Limitation of Actions Consultation - Law Commission

13.156 Another factor to be considered in the case of section 459 proceedings is that
shareholders may in many cases have difficulty in obtaining the information
relevant to their claim. Many claims are brought in respect of small (often ownermanaged)
companies. In those types of companies, it is often the case that little
information is available from the accounts or other documents made available to a
shareholder.
13.157 Where the claim depends on a series of incidents, it may also be difficult to
determine the point from which the long-stop period commences. Where each of
the incidents relied on would, of itself, be sufficient to found a claim under section
459, the long-stop limitation period would start from the first such incident.
Where only the cumulative effect of the whole series of incidents gives rise to the
claim for unfair prejudice, the long-stop period will start from the date of the first
incident which gives the plaintiff grounds to make a claim for unfair prejudice. 224
13.158 Our provisional view is that the core regime should apply to proceedings
under section 459 of the Companies Act 1985. 225
However, we would
welcome consultees’ views on this in the light of the difficulties highlighted
above. If consultees do not consider that the core regime should apply to
section 459 proceedings:
(1) Do they consider that a longer initial limitation period should
apply, and if so what period?
(2) Do they consider that the initial limitation period should run from
some starting point other than the date of discoverability and, if so,
what starting point?
(3) Do they consider that a different length of long-stop should apply?
17 SHOULD THE CORE REGIME APPLY TO EQUITABLE, AS WELL
AS, COMMON LAW REMEDIES?
13.159 In understanding the present law on limitation in relation to equitable remedies -
and possible reform of it - one must take account of both the doctrine of laches
(which we regard as distinct from acquiescence or waiver or estoppel or
affirmation) and section 36 of the Limitation Act 1980. 226
Section 36(1) lays down
that the time limits in the Act for contract, tort, defamation and malicious
falsehood, specialties, enforcement of arbitration awards and judgments, and the
recovery of sums recoverable by statute, shall not apply to claims for specific
224 This, of course, would not prevent the applicant calling evidence of an earlier event (outside
the limitation period) to explain, eg, why the incident relied on as founding his or her claim
to relief constitutes unfairly prejudicial conduct. An analogous situation may arise with a
claim for defamation, where the publication the plaintiff alleges is defamatory took place
inside the limitation period. If the defence is that the allegation of which the plaintiff
complains is fair comment, the plaintiff may wish to call evidence of earlier publications,
outside the limitation period, to prove that the defendant was actuated by malice.
225 We would envisage that the approach to s 459 proceedings would apply also to analogous
proceedings, such as a contributory’s petition to wind up a company on just and equitable
grounds.
226 See paras 9.12 - 9.22 above.
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