Tips Hartanah

Latent defects — now you can make claims after six years but…

Many may not be aware that they have generally six years’ period to commence legal action to enforce their rights if they suffer from any physical or financial injury. This is stipulated under Section 6(1)(a) of the Limitation Act 1953.

The imposition of a time limit to file legal action is to prevent injustice to defendants as they might have lost the evidence to disprove a stale claim over time. In addition, persons with good causes for action are expected to pursue them with reasonable diligence. 

Nevertheless, there are many instances where persons who have suffered damages are not able to commence legal action to enforce their rights as the damages only manifest themselves or come into the persons’ knowledge past six years.

It will be too late for them as they are barred by the Limitation Act from pursuing their legitimate claims. This commonly happens in property defect cases as most owners do not have the know-how to uncover or identify defects in buildings.

More often than not, they will only be aware of the problems when the defects manifest themselves or become apparent through chance inspection. This kind of defect is commonly known as “latent defect” as opposed to “patent defect”, which refers to a defect which is easily detected.

Unfortunately, these latent defects usually rear their ugly heads after the expiry of the defect liability period (DLP) of 24 months as stipulated in the standard sale and purchase agreement (SPA) under the Housing Development (Control & Licencing) Act and its regulations.

This unenviable situation can be seen in the House of Lords’ 1983 decision of Pirelli General Cable Works Ltd vs Oscar Faber & Partners (A Firm). In Pirelli, damage was done to a factory due to the wrong usage of construction material for the chimney.

The chimney was built in 1969 but the faulty condition of the chimney was only discovered in 1977. A legal action was filed only in 1978. The question was whether the six-year period ran from the date the faulty chimney was built or from the date when the fault could have been or was discovered.

The House of Lords held that the date of accrual of a cause of action in tort for damage caused by the negligent design or construction of a building was the date when the damage came into existence, and not the date when the damage was discovered or should with reasonable diligence was discovered.

As the cracks occurred in the chimney not later than April 1970 and since that date was past six years before the commencement of the claim, it was barred by limitation.

This decision is persuasive to Malaysian courts because Section 2 of the UK Limitation Act 1939 is similar to Section 6(1) of the Malaysia Limitation Act.

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