Articles

Introduction

At the heart of a claim for latent building defects is a question of timing – when does the injured party (e.g. a building owner) have a right to sue for latent defects? How long will they have to commence action under Singapore law?

The Appellate Division has clarified these questions in the case of Management Corporation Strata Title Plan No 4099 V KTP Consultants Pte Ltd [2024] SGHC(A) 32 (“MCST v KTP”) in relation to Section 24A of the Limitation Act 1959 (2020 Rev Ed) (the “LA”). However, a recent decision by the English Supreme Court potentially signals the unravelling of the Singapore position in the future.

Singapore’s position on limitation of tortious claims for building defects 

Under Singapore law, limitation of actions is dealt with by the LA. 

For an action in tort, the starting position is Section 24A of the LA. Under Section 24A(3) of the LA, a claim for latent defects will be time-barred if the action is brought: 

1. 6 years from the date on which the cause of action accrued (i.e., the date when the damage occurred). This is the ‘damage’ limb; or 
2. 3 years from the earliest date on which the claimant first had both the knowledge required for bringing an action for damages in respect of the relevant damage, and a right to bring such an action, if that period expires later than the period mentioned in paragraph (a). This is the ‘knowledge’ limb.

Section 24A(4) of the LA elaborates on the requirements for “knowledge” under the ‘knowledge’ limb: 

1. that the injury or damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty;
2. of the identity of the defendant;
3. if it is alleged that the act or omission was that of a person other than the defendant, of the identity of that person and the additional facts supporting the bringing of an action against the defendant; and
4. of material facts about the injury or damage which would lead a reasonable person who had suffered such injury or damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.

A critical question arises – what is the difference between the ‘damage’ limb and the ‘knowledge’ limb? In the case of latent building defects, the first sign of damage is when it is discovered by the injured party. This appears to overlap with the injured party’s “knowledge” to commence a claim.

The difference between the ‘damage’ and ‘knowledge’ limbs is explained in MCST vs KTP, which we now turn to.  

Facts of MCST v KTP

Este Villa is a 121-unit cluster terrace development. The relevant parties involved are:  

1. MCST: MCST 4099 (“MCST”) 
2. Developer: Kedron Investments
3. Main Contractor: TPS Construction (“TPS”) 
4. Structural Engineer and Qualified Person (“QP”): KTP Consultants (“KTP”) 
5. Architect: AGA Architects (“AGA”)
6. Sub-contractor: Polydeck Composites (“PD”)  

In June 2015, the claimant MCST discovered numerous alleged defects after the development had obtained TOP and CSC.  

The MCST engaged Bruce James Building Surveyors, whose 22 September 2016 report (“BJ 2016 Report”) recorded, amongst others, “excessive accelerated deterioration” and warping of timber cladding around bay windows in fourteen units and recommended further investigation into the Development’s façade system. 

TPS performed rectification works from March 2017 to June 2017. Between March 2017 and September 2017 similar deterioration, delamination and panel detachment reappeared, eventually affecting forty-nine units (“Cladding Defect”).

On 21 February 2022, the MCST commenced an action against TPS; in July 2022, the MCST engaged Meinhardt Façade (“Meinhardt”), who issued reports on 29 July 2022 and 3 August 2022 on the Cladding Defect.

The MCST amended its Statement of Claim on 17 February 2023 to add KTP, AGA and PD to the suit, alleging that KTP breached its duty of care owed to the MCST as well as statutory duties under the Building Control Act 1989 (2020 Rev Ed) in relation to the Cladding Defect. 

KTP applied on 28 August 2023 to strike out the MCST claim against it, contending that the MCST’s Cladding Defect claim was time-barred under Section 24A(3) of the LA. The Assistant Registrar dismissed the application. KTP appealed against the Assistant Registrar’s decision in the High Court. 

The High Court’s Decision 

On appeal to the High Court, Judicial Commissioner Alex Wong allowed the striking out application, holding that the MCST’s claim against KTP accrued (at the latest) from February 2020 under Section 24A(3) of the LA, and was time-barred by the time the MCST commenced proceedings against KTP on 17 February 2023.  

