律所新闻

Latent defects, which are defects that cannot be discovered by reasonable inspection or testing (see: Sigma Elevator v. Isyoda [2015] 1 LNS 1363), often only surface years after completion or occupation of a building. Unsurprisingly, a recurring question that surrounds latent defects is that of limitation.

Prior to 1.9.2019, the limitation period for bringing an action in respect of latent defects would be within 6 years from the date the cause of action had accrued pursuant to section 6(1) of the Limitation Act 1953. Based on the principle in AmBank v. Abdul Aziz [2010] 3 MLJ 784, this meant that a claimant claiming in tort for latent defects must do so within 6 years from the date the damage was suffered regardless of when such defects were discovered. In Abdul Aziz, the Court of Appeal acknowledged in passing that this principle may lead to a harsh result where the damage is not apparent at the time it had occurred. Subsequently, the Court of Appeal in AmBank v. Kamariyah [2013] 5 MLJ 448 introduced the discoverability rule, under which the limitation period runs from the date the damage could have first been discovered by reasonable diligence. At the time of writing, the Federal Court has yet to resolve the apparent conflict between Abdul Aziz and Kamariyah in respect of section 6 (1).

Whilst neither Abdul Aziz nor Kamariyah involved latent defects, both cases did discuss the English case of Pirelli General Cable Works Ltd v. Oscar Faber & Partners [1983] 2 AC 1, wherein the House of Lords held that under section 2(1) of the UK Limitation Act 1980 [the English equivalent of the aforementioned section 6(1)], a cause of action in tort for defects in construction cases accrues at the date the damage came into existence, not the date when it was discovered. The ruling in Pirelli was followed by the UK Parliament introducing section 14A of the UK Limitation Act 1980 vide the UK Latent Damage Act 1986, under which limitation period for negligence actions now takes into account the claimant’s knowledge of the damage. In 2018, the Malaysian Parliament introduced an equipollent section 6A of the Limitation Act 1953 (“the Act”) with the express intention of extending the limitation period for negligence cases involving latent damage. This provision has since come into force on 1.9.2019 vide the Limitation (Amendment) Act 2018.

Since 1.9.2019, negligence actions not involving personal injuries now enjoy an extended limitation period under section 6A of the Act. Pursuant to this new provision, even after the aforesaid 6 years’ limitation period has lapsed, a plaintiff may nevertheless commence an action for damages for negligence in respect of latent defects within 3 years from the date he or she first had both the “knowledge required” and the “right” to bring such an action. However, this extended limitation period is subject to a longstop of 15 years from the date on which the cause of action accrued. It bears emphasis that section 6A does not affect the limitation period for contractual actions in respect of latent defects, which is 6 years from the date of the breach of contract (see: Abdul Aziz).

The extended limitation period under section 6A however has been somewhat offset by an onerous definition of “knowledge required” set out in section 6A (4)(b) of the Act. In particular, “knowledge required” includes, amongst others, knowledge which the plaintiff might reasonably have been expected to acquire “from facts observable or ascertainable by him” or “from facts ascertainable by him with the help of appropriate expert advice which is reasonable for him to seek”. In other words, those who wish to take advantage of section 6A may be expected to make inquiries in some circumstances, though it remains to be seen how the Courts would interpret this provision.

If you have any queries regarding the above, please do not hesitate to get in touch with us.

 

 

Lam Ko Luen Partner [email protected]

Jeremy Ooi Associate [email protected]