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PART II

AN OUTLINE OF THE PRESENT LAW

1. Introduction

2.1      In the Consultation Paper it required 159 pages to set out the then current law on limitation periods.^[1] We do not intend to repeat that statement in this Report, so readers who are seeking a detailed analysis of the current law are referred back to that paper.^[2] Rather in this Part we set out, in bare outline only, the present law applying under the Limitation Act 1980, with detail being confined to recent developments.

2. Claims for breach of contract^[3]

2.2      The time limit for a claim for breach of contract is six years from the date on which the breach occurs.^[4] However, if the contract is made by deed the limitation period is twelve years.^[5]
2.3      In the Consultation Paper we noted the difficulties pertaining to contracts of loan.^[6] At common law, unless provision is made for the date of repayment or repayment is made conditional upon an event, the borrower is instantly liable to repay the debt. Thus the creditor's cause of action accrues immediately the loan is made.^[7] The rigour of this common law rule is mitigated by section 6 of the 1980 Act which provides that in such a situation the six year limitation period runs not from the date of the accrual of the cause of action but rather from the date on which the creditor makes a written demand for repayment.^[8]

3. Claims founded on Tort^[9]

(1) General

2.4      The limitation period applicable to a claim in tort (other than a claim for damages in respect of personal injuries) is six years from the date on which the cause of action accrues.^[10] In respect of torts actionable per se, the cause of action accrues immediately the tort is committed. In respect of torts actionable only on proof of damage, the cause of action accrues upon the damage occurring.^[11]
2.5      In the Consultation Paper we referred to Pirelli General Cable Works v Oscar Faber & Partners,^[12] where the House of Lords held that the cause of action arising from the defective design of a chimney arose when damage first occurred and not when that damage was discoverable. Already subject to much criticism,^[13] Pirelli has recently come under renewed attack in New Islington & Hackney Housing Association Ltd v Pollard Thomas & Edwards Ltd.^[14] Dyson J said that in Murphy v Brentwood District Council^[15] the House of Lords had "re-interpreted" the loss in Pirelli as economic loss rather than property damage. The result was that:

if it is now to be understood as a case on economic loss, then Pirelli cannot stand. That is because it makes no sense to say that the plaintiffs in that case first suffered economic loss when, unknown to them, cracks first occurred in the chimney.^[16]

Instead, said Dyson J, economic loss would occur either when the property was acquired, because a higher price was paid than was warranted, or when the defect was discoverable, because it was only then that the actual value of the property diminished.^[17] Despite this being his preferred reasoning, Dyson J felt that, because in Murphy the House of Lords had not explicitly said that Pirelli was wrong, he was still bound by the rule in Pirelli that a cause of action in such a case accrues when damage occurs and not when the defect is discoverable.

2.6      In the Consultation Paper we also noted the difficulties in determining when economic loss caused by negligent advice occurs.^[18] This issue was reconsidered by the House of Lords in Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2).^[19] The claimants had advanced £2,450,000 on the security of a property negligently valued by the defendants at £3,500,000. The borrower immediately defaulted and the property, although initially worth £2,100,000, was eventually sold for £345,000. The question that fell for determination was when the claimants' cause of action had arisen within the meaning of section 35A(1) of the Supreme Court Act 1981.^[20] Lord Nicholls and Lord Hoffmann held that the cause of action accrues when the comparison between (a) what the claimant's position would have been if the defendant had fulfilled his or her duty of care and (b) the claimant's actual position, reveals a loss. In the present case that comparison revealed a loss immediately the loan transaction was executed.^[21] The claimant's cause of action therefore accrued on the date of the loan transaction.^[22]
2.7      Although Nykredit does provide useful guidance in determining when a claimant suffers loss, in practice its application is not always easy. For example, in Lloyd's Bank plc v Burd Pearse^[23] the claimant bank sought damages against a firm of solicitors who had failed to advise it that land, taken as security for a loan, was subject to restrictive covenants. Evans-Lombe J held that, although the claimant's security was worth less than it had believed, it did not suffer loss immediately upon the loan transaction being executed. The reason was that the claimant might still have eventually been able to recover its advance either through the realisation of the security or through the covenants of the debtor and guarantor to repay it. As there was no evidence that in July 1990 the claimant would not be able to recover the advance through these means, the claimant had not at that stage suffered any loss. Therefore the writ, issued in July 1996, was issued in time.^[24]
2.8      More recently, in Gordon v JB Wheatley & Co,^[25] the claimant alleged that the defendant solicitors had negligently failed to advise him that to enter into a collective investment scheme in 1991 he required authorisation from the Securities Investment Board (SIB). As a result, having been investigated by the SIB, he was required to underwrite his investors' losses in 1992. The Court of Appeal held that it was wrong to suggest that the claimant was only potentially worse off in 1991 when the investments were made, and not actually worse off until 1992. Rather, in 1991 the claimant was exposed to the risk of being liable to his investors and since that was a liability, albeit a contingent liability, he suffered loss on that date.

(2) Claims for damages consisting of or including damages for personal injuries and related claims

(a) General

2.9      The limitation period applicable to any claim in negligence, nuisance or breach of duty which consists of, or includes, a claim for damages for personal injuries is three years from the date on which the cause of action accrues, or if later, three years from the date of knowledge of the person injured.^[26]
2.10      Claims in respect of intentional trespass to the person do not fall within the terms of this provision.^[27] However the phrase "breach of duty" does cover any action based on a breach of contract, even where the contractual duty imposed is strict, as opposed to being a duty to exercise reasonable care.^[28]
2.11      Section 14(1) of the 1980 Act provides that a person's date of knowledge is the date on which he first had knowledge of the following facts:

(1) that the injury in question was significant;^[29]

(2) that the injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty;

(3) the identity of the defendant; and

(4) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.

This subsection also provides that knowledge that any act or omission did or did not, as a matter of law, involve negligence, nuisance or breach of duty is irrelevant.

2.12      Section 14(3) provides that a person's knowledge includes knowledge which he might reasonably have been expected to acquire:

(1) from facts observable or ascertainable by him; or,

(2) from facts ascertainable by him with the help of medical or other appropriate expert advice which it is reasonable for him to seek;

but also provides that a person is not to be fixed with knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain and act on that advice.^[30]

2.13      The court may disapply the limitation period described above if it is equitable to do so in all the circumstances of the case.^[31] Recently, the courts have emphasised that the onus is on the claimant to satisfy the court that it would be equitable to disapply the limitation period, and that the onus is a heavy one.^[32]

(i) Damages in respect of personal injuries to the claimant or any other person

2.14      As a number of recent cases have shown, determining whether an action is one which includes a claim for damages in respect of personal injuries is a matter of some difficulty.
2.15      In Bennett v Greenland Houchen & Co,^[33] solicitors representing the claimant compromised a claim on very unfavourable terms. The claimant instituted an action against the solicitors, alleging that their negligence had caused him "distress, loss, damage and expense", his particulars of claim stating that he "came into debt ... and he became and is clinically depressed".^[34] If this action included a claim for damages in respect of personal injuries it would have been statute-barred because the claimant had not made the claim within three years of the date on which he had acquired knowledge of the facts listed in section 14(1). The claimant argued that his action was essentially a claim for damages for economic loss, and that the claim in respect of depression was merely peripheral. The Court of Appeal rejected this, Peter Gibson LJ saying that section 11 of the 1980 Act:

expressly contemplates that the action might be one where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty do not consist of, but only include, damages in respect of personal injuries. It is wrong, in my view, to ... look for some other limitation to which section 11 must be subject.^[35]

Hence the court held that the proceedings brought by the claimant did include a claim for damages in respect of personal injuries.^[36]

2.16      In Burns v Shuttlehurst Ltd,^[37] the Court of Appeal held that a claim under the Third Party (Rights Against Insurers) Act 1930 is not a claim for damages in respect of personal injuries, because it is a claim for an indemnity once a claim for damages has been quantified.^[38] However, in Norman v Ali,^[39] the Court of Appeal held that a claim against a car owner for allowing an uninsured driver to use his vehicle may be a claim in respect of personal injuries.
2.17      Most recently, in Phelps v Mayor and Burgesses of London Borough of Hillingdon,^[40] the House of Lords held that a failure to ameliorate or mitigate the effects of dyslexia could amount to a personal injury.
2.18      In the Consultation Paper we noted that claims for wrongful birth have created difficulties of classification.^[41] Those difficulties were revisited in Das v Ganju^[42] where the claimant sought damages for the continuation of her pregnancy following the defendant's failure to detect that her foetus was at risk from rubella. Garland J applied the decision of the Court of Appeal in Walkin v South Manchester Health Authority,^[43] and held that the continuation of the claimant's pregnancy and the subsequent birth of her child amounted to a personal injury to her.^[44] He went on to hold that, because the claimant's daughter had been born with a personal injury, congenital rubella syndrome, the claim to recover expenses for her care was also a claim in respect of a personal injury. The fact that the injury had not been caused by the defendant, since her injuries pre-dated the defendant's negligence, was irrelevant.^[45]

(ii) Actual and constructive knowledge^[46]

2.19      In several recent cases the Court of Appeal has re-examined the issue of how to determine whether a claimant should reasonably have ascertained the relevant facts and so be fixed with constructive knowledge.
2.20      In Smith v Leicester Health Authority,^[47] the court referred to the conflicting statements in Nash v Eli Lilly & Co^[48] and Forbes v Wandsworth Health Authority,^[49] and continued:

We are prepared to accept for the purposes of this appeal that the proper approach to this question is "what would the reasonable person have done placed in the situation of the plaintiff" and that the answer in each case must depend on its own facts ... We accept that the plaintiff's individual characteristics which might distinguish her from the reasonable woman should be disregarded.^[50]

Thus the court disregarded characteristics such as the claimant's fortitude, her lack of bitterness at becoming a tetraplegic, and the determination and devotion she had demonstrated in making herself an independent and useful member of her family and society. However, the claimant's 'situation', the fact that she was wheelchair-bound and had no means of her own, were relevant in determining whether she had acted reasonably in not investigating the cause of her condition.

