In this case, the Supreme Court considered an appeal in relation to the calculation of a limitation period, in respect of causes of action which accrued at, or on the expiry of, the midnight hour at the end of Thursday 2 June 2011. The issue before the Supreme Court was whether Friday 3 June 2011 counted towards the calculation of the six-year limitation period.
Matthew and others (the Appellants) are the trustees of a trust established under the 1948 will of Mrs Evelyn Hammond (the Trust). They replaced Sedman and others (the Respondents), who were the trustees until their retirement on 1 August 2014. The Trust had a shareholding in Cattles plc (Cattles). In 1994, Cattles acquired Welcome Financial Services Ltd (Welcome). In 2007, Cattles published an annual report and the Financial Services Authority subsequently found that information contained in the report was misleading. Trading in Cattles' shares was suspended as a result and, in December 2010, Welcome and Cattles each commenced proceedings for court-sanctioned schemes of arrangement (the Welcome Scheme and the Cattles Scheme). The court approved these schemes on 28 February 2011. The terms of each scheme included provision for claims to be submitted by shareholders. The Trust had a claim in both schemes.
The Respondents made a claim under the Cattles Scheme, but failed to do so under the Welcome Scheme. The Welcome Scheme rules provided that in order to be entitled to any scheme payment, scheme creditors had to submit a claim form on or prior to the bar date, which was Thursday 2 June 2011. Accordingly, the Respondents had until midnight on Thursday 2 June 2011 to issue a claim form. They did not do so.
On Monday 5 June 2017, the Appellants commenced proceedings against the Respondents, by a claim form issued on that date. The Appellants sought damages and/or equitable compensation and other remedies and relief in relation to the Respondents' failure to issue a claim form under the Welcome Scheme (the Welcome Claim). The Respondents, on 4 July 2017, issued an application for strike out/summary judgment in relation to the Welcome Claim on the basis that it had been issued out of time, and was consequently statute–barred pursuant to sections 2 and/or 5 and/or 21(3) of the Limitation Act 1980.
In a judgment handed down on 27 November 2017, the High Court granted the Respondents' application. The judge held that that if a cause of action arises during the course of a day, that day is excluded from counting towards the calculation of the limitation period. The judge said if this were not the case, a claimant would not have a full six-year period within which to bring his cause of action. The judge held that this rule does not apply, however, whenever a cause of action accrues at the very first moment of a day as the claimant can bring a claim at any moment during that day. The judge held that to exclude that day would have the effect of giving the claimant an extra day over and above the statutory limitation period. Relying on Gelmini -v- Moriggia  2 KB 549, the judge held that "where it is absolutely clear that the cause of action arises at the very beginning of a particular day, that day should not be excluded from the calculation for Limitation Act purposes." The judge concluded that the Appellants' cause of action accrued at the first moment of Friday 3 June 2011 and, as a result, Friday 3 June 2011 was to be included for the purposes of calculating the limitation period, so that the last day for issuing the claim form was Friday 2 June 2017. The Appellants appealed.
The Court of Appeal handed down reserved judgments on 20 March 2019, dismissing the Appellants' appeal. The Court of Appeal accepted, as was common ground, that in cases where the cause of action accrues partway through a day, that day is to be ignored in the reckoning of time for limitation purposes. However, the Court of Appeal differed from the High Court judge's conclusion that the Appellants' cause of action accrued at the first moment of Friday 3 June 2011. Irwin LJ, relying on Dodds -v- Walker  1 WLR 1027, held that in the case of a midnight deadline it is wrong to attribute the accrual of an action to the day after the relevant midnight. Irwin LJ added that a midnight deadline provides a categorical indication that the action accrued by that point in time, rather than accruing on the day following midnight. Underhill LJ also differed from the High Court judge's conclusion, holding that the cause of action arises at, not after, midnight.
The Court of Appeal refused the Appellants permission to appeal. However, on 17 December 2019, a panel of the Supreme Court granted permission.
