Limitation of Actions Consultation - Law Commission

the trustees for investing trust money in a mortgage of property of insufficient
value to secure the amount of the mortgage. In respect of the tenant for life, the
cause of action accrued when the investment was made, over six years before the
action was begun, so that the action was time-barred under section 8 of the
Trustee Act. However, the infant remaindermen did not at that time have an
interest in possession of the trust property, so that time had not started to run
against them. The trustees were therefore liable to make good the loss to the
estate in respect of the infant remaindermen. 59
In Armitage v Nurse 60
Millett LJ
explained the rationale of section 21(3) as follows: “It is not that a beneficiary with
a future interest has not the means of discovery, but that he should not be
compelled to litigate (at considerable personal expense) in respect of an injury to
an interest which he may never live to enjoy.”
4.30 Section 21(3) applies only to actions by a beneficiary. Attorney-General v Cocke 61
concerned an action by the Attorney-General against the trustees of a charitable
trust, seeking an injunction to restrain them from dealing with the trust property.
The writ was issued over 25 years after the will setting up the trust had been
proved. The trustees argued that the action was barred by section 21(3) of the
1980 Act. Harman J held that the action was not brought by a beneficiary, as in
cases where the Attorney-General is suing on behalf of the public at large there
could not be said to be any individual beneficiaries. 62
It followed that there was no
applicable limitation period, and so the Attorney-General’s action was not statutebarred.
If, on the other hand, a charitable trust can be shown to have individual
beneficiaries, then the limitation period for an action by the Attorney-General will
depend on the cause of action on which the proceedings are based: for example, if
the proceedings are to set aside a lease, the rules relating to actions for the
recovery of land will apply. 63
4.31 Section 21(4) incorporates the rule in equity that where the action of one
beneficiary has become time-barred, that beneficiary should not be permitted to
benefit from a successful action by another beneficiary whose claim is not timebarred.
64
This becomes relevant where the beneficiaries for a trust include both
beneficiaries with an interest in possession (such as a life tenant) and beneficiaries
with future interests (such as a remainderman). Under section 21(3), time will not
start to run against the remaindermen until their interest has fallen into possession.
59 See also In re Blow [1913] 1 Ch 358.
60 [1997] 2 All ER 705, 720.
61 [1988] Ch 414.
62 Certainly no members of the public can be said to have an interest in possession in respect
of such trusts. This question did not arise in Attorney-General v Manchester City Council
(unreported, 7 March 1983) (see para 4.20 above) because the section under consideration
in that case, Trustee Act 1888, s 8, did not contain the same reference to beneficiaries.
63 That is, under Limitation Act 1980, s 15: see, eg, President and Scholars of Magdalen College,
Oxford v Attorney-General (1857) 6 HL Cas 189, 10 ER 1267, which concerned a charitable
trust for the benefit of the poor of a specified parish. But in Attorney-General v Cocke,
Harman J said that “in almost all charitable trusts there are no individual beneficiaries”,
and appeared to doubt whether the Magdalen College case would be decided in the same
way if the current wording of the statute had applied: [1988] 1 Ch 414, 419.
64 See also In re Somerset [1894] 1 Ch 231; Re Dive, Dive v Roebuck [1909] 1 Ch 328 at 336.
82