A. M. M. FUARD , Appellant ,and A. R. WEERASURIYA , Respondent

004-NLR-NLR-V-56-A.-M.-M.-FUARD-Appellant-and-A.-R.-WEERASURIYA-Respondent.pdf

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Fuard f>*'
[In the Privy Council]"
Present: Lord Porter, Lord Asquith of Blshopstone, LordKeith of Avonholm and Mr. L. M. D. de SilvaM. M. FUARD, Appellant, and A. R. WEERASURIYA,
Respondent t
Privy Council Appeal No. 41 of 19538. C. 387—D. C. Colombo, 18,596
Proctor and client—Fiduciary relationship—Conflict between interest and duty—Duty of making full disclosure of relevant facts—Breach of such duty—Equitableclaim for damages—Applicability of Prescription Ordinance, s. 10.
A Proctor’s fiduciary relationship to bis client renders him liable to indemnifythr client in respect of damages incurred by tbe cliont in a transaction wherebythe Proctor, in breach of his fiduciary duty, gains an advantage and his clientsuffers loss as the result of advice given by him and taken by the client.
The Prescription O.dinanoe of Ceylon, unlike the English Statute of Limita-lions, “ governs the whole of a jurisdiction which ie general, including lawand equity in one system It is therefore applicable to an action for damagesfor breaoh of a fiduciary duty. None of its sections dealing with special causes. of action is applicable to a breach-of a ftduoiary duty and, therefore, suoh a: 1 {I960) 34 Criminal Appeal'Reports 60.'
Fuard v. Weeraauriya
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breach falls under seotion 10. Under that section an action is not maintainable•• unless the same shall be commenced within three, ye ns from the time whensuch cause of action shall have aoorued
The defendant-appellant, a Proctor, was employed by the plaintiff-respondentos legal adviser for the purpose of making an investment of a sum of Rs. 15,000.The money was thereafter lent by the respondent to one S. on mortgage bondNo. 2308 of the 3rd December, 1042, attested by the appellant. The Hoourityafforded by bond No. 2308 was the primary mortgage of oertain lauds at Punwiluand the sooondury mortgage of a land known as Finoham’s land. The primarymorlgago in favou, of one M. of the latter property was for a sum of Rs. 35,000.It was sold on an order of Court on a decree on the primary moitgage obtainedby M. and realised a sum of Rs. 10,000 which left no surplus towards the pay-ment of the loan made by the respondent on the secondary mortgage. On usale on a decree obtained by the respondent on the primary mortgage of thePanwila lands a sum of Rs. 2,250 was realised. . The respondent thus lost thegreater part of his principal and ail interest. He then instituted the present* action to recover from the appellant a sum of Rs. 20,000 by way of damageson the ground that the appellant had, while acting as his legal adviser in con-nection with the investment of the Bum of Rs. 15,000, furthered “ the interestsof othois whose interests were adverse to those of the respondent ”.
There was evidence that out of the sum of Rs. 15,000 obtained by S. fromthe respondent, a sum of Rs. 4,500 was utilised to pay a debt duo by S. to theappellant's cousin upon a primary mortgage of the Panwila land and a sumof Rs. (1,000 to pay another debt due to the appellant’s wife and his brotherupon a secondary mortgage of Fincham’s land. The respondent hud beentold of the relationship between the parties and about the mortgages in favourof the appellant's relatives. On his own testimony, however, the appellanthud had experience of certain incidents which indicated how undesirable S.was as a borrower.
Held, that in aoting for the respondent in a matte r in whioh the appellant’srelatives had an interest, the duty ai ising from the fiduciary relationship betweenthe appellant and the respondent placed upon the appellant the obligationof making a disclosure to the respondent of all facts iu detail that might haveaffected u decision by the respondent to make tho loan, or evon merely led himto an investigation closer titan he had uctually made as to whether the proposedloan could prudently be raado. “ A man may have a duty on one side and aninterest on another. A man who puts himself in that position tukes uponhimself u grievous responsibility ”. In the present case the appellant had notdischarged the heavy burden whioh lay upon him to establish that ho made afull disclosure to the respondent of information in his possession relevant to tholoan. For this failure of duty he was liable in damages, although lie hudhonostly done all that he thought he was bound to do in dealing with therespondent.
