A person’s rights, lost and regained
In Peninsular Malaysia, a creditor loses the right to start legal action after six years has passed, but there are exceptions.
WHEN a person’s rights have been breached and/or damage caused to him, he can seek a remedy.
However, the right to do so is not unqualified. He must not only comply with the correct procedures but must also prove his case.
In criminal matters, this has to be beyond reasonable doubt. In the case of civil matters, it is on the balance of probabilities.
In some specific situations, there may be restrictions that need to be complied with before an action can be commenced.
For example, there may be a requirement that either consent must be obtained or notice given to a particular official before commencing action.
Or there may be a time limit within which a complaint must be made or an application filed. This is true when dealing with some statutory bodies or making an application, such as for judicial review.
A more critical and serious restriction is that imposed by the law of limitation, which is applied very strictly with no room for extension, unless specifically provided for. The Limitation Act 1953, Section 6 states:
“Save as hereinafter provided the following actions shall not be brought after the expiration of six years from the date of 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 and 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.”
However, this is only applicable in Peninsular Malaysia and does not extend to Sabah and Sarawak. In these two territories, the limitation provides for a shorter period but there are also provisions for the time to be extended.
But going back to the law of limitation in Peninsular Malaysia, the application of Section 6 is absolute: if the claim is filed even one day late, the right would be completely lost.
Some have argued that this will cause injustice if on occasions the court fails to extend the time. But the principle of limitation is a very ancient one.
The object of modern statutes of limitation has been described by Wood, Vice-Chancellor, in the case of Manby v. Bewicke.
“The legislature has, in this as in every civilised country that has ever existed, thought fit to prescribe certain limitations of time after which persons may suppose themselves to be in peaceable possession of their property, and capable of transmitting the estates of which they are in possession, without any apprehension of the title being impugned by limitation in respect of transactions which occurred at a distant period, when evidence in support of their own title may be most difficult to obtain.”
There is no reason why the legislature should not detract from the certainty which the subject thus enjoys by giving the courts power to enlarge the periods of limitation prescribed by statute, but one would expect any statute which had this object to be expressed with very great clarity and particularity.
As Archibald J. said in the case of Washer v. Elliott, “It is not reasonable to expect that such a change would be made without particular and precise enactments regulating the exercise of a power so extensive and exceptional, or that it would be left to be implied from mere general words the purpose and object of which may be answered by attributing to them a natural but more limited meaning.”
Thus, once the limitation period sets in, the rights of the creditor are lost and in every way the debtor is free of the debt which the debtor would otherwise have been liable for.
However, the situation can be reversed if the debtor, who is on a legal basis now free from liability, takes action towards payment of part of the debt or acknowledges the debt. This is provided for by Section 26(2) of the Limitation Act:
“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 therefore acknowledged 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 acknowledgement or the last payment.”
On the other hand, not all payments necessarily result in the revival of the debt. This is because it all depends on the nature of the debt in terms of whether it is a single debt or several distinct debts arising out of different transactions over a period of time, where some of them are time-barred and some of them are not.
It is the law that when payments are made not towards an account but towards a specific item outside the limitations period, then it does not revive a time-barred claim.
This is where the law with regard to appropriation of payments comes into play and has an effect on whether the debt is revived or not. This is provided for in the Contracts Act 1950. Section 60 reads:
“Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation or under circumstances implying that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly.”
On this basis, if the payment is made specifically for the discharge of a particular debt which is not one of those which is time-barred but a debt nevertheless due to the creditor, it will not revive the time-barred debt.
In some specific situations, there may be restrictions that need to be complied with before an action can be commenced.