Limitation of Actions Consultation - Law Commission

authorities and bodies levying charges pursuant to statute, there might be an
argument for a shorter time limit for claims against local authorities and others
with more limited resources. 219
On consultation, concern was expressed that such
time limits would favour those with access to legal advice, rather than the smaller
tax payer and businessman who is most likely to need the assistance of recovery
provisions. Our recommendation in the Report was that short time limits should
not be enacted for claims for the repayment of tax overpaid as a result of a mistake
or an ultra vires demand. 220
13.153 Our provisional view is that, as under the present law, no special
protection in limitations law should be given to public authorities. Where
the core regime would apply to any other defendant, it should therefore
apply in the same way to actions against public authorities. Do consultees
agree?
16 SHOULD THE CORE REGIME APPLY TO PROCEEDINGS
UNDER SECTION 459 OF THE COMPANIES ACT 1985?
13.154 Applications under section 459 of the Companies Act 1985 (a shareholder’s
remedy for unfair prejudice) are not subject to a statutory limitation period, albeit
that it appears that the equitable doctrine of laches does apply. 221
We have recently
produced a Report on Shareholder Remedies 222
in which we recommended that
there should be a time limit for bringing claims under section 459 but that the
length of the period and the other relevant details (such as the date from which the
period should run) should be considered in the context of this paper. If claims
under section 459 of the Companies Act 1985 are to be subject to our core
regime, the shareholder would have three years to bring the application from the
date when he or she knew of the facts constituting the alleged unfairly prejudicial
conduct. This would be subject to a long-stop (of ten years) from the date of the
act or omission of the defendant alleged to constitute unfairly prejudicial conduct.
13.155 These provisions (and particularly the operation of the long-stop) might give rise
to difficulties in certain cases. A claim under section 459 may be based on a series
of facts which together constitute unfairly prejudicial conduct (for example, nonpayment
of dividends over a period of time, or a series of acts of failure to give
information, or exclusion from important decisions); the earliest act or omission
may not on its own be sufficient to justify a remedy. The potential difficulties are
illustrated by Re Macro (Ipswich) Ltd. 223
In Re Macro (Ipswich) Ltd the claim
included allegations of mismanagement of the company going back over a period
of some 40 years, as well as allegations of exclusion from management going back
some 20 years. In such cases, it may be difficult to determine when the cause of
action actually accrues, and in consequence, when the plaintiff knows or ought
reasonably to know that he or she has a cause of action.
219 See Restitution of Payments made under a Mistake of Law, Consultation Paper No 120, pp
113 - 114.
220 Law Com No 227, paras 10.40 - 10.41.
221 See para 9.13, n 38 above.
222 Shareholder Remedies (1997) Law Com No 246; Cm 3769, para 4.22.
223 [1994] 2 BCLC 354.
374