Held further, that, for the purpose of applying soction 10 of tho ProscriptionOrdinance, a cause of action “ accrued ” to the respondent ut tho time whenthe Panwila lands were sold under mortgage deorco, namely, on tho 9th March,
1946. It was only on that day that tho respondent could be said to have sufferedthe damage that he did in fact suffer.'
Appeal from a judgment of the Supreme Court reported in(1952) 54 N. L. R. 49.
Michael I^ee, for the defendant appellant.
Dingle M. Foot, Q.C., with T. O. Kellock, for the plaintiff respondent.
Cur. adv. vull.
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MR. L. M. D. DE SILVA—Foard v. Weerasuriya
July 27, 1954.[Delivered by Mb. L. M. D. dk Silva]—
The respondent instituted this action in the District Court of Colomboto recover from the appellant a sum of Rs. 20,000 by way of damageson the ground that the ap[>ellant had in November, 1942, while actingas the respondent’s legal adviser in connection with the investment ofa sum of Rs. 15,000 by the respondent furthered “ the interests of otherswhose interests were adverse to those of the respondent ”. He allegedthat the appellant had recommended one Samaratunge as a borrower andrecommended also the security offered by Samaratunge, fraudulently con-cealing from the respondent the existence of the adverse interestsmentioned. He alleged that the appellant was “ fully aware of the factsand circumstances ” which rendered the security offered “ inadequate anddoubtful ” but nevertheless in “ breach of his duty ” to the appellantfailed to declare them. He alleged against the appellant “ an intentionaland deliberate dereliction of his professional duty and a breach of hiscontract of employment as legal adviser ”.
The learned District Judge held that the appellant had not recom-mended Samaratunge as a borrower or the security offered by Samara-tunge. He held that the appellant had not done anything “ with a viewto furthering the interests of others whose interests were adverse to thatof the plaintiff” (respondent). He found that the appellant’s conducthad not been fraudulent and dismissed the action.
The Supreme Court on appeal felt bound not to disturb the finding onthe facts on the question of fraud. It however awarded to the respondentthe sum claimed by him as damages on the ground that there had beena breach by the appellant of his duty to the respondent. In doing soit has taken a view' of the facts less favourable to the appellant than theview taken by the learned District Judge.
The learned District Judge who saw and heard the witnesses, althoughhe does not say so in terms, regarded the appellant as a witness of truth.He accepted the evidence of the appellant whenever it was in conflictwith other evidence. The judgment of the Supreme Court does “notproceed on the basis that there is sufficient reason to disturb the viewstaken by the learned District Judge on the credibility of fitnesses andon the facts generally. In these circumstances their Lordships thinkthat the view of the learned trial judge that the appellant was a truthfulwitness must be accepted without qualification. When his evidence isaccepted it appears that the appellant honestly did all that he thoughtho was bound to do in dealing with the respondent, his client. –
Their Lordships are however in agreement with the Supreme Courtthat the appellant has failed to perform his duty towards the respondent-.They have arrived at this conclusion on the evidence of the appellanthimself. It appears to their Lordships that the appellant failed to realisehow extensive in law the duty was.
The respondent is a retired government servant. At the time of hisretirement in 1941 he had a sum of Rs. 15,000 which he desired to invest.He lent this sum to one Wiswasam on a mortgage bond attested by theappellant. Wiswasam had desired to return the money by raising a loan
MR. L. M. D. DE SILVA—Fuard v. Weeraauriya
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at a lower rate of interest but had been dissuaded at the instance ofthe appellant by a broker for a time from returning the money. Wis-wasam eventually returned the money in 1942 which was then lent by therespondent to one Samaratunge on Mortgage Bond No. 2308 of the 3rdDecember, 1942, attested by the appellant. It will be seen that in thedealings with Wiswasam the appellant had given the respondentassistance which in character was not purely legal.
It is with regard to the loan to Samaratunge on Bond No. 2308 thata failure of duty on the part of the appellant is suggested. It is clearfrom the appellant’s evidence that a lender could not have regardedSamaratunge as a satisfactory borrower. The appellant says his brotherShamsudeen was instrumental in the negotiations for the loan and thathe came to know about it only on 27th November, 1942, six days beforethe bond was signed. The appellant said :—
“ It is not true that thereafter I negotiated the loan on bond PI(No. 2308) I deny I did so. It is not true that I recommended toplaintiff the security as being sufficient. I deny I recommended theborrower Samaratunge as being reliable. I attested that bond in theusual course of ray business.”
Of Shamsudeen the appellant said “ Me calls himself a land agent. Infact he is an unlicensed broker ”. Shamsudeen admittedly transactedbusiness in the appellant’s office and used the appellant’s stationery withhis name typed above the printed name of the appellant. In the coui'seof negotiations he wrote three letters on the 17th, 22nd, and 2(ithNovember, 1942, in which amongst other things he said that Samaratungewas a " long standing client of ours ” (meaning thereby of the appellantand of Shamsudeen), that Samaratunge would be “ very regular ” inpaying interest and that the borrower (Samaratunge) is absolutely ‘good ”. He gave details of the security offered, he made out that theappellant was in close touch with the negotiations, that the appellant hadsuggested a secondary mortgage over a land known as Pincham’s landand said in terms ‘‘ Mr. Fuard (the appellant) highly recommends thisloan ”.*
According to the appellant " …. it is false what Shamsudeen
has stated in his letter that the suggestion to give a secondary mortgageof Fincham’s land first came from me ”.
The appellant also said :—
" He has stated in this letter that he consulted me, that is wrong.° I never knew anything about these letters he has written, he hasbeen acting behind my back.”-
and by this he certainly meant that he had not seen them before theday on which the bond was signed. Shamsudeen admitted in evidencethat he had made false statements in the letters. The learned trialJudge has accepted the appellant’s evidence that he did not see these
MR. L. M. T>. TYR STT.VA—•Fuflfrf'ui WeeroAuriva
letters and, for the reasons they have already given, their Lordshipsthink the learned trial Judge’s view must be accepted. The SupremeCourt held that it appeared from the evidence the appellant had failedto correct the false impressions created by the letters, and in so holdingthe Supreme Court appears to have taken the view that the appellanthad seen the letters before the bond was signed. The facilities to transactbusiness afforded to Shamsudeen in the appellant’s office and the constantcontacts between Shamsudeen and the appellant disclosed by the evidencewould give some measure of probability to the view taken by the SupremeCourt. It is in their Lordships’ view important that the work of aproctor should be free from all contamination or suspicion of contami-nation and it is undesirable that a person 3uch as Shamsudeen who onhis own showing makes deliberately false statements should be allowedpo be active in a proctor’s office. The letters written in this case tendedto compromise the proctor himself. There is however nothing to showthat the learned trial Judge did not give full weight to the implicationsthat arose from Shamsudeen’s activities in the appellant’s office and hisview that the appellant had not seen the-letters is entitled to prevail.
The security afforded by Bond No. 2308 was the primary mortgage ofcertain lands .at Panwila and the secondary mortgage of a land nearKandy known as Fincham’s land. The primary mortgage in favour ofone Moolchand of the latter property was for a sum of Rs. 35,000. Itwas sold on an Order of Court on a decree on the primary mortgageobtained by Moolchand and realised a sum of Rs. 16,000 which leftno surplus towards the payment of the loan made by the respondent onthe secondary mortgage. On a sale on a decree obtainod by the re-spondent or) the primary mortgage of the Panwila lands a sum of Rs. 2,250was realised. The respondent thus lost the greater part of his principaland all interest.
There iB no evidence from either side which seeks to explain how orwhy Fincham’s land mortgaged for Rs. 35,000 realised only Rs. 16,000on the sale under the decree. There were statements by witnesses inthe case to the effect that the value of the property was considerablymore than Rs. 35,000 but there is no evidence which reconciles thesestatements with the price of Rs. 16,000 realised at the sale. The reasonwhy the property fetched Rs. 16,000 has not been established or evensought to be established by evidence.,
On the date of the execution of Bond No. 2308 by Samaratunge infavour of the respondent, Samaratunge owed. Rs. 4,990 and intereston a decree on a primary mortgage of the Panwila lands to one NainaMarikar, a cousin of the appellant. He also owed a sum of Rs. 6,000on a secondary mortgage of Fincham’s land to Shamsudeen and to thewife of the appellant. Of the sum of Rs. 15,000 obtained by Samara-tunge from the respondent, a sum of Rs. 4,500 was utilised to pay thedebt due to Naina Marikar and a sum of Rs. 6,000 to pay the debt dueto Shamsudeen and the appellant’s wife. In these circumstances itmust bo held that the defendant’s wife, brother and cousin, creditorsof Samaratunge, were interested in the loan that was being made by therespondent to Samaratunge and it has been rightly conceded by counsel
MR. 1m. M. D. DE SILVA—Fuard v. Wceraauriya
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for the appellant that it makes no difference in law to the position ofthe appellant whether the interest shown to exist is that of his relativesor of himself.
e
Their Lordships are of opinion that in acting for the respondent in amatter in which the appellant’s relatives had an interest the duty arisingfrom the fiduciary relationship between the appellant and the respondentplaced upon the appellant the obligation of making a disclosure torespondent of all facts in detail that might have affected a decision by therespondent to make the loan, or even merely led him to an investigationcloser than any he had actually made as to whether the proposed loancould prudently be made. In a matter where a solicitor who (as atrustee for certain beneficiaries) was selling property, acted also for thepurchaser, Lord Cozens Hardy observed “ A man may have a duty onone side and an interest on another. A man who puts himself in thatposition takes upon himself a grievous responsibility ” (Moody v. Cox1).Their Lordships share that view. The appellant in acting for therespondent took upon himself a grievous responsibility. The burden ofproving that he discharged that responsibility is upon the appellant.One of the incidents of that responsibility is, as already stated, theduty of making a full disclosure to the respondent. Their Lordshipsneed only refer to certain events, spoken to by the appellant himself,which suffice to satisfy them that the appellant has not discharged theburden resting on him.
It was curious that the sum lent by Moolchand on the primary mortgagewas the same as the amount that Samaratunge the borrower had pair!for the property mortgaged. According to the appellant Moolchand hadoriginally agreed to lend Rs. 40,000. The appellant said that this fact“ surprised ” him and that he spoke to Moolchand about it. In examina-tion in chief the appellant said :—
“ I was surprised and asked Moolchand what was the meaningof this. He said that the property belonged to Samaratunge’s uncleand Samaratunge had spent about Its. 10,000 to Rs. 15,000 to bringthe property to a proper condition and that Samaratunge feels thatthe property is now worth about one lac of rupees. Then I told himthat if that is so he had better take a valuer. They did not agree toa valuer being sent. Moolchand was satisfied with the property andafter inspection he was prepared to lend the Rs. 40,000 with 8 centsrebate on the coupons. About two months after the inspectionMoolchand said he could not lend more than Rs. 35,000 and wanted20 cents rebate on each pound. According to that on every pound oftea coupon Moolchand was to get 20 cents and the balance was to becredited against the principal due on the bond. The interest thatMoolchand was getting was 20 cents on each pound of tea coupons.”
In cross-examination he said :—
“ Moolchand told me that Samaratunge was going to buy thisproperty from his uncle for Rs. 35,000 and that Samaratunge wantedMoolchand to give him Rs. 40,000. Then I asked Moolchand “ How1 (1917) 2 Ch. 71.
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MR. L. M. D. DE SILVA—Foard v. Weerasuriya
could you lend Rs. 40,000 on a property purchased for Rs. 35,000 ?Then Moolchand said that this property -was purchased by Samara-tunge’s uncle and that Samaratunge has spent nearly Rs. 10.00Q toRs. 16,000 over it with an understanding that Samaratunge’s unclewould sell it to him for Rs. 35,000, and that Rs. 35,000 was not thetrue value. At the time Moolchand entered into this bond he knewall these facts fully.”
If the appellant had believed what Moolchand said it would haveappeared to the appellant that , making allowance for the “ Rs. 10,000 toRs. 15,000 ” owed by the uncle to Samaratunge, the real price at whichthe property passed from the uncle to Samaratunge was Rs. 45,000 toRs. 50,000. This may or may not have been the actual value of theland but it was a piece of information of importance to a lender inweighing up a proposal for a loan.
The appellant said further :—
“ Moolchand, Samaratunge and I had a talk. Then Moolchandfixed an appointment with me to inspect the land because 1 told himit was absurd to lend Rs. 40,000 on a property purchased forRs. 35,000. I suggested to Moolchand that we should take a valuer.He did not want to take a valuer. I was asked to find out the exactposition of the land and get a valuer’s opinion. Mr. McHeyzer valuedthe lind. He told me that if the estate was in excellent conditionwith a factory he would value an acre at Rs. 2,000. If it was withouta factory he would value it at Rs. 1,000 to Rs. 1,500 an acre. Fincham’sland is situated at an elevation of 4,500 feet. It was high grown tea.I did not ask Moolchand not te embark on this venture. Moolchandtold me that Samaratunge’s valuation of the estate was over Rs. 100,000.I suggested to Moolchand that we take, a valuer. Mr. McHeyzerwas never taken to the estate. I did not pay Mr. McHeyzer a fee.I took the plan and the report of the .estate to Mr. McHeyzer andshowed him the plan and report. Then I told him the exact positionof the land and its present condition. His was a hypotheticalvaluation. I told him that my client, was going to lend aboutRs. 35,000 or Rs. 40,000 and asked him whether it was a safe invest-ment. Mr. McHeyzer recommended and said that it was a safeinvestment. The estate was in very good condition at the time ofmy inspection. After consulting Mr. McHeyzer I thought the estatewas worth more than Rs. 100,000.”I
The surprise experienced by the appellant and the wav in which itwas allayed were important items of information.
The respondent was in their Lordships’ opinion entitled to have haddisclosed to him the whole history in detail of the Moolchand loan. .Theappellant does not say, and there is nothmg to show, that it was com-municated to the respondent. The appellant says that he told therespondent to satisfy himself about tile value ,of the land. He also says
JtR. L. M. D. DE SILVA —Fuard v. Weerasuriya
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that as the result of his own valuation, after leaving a comfortablemargin, he told the respondent not to accept the proposed security unlessFincham’s land was worth at least Rs. 50,000. But these or similarexpedients could not in their Lordships’ view discharge the obligationof full disclosure with regard to Fincham’s land. The appellant had noright to act until he was satisfied that the respondent was informed indetail of the facts referred to above and that the respondent had beenplaced in a position to decide for himself whether in the light of theinformation received he should investigate further the soundness of theloan he was about to make, and in particular the soundness as a secondarymortgage of a security which for a reason unestablished in the case hasrealised a price which is less than half the amount of the principal ofthe loan made on it on the primary mortgage. The possibility, for onereason or another, of such a price being realised may have occurred tothe respondent if he had been placed upon the road to an investigation.
As already stated the appellant in terms disavowed the statementmade in a letter from Shamsudeen to the respondent that Samaratungewas a desirable borrower from the point of view of a lender. On his owntestimony the appellant had had experience of certain incidents whichindicated how undesirable Samaratunge was as a borrower. At the timethe negotiations for the loan were proceeding a decree was outstandingon the mortgage bond given by Samaratunge to Naina Marikar (theappellant’s cousin referred to earlier) in respect of the Panwila lands.The appellant had acted for Naina Marikar in the action and experienceddifficulty in serving summons on Samaratunge. Further according to theappellant Samaratunge had “ played a trick ”, the definite details ofwhich do not appear in evidence, on him in respect of certain tea coupons.The appellant does not say nor does it appear otherwise, that the factswith regard to the service of summons and the “ trick ” were disclosedto the respondent. The appellant does say that he told the respondentthat “ Samaratunge was a difficult customer and would not keep to hiswords ”. But in their Lordships’ view a bare statement such as thatwithout the details which gave rise to it would not be a sufficient dis-charge by the appellant of his duty however much he may have thoughthe had performed it. Their Lordships think it was not a sufficent dis-charge even though (as the appellant stated) the respondent said thathe was “ not lending the money to Samaratunge on his personal securityand that he was lending the money on a mortgage of lands ”. In thecircumstances in which the appellant had placed himself the duty to makea full disclosure of the details with regard to the service of summonsand the “ trick ”, was not brought to an end by the statement made bythe respondent. The duty persisted all the more for the reason that therespondent had not been acquainted with the history of the loan byMoolchand on the security of Fincham’s land. It is relevant here tomention that the appellant says he told the respondent “ that he shouldnot take into consideration the value of the small lands in Panwila asthey consisted of several small lots and that he should be fully satisfiedwith the security of the secondary mortgages of Fincham’s land to coverthe amount he lent ”. This advice appears to have been sound and tohave been accepted by the respondent.
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MR. L. M. D. DE SILVA—Fuxrrd t*. Weerasuriya
The appellant has stated that at the time when negotiations for theloan were going on the respondent knew that there was a mortgage c^pcreein favour of Naina Marikar in respect of the Panwila land and a secondarymortgage (No. 2205 of the 2nd June, 1941), in respect of Fincham’s landin favour of the appellant’s wife and Shamsudeen. He says that therespondent know alBo of the relationship between the parties. For reasonsalready stated his evidence must be accepted. There is a matter howeverwhich calls for consideration. Bond No. 2205 carried no interest, andaccordingly it was to the advantage of the lenders to have it repaidas early as possible. This fact might strike a lender with whose moneythe mortgage was to be paid as giving rise to an added interest on thepart of the mortgagees, to have their money back. The fact that BondNo. 2205 carried no interest therefore called for disclosure.
Samaratunge says that it was from the Rs. 6,000 borrowed on BondNo. 2205 in favour of Shamsudeen and the appellant’s wife that he paidcommission to Shamsudeen and “ notarial expenses ” to the appellantin respect of his loan transaction (on the primary bond of the sameproperty) with Moolchand. This evidence has not been contradicted orqualified by the appellant or anyone else. This Rs. 6,000 as alreadystated was paid off by Samaratunge from moneys received on the loanfrom the respondent. In effect this means amongst other things that theappellant was paid “ notarial expenses ” (it is not clear what the termincludes) with money borrowed by Samaratunge from the appellant’s wifeand Shamsudeen, and that the appellant’s wife and Shamsudeen receivedthe money back from Samaratunge through the loan raised by Samara-tunge from the respondent. If the respondent had been told thatBond No. 2205 carried no interest he might have made enquiries whichwould have led him to the facts just mentioned. These facts may in turnhavo led him to an investigation closer than the one he had made of thesoundness of the security which he had been offered.
For the reasons which they have given their Lordships are satisfied thatthe appellant has not discharged the heavy burden which lay upon himto establish that he made a full disclosure to the respondent ofinformation in his possession relevant to the loan. For this failure ofduty he is liable in damages unless the provisions of the PrescriptionOrdinance (Gap. 55, vol. 2, Legislative Enactments of Ceylon, p. SO),bar the claim.
In the case of Nodon v. Ashburton1, a solicitor was held to havo beenguilty of a breach of a fiduciary duty though not of fraud in respect of atransaction whereby he had gained an advantage and his client hadsuffered loss as the result of advice given by him and taken by the client.It was held in that case that the English Statute of Limitations did notapply to an action against the solicitor. It was argued that equally thePrescription Ordinance of Ceylon did not apply to an action for damagesfor breach of a fiduciary duty. Their Lordships do not agree. It washeld in Nocton v. Ashburton that the English Statute of Limitations didnot apply to an action in respect of a breach of a fiduciary dutj’ because. such ivn action before the passing of the Judicature. Act would have
1 House of Lords, 1914, A. O., 932.
MK. L. M. D. DE SILVA—Fuard v. Weerasuriya
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fallen within the “ exclusive jurisdiction ” of the Court of Chancery.It was held that although “ since the passing of the Judicature Act anybranch of the Court may give both kinds of relief” nevertheless theStatute of Limitations would not apply even after the passing of theAct. The course by which rules of limitation became applicable inEngland to certain causes of action in equity and not to others has hadno counterpart in Ceylon. No Court in Ceylon had at any time juris-diction corresponding to the “ exclusive jurisdiction ” of the Court ofChancery in England. Their Lordships do not propose to refer toprinciples of the English law of limitation which led to the decisionmentioned above in Nocton v. Ashburton as they are of the opinion thatthose principles are not relevant to the law of Ceylon. The PrescriptionOrdinance of Ceylon in various sections prescribes a period of limitationfor special causes of action and section 10 prescribes a period for “ anycause of action ” not caught up by the others. The Ordinance is clearlyapplicable to all causes of action and no basis can be found in the lawof Ceylon for excluding its application to all or any causes of action inequity. This view was expressed by the Board in John v. Dodwell1.In the words of Lord Haldane :—
“ The Prescription Ordinance of Coylon governs the whole of ajurisdiction which is general, including law and equity in one system.”
Their Lordships are of the view that none of the sections of the Pre-scription Ordinance dealing with special causes of action is applicableto a. breach of a fiduciary duty and that therefore such a breach fallsunder section 10. Under that section an action is not maintainableunless the same shall be commenced within three years from the timewhen such cause of action shall have accrued ”. By a breach of dutythe appellant created a situation which rendered him responsible ifdamage occurred. In the case before their Lordships it was impossiblefor the respondent at the time the breach was committed to have assessedthe loss which he subsequently suffered. Their Lordships are of opinionthat a cause of action “ accrued ” to the respondent at the time when thePamvila lands were sold under mortgage decree, namely, on' the 9thMarch, 1946. It was only on that day that the respondent can besaid to have suffered the damage that he did in fact suffer. The actionwas instituted on the 23rd October, 1947, and is consequently not barredby the Prescription Ordinance.
The amount of damages claimed by the respondent has not beencontested.
For the reasons which they have given their Lordships will humblyadvise Her Majesty that the appeal be dismissed. The appellant mustpay the respondent his costs of this appeal.
Appeal dismissed.
1 1918 A. O. 503.