.: 470519-06-5019/2035751)

MOHAMAD AZMAN BIN IBRAHIM (NRIC No.: 670401-06-5693/A0926792) …DEFENDANTS JUDGMENT [1] Can a plaintiff who has entered into a settlement agreement with a defendant in full and final settlement of a judgment obtained against the defendant apply for leave to execute the judgment upon the defendant’s default of the settlement agreement? Is the judgment 2 superseded by the settlement agreement? In an application under Order 46 rule 2(1)(a) of the Rules of Court 2012 for leave to enforce a judgment after more than 6 years have elapsed since the date of the judgment, is section 6(3) of the Limitation Act 1953 (“the 1953 Act”) relevant and constitutes an absolute bar after the expiry of 12 years from the date of the judgment? These are the issues dealt with in this judgment. Background Facts [2] Enclosure 16 is the Plaintiff’s Application filed on 15.3.2024 to obtain leave to execute a summary judgment dated 18.5.2010 made against, inter alia, the 2nd Defendant for various sums in respect of banking facilities that was granted by the Plaintiff to the 1st Defendant (“the Judgment”). [3] The 1st Defendant has been wound up on 9.7.2019. The 2nd and 3rd Defendants were guarantors for the banking facilities extended by the Plaintiff to the 1st Defendant. [4] Enclosure 16 is filed pursuant to Order 46 rule 2 and rule 3 of Rules of Court 2012 (“ROC 2012”). [5] After the Judgment was obtained on 18.5.2010, the Plaintiff commenced a petition to wind up the 1st Defendant on 8.8.2012 and also issued notice of bankruptcy against the 2nd Defendant simultaneously. 3 [6] The aforesaid actions resulted in a compromise agreement in late 2012 (“2012 Compromise Agreement”) where time was given to the 2nd Defendant to settle the judgment sum. Following the 2012 Compromise Agreement, the Plaintiff withdrew its winding up petition and the notice of bankruptcy against the 1st Defendant and the 2nd Defendant respectively in 2013. [7] However, notwithstanding the 2012 Compromise Agreement, the judgment sum was not fully settled as the 2nd Defendant had defaulted in making the payments as promised. This led to the Plaintiff commencing a fresh notice of bankruptcy against the 2nd Defendant and the 3rd Defendant on 25.3.2015 and a fresh winding up petition against the 1st Defendant on 29.7.2015. [8] The aforesaid led to the parties reaching another compromise agreement sometime on 15.2.2016 (“the 2016 Compromise Agreement”) where further indulgence was given by the Plaintiff for the Defendants to settle the outstanding judgment sum. The winding up petition against the 1st Defendant filed on 29.7.2015 was withdrawn. [9] Unfortunately, the 2016 Compromise Agreement also did not lead to a full settlement of the Judgment. [10] On 7.11.2016, after more than 6 years had elapsed from the Judgment, the Plaintiff issued a letter to the 2nd Defendant agreeing to accept a sum of RM 500,000.00 as settlement of his liability as guarantor and set out a schedule of payment for the RM 500,000.00 (“the 2016 Settlement Agreement”). The Plaintiff also proceeded 4 to withdraw its notice of bankruptcy against the 2nd Defendant on 29.12.2016 after the 2nd Defendant had made the first payment under the 2016 Settlement Agreement. [11] However, the 2nd Defendant failed again to make further payments as agreed under the 2016 Settlement Agreement. [12] BY reason of the aforesaid, on 20.9.2018, the Plaintiff filed a notice of application under Order 46 rule 2 of the ROC 2012 for leave to execute the judgment since, as alluded to above, more than 6 years had elapsed from the Judgment on 18.5.2010 (“the 1st Leave Application”). [13] On 9.10.2018, the Court granted an order in terms of the 1st Leave Application (“the 1st Leave Order”). [14] The Plaintiff filed a winding up petition against the 1st Defendant after obtaining the 1st Leave Order and on 9.7.2019, the Plaintiff obtained an order for the 1st Defendant to be wound up. [15] The Plaintiff however did not proceed with any execution against the 2nd Defendant. Instead, the Plaintiff was contended to give further time to the 2nd Defendant to settle the outstanding judgment sum. [16] When the 2nd Defendant failed to make payments to the Plaintiff, the Plaintiff filed another application for leave to execute the Judgment against the 2nd Defendant on 22.7.2020 (“the 2nd Leave Application”) since more than 1 year had elapsed from the 1st 5 Leave Order and the Court granted the Plaintiff an order in terms of the fresh leave application on 20.10.2020 (“the 2nd Leave Order”). [17] Based on the 2nd Leave Order, the Plaintiff issued a notice of bankruptcy against the 2nd Defendant on 17.2.2021. This prompted the 2nd Defendant to come forward to discuss settlement again with the Plaintiff. In fact, a settlement agreement was entered on 14.10.2021 between the Plaintiff and the 2nd Defendant (“the 2021 Settlement Agreement”). With the settlement, the notice of bankruptcy was withdrawn. [18] After making a payment of RM 62,500.00 under the 2021 Settlement Agreement, the 2nd Defendant failed to make further payments to the Plaintiff thereunder. The 2nd Defendant’s last payment was for a sum of RM 2,500.00 on 15.8.2023. There was still a sum of RM1,278,560.64 remaining outstanding under the Judgment. [19] On 19.8.2023, the 2nd Defendant wrote to the Plaintiff stating as follows: “Saya sedang bersungguh-sungguh lagi untuk mendapatkan wang untuk membayar baki akaun pinjaman itu. Dalam tempoh itu saya mohon untuk melanjutkan membayar sebanyak RM 2,500.00 sebulan sehingga Mac 2024.” [20] This led to another discussion and on 20.10.2023, the 2nd Defendant and the Plaintiff agreed to a fresh settlement agreement (“the 2023 Settlement Agreement”) based on the Plaintiff’s letter dated 11.9.2023. 6 [21] Under the 2023 Settlement Agreement: a) The Plaintiff shall accept the payment of a sum of RM 350,000.00 from the 2nd Defendant (including the sum of RM 62,500.00 paid previously) to discharge its obligations as guarantor (“the agreed settlement sum”); b) The balance agreed settlement sum shall be paid by the 2nd Defendant in 4 instalments, namely, 3 equal monthly instalments of RM 2,500.00 from 20.9.2023 until 20.11.2023 with the final instalment in the sum of RM 280,000.00 to be paid by 31.12.2023. [22] The 2023 Settlement Agreement also contained the following terms: “5. Nothing in this letter shall be construed as:

