Limitation of Actions Consultation - Law Commission

Pauling’s Settlement 230
that laches cannot be invoked where there is a statutory
limitation period.
13.162 As we understand it, therefore, under the present law laches (as opposed to any
statutory limitation period) applies to, for example, the following: specific
performance for breach of contract; injunctions for torts (or breach of contract);
account of profits for torts; equitable damages (in lieu of specific performance or
an injunction) for breach of contract or tort; equitable compensation or an
account of profits for, or in relation to, a breach of trust where no statutory period
is laid down by section 21 of the 1980 Act; equitable compensation or an account
of profits for breach of confidence; rescission of a contract for undue influence
misrepresentation or duress.
13.163 In general, where the core regime applies to common law remedies for the cause
of action, we see no good reason why the same regime should not apply to
equitable remedies for that cause of action. Common law and equitable remedies
should be assimilated as far as possible. As Jack Beatson writes, “[I]t is important
that the Commission does not neglect the effect of lapse of time and delay on
equitable remedies, and in particular those equitable remedies which, like specific
performance, are an alternative to damages or, like claims for equitable
compensation, are an alternative to claims in tort. The case for doing so is strong,
since any investigation into the effect of lapse of time in equity still takes one back
into the pre-Judicature Act law, and, as the example of specific performance will
show, there is great uncertainty as to what that law is. Any comprehensive and
rationalising review of limitation must address and deal with equitable relief.” 231
And he later goes on to write, “It is submitted that the wider scope of specific
performance as an alternative to damages for breach of contract makes differences
in the operation of the limitation periods more visible and also makes the rationale
for having a different approach to lapse of time in the two types of claim more
fragile”. 232
It should also be pointed out that our proposal that the initial limitation
period should run from the date of discoverability rather than accrual of the cause
of action may be regarded as “borrowing” a central feature of the laches doctrine.
13.164 We have considered whether it makes a difference that actions for specific
performance or injunctions can succeed before accrual of the cause of action. But
this does not create a difficulty because claims made before the accrual of the
cause of action will plainly be unaffected by our core regime. That is, the plaintiff
who has three years from discoverability of the cause of action cannot be out of
time before the cause of action accrues; and, similarly, the long-stop does not start
to run until the relevant act or omission of the defendant.
13.165 In our view therefore, the core regime should apply (subject to the question dealt
with below in paragraphs 13.166 - 13.167) to equitable remedies (for example,
specific performance for breach of contract, an account of profits for an
intellectual property tort, or an injunction to restrain a nuisance) as well as to
230 [1962] 1 WLR 86 at 115, approved by the Court of Appeal [1964] 1 Ch 303 at 353. See
para 9.14 above.
231 “Limitation Periods and Specific Performance” in Lomnicka and Morse (eds),
Contemporary Issues in Commercial Law (1997), pp 9 - 10.
232 Ibid, p 21.
377