Makeway Construction Sdn Bhd v Country Heights Smart Living Sdn Bhd (BA-22C-21-07/2025)

This is an appeal by the Defendant against my decision delivered on 8.5.2026, wherein I dismissed the Defendant's application in Enclosure 9 to, inter alia, set aside the Judgment in Default of Appearance dated 20.8.2025 (“the Application”).

The Plaintiff was appointed by the Defendant to undertake works in respect of 2 projects under two Letters of Acceptance dated 9.7.2010 and 15.7.2010 respectively (“LoAs”).

Notwithstanding the issuance of the Final Certificates for both projects on 29.6.2012, the Plaintiff claimed that the Defendant has failed, neglected and/or refused to settle and/or pay an outstanding sum of RM1,012,071.53.

It is also in evidence that the Defendant has issued the Confirmations of Balance for the years 2019, 2022 and 2023 where the Defendant has requested the Plaintiff to “confirm the under mentioned balance on your account to our auditors”. The three Confirmations of Balance issued by the Defendant consistently acknowledged that the outstanding balance due and owing to the Plaintiff was RM1,012,071.53.

Despite numerous reminders, 29 in total, as well as the service of a statutory notice dated 6.6.2025 under s. 465(1) and s. of the Companies Act culminating in a letter of demand dated 24.6.2025 issued by the Plaintiff to the Defendant for the balance outstanding sum of RM1,012,071.53, no payments were forthcoming from the Defendant.

The Plaintiff then initiated this action on 17.7.2025 to recover the balance outstanding sum of RM1,012,071.53 from the Defendant.

The Writ and Statement of Claim dated 17.7.2025 were served by registered post to the Defendant’s registered address on 18.7.2025.

In default of appearance by the Defendant, a Judgment in Default of Appearance was entered against the Defendant on 20.8.2025 (“JID”).

The execution of the JID was undertaken by the Plaintiff in the form of a garnishee proceedings under O.49 Rules of Court, 2012 vide BA-37G-93-09/2025.

The Application was filed on 17.12.2025, approximately four months after the JID, and notably just one day before the hearing of the Garnishee Order to Show Cause which was scheduled on 18.12.2025.

The cause papers pertinent to the Application are as follows :-

the Writ and the Statement of Claim both dated 17.7.2025 (Enclosures 1 and 2);

(ii) the Affidavit of Service affirmed by Kesevan A/L Nasiramulu on 15.8.2025 (Enclosure 4);

(iii) the Certificate of Non-Appearance dated 20.8.2025 (Enclosure 5);

(iv) the JID dated 20.8.2025 (Enclosure 7);

the Application dated 17.12.2025 (Enclosure 9);

(vi) the Defendant’s Affidavit in Support affirmed by Khavitha Devi A/P Pothuraju on 30.12.2025 (Enclosure 10);

(vii) the Plaintiff’s Affidavit in Reply affirmed by Lim Teik Huat on 27.01.2026 (Enclosure 11);

(viii) the Defendant’s Affidavit in Reply affirmed by Khavitha Devi A/P Pothuraju on 25.02.2026 (Enclosure 12).

Having perused the cause papers, documents exhibited thereto and the extensive submissions by parties, I dismissed the Application on 8.5.2026 and my grounds are as stated below.

At the hearing of the Application, when he was referred to O.62 r.4(1) of the Rules of Court 2012 (“RoC”), the Defendant’s Counsel conceded that the JID may be regular in view that the service of the Writ and Statement of Claim onto the Defendant was effected by registered post to the registered address of the Defendant.

As such, in determining the Application, where and if the JID was regularly obtained, the court must be satisfied that the Defendant has defence on merits which raises a bona fide reasonable defence that ought to be tried.