a waiver, forbearance or indulgence by us of any breach or default by you of our rights to commence or proceed with legal or other proceedings or action for the recovery of all amounts owing by the Borrower to us:

a release or discharge of the Borrower and Guarantors from any or all of their respective liabilities, obligations and indebtedness to us under, arising from or in connection with the abovementioned Facility, and

a waiver of the requirement to make prompt and immediate payment by the Borrower: and

a modification and/ or variation and or waiver of any terms and conditions and/ or the Bank's rights and /or powers as contained in any and all security documents executed between the Borrower, Guarantors and the 7 Bank in relation to the above matter nor should It be treated as a departure by the Bank of any of its rights and or any stand taken by the Bank as contained in all previous correspondences exchanged between the Borrower, Guarantors and the Bank, prior to the issuance of this letter.

Please take note that in the event you fail comply with any of the terns as stated in this letter of offer and/or in the event the Bank does not receive any payments as mentioned in paragraph 3 above, this arrangement shall be deemed terminated and the Bank shall be at liberty to commence fresh Bankruptcy proceeding and/ or continue with any or all actions to enforce the rights of the Bank in the matter, concurrently or otherwise to recover the outstanding sums from you, you HEREBY EXPRESSLY UNDERTAKE not to plead the defence of delay, laches, acquiescence, condonation, and/or limitations in any proceedings taken by the Bank in the relation to the Bank's unfettered rights to enforce their rights against you. [8]. This letter is issued without prejudice to any of the Bank's rights of recovery or to institute whatsoever execution and/or enforcement proceedings against you. In addition, the issuance of this letter and the contents herein shall not preclude the Bank from instituting and/or resuming/continuing with whatsoever actions deemed appropriate and necessary, and the costs and expenses Incurred will be for the account of the Borrower. All legal and incidental expenses Incurred in this matter and other incidental costs, if any, will be borne by you, and any work relation to the said this payment arrangement is to be handled by our panel of solicitors and the costs of which shall be borne by you. 8

