Limitation Periods After Midnight Deadlines: The Saga Continues In The Supreme Court

• Published date: 12 August 2021
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Gatehouse Chambers
• Author: Mr Tom Bell

Matthew & Ors v Sedman & Ors [2019] EWCA Civ 475

Following our comment on this case in the Court of Appeal, this article looks at how the Supreme Court has established a new category of 'midnight deadline cases' which form an exception to the general rule that the day that a cause of action accrues is to be excluded from the calculation of any limitation period.

Background

The Appellants were the present trustees and beneficiaries under a testamentary trust, the main asset of which were shares in a company, Cattles plc. The Respondents were the former trustees of the trust, who, upon retirement, were replaced by the 1^st and 2^nd Appellants on 1 August 2014.

On Monday 5th June 2017 the claimants issued a claim for equitable compensation, damages for breach of trust, an order for the reconstitution of the trust estate, and an account in respect of a court sanctioned scheme of arrangement registered at Companies House on 2 March 2011. By the terms of the arrangement, claims by shareholders and creditors could be made until midnight on Thursday, 2 June 2011 ('the Bar Date').

It was common ground that the Appellants' cause of action accrued immediately after the expiry of the midnight deadline for the Bar Date, i.e., at the very beginning of 3 June 2011. The primary issue in the present appeal was whether 3 June 2011 should be excluded when calculating limitation, in accordance with the long-established principle that the day on which an action accrues is excluded for limitation. If 3 June 2011 was included, limitation expired on Friday 2 June 2017, and the claim would be time-barred. If 3 June 2011 were excluded, then the six-year period expired on Saturday, 3 June 2017 with the final day for issue agreed to be Monday 5 June 2017. Hence, the claim would be in time.

At first instance, HHJ Hodge QC (as a Judge of the High Court) relied on Gelmini v Moriggia [1913] 2 KB 549 to hold that Friday 3 June 2011 should be included for the purpose of calculating the limitation period.

That decision was upheld by the Court of Appeal (Underhill and Irwin LJJ), both members of which held that there was a discrete category of 'midnight deadline cases' which were distinct from cases in which the cause of action accrues part-way through a day. 3 June 2011 should, therefore, be included in the calculation of the limitation period.

The Supreme Court

Lord Stephens (with whom Lord Hodge, Lady Arden, Lord Sales, and Lord Burrows agreed) upheld the decision of the decision of the...