2.21      The Court of Appeal took a rather different approach in Ali v Courtaulds Textiles Ltd,^[51] where it held that it was "essential to that enquiry into the claimant's actual and constructive knowledge that regard is had to the man he is".^[52] The claimant suffered from industrial deafness, but had very limited English, and could neither read nor write in any language. The court held that the claimant was not to be fixed with constructive knowledge that his deafness was noise-induced because his was a case where he could only be satisfied of that after receiving medical advice.
2.22      The apparently conflicting reasoning in Smith and Ali has caused some difficulty in cases which have followed. In Fenech v East London & City Health Authority,^[53] the Court of Appeal avoided any reconciliation of the cases, stating that it was sufficient to recognise that "some degree of objectivity at least must be required in determining when it is reasonable for someone to seek advice".^[54] Thus the court held that the claimant did have constructive knowledge because it made no sense for her to remain silent about her pain, however stoical or shy she was.^[55]
2.23      In Sniezek v Bundy^[56] the Court of Appeal did at least clarify that objective criteria are irrelevant in determining whether the claimant has actual knowledge. The claimant had suffered a gradually deteriorating throat injury and, as he believed that it was attributable to his work, he went to see his GP in April 1989. His doctor did not detect any abnormality, and it was not until 1992 that the claimant was finally referred to a specialist where he was told his suspicions had been correct. The court held that because the claimant had firmly attributed his condition to his work before visiting his GP he had actual knowledge of that fact. That was enough to start the limitation period. The incorrect expert advice he then received did not stop time running, but would be a good reason to disapply the limitation period under section 33. Judge LJ added that the question of knowledge is essentially one of fact in each case and doubted whether "any considerable legal refinement is normally necessary or appropriate".^[57]

(b) Claims in respect of personal injuries surviving under the Law Reform (Miscellaneous Provisions) Act 1934

2.24      The limitation period for a claim in respect of personal injuries under the Law Reform (Miscellaneous Provisions) Act 1934 is three years from (a) the date of the deceased's death, or (b) the date of the personal representative's knowledge, whichever is later.^[58] The facts of which the personal representative must have knowledge are set out in section 14 of the 1980 Act,^[59] and the court may disapply the limitation period if it is equitable to do so.^[60]

(3) Claims under the Fatal Accidents Act 1976

2.25      The limitation period for a claim under the Fatal Accidents Act 1976 is three years from (a) the date of the deceased's death, or (b) the date of knowledge of the dependant for whose benefit the action is brought, whichever is later.^[61] The facts of which the dependant must have knowledge are set out in section 14 of the 1980 Act,^[62] and the court may disapply the limitation period if it is equitable to do so.^[63]

(4) Latent damage (other than personal injury) caused by negligence

2.26      The limitation period applicable to any claim in negligence, other than one which includes a claim for personal injuries, is either (a) six years from the date on which the cause of action accrues, or (b) three years from the 'starting date', whichever is later.^[64]
2.27      The 'starting date' is the earliest date on which the claimant first had both the right to bring the action and either actual or constructive knowledge of:

(1) such facts about the damage as would lead a reasonable person to consider it sufficiently serious to institute proceedings against a defendant who did not dispute liability and who was able to satisfy a judgment;

(2) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence;

(3) the identity of the defendant; and

(4) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.^[65]

Section 14A(9) of the 1980 Act provides that knowledge that any acts or omissions did or did not, as a matter of law, involve negligence is irrelevant.

2.28      These provisions are subject to an overriding limitation period of fifteen years from the date on which the negligent act or omission occurred.^[66]
2.29      In the Consultation Paper we noted the difficulty in differentiating, especially in cases of omissions, between knowledge of attributability, which is relevant, and knowledge of negligence, which is not.^[67] This difficulty has been further demonstrated in the case of Oakes v Hopcroft.^[68] The claimant was suing a medical expert who had caused her to settle a personal injuries claim for less than its true worth by failing to correctly diagnose the severity of her injuries. Lord Woolf CJ held that, although the claimant had known for more than three years before commencing the action that her injuries were worse than reported, there had been no reason for her to know her settlement was too low because of that misdiagnosis. Waller LJ and Clarke LJ reasoned differently saying that although the claimant was aware that her condition was worse than had been reported, she could not have known that there had been a misdiagnosis. This would seem to suggest that the claimant had to be aware, not only that the defendant had been wrong, but also that he had also been at fault. However Waller LJ added that:

the question is whether she was aware of the essence of the omission which had caused the original settlement to be too low, i.e. that there had been a misdiagnosis; not, it should be noted, whether that misdiagnosis had been negligent but simply whether there had been a misdiagnosis.^[69]

2.30      In contrast to this case the Court of Appeal took a strict approach in both Fennon v Hodari,^[70] and Sage v Ministry of Defence.^[71] In Fennon the claimant claimed that the defendant had failed to advise her about a charge on her house. In Sage the claimant alleged that the defendant had failed to inform him of his hearing loss. In each case the Court of Appeal held that because the claimant knew that the defendant had not given him or her any advice on the relevant matter, and because it was irrelevant that the claimant did not know that the defendant should, as a matter of law, have done so, the limitation period began running.
2.31      Two recent cases also show that it is not easy to differentiate between knowledge of facts and knowledge of law. In Perry v Moysey,^[72] the claimant had been advised that he did not need to pay income tax under section 311 of the Companies Act 1985. This advice was incorrect. Hence, when the claimant was later faced with a substantial tax demand to recover the arrears which had been due, he sued his accountant. His Honour Judge Jack QC held that whether the claimant owed the money to the Inland Revenue was a question of fact, and that therefore time did not start running against him until he was aware of that debt.
2.32      However Perry v Moysey was distinguished in HF Pension Trustees Ltd v Ellison.^[73] In that case the defendant solicitors advised the claimant trustee that it could transfer the surplus trust funds of an occupational pension scheme to a different scheme. That advice was incorrect and the transfer was in fact invalid. The claimant sought to recover from the defendant payments made to the Inland Revenue as a result of the transfer. Jonathan Parker J held that the damage incurred by the claimant was the making of the payments, and therefore that time started as soon as those payments were made. He held that it was irrelevant that the claimant did not know that it was suffering damage since that was a matter of law. He said:

What [the claimant] did not know and could not have known was that at some time in the future a court would hold that the transfer was unlawful; but although the making of the decision is undoubtedly a fact, the unlawfulness of the transfer is a matter of law. What the plaintiff's argument boils down to is that although it knew all the material facts, it did not know until later that those facts gave rise to a claim in negligence. In my judgment, however, in cases under section 14A as in personal injury cases, mere ignorance that the known facts give rise to a claim in law cannot postpone the running of time ...^[74]

Perry v Moysey was distinguished on the grounds that 'in that case the plaintiff did not know until some time after he had entered into the transaction in question that it had caused him any damage at all'.^[75]

2.33      Finally, the question of what amounts to constructive knowledge within section 14A(10) of the 1980 Act where the claimant is a corporation was considered in Abbey National plc v Sayer Moore.^[76] The claimant bank sued the defendant solicitors for negligently failing to report matters relating to a fraudulent land valuation in 1989. During 1991 and 1992, the Abbey National learned of fraud by the surveyors in other transactions and pursued matters through the police. It was held that this knowledge was enough to give the Abbey National constructive knowledge of the over-valuation in this particular transaction, and hence constructive knowledge of their loss. As Jacob J held:

I do not think it was reasonable for no one to look at the papers in a realistic way until they were looked at ... in 1997. This is a case in which the left hand of the Abbey National did not know what the right hand was doing.^[77]

2.34      Jacob J quoted from the unreported judgment of His Honour Judge McGonical in Abbey National v Wilkin & Chapman,^[78] that:

In any large organisation like Abbey National there are lines of responsibility and reporting and layers of management ... A large organisation can reasonably be expected to have in place procedures whereby facts and matters are reported to the relevant level of management, where appropriate and/or the relevant managers are required as part of their supervisory function to take steps to ensure that facts and matters which should be reported to them are reported to them or that they obtain the information in some other way, such as by reading all incoming correspondence. Such an organisation can also reasonably be expected to have procedures whereby facts and matters are reported upwards within the management to the appropriate level of management responsible for evaluating them and deciding what action, if any, to take or to recommend to be taken.^[79]

(5) Claims under the Consumer Protection Act 1987

2.35      The limitation period applicable to a claim for damages in respect of personal injuries or loss of, or damage to, property under Part I of the Consumer Protection Act 1987 is three years from (a) the date on which the cause of action accrues, or (b) the date of knowledge of the claimant, whichever is later.^[80] The facts of which the claimant must have actual or constructive knowledge are:

(1) such facts about the damage as would lead a reasonable person to consider it sufficiently serious to institute proceedings against a defendant who did not dispute liability and who was able to satisfy a judgment;

(2) that the damage was wholly or partly attributable to the facts and circumstances alleged to constitute the defect; and

(3) the identity of the defendant.^[81]

2.36      This is subject to an overriding limitation period of ten years from the date on which the defective product is supplied by either its manufacturer or by the person who imported it into the European Union, and the expiry of the overriding limitation period operates to extinguish the right of action.^[82] The court may disapply the primary limitation period if it is equitable to do so, but cannot disapply the overriding limitation period.^[83]

(6) Claims for defamation and malicious falsehood

2.37      The limitation period applicable to a claim for libel, slander, slander of title, slander of goods, or other malicious falsehood, is one year from the date on which the cause of action accrues. The court may disapply this limitation period if it is equitable to do so in all the circumstances of the case.^[84]

(7) Conversion

2.38      The limitation period applicable to a claim in respect of the conversion of a chattel, and any subsequent conversion of that chattel, is six years from the date of the original conversion.^[85] However where the original conversion constitutes theft, time does not begin to run until the chattel is purchased in good faith.^[86]

4. Claims in respect of trust property^[87]

(1) Claims for breach of trust

2.39      Section 21(3) of the 1980 Act provides that the limitation period for a claim by a beneficiary in respect of trust property is six years from the date on which the right of action accrues. However, section 21(1) states that no limitation period applies to:

(a) actions in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

(b) actions to recover from the trustee trust property, or the proceeds of trust property, either in the trustee's possession or converted to his use.

