Lowsley v Forbes (t/a L.E. Design Services)

CourtHouse of Lords
JudgeLORD BROWNE-WILKINSON, LORD LLOYD OF BERWICK, LORD NOLAN, LORD HOFFMANN, LORD HOPE OF CRAIGHEAD
Judgment Date29 Jul 1998
JurisdictionEngland & Wales

[1998] UKHL J0729-4

HOUSE OF LORDS

Lord Browne-Wilkinson

Lord Lloyd of Berwick

Lord Nolan

Lord Hoffmann

Lord Hope of Craighead

Lowsley

And Another

(Respondents)
and
Forbes
(Trading as L.E. Design Services) (Appellant)
LORD BROWNE-WILKINSON

My Lords,

1

I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Lloyd of Berwick. I agree with it and for the reasons which he gives I would dismiss the appeal save as to the question of interest, on which latter point I would allow the appeal and restore the judgment of Tuckey J.

LORD LLOYD OF BERWICK

My Lords,

2

The Limitation Act 1980 continues to give rise to questions of some difficulty. Section 24 provides:

"(1)An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.

(2)No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due."

3

The word "action" is defined by section 38(1) as including "any proceeding in a court of law."

4

The first question is whether section 24(1) bars execution of a judgment after six years, or whether it only bars the bringing of a fresh action on the judgment. If the answer is, as the plaintiffs contend, that it only bars a fresh action, the second question is whether, when a judgment is executed after six years, interest on the judgment is limited under section 24(2) to a period of six years before the date of execution. Tuckey J. answered the first question in favour of the plaintiffs, and the second question in favour of the defendant. The Court of Appeal agreed with the judge on the first question but disagreed on the second.

5

It is scarcely necessary to recount the facts in order to decide these two questions of construction, save only to say that on 2 February 1981 the plaintiffs, Mr. and Mrs. Lowsley, obtained a judgment by consent against the defendant Mr. Forbes, in the sum of £70,000. Mr. Forbes then left the country, whether to seek employment (as he claims) or to evade the judgment need not be decided. By 9 July 1992 the judgment debt plus 11 ½ years' interest at 15 per cent. had grown to £184,199. The plaintiffs obtained leave from the Master to enforce the judgment under R.S.C. Ord. 46, r. 2(1)(a). Leave was necessary because over six years had elapsed since the date of the judgment. They also obtained a charging order nisi on the defendant's share of the matrimonial home, and a garnishee order nisi over his bank account. Tuckey J. reduced the interest to six years at 15 per cent., making £133,000 in all. The orders for execution were made absolute in that amount. On further appeal, the Court of Appeal restored the order of the master. It was held that interest should run from the date of judgment. The defendant now appeals on both questions to your Lordships.

6

The principal argument which Mr. Hockman, for the defendant, advances on the first question is that, having regard to the extended meaning of "action," all proceedings for enforcement of the judgment debt are now barred under section 24(1) of the Act. If so, the Master ought not to have given leave to enforce the judgment; and if the judgment debt is itself statute barred, there could clearly be no question of recovering interest.

7

In support of his main argument, Mr. Hockman took your Lordships back to the origins of the modern law of limitation. Mr. Anthony Mann for the plaintiffs, pointed out that the Limitation Act 1980 is a consolidation Act. He reminded us of what Lord Keith of Kinkel said in the same context as recently as 1995 in Sheldon v. Outhwaite [1996] 1 A.C. 102, 140:

"Recourse to the antecedents of a consolidation statute should only be had when there is a real difficulty or ambiguity incapable of being resolved by classical methods of construction: Farrell v. Alexander [1977] A.C. 59, 73, per Lord Wilberforce."

8

Mr. Mann submits that section 24(1) does not give rise to any real difficulty. "Action" means a fresh action. The extended definition must be read in the same light.

9

I see the force of this objection. But Mr. Hockman argues that the extended definition of "action" is capable of two possible meanings. There is therefore an ambiguity. In any event one cannot do justice to Mr. Hockman's argument without giving some account of the background.

10

Mr. Hockman showed how at common law there was no limitation period at all for the enforcement of judgments. There was, however, a presumption that a judgment is satisfied within a year and a day. If for whatever reason the judgment creditor failed to issue execution within that period, it was necessary for him to apply to revive the judgment by writ of scire facias. This was a new procedure introduced by the Statute of Westminster II in 1285. Unless the debtor showed cause why the judgment should not be revived, execution would follow.

