Limitation of Actions Consultation - Law Commission

if a thief’s identity and whereabouts (and, presumably, those of anyone else into
whose possession the goods came) were discovered during the limitation period, as
extended, it was still possible that the goods themselves would be hidden, and they
thought that it was inappropriate to expect a plaintiff to commence proceedings
against a defendant who was not in possession of the goods and therefore might
not be worth suing, so they rejected this approach, deciding instead that time
should not run at all in theft cases, except against a bona fide purchaser. We do not
find this reasoning persuasive. Where a discoverability test is applied, we do not
regard knowledge about the defendants’ means as being knowledge which the
plaintiff must have before the limitation period can start to run, and we see no
reason to make an exception to this general rule in theft cases. We have already
suggested, however, that our proposed discoverability test should here include
knowledge of the location of the goods as well as knowledge of the defendant’s
identity. It would seem, therefore, that the problems that have in the past been
thought to necessitate a theft exception are solved by the discoverability test and
that there is no need for theft to be treated specially, at least as far as the primary
limitation period is concerned. 81
13.54 But, it might instead be argued that the need for theft to have special limitation
rules arises from the moral iniquity of theft, and the feeling that it would therefore
simply be wrong to allow a thief to claim the benefit of a limitation defence. 82
This
begs the question why such an argument should apply uniquely to theft. A person
carrying out a fraud, which does not constitute a theft and a conversion of goods,
may possess the same degree of moral turpitude as a thief, yet under the current
law a limitation period will apply to such a fraud, albeit one whose
commencement is postponed until the fraud is discoverable. 83
We are inclined to
take the view that what matters to the plaintiff, in this context, is not so much the
degree of wrongdoing involved in the defendant’s actions, but that the plaintiff has
sufficient time to discover the defendant’s identity and the location of the goods
and to take action.
13.55 Applying our provisional proposals, therefore, a claim for conversion against
anyone receiving the goods would be subject to an initial limitation period of three
years from discoverability.
Example D1 steals a painting from P in 2000. D1 sells it on to D2, who
knows that it is stolen, in 2001. D2 sells it to D3, who does not know that it is
stolen, in 2002. D3 sells it to D4, another bona fide purchaser, in 2003. P
discovers 84
D1’s identity in 2003, D2’s identity in 2004, D3’s identity in 2005 and
D4’s identity in 2006. If the “core” initial limitation period were applied to all
81 See paras 13.58 - 13.64 below, in relation to the long-stop period.
82 See, eg, Law Reform Committee, Twenty-First Report (Final Report on Limitation of Actions)
(1977) Cmnd 6923, para 3.4.
83 Under Limitation Act 1980, s 32(1)(a). This does not apply to fraudulent breaches of trust,
to which no limitation period applies: s 21(1)(a).
84 It is assumed that P has not acquired constructive knowledge, and has actual knowledge of
all other relevant facts, including (at least where delivery up of the property is sought) the
location of the painting.
342