Accrual of a Cause of Action in Tort: IPP Financial Advisers Pte Ltd v Saimee Bin Jumaat
(2020) 36(4) Journal of Professional Negligence 186
Posted: 30 Sep 2020 Last revised: 12 Feb 2021
Date Written: August 14, 2020
When does a client suffer damage as a consequence of relying on professional advice such that his cause of action in tort for financial loss arising from professional negligence begins to accrue? The courts have not spoken with one voice on this issue. In Forster, damage occurred the moment the mortgage was executed. In Nykredit, damage was only suffered when the value of the security was worth less than the amount left outstanding. Sephton distinguished transaction (Nykredit type cases) and pure contingent liability cases (i.e. where loss or damage is suffered only when certain events have occurred). Maharaj further distinguished between “no-transaction” and “flawed transaction” cases.
In that regard, the Singapore Court of Appeal decision of IPP Financial Advisers Pte Ltd v Saimee bin Jumaat (“IPP Financial”) will be of interest. Eschewing various approaches set out in case law, the court preferred to focus the inquiry on whether the loss in question was purely contingent. If so, damage would only be suffered, and the cause of action would only begin to accrue at the point the contingency occurred. This approach, it is submitted, represents a clearer and more straightforward way of ascertaining when a cause of action accrues.
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