11/02/2022
Civil Law Procedure Code Case Updates
Wonderful Compound Sdn Bhd v Man Plug Industries Sdn Bhd [2021] 1 LNS 470
Issues:
1. When does the cause of action (breach of contract) arose?
Facts of the case:
1. The P had filed a claim for an amount of RM 1,065,271 against the D for goods sold and delivered.
2. The invoice was dated 1st October 2013
3. However, there is a credit term of 90 days given to the D to settle the balance purchase price
4. The Claim was filed on 25th November 2019, the D averred that it was statute-barred as limitation had already set in on 1st October 2019 (6 years from the date of invoice of 1st October 2013).
Judgments:
1. Cause of action arose when payment was due, or at the expiry of the term for payment stipulated in the contract as held in Menta Construction Sdn Bhd v SPM Property & Management Sdn Bhd & Anor [2017]
2. The credit term, which formed part of the contract between parties, allowed for a 90-day grace period, which meant that the cause of action accrued only after the expiry of 90 days.
3. See Court of Appeal’s decision in Ly Furniture Sdn Bhd & Anor v Lifestyle Enterprise, Inc & Anor and another Appeal [2015] where it was held that payment for the goods sold and delivered should be made before the expiry of the credit term, and failure thereof will result in a breach of contract
4. Therefore, the last date for the P to have filed this Claim was at the expiry of the 90-day credit term, which was 29 December 2019.
5. Since the P had filed the Writ and Statement of Claim on 25th November 2019, it was obvious that this Claim was not statute-barred.
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Disclaimer:
These infographics are for general informational purposes only and will not be meant to be used or construed as legal advice in any manner whatsoever.