The Appellants submitted that their cause of action accrued on 3 June 2011 and that longstanding authority establishes a rule that directs that the day of accrual of the cause of action should be excluded from the reckoning of time in all cases. The Appellants primarily relied on four authorities to establish this argument.
The Respondents approached the appeal on the basis that the Welcome Claim was based on negligence by omission; the omission to submit a claim form on or prior to 2 June 2011. The Respondents contended that two things happened precisely at the same moment; first, the time for submitting the claim elapsed and, second, the cause of action arose. The Respondents said these were not consecutive events but were inextricably linked, so that they occurred simultaneously at the last moment of 2 June 2011. The respondents also argued that it was strictly unnecessary to determine whether that moment was properly ascribed to 2 June 2011 or the very first moment of 3 June 2011, stating that one can "either look back and call it the end of 2 June 2011 or look forward and call it the beginning of 3 June 2011." In either event, there was no fraction of a day and the Appellants had the entirety of 3 June 2011 in which to commence proceedings.
On analysis of the authorities relied on by the Appellants, the Supreme Court judge stated that none of them established a general rule applicable to a midnight deadline case, and all on their facts involved a fraction of a day. The judge held that the only midnight deadline case is that of Gelmini -v- Moriggia  2 KB 549.
The case of Gelmini -v- Moriggia concerned an action upon a promissory note. The time for payment of the promissory note expired at midnight on 22 September 1906 and the writ in action against the makers was issued on 23 September 1912. Channell J held that the cause of action was complete at the commencement of 23 September 1906. On this basis, the question whether the action was commenced in time depended on whether the six-year period, provided for under section 3 of the Limitation Act 1623, was inclusive or exclusive of 23 September 1906. Channell J decided that that day must be included in calculating the six years. Channell J stated: "An action cannot be brought until the cause of action is complete, and in all cases 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 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..."
The Appellants sought to argue that Gelmini was:
- inconsistent with the case of Radcliffe -v- Bartholomew  1 QB 161,
- expressly disapproved in the case of Marren -v- Dawson Bentley & Co Ltd  2 QB 135; and
- implicitly disapproved in the case of Pritam Kaur -v- S Russell & Sons Ltd  QB 336.
The Supreme Court judge disagreed, citing the following reasons:
- the decision in Radcliffe did not involve a midnight deadline,
- the judge in Marren was referred to a number of authorities including Gelmini, but he did not approach Gelmini as being an exception to the general rule, applicable in midnight deadline cases, and therefore did not consider distinguishing it from the factors before him, where there was a fraction of a day; and
- the court in Pritam based their decision on Marren, which was a case involving a fraction of a day. There was no analysis in Pritam, or indeed in Marren, of whether the day of accrual of the cause of action would be included when that day was a complete undivided day, as it was in Gelmini.
The judge decided to dismiss the Appellants' appeal. In making his decision, the judge held that, for his own part, he preferred the approach of Underhill LJ that "the cause of action arises at, not after, midnight". However, the judge held that it was not necessary to endorse any of the competing answers to that issue because, as in Gelmini, whether the cause of action accrued at the expiry of 2 June 2011 or at the very start of 3 June 2011, there was no significant difference, in that 3 June 2011 was for practical purposes a complete undivided day. The judge held that Gelmini is an exception to the general rule 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 for the purposes of the provision of the Limitation Act. As the 3 June 2011 in this case was a whole day, the judge held that it was to be included in the computation of the limitation period. The judge stated that if it were excluded then the limitation period would be six years and one complete day, which would unduly distort the six-year limitation period laid down by Parliament.
This case settles an area of law that has been unclear for some time.
As per the case of Gelmini -v- Moriggia, in a midnight deadline case, where the cause of action accrues at midnight at the end of the day or at the start of the day following midnight, because the day following midnight is a complete undivided day, that day is to count towards the limitation period.
Gelmini -v- Moriggia is however an exception to the general rule. The general rule, that any part of a day happening after the cause of action accrues is to be excluded from the calculation of the limitation period, still stands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.