The Federal Court in Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305 held as follows : “The principle of setting aside a default judgment under O. 13 r. 8 has been well established and needs no detailed repetition. What is important to observe is that a default judgment is not a judgment on the merits. Accordingly, when such judgment is obtained irregularly, such irregularity would be a sufficient ground by itself for setting it aside. But where the default judgment has been obtained regularly, in order to succeed the defendant must file an affidavit of merits, i.e. the defendant must disclose by affidavit evidence that prima facie he has a defence on the merits. Put in another way, the affidavit must disclose that he has an arguable or triable issue on the merits. (see Evans v. Bartlam [1937] AC 478)…” [Emphasis added]

O.62 r.4 of the RoC provides as follows : Service on corporation (O. 62, r. 4)

Where an action is against a corporation, the writ may be served—

by leaving a copy of it at the registered office (if any) of the corporation;

by sending a copy of it by registered post addressed to the corporation at the office, or, if there are more offices than one at the principal office of the corporation, whether such office is situated within Malaysia or elsewhere;

by handing a copy of it to the secretary or to any director or other officer of the corporation; or

in the case of a foreign company registered under Part XI of the Companies Act 1965 [Act 125] by handing a copy of it to, or sending the same by registered post to, a person authorized to accept service of process on behalf of the foreign company.

The service of the Writ and Statement of Claim onto the Defendant in this case was effected to the registered address of the Defendant by registered post on 18.7.2025. This is clearly evidenced in the Affidavit of Service, vide Enclosure 4.

The search conducted on the Defendant at the Companies Commission of Malaysia showed that the registered address of the Defendant is also the business address of the Defendant (see Exhibit LTH-2 of the Plaintiff’s Affidavit in Reply affirmed by Lim Teik Huat on 27.01.2026 (Enclosure 11)).

Accordingly, I am satisfied that the Writ and Statement of Claim were duly served on the Defendant by the Plaintiff pursuant to O.62 r.4(1)(b) of the RoC. It follows that the JID was regularly obtained upon the Defendant’s failure to enter an appearance within the time prescribed by the RoC.

As the JID was regularly obtained, the burden rests on the Defendant to demonstrate that it has a bona fide defence on the merits warranting the setting aside of the JID. To discharge that burden, the Defendant relies on the following grounds :-

that the Plaintiff’s claim is statute-barred by limitation; and

(ii) that the Plaintiff’s works were defective.

I shall deal with each issue in turn.

The Issue of Limitation

It is the Defendant’s contention that the Plaintiff’s cause of action accrued on 29.6.2012 when the Final Certificates were issued. On that basis, according to the Defendant, limitation has set in on 28.6.2018 under s. 6(1) of the Limitation Act 1953. The Writ was filed only on 17.7.2025.

Further, whilst the Defendant accepts that the Plaintiff relies on the Confirmations of Balance for years ending 2019, 2022 and 2023, the Defendant maintains that these came after the expiry of limitation and cannot revive a time-barred claim.

In support of its contention that an acknowledgment or admission must be made within the applicable limitation period in order to extend time beyond six years, the Defendant relied on Lakshmi I/K Malayandy v EK Housing Developer Sdn Bhd & Ors [2014] MLJU 1895, Tan Hin Choon & Ors v Ban Hin Lee Bank Ltd [1972] 2 MLJ 211, and Wright v Pepin [1954] 2 All ER 52.

The Plaintiff, on the other hand, relies on sections 26(2) and 28(4) of the Limitation Act 1953.

s. 26(2) provides : 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: Provided that a payment of a part of the rent or interest due at any time shall not extend the period for claiming the remainder of the rent or interest then due, but any payment of interest shall have effect, for the purposes of this subsection only, as if it were a payment in respect of the principal debt.

(ii) s. 28(4) provides : An acknowledgment of any debt or other liquidated pecuniary claim shall bind the acknowledgor and his successors but not any other person: Provided that an acknowledgment made after the expiration of the period of limitation prescribed for the bringing of an action to recover the debt or other claim shall not bind any successor on whom the liability devolves on the determination of a preceding estate or interest in property under a settlement taking effect before the date of the acknowledgment.

In Fatric Sdn Bhd v Hassan bin Abd Hamid & Ors [2018] 10 MLJ 289, the High Court held that an acknowledgment made after the expiry of the six-year limitation period could operate to revive a cause of action under s. 26(2). The case further made a distinction between the Sarawak/Sabah Limitation Ordinances, the English Limitation Act 1980 and the Limitation Act 1953 applicable in Peninsular Malaysia and held that the Limitation Act 1953 does not contain express wording requiring acknowledgments to be made before the expiration of the limitation period, unlike the Sarawak/Sabah Limitation Ordinances, the English Limitation Act 1980.

