Limitation of Actions Consultation - Law Commission

postponement will last until the plaintiff has discovered the fraud, concealment or
mistake, or could with reasonable diligence have discovered it.
(1) Action based on Fraud
8.12 The first exception is of limited application. It is confined to cases where fraud is
an essential element of the action. In Beaman v ARTS Ltd 30
the plaintiff stored
several packages with the defendants in 1935 before she moved to Turkey. On the
outbreak of war the defendants lost touch with her, and in 1940 when they wished
to wind the business up, the defendants decided to give the plaintiff’s property
away. When the plaintiff returned, she sued the defendants, claiming damages for
conversion. The Court of Appeal held that section 26 (a) of the Limitation Act
1939 31
only applied where fraud had to be proved to enable the plaintiff to succeed
- which would not be the case in an action for conversion, where fraud was not a
necessary or a relevant consideration. An example given by Lord Greene MR of
an action which would be “based upon the fraud of the defendant” for the
purposes of section 26 (a) was an action for damages for deceit. 32
(2) Deliberate Concealment
8.13 Under section 26(b) of the Limitation Act 1939 where “the right of action” was
“concealed by the fraud” 33
of the defendant or his agent the period of limitation
did not begin to run until the plaintiff discovered the fraud or could with
reasonable diligence have discovered it. This was amended in 1980 34
and under
section 32(1)(b) of the Limitation Act 1980 the central wording is now “where any
fact relevant to the plaintiff’s right of action has been deliberately concealed from
him by the defendant”. Further guidance on the meaning of this is provided in
section 32(2), which states that “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 the breach of duty.”
8.14 Authorities on section 26(b), such as Beaman v ARTS Ltd, 35
Kitchen v Royal Air
Forces Association, 36
and King v Victor Parsons & Co 37
had interpreted the phrase
“concealed by the fraud of any such person” so liberally that Megarry V-C noted
in Tito v Waddell 38
that “as the authorities stand, it can be said that in the ordinary
use of language not only does ‘fraud’ not mean ‘fraud’ but also ‘concealed’ does
30 [1949] 1 KB 550. See also para 4.14 above.
31 The predecessor of section 32 (1)(a) of the 1980 Act.
32 See also GL Baker Ltd v Medway Building and Supplies Ltd [1958] 1 WLR 1216 (discussed
in para 4.16 above), where an action for fraudulent breach of trust was held to come within
the provisions of s 26(a) of the Limitation Act 1939.
33 This was the first statutory enactment of the equitable doctrine of concealed fraud.
34 Limitation Amendment Act 1980, s 7.
35 [1949] 1 KB 550. See also para 4.14 above.
36 [1958] 1 WLR 563.
37 [1973] 1 WLR 29.
38 [1977] Ch 106, 245.
146