Limitation of Actions Consultation - Law Commission

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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. 375
performance, injunctions, or other equitable relief: but this is then subject to the proviso ‘except in so far as such time limit may be applied by the court by analogy in like manner as the corresponding time limit under any enactment repealed by the Limitation Act 1939 was applied before 1st July 1940’. By section 36(2), nothing in the Act is to affect any equitable jurisdiction to refuse relief on the ground of acquiescence or otherwise. 13.160 The first part of section 36(1) means that, for example, the standard six-year limitation periods for tort and contract in sections 2 and 5 of the 1980 Act do not apply to equitable remedies, for example, specific performance or injunctions. The exception in section 36(1) is where the limitation period can be applied by analogy but, although the authorities are in conflict on this, 227 the better view is that, for example, specific performance for breach of contract would not fall within the ‘by analogy’ exception. In his masterly and comprehensive examination of this question in “Limitation Periods and Specific Performance,” Jack Beatson concludes, 228 “[T]he statutory limitation period does not apply either directly or ‘by analogy’ to claims for specific performance, but, if it did apply ‘by analogy’, it would not be applied dispositively: a court considering ordering specific performance would have regard to the statutory period as one of the factors in the exercise of its discretion in considering whether the claim was barred by laches or acquiescence.” Indeed it seems unclear whether the statutory limitation period for tort and contract will ever be applied by analogy to equitable remedies, including an account of profits 229 or equitable damages (that is, damages in lieu of an injunction) for a tort. 13.161 If there is no direct or by ‘analogy’ statutory limitation period applicable to specific performance or an injunction or an account of profits for a breach of contract or tort, laches can be applied without contradicting Wilberforce J’s view in Re 227 Statements favouring application of the statute to specific performance are made in, eg, Redgrave v Hurd (1881) 20 Ch D 1, 13; Firth v Slingsby (1888) 58 LT 481, 483. The contrary view is most clearly stated by Dixon CJ and Fullagar J in Fitzgerald v Masters (1956) 95 CLR 420, 428; and is also supported by the reasoning (ignoring the statutory limitation period) in, eg, MEPC v Christian-Edwards [1977] 1 WLR 1328, 1333 (reversed on another point, [1978] Ch 281, [1981] AC 205); see also the early case of Talmash v Mugleston (1826) 4 LJOS 200, 201. Commentators who consider that the statute can be applied by analogy to specific performance include Prime & Scanlan, The Modern Law of Limitation (1993) p 225; McGee, Limitation Periods (2nd ed 1994) p 17; Spry, Equitable Remedies (4th ed 1990), pp 241 - 242, 410. The contrary view is taken by, eg, Jones & Goodhart, Specific Performance (2nd ed 1996) p 109; Hanbury & Martin (15th ed 1997) p 718; Snell’s Principles of Equity (29th ed 1990) pp 34, 36. See, generally, J Beatson, “Limitation Periods and Specific Performance” in Lomnicka and Morse (eds), Contemporary Issues in Commercial Law (1997), pp 9 - 23. 228 Lomnicka and Morse (eds), Contemporary Issues in Commercial Law (1997), p 20. 229 A further problem in relation to an account of profits is s 23 which lays down that “An action for an account shall not be brought after the expiration of any time limit ... applicable to the claim which is the basis of the duty to account”. The relationship between this and s 36 was regarded as confusing by Megarry V-C in Tito v Waddell (No 2) (1977) 1 Ch 106, 250 - 252. It would seem that where s 36(1) applies, s 23 does not. But s 23 would apply, eg, to equitable accounting for a breach of trust because s 36(1) is inapplicable to actions for breach of trust. 376
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PART I INTRODUCTION 1. WHY DOES THE
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Consumer Protection Act 1987. 12 Th
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periods applicable to them, 29 they
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whether a period of four or five ye
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have been damaged. 54 The Committee
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it is fair to assume that it reflec
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particularly where a defendant is o
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We apprehend that the law of limita
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1.41 Although, plainly, there are a
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(5) actions on a judgment or arbitr
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SECTION A: THE CURRENT LAW PART II
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TABLE 1 Limitation Periods under th
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Nature of Action Starting Point Len
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performed even after they are first
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promise by the guarantor that the d
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The fact that the damage was not at
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whether the ‘reasonable discovera
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limitation period that commission,
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the starting of time running from t
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had been no violation of the Conven
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has taken all reasonable steps to o
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3.44 The operation of section 14(2)
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(that is, the amputation). The Cour
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assess the intelligence of the plai
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approach taking into account an ind
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But there is a lack of solid and bi
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court will naturally be more inclin
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that the court will wish to exercis
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3.82 The basic provision is section
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enacted in the Latent Damage Act 19
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(2) the identity of the defendant;
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first has knowledge of those facts,
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“once he knew whether or not the
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3.113 The drafting of section 4 has
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(8) A Note on Bailment 3.116 A bail
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PART IV STARTING DATE, LENGTH OF PE
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Property Act 1925 where land is own
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express but implied and constructiv
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with the meaning of fraud in sectio
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was the expression “to recover mo
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from the other beneficiaries who ha
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The situation can therefore arise w
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elation to the apportioned cost) re
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defendant’s unjust enrichment has
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difference between this and the San
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money received will fall within thi
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PART VI STARTING DATE, LENGTH OF PE
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the limitation period running from
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a third party who has dispossessed
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in respect of which time will never
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It is not necessary, however, for t
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(1) where the land has been effecti
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title to the land of the person who
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limitation period is either sixty y
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6.50 Where a lender holds a second
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2. ARBITRATION (1) Arbitration Awar
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outside his control; whether the cl
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local authority entered on to the l
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such actions should be classified a
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7.25 Under section 10(4), where the
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expiry of the time limit; whether n
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(vi) Merchant Shipping Act 1995 (
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Act Nature of Action Starting Point
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Act Nature of Action Race Relations
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Act Nature of Action Compulsory Pur
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Act Nature of Action Companies Act
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Act Nature of Action Ibid, Schedule
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Act Nature of Action Town and Count
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PART VIII FACTORS WHICH POSTPONE TH
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(a) the period applicable in accord
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ended in 1993. 25 But, as the next
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not mean ‘concealed’, since any
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supported by the wording of this ph
