Thai Kok Yoong ( ) Granstep Development Sdn Bhd ( )

Thai Kok Yoong ( ) Granstep Development Sdn Bhd ( )

Clause 7 of the Performance Guarantee read with Clauses 3 and 5 does not offend section 29 Contracts Act 1950 because it prescribes the period within which a demand/claim under the guarantee must be made (validity of the guarantee) rather than limiting the time to enforce contractual rights; because the plaintiff failed to make any demand within the guarantee validity period (one year after termination) no cause of action arose against the guarantor and the claim was properly struck out.

Citation
BA-12A-60-10/2019 (Mahkamah Tinggi)
Parties
Appellant/defendant: Thai Kok Yoong; Respondent/plaintiff: Granstep Development Sdn Bhd
Court
High Court
Jurisdiction
Malaysia
Judgment Date
13 March 2020
Case Number
BA-12A-60-10/2019 (Mahkamah Tinggi)
Procedural Posture
Civil Appeal Against Refusal to Strike Out (performance Guarantee Dispute) / High Court Appellate Determination From Sessions Court Decision
Outcome
Appeal allowed with costs; plaintiff's claim against the guarantor struck out for failure to make demand within guarantee validity period
Legal Topics
Performance Guarantee, Guarantee Liability, Section 29 Contracts Act 1950 (restraint on Legal Proceedings), Limitation and Demand Timing, Striking Out Under Order 18 Rules of Court 2012, Doctrine of Laches
Source Language
Malay/English
Contract Law Civil Procedure Performance Guarantee Guarantee Liability Section 29 Contracts Act 1950 (restraint on Legal Proceedings) Limitation and Demand Timing Striking Out Under Order 18 Rules of Court 2012 Doctrine of Laches

Case Brief

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Parties

Thai Kok Yoong

Appellant/defendant

Granstep Development Sdn Bhd

Respondent/plaintiff

Procedural Posture

Civil Appeal Against Refusal to Strike Out (performance Guarantee Dispute) / High Court Appellate Determination From Sessions Court Decision

Legal Issues

  1. 1 Whether Clause 7 of the Performance Guarantee offends section 29 Contracts Act 1950
  2. 2 Whether Clause 7 limits the time to enforce rights or only the period to make a demand
  3. 3 Whether failure to make a demand within the guarantee validity extinguished the cause of action

Ratio Decidendi

Clause 7 of the Performance Guarantee read with Clauses 3 and 5 does not offend section 29 Contracts Act 1950 because it prescribes the period within which a demand/claim under the guarantee must be made (validity of the guarantee) rather than limiting the time to enforce contractual rights; because the plaintiff failed to make any demand within the guarantee validity period (one year after termination) no cause of action arose against the guarantor and the claim was properly struck out.

Court Disposition

Appeal allowed with costs; plaintiff's claim against the guarantor struck out for failure to make demand within guarantee validity period

Orders

  • Appeal allowed with costs
  • Claim against the defendant/guarantor struck out pursuant to Order 18 Rules of Court 2012 (striking out for being unsustainable)