Limitation of Actions Consultation - Law Commission

hiatus within which a defendant could no longer be sued for conversion, because
the plaintiff’s claim was time-barred, yet the plaintiff still owned the goods. So, in
the example in the previous paragraph, P’s title to the goods would be
extinguished in 2009, when P’s claim against D2 became statute-barred. 97
P,
having lost title to the goods before D2 sold them on, would never have a claim
against D3 or against D4. Is this a just result? We think provisionally that it is not
unduly harsh on the plaintiff, who has allowed more than three years to elapse
without taking any action to recover the goods.
13.68 The same approach could be applied to long-stops.
Example D1 steals goods from P in 2000, and sells them on to bona fide
purchaser D2 in 2005, who sells them on to D3, also a bona fide purchaser, in
2020. P discovers the facts about D2 in 2016, but the long stop (of ten years)
expired in 2015. P’s title to the goods will therefore be extinguished in 2015, and P
will have no claim in damages against D3.
13.69 Our provisional view is that where goods have been converted (whether
there has been a theft or not) the plaintiff’s title should become
extinguished when both the following conditions are satisfied: (i) the
limitation period (whether the initial period or the long-stop) has expired
in relation to the plaintiff’s claim in conversion against a defendant; and
(ii) at the time when that limitation period expired the goods remained in
the possession of that defendant. We ask consultees whether they agree
and, if not, to say why not.
(4) Summary of our Preferred Approach to Conversion
13.70 It may help consultees, in deciding on the issues we have raised in relation to this
difficult area, to see an outline summary of our provisional preferred views on
limitation periods for conversion.
(i) The core regime (three years from discoverability 98
and with a long-stop of ten
years running, however, from the date of the first conversion) would apply to
actions for conversion.
(ii) The long-stop would be disapplied for deliberate concealment by the
defendant, or in relation to anyone taking title through the deliberate concealer
except a bona fide purchaser (and anyone taking title through the bona fide
purchaser). The long-stop for a bona fide purchaser (and anyone taking title
through him or her) would run from the date of the first bona fide purchase.
(iii) The plaintiff’s title to goods would be extinguished when the initial limitation
period or the long-stop for conversion expired as against a defendant in possession
of the goods.
97 Assuming that P never acquired actual or constructive knowledge in relation to D1.
98 We have provisionally recommended that the definition of the date of discoverability should
be amended to include knowledge of the location of the goods at least in relation to actions
to recover converted property.
347