2.40      In the Consultation Paper we cited Nelson v Rye^[88] as a case examining the circumstances in which a fiduciary becomes a constructive trustee so that a claim against him is also a claim for breach of trust to which section 21 applies. The reasoning in that case must now be seen as incorrect following the Court of Appeal case of Paragon Finance plc v DB Thakerar & Co^[89] in which Millett LJ re-examined the question of which claims do in fact fall within section 21.
2.41      Millett LJ distinguished two categories of constructive trusteeship. First, cases where the trustee, though not expressly appointed as such, assumes the duties of a trustee by a lawful transaction that is independent of and precedes the breach of trust impugned by the claimant. The constructive trustee really is a trustee, as his or her possession of the trust property is affected from the outset by the trust and confidence through which it was obtained. The court held that this category of constructive trusteeship falls within section 21 of the 1980 Act.
2.42      The second category of constructive trusteeship encompasses cases where the trust obligation arises as a direct consequence of the unlawful transaction that is impeached by the claimant. The court held that this category of constructive trusteeship falls outside section 21 of the 1980 Act.^[90] The court observed that the words of section 21(1) of the 1980 Act are only applicable to those whose trusteeship precedes the occurrence which is the subject of the claim, and not those whose trusteeship arises only by reason of that occurrence. Moreover, the "constructive trustee" is not in fact a trustee at all, as he or she never assumes the position of a trustee, and the "constructive trust" is no more than a remedial mechanism by which equity gives relief for fraud. Millett LJ, observed that:

There is a case for treating fraudulent breach of trust differently from other frauds, but only if what is involved really is a breach of trust. There is no case for distinguishing between an action for damages for fraud at common law and its counterpart in equity based on the same facts merely because equity employs the formula of constructive trust to justify the exercise of the equitable jurisdiction.^[91]

2.43      Although the comments of Millet LJ in Paragon are strictly obiter dicta, they have since been followed. In Coulthard v Disco Mix Club Ltd,^[92] Jules Sher QC held that section 21(1) of the 1980 Act did not apply where the claimant sought damages for breach of both management and agency contracts and of fiduciary duty. There was no trust property before the defendants' breaches as they were not required to keep the claimant's money separate from theirs. Therefore the constructive trust which arose was merely a creation of the court to remedy the wrongdoing by the defendants and so section 21 did not apply.
2.44      Cases which fall into Millett LJ's first category are those in which the claimant can prove that there was pre-existing trust property. For example, in Bank of Credit & Commerce International (Overseas) Ltd v Jan,^[93] the claimant bank alleged that one of the defendants, who was also its employee, had fraudulently misappropriated and misapplied its funds. Jonathan Parker J held that this was a case falling into the first category of constructive trust because the defendant:

was at all material times a constructive trustee of the funds under his control in that he was under a subsisting fiduciary duty to apply those funds for the benefit of the BCCI. His misapplication of those funds was a breach of that pre-existing duty.^[94]

Hence, section 21(1) of the 1980 Act applied and the defendant's limitation defence failed.^[95]

2.45      Finally, in James v Williams,^[96] the Court of Appeal held that a defendant who had taken it upon himself to take possession of inherited property as an executor with full knowledge of the claimant's part interest in that property, held it for the claimant as a constructive trustee. Therefore the claimant's action to recover her share fell within section 21(1)(b) of the 1980 Act and was not subject to a limitation period.

(2) Claims in respect of the personal estate of a deceased person

2.46      The limitation period for any claim to the personal estate of a deceased person is twelve years from when the right to receive the share or interest accrues.^[97] However if the action falls within section 21(1) of the 1980 Act, no period of limitation applies.
2.47      The limitation period applicable to a claim to recover arrears of interest in respect of a legacy, or damages in respect of such arrears, is six years from the date on which the interest becomes due.^[98]

5. Claims for Restitution^[99]

2.48      Unjust enrichment was only recognised by the House of Lords as an independent cause of action in 1991.^[100] Hence the Limitation Act 1980 does not contain a limitation period which explicitly applies to restitutionary claims.^[101]
2.49      The 1980 Act does, however, contain provisions applicable to many restitutionary claims. For example, section 9 sets a six year limitation period for claims under the Law Reform (Frustrated Contracts) Act 1943; section 10(1) sets a two year limitation period for claims under the Civil Liability (Contribution) Act 1978; section 21(3) lays down a six year limitation period for claims to recover trust property; section 22 applies a twelve year limitation period to claims to recover the personal estate of a deceased person; and section 23 applies a six year limitation period to actions for an account. Also, section 32(1)(c) of the 1980 Act postpones the limitation period for a claim for relief from the consequences of a mistake until the mistake is, or could with reasonable diligence be, discovered.^[102]
2.50      In addition to these specific provisions, the courts have held that other, more general, provisions of the 1980 Act are applicable to restitutionary claims. For instance, claims which were previously characterised as quasi-contractual, such as an action for money had and received and a quantum meruit, fall within section 5 of the 1980 Act.^[103] Thus the limitation period applicable to such actions is six years from the date on which the defendant is unjustly enriched.^[104]
2.51      Where the claimant seeks to rescind an executed contract for misrepresentation, mistake, duress or undue influence, or recover damages for breach of confidence, the equitable doctrine of laches may apply in addition to any limitation defence.^[105]

6. Claims to recover land and related claims^[106]

(1) Claims to recover land

2.52      The limitation period applicable to a claim to recover land is twelve years from the date on which the right of action accrues.^[107]
2.53      The circumstances in which a right to recover land accrues are set out in section 15 of, and the first schedule to, the 1980 Act. The overriding requirement for the right to recover the land to be treated as having accrued, so the limitation period begins to run, is that the land is in adverse possession. If the land ceases to be held in this way, the right of action will cease to be treated as having accrued.^[108]
2.54      To be in adverse possession both factual possession of the land in question, and an intention to possess it (animus possidendi) must be demonstrated.^[109] Factual possession signifies an appropriate degree of exclusive physical control according to all the circumstances of the case, particularly the nature of the land and the manner in which land of that nature is commonly used or enjoyed.^[110] The animus possidendi involves an intention to possess the land to the exclusion of all other persons, including the owner with the paper title, so far as is reasonably practicable and so far as the process of law permits.^[111] Possession pursuant to a lawful title is never adverse.^[112]
2.55      Section 17 of the 1980 Act states that the expiry of the limitation period extinguishes the title of the person entitled to maintain the action to recover land. The effect of this, and the nature of the title thereby passed to the squatter, varies according to whether the land is freehold or leasehold, registered or unregistered.
2.56      Where the freehold estate is unregistered, the person in adverse possession does not succeed to the old title, but is entitled to a separate possessory title in the land. Where the freehold estate is registered, the paper owner holds that estate on trust for the person in adverse possession until he is, as he is entitled to be, registered as proprietor.^[113]
2.57      Where the leasehold estate is unregistered, the squatter obtains a possessory title as against the lessee but not as against the lessor. Hence if the former lessee surrenders his interest to the lessor, the lessor can lawfully eject the squatter.^[114] The position is significantly different where the leasehold estate is registered because the squatter is entitled to be registered as proprietor of the lease and, once registered, cannot be disturbed by a purported surrender of it.^[115] In Central London Commercial Estates Ltd v Kato Kagaku Ltd,^[116] Sedley J confirmed that a squatter is protected even before he or she is registered as proprietor.^[117]
2.58      In JA Pye Ltd v Graham,^[118] Neuberger J, having decided that a squatter had obtained title to land by adverse possession, went on to criticise the present law as follows:

I believe that the result is disproportionate, because, particularly in a climate of increasing awareness of human rights including the right to enjoy one's own property, it does seem Draconian to the owner and a windfall for the squatter that, just because the owner has taken no steps to evict a squatter for 12 years, the owner should lose 25 hectares of land to the squatter with no compensation whatsoever.^[119]

2.59      In the Court of Appeal the owner took up this passage and argued that his right to peaceably enjoy property, under the Human Rights Act 1988 and Article 1 of the First Protocol to the European Convention on Human Rights, had been breached.^[120] The court rejected this, noting that limitation periods are not inherently incompatible with the Convention,^[121] nor is the limitation period in section 15 of the 1980 Act disproportionate, discriminatory, impossible or so excessively difficult to comply with as to render the owner's right to his property ineffective to exercise.

(2) Claims to recover proceeds of the sale of land

2.60      The limitation period for a claim to recover the proceeds of the sale of land is twelve years from the date on which the right to receive the money accrues.^[122] The limitation period for an action to recover arrears of interest payable in respect of such proceeds, or to recover damages in respect of such arrears, is six years from the date on which the interest becomes due.^[123]

(3) Claims to recover rent

2.61      The time limit for a claim to recover arrears of rent, or damages in respect of such arrears, is six years from the date on which the arrears become due.^[124]

7. Claims in relation to mortgages and charges^[125]

2.62      The limitation period for a mortgagor's claim to redeem a mortgage is twelve years from the date on which the mortgagee takes possession of the property.^[126]
2.63      The limitation period applicable to a claim to recover any principal sum of money secured by a mortgage or other charge on real or personal property is twelve years from the date on which the right to receive the money accrues.^[127]
2.64      In a claim to recover arrears of interest payable on any sum of money secured by a mortgage or other charge, or to recover damages in respect of such arrears, the time limit is six years from the date on which the interest becomes due.^[128]
2.65      Finally, the limitation period for a foreclosure action in respect of mortgaged personal property is twelve years from the date on which the right to foreclose accrues. If the mortgagee is in possession of the mortgaged property after that date, the right to foreclose is treated as accruing when the mortgagee discontinues possession.^[129]
2.66      The recent case of Re Maxwell Fleet & Facilities Management Ltd (in Administration),^[130] demonstrates a situation in which the twelve year time limit in section 20 of the 1980 Act applies. The issue was whether a claim for wages and holiday pay by twelve former employees of a liquidated company would be time-barred. By virtue of section 19(5) of the Insolvency Act 1986 the employees had priority claims for the sums due, and any such sums were to be charged on and paid out of any property of the company at the end of the administration.^[131] Jules Sher QC held that, as the administration had not yet ended, the statutory duty to pay had not yet arisen and therefore the limitation period had not yet begun. However he also held that the claims were not simple contractual claims which, under section 5 of the 1980 Act, would have become timed-barred six years after the end of the administration. Rather, they were actions to enforce the statutory charge created by the 1986 Act. Hence section 20 of the 1980 Act applied, and the employees' claims would only become barred after twelve years.

