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Brandley v Deane (Part 1): Limitation in Malaysian Construction Latent Defects

In Brandley v Deane, the Irish Supreme Court examined the law on computation of limitation in the context of latent defects, and adopted the "manifest" test. This article explores the possible application of Brandley v Deane in Malaysian construction latent defects, and how despite the new Section 6A of our Malaysian Limitation Act 1953, the case may have significant ramifications in pending legal proceedings.


 

On 15.11.2017, the Supreme Court of Ireland delivered its judgment in the case of Brandley & Anor v Deane & Anor, its arrival having been hailed by critics as providing much needed clarification, or at least an authoritative restatement, of the law on a rather vexing legal area.


A copy of the judgment can be accessed here.


The judgment appears to be a welcomed one by construction lawyers in Ireland, as well as members of the common law family around the world who did not have the benefit of a happily accepted statutory or common law regime dealing with limitation in the context of construction latent defects. We used to fall into this latter category, until the passing of our Limitation (Amendment) Act 2018, gazetted on 4.5.2018. A little more on this, later below.


To begin, a claimant is encouraged to bring legal proceedings within a reasonable period. His failure to do so may result in him being barred from bringing such proceedings later. This is generally promulgated by the doctrines of laches (*1) and limitation (*2). Brandley v Deane concerns the latter. In particular, one of the principal issues which the case dealt with was the question of when time begins to run in cases of negligence in the context of latent defects in the construction of a building.


To succeed in a cause of action founded on negligence, the elements which need to be proved are the existence of a duty of care, the breach of such a duty, causation and damage. Time begins to run when the cause of action has accrued (*3), namely when all 4 of these elements have crystallized. Typically, determining the point of crystallization of the first 3 elements does not raise too much of an issue. It is the 4th element which is trickier, but highly important as damage is usually the last of the elements to crystallize (though not necessarily always), and would therefore normally be the focal point in determining when time starts to run for the purposes of computing limitation. This was one of the main issues in Brandley v Deane (*4).


Brandley v Deane was in the context of the Irish Statute of Limitations 1957. Section 11(2) in essence provides that "an action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued". This provision is similar in wording and effect to Section 6 of our own Limitation Act 1953 (before our 2018 amendment). The common law had evolved in such a way that the Irish Section 11(2), as well as our Section 6, was applied in a rather unpopular but well-entrenched manner in the context of latent defects, most visibly seen in construction cases.



Despite this, common law had evolved in such a way that the statutory provisions alluded to above have in many instances been construed and applied to state that time had already began to run despite the fact that the claimant could not have known of or discovered the defect (i.e. before it was discoverable). Finding this unreasonable, untenable and unpalatable, some Courts have fashioned what they deemed a more just test: that of discoverability (described below). The discoverability test has a significant number of detractors, often on the ground that it offends the clear statutory provision of the limitation regime. In between was also spawned a spectrum of other tests. At the end of the day, we had a number of very different tests operating at the same time (*5), sometimes even erroneously used interchangeably.


Brandley v Deane identified 5 different scenarios where time could be said to begin running (at least 3 of them having some form of support in or have been flirted with by our local case law). They are:-


  1. the date of the wrongful act (this being most helpful to the defendant): the date on which the defendant committed the wrong (despite damage only occurring later)

  2. the date the damage occurs: the date on which the loss sought to be recovered actually happened

  3. the date that damage is manifest: the date on which the damage was capable of being discovered and capable of being proved, even if there was no reasonable or realistic prospect of that being so

  4. the date of discoverability: the date on which damage could or ought with reasonable diligence to have been discovered

  5. the date which the damage is actually discovered (this being the most helpful to the plaintiff).


Brandley v Deane examined and analysed the development of the law, and ultimately concluded that the proper test was that time begin to run when the physical damage caused by the latent defect (and not the latent defect itself) is manifest, meaning that the damage must have been capable of being discovered and capable of being proved by a plaintiff. Distinguishable from the discoverability test, which has often been rejected by common law Courts (see above) and which imports an element of reasonableness to the plaintiff's ability to discover the injury, the "manifest" test only requires that the manifest injury or manifest damage need only be capable of being discovered, meaning that it must be provable.


I find myself nodding in support of the "manifest" test. It serves the ends of justice, whilst appearing not to cannibalize the intention of parliament. For common law jurisdictions with provisions such as the Irish Section 11(2) but without the regime introduced by the UK's Latent Damage Act 1986, I am of the opinion that this is a clever sculpting of the law, as one patiently awaits legislative intervention.


Happily, insofar as Malaysia is concerned, the Limitation (Amendment) Act 2018 has ended this headache for us. The amendment introduces Section 6A to our Limitation Act 1953, which in short introduces the discoverability test. It provides that for any action for damages for negligence not involving personal injuries, time for the purposes of limitation begins to run from the date on which the plaintiff first had both the knowledge required for bringing an action for damages and a right to bring such action.


The above 2018 amendment is applicable to causes of action which have already accrued before the amendment came into force. However, it does not apply to any action or proceedings commenced or pending before the coming into operation of the Act. In the latter situation, although not binding on our Courts, Brandley v Deane may come in handy, and may have far reaching consequences and ramifications insofar as these pending cases are concerned in attempts to depart from the rigid application of Section 6 (*6). I would also think that the analysis and principles in Brandley v Deane may offer some guidance when applying the new Section 6A.



(1) On laches generally, see M Ratnavale [1988] 2 MLJ 371 (SC) at page 378.


(2) The primary objectives of the doctrine of limitation are to discourage plaintiffs from sleeping on their actions and more importantly, to have a definite end to litigation. The guiding basis for the doctrine is two-fold: (1) the presumption that a right not exercised for a long time is non-existent; and (2) the necessity that matters of right in general should not be left too long in a state of uncertainty, doubt or suspense.


(3) A cause of action is said to accrue when "there is in existence a person who can sue and another who can be sued, and when all the facts have happened which are material to be proved to entitle the plaintiff to succeed." See Credit Corporation (M) Bhd v Fong Tak Sin [1991] 1 MLJ 409 (SC) at page 413.


(4) The other interesting issue of law, or indeed the real issue in the case, was whether a mere defect to the foundation, without there being any actual physical damage, was sufficient to sustain an action for negligence. The Court answered in the negative. See paragraphs [111] to [136]. This requires a whole other and separate discussion, perhaps best dealt with in a separate article.


(5) In the Malaysian context, suffice for present purposes to refer to the Court of Appeal case of AmBank (M) Bhd v Kamariyah bt Hamdan & Anor [2013] 5 MLJ 448, where the Court of Appeal adopted the discoverability test and departed from AmBank (M) Bhd v Abdul Aziz bin Hassan & Ors [2010] 3 MLJ 784, which stood for the proposition that based on Section 6, time begins to run from the date damage is suffered, regardless whether it was discovered or not. These two cases appear to be good law (before the Limitation (Amendment) Act 2018 of course) and are often referred to when computing limitation.


(6) As seen in AmBank (M) Bhd v Abdul Aziz bin Hassan & Ors [2010] 3 MLJ 784.

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