Save as stated above, nothing in this letter shall be taken or construed as prejudicing the Bank's rights and remedies under the Facility, any letters of offer, facility agreement, security documents or other documents relating thereto ("Financing Documents") and that all other terms of the Facility and the Financing Documents shall continue to subsist and remain valid and be of full force and effect until all the liabilities under the above Facility and the Financing Documents have been discharged in full.” (collectively referred as the ‘preservation of rights clauses”) [23] Unfortunately, the Plaintiff did not receive any payment from the 2nd Defendant under the 2023 Settlement Agreement. [24] As such, on 11.3.2024, the Plaintiff filed Enclosure 16 seeking leave again from this Court to execute the Judgment against the 2nd Defendant. As can be seen, by the time Enclosure 16 was filed, more than 12 years have elapsed from the Judgment. Plaintiff’s Contentions [25] Learned counsel for the Plaintiff premised his submission by stating that since the Judgment was obtained on 18.5.2010, under section 6(3) of the 1953 Act, the Plaintiff is entitled to bring an action upon the Judgment within a period of 12 years, which means that, any execution proceedings on the Judgment must be brought by the Plaintiff before 18.5.2022. [26] More specifically, s.6(3) of the 1953 Act states thus: 9 “An action upon any judgment shall not be brought after the expiration of twelve years from the date on which the judgment became enforceable and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.” [27] However, learned counsel for the Plaintiff contended that there has been fresh accrual of the right of action upon the Judgment by reason of acknowledgements and part payment by the 2nd Defendant. In this regard, learned counsel for the Plaintiff relied on section 26(2) of the 1953 Act which reads: “(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 therefor 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 …” [emphasis added] [28] According to learned counsel for the Plaintiff, the aforesaid section 26(2) is to be read with section 27(1) of the 1953 Act, which stipulates: “(1) Every such acknowledgment as is referred to in section 26 … shall be in writing and signed by the person making the acknowledgment.” 10 [29] On the facts of the present case, learned counsel for the Plaintiff submitted that there were two acknowledgements and one last part-payment as follows: a) the acknowledgments - the 2nd Defendant’s request on 19.8.2023 and the 2023 Settlement Agreement signed by the 2nd Defendant on 20.10.2023 acknowledging the settlement sum of RM350,000.00 in accordance with the scheduled instalments payment plan; b) the part-payment - the 2nd Defendant’s last payment was RM2,500 on 15.8.2023. [30] It was contended that by virtue of the acknowledgments of the debt, the right of action upon the Judgment in section 6(3) of the 1953 Act is deemed to have accrued on 19.8.2023 or 20.10.2023 at the latest, by virtue of section 26(2) of the Act. This means that the Plaintiff’s right to enforce the Judgment has been extended by a further 12 years from the date of acknowledgment to 19.8.2035 or 20.10.2035 at the latest. [31] Further, by virtue of the last part-payment on 15.8.2023, the right of action on the Judgment is deemed to have accrued on 15.8.2023 by virtue of section 26(2) of the Act. The period of limitation has effectively been extended to 15.8.2035. [32] In either case, the limitation period to enforce or execute the Judgment has not expired. Therefore, the Plaintiff contended that 11 judicial discretion ought to be exercised in favour of the granting of the leave application to execute the Judgment. [33] Learned counsel for the Plaintiff further submitted that the 2nd Defendant is estopped from raising any defence of limitation. This is because under Clause 8 of 2023 Settlement Agreement, it is expressly provided that in the event of default by the 2nd Defendant, the Plaintiff is entitled to commence fresh bankruptcy proceeding and or continue with any or all actions to enforce the rights of the Plaintiff to recover the outstanding sums from 2nd Defendant and the 2nd Defendant has expressly undertaken not to plead the defence of delay, laches, acquiescence, condonation and or limitation in any proceedings taken by the Plaintiff. [34] Learned counsel for the Plaintiff referred this Court to the following cases: a) RHB Bank Berhad v Yung Chen Wood Industry Sdn Bhd & Ors [2019] AMEJ 1767, High Court; b) Koperasi Pembangunan Desa v Merotai Setia Maju Enterprise (Sued as a Firm) [2002] 6 MLJ 579, High Court; c) Seema Development Sdn Bhd v Mah Kim Chye [2014] 1 CLJ 804, High Court. [35] The above 3 cases will be dealt with below. 12 [36] It was contended by learned counsel for the Plaintiff that in the present case, the delay in the execution of the Judgment was due to the repeated requests by the 2nd Defendant for indulgence to settle the judgment debt which resulted in 2021 Settlement Agreement and 2023 Settlement Agreement entered into by both parties. [37] Further, since the 2nd Defendant did commit a default in the instalment payment plan, the Plaintiff is compelled to seek leave to execute the Judgment. There are exceptions provided for to extend the limitation period of 12 years, which are section 26(2) of the 1953 Act, giving rise to fresh accrual of action based on acknowledgement and or part payment. The facts and events in this case satisfy both exceptions and that warrants an extension of limitation period. [38] Learned counsel for the Plaintiff contended that the exceptions in section 26(2) of the 1953 Act (i.e acknowledgement and part payment) are applicable, inter alia, to “any right of action to recover any debt or other liquidated pecuniary claim”. The phrase “right of action” includes right of an action upon a judgment as provided in section 2(6)(b) of the 1953 Act which states: “In Part III of this Act references to a right of action shall include references to a cause of action and a right to receive money secured by a mortgage or charge on any property or to recover proceeds of sale of land, and to a right to receive a share or interest in the personal estate of a deceased person and references to the date of the accrual of a right of action shall –

…

In the case of an action upon a judgment, be construed as references to the date on which the judgment became enforceable; 13

