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  • Writer's pictureGavin Jayapal

Running accounts and limitation

The Running Man (1987) is a ridiculously campy (yet excellent) affair. It is emblematic of film from the 80s.


Its premise is simple: in a dystopian future, humanity derives great pleasure from over-the-top game shows that involve literal duels to the death.


Not far off reality, one dares to venture.


A conversation with a solicitor and a discussion of The Running Man brought to mind a little-discussed scenario: limitation and running accounts.




Limitation is always a thorn in one’s side. It may serve as an absolute defence that could result in one’s claim being struck.


Limitation may be a triable issue. Viva voce evidence may be required to determine when a cause of action arose (AmBank v Metroplex [2012] 8 MLJ 832; Malaysia Debt Ventures v Ho Siau Chiang [2018] MLJU 146).


Running accounts


Running accounts enjoy a peculiar position in limitation. In Stamford College v Seri Stamford College [2021] MLJU 1386, Nantha Balan J (presiding JCA) defined a running account as follows:


[30] I mentioned earlier that SCB was asserting that the Claim against SCPJ and SCM arose out of a “running account”. On that premise, it was argued that the claim was not caught by limitation. Hence, it is apposite to ask – what is a running account? The short answer is that a running account is a single account and not composite of its various parts. A payment made on a running account is in respect of the entire outstanding balance, with the result that time is extended for the whole debt.


Assume that you order 100 reams of paper on credit. The reams are delivered to you, with a 30-day credit period.


20 days after delivery of the first batch, you order an additional 20 reams. These get added to your account, with a running tally being racked-up. You make payments intermittently.


As you make payment, the limitation period is extended accordingly.


Does limitation affect running accounts?


Does limitation accrue to a running account?


The short answer: Yes.


The crucial issue for determination would be the gap between the last entry on the running account and the last date for payment.

When the recipient makes payment, the limitation period gets extended. This is pursuant to S. 26(2) of the Limitation Act 1953, which provides:

Fresh accrual of action on acknowledgment or part payment

26. (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:

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.

In Ekuiti Setegap v Plaza 393 [2018] 4 MLJ 284, the CA applied the ratio of the HC in Malayan Banking v Wembley Industries [2012] MLJU 91 and stated:


“[32] Before we proceed with the main issues, we wish to state at the outset that we find no appealable error in respect of the learned judge’s finding that the plaintiff’s claim is based on a running account. In Wembley Industries Holdings Bhd, it was held:
 … a running account is a single account and not a composite of its various parts. A payment made on account of a running account is in respect of the entire outstanding balance, with the result that time is extended for the whole of the debt. It appears, therefore that a running account will become statute-barred only if more than six years elapse between the supply of the last article under it and the last payment on account.
[33] Consequently, we agree with the learned judge that the plaintiff’s claim is not barred by limitation under s 6 of the Limitation Act 1953. We also agree that s 45(3)(c) of the STA allows the plaintiff to charge and claim interest of 10% pa for the late payment of the maintenance charges.”


In Mascot Star Enterprise v Perbadanan Pembekalan Air Pulau Pinang [2021] MLJU 1830, the HC applied Ekuiti Setegap and stated:


[62]  Thus, having perused the grounds of the judgment in Ekuiti Setegap Sdn Bhd (supra), I am of the considered view that the Court of Appeal did not hold that limitation period does not apply in the case of a running account as contended by the learned counsel for the plaintiff.
[63]  The LA is still applicable to running accounts. However, if there are payments made in respect of the running account, the last date for payment would extend the limitation period in respect of the whole outstanding debt.
[64]  A running account assumes some payments made to keep it as a running account. The payments made are acknowledgement of the continuing debt. Thus, each payment made would renew the date of accrual of the cause of action.




From the above, it is clear that a running account’s limitation period may be extended by partial payment. The time period from which limitation will begin to run would be the date on which the last payment was received.


To put this into a diagram:

A claim caught by limitation may be refreshed and reignited by a partial payment. In such a scenario, practitioners would be wise to temper their advice to their clients.



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