Taret Pty Ltd. Vs. My Law Firm Pty Ltd. - (12 Aug 2022)

An action in tort accrues when loss is actually suffered

Civil

Present is the third Defendant's application to strike out the plaintiffs' claim against it on the basis that the action is statute barred. The Plaintiff claims against the first and second defendant for negligence and breach of contract in relation to legal services they provided to the Plaintiffs. The claim against the third Defendant is a claim in negligence. The Plaintiffs accept any claim in contract would be statute barred.

As at November 2015, the Plaintiffs were the registered proprietors of a property in East Cannington. Peter and Joseph Tilli were directors of two corporations, Developments (WA) Pty Ltd (DWA) and Canningvale Properties (WA) Pty Ltd (CVP). DWA was the registered proprietor of certain home units at Grey Street, Cannington. Two entities, Walthamstow Pty Ltd. and Angas Securities Ltd., had registered mortgages over the Grey Street units.

The issues that arise in present case relate to attempts by the Tillis through companies which they control to purchase the Cannington property. After extensive negotiation, the Plaintiffs entered into a suite of agreements, the effect of which was they sold the Cannington property to CVP. The Cannington property was sold on vendor finance terms. The unpaid portion of the purchase price was payable by CVP to the Plaintiffs on the second anniversary of settlement - 27 November 2017. The unpaid portion of the purchase price was secured by, amongst other things, guarantees from the Tillis. It is the Plaintiffs' case that, the third Defendant provided negligent advice in relation to the proposed sale. The Plaintiffs plead had they been properly advised by the third Defendant, they would not have entered into the sale.

Any cause of action in contract became statute barred on 26 November, 2021. But that does not necessarily mean that an action in tort is statute barred. An action in tort accrues when loss is actually suffered. The rationale for the principle is clear - damage is an essential element of a cause of action in tort and without damage, there is no claim.

The Plaintiffs' position is arguable. But having determined the position is arguable, it is a question for trial whether or not the limitation defence will succeed. After all a limitation defence must be pleaded - what the Limitation Act does is provide a party with a potential defence to a claim. It does not remove the court's jurisdiction and in the absence of a limitation plea in the defence, a court is justified in ignoring the issue. The third Defendant's application will be dismissed.

Tags : NEGLIGENCE CONTRACT LEGAL SERVICES