In the case of Matthew & Ors v Sedman & Ors [2017] EWHC 3527 (Ch), the court had to consider a short but crucial point on the law of limitation. The Limitation Act sets out the timescales within which action may be taken in court. For example, broadly speaking, actions for breach of a simple contract and tort (such as negligence) must be brought within a period of six years from the date on which the cause of action accrued.
The question before the court was this: “when a cause of action is completely constituted at the very first moment of a particular day, does that day fall to be included when calculating the applicable six years' limitation period or does it fall to be excluded?” In this case the cause of action accrued at the very first moment of Friday, 3 June 2011, and the claimants issued a claim form on Monday, 5 June 2017. Does this mean the claim was brought after the expiration of six years from the date on which the cause of action first accrued? If the limitation period expired on Saturday, 3 June 2017, as the court office was closed, that would likely have been sufficient to defeat the operation of the Limitation Act.
Over the years there has been some inconsistency in the decisions on whether or not to exclude the day on which the cause of action arose when calculating limitation periods. Judge Hodge QC used this case to provide more certainty on this topic.
What happened in this case? Briefly, this was a negligence claim against professional trustees for failing to make a claim before the "Bar Date" under a scheme of arrangement. The “Bar Date” for filing a claim was defined as meaning the first business day falling three months after the 'Effective Date'. The ‘Effective Date’ was Thursday, 2 March 2011. The professional trustee defendants did not make any claim on or before that date. It’s unclear exactly what happened in the interim period but the claimants only filed their case against the retired professional trustees on 5 June 2017.
The question here was whether the claim was brought within a period of six years from the date on which the cause of action accrued?
The defendants argued that as the bar date was 2 June 2011, the time for making a claim under the scheme expired at midnight between 2 and 3 June 2011 and the claimants' cause of action was complete at the first moment of 3 June 2011.
The High Court confirmed that, when a cause of action accrues at the first moment of a particular day, that day is included when calculating the applicable limitation period. With reference to section 2 of the Limitation Act 1980, proceedings therefore had to be issued six years from 3 June 2011, which meant by the end of Friday, 2 June 2017. As a result the claim form issued on 5 June 2017 was out of time.
The judge also confirmed that any part of a day, but not a whole day, happening after the cause of action accrues, is excluded from the calculation of the limitation period. Quite often, the cause of action will accrue part-way through the day and so that day will be disregarded. However, where the cause of action accrues at the first moment of the day, that day is included in the calculation.
As always, if you have a legal query please get in touch with the FSB Legal Helpline on 0345 0727727 and we'll be happy to assist you.