Where a cause of action accrues at, or on the expiry of midnight, the day immediately following should be included in calculating the limitation period.
Summary
The Supreme Court unanimously upheld the decision of the Court of Appeal that where a cause of action accrues at, or on the expiry of midnight, the day immediately following should be included for the purposes of calculating the limitation period. Therefore, the appellants’ claim against the respondents was statute barred.
Background
The current trustees (the appellants) of a trust (the Trust) replaced the previous trustees (the respondents), upon their retirement during 2014. In 2008 a company in which the Trust held shares, Cattles plc, published an annual report and a rights issue prospectus that contained misleading information. This led to the suspension of trading in Cattles plc’s shares.
During February 2011, schemes of arrangement were approved in respect of Cattles plc and a subsidiary, Welcome Finance Services Ltd (Welcome). Under the schemes of arrangement, the Trust had a claim against both Cattles plc and Welcome, because of the publication of the misleading information.
As regards to the claim against Welcome, the Trust could commence its claim up until midnight Thursday 2 June 2011.
As the respondents failed to make a claim against Welcome by Thursday 2 June 2011, the appellants began proceedings on Monday 5 June 2017 in negligence, breach of trust and contract against the respondents. However, the respondents argued that the claim was brought out of time and was therefore statute barred.
Under section 30 of the Limitation Act 1980 (LA 1980), actions in tort, breach of trust and contract cannot typically be brought after six years from the date on which the cause of action accrued. Therefore, in this case, before the end of Friday 2 June 2017.
The appellants argued that Friday 3 June 2011 should be counted within the limitation period, and that the time bar would only start from Saturday 4 June 2011. As the parties agreed that a claim form can only be issued on a day when the court office is open (the office is closed on weekends) both parties accepted that should Friday 3 June 2017 be excluded for limitation purposes, the final day on which the proceedings could be brought would be Monday 5 June 2017, and the claim would have been brought in time.
The Court of Appeal held that the day immediately following the midnight deadline for bringing the claim against Welcome, should be included in the calculation of the six year limitation period for bringing the relevant actions under the LA 1980.
The appellants referred to the case of Gelmini v Moriggia (1913) 2 KB 549 to support their position. However, Gelmini was a midnight deadline case, the High Court had held that as the cause of action could be brought throughout the day following the expiry of the midnight deadline in that claim, that day should be included for limitation purposes.
The court's decision
The Supreme Court confirmed that ‘any part of a day’ (but not a whole day) happening after the cause of action accrues is excluded from the calculation for the limitation period for the purpose of the provisions of the LA 1980 (para 49).
The court considered that Gelmini ought properly to be viewed as the exception to the general rule applicable in midnight deadline cases, as the cause of action was held to accrue at the very beginning of a day (the stroke of midnight).
The court noted that to exclude a full day in a midnight deadline such as this would result in the limitation period being extended to six years and one complete day, which would ‘distort the six-year limitation period laid down by Parliament’. As a result, Friday 3 June 2011 included in the calculation of the limitation period and the claim against Welcome was therefore made out of time.
Comments
The case is important in confirming the calculation of limitation periods, as it identifies the difference between cases.
Where the case of action accrues at midnight, the day beginning at 00:01 counts when calculating the limitation period. Where the cause of action accrues during the day (i.e. not at midnight), the day on which the cause of action accrues is not counted when calculating limitation.