…” [39] Learned counsel for the Plaintiff also submitted that bankruptcy proceeding is an action upon a judgment, ie. an action to enforce a judgment: [See AmBank (M) Bhd v Tan Tem Son & Anor Appeal [2013] 3 CLJ 317, FC. This part of the judgment was not over-ruled by Federal Court in Dr Shamsul Bahar Abdul Kadir & Anor Appeal v RHB Bank Bhd [2015] 4 CLJ 561 which had ruled that a judgment creditor who commences bankruptcy proceedings after more than 6 years had lapsed from the date of judgment must obtain the prior leave of the court pursuant to Order 46 rule 2 of the Rules of the High Court 1980. Court’s Considerations Whether Judgment superseded by the 2023 Settlement Agreement [40] In the present case, after the Plaintiff had obtained the Judgment, the Plaintiff had entered into 2 separate settlement agreements with the 2nd Defendant, namely the 2021 Settlement Agreement and the 2023 Settlement Agreement. This gives rise to the question whether the Judgment had been superseded by the said settlement agreements, in particularly the 2023 Settlement Agreement. [41] On this point, the Court of Appeal case of Pacific Sanctuary Holdings Sdn Bhd (formerly known as Ideal Prestige Sdn Bhd) v. Masaland Construction Sdn Bhd [2020] 3 MLJ 692 (“Pacific Sanctuary”) is instructive. 14 [42] In Pacific Sanctuary, a default judgment was entered against the defendant. Thereafter, the plaintiff and the defendant entered into a settlement agreement where the plaintiff agreed not to enforce on all and or any of its claims under the judgment in return for the defendant agreeing to pay an agreed sum partly in cash and partly by contra of properties. After the defendant had defaulted in its obligations under the settlement agreement, more than 6 years had lapsed since the judgment and the plaintiff applied for leave to execute the judgment. The Court of Appeal held that there was no longer any pending judgment to be enforced as the judgment had been superseded or extinguished by the settlement agreement. In para [21] of the judgment, the Court of Appeal held thus: “[21] Another point is that we agree with the learned counsel for the defendant submission that the learned JC had erred in law and in fact in granting leave to the plaintiff for failure by the learned JC to take into consideration that there is no longer any pending judgment and/or order of the court to be enforced as the said judgments and/or order have been superseded or extinguished by the settlement agreement entered between the parties on 28 May 2012. The settlement agreement constitutes a new and independent agreement for good consideration. Its effect in law is to supersede the original cause of action altogether and put an end to the proceedings, which are thereby spent and exhausted. The parties are therefore precluded from taking any further steps in the action.” [emphasis added] [43] Similarly, in the present case, notwithstanding the Judgment, the Plaintiff had agreed by the 2023 Settlement Agreement to accept the 15 payment of a sum of RM 350,000.00 from the 2nd Defendant (including the sum of RM 62,500.00 paid previously under the 2021 Settlement Agreement) as full and final settlement of the 2nd Defendant’s obligations as guarantor under the Judgment. [44] Significantly, the 2023 Settlement Agreement contained no provisions preserving the Plaintiff’s rights to enforce the Judgment in the event the 2nd Defendant defaults in his obligations to pay the settlement sum under the said agreement. This is because when one examines the preservation of rights clauses in the 2023 Settlement Agreement, what these clauses sought to do was to preserve the Plaintiff’s rights against “the Borrower and the Guarantors” under the various facility documents and “to provide that [the Plaintiff] shall be at liberty to commence fresh bankruptcy proceeding and or continue with any or all actions to enforce the rights of [the Plaintiff] in the matter, concurrently or otherwise to recover the outstanding sums from [the 2nd Defendant].” [45] Insofar as the Plaintiff’s rights under the “facility documents”, these rights have since merged with the Judgment and no longer exist. As regards the Plaintiff’s rights under the 2023 Settlement Agreement to commence fresh bankruptcy proceedings and or actions to enforce its rights “in the matter”, this does not refer to the Judgment but the rights under the 2023 Settlement Agreement. [46] What this means is that the Plaintiff’s rights under the Judgment had been superseded by the terms of the 2023 Settlement Agreement. Put it in another way, the Judgment is no longer available for the 16 Plaintiff to enforce against the 2nd Defendant when the Plaintiff entered into the 2023 Settlement Agreement with the 2nd Defendant. [47] Based on the aforesaid, the Plaintiff’s application under Enclosure 16 simply has no merits and on this ground alone, must be dismissed. Relationship between section 6(3) of the 1953 Act and Order 46 rule 2(1)(a) of ROC 2012 [48] Considerable time was expended at the oral hearing of Enclosure 16 focusing on the application of section 6(3) of the 1953 Act to Order 46 rule 2(1)(a) of the ROC 2012. The relationship between the limitation provisions in the 1953 Act and the procedural mechanism for leave to enforce a judgment under Order 46 rule 2(1)(a) of the ROC 2012 needs to be clarified. [49] The Plaintiff filed Enclosure 16 pursuant to Order 46 rule 2(1)(a) which provides: “2. (1) A writ of execution to enforce a judgment or order may not be issued without leave of the Court in the following cases:

