Peter Matthew v Barrie Sedman
| Jurisdiction | England & Wales |
| Judge | Lord Justice Irwin,Lord Justice Underhill |
| Judgment Date | 20 March 2019 |
| Neutral Citation | [2019] EWCA Civ 475 |
| Docket Number | Case No: A3/2018/0285 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 March 2019 |
[2019] EWCA Civ 475
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BUSINESS AND PROPERTY COURTS IN MANCHESTER,
BUSINESS LIST (ChD)
His Honour Judge Hodge QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Underhill
Vice President of the Court of Appeal (Civil Division)
and
Lord Justice Irwin
Case No: A3/2018/0285
Jeremy Cousins QC and Christopher McNall (instructed by Steele & Son with Bagot Heyes Solicitors) for the Appellants
Clare Dixon and Nicholas Broomfield (instructed by Mills & Reeve LLP) for the Respondents
Hearing date: 15 January 2019
Approved Judgment
Introduction
This is an appeal from the judgment of HHJ Hodge QC sitting as a Judge of the High Court in the Manchester Civil Justice Centre on 27 November 2017. The case concerns the calculation of the limitation period for a claim against trustees, which itself turns on a failure to claim under a court-sanctioned scheme of arrangement.
Originally, three issues arose in this appeal. Firstly, as Ground 1 the Appellants argued that the learned judge erred as to the “Bar Date” under the material scheme of arrangement, when he concluded that 2 June 2011 was the Bar Date and as a consequence concluded that the period for a legal claim in respect of the failure to claim under the scheme began too soon. At the opening of the appeal the Appellants conceded this point.
Secondly, under Ground 2 the Appellants argue that the judge was in error as to the limitation date for legal action. This was the central issue before the judge and he formulated it as follows:
“The question is 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? More pertinently for present purposes, if a cause of action accrued at the very first moment of Friday 3rd June 2011, is a claim issued after Friday 2nd June 2017 brought after the expiration of six years from the date on which the cause of action first accrued?” (paragraph 2)
Thirdly, the Respondents sought to support the judge's conclusion on an alternative ground, namely that the legal claim in question:
“… had been issued out of time because the Appellants still suffered actionable damage by reason of the Welcome claim not being submitted on or before 2 June 2011.”
However, Ms Dixon made clear that this argument no longer arose, given the Appellants' abandonment of Ground 1.
It follows that we are now concerned only with Ground 2.
The Facts
The learned judge summarised the facts and the procedural history succinctly as follows:
“3. The background to the application presently before the court is as follows: On Monday 5th June 2017 the claimants issued a claim form in the Manchester District Registry of the Chancery Division claiming equitable compensation, damages for breach of trust, an order for the reconstitution of the trust estate, an account, and further or other relief, with interest and costs. The first two claimants, Mr Peter Matthew and Mr Scott Nixon, sue as the trustees of the trusts of the will of the late Evelyn Hammond. Mrs Hammond died as long ago as 27th December 1952 leaving a will dated 21st August 1948. The beneficiaries of the trusts arising under that will are the third claimant, Diana Rose Cook (as life tenant) and the fourth, fifth and sixth defendants (as the remaindermen of the will trusts). The three defendants – Mr Barrie Sedman, Mr Thomas William Hallam and Mr Peter James Roberts – were the trustees of the will trusts until their retirement on 1st August 2014 when they were replaced by the first and second claimants. At all material times, the defendants were professional trustees, being partners or employees of Forrester Boyd Chartered Accountants.
4. The principal asset of the trust comprised shares in Cattles plc. In 1994, Cattles acquired Welcome Financial Services Limited. By April 2004 the trust owned almost 162,000 shares in Cattles which, as of 5th April 2008, were valued at some £393,000. In April 2009, trading in Cattles' shares was suspended and in December 2010 both Cattles and Welcome commenced court proceedings for court sanctioned schemes of arrangement. In the case of the Welcome scheme, the supervisor was KPMG. As a result of an order made by Mr Justice Newey on 28th February 2011 the schemes of arrangement were sanctioned. That order was registered at Companies House on 2nd March 2011. The terms of the scheme of arrangement included provision for claims to be submitted by shareholders.