On the ‘damage’ limb, i.e., Section 24A(3)(a) of the LA, the High Court found that “the Bruce James Report clearly noted on 22 September 2016 that physical damage had manifested on the cladding façade.”  

Section 24A(3)(a) codifies the principle under English law – that a cause of action in negligence accrues when the damage is suffered by the claimant (Lian Kok Hong v Ow Wah Foong and another [2008] 4 SLR(R) 165 (“Lian Kok Hong”) at [24], citing the English case of Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 (“Pirelli”). For construction defects, the damage occurs when the defects come into existence, i.e., when “the defects manifest themselves in the form of physical damage to the building”, and not when it was discovered or reasonably discoverable. 

The 6-year limitation period thus started running from 22 September 2016 and the action was time-barred by 17 February 2023.

On the ‘knowledge’ limb, i.e., Section 24A(3)(b) of the LA, the High Court found that the MCST by 17 February 2020, had “the knowledge required for bringing an action” defined in Section 24A(4) of the LA: 

1. First, attributability. The BJ 2016 Report identified “excessive accelerated deterioration” across fourteen units, and recommended systemic investigation of the cladding “system,” which pointed to wider systemic issues. The MCST ought reasonably to have known that the systemic issue was attributable at least in part to KTP’s deficient design and supervision. It was no excuse that the MCST engaged Meinhardt in 2022, as knowledge includes constructive knowledge and the MCST should have commissioned an expert to further study the Cladding Defect. Thus, the MCST would have acquired knowledge of the Cladding Defect by 17 February 2020.
2. Second, seriousness. The Cladding Defects re-surfaced between March 2017 and September 2017 after TPS’ rectification works, indicating an ongoing, widespread problem. A reasonable MCST, armed with the BJ 2016 Report, would regard the issue as serious enough by latest 2017, to justify proceedings against KTP, thus satisfying Section 24A(4)(d).
3. Third, identity. KTP, the structural engineer and QP, was identifiable from publicly available building plans or by reasonable inquiry. Under Section 24A(6), knowledge includes facts obtainable through reasonable investigation or appropriate expert advice; and the MCST could, and should, have ascertained KTP’s role well before February 2020.

Consequently, the latest date on which the MCST acquired constructive knowledge was September 2017, and no later than 17 February 2020. As proceedings were only commenced against KTP on 17 February 2023—beyond the three-year window— Section 24A(3)(b) could not extend the limitation period. The claim was therefore time-barred and struck out. 

The Appellate Division Decision 

The Appellate Division allowed the MCST’s appeal and reinstated its claims against KTP.

The Appellate Division found the High Court had erred in striking out the MCST’s claim against KTP under Section 24A(3) of the LA as there was insufficient evidence that the MCST had the necessary knowledge under Section 24A(3)(b) of the LA by 17 September 2020. This is because, at the striking out stage, it cannot be shown that the MCST knew that the Cladding Defect was attributable to KTP’s negligent deficient design and supervision.

1. Attributability comprises 3 elements: (1) knowledge of the damage on which the claim is founded, (2) knowledge of the act or omission alleged to constitute negligence, nuisance or breach of duty, and (3) knowledge that the damage was attributable (in whole or in part) to the act or omission complained of.
2. The degree of knowledge required under the first element is “reasonable rather than absolute or certain”. In other words, “the claimant need not know the details of what went wrong, and it is wholly irrelevant whether he appreciated that what went wrong amounted in law to negligence, as long he knows the factual essence of his complaint” (Lian Kok Hong (at [36]) affirmed in MCST v KTP at [50]).

Based on the limited material available at this stage of the proceedings, the Appellate Division could not agree with the High Court’s finding that the MCST “ought reasonably to have known that the systemic issue with the cladding façade was attributable at least in part to KTP’s deficient design and supervision” (at [68]). This is because the BJ 2016 Report only pointed to deterioration in the form of warping but did not warn of delamination or other safety risks due to structural issues. The Court noted that “while it recommends further investigations” it appears to be directed to the question of “external quality” rather than anything concerning the fixings.  