11

Until 1833 there was no time limit for applying for a writ of scire facias, although the longer the period that elapsed between the judgment and the application the greater the formalities required. Thus if the judgment was under seven years old, the judgment creditor was entitled to sue out a writ of scire facias as of course. If it was over 20 years, there had to be a rule to show cause: see Tidd: Practice of the Courts of King's Bench and Common Pleas, (1828) p. 1106.

12

But then in 1833 came the Real Property Limitation Act. By section 40 it was provided:

"… no action or suit or other proceeding shall be brought to recover any sum of money secured by any mortgage, judgment or lien or otherwise charged upon or payable out of any land … but within 20 years next after a present right to receive the same shall have accrued … unless in the meantime some part of the principal money, or some interest thereon, shall have been paid, or some acknowledgement of the right thereto shall have been given in writing …"

13

The reference to "judgment" may seem out of place in the context of mortgages and liens. But the explanation is that under the Statute of Westminster the effect of a judgment was to bind one-half of the judgment debtor's freehold lands. Execution was by writ of elegit, whereby the judgment creditor was put in possession of half the rents or profits. It was natural, therefore, for the Real Property Limitation Act to apply to judgments binding the debtor's real estate as it applied to mortgages and liens.

14

In two cases which came before the House on appeal from the Court of Exchequer in Ireland in the early 1840s there was much discussion as to the nature of scire facias, and in particular whether scire facias created a new right, or whether it only operated as a continuation of the original judgment: see Farran v. Beresford (1842) 10 C.& F. 319 and Farrell v. Gleeson (1844) 11 C.& F. 702. In the former case the point was left open by Tindal C.J. giving the unanimous opinion of the judges. But the Lord Chancellor, Lord Lyndhurst, said in passing that he agreed with the judges that the plaintiff had acquired a new right by scire facias, and this view was confirmed by his successor, Lord Cottenham, in the second of the two cases, after elaborate argument by the Attorney-General on the one side and the Solicitor-General on the other. At all events there seems to be no doubt at all that in the absence of an intervening writ of scire facias a judgment debt became statute barred for all purposes after 20 years. It was not only too late to bring a fresh action on the judgment; it was also too late to execute. This was a cause of great anxiety in Ireland, as Lord Brougham pointed out in Farran v. Beresford. For it appears that in Ireland judgments were commonly left outstanding for very long periods, apparently as a form of investment.

15

In Watson v. Birch (1847) 15 Sim. 523, it was argued that the Act of 1833 did not apply to cases where the judgment creditor was seeking to execute on the debtor's personal estate. But this argument was rejected. Shadwell V.C. said, at pp. 524-525:

"The intention of the legislature was that no proceeding whatever should be taken on a judgment after the lapse of 20 years from the time when the money secured by it became due, unless some payment should have been made on account of it, or some acknowledgement of it should have been given in writing within the period of 20 years."

16

And so it continued until 1852.

17

By section 128 of the Common Law Procedure Act of that year the old year and a day rule was abolished. Judgments could be executed at any time within six years without a revival of the judgment by scire facias. Where revival was necessary by reason of a change of parties or lapse of time beyond six years, it was to be done by writ of revivor instead of scire facias, and in straightforward cases by Suggestion on the Roll. But these procedural changes did not affect the absolute statutory bar after 20 years imposed by section 40 of the Act of 1833.

18

Then came section 8 of the Real Property Limitation Act 1874, which re-enacted section 40 of the Act of 1833 in identical language, save that the period of 20 years was reduced to 12.

19

The next important landmark was the Supreme Court of Judicature (1873) Amendment Act 1875. Section 16 provided for Rules of Court to regulate the procedure of the High Court of Justice and the Court of Appeal. The Rules were set out in the First Schedule. Order 42 covered execution. Rules 18 and 19 provided as follows:

"18. As between the original parties to a judgment, execution may issue at any time within six years from the recovery of the judgment.

"19. Where six years have elapsed since the judgment, or any change has taken place by death or otherwise in the parties entitled or liable to execution, the party...

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