UBAF Ltd v European American Banking Corporation: CA 1984

The defendant invited the plaintiff to take part in a syndicated loan. The defendant’s assistant secretary signed a letter to the plaintiff making representations, now claimed to be fraudulent. The defendant succeeded at first instance arguing that the signature was not that of the bank, and that even if it was, the action would be statute barred.
Held: The court refused to strike out the claim. A company itself made a representation, if it produced a document which was signed by an authorised officer or agent acting within the scope of his actual authority. This applied to bind the defendant bank. The nature of a syndicated loan was a fiduciary arrangement, and the obligations on a lead bank were continuing for limitation purposes, time did not run, and the obligation was not time barred. The issue would be settled at trial when it was established when the defendant could be said to have come to know of the alleged deceit.

Ackner LJ
[1984] QB 713, [1984] 1 WLR 508, [1984] CLY 1579
England and Wales
ExplainedSwift v Jewsbury and Goddard 1874
. .
ExplainedHirst v West Riding Banking Co CA 1901
The representation on which the claim made was was in a letter signed by the branch manager of the defendant bank and the court evidently assumed that this could not be equated with the bank’s own signature.
Held: The action against the bank . .
ConsideredForster v Outred and Co CA 1981
A mother signed a mortgage deed charging her property to H as security for a loan to her son. She claimed the solicitor had been negligent in his advice. The solicitor replied that the claim was out of time. The loss accrued not when demand for . .

Cited by:
CitedNykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) HL 27-Nov-1997
A surveyor’s negligent valuation had led to the plaintiff obtaining what turned out to be inadequate security for his loan. A cause of action against a valuer for his negligent valuation arises when a relevant and measurable loss is first recorded. . .
CitedPegasus Management Holdings Sca and Another v Ernst and Young (A Firm) and Another ChD 11-Nov-2008
The claimants alleged professional negligence in advice given by the defendant on a share purchase, saying that it should have been structured to reduce Capital Gains Tax. The defendants denied negligence and said the claim was statute barred.
Banking, Limitation, Torts – Other, Company

Updated: 29 November 2021; Ref: scu.181338