As such, the issue before this Court is whether the applicable statute here provides for a fresh accrual upon acknowledgment within the meaning of s. 26(2) of the Limitation Act 1953.

In my judgment, it does.

The facts as revealed in the documents show that the Defendant has issued repeated Confirmations of Balance acknowledging the same debt, well after June 2018, which are as follows :-

the Confirmation of Balance dated 23.1.2020 acknowledging as due as at 31.12.2019;

(ii) the undated Confirmation received on 10.4.2023 acknowledging as due as at 31.12.2022;

(iii) the undated Confirmation received on 15.3.2024 acknowledging as due as at 31.12.2023.

The Court of Appeal in Hasrat Usaha Sdn Bhd v Pati Sdn Bhd

3 AMR 501 had the occasion to state that confirmation of balance constituted a clear and unequivocal admission of a debt. At paragraph 9, the Court of Appeal held : “With respect it must be noted that the facts of the above case are distinguishable. As can be seen from the facts of the instant case the letter exhibit "RS3" emanated from the defendant's own office and presumably the contents of that letter must have come from the defendant's own accounts department. Although the plaintiff disputed the correctness of the amount stated in the said letter, claiming that a bigger amount was due and owing from the defendant, we are of the view that there is a clear and unequivocal admission by the defendant that there was a balance due to the plaintiff to the tune of RM1,310,806.02. Up to that amount, the defendant is under obligation to pay to the plaintiff. It does not make any difference that the defendant was merely enquiring and seeking confirmation of the correctness of the figure. The facts still remained that the defendant's own accounting records show that there was an outstanding sum of RM1,310,806.02 payable to the plaintiff. Accordingly the appeal of the defendant is dismissed with costs.”

The Defendant here did not say that these Confirmations of Balance were forged; the Defendant did not say that they were issued by mistake; the Defendant did not say that they were issued under protest nor did the Defendant say that these Confirmations of Balance were conditional or subject to a reservation of rights.

The Defendant’s only contention is that, as a matter of law, these Confirmations of Balance came too late.

The issue is one of construction of the documents rather than deciding on contested facts. The relevant documents are before this Court and as such, this Court is in as good a position as a trial court to construe the documents and determine whether they disclose a bona fide defence on the merits.

The starting point must be the language of the Limitation Act 1953 applicable in West Malaysia.

In substance, s. 26(2) allows, that where a right of action has accrued to recover a debt and the person liable acknowledges the claim, the right shall be deemed to have accrued on and not before the date of the acknowledgment.

S. 28(4) provides that an acknowledgment of any debt shall bind the acknowledgor and his successors, subject to the proviso relating to successors on whom liability devolves under a settlement.

Section 26(2) contains no express requirement that the acknowledgment must be made before the expiry of the limitation period.

This is materially different from s. 19(1) of the Sarawak Limitation Ordinance, which expressly provides that an acknowledgment must be made “before the expiration of the period prescribed”. The Defendant’s reliance on the Sabah and Sarawak position is therefore misplaced. Those statutes contain materially different wording. The present case is governed by the Limitation Act 1953.

In Fatric, the High Court held that the missing words found in the Sarawak Ordinance cannot be read into s. 26(2) of the Limitation Act 1953. The Court reasoned that Parliament would have included such words had it intended s. 26(2) to operate in a similar restricted manner.

I respectfully agree with that reasoning.

The Court must construe the statute enacted by Parliament. It is not permissible to import into s. 26(2) words which Parliament did not enact.

I find that the Defendant’s argument would effectively require this Court to read s. 26(2) as though it says: “provided that the acknowledgment is made before the expiration of the limitation period.”

Those words are clearly absent and the absence is significant because other limitation regimes contain express provisions either requiring acknowledgment before expiry or prohibiting revival after expiry.

