Queensland Supreme Court not afraid to strike out claim for limitation of actions defence

The decision of Port Ballidu Pty Ltd v Frews Lawyers & Ors [2017] QSC19 delivered in February 2017 gives clarity to two aspects of the law concerning limitation periods in Queensland.

The decision is significant for two reasons. Firstly, the court considered it appropriate to grant summary judgment on the basis of a limitation of actions defence. Secondly, the Queensland Supreme Court followed a decision of Gerace v Auzhair Supplies Pty Ltd [2014] 87 NSWLR 435, in that a court will apply a limitation period by analogy to a claim for equitable compensation when there is sufficient similarity between that equitable claim and a common law action which has a statutory limitation period.

The case concerned a claim against a firm of solicitors who were allegedly knowingly concerned in a director’s misconduct allowing the registration of a mortgage over the plaintiff’s property and the fraudulent use moneys by the director secured by that mortgage. The solicitor was engaged by the director to act for the company in the loan transaction. The lender commenced proceedings to recover the loan from the plaintiff. The plaintiff tried to defend those proceedings on grounds which included the alleged fraud of the director. During the proceedings brought by the lender the plaintiff became aware of the conduct of the solicitors which pointed them being knowingly concerned in the director’s conduct. This awareness happened more than six years before the commencement of the proceedings brought by the plaintiff against the solicitors.

Under section 10 of the Limitations of Actions Act 1974 (Qld) a plaintiff has six years within which to commence proceedings for breach of contract or tort giving rise to economic losses. There is no statutory limitation period in Queensland for breach of fiduciary duty.

The defendant had to overcome the general reluctance of courts to make interlocutory determinations on limitation periods as suggested in the High Court decision of Wardley. The court found that if the plaintiff proved what it had pleaded its action in negligence against the solicitors would be statute barred. Given the relevant facts in the statement of claim were not contested by the defendant the court considered that it was warranted in making a determination at an interlocutory level.

The court then found that the common law cause of action in negligence was sufficiently analogous to the claim for equitable compensation against the solicitors that the limitation period of six years for the negligence claim should also effectively apply to the equitable claim. There was an absence of Queensland Supreme Court authority on the point, but the court considered that it should follow the decision of Gerace referred to above.

From a Queensland perspective, the decision is very significant as it helps clarify when a court will chose to make an interlocutory decision on question of limitations of actions, but perhaps more importantly confirms that the decision of Gerace is good law in Queensland.


Drew Castley

Drew is an insurance and commercial litigation lawyer, specialising in the defence of professional negligence claims.

Sean Sullivan

Sean has practised insurance law for over 30 years, with a focus on employment liability insurance litigation.

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