Where six years or more have lapsed since the date of the judgment or order.” [50] As can be seen, Order 46 rule 2(1)(a) merely provides that leave is required to enforce a judgment or order where 6 or more years have lapsed since the date of the judgment or order. There is no mention 17 of any maximum time period before any judgment or order can no longer be enforced. [51] Learned counsel for the Plaintiff, however, had proceeded with its application under Enclosure 16 on the premise that section 6(3) of the 1953 Act is applicable where more than 12 years have lapsed since the date of the judgment or order which is sought to be enforced. In other words, it is premised on the assumption that the said section 6(3) applies to execution proceedings and that there is an absolute bar to any execution of a judgment after 12 years. [52] With respect, this is not the case. [53] The first limb of section 6(3) of the 1953 Act refers to “an action upon any judgment”. To my mind, this refers to a fresh action commenced on a judgment and not to execution proceedings on a judgment, which is a procedural step taken to enforce a judgment. This means that the commencement of execution proceedings, which is a continuation of the judgment cannot be considered as ‘an action upon a judgment” under the aforesaid section 6(3). In fact, this position has been expressly dealt with by the UK courts. [54] Section 6(3) of the Act is identical to section 2(4) of the UK Limitation Act 1939 (“the UK 1939 Act”) which provides: “An action shall not be brought upon any judgment after the expiration of twelve years from the date on which the judgment became enforceable, and no arrears of interest in respect of any 18 judgment debt shall be recovered after the expiration of six years from the date on which the interest became due” [55] Section 2(4) was in fact a consolidation of section 8 of the UK Real Property Limitation Act 1874 and section 42 of the UK Real Property Limitation Act 1833. [56] Prior to 1939, at common law there was no limitation period at all for the enforcement of judgments. There was however a presumption that a judgment is satisfied within a year and a day, known as the ‘one year one day’ rule. [57] By the Statute of Westminster the Second (1285), after one year and one day, the judgment creditor may apply to revive the judgment by writ of scire facias. Until 1833, there was no time limit to apply for the writ of scire facias except that the longer the period that elapsed between the judgment and the application, the greater the formalities required. [58] In 1833, the Real Property Limitation Act (“the UK 1833 Act”) was enacted and by section 40 thereto, any action to recover any sum of money secured by judgment can no longer be brought after 20 years, save for certain exceptions. What this means is that unless a writ of scire facias was obtained, a judgment debt became statute-barred for all purposes after 20 years. So, not only were fresh action on a judgment barred, so were execution on the same. More specifically, section 40 stipulates: 19 “… no Action or Suit or other Proceeding shall be brought, to recover any Sum of Money secured by any Mortgage, Judgment, or Lien, or otherwise charged upon or payable out of any Land … but within twenty Years next after a present Right to receive the same shall have accrued …” (As an aside, it seems that under the Statute of Westminster, the effect of a judgment would bind one half of the judgment debtor’s freehold lands, much like a charge or a mortgage. This was why the provision on the judgment was dealt with together with mortgages and liens) [59] In 1852, under section 128 of the Common Law Procedure Act, the one year one day rule was abolished. Judgments could be executed at any time within 6 years without the revival by writ of scire facias. Also, the revival by writ of scire facias was replaced by a writ of revivor. However, the 20 years absolute bar remained. [60] Then in 1874, section 8 of the Real Property Limitation Act 1874 (“the UK 1874 Act”) re-enacted section 40 of the UK 1833 Act in identical language save that the period of 20 years was reduced to 12 years. A year later, in 1875 the Supreme Court of Judicature Act 1875 provided by its section 16 for rules of courts to regulate the procedure of the High Court of Justice and the Court of Appeal. Order 42 rules 18 and 19 of the UK Rules of Court provided that execution of a judgment may issue at any time within 6 years from the judgment and thereafter leave of court is needed. [61] In Watson v Birch (1874) 15 Sim 523, 60 ER 721 (“Watson v Birch”), a decision approved by Lord Coleridge CJ of the Court of Appeal in 20 Jay v Johnstone [1893] 1 QB 189, it was held that the rules of court did not affect the 20 year absolute bar in the 1833 Act (and by extension the 12 year absolute bar in the 1874 Act). This was the position when the UK 1939 Act was enacted with the section 2(4). In other words, the prohibition applied to both fresh action as well as execution proceedings to enforce a judgment. This was notwithstanding that Order 46 rule 23 of the Rules of the Supreme Court then in force in UK provided that leave of the courts was necessary to proceed with execution proceedings where more than 6 years have elapsed from the date of the judgment. The UK courts did not see any inconsistency between the section 2(4) and Order 46 rule 23. [62] However, in 1939, the UK Court of Appeal in W.T. Lamb & Sons v. Rider 3 All ER 402 (“W.T. Lamb & Sons”) held that the right to sue on a judgment is distinct from the right to issue execution on a judgment. Execution is said to be a matter of procedure machinery which the court can, subject to the rules from time to time in force, operate for the purpose of enforcing the judgments or orders. They are to be governed by the Rules of the Supreme Court and the Common Law Procedure Act. On the other hand, section 2(4) deals with the substantive rights to sue for and obtains a judgment. [63] Scott LJ explained that the definition of “action” which includes “any proceedings in a court of law” is to cover fresh actions commenced by originating summons and not writ. These words do not include the procedural machinery for execution proceedings. W.T Lamb & Sons was followed in subsequent cases. 