Thus, this was not an issue that implicated KTP and the Appellate Division could not agree “at this point the MCST knew the damage could be attributable in whole or in part to an act or omission of KTP” (at [68]). Further, there is also insufficient evidence, at this stage, that upon receipt of the BJ 2016 Report, the MCST ought reasonably to have sought appropriate expert advice. Accordingly, the Appellate Division found that the MCST’s case that it was only upon receipt of the Meinhardt Report (and not the 2016 BJ Report) that it knew that the Cladding Defect could be attributed to KTP, was an arguable and viable one that should go to trial (at [74]). 

The Singapore position on applying the ‘damage’ and ‘knowledge’ limbs appears to be clear. However, recent English case law has suggested that there may be changes in the operation of Section 24A(3) of the LA in the future.

UKSC’s decision 

In BDW Trading Limited v URS Corporation Limited [2021] EWHC 2796, BDW (a property developer) undertook broader investigations into developments which had been designed by URS. In 2019, BDW discovered structural defects in both the Capital East and Freeman Meadow developments (the “Developments”), and while these were dangerous defects, no physical damage occurred in either development. BDW then carried out permanent remedial works to the buildings and then sued URS for negligence in March 2020. 

Consequently, one of the key issues was when did BDW’s cause of action accrue. One of URS’ arguments was that the cause of action only accrued in 2019 when the defects were discovered, after BDW had already sold the Developments by then (which would have meant that BDW had suffered no actionable damage). The argument was accepted by the Court of First Instance. 

In the Court of Appeal, the Court distinguished the case from Pirelli-type cases where the building defects caused physical damage. Here, the Developments did not suffer any physical damage. As the loss is pure economic loss, BDW’s cause of action accrued, at the latest, on the date of practical completion. Accordingly, the Court of Appeal upheld the first instance decision that the claim was time-barred. 

On appeal (see [2025] 2 WLR 1095 (“UKSC Decision”)), the UKSC did not decide on the issue of limitation. However, in obiter dicta, the UKSC made the following observations of Pirelli:  

1. The UKSC declined to overrule Pirelli;
2. The UKSC noted that Pirelli was decided on the false premise that cracks in a building constitute physical damage rather than pure economic loss for the purposes of the tort of negligence (UKSC Decision at [74]), they further noted that this false premise does not necessitate that Pirelli was wrong in reasoning that the cause of action in the tort of negligence accrues when the relevant “damage” occurs and not when that damage is discovered or could reasonably have been discovered (UKSC Decision at [75]); and
3. The UKSC acknowledged that there are “strong arguments of principle for accepting that there can only be an actual loss once the pure economic loss has been discovered or could reasonably have been discovered” (at [76]).

Unravelling limitation commentary 

The UKSC Decision, while not binding, presents a potentially unravelling picture of Section 24A(3) of the LA. 

Singapore applies the Pirelli concept of ‘damage’ as ‘physical damage’. However, according to the UKSC, ‘damage’ could potentially start from as early as the date of practical completion or when the effect of such damage is discovered or reasonably discoverable to the injured party. This appears to overlap with the knowledge limb under Section 24A(3)(b) of the LA. If so, the 6 years will run from the date that the damage is known / ought to have been known, and may render the ‘knowledge’ limb otiose. 

However, the UKSC ultimately chose not to overrule Pirelli as this would arguably be against Parliament’s intention. This is because with the Latent Damage Act 1986 the legislature intervened to reform the law in the light of what was seen to be an unfair result for claimants in Pirelli whereby they might lose their cause of action before they knew, or could reasonably have known, of the existence of the damage.  

It is noted that this argument applies with equal force in Singapore, since in line with the amendments to the UK Limitation Act 1980, the law reform committee recommended amending the Limitation Act (Cap 163, 1985 Ed), keeping in view the likelihood of the Singapore courts finding themselves constrained to follow Pirelli. 

It remains to be seen whether the English Courts, and Singapore Courts, will unravel the understanding of the ‘damage’ and ‘knowledge’ limbs under Section 24A(3) of the LA. 

Contributed by:

Divyesh Menon - Partner, Rajah & Tann Singapore LLP

Nikolas Tong - Senior Associate, Rajah & Tann Singapore LLP