Part 6: Limitation Law and Foreclosure

 

Disclaimer: This article contains personal views and analysis on matters of public interest. It is not legal advice. Readers should consult a qualified lawyer for advice on their specific circumstances.

From Sivadevi to Thameez and the Question of Sabah’s 60‑Year Horizon

In Part 5, I exposed the inequity: borrowers in the Peninsula lived under a 12‑year horizon, while borrowers in Sabah faced a 60‑year horizon. The same default, but radically different consequences depending on geography. That inequity could not stand unchallenged. Courts revisit their own decisions, and when they do, the consequences ripple across the federation.

 

Here, I turn to the Federal Court’s decision in Thameez. It is a case that corrected a doctrinal misstep in the Peninsula and clarified how limitation law applies to foreclosure actions under the Limitation Act 1953.

 

The Turning Point: Sivadevi (2020) vs Thameez (2023)

In Sivadevi (2020), the Federal Court held that an Order for Sale was not an “action” under s.21(1) of the Limitation Act, meaning limitation did not apply.

 

In Thameez (2023), the Federal Court departed from Sivadevi, holding that an Order for Sale is an “action” under s.21(1). Foreclosure actions are therefore subject to a 12‑year limitation period in the Peninsula.

 

This reversal is more than a technical correction. It rebalanced the rights of chargees and borrowers, and it restored certainty in the Peninsula.

 

Why This Matters — and Why Sabah Is Different

For decades, Sabah courts have treated foreclosure actions as subject to a 60‑year limitation period under the Sabah Limitation Ordinance. That position has left borrowers exposed for most of their lives.

 

The Federal Court’s decision in Thameez binds courts in the Peninsula on the Limitation Act 1953. But Sabah applies its own Ordinance, with its own schedules and provisions. That means the inequity remains: borrowers in Sabah still face a different horizon unless the Ordinance is interpreted afresh or reformed legislatively.

 

Key Principles in Plain Language

Peninsula: Foreclosure actions are subject to a 12‑year limit under the Limitation Act 1953.

 

Sabah: Foreclosure actions have been treated as subject to a 60‑year limit under the Limitation Ordinance.

 

Systemic impact: The law is fragmented. Borrowers in different regions live under different rules.

 

Comparative Perspective

Globally, a 12-year limitation period for actions to recover land or enforce charges is the common norm.For example, under the United Kingdom’s Limitation Act 1980, the period is 12 years for actions to recover principal money secured by a mortgage or to enforce the charge.

Sabah’s longstanding 60-year approach stands out as unusually extended by international standards. Borrowers here remain exposed to enforcement far longer than in most comparable jurisdictions, while elsewhere legal certainty is restored after 12 years.

Systemic Reform Lens

This case illustrates why clarity in limitation law is essential. Without it:

 

Borrowers face perpetual insecurity.

 

Chargees exploit discretion to delay enforcement.

 

Courts struggle with inconsistent precedent.

 

By correcting Sivadevi, the Federal Court in Thameez restored fairness in the Peninsula. But the inequity across Malaysia remains. The question now is whether reform will extend to Sabah and Sarawak, or whether regional fragmentation will continue to erode trust in the system.

 

The Federal Court’s decision in Thameez marks a turning point for the Peninsula. Foreclosure actions there are now subject to a 12‑year limitation, running from the date of default. For borrowers, certainty is restored. For chargees, vigilance is essential.

 

But for Sabah, the horizon remains 60 years under its Ordinance. The inequity is not yet resolved. In Part 7, I will turn to this unresolved question — examining whether institutions, lawyers, and leaders in Sabah will confront the disparity, or whether systemic reform can finally extend across the federation.