21 [64] In 1980, section 2(4) of the UK 1939 Act was replaced by section 24(1) of the UK Limitation Act 1980 (“the UK 1980 Act”). The new section retains the wordings of the repealed section 2(4) but reduced the limitation for actions on a judgment to six years. The definition of “action” was re-enacted verbatim in section 38(1) of the UK 1980 Act. [65] More importantly, in respect of section 24(1) of the UK 1980 Act, the UK Court of Appeal in National Westminster Bank plc v. Powney & Others [1991] Ch 339 (“National Westminster”) had also held that the said section applied only to action to sue on a judgment and not to execution proceedings, adopting with approval the decision of Scott LJ in W.T. Lamb & Sons. [66] In fact, the House of Lords in Lowsley and another v Forbes (t/a L E Design Services) [1998] 3 All ER 897 (“Lowsley”) similarly held that the word “action” in section 24(1) of the UK 1980 Act meant fresh action and does not include proceedings by way of execution. [67] Lowsley is an interesting case because Lord Lloyd of Berwick had followed the decision of Scott LJ in W.T Lamb & Sons even though he was of the view that the reasonings were flawed. [68] It was Lord Lloyd’s view that when the UK 1939 Act came into force, section 2(4) therein had preserved the pre-1939 position that a judgment debt shall become statute barred after 12 years. The aforesaid was the reason why Lord Lloyd did not agree with the reasoning of Scott LJ in W.T Lamb & Sons. He felt that the words “Action or Suit or other Proceeding’ in section 40 of the UK 1833 Act 22 and section 8 of the UK 1874 Act were given too narrow a meaning by Scott LJ. [69] However, Lord Lloyd opined that the decision of Scott LJ in W.T Lamb & Sons had not only been treated as correct in subsequent cases, but more significantly, that the UK Parliament, by enacting the UK 1980 Act must be presumed to have accepted the meaning that the courts have ascribed to the words “action or suit or other proceedings”. More specifically, this was what Lord Lloyd said at p. 906: “Finally Mr Hockman argued that it would be a reduction ad absurdum of statutory construction if your Lordships were to disapprove the reasoning in the Lamb case and at the same time hold that it is now the law by virtue of its subsequent adoption by Parliament. But there is nothing new in this. It is Parliament’s understanding of the existing law when enacting the Limitation Amendment Act 1980 that matters, not what the law is subsequently shown to have been. As Lord Simon of Glaisdale said in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] 1 All ER 810 at 845, [1975] AC 591 atv 648: ‘Once it is accepted that the purpose of ascertainment of the antecedent defect in the law is to interpret Parliament’s intention, it must follow that it is Parliament’s understanding of that law as evincing such a defect which is relevant, not what the law is subsequently declared to be’ If common error can make the law, so can parliamentary error.” 23 [70] Based on the aforesaid, His Lordship held that it was too late to hold that Scott LJ was erroneous in his reasonings. [71] Now, how do all the aforesaid affect our interpretation of section 6(3) of the 1953 Act? [72] Our section 6(3) of the 1953 Act is an adoption of section 2(4) of the UK 1939 Act. When the Malaysia Federal Council in 1953 adopted section 2(4) of the UK 1939 Act as section 6(3) of our 1953 Act, the position in the UK was that as enunciated by Scott LJ in W.T Lamb & Sons. This must mean that the Federal Council had approved of the decision in W.T Lamb & Sons and intended the law in Malaya to be similar to the said decision. [73] Indeed, in the High Court case of Re Lim Ah Hee @ Sim Ah Hee, ex parte Perwira Habib Bank [1997] MLJU 46 (“Re Lim Ah Hee HC”), Haidar J, when interpreting our section 6(3) of the Act stated thus: “In so far as the first limb is concerned it would seem clear by the definition of the word 'action' in section 2(1) of the Act that section 6(3) of the Act applies only to the process of bringing an action upon a judgment. It does not extend to seeking execution of a judgment: the latter is a purely procedural step, and is not an "action" within the meaning of the Act and "action" is defined to include a suit or any other proceedings in a court of law. Our Act is modelled on the English Limitation legislation. In National Westminster Bank Plc. v. Powney and Others (1990) 2 WLR 1084, the Court of Appeal held that an application to issue, or to extend the time, for execution under a judgment was not an 24 'action' within the meaning of section 38(1) of the Act of 1980; and that, therefore, an application by the bank for the renewal of the existing warrant or the issue of a new one would not come within the provisions in section 24(1) prohibiting the bringing of an action on a judgment after the expiration of six years from the date on which judgment became enforceable. The Court of Appeal cited with approval another Court of Appeal's case of W.T. Lamb & Sons v. Rider (1948) 2 All ER. 402. No doubt in W.T. Lamb's case, the Court of Appeal was considering the respective antecedents of section 2(4) of the Limitation Act 1939 and Order 42 rule 23 of the Rules of Supreme Court, however, it does provide a guidance to the interpretation of our section 6(3) of the Act. Section 2(4) of the Act of 1939 would appear to be in more or less similar terms as our section 6(3) of the Act and reads … According to Andrew McGee on Limitation Periods, 1994, 2nd Edition at page 60, the effect of the judgment of W.T. Lamb is - "There is a vital distinction between suing on a judgment and enforcing it. The former involves bringing an action and is subject to the 1980 Act, whereas the latter is purely procedural matter, to which the 1980 has no relevance." [74] After quoting W.T Lamb & Sons in extenso, Haidar J proceeded to hold that bankruptcy actions do not come within the meaning