LAW NOW ALLOWS EXTENDED PERIOD TO SUE FOR NEGLIGENCE
The new Malaysian Act extends the limitation period for negligence suits to either 6 years from the date when the cause of action accrues, or within three years from the date on which the claimant knew about the material facts (if that period expires after the 6-year period).
Most people are aware that in court cases, there is a time limit or time bar for the aggrieved party (termed “plaintiff”) to sue the other party (“defendant”). In civil cases, the time limit can be different depending on the subject matter and who the defendant is. In the case of construction work, the law in Malaysia currently provides for the following:
- For actions in simple contract: 6 years from the date of the breach of contract.
- For actions in tort such as negligence: 6 years from the date when the cause of action accrues (e.g. when physical damage occurs).
- For latent or hidden damage: 6 years from the date on which the damage occurred.
It should be noted that, in cases of fraudulent concealment (i.e. deliberate concealment of defects), the limitation period does not begin to run until the fraud is discovered or could have been discovered with reasonable diligence, according to a blog on Malaysian laws.
However, the time bar has now been extended in favour of the claimant following the passing of the Limitation (Amendment) Act 2018 (the “Act”). It will become enforceable once it is gazetted within the next few months.
The Act will extend the maximum period for eligibility to claim to 15 years. According to Datuk Prof. Sundra Rajoo, Director of AIAC, (Asian International Arbitration Centre, formerly known as the KLRCA), the Act will also extend the limitation period for negligence suits not involving personal injuries to either 6 years from the date when the cause of action accrues, or within three years from the date on which the claimant knew about the material facts (if that period expires after the initial 6-year period).
The new section applies to all applicable limitation periods and not just exclusively construction cases although the latter forms the bulk of cases where this new limitation period applies as it involves hard to discover latent building defects. This also explains why the maximum length of time the plaintiff can bring a suit is 15 years – as other items such as cars or electrical items normally do not have such a long working life.
Most notably, it will cover latent damages in construction cases, allowing the buyer a right of action for damages for negligence from the date of discovery of the damage (as opposed to the date when the cause of action arises).
“In other words, the right of action starts from the date when the buyer discovers the damage and not from the date of purchase or from the date of possession,” the AIAC Director says in his explanatory note to ‘A Bill to Amend the Limitation Act 1953’.
LATENT DAMAGES TARGETED
Clause 2 of Section 6A of the Bill is intended to cover latent damages in construction cases. Under the new section 6A, a buyer can claim damages within three years from the date when he/she discovered the damage, regardless of the fact that on the date of purchase, the damage was not discoverable through general inspection or the buyer did not know or could not have been reasonably expected to know the damages.