Analysis of Section 6A of the Limitation Act – Real Estate

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The Limitation Act 1953 provides a limitation period of 6 years during which a plaintiff is permitted to enforce his rights against any claim in contract or tort. In other words, after the 6 year period, anyone will generally be prohibited from making such claims.

Within the construction industry, it was common to assert that this law is restrictive and unfair with regard to latent defects. Hidden defects are invisible or undetected defects that can only be apparent by inspection. There have been instances where owners only became aware of the defects in their newly purchased property after the 6 year statute of limitations expired and were therefore prevented from taking legal action to enforce their claims. rights against the promoter and/or the contractor.

However, it was not until 2018 that the Malaysian Parliament redefined the Latent Defects Act by introducing Section 6A into the Limitation Act 1953. The amendment to the Limitation Act reassures owners in such a situation because it redresses the injustice that allows the owner to bring the action despite the rigidity of the law.

Pre-Amendment

In the years before the Limitation Act was amended, the limitation period for latent defects fell strictly under section 6(1)(a) of the Limitation Act 1953, the provision states what follows:

“Subject as hereinafter provided, the following actions may not be brought after the expiration of six years from the date on which the cause of action arose, that is, actions based – on a contract or on a tort; »

Because of the similarities between section 6 of the Limitation Act 1953 and section 2 of the UK Limitation Act 1980, the Malaysian courts were very persuaded by the House of Lords’ decision in
Pirelli General Cable Works Ltd v Oscar Faber & Partners (a firm) [1983] 1 All ER 65s. In this case, due to negligent design and construction, the plaintiffs sued for damages arising from cracks in their chimney. However, expert testimony revealed that such cracks appeared in 1970, but the plaintiffs did not discover the cracks until 1977.

At that time the House of Lords held that although the damage caused by the cracks could not have been discovered at the time it appeared, the plaintiffs were still hit by the 6 year statute of limitations and therefore , the action was prescribed. Lord Fraser of Tullybelton was of the opinion that although he recognizes the inadequacy and injustice of state law, the statute of limitations itself is so firmly established that only the British Parliament can alter it.

Following the decision in the Pirelli case, the UK Parliament took notice and amended the law by introducing a new section 14A in the UK Limitation Act 1980, which provides a special time limit for actions in negligence where the relevant facts to the cause of action are not known as of the date of the action. regularization.

Although the law in the UK has been updated, the Malaysian court has been reluctant to follow the UK position due to the lack of a similar or equivalent amendment to our Malaysian Limitation Act 1953. In 2010, the same legal problems in
Pirelli were raised inAmBank (M) Bhd vs. Abdul Aziz bin Hassan & Ors [2010] 3MLJ 784. Here, the Court of Appeal followed the decision in Pirelli and stated that the situation in Malaysia remains the same and that the statute of limitations runs from the date the cause of action arises, whether or not the plaintiff discovers the damage. The Court of Appeal further states that there is only one test in Malaysia for determining limitations, and it is found in Section 6(1)(a) of the Limitation Act 1953. .

However, due to the inadequacy of the law in our legislation, in 2013 the Court of Appeal of AmBank (M) Bhd vs. Kamariah bt Hamdan & Anor [2013] 5MLJ 448 moved away from following the position in Abdul Aziz bin Hassan. In this case, the panel unanimously held that the limitation period does not begin to run until the damages are first known or discovered. Due to the contradictory decision, there has been confusion as to the position of the statutes on the limitation of latent defects.

Post-Amendment

To address conflicting rulings and unfairness that can arise in the construction industries, in April 2018, the Malaysian Parliament introduced a new Section 6A in the Limitation Act 1953, which came into force on 1stSeptember 2019. The new layout can be seen as follows:

“6A. Limitation of Actions for Damages for Negligence Not Involving Bodily Injury

(1) Notwithstanding subsection 6(1), this section applies to any action for damages for negligence not involving bodily harm, where the commencement date of the calculation of the limitation period under subsection (2 ) falls after the date on which the cause of action accrued.

(2) An action to which this section applies may not be brought after the expiration of three years from the commencement date if the three-year period expires after the limitation period provided for in paragraph 6(1).

Notwithstanding the limitation period of 6 years, the new article 6A(2) extends the limitation period to an additional 3 years from the date of discovery of the latent defect. However, the new limitation period is also subject to S.6A(3) under which an action is barred after the expiration of fifteen years from the date on which the default occurred. S.6A(3) states the following:

“(3) Notwithstanding subsection (2), no action shall be brought after the expiration of fifteen years from the date on which the cause of action arose.”

In short, the addition of the new Section 6A introduces the new expiration of the statute of limitations for latent defect as follows:-

  1. 3 years from the date of discovery of the defect; and

  2. 15 years from the date of appearance of the defect.

Reading the new Section 6A(4), the moment begins when the owner has both knowledge of the damage and the right to bring such an action, and such “knowledge” means having knowledge of the material facts of the damage and of the identity of the accused. In addition, Section 6A(4)(b) also states that the owner must be reasonably alert to the discovery of defects, either by his own observation or with the aid of any relevant expert opinion he may reasonably ask. However, the owner is not limited to the defect being found only with the aid of expert advice, so long as he has taken all reasonable steps to obtain, if necessary, and acted on the basis of this opinion.

Conclusion

The amendments to the Limitation Act certainly enlighten owners since the law on latent defects is now enshrined in law. Unlike the injustice suffered by owners during the pre-amendment, the amendment to the Limitation Act allows the owner to enforce his rights within a reasonable time from knowledge of the defect and up to 15 years from of the occurrence of the defect. However, it is imperative for the owner to be vigilant and not to sit on their rights and take legal action to enforce their rights as soon as the damage is known. If in doubt, the owner should take extra care by seeking the advice of any appropriate expert immediately. On the other hand however, this exposes the developers to a wider range of liability as the time limit for filing a lawsuit has been extended. It also indirectly forces the developer to be more aware of the product used and to deliver the property with better quality.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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