Limitation of Actions and Latent Damage — An Australian Perspective
| Date | 01 March 1991 |
| Published date | 01 March 1991 |
| DOI | http://doi.org/10.1111/j.1468-2230.1991.tb02649.x |
Limitation
of
Actions and Latent Damage
-
An
Australian
Perspective
Nicliolas
J.
Mullany
*
No
cause of action accrues
in
negligence unless and
until
the
plaintiff suffers injury.
Australian limitation legislation,' like most other Commonwealth Limitation Acts,2
generally provides
that
an action founded on tort must be brought within six years
of the date on which that cause of action accrued. Thus,
in
an action founded on
negligence proceedings must be commenced
within
six years of the plaintiff suffering
actual injury. Where damage is immediately apparent upon
its
occurrence the general
limitation period works satisfactorily.3
A
plaintiff who is aware that he has
suffered actionable damage and elects
to
delay the commencement of proceedings
has no grounds for complaint
if
his action is ultimately time-barred. Presumably,
a plaintiff whose right of action lapses
as
a
result of the negligence
of
a
third party
(for example, his legal adviser) would have an alternative action against that party.
The limitation period is not absolute and
a
certain degree of flexibility has been
incorporated into the present legislation. The Acts qualify the general principle where
the plaintiff's lack of knowledge is due
to
the fraud or deliberate concealment of
the defendant.J
In
these circumstances the running of time is postponed
to
the
date
at which the fraud
or
deliberate concealment could, with reasonable diligence, have
been discovered. Similarly, where the plaintiff is under a legal disability the specified
time is capable of being extended
so
as
to
run from the date at which
the
disability
comes
to
an end.5
Difficulties arise, however, where the effects of a defendant's non-fraudulent
wrongdoing do not become manifest
to,
or could not reasonably have been discovered
by,
a
plaintiff of
full
capacity
until
it
is
too
late
to
pursue
a
cause of action. The
practical result
is
that an innocent plaintiffs claim
in
negligence may well be statute-
*Consultant to the Law Reform Coinmission of Westcrn Australia.
Tlic views cxpressed are personal and do not reflect thosc of the Law Rcforni Commission of Western
Australia. Discussions with
Dr
Peter Handford and his comments on earlier drafts of this articlc have been
iiiost
Iiclpful
and arc gratefully acknowledged.
I
SCC
Limitation Act
1935
(WA),
s
38(
I)(c)(vi); Limitation of Actions Act
1936
(SA),
s
35(c);
Limitation
of
Actions Act
1958
(Vic),
s
5(l)(a);
Limitation
of
Actions Act
1969
(NSW),
s
14(l)(b);
Limitation
of Actions Act
1974
(Qld),
s
10(
I)(a);
Limitation Act
1974
(Tas),
s
4(
I)(a);
Limitation Act
1985
(ACT),
s
I
l(1).
Note, howcvcr, that the Liniitation Act
1981
(NT),
s
12(l)(b)
provides only for
a
three year
limitation pcriod and, along with the South Australian and Australian Capital Territory legislation,
makes provision for possible extensions of the general period.
2
See eg
s
2
of
the
Limitation Act
1980
(UK).
3
For an illustration.
scc
D
t
F
Emrcs
Dd
v
771c
Chirch
Corritriissiorier.~jc,r.
Drgkrrtd
(1985)
(unreported)
whcrc
it
wus held thut the date of tlic collapse of plasterwork wus also thc date of thc damage,
so
thut damage and
its
discoverability coincidcd. Subsequent proceedings in the Court of Appeal and
thc Housc of Lords do not uppcar to have ruiscd any limitation issuc; see
(1987) 36
BLR 72;
119893
AC
177.
Scc
ulso
Kcrretticiri
v
Hnrisel
Properrim
L&l
119871
AC
189
(HL).
4
SCC
Limitation Act
1935
(WA).
s
27;
Limitation of Actions Act
1936
(SA).
s
25(1);
Limitation of
Actions Act
1958
(Vic),
s
27;
Limitation of Actions Act
1969
(NSW),
s
55;
Limitation of Actions
Act
1974
(Qld).
s
38;
Limitation Act 1974 (Tus),
s
32;
Limitution Act
1981
(NT),
s
42;
Limitation
Act
1985
(ACT),
s
33.
Sce also
s
32(l)(b)
of the Limitation Act
1980
(UK).
5
See Limitation Act
1935
(WA),
s
40;
Limitation of Actions Act
1936
(SA),
s
45;
Limitation of Actions
Act
1958
(Vic),
s
23(1);
Limitation of Actions Act
1969
(NSW).
s
52;
Limitation of Actions Act
1974
(Qld).
s
29;
Limitation Act
I974
(Tas),
s
26;
Limitation Act
1981
(NT),
s
36;
Limitation Act
1985
(ACT),
s
30.
SCC
also
s
28(
I)
of
the Limitation Act
1980
(UK).