8. Miscellaneous claims^[132]

(1) Claims on a judgment

2.67      Section 24(1) of the Limitation Act 1980 provides that the limitation period for an action to enforce a judgment is six years from the date on which the judgment becomes enforceable. In Lowsley v Forbes,^[133] the House of Lords affirmed that section 24(1) does not apply to prevent the execution of a judgment after six years, but applies only to bar fresh claims to enforce that judgment.^[134]
2.68      Section 24(2) of the 1980 Act provides that no arrears of interest in respect of any judgment are recoverable after six years from the date on which the interest becomes due. In Lowsley v Forbes, the House of Lords held that section 24(2) applies to both the interest recoverable in an action on a judgment and the interest recoverable in proceedings to execute a judgment.^[135]

(2) Arbitration

2.69      The limitation period applicable to a claim to enforce an arbitration award is six years from the date of the defendant's failure to honour the award when called upon to do so.^[136]
2.70      Furthermore, the provisions of the Limitation Act 1980 apply to arbitral proceedings as they apply to legal proceedings.^[137] The parties are free to agree when arbitral proceedings are to be regarded as commencing for the purposes of the 1980 Act.^[138] In the absence of such an agreement, the arbitral proceedings will be deemed to have started when one party serves a notice in writing on the other party making it clear that the sender is invoking the arbitration agreement and requiring the receiver to take steps accordingly.^[139]

(3) Claims on a statute (including claims for contribution)

(a) Claims on a statute

2.71      Section 8(1) of the 1980 Act provides that the limitation period for an action on a specialty, of which a statute is an example,^[140] is twelve years from the date on which the cause of action accrues. However, section 9(1) of the 1980 Act provides that the limitation period for a claim to recover a 'sum recoverable by virtue of any enactment' is six years from the date on which the cause of action accrues.^[141]
2.72      As we noted in the Consultation Paper, it is the nature of the relief sought that determines whether a statutory action is governed by section 8(1) or by section 9(1).^[142] Where the claimant seeks non-monetary relief the limitation period is twelve years under section 8(1), but where the claimant seeks a sum of money the limitation period is six years under section 9(1).
2.73      Recent cases have confirmed this distinction. In Re Farmizer (Products) Ltd,^[143] the Court of Appeal held that section 9(1) applied to a claim under section 214 of the Insolvency Act 1986 against a director for a contribution towards a company's assets. 'Contribution' within these provisions meant a contribution of a sum of money. Peter Gibson LJ added that even where the statutory provision relied upon enabled the court to give either monetary or non-monetary relief, the court should look at what is actually being claimed in the proceedings to determine which limitation period applies.^[144]
2.74      A recent case in which section 8(1) applied is Rahman v Sterling Credit Ltd.^[145] The claimants sought to reopen a credit agreement by virtue of the Consumer Credit Act 1974. The Court of Appeal held that the six year time limit for a claim upon a simple contract in section 5 of the 1980 Act did not apply since the cause of action arose out of, and only out of, the provisions of the 1974 Act. Nor did section 9(1) of the 1980 Act apply, because the relief sought was the reopening of the credit bargain, which was non-monetary relief.^[146] As a result, it was the twelve year time limit in section 8(1) of the 1980 Act that was applicable.
2.75      Finally, in order for section 9(1) to apply, the sum of money sought must be recoverable 'by virtue of' an enactment. This is demonstrated by Global Financial Recoveries v Jones.^[147] Under the Insolvency Act 1986 the claimant made a statutory demand in order to establish the defendant's inability to pay an outstanding loan. The court held that such a petition did not itself give rise to a right to recover money, but simply provided a mechanism whereby a claimant hoped to be paid. Therefore the money was not recoverable "by virtue of" an enactment and the six year time limit in section 9(1) of the 1980 Act did not apply. Nor, however, did the six year time limit for simple contract as set down in section 5 apply. This was because the outstanding loan was the shortfall following the repossession of property according to a mortgage executed as a deed. As the mortgage contained a specific term which addressed the situation in which there was a shortfall, the claimant's action was an action on a specialty and hence the twelve year time limit in section 8(1) applied.^[148]
2.76      Where section 9(1) of the 1980 Act does apply the court may have to consider when the right to recover the sum of money accrues. In Hillingdon London Borough Council v ARC Ltd (No 1),^[149] the Court of Appeal affirmed that the right to compensation under the Compulsory Purchase Act 1965 accrues immediately the acquiring body enters the land compulsorily acquired.^[150]

(b) Claims under the Civil Liability (Contribution) Act 1978

2.77      The limitation period applicable to a claim for contribution pursuant to section 1 of the Civil Liability (Contribution) Act 1978 is two years from the date on which the right to recover contribution accrues.^[151]

9. Factors postponing the running of time^[152]

(1) Claimant under a disability

2.78      Where a right of action accrues to a person under a disability, the general rule is that proceedings may be commenced at any time within six years of the date on which the disability ends or the person dies.^[153] However, if the person comes under a disability after the cause of action has accrued, the normal limitation period applies.^[154]
2.79      A person is under a disability if he is a child or a person who, by reason of mental disorder, is incapable of managing and administering his property and affairs.^[155]

(2) Claim based on fraud

2.80      Section 32(1)(a) of the 1980 Act provides that where a claim is based upon the fraud of the defendant, the limitation period does not begin to run until the claimant discovers the fraud, or could with reasonable diligence discover it.^[156]
2.81      The standard of diligence required in cases where the claimant is a company was considered in Paragon Finance plc v DB Thakerar & Co.^[157] Millett LJ said that the test to apply was how a person carrying on a business of the relevant kind would act if he had adequate, but not unlimited, staff and resources, and was motivated by a reasonable but not excessive sense of urgency. Millett LJ continued:

The question is not whether the plaintiffs should have discovered the fraud sooner; but whether they could with reasonable diligence have done so. The burden of proof is on them. They must establish that they could not have discovered the fraud without exceptional measures which they could not reasonably have been expected to take.^[158]

2.82      In UCB Home Loans Corporation v Carr,^[159] Crane J cited this test but, stating that the remarks were made obiter, suggested that the word "exceptional" should be omitted since it raises the standard too high. Crane J went on to hold that reasonable diligence on the part of a company required not just that individual employees were diligent in noticing possible claims, but also that those in control of the company had in place proper systems to detect them.^[160]
2.83      In Haque v Bank of Credit & Commerce International SA,^[161] the Court of Appeal considered the situation in which it was an employee of the company that had been fraudulent. The court said that the relevant question was: could the claimant company, for this purpose represented by some non-fraudulent officer, or perhaps its auditor, have discovered the fraud with reasonable diligence? The court held that as all necessary inquiries had been made, and as the only people to have seen incriminating documents were those implicated in the fraud, the claimant company could not with reasonable diligence have discovered it.^[162]

(3) Deliberate concealment

2.84      Where the defendant deliberately conceals a fact relevant to the claimant's right of action, the limitation period does not begin to run until the claimant discovers the concealment, or could with reasonable diligence discover it.^[163]
2.85      Section 32(2) of the 1980 Act provides that a 'deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty'. There have been important developments in relation to this provision.
2.86      In Brocklesby v Armitage & Guest,^[164] the defendant solicitors had negligently failed to release the claimant from mortgage obligations. The two-man Court of Appeal held that, despite there being no allegation of impropriety against the solicitors, they had deliberately committed a breach of duty within the meaning of section 32(2). The six year limitation period did not therefore start to run until the breach could be discovered. Morritt LJ said that, since it was trite law that ignorance of the law is no defence, if Parliament had intended that the defendant should know, not simply that he was acting, but also that his act gave rise to a breach of duty, it required clearer words to spell that out. Morritt LJ continued:

it is not necessary for the purpose of extending the limitation period pursuant to section 32(1)(b) to the 1980 Act to demonstrate that the fact relevant to the claimant's right of action has been deliberately concealed in any sense greater than that the commission of the act was deliberate in the sense of being intentional and that that act or omission, as the case may be, did involved a breach of duty whether or not the actor appreciated that legal consequence.^[165]

2.87      This decision was followed in Liverpool Roman Catholic Archdiocese Trustees Inc v Goldberg,^[166] where Laddie J suggested that claimants could benefit from the extension of the limitation period under section 32 even where they are aware at all times of all the facts giving rise to the cause of action:

[Section 32(2) treats] intentional commission of a breach of duty which is unlikely to be discovered in the same way as if it were a deliberate concealment of the facts which are necessary to maintain the action for breach of duty. Thus even if all the facts are known to the claimant, the intentional commission of the breach of duty in circumstances where that breach is unlikely to be discovered, results in the creation of a legal fiction, namely that the facts are unknown.^[167]

Laddie J added that the limitation period will only then begin to run once the claimant has discovered that there was a breach of duty.^[168]

2.88      Brocklesby has now been upheld by the full Court of Appeal in Cave v Robinson Jarvis & Rolf.^[169] The court recognised the force of the arguments against Brocklesby: in particular, that the natural meaning of the phrase 'deliberate breach of duty' in section 32(2) of the 1980 Act is ignored, so that the word 'deliberate' becomes redundant; that dicta from the House of Lords case of Sheldon v RHM Outhwaite (Underwriting Agencies) Ltd^[170] suggest that an element of impropriety on the defendant's part is required; and that the effect of Brocklesby is to override the discoverability provisions, including the long-stop, in sections 14A and 14B of the 1980 Act. However the court felt bound by Brocklesby and, although minded to grant permission to appeal, refused to do so given that the House of Lords had itself refused to hear an appeal in Brocklesby.

(4) Relief from the consequences of a mistake

2.89      Where an action is for relief from the consequences of a mistake, the limitation period does not begin to run until the claimant discovers the mistake, or could with reasonable diligence discover it.^[171]
2.90      In Kleinwort Benson Ltd v Lincoln City Council,^[172] a majority of the House of Lords held that there is a general right to recover money paid under a mistake, thus abrogating the rule that money paid under a mistake of law is irrecoverable. The House of Lords also held that an action to recover the money falls within the terms of section 32(1)(c) of the 1980 Act, so that the relevant limitation period is six years from the date on which the mistake is discoverable. Accordingly, if a payment is made pursuant to the law as stated by a decision of the Court of Appeal, and the House of Lords later overrules that decision, the payment may be recovered up to six years after the House of Lords case. This aspect of the decision prompted Lord Browne-Wilkinson and Lord Lloyd to dissent, Lord Browne-Wilkinson expressing his disagreement in the following terms:

On every occasion in which a higher court changed the law by judicial decision, all those who had made payments on the basis that the old law was correct (however long ago such payments were made) would have six years in which to bring a claim to recover money paid under a mistake of law. All your Lordships accept that this position cannot be cured save by primary legislation altering the relevant limitation period. In the circumstances, I believe that it would be quite wrong for your Lordships to change the law so as to make money paid under a mistake of law recoverable since to do so would leave this gaping omission in the law.^[173]

The majority of their Lordships recognised this difficulty but thought that it could be adequately dealt with by statutory reform of the applicable limitation period and called for consideration of this by the Law Commission.^[174]

(5) Acknowledgment and part payment

2.91      Section 29 of the 1980 Act provides for the fresh accrual of the cause of action where the defendant either acknowledges the title or claim of the claimant, or makes a payment in respect of it. However this section only applies to claims for the recovery of land, claims in relation to mortgages, claims to recover a debt or other liquidated sum, and claims to recover a share or interest in the personal estate of a deceased person.^[175]
2.92      The limitation period may be repeatedly extended by further acknowledgments or payments. However an acknowledgment or payment cannot revive a right of action already time-barred.^[176]

10. Additional issues^[177]

(1) What happens when time expires?