S. 29(7) of the English Limitation Act 1980, expressly provides that a right of action once barred shall not be revived by subsequent acknowledgment or payment. No equivalent provision exists in the Limitation Act 1953.

This supports my conclusion that, under the Limitation Act 1953, an acknowledgment falling within ss. 26(2) and 28(4) is not precluded merely because it was made after expiry of the original limitation period.

The Defendant further contends that the Confirmations of Balance did not amount to acknowledgments of debt, per se because these Confirmations did not state that the debt “subsists” and further these Confirmations contained wording to the effect that the account may have been paid or settled since the date mentioned.

I reject this argument as well as the test is whether the document, fairly read, contained an acknowledgment of liability in respect of the debt or liquidated pecuniary claim.

I find that these Confirmations of Balance identified the Plaintiff, the Defendant and the exact outstanding balance. They were issued successively over several years. The same figure was repeated. There was no counterclaim, qualification, reservation, or denial. The phrase suggesting that the account may have been paid or settled since the mentioned date did not destroy the acknowledgment. It did not deny the existence of the balance as at the relevant date.

In any event, and perhaps more importantly, the Defendant has not adduced evidence that the debt was in fact paid or settled.

I therefore find that the Confirmations of Balance constitute acknowledgments of debt within sections 26(2) and 28(4) of the Limitation Act 1953.

In the upshot, I hold that the Confirmations of Balance are clear acknowledgments of the Defendant’s debt to the Plaintiff and consequently, s. 26(2) operates to provide a fresh accrual of action from the date of the acknowledgment, even if the claim was previously statute-barred. The Confirmations of Balance issued successively by the Defendant thus revived the Plaintiff's claim.

Putting it another way, the Defendant’s attempt to raise a defence of limitation was negated by its own post-expiry acknowledgments, which revived the claim under the Limitation Act 1953.

It is thus, my finding that the Plaintiff’s cause of action is accordingly deemed to have accrued on the dates of the respective acknowledgments, the earliest being 23.1.2020. As such, the Writ filed on 17.7.2025 is therefore not statute-barred and the limitation issue does not disclose a bona fide defence on the merits.

(ii) The Issue of Defective Works and Set-off

The Defendant further alleges that the Plaintiff has breached the contract through defective works discovered in 2011.

Correspondences were produced by parties on this issue, spanning between 30.5.2011 until the termination of the Plaintiff vide the Defendant’s letter dated 28.7.2011.

Thereafter the architect issued two Final Certificates on 29.6.2012 for both projects. At no material time did the Defendant raise any objections or challenges to the two Final Certificates.

I accept the Plaintiff’s evidence that the Plaintiff has since 2016 issued 29 reminders to the Defendant for payment of the outstanding amount, all to no avail. Please see Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian Merchant Bank Berhad (1995) 4 CLJ 283.

Most significantly, the Defendant subsequently issued the Confirmations of Balance acknowledging and admitting its indebtedness to the Plaintiff without any qualification, reservation or assertion of a right of set-off for rectification costs.

Under the above circumstances, the Defendant’s attempt to raise the issue of defective works in its affidavit in support of the Application affirmed on 31.12.2025, and after garnishee proceedings had commenced, does not elevate the allegation into a bona fide defence on the merits. This is particularly so when viewed against the Defendant’s prolonged inaction, its failure to challenge the Final Certificates, its repeated acknowledgements of the debt, and the complete absence of any contemporaneous attempt to pursue its purported claim for rectification costs.

Based on the above deliberations, I am satisfied that the JID was regularly obtained and the Defendant has failed to demonstrate any defence on merits.

Accordingly, Enclosure 9 was dismissed with costs of RM8,000.00 to the Plaintiff, subject to allocator. Dated : 13th July 2026 t.t ………………………………………… Shahriza Zalina Binti Abdul Shukor Judicial Commissioner Mahkamah Tinggi Malaya Shah Alam For the Plaintiff: Mr. Polwin Sua Shiang-Nian (Messrs Sua & Co.) For the Defendant: Mr. Adrian a/l Silvarajoo Miss Nur Amalina binti Mohamad Rosli (Messrs Adrian & Co.)