Limitation of Actions Consultation - Law Commission

money received will fall within this section. In Amantilla Ltd v Telefusion plc, 27
it was
held somewhat controversially, that a quantum meruit claim also fell within section
29(5). 28
3. RESTITUTION FOR WRONGS
5.16 The extent to which a restitutionary remedy (whether an action for money had or
received, an account of profits, or restitutionary damages) can be awarded for a
civil wrong is unclear. We examine this area in our Report on Aggravated,
Exemplary and Restitutionary Damages. 29
But what is clear is that for some torts
and equitable wrongs 30
restitution may be awarded.
5.17 Where the underlying wrong is a tort, does the limitation period which applies to
actions founded on tort, that is section 2 of the 1980 Act, apply also to actions for
restitution for tort? Or does the fact that the remedy is restitutionary rather than
compensatory (and indeed that there are different restitutionary remedies) bring
into play a different limitation period? The natural interpretation of section 2 is
that it does apply to restitution for tort. However, in Chesworth v Farrar, 31
Edmund
Davies J held that an action for money had and received to recover the proceeds of
sale of converted goods was not ‘a cause of action in tort’ for the purposes of the
old six month time limit for tort actions against the deceased tortfeasor’s estate.
Rather the action was analogous to contract so that the contract limitation period
applied, even though it was regarded as essential that the plaintiff establish the tort
of conversion in order to succeed in her claim. In practice, however, it nowadays
may matter little which approach is taken: on either approach the limitation period
will be six years from accrual.
5.18 Where the underlying wrong is a breach of trust, the limitation period will be
governed by section 21 of the 1980 Act. 32
This prescribes a period of six years 33
unless the action is in respect of a fraudulent breach of trust to which the trustee
was party, or is to recover trust property or its proceeds from the trustee. 34
In this
case, no statutory limitation period applies, although the doctrine of laches will
apply. 35
Laches also applies in respect of restitutionary (and indeed all other)
actions for breach of confidence, which is not dealt with in the 1980 Act.
5.19 The issue of when a cause of action accrues in respect of an action for restitution
for wrongs is also generally undecided. Applying the view that, just as with a claim
for compensation, the cause of action is the underlying wrong, the claim for
27 (1987) Con LR 139.
28 See discussion in HM McLean, “Limitation of Actions in Restitution” [1989] CLJ 472, 477
- 479. See also A McGee, Limitation Periods (2nd ed 1994), p 299.
29 (1997) Law Com No 247.
30 Equitable wrongs include breach of fiduciary duty and breach of confidence.
31 [1967] 1 QB 407.
32 See para 4.1 - 4.32 above.
33 Section 21(2).
34 Section 21(1).
35 See Nelson v Rye [1996] 1 WLR 1378, and the discussion at paras 9.14 - 9.17 below.
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