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(4) Proviso to Section 32 8.23 By r
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3. ACKNOWLEDGEMENT AND PART PAYMENT
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further agreement by the parties. 8
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of discrete debts, and those where
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(3) Acknowledgements and Part Payme
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PART IX ADDITIONAL ISSUES 1 WHAT HA
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2 WHAT THE PLAINTIFF NEEDS TO DO TO
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that the defendants were also debar
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laches cannot be invoked where ther
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emedy, 52 so that, for example, a p
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granted. Under section 13(4) of the
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actions under Order 15, rule 1(2) o
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the court from allowing the action
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9.37 It appears, therefore, that su
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SECTION B: OTHER JURISDICTIONS PART
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Law Reform (Miscellaneous Provision
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(who may not be immediately identif
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for personal injuries; actions for
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corresponding English provision. 64
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1980 78 ] are so obvious that the e
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10.40 Under the 1991 Act, an action
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10.44 There are two exceptions to t
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(7) Factors Postponing the Running
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except in the Northern Territory, w
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fraudulent breach of trust or the r
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(b) while he is, for a continuous p
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causes of action. A confirmation is
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action. 206 As in England and in ot
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discoverable. 228 Moreover, one sho
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(6) Actions in respect of Land 10.7
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5. CANADA 10.85 Statutory rules of
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(3) Latent Damage 10.90 Nearly all
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Central Trust Co v Rafuse, 301 a pr
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the new Limitations Act in Alberta
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periods may apply for the different
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10.112 Below we shall examine three
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product liability, 362 although the
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disguise the nature or the effect o
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general, parties cannot renounce fi
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(vii) A one-year period 425 applies
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prescription is suspended as agains
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the same manner as under the Limita
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10.155 In relation to hidden defect
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at achieving a settlement. 512 Simi
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evision and extension of the ground
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pursued in the tort of nuisance 6 b
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open to argument. It is also arguab
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Deliberate concealment (initial and
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11.22 In discussing the options for
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the chance of a limitation period e
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action does not accrue until the fa
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adopt the model of the Latent Damag
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liability in contract and tort - th
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which the demand was made. We would
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(c) that the injury, assuming liabi
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provision for vicarious liability.
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ecommended a definition of knowledg
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12.43 A final question is the exten
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actual knowledge of information was
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12.56 We are of the view that a sim
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the law of limitations and possibly
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negligently, and that the plaintiff
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a definition of who within an organ
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However, we do not believe that it
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to obtain the relevant information
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12.92 It should also be remembered
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We discuss in a later section the i
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(2) A period of 30 years from the a
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in connection with the provision of
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always protect plaintiffs. But a li
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a form of “disability” sufficie
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It is also provided that unless the
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(b) Supervening disability 12.126 B
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In practice a right of action again
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where the injury is known only to t
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isks precisely this injustice, and
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12.148 This leaves two issues for c
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view that deliberate concealment sh
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equirement is inappropriate. Whilst
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Commission felt that the difficulti
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limitation period by entering into
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those rights. 272 We recognise the
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any, the acknowledgement would have
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5 SHOULD THE COURTS HAVE A DISCRETI
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the actual hardships to both sides
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307 See also Deerness v John Keeble
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Page 337 and 338: If consultees do not agree, we ask
Page 339 and 340: (2) To What Extent should the Core
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Page 343 and 344: 13.59 It can be strongly argued, ho
Page 345 and 346: If consultees do not agree, we ask
Page 347 and 348: 7 ACTIONS BY A SUBSEQUENT OWNER OF
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Page 373: authorities and bodies levying char
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Page 385 and 386: (2) whether they consider that a li
Page 387 and 388: If a defendant can waive a limitati
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Page 400 and 401: (2) Definition of the Date of Disco
Page 402 and 403: (b) the individual would not be exp
Page 404 and 405: (2) whether, in addition, the defin
Page 406 and 407: Should an acknowledgement or part p
Page 408 and 409: 6 ACTIONS FOR CONVERSION Are modifi
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Page 412 and 413: 13.155 - 13.157. If consultees do n
Page 414 and 415: 2. WHAT THE PLAINTIFF NEEDS TO DO T
Page 416 and 417: [13 November 1980] APPENDIX LIMITAT
Page 418 and 419: 4A. Time limit for actions for defa
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and knowledge that any acts or omis
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able to satisfy a judgment. (8) The
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preceding estate or interest or six
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(b) any land is held upon trust (in
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of trust property under the trust,
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ar, the assurance shall thereupon o
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Acknowledgment and part payment 29
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(4) Where in a case within subsecti
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Discretionary exclusion of time lim
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(3) In acting under this section th
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(as the case may be) by way of coun
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In this subsection "duty" includes
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(5) Subject to subsection (6) below
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SCHEDULES SCHEDULE 1 Provisions wit
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7. Accrual of right of action in ca
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corporation sole the right of actio
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9. (1) Nothing in any provision of
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