Limitation of Actions Consultation - Law Commission

3.22 In contrast, in UBAF Ltd v European American Banking Corporation, 44
it was
suggested by the Court of Appeal that damage might have occurred at a date later
than when a plaintiff enters into a transaction in reliance on negligent advice. The
case concerned a negligent inducement to the plaintiff to lend money under loans
on which the borrowers defaulted. At that date the value of the plaintiff’s chose in
action might have been higher than the sum paid. Consequently, the Court of
Appeal (though leaving the question when the cause of action accrued on the facts
for decision at trial) held that the cause of action did not necessarily arise when the
plaintiffs entered into the loans but, rather, might have accrued when the
borrower’s financial position was such that the loans were worth less than their
face value. Only at that point did they suffer loss. 45
3.23 These cases show that economic loss may arise in a variety of different factual
circumstances and take a variety of forms. 46
Applying the accrual test, the courts
have been concerned to identify the point at which recoverable loss is actually
suffered by the plaintiff as the point at which time begins to run for limitation
purposes. 47
(b) Continuing torts
3.24 Certain torts may be continuous in character and therefore a fresh cause of action
arises on a day to day basis as long as the tort continues. The main examples of
such torts are continuing trespass and continuing nuisance. 48
The right of action
can never become barred so long as the breach continues. As long as the plaintiff
can show that the action for a later commission of the tort is brought within the
44 [1984] QB 713.
45 See also First National Commercial Bank plc v Humberts [1995] 2 All ER 673, a case
concerning a negligent valuation, the Court of Appeal held that the loss suffered by the
financier did not necessarily occur at the time the advance was made but at the point when
the bank’s outlay, costs or the notional profit which could have been obtained elsewhere in
the market were more than the security held for the advance. Saville LJ also noted that the
plaintiffs could have been said to have suffered loss when they entered into the transaction if
it had been demonstrated that the investment value of the transaction was less than the
value of other transactions which the plaintiffs would have made if they had not entered into
that particular loan. However this was not pleaded, and there was no evidence on the
matter before the court. See further Mathew v Maughold Life Assurance Co, The Times,
January 23, 1985 (overruled on another point: The Times, February 19, 1987 (CA)). See
also Wardley Australia Ltd v State of Western Australia (1992) 109 ALR 247, 254.
46 First National Commercial Bank plc v Humberts [1995] 2 All ER 673, 680, citing Wardley
Australia Ltd v State of Western Australia (1992) 109 ALR 247, 254.
47 Many of these cases would now be governed by s 14A of the 1980 Act (inserted by the
Latent Damage Act 1986). See paras 3.87 - 3.100 below.
48 See Konskier v B Goodman Ltd [1928] 1 KB 421, an example of a continuing trespass
committed where rubbish was dumped on the plaintiff’s property and left there. In Coventry
v Apsley (1691) 2 Salk 240, false imprisonment created a continuing cause of action for as
long as the imprisonment continued. Continuing torts should be distinguished from cases
where a single act creates two or more separate causes of action, such as Darley Main
Colliery Co v Mitchell (1886) 11 App Cas 127, where excavations by the defendant on land
adjacent to the plaintiff’s property caused subsidence to that property in breach of the
plaintiff’s right to support for his land. The subsidence continued after the excavations had
ceased, and the House of Lords held that a fresh cause of action arose with each successive
fresh subsidence.
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