2.93      Generally the expiry of the limitation period bars the claimant's remedy, but does not extinguish his or her right.^[178] It follows that if the defendant does not include details of the expiry of the limitation period in the defence, the claimant may obtain a remedy notwithstanding the fact that the limitation period has expired.^[179]

(2) What the claimant has to do to prevent the expiry of the limitation period

2.94      Time ceases to run against a claimant when he or she commences proceedings, that is, when a claim form is issued by the court at the claimant's request.^[180]
2.95      In Riniker v University College London,^[181] the claimant's writ was received by the court within the relevant limitation period. However, due to an administrative error, the writ was not issued until after the limitation period had expired. The Court of Appeal held that, pursuant to its inherent jurisdiction, it had a discretionary power to direct that a writ should be treated as if it had been issued on a date earlier than that on which it was actually issued. Hence, the court, which was unable to identify any fault on the claimant's part, ordered that her writ should be deemed to have been issued on the date on which it was received.^[182]

(3) Contracting out of, or waiving, the statutory limitation period

2.96      The limitation period may be excluded by agreement, express or implied.^[183] Similarly a party may be estopped by his own conduct from asserting a limitation defence.^[184]

(4) Laches and acquiescence

2.97      Section 36(2) of the 1980 Act expressly preserves the equitable jurisdiction to refuse relief on the ground of acquiescence or laches.
2.98      Laches is available as a defence where a claimant, who knows of his entitlement to relief, delays in instituting legal proceedings with the result that it would be unjust to award the remedy sought against the defendant.^[185] In each case the test is whether the balance of justice or injustice is in favour of granting a remedy or withholding it.^[186] In Frawley v Neill,^[187] the Court of Appeal recently emphasised that the modern approach to laches does not require an investigation as to whether the circumstances of a particular case can be fitted within the confines of a preconceived formula derived from earlier cases. Rather, the court should adopt a broad approach to ascertain whether it would, in all the circumstances, be unconscionable for a party to be permitted to assert his beneficial right.
2.99      Acquiescence is available as a defence where a claimant, who knows of his or her rights, acquiesces in a breach of those rights by the defendant so that, in all the circumstances, it is unconscionable for the claimant to rely on them.^[188] In Jones v Stones,^[189] the Court of Appeal reaffirmed that it is not sufficient to show delay by the claimant. Rather, the defendant must establish that he or she relied, to his or her detriment, upon the action or inaction of the claimant.

(5) Application of the 1980 Act to equitable remedies by analogy

2.100      Section 36(1) of the 1980 Act provides that the court may apply time limits to claims for equitable relief by analogy with the provisions of the 1980 Act. In Paragon Finance plc v DB Thakerar & Co,^[190] Millett LJ stated that this provision preserved the rule in Knox v Gye^[191] that, even where there is no contractual relationship between parties so that liability is exclusively equitable, the court may still impose a time limit by analogy.^[192]
2.101      Further explanation was provided in Coulthard v Disco Mix Club Ltd,^[193] where Jules Sher QC, sitting as a deputy judge of the High Court, said that the court would apply the Act by analogy in two situations:

(1) where a court is simply exercising a concurrent equitable jurisdiction to give the same relief as is available at law; and,

(2) where there is a "correspondence" between the remedies available at law or in equity, even if the equitable relief is wider than the relief available at law.^[194]

Jules Sher QC held that the alleged breaches of fiduciary duty were based on the same factual allegations as, and were the equitable counterparts of, a common law claim for fraud. Therefore, he held that section 5 of the 1980 Act applied by analogy.

2.102      Coulthard was approved by the Court of Appeal in Cia De Seguros Imperio v Heath (REBX) Ltd.^[195] The court held that, where the facts of a case give rise to both a common law action for fraudulent breach of contract and an equitable claim for breach of fiduciary duty, the six year limitation period in section 5 of the 1980 Act applies to both. Clarke LJ said:

If the claims for damages for breach of contract and duty are time barred ... no rational system should permit the plaintiff to proceed with a claim for damages which is essentially based on the same facts, merely because it is strictly a claim for compensation in equity..^[196]

(6) Burden of proof

2.103      Where the defendant raises a limitation defence, the legal burden of proof rests throughout on the claimant, although the evidential burden may rest on the defendant according to the particular matter in issue.^[197]

(7) The 'Sevcon' problem: restrictions on the claimant's right to sue

2.104      Generally time begins to run under the 1980 Act as soon as a cause of action accrues, irrespective of any procedural bars precluding legal proceedings. Thus a right of action may be time-barred before it can be enforced.^[198]

(8) Adding new claims in existing proceedings

2.105      A new claim made in the course of proceedings is deemed to be a separate claim and, unless made in or by way of third party proceedings, to have been commenced on the same date as the original proceedings.^[199]
2.106      However, the court may only allow a new claim to be made after the expiry of a relevant time limit if: (a) it is an original set-off or counterclaim;^[200] or (b) the conditions in section 35 of the 1980 Act, and rules 17 and 19 of the Civil Procedure Rules 1998,^[201] are satisfied.
2.107      According to these provisions the new claim may be allowed in the following circumstances:

(1) if the new claim is one which adds a new cause of action, that new cause of action must arise out of the same facts or substantially the same facts as are already in issue;^[202] or,

(2) if the new claim is one which adds or substitutes a new party, either:

(a) the introduction of the new party must be necessary for the determination of the original action. 'Necessary' for this purpose means that either:

(i) the new party is substituted for a party who was named in the claim form in mistake for the new party; or,

(ii) a claim made in the original action cannot properly be maintained unless the new party is joined or substituted; or,

(iii) the original party has died or been subject to a bankruptcy order, so that their interest or liability has passed to the new party;^[203] or

(b) the court must direct that, by virtue of section 33 of the 1980 Act, the three year limitation period does not apply to the new claim.^[204]

2.108      The question of whether an amendment adds a new cause of action, and if so, whether that new cause of action arises out of the same or substantially the same facts as a previous cause of action, fell for consideration in Paragon Finance plc v DB Thakerar & Co.^[205] The Court of Appeal held that an amendment to make an allegation of intentional wrongdoing, where previously no intentional wrongdoing had been alleged, did constitute the introduction of a new cause of action. Millett LJ relied upon the following definition by Diplock LJ in Letang v Cooper:^[206]

A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person.

2.109      In Lloyds Bank plc v Rogers,^[207] Auld LJ followed this by holding that a building society which had originally only sought possession of a property, but now sought to amend its pleadings to include a claim for a money judgment, would not be adding a new cause of action to its claim. Auld LJ held that, although seeking a new remedy, the claimant was relying on facts already pleaded (the same factual situation) so that there was no new cause of action. Evans LJ disagreed, saying that, even if no new facts were to be pleaded, the claim for possession under a legal charge and guarantee was a different cause of action to the claim for sums due as principal and interest under the guarantee.^[208]
2.110      In Stewart v Engel,^[209] the claimant sought rectification of a contract and damages for conversion in addition to a previously pleaded claim in negligence. The Court of Appeal held that, in the light of Diplock LJ's definition of a cause of action, amending the pleadings to include a conversion claim would not add a new cause of action if all the facts relied upon had already been pleaded. However, as the original pleadings had not included one fact essential to the claim for conversion the effect of the new claim would be to add a new cause of action. Despite this, the court did allow the amendment since the evidence for the negligence claim would have covered substantially, albeit not all, the same ground as would have been covered in presenting the new claim.^[210]
2.111      Another issue which the courts have considered recently is whether a claimant, who has sought damages for both personal injury and economic loss, but whose claim is time-barred by virtue of the three year limitation period in section 11 of the 1980 Act, may be permitted to delete the personal injury claim and take advantage of the six year limitation period for non-personal injury claims.^[211]
2.112      In Oates v Harte Reade & Co,^[212] Singer J held that the deletion of one type of damage claimed could not amount to adding or substituting a new cause of action. Section 35(5) of the 1980 Act therefore did not apply. However he still refused to allow the claimant to amend the pleadings^[213] because it would have deprived the defendant of a good limitation defence which had arisen out of the way in which the claimant had chosen to plead her case.
2.113      In Shade v Compton Partnership,^[214] the Court of Appeal said that the reasoning in Oates was less than fully satisfactory. The court disagreed that section 35 of the 1980 Act and part 17.4 of the Civil Procedure Rules could be irrelevant when the issue of limitation arose in connection with a proposed amendment. Also it said that the fact that an amendment would deprive the defendant of an accrued limitation defence was only relevant when the claimant could not usefully start new proceedings. In this case, if the claimant wished to bring a new action without seeking damages for personal injuries he would not be time-barred and so he should have been allowed to amend his pleadings.

(9) Commencement and retrospectivity

2.114      Statutes are not interpreted retrospectively so as to impair existing rights or obligations unless that interpretation is unavoidable from the language used. An accrued right to a limitation defence is in every sense a legal right. Accordingly statutes of limitation are not applied retrospectively where such an application would abrogate an accrued right to plead a time bar.^[215]
2.115      These propositions were confirmed in Marsal v Apong,^[216] where the Privy Council, considering Brunei law, had to determine whether section 2 of the Emergency (Limitation) Order 1991 applied retrospectively to an action that was otherwise already statute-barred. That section provided:

(1) This Order shall apply to any action commenced after the date of coming into force of this Order, whether the cause of action accrued before or after that date. (2) Any action commenced before the date of coming into force of this Order, shall continue in accordance with, and be bound by, the provisions of the Act repealed by section 52 of this Order.

2.116      The Privy Council held that section 2(2) of this Order preserved the defendant's acquired limitation defence. Lord Slynn expressed himself in the following terms:

it is quite impossible to say that it is "unavoidable" to construe the Order as removing rights acquired under the Limitation Act itself. On the contrary, in the absence of an express provision in section 2(2) of the Order that existing acquired rights to a limitation defence were removed, the clear presumption must be the other way.^[217]

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Note 1    Limitation of Actions, Consultation Paper No 151 (1998), Section A. The law was stated as at 22 October 1997.    [Back]

Note 2    Which is available on our website www.lawcom.gov.uk.    [Back]

Note 3    See Limitation of Actions, Consultation Paper No 151 (1998), paras 3.1 - 3.11.    [Back]

Note 4    Limitation Act 1980, s 5; Gibbs v Guild (1881) 8 QBD 296, 302, per Field J; Gulf Oil (Great Britain) Ltd v Phillis [1998] PNLR 166, 168, per Harman J.    [Back]

Note 5    Limitation Act 1980, s 8. See also paras 2.71 - 2.75, below.    [Back]

Note 6    Limitation of Actions, Consultation Paper No 151 (1998), para 3.8.    [Back]

Note 7    Re Brown’s Estate [1893] 2 Ch 300, 304, per Chitty J.    [Back]

Note 8    For recent examples of the application of this section seeVon Goetz v Rogers, CA, unreported, 29 July 1998 and Bank of Baroda v Mahomed [1999] CLC 463, CA.     [Back]

Note 9    Limitation of Actions, Consultation Paper No 151 (1998), paras 3.12 - 3.119.    [Back]

Note 10    Limitation Act 1980, s 2. Recently, in R v Secretary of State for Transport, ex p Factortame (No 6), QBD, The Times, 10 January 2001, Judge Toulmin QC held that s 2 of the 1980 Act also applies to a claim for damages for breach of European Community law.    [Back]

Note 11    Where a solicitor negligently fails to draft a will, the beneficiary’s cause of action accrues when the would-be testator dies: Bacon v Kennedy [1999] PNLR 1. See alsoMacaulay & Farley v Premium Life Assurance Company, Ch D, unreported, 29 April 1999. In malicious prosecution the cause of action accrues when the criminal proceedings against the claimant end:Dunlop v Commissioners of Customs & Excise, CA, The Times, 17 March 1998.     [Back]

Note 12    [1983] 2 AC 1, see paras 3.15 - 3.19 of the Consultation Paper.    [Back]

Note 13    FollowingPirelli, ss 14A and 14B were inserted into the Limitations Act 1980 to prevent time running against a claimant who is not aware of any damage. Also, see Invercargill City Council v Hamlin [1996] AC 624 where the Privy Council declined to followPirelli.    [Back]

Note 14    QBD, unreported, 8 December 2000.    [Back]

Note 15    [1991] 1 AC 398.    [Back]

Note 16    Smith Bernal transcript, Case No 1998/ORB/200, at para 43.    [Back]

Note 17    Dyson J preferred the former option since adopting the discoverability test would undermine the 15 year long-stop period in s 14B of the 1980 Act.    [Back]

Note 18    Limitation of Actions, Consultation Paper No 151 (1998), paras 3.20 - 3.23.    [Back]

Note 19    [1997] 1 WLR 1627.    [Back]

Note 20    S 35A of the 1981 Act allows a court to award simple interest on “damages in respect of which judgment is given ... for all or any part of the period between the date when the cause of action arose and ... the date of judgment.” For the purposes of this act and the Limitation Act 1980, “arose” and “accrue” have the same meaning: Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627, 1638, per Lord Hoffmann.    [Back]

Note 21    Since in return for making its advance of £2,450,000, which it would not have done had the defendant not breached its duty of care, the claimant received a security of a value of £2,100,000 and covenants from the debtor which were worthless.    [Back]

Note 22    Where purchasers rely on a negligent under-valuation to buy property which is worth less than they are led to believe, the cause of action accrues upon the exchange of contracts, since that is when the claimants, being irrevocably committed to acquiring the property, first suffer loss: Byrne v Pain & Foster [1999] 1 WLR 1849, CA.    [Back]

Note 23    [2000] PNLR 71, Ch D.    [Back]

Note 24    See alsoWhite v Woodroffe Vaughan, CA, unreported, 24 January 2000.     [Back]

Note 25    [2000] Lloyd’s Rep PN 605.    [Back]

Note 26    Limitation Act 1980, s 11(1), (2) - (4). “Personal injuries” are defined in s 38(1).    [Back]

Note 27    Stubbings v Webb [1993] AC 498.    [Back]

Note 28    Foster v Zott GmbH & Co, CA, unreported, 24 May 2000. The Court of Appeal went as far as to say that, subject to the exception in respect of deliberate assault, the three year limitation period applies to all personal injury cases whether founded on contract or on tort.     [Back]

Note 29    An injury is significant if the claimant would reasonably have considered it sufficiently serious to justify instituting proceedings against a defendant who did not dispute liability and could satisfy the judgment: Limitation Act 1980, s 14(2). See recently Berry v Calderdale Health Authority [1998] Lloyd’s Rep Med 179, CA; Briggs v Pitt-Payne (1999) 46 BMLR 132, CA, and James v East Dorset Health Authority, CA, unreported, 24 November 1999.    [Back]

Note 30    In Henderson v Temple Pier Co Ltd [1998] 1 WLR 1540 the Court of Appeal held that advice given by a solicitor could only ever be called “expert advice” if it related to matters of fact upon which expert advice was required, and that the identity of the shipowner was not a matter of fact ascertainable only with the help of expert advice.    [Back]

Note 31    Limitation Act 1980, s 33. Since the publication of the Consultation Paper, s 33 has been considered in a number of Court of Appeal cases, including: Farthing v North East Essex Health Authority [1998] Lloyd’s Rep Med 37; Hammond v West Lancashire Health Authority [1998] Lloyd’s Rep Med 146; Hayward v Sharrard (2000) 56 BMLR 155; Roberts v Winbow [1999] PIQR P77; Das v Ganju [1999] PIQR P260; andLennon v Alvis Industries plc, CA, unreported, 27 July 2000.     [Back]

Note 32    Price v United Engineering Steels Ltd [1998] PIQR P407, P414, per Brooke LJ. InMold v Hayton & Newson, unreported, 17 April 2000 the Court of Appeal held that if a judge gives a large extension of time, he is under a duty to explain his reasons with meticulous care.    [Back]

Note 33    [1998] PNLR 458.    [Back]

Note 34    [1998] PNLR 458, 463-464.    [Back]

Note 35    [1998] PNLR 458, 466, per Peter Gibson LJ. In so formulating, Peter Gibson LJ had particular regard to Ackbar v Green [1975] QB 582; see para 3.30 of the Consultation Paper.    [Back]

Note 36    Bennett v Greenland Houchen has since been followed and applied twice: Oates v Harte Reade & Co [1999] 1 FLR 1221, QBD and Shade v Compton Partnerships [2000] PNLR 218, CA.     [Back]

Note 37    [1999] 1 WLR 1449.    [Back]

Note 38    In Gaud v Leeds Health Authority [1999] BMLR 105, CA, the claimant, who had contracted hepatitis B and tuberculosis, sought damages from his employer for failing to advise him of his rights to benefits to which he was entitled because of his illness. Lord Woolf MR held that this was not a personal injuries case.    [Back]

Note 39    [2000] PIQR P73.    [Back]

Note 40    [2000] 3 WLR 776.    [Back]

Note 41    Limitation of Actions, Consultation Paper No 151 (1998), para 3.37.    [Back]

Note 42    (1998) 42 BMLR 28, QBD. The case has now been decided by the Court of Appeal ([1999] PIQR P260) but this point was not argued.     [Back]

Note 43    [1995] 1 WLR 1543.    [Back]

Note 44    This has now been affirmed by the House of Lords in McFarlane v Tayside Health Board [2000] 2 AC 59 where it was held, in considering the duty of care in negligence, that the pain, discomfort and inconvenience of an unwanted pregnancy is a personal injury, whereas the cost of bringing up a healthy child is pure economic loss.    [Back]

Note 45    Rand v East Dorset Health Authority (2000) 56 BMLR 39 casts some doubt on this aspect of the decision because Newman J held, again in the context of duty of care, that a claim for the cost of maintenance of a disabled child is a claim for pure economic loss.     [Back]

Note 46    See paras 3.52 - 3.65 of the Consultation Paper. Also, in addition to the cases considered in the following paragraphs, see the latent damage cases discussed at paras 2.29 - 2.34 below.    [Back]

Note 47    [1998] Lloyd’s Rep Med 77.    [Back]

Note 48    [1993] 1 WLR 782.    [Back]

Note 49    [1997] QB 402.    [Back]

Note 50    [1998] Lloyd’s Rep Med 77, 86.    [Back]

Note 51    (2000) 52 BMLR 129.    [Back]

Note 52    (2000) 52 BMLR 129, 132, per Henry LJ.    [Back]

Note 53    [2000] Lloyd’s Rep Med 35.    [Back]

Note 54    [2000] Lloyd’s Rep Med 35, 38, per Simon Brown LJ.    [Back]

Note 55    See alsoMold v Hayton & Newson, CA, unreported, 17 April 2000, where the Court of Appeal applied a similarly objective test.    [Back]

Note 56    [2000] PIQR P213.    [Back]

Note 57    [2000] PIQR P213, P232.    [Back]

Note 58    Limitation Act 1980, s 11(5).    [Back]

Note 59    See paras 2.11 - 2.12 above.    [Back]

Note 60    Limitation Act 1980, s 33.    [Back]

Note 61    Limitation Act 1980, s 12.    [Back]

Note 62    See paras 2.11 - 2.12 above.    [Back]

Note 63    Limitation Act 1980, s 33.    [Back]

Note 64    Limitation Act 1980, s 14A(1) and (4).    [Back]

Note 65    Limitation Act 1980, s 14A(5) - (8). Section 14A(10) deals with constructive knowledge using exactly the same wording as in s 14(3): see para 2.12 above.    [Back]

Note 66    Limitation Act 1980, s 14B.    [Back]

Note 67    See Limitation of Actions, Consultation Paper No 151 (1998), paras 3.47 - 3.49. We noted that the strict rule in Broadley v Guy Clapham & Co [1994] 4 All ER 439 and Dobbie v Medway Health Authority [1994] 1 WLR 1234, that knowledge of fault is irrelevant, has not been applied rigorously in all cases, eg, Smith v West Lancashire Health Authority [1995] PIQR P514 and Forbes v Wandsworth Health Authority [1997] QB 402. Now see alsoSmith v National Health Litigation Authority, QBD, unreported, 14 November 2000.     [Back]

Note 68    (2000) 56 BMLR 136.    [Back]

Note 69    (2000) 56 BMLR 136, 145.    [Back]

Note 70    CA, unreported, 21 November 2000.    [Back]

Note 71    [2001] EWCA Civ 190 (CA, unreported, 9 February 2001).    [Back]

Note 72    [1998] PNLR 657.    [Back]

Note 73    [1999] PNLR 894.    [Back]

Note 74    [1999] PNLR 894, 904.    [Back]

Note 75    [1999] PNLR 894, 904, per Jonathan Parker J.    [Back]

Note 76    Ch D, The Times, 30 August 1999    [Back]

Note 77    Smith Bernal transcript, Case No CH 1998/A/32, 23 July 1999.    [Back]

Note 78    QBD, unreported, 7 October 1997.    [Back]

Note 79    The knowledge of corporations has also been considered in fraud cases, within the context of s 32(1)(a) of the 1980 Act. See paras 2.80 - 2.83 below.     [Back]

Note 80    Limitation Act 1980, s 11A(4).    [Back]

Note 81    Limitation Act 1980, s 14(1A). Section 14(3) applies in relation to constructive knowledge: see para 2.12, above.    [Back]

Note 82    Limitation Act 1980, s 11A(3); Consumer Protection Act 1987, ss 4(2) and 2(2).    [Back]

Note 83    Limitation Act 1980, s 33(1) and (1A).    [Back]

Note 84    Limitation Act 1980, ss 4A and 32A.    [Back]

Note 85    Limitation Act 1980, ss 2 and 3(1). The expiry of the limitation period operates to extinguish the owner’s title to the converted property: Limitation Act 1980, s 3(2).    [Back]

Note 86    Limitation Act 1980, s 4.City of Gotha v Sotheby’s (No 2), QBD, The Times, 8 October 1998.    [Back]

Note 87    Limitation of Actions, Consultation Paper No 151 (1998), paras 4.1 - 4.36.    [Back]

Note 88    [1996] 1 WLR 1378, see para 4.7 of the Consultation Paper.    [Back]

Note 89    [1999] 1 All ER 400.    [Back]

Note 90    Contrast the decision of Harman J in Gwembe Valley Development Co Ltd v Koshy [1998] 2 BCLC 613, 623, decided 6 months beforeParagon, that an action for knowing receipt of trust property falls within the terms of s 21(1)(b) of the 1980 Act.    [Back]

Note 91    [1999] 1 All ER 400, 414. Millett LJ also said that Nelson v Rye was wrong insofar as it was held that a simple claim for breach of fiduciary duty falls outside the 1980 Act so that no time limit applies. Instead, the correct rule (preserved by s 36 of the 1980 Act) is that equity imposes time limits on equitable actions by analogy with the statutory limitation periods for common law claims. For a fuller discussion see paras 2.100 - 2.102 below.    [Back]

Note 92    [2000] 1 WLR 707.    [Back]

Note 93    Ch D, unreported, 17 November 1999.    [Back]

Note 94    Smith Bernal transcript, Case No CH 1998/B/1572.    [Back]

Note 95    See also UCB Home Loans Corporation Ltd v Carr [2000] Lloyds Rep PN 754, QBD.    [Back]

Note 96    [2000] Ch 1.    [Back]

Note 97    Limitation Act 1980, s 22(a).    [Back]

Note 98    Limitation Act 1980, s 22(b).    [Back]

Note 99    Limitation of Actions, Consultation Paper No 151 (1998), paras 5.1 - 5.19.    [Back]

Note 100    Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548.    [Back]

Note 101    See Portman Building Society v Hamlyn Taylor Neck [1998] 4 All ER 202, 209, where Brooke LJ called for statutory reform to bring restitutionary remedies within a coherent and principled limitation regime.    [Back]

Note 102    See the detailed discussion of the House of Lords’ seminal decision in Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, at para 2.90 below.    [Back]

Note 103    Kleinwort Benson Ltd v Sandwell Borough Council [1994] 4 All ER 890, 942-943, per Hobhouse J.    [Back]

Note 104    BP Exploration Co (Libya) Ltd v Hunt (No 2) [1983] 2 AC 352, 373-374, per Lord Brandon. Where the claimant pays money to the defendant pursuant to a mistake, the cause of action accrues on the date of payment (or, if later, the date of receipt): Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, 359, per Lord Browne-Wilkinson, 386, per Lord Goff, 409, per Lord Hope. A Burrows, The Law of Restitution (1993) p 442 - 443.    [Back]

Note 105    See, eg, West Sussex Properties Ltd v Chichester District Council [2000] NPC 74, CA, where neither defence was successful. See also paras 2.97 - 2.99 below.    [Back]

Note 106    Limitation of Actions, Consultation Paper No 151 (1998), paras 6.1 - 6.50.    [Back]

Note 107    Limitation Act 1980, s 15(1). Section 15(2) contains the exception that where the interest claimed was a future interest, the claimant has either 12 years from when the person entitled to the previous interest was dispossessed or 6 years from when his own interest fell into possession, whichever is the later.    [Back]

Note 108    Limitation Act 1980, Sch 1, para 8(1) and (2).    [Back]

Note 109    Buckinghamshire County Council v Moran [1990] 1 Ch 623, 635 - 636 per Slade LJ, 645 per Nourse LJ.     [Back]

Note 110    Powell v McFarlane (1979) 38 P & CR, 452, 470 - 471. See recently eg Green v Wheatley [1999] 96/22 LSG 36, CA.    [Back]

Note 111    Buckinghamshire County Council v Moran [1990] 1 Ch 623, 643, per Slade LJ, 645, per Nourse LJ; see also Prudential Assurance Co Ltd v Waterloo Real Estate Inc [1999] 2 EGLR 85, CA and JA Pye Ltd v Graham [2001] EWCA Civ 117, CA, The Times, 13 February 2001.    [Back]

Note 112    Hyde v Pearce [1982] 1 WLR 560; see also Black Country Housing Association Ltd v Shand [1998] NPC 92, CA, and Bromley London Borough Council v Morritt [2000] EHLR 24, CA.    [Back]

Note 113    Land Registration Act 1925, s 75.    [Back]

Note 114    Fairweather v St Marylebone Property Co Ltd [1963] AC 510. The lessor’s cause of action against the squatter only accrues once the lease is ended: Limitation Act 1980, Sch 1, para 4.    [Back]

Note 115    Spectrum Investment Co v Holmes [1981] 1 WLR 221: Limitation of Actions, Consultation Paper No 151 (1998), para 6.39.    [Back]

Note 116    [1998] 4 All ER 948. See C Harpum, “Estates in the Clouds - The Squatter, The Lease and The Car Park” (1999) 115 LQR 187.    [Back]

Note 117    Immediately the limitation period expires, s 75 of the Land Registration Act 1925 creates a trust of the leasehold estate in favour of the person in adverse possession. This trust is an overriding interest under s 70 of the 1925 Act. Accordingly, if the lessee surrenders the lease to the lessor, the statutory trusteeship passes to the lessor, thereby preserving the right of the person in adverse possession to be registered as proprietor of the leasehold estate.    [Back]

Note 118    [2000] Ch 676.    [Back]

Note 119    [2000] Ch 676, 710. Ellis v Lambeth London Borough Council [1999] EGCS 101, CA, another case of adverse possession, attracted widespread media comment. See, eg, The Times, 21 July 1999, where adverse possession was said to be “a loophole in the 1980 Limitations Act”: A Sherwin, “A Free Home is my Right, says Happy Squatter”.    [Back]

Note 120    JA Pye Ltd v Graham [2001] EWCA Civ 117, CA, The Times, 13 February 2001.    [Back]

Note 121    Stubbings v United Kingdom [1996] 23 EHRR 213, ECHR.    [Back]

Note 122    Limitation Act 1980, s 20(1)(b).    [Back]

Note 123    Limitation Act 1980, s 20(5).    [Back]

Note 124    Limitation Act 1980, s 19.    [Back]

Note 125    Limitation of Actions, Consultation Paper No 151 (1998), paras 6.46 - 6.50.    [Back]

Note 126    Limitation Act 1980, s 16.    [Back]

Note 127    Limitation Act 1980, s 20(1)(a). The date on which the right to receive money accrues where the mortgaged property is a future interest is provided for in s 20(3) and (7).    [Back]

Note 128    Limitation Act 1980, s 20(5). However s 20(6) provides that, where the property was previously in the possession of a prior mortgagee and an action is brought within one year of the end of that possession, all arrears due from the previous possession are recoverable.    [Back]

Note 129    Limitation Act 1980, s 20(2). This section does not apply to foreclosure actions in respect of mortgaged land - s 15 applies: Limitation Act 1980, s 20(4).    [Back]

Note 130    [2001] 1 WLR 323.    [Back]

Note 131    Powdrill v Watson [1995] 2 AC 394.    [Back]

Note 132    Limitation of Actions, Consultation Paper No 151 (1998), paras 7.1 - 7.39.    [Back]

Note 133    [1999] 1 AC 329.    [Back]

Note 134    An example of a fresh claim to enforce a judgment is a petition for bankruptcy: Chohan v Times Newspapers Ltd [2001] 1 WLR 184. This is to be contrasted with court proceedings aimed simply at executing a judgment to which no limitation period applies. However, when seeking execution after more than six years, the applicant must first obtain the leave of the court: RSC, O 46, r 2: see Duer v Frazer [2001] 1 All ER 249.    [Back]

Note 135    Reversing the decision of the Court of Appeal, noted at para 7.2 of the Consultation Paper, that the limitation period in s 24(2) applies only to actions on a judgment.    [Back]

Note 136    Limitation Act 1980, s 7; Agromet Motoimport v Maulden Engineering Co (Beds) Ltd [1985] 1 WLR 762.    [Back]

Note 137    Arbitration Act 1996, s 13.    [Back]

Note 138    Arbitration Act 1996, s 14.    [Back]

Note 139    By either selecting an arbitrator or by submitting to a previously designated one: Arbitration Act 1996, s 14(3) - (4). In addition to the cases cited in para 7.6 of the Consultation Paper, see Cathiship SA v Allanasons Ltd, The Catherine Helen [1998] 3 All ER 714, QBD and Allianz Versicherungs AG v Fortuna Co Inc, The Baltic Universal [1999] 1 WLR 2117, QBD.     [Back]

Note 140    Collin v Duke of Westminster [1985] QB 581. A deed is also a specialty, see para 2.75 below.    [Back]

Note 141    By virtue of s 8(2), s 9(1) takes precedence over s 8(1).    [Back]

Note 142    Limitation of Actions, Consultation Paper No 151 (1998), para 7.15.    [Back]

Note 143    Re Farmizer (Products) Ltd [1997] 1 BCLC 589    [Back]

Note 144    In Rowan Companies Inc v Lambert Eggink Offshore Transport Consultants VOF (No 2) [1999] 2 Lloyd’s Rep 443, David Steel J followed Re Farmizer holding that the application of s 9(1) of the 1980 Act was not restricted to liquidated sums, but that it applied to any monetary relief whether in the form of a debt, damages, compensation or otherwise.    [Back]

Note 145    [2001] 1 WLR 496.    [Back]

Note 146    Mummery LJ added that if the claimant had sought the repayment of money by the creditor, the six year time limit in s 9(1) would have applied to that claim.    [Back]

Note 147    [2000] BPIR 1029.    [Back]

Note 148    As authority for this last point Robert Englehart QC, sitting as a Deputy High Court Judge, pointed to Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426, CA. In doing so he distinguished Hopkinson v Tupper, CA, unreported, 30 January 1997, where Auld LJ had said that it was seriously arguable that such a claim was one in simple contract whatever the nature of the instrument under which the debt was initially secured. Cf Raja v Lloyds TSB Bank plc [2001] EWCA Civ 210 (CA, unreported, 24 January 2001) where it was held that a mortagee’s duty to obtain a proper price on the sale of property arose in equity, rather than from the contract or deed. Hence, the limitation period in s 2 of the 1980 Act applied by analogy through s 36: see paras 2.100 - 2.102 below.    [Back]

Note 149    [1999] Ch 139, affirming the decision of Stanley Burnton QC, referred to in para 7.13 of the Consultation Paper. The court also held that the Lands Tribunal is a court of law for the purposes of the 1980 Act.    [Back]

Note 150    Cf Halstead v Manchester City Council [1998] 1 All ER 33, where the Court of Appeal held that the right to recover interest on compensation under the Compulsory Purchase Act 1965 does not accrue until the amount on which the interest is payable is awarded or agreed.    [Back]

Note 151    Limitation Act 1980, s 10.    [Back]

Note 152    Limitation of Actions, Consultation Paper No 151 (1998), paras 8.1 - 8.48.    [Back]

Note 153    Limitation Act 1980, s 28. This rule is subject to the important provisos in s 28(2) - (7).     [Back]

Note 154    Purnell v Roche [1927] 2 Ch 142, 149, per Romer J.    [Back]

Note 155    Limitation Act 1980, s 38(2) and (3).     [Back]

Note 156    An action is based upon the fraud of the defendant if fraud is an essential ingredient of the cause of action: Beaman v ARTS Ltd [1949] 1 KB 550.    [Back]

Note 157    [1999] 1 All ER 400, CA.    [Back]

Note 158    [1999] 1 All ER 400, 418. This formulation was adopted in Birmingham Midshires Building Society v Infields [1999] Lloyd’s Rep PN 874, QBD; Clef Aquitaine SARL v Laporte Materials (Barrow)Ltd [2000] 3 All ER 493, CA; and Halifax plc v Ringrose & Co [2000] PNLR 483, QBD.     [Back]

Note 159    [2000] Lloyds Rep PN 754, QBD.    [Back]

Note 160    Crane J cited several cases in which corporate knowledge had been considered in the context of s 14A of the 1980 Act including Abbey National v Wilkin & Chapman, QBD, unreported, 7 October 1997; andAbbey National plc v Sayer Moore, Ch D, The Times, 30 August 1999. See paras 2.33 - 2.34 above.     [Back]

Note 161    CA, unreported, 24 November 1999.    [Back]

Note 162    See alsoBank of Credit and Commerce International (Overseas) Ltd v Jan, Ch D, unreported, 17 November 1999.    [Back]

Note 163    Limitation Act 1980, s 32(1)(b). If concealment is subsequent to the accrual of the cause of action, the limitation period is restarted (i.e. the clock is reset) after the concealment has been discovered: Sheldon v RHM Outhwaite (Underwriting Agencies) Ltd [1996] 1 AC 102.    [Back]

Note 164    [2001] 1 All ER 172.    [Back]

Note 165    [2001] 1 All ER 172, 181. This reasoning has since been followed in Halifax v Ringrose [2000] PNLR 483, QBD and Tucker v Allen [2000] NPC 132, QBD.    [Back]

Note 166    [2001] 1 All ER 182.    [Back]

Note 167    [2001] 1 All ER 182, 191, per Laddie J.    [Back]

Note 168    [2001] 1 All ER 182, 191. This results in a conflict between s 32(2) of the 1980 Act and the provisions as to knowledge of the law in ss 14(1) and14A(9): see paras 2.11 and 2.27, above.    [Back]

Note 169    [2001] EWCA Civ 245 (CA, unreported, 20 February 2001).    [Back]

Note 170    [1996] 1 AC 102.    [Back]

Note 171    Limitation Act 1980, s 32(1)(c). An action is one for relief from the consequences of a mistake where the mistake is an essential ingredient of the cause of action: see recentlyMalkin v Birmingham City Council, CA, unreported, 12 January 2000.    [Back]

Note 172    [1999] 2 AC 349.    [Back]

Note 173    [1999] 2 AC 349, 364.    [Back]

Note 174    [1999] 2 AC 349, 389, per Lord Goff, 401, per Lord Hoffmann, 417 - 418, per Lord Hope. It appears that their Lordships’ attention was not drawn to our provisional recommendation that there should be a uniform long-stop limitation period of ten years from the date of the relevant act or omission applicable to all actions (other than actions in respect of personal injuries): Limitation of Actions, Consultation Paper No 151 (1998), para 12.113.    [Back]

Note 175    Limitation Act 1980, s 29(1) - (6). See recently Bank of Baroda v Mahomed [1999] CLC 463, CA, for an example of the conduct amounting to acknowledgment and part-payment.    [Back]

Note 176    Limitation Act 1980, s 29(7).    [Back]

Note 177    Limitation of Actions, Consultation Paper No 151 (1998), paras 9.1 - 9.39.    [Back]

Note 178    Royal Norwegian Government v Constant & Constant [1960] 2 Lloyds List Law Rep 431, 442, per Diplock J. For exceptions to this rule, see paras 2.36, 2.38 and 2.55 above.    [Back]

Note 179    Civil Procedure Rules 1998, Rule 16.5; Ronex Properties Ltd v John Laing Construction Ltd [1983] 1 QB 398, CA.    [Back]

Note 180    Thompson v Brown [1981] 1 WLR 744; Dresser UK Ltd v Falcongate Freight Management Ltd [1992] 1 QB 502, 517-518; Civil Procedure Rules, Rule 7.2.    [Back]

Note 181    CA, The Times, 17 April 1999.    [Back]

Note 182    Practice Direction 5.1 to Part 7 of the CPR now provides that where the claim form was received in the court office on a date earlier than the date on which it was issued by the court, the claim is 'brought' for the purposes of the Limitation Act 1980 on that earlier date.    [Back]

Note 183    Lade v Trill (1842) 11 LJ Ch 102.    [Back]

Note 184    See recently Co-operative Wholesale Society Ltd v Chester le Street District Council [1998] RVR 202; Ellis v Lambeth London Borough Council [2000] 32 HLR 596, CA;Cotterrell v Leeds Day, CA, unreported, 13 June 2000; London Borough of Hillingdon v ARC Ltd (No 2) [2000] RVR 283, CA.    [Back]

Note 185    In addition to the cases cited at paras 9.14 - 9.17 of the Consultation Paper, see Gwembe Valley Development Co Ltd v Koshy [1998] 2 BCLC 613, 623, per Harman J; and West Sussex Properties Ltd v Chichester District Council [2000] NPC 74, CA.    [Back]

Note 186    Lindsay Petroleum Company v Hurd (1874) LR 5 PC 221, 239-240, per Sir Barnes Peacock; Nelson v Rye [1996] 1 WLR 1378, 1392, per Laddie J.    [Back]

Note 187    CA, The Times, 5 April 1999.    [Back]

Note 188    Shaw v Applegate [1977] 1 WLR 970, 978, per Buckley LJ, 980, per Goff LJ.    [Back]

Note 189    [1999] 1 WLR 1739.    [Back]

Note 190    [1999] 1 All ER 400, 415 - 416.    [Back]

Note 191    (1872) LR 5 HL.    [Back]

Note 192    Hence, although there is no provision in the Limitation Act 1980 which explicitly applies to claim against a fiduciary for breach of fiduciary duty, that does not prevent a time limit applying to such a claim. For this reason Millett LJ said that Nelson v Rye [1996] 1 WLR 1378, had been wrongly decided.     [Back]

Note 193    [2000] 1 WLR 707.    [Back]

Note 194    [2000] 1 WLR 707, 730    [Back]

Note 195    [2001] 1 WLR 112.    [Back]

Note 196    [2001] 1 WLR 112, 126. Other cases in which a limitation period has been applied to an equitable claim by analogy include:Mortgage Company v Johnson, Ch D, The Times, 22 September 1999; and Raja v Lloyds TSB Bank plc [2001] EWCA Civ 210 (CA, unreported, 24 January 2001).    [Back]

Note 197    Crocker v British Coal Corporation (1996) 29 BMLR 159. Cf Lloyd’s Bank plc v Burd Pearse [2000] PNLR 71, Ch D. Limitation of Actions, Consultation Paper No 151 (1998), paras 9.23 - 9.25.    [Back]

Note 198    Sevcon Ltd v Lucas CAV Ltd [1986] 1 WLR 462, HL. Limitation of Actions, Consultation Paper No 151 (1998), paras 9.26 - 9.27.    [Back]

Note 199    Limitation Act 1980, s 35(1). A new claim means any claim by way of set-off or counterclaim, any claim involving the addition or substitution of a new cause of action, or any claim involving the addition or substitution of a new party: Limitation Act 1980, s 35(2). In Filross Securities Ltd v Midgeley (1999) 31 HLR 465, CA, the court held that an equitable set-off is not a new claim within s 35 because it is an equitable defence. However s 36(2) applies, so the set-off may be refused on the grounds of delay.    [Back]

Note 200    A claim is an original set-off or counterclaim if the party making it has not previously made any claim in the action: Limitation Act 1980, s 35(3). A mere positive averment in a defence is not a ‘claim in the action’: JFS (UK) Ltd v DWR Cyrmu Cyf (No 1) [1999] 1 WLR 231.     [Back]

Note 201    These have replaced the Rules of the Supreme Court (RSC, O 15, r 6 and O 20, r 5) set out at para 9.30 of the Consultation Paper.    [Back]

Note 202    Limitation Act 1980, s 35(5)(a); Civil Procedure Rules, Rule 17.4(2).    [Back]

Note 203    Limitation Act 1980, s 35(5)(b) and (6); Civil Procedure Rules, Rule 19.5(2) and (3).    [Back]

Note 204    Civil Procedure Rules, Rule 19.5(4).    [Back]

Note 205    [1999] 1 All ER 400.    [Back]

Note 206    [1965] 1 QB 232, 242 - 243.    [Back]

Note 207    [1999] 3 EGLR 83.    [Back]

Note 208    Both judges in the two-man Court of Appeal did however agree that even if there was a new cause of action the facts relied upon were the same, or substantially the same, and hence the building society was permitted to amend its particulars of claim.     [Back]

Note 209    [2000] 1 WLR 2268.    [Back]

Note 210    See also Pledger v Martin [2000] PIQR P31, QBD, Darlington Building Society v O’Rourke James Scourfield & McCarthy [1999] Lloyd’s Rep PN 33, CA, andR v Secretary of State for Transport, ex p Factortame (No 6), QBD, The Times, 10 January 2001.    [Back]

Note 211    See the discussion of Bennett v Greenland Houchen & Co [1998] PNLR 458, at para 2.15 above.    [Back]

Note 212    [1999] 1 FLR 1221.    [Back]

Note 213    Under RSC, O 20, r 5(1), now replaced by CPR Rule 17.1(2).     [Back]

Note 214    [2000] PNLR 218.    [Back]

Note 215    Yew Bon Tew v Kenderaan Bas Mara [1983] 1 AC 553, 558 - 563, per Lord Brightman.    [Back]

Note 216    [1998] 1 WLR 674.    [Back]

Note 217    [1998] 1 WLR 674, 679.    [Back]