Limitation of Actions Consultation - Law Commission

such actions should be classified as actions founded on tort for limitation
purposes.
7.19 It is a fortiori, from the above treatment of some statutory actions as statutory
torts, that an action for the tort of breach of statutory duty (where the existence of
a right to damages is not expressly laid down in the statute but is ‘implied’ by the
courts) is an action founded on tort for limitation purposes. 43
7.20 An action against a receiver by a preferential creditor under the Companies Act
1929 for failing to satisfy the preferential debts of a company before paying
ordinary creditors has also been treated as a claim in tort for limitation purposes. 44
(c) Actions on a statute and contract
7.21 A similar problem in interpreting the 1980 Act also arises in respect of the
relationship between actions founded on simple contract (section 5) and actions
on a statute (under sections 8 or 9). It appears to be necessary to distinguish
between cases where the statute merely implies obligations into, or retrospectively
validates, an existing contract, 45
and cases where the statute creates the contract.
The distinction is illustrated by the cases of Aylott v West Ham Corpn, 46
and Cork &
Bandon Railway Co v Goode. 47
In the first case the local authority resolved to pay
their enlisted employees both the difference between their civilian and service pay
and any increases of pay to which they would have become entitled during their
war service. At the time the resolution was made, the contract was illegal. During
the war, the Local Government (Emergency Provisions) Act 1916 validated such
agreements with retrospective effect. The plaintiff sued for additional pay to
which he was entitled from the local authority for his war service years, arguing
that the action was an action on the statute, and that he was therefore entitled to
the longer limitation period given to specialties. The Court of Appeal rejected
this, holding that the action arose out of the agreement, not upon the statute. By
contrast, in the second case - an action to recover calls on shares brought by a
railway company in reliance on the Company Clauses Consolidation Act 1845 48
-
an argument by the defendant that the action was founded upon contract was
rejected on the ground that there would have been no contract by the shareholder
to pay the calls apart from the statute. 49
The action was therefore an action upon
the statute so that the limitation provisions for specialties applied. 50
43 See generally Winfield & Jolowicz on Tort (14th ed), Ch 7.
44 Westminster Corpn v Haste [1950] Ch 442. It does not appear to have been argued that s 9
might apply in this case.
45 As with the obligations implied by the Sale of Goods Act 1979.
46 [1927] 1 Ch 30.
47 (1853) 13 CB 826, 138 ER 1427.
48 8 & 9 Vic c 6, and also the Cork and Bandon Railway Act 1845, 8 & 9 Vic c cxxii.
49 This can be contrasted with In re Compania de Electricidad de Provincia de Buenos Aires Ltd
[1980] Ch 146, where Slade J held that claims against a company for unpaid dividends
under the Articles of Association of the company (which on registration give rise to a
contract between the company and its members under what is now s 14 of the Companies
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