of writ of execution and therefore no leave was required under Order 46 rule 2. The learned judge however held that the judgment creditor could claim recovery of interest beyond the 6 years under the 25 bankruptcy notice. This decision was appealed upon to the Court of Appeal. [75] For our purposes, the Court of Appeal in Re Lim Ah Hee, ex p Perwira Habib Bank Bhd [2000] 3 MLJ 211 (“Re Lim Ah Hee CA”) by obiter confirmed that the word “action” in our section 6(3) of the 1953 Act (equivalent to section 24(1) of the UK 1980 Act) means “fresh action” and does not include proceedings by way of execution. The Court of Appeal followed Lowsley and W.T Lamb & Sons without any reservation. [76] The matter did not stop there and was brought before the Federal Court. In Perwira Affin Bank Bhd v Lim Ah Hee @ Sim Ah Hee [2004] 3 MLJ 253 (“Re Lim Ah Hee FC”), the Federal Court affirmed that bankruptcy proceeding is an action upon a judgment and not an execution proceeding and is therefore caught by section 6(3) of the 1953 Act. The Federal Court did not disagree with the interpretation of the word “action” by the Court of Appeal to mean “fresh action”. [77] Both Professor Sujata Balan and Mr Chong Joo Tian in their respective well written articles “The Limitation Periods for Action Upon a Judgment and Execution Proceedings in Malaysia” and “Limitation Period for the Enforcement of Judgment: Whether the House of Lords’ decision in Lowsley should be followed” [1999] 1 MLJ lxvii, have referred to the pre-1953 cases of Daud v Ibrahim [1961] MLJ 43 (“Daud v Ibrahim”) and Neo Ong Tew v Neo Ong Tee [1926] SSLR 120, Court of Appeal Straits Settlement (“Neo Ong Tew”) to suggest that perhaps a different interpretation should be given to section 6(3) of the 1953 Act. 26 [78] The Court of Appeal in Daud v Ibrahim and Neo Ong Tew were dealing with the then Kedah Limitation Enactment and the Straits Settlement Limitation Ordinance respectively. Both decisions suggest that the limitation statutory provisions would include proceedings by way of execution and accordingly they created an absolute bar to execution after the stated period of limitation. [79] However, both the cases were heard and decided prior to the enactment of the present 1953 Act and given the adoption of the W.T Lamb & Sons decision by the UK in enacting section 2(4) of the UK 1939 Act which we have deemed it fit to adopt without any qualifications and given the decisions by our Court of Appeal in Re Lim Ah Hee CA, I would respectfully decline to adopt the decisions reached in the 2 cases. In fact, as will be seen below, these 2 decisions were also not followed by His Lordship Richard Melanjum J (as he then was) in Koperasi Pembangunan Desa v Merotai Setia Maju Enterprise (Sued as a Firm) [2002] 6 MLJ 579, HC (“Koperasi Pembangunan Desa”). [80] I will now deal with the 3 cases that learned counsel for the Plaintiff had brought to the attention of this Court. [81] The Plaintiff referred this Court to the case of RHB Bank Berhad v Yung Chen Wood Industry Sdn Bhd & Ors [2019] AMEJ 1767, HC (“RHB Bank Bhd”). In this case, judgment in default were entered against the 2nd and 3rd defendant on 21.8.2003 and against the 5th defendants on 1.8.2003 but were never executed. Instead, on 29.11.2003, the plaintiff entered into a debt restructuring agreement (“DRA”) with the 1st defendant. The DRA provided that in the event 27 of default, the plaintiff could proceed to enforce any judgment against the 2nd, 3rd and 5th defendants. After the expiry of 12 years from the default judgments, the plaintiff commenced an action against them for breach of the DRA. It was contended that the said action was an execution of the judgment in default and was barred by the 12-year limitation under section 6(3). It was also contended that the cause of action against the 2nd, 3rd and 5th defendant as guarantors had merged into the judgment in default and a second cause of action can no longer be brought. [82] The High Court held that the limitation provision was no bar to the filing of the action because there was an express term in the DRA that the plaintiff was not to execute its judgment in default against the defendants. The Court also held that there was no merger as the plaintiff was suing on the DRA and not the original agreement. [83] I must confess that it is not easy to appreciate the reasonings of the learned judge. The filing of a fresh action based on the cause of action for breach of the DRA is clearly not an execution of the default judgments. The decision, to my mind, can best be explained on the basis that the DRA had in fact superseded the judgment in default obtained against the 2nd 3rd and 5th defendants. After all, the plaintiff did in fact sue for breach of the DRA and not on the judgment. This was why the argument on merger of the cause of action into the judgment was rejected. [84] In fact, the decision in RHB Bank Berhad affirmed the finding of this Court that the 2023 Settlement Agreement in the present case had superseded the Judgment and if at all, the Plaintiff in this case 28 should commence an action against the 2nd Defendant under the said agreement instead of seeking leave to enforce the Judgment. [85] The Plaintiff also referred to the case of Koperasi Pembangunan Desa. [86] In the that case, the plaintiff obtained judgment in default against the defendant on 1.2.1985. Attempts made to execute the judgment within 6 years of the same proved futile for various reasons including the fact that the court dockets could not be traced. Subsequently in 1993, an application was made for leave to execute the judgment. The application was struck out when the parties entered into settlement negotiations. In 1999, a fresh application for leave to execute was filed and heard in 2000 before the deputy registrar. The application was dismissed on the ground that the word “suit” in section 3 of the Sabah Limitation Ordinance included “execution proceedings” and since more than 12 years had lapsed, the application was statute barred. [87] On appeal to the High Court, Richard Malanjum J (as he then was)

