Ashcroft v Bradford & Bingley Plc

For limitation purposes, part payment is a freestanding mechanism under Limitation Act 1980 s.29(5), separate from acknowledgment. The historical qualifications governing acknowledgment need not be imported into the analysis of payment. Whether a payment is made in respect of the debt sued on is a question of fact, determined from any appropriation or qualification and the surrounding circumstances. Where the only debt owed to the claimant is the debt sued on, payment will ordinarily restart time for that debt. An unquantified dispute about the amount or validity of the debt does not prevent that result.

John Howard Ashcroft borrowed money secured by a mortgage from Bradford & Bingley Plc. After the mortgaged property was sold at a substantial shortfall, the claimant sought payment of the remaining debt. The defendant later made monthly payments of £10 while continuing to dispute aspects of the debt.

The claimant issued proceedings in August 2008. On 15 July 2009, Sheffield County Court, before Mr Recorder Oldham, held that the claim was not statute-barred and granted permission to appeal. The central issue in the Court of Appeal was whether the payments or correspondence in 2000 and 2001 restarted time under the Limitation Act 1980, despite the defendant’s continuing dispute concerning the property’s sale price.

The appeal was dismissed unanimously. Lord Justice Sedley gave the reasons, with which Lord Justices Jacob and Patten agreed. The recorder had reached the correct conclusion that the claim was not statute-barred.

1. Section 20 of the Limitation Act 1980 imposed a 12-year period for recovering the mortgage loan. Section 29(5) provided that time began running again when the debtor acknowledged the claim or made a payment in respect of it. Part payment was expressly separated from acknowledgment and given equal statutory status. It was therefore unnecessary to analyse part payment through the historical law of acknowledgment.
2. Whether a payment was made in respect of the debt sued on was a question of fact. Any express appropriation could qualify the payment, but the surrounding circumstances could establish its purpose without direct evidence. Baildon v Walton (1847) 1 Exch. 617 did not support the proposition that a debtor’s declarