Limitation periods in claims against valuers ' NSW Court of Appeal provides a useful reminder

• Published date: 15 May 2020
• Author: Mr Alex Haslam and Katrina Sweet
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Court Procedure
• Law Firm: Gilchrist Connell

On 30 April 2020, the NSW Court of Appeal in Todd Hadley Pty Ltd v Lake Maintenance (NSW) Pty Ltd [2020] NSWCA 81 considered the duty of care owed by a valuer when providing a valuation for mortgage purposes, and how this impacts on issues of limitation.

In doing so, the Court affirmed existing authorities that a cause of action for negligence against a valuer of a property for pure economic loss occurs when the loss is first reasonably ascertainable, which is no later than the subsequent sale of the secured property.

Background

In 2010, MDJ Valuers (valuers) were engaged by Mr Bone to prepare a valuation report for a property known as 137 High Street, Wallalong NSW (Property). Mr Bone was the sole registered proprietor of the property. The valuers, in their valuation report, estimated the current market value of the property to be $7,450,000 and recorded that the report had been prepared for mortgage purposes.

In 2010, Lake Maintenance (lender) entered into a loan agreement with Mr Bone, pursuant to which it advanced $3,073,000 for a first registered mortgage over the Property (Loan Agreement). The Loan Agreement contained a personal covenant that, Mr Bone, as the borrower, was to pay interest at the end of the term at the same time he repaid the principal sum. The mortgage also contained a personal covenant to repay the loan.

The lender alleged...