Mr. Tay Hong Huat together with Janice Khoo Huai Ting for Plaintiff Messrs. Tay & Helen Wong (Kuala Lumpur) 36

RHB Bank Berhad v Yung Chen Wood Industry Sdn Bhd & Ors [2019] AMEJ 1767, High Court 2. Koperasi Pembangunan Desa v Merotai Setia Maju Enterprise (Sued as a Firm) [2002] 6 MLJ 579, High Court 3. Seema Development Sdn Bhd v Mah Kim Chye [2014] 1 CLJ 804, High Court 4. AmBank (M) Bhd v Tan Tem Son & Anor Appeal [2013] 3 CLJ 317,

Dr Shamsul Bahar Abdul Kadir & Anor Appeal v RHB Bank Bhd [2015] 4 CLJ 561 6. Pacific Sanctuary Holdings Sdn Bhd (formerly known as Ideal Prestige Sdn Bhd) v. Masaland Construction Sdn Bhd [2020] 3 MLJ 692 7. Watson v Birch (1874) 15 Sim 523, 60 ER 721 8. Jay v Johnstone [1893] 1 QB 189 9. W.T. Lamb & Sons v. Rider 3 All ER 402 10. National Westminster Bank plc v. Powney & Others [1991] Ch 339 11. Lowsley and another v Forbes (t/a L E Design Services) [1998] 3 All

Re Lim Ah Hee @ Sim Ah Hee, ex parte Perwira Habib Bank [1997]

Re Lim Ah Hee, ex p Perwira Habib Bank Bhd [2000] 3 MLJ 211 14. Perwira Affin Bank Bhd v Lim Ah Hee @ Sim Ah Hee [2004] 3 MLJ 253 15. Daud v Ibrahim [1961] MLJ 43 16. Neo Ong Tew v Neo Ong Tee [1926] SSLR 120 17. Koperasi Pembangunan Desa v Merotai Setia Maju Enterprise (Sued as a Firm) [2002] 6 MLJ 579, HC 37

RHB Bank Berhad v Yung Chen Wood Industry Sdn Bhd & Ors [2019] AMEJ 1767, HC

Koperasi Pembangunan Desa v Merotai Setia Maju Enterprise (Sued as a Firm) [2002] 6 MLJ 579, HC

Seema Development Sdn Bhd v Mah Kim Chye [2014] 1 CLJ 804 21. AmBank (M) Bhd (formerly known as AmFinance Bhd) v Tan Tem Son and another appeal [2013] 3 MLJ 179 22. Dr Shamsul Bahar Abdul Kadir & Anor Appeal v RHB Bank Bhd [2015] 4 CLJ 561

Sections 2(6)(b), 6(3), 26(2) and 27(1) of the Limitation Act 1953.

Section 2(4) of the UK Limitation Act 1939 3. Section 8 of the UK Real Property Limitation Act 1874 4. Sections 40 and 42 of the UK Real Property Limitation Act 1833 5. Section 128 of the UK Common Law Procedure Act 6. Section 16 of Judicature Act 1875 7. Section 24(1) of the UK Limitation Act 1980 8. Order 46 Rules 2(1)(a) and 3 of the Rules of Court 2012 9. Order 42 Rules 18 and 19 of the UK Rules of Court 10. Order 46 Rule 23 of the Rules of the Supreme Court 11. Order 46 rule 2 and Order 46 rule 3 of the then Rules of Courts 1980

Statute of Westminster the Second (1285)