The Importance of Hours and Minutes in Calculating Limitation Periods: Matthew & Ors v Sedman & Ors [2021] UKSC 19

Last week, the Law Gazette forewarned that judgment would soon be handed down on a ‘key decision for litigators’, concerning the ‘importance of hours and minutes in calculating limitation periods’.[i]  

The article in question was referring to the Supreme Court decision in Matthew & Ors v Sedman & Ors [2021] UKSC 19, which was heard on 21 May 2021.

In summary, the respondents were former trustees of a trust, who were entitled to bring claims under two schemes of arrangement, because of misleading information supplied to them in an annual report and prospectus.

One such scheme specified that entitlement to payment necessitated the submission of a Claim Form ‘on or prior to the Bar Date’, which was 2 June 2011. As such, a valid claim could have been made up until ‘midnight (at the end of the day)’ on 2 June 2011.

However, the respondents failed to make a claim on or before the ‘Bar Date’.

On 5 June 2017, the appellants, who replaced the respondents as trustees of the trust, commenced proceedings on account of the respondents’ failings, which was couched in the tort of negligence and breach of trust (and breach of contract).

In response, the respondents applied for strike out, or summary judgment, on the basis that the appellants’ claim had been issued outside of the relevant 6-year (‘from the date on which the cause of action accrued’) limitation period and was therefore statute-barred, pursuant to s.2 and/or s.5 and/or s.21(3) of the Limitation Act 1980.

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The poignant question is: where a cause of action accrues ‘at, or on the expiry of, the midnight hour at the end of a day’ does the following day’ count towards the calculation of the limitation period?

In the context of the current claim, if the limitation clock was deemed to have started from 00:00, on 3 June 2011, then the limitation period essentially expired by the end of 2 June 2017 – this was the respondents’ position.

Whereas, if the limitation clock did not start running until 4 June 2011, then the limitation period could not have expired until the end of 5 June 2017 (3 June 2017 was a Saturday and the Court Office was only able to accept issued Claim Forms on weekdays – see Pritam Kaur v S Russell & Sons Ltd [1973] QB 336] – this was the appellants’ position.

Plainly, if 3 June 2011 was excluded from the limitation period, then the claim was validly issued in time and was not statute-barred. By contrast, if 3 June 2011 was included, then the claim was issued outside of the 6-year time limit and was statute-barred.

The Supreme Court’s judgment on this issue of interpretation was handed down last Friday, unanimously dismissing the appeal and reiterating of the earlier Court of Appeal and High Court rulings.[ii]

It heard the appellants’ submissions on the so-called ‘general rule’ that ‘the day of accrual of the cause of action should be excluded from the reckoning of time’, as discerned from a list of long-standing authorities.[iii] Indeed, where the 1980 Act pronounces that a limitation period runs ‘from’ a relevant date, the case law does suggest that this signifies a timeframe ‘subsequent to the date of the event itself’.

However, Lord Stephens, with whom Lord Hodge, Lady Arden and Lord Burrows agreed, explained that, even if a cause of action accrues immediately after the stroke of midnight, this leaves a ‘complete undivided day’.

As such, the ‘general rule’, whose purpose is to prevent a fraction of a day from counting towards a whole day of the overall limitation period and thus alleviate prejudice, could not be justified here:

‘I consider that it would impermissibly transcend practical reality if the stroke of midnight or some infinitesimal division of a second after midnight, led to the conclusion that the concept of an undivided day was no longer appropriate. In that sense this would not only be impermissible metaphysics but also, in this context, such a minimum period of time does not cross the threshold as capable of being recognised by the law. Whether the issue is framed in terms of metaphysics, which the common law eschews, or of the principle that the law does not concern itself with trifling matters, the conclusion is the same: realistically, there is no fraction of a day. That being so, the justification in relation to fractions of a day does not apply in a midnight deadline case’.

Lord Stephens went on to rationalise his treatment of ‘midnight deadline’ cases as a discrete category, distinct from those where the cause of action accrues part-way through a day, as follows:

‘If … [the following] … day were excluded from the computation of time [in the present case] then the limitation period would be six years and one complete day. I consider that would unduly distort the six-year limitation period laid down by Parliament and would prejudice the defendant by lengthening the statutory limitation period by a complete day’.

In so reasoning, the only historic ‘midnight deadline’ authority of Gelmini v Moriggia [1913] KB 549, which held that the cause of action could be brought throughout the day following the expiry of the deadline, was viewed as an exception to the general rule.

The appellants in the present case were therefore unsuccessful in arguing that Gelmini was wrongly decided for being inconsistent with the general rule. Rather, it was correctly decided and was applicable to the present ‘midnight deadline’ case.

In summation, 3 June 2011 should have been included in the calculation of the limitation period, meaning that the appellants’ claim was issued 1-day out of time.

Full text judgment can be accessed here.

Whilst Matthew does undoubtedly provide clarity on the general rule, its practical effect on certain claim types will be limited where courts have the discretion to disapply the relevant time limit (e.g. s.33 of the 1980 Act).

For personal injury cases, the legal position is now less ambiguous.

In the case of Marren v Dawson Bentley & Co Ltd [1961] 2 QB 135, the defendant contended that the claimant’s cause of action, in respect of an industrial accident, which occurred at 13:30 on 8 November 1954, accrued on that date. Thus, when the claimant commenced proceedings on 8 November 1957, he had done so after the 3-year limitation period had elapsed.

On that occasion, Havers J was referred to Gelmini, but did not approach it as an exception to the general rule and therefore did not distinguish the authority on the facts, i.e. on the basis that the accident happened at 13:30 (a fraction of a day). Instead, the High Court judge regarded Gelmini as conflicting with Radcliffe v Bartholomew [1892] 1 QB 161, which approved the following test in Young v Higgon (1840) 6 M&W, 49:

‘Apply the criterion which has been before suggested - reduce the time [limit] to one day, and then see what hardship and inconvenience must ensue if the principle I have stated is not to be adopted’.

On balance, Havers J considered that he was bound by Radcliffe, or that he preferred the decision over Gelmini.

However, the Supreme Court, in Matthews, makes plain that Gelmini, when observed as an exception to the general rule, is in fact consistent with Radcliffe and ought to have been distinguished in Marren.

It is therefore difficult to envisage many (if any) personal injury claims falling under the Gelmini exception.

 

[i] Jemma Slingo, ‘Supreme Court to rule on “midnight deadlines”’ (21 May 2021 Law Gazette) <https://www.lawgazette.co.uk/news/supreme-court-to-rule-on-midnight-deadlines/5108604.article> accessed 21 May 2021.

[ii] Jemma Slingo, ‘“Transcends practical reality”: Supreme Court dismisses midnight deadline appeal’ (21 May 2021 Law Gazette) <https://www.lawgazette.co.uk/news/transcends-practical-reality-supreme-court-dismisses-midnight-deadline-appeal/5108606.article> accessed 21 May 2021.

[iii] Mercer v Ogilvy (1796) 3 Pat App 434

Lester v Garland (1808) 15 Ves Jun 248 (33 ER 748)

The Goldsmiths’ Co v The West Metropolitan Railway Co [1904] 1 KB 1

Stewart v Chapman [1951] 2 KB 792