HOTEL 77 SDN BHD v 1. ) PADUAN EKSKLUSIF SDN BHD 2. ) RAR ALAM BINA SDN BHD

Case Significance

Sets out the negligence framework for a flood-damage claim and the narrow scope of the Act of God defence, which applies only to extraordinary natural events that reasonable precautions could not have prevented.

This High Court decision at Johor Bahru concerns an appeal in a negligence claim for flood damage and the defence of Act of God. The appellant, Hotel 77 Sdn Bhd, the registered owner of a hotel building in Johor Bahru, had sued in negligence over flood damage, alleging that the respondents had failed to take reasonable precautions to prevent flash flooding in connection with a flood-mitigation construction project. The Sessions Court dismissed the claim, and this was the owner's appeal. The court analysed the elements of negligence, applying Donoghue v Stevenson and Arab-Malaysian Finance Bhd v Steven Phoa Cheng Loon, namely whether the respondents owed the appellant a duty of care, whether that duty was breached, whether there was a causal connection between the breach and the loss, and whether the appellant had proved negligence on the balance of probabilities. It also addressed an evidential point: a report prepared by a third party had been tendered through an agency witness without calling its maker, raising questions of admissibility under section 73A of the Evidence Act 1950, the best-evidence rule, and the drawing of an adverse inference under section 114(g). The court set out the limits of the Act of God defence, explaining that it applies only where a natural event is so extraordinary and beyond human intervention that even reasonable precautions could not have prevented it, and that where damage flows from a foreseeable and avoidable occurrence the injured party may recover, with the courts today more cautious about accepting the defence as human knowledge and foreseeability increase. Finding no error in the Sessions Court's findings that warranted appellate interference, the court affirmed those findings and dismissed the appeal with costs of RM5,000. The judgment is a useful statement of the negligence framework and the narrow scope of the Act of God defence in flood-damage claims.