5. By clause 3.6, and subject to an exception not material hereto, in order to be entitled to any scheme payment, scheme creditors were required to submit a claim form on or prior to the ‘Bar Date’. Clause 3.5.3 provided in terms that claim forms must be sent to the scheme supervisors to arrive on or before the Bar Date. By clause 3.9 (headed “Variation of Time Limits”) the scheme supervisors had a power in their absolute discretion to extend time limits in exceptional circumstances outside the control of a submitted scheme claimant, but that power expressly did not apply to a failure to comply with the Bar Date. The Bar Date was defined as meaning the first business day falling three months after the ‘Effective Date’. The Effective Date was the date on which the scheme became effective in accordance with clause 1.5.1. That was the date on which an office copy of the final court order was delivered to the Registrar of Companies for registration. As I have indicated, that was 2nd March 2011.”
It is common ground that the “Effective Date” under the Welcome scheme was 2 March 2011, that being the date when Newey J's Order was registered at Companies House. The scheme defined the “Bar Date” as “the first Business Day falling three months after the Effective Date”. It was common ground that applications could be made up until midnight on the Bar Date. 2 June 2011 was a Thursday and hence a “Business Day” under the scheme, and it is now agreed that the judge was correct in finding that the “Bar Date” was 2 June 2011.
If the day following the Bar Date — the day when the action accrued — falls to be counted, then limitation expired on Friday 2 June 2017. If not, then the six year period expired on Saturday 3 June 2017. Since the necessary act on the part of the Respondents was the issue of the claim form in the legal action, something which can only be done when the Court office is open, then it was common ground, following Pritam Kaur v S Russell and Sons Ltd. [1973] QB 336 (CA), that the final day for issue would be Monday 5 June 2017. That was the date of the issue of proceedings. Hence, issue would be in time.
Ground 2: Given that the Bar Date was 2 June 2011 was the claim issued out of time?
As I have indicated, this was the central issue before the judge. On this issue the Respondents relied (successfully below) on the decision of the High Court in Gelmini v Moriggia [1913] 2 KB 549. That case turned on the limitation of an action relating to the time for payment under a promissory note. The time for payment of the promissory note expired on 22 September 1906. Proceedings were issued on 23 September 1912. Channell J found that the claim was out of time because the cause of action was complete at the beginning of 23 September 1906 and so limitation expired six years later at the end of 22 September 1912.
The critical passage relied on by the Respondents from the judgment of Channell J is as follows:
“… The other point is, what is the true rule as to the computation of the six years under that statute? An action cannot be brought until the cause of action is complete, and in all eases of contract the person who has to pay has the whole of the day upon which payment is due in which to pay; therefore until the expiration of that day an action cannot be brought because until then there is no complete cause of action. The result is that an action cannot be brought until the next day; but it can be brought on that day because the cause of action is complete at the commencement of that day. If the cause of action is not complete, the action cannot be brought. It therefore follows that that day is one of the days upon which the action can be brought. The words of the statute are “within six years next after the cause of such action or suit.” Now the day after that on which the debtor's time for paying expires is, in my opinion, the date on which the cause of action arises, and on that day an action can be brought, and that day is the first of all the days in the six years. Therefore, assuming that the day upon which the action can be brought to be a Thursday, and the period for bringing the action to be a week, the creditor can bring it at any time up to and including the following Wednesday, but not the Thursday. And the same rule applies where the period, as under the statute, is six years. I do not think that the day on which the cause of action arises is excluded. It is the previous day which is excluded, i.e., the day at the expiration of which the cause of action becomes complete.” [emphasis added] (page 552)
This was the approach accepted by the judge. He said that he was “satisfied that the cause of action accrued at the first moment of 3 June 2011” (para 26). The judge accepted the distinction between such a case as the instant case (and that in Gelmini) as opposed to others. He concluded as follows:
“31. In my judgment, where it is absolutely clear...
To continue reading
Request your trial
-
Limitation Periods After Midnight Deadlines: The Saga Continues In The Supreme Court
...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 i......
-
Limitation Periods After Midnight Deadlines: The Saga Continues In The Supreme Court
...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 i......
-
The New Hybrid Workplace: Some Employer Considerations During Covid-19
...OSHA guidance can be found at https://www.dir.ca.gov/dosh/coronavirus/General-Industry.html.3. See SB 1159 (Stats. 2020, ch. 85) for further information on the Workers' Compensation presumption, which is codified at Labor Code §§ 3212.86-3212.88.4. See Cochran v. Schwan's Home Service, Inc.......
-
The New Hybrid Workplace: Some Employer Considerations During Covid-19
...OSHA guidance can be found at https://www.dir.ca.gov/dosh/coronavirus/General-Industry.html.3. See SB 1159 (Stats. 2020, ch. 85) for further information on the Workers' Compensation presumption, which is codified at Labor Code §§ 3212.86-3212.88.4. See Cochran v. Schwan's Home Service, Inc.......