2
16
771e
Motkcrrt
L~JIV
Reiiciv
54:2
March
1991 0026-7961
March
1991)
Limitcrlion
of
Acriotu
a~l
htait
Dmrcige
barred before he either knew or ought to have known that such a right ever
existed.6
The harshness of the latent damage problem was first highlighted
in
the context
of personal injuries' and has become particularly prominent
in
dcfective building
cases.8 However, there
is
a wide range of other situations where tortious damage
may be suffered which does not manifest itself
until
the expiration of the limitation
period. Persons, for example, who deal with insurance and stockbrokers, bankers,
accountants, valuers, lawyers, local authorities and manufacturers of goods potentially
face the same sorts
of
concerns encountered
in
the personal injury and building
sphere^.^
Notwithstanding legislative attempts in some jurisdictions1" to remedy the
problem, latent damage remains a highly contentious area of the law.
It
has evoked
criticism from both
the
courts and legal commentators and has troubled law reform
agencies throughout the Commonwealth. However, dcspite the continued expressions
of discontent with
the
present state of affairs, the problem remains unresolved
in
most jurisdictions. This article analyses the difficulties produced by the common
law and their implications in the Australian context.
A
subsequent article discusses
the
legislative attempts, existing and proposed, to deal
with
these difficulties.Il
The Development
of
the Law
of
Limitation up to
1983
It had been held
in
Cnrtledgc
v
E.
Jopling
&
Sons LtdI2
that,
in
relation to
personal injuries, a cause of action accrued, and the limitation period commenced,
when the body sustained damage irrespective of the sufferer's knowledge of his
symptoms or their cause.I3 However,
in
Sparham-Souter
v
Town
and Coiintry
Developments
(Essex)
Ltd14
the Court of Appeal found themselves able to reject
the strict approach as applied to other forms of
loss
by drawing
a
distinction between
personal injuries and damage to property.
It
was held that time could not begin to
run
against an owner of property
until
he discovered, or ought
with
reasonable
diligence to have discovered, the damage (latent damage being insufficient to start
6
7
8
9
10
II
12
13
14
As occurrcd cg in
Lotidoti
Bororrgh
ofBrottiky
v
Rtrslr
atid
Tottipkitis
(1985)
4
Con LR
44.
Scc
also
N~~tiorrol
Graphical Associatioil
v
7lritt16le6y
(1983) 25
BLR
91.
See
Cartledge
v
E
Joplitig
&
Sorrs
Lfd
[
19631
AC
758
(HL).
cg thosc involvcd in thc building and construction industries have recently voiced conccrn over the
lcgal raniifications of
a
niodc of cheniical deterioration known colloquially
as
'concrete cancer.' This
form of deterioration results from thc corrosion of the stccl rcinforccnicnt
in
concrctc structurcs.
It
is only
12-
I5
years from the date of construction that the cvidence of deterioration begins
to
manifest
itself. For an examination of the limitation issues of this phenomenon, scc Mullany NJ, 'Concrctc
Cancer
-
Its
Limitation Implications'
(1989)
5
Birikdirtg
atid
Cotrstrrrctbtt
~AIV
197.
Thc list scciiis to bc cndless. SCC cg thc House of Lords dccision
in
Sevcori
Lrd
v
Ltrctrs
CAV
Ltd
119861
2
All
ER
104,
whcrc thcir Lordships statcd that an action against thc infringcr of
a
patcnt
may potcntially bc tiinc-barrcd cvcn bcforc thc patcnt is grantcd.
Most significantly. the Latcnt Daniagc
ACI
1986
(UK).
Scc Mullany NJ, 'Rcforni of thc Law
of
Latcnt Damagc'
to
bc published
in
thc
July
1991
issuc of
thc Review.
[
19631
AC
758
(HL) (hcreaftcr rcfcrrcd
to
as
Cortlcdp).
The harshness of this dccision Icd
to
thc cnactnicnt
of
legislation incorporiiting
a
'discovcrability test'
in
thc United Kingdom (sec
s
I
I
of the Limitation Act
1975
(UK)
now re-enacted
in
the 1,imitalion
Act
1980
(UK))
and
in
all thc Australian Statcs (SCC Limitation Act
1969
(NSW),
ss
57-58;
Limitation
of Actions Act
1974
(Qld),
ss
30-31; Limitation Act
1974
(Tas),
s
5;
Liniitation of Actions Act
1936
(SA),
s
48;
Limitation Act
1981
(NT),
s
44;
Limitation of Actions Act
1958
(Vic).
s
23h.
Rcforiii
in
Western Australia has bccn iniplcnicnted
to
a
lesser extent and is confined
to
asbcstos-relilted discitses,
scc Acts Amcndmcnt (Asbestos Rclatcd Diseases) Act
1983
(WA),
ss
38A(6)-(9)).
[
19761
QB
858
(CA) (hereaftcr referred to
as
S~~arlia~tt-S~~ttrcr).
217
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