1. ) CHIA YANG HOCK 2. ) CHIA YONG HAK 3. ) CHIA YONG PENG v TETUAN TAY & PARTNERS

Case Significance

Instructive on the accrual of a negligence cause of action for limitation purposes, and on the impropriety of striking out on affidavit evidence alone a claim against solicitors that raises triable issues of limitation, fraud and partnership liability.

This High Court decision at Johor Bahru is an appeal from a Sessions Court that had struck out a claim against a firm of solicitors under Order 18 rule 19(1)(a), (b) and (d) of the Rules of Court 2012. The appellants, three brothers who were the plaintiffs below, had in 1996 purchased a commercial unit in a shopping complex in Johor Bahru from a developer, and had appointed the respondent, a firm of solicitors, to act as their conveyancing solicitors in handling the sale and purchase agreement and the deed of mutual covenants. It was undisputed that the plaintiffs had paid the full purchase price and obtained vacant possession, and that the master title over the land had been charged by the developer to a bank. Difficulties later arose, and the plaintiffs sued the firm; the Sessions Court struck out the claim on the ground that it was barred by limitation under the Limitation Act 1953, deciding the point on the affidavit evidence alone. The court, per Noor Hisham bin Ismail J, allowed the appeal. It held, drawing on established authority, that a cause of action founded on negligence does not accrue until damage is suffered, so that the six-year limitation period runs from the date damage is suffered rather than the date of the negligent act or omission, and that it was erroneous for the Sessions Court to have found the action time-barred on the basis of the existing affidavit evidence alone. The court further held that other issues, including allegations of fraud and the firm's liability under the law of partnership, were matters requiring deeper investigation and argument to arrive at a just result, and that the plaintiffs' claim was not an obviously unsustainable case warranting striking out under Order 18 rule 19. It accordingly allowed the appeal, set aside the striking-out order, and remitted the action to the Sessions Court for a full trial, with costs. The judgment is instructive on the accrual of a negligence cause of action for limitation purposes and on the impropriety of striking out a claim raising triable issues of limitation, fraud and partnership liability on affidavit evidence alone.