1. Breach of Contract Accrual

Under Hong Kong law, a claim for breach of contract generally accrues at the date the breach occurs, rather than at the date of discovery of the problem. Section 4(1) of the Limitation Ordinance (Cap. 347) imposes a six-year time limit for contract claims. In this scenario, Skyline first complained of defective flooring in October 2015, and by December 2015 was withholding payment. A possible view is that the breach arose no later than December 2015, when Skyline effectively took remedial action (redoing the flooring) and deducted payment. If the court concludes that December 2015 is the accrual date, the six-year limitation period would ordinarily expire in December 2021, unless Oceanic can demonstrate some ground for extension or another later accrual date (for instance, if Skyline’s conduct in 2016 or beyond gave rise to a separate breach). Ultimately, the precise date of breach hinges on when the claimant first had a right to sue—a date often identified when the defendant’s conduct definitively departs from its contractual obligations.

2. Effect of Negotiations and Written Acknowledgment

Mere negotiations or informal discussions with the defendant do not, by themselves, suspend or “toll” the running of the limitation period. Unless the parties enter into a written standstill or tolling agreement, time will generally continue to run despite ongoing settlement talks. However, under sections 23 to 25 of the Limitation Ordinance, if the defendant issues a valid written acknowledgment of liability—an acknowledgment that clearly confirms responsibility for the relevant debt or claim—this can restart the six-year clock from the date of that acknowledgment. In this case, Skyline’s May 2018 statement might serve as such an acknowledgment, provided it sufficiently admits or recognizes a liability to Oceanic. If so, the limitation period for the acknowledged claim could restart in May 2018, effectively extending Oceanic’s deadline to May 2024. That said, Skyline might argue that the written statement was too vague or conditional to constitute an unambiguous acknowledgment, leaving it to the court to decide whether the letter restarts time.

3. Multiple Claims, Multiple Time Bars

Different causes of action often arise from the same factual matrix, each with its own accrual date. The alleged defective flooring claim would most likely be deemed to have accrued around late 2015, and thus subject to a six-year restriction expiring in late 2021 unless extended. However, Oceanic’s claim for unpaid contract sums would typically accrue at the time payment became due and remained unpaid, which may have occurred around January 2019 when Skyline flatly refused to pay. If so, the limitation for that component might extend until somewhere around January 2025. A related water leakage dispute could involve either contractual or tortious liability (depending on how the claim is framed), and time may begin running from the date of breach or from the date damages are discovered. Consequently, each of these claims can be time-barred at different points if the necessary steps (such as protective writs or valid acknowledgments) are not taken.

4. Protective Measures

The best way for a claimant to avoid missing the limitation deadline, despite prolonged negotiations, is to secure a standstill agreement or, at minimum, issue a protective writ. Filing a writ before the expiry of the six-year window effectively stops time from running, as courts treat the claim as having commenced once the writ is issued. Negotiations can then continue without the claimant risking a time-bar, provided the writ is properly served within its period of validity (initially twelve months, subject to extension). Without these formal measures, a party relying solely on protracted discussions may find its claims barred once the limitation clock expires.

5. Court Discretion and Equitable Relief

Section 30 of the Limitation Ordinance grants courts discretionary power to allow time-barred actions to proceed if it is equitable to do so. Courts will consider, among other factors, the length and reasons for the delay, the quality of evidence preserved or lost due to the passage of time, and each party’s conduct during the period of delay. Where parties have acted diligently and where the defendant’s actions contributed to the delay, courts might be more inclined to invoke their discretion. However, owing to the principle of certainty underlying limitation law, courts in Hong Kong are typically cautious, especially in purely commercial disputes, about granting relief in circumstances where a party allowed time to lapse without protective action.

6. Outcome Possibilities

If the flooring claim is found to have accrued in 2015 and lacks a valid extension, the court may consider it time-barred by late 2021 or soon thereafter. That portion of the claim could be dismissed. However, Oceanic might still proceed with its unpaid-sums claim if the accrual dated to early 2019, making it plausible that the limitation window remains open. Similarly, a claim regarding water leakage could remain viable if its accrual date is later than December 2015. Overall, it is entirely possible that some claims are upheld while others are struck out as time-barred, depending on each individual accrual date and whether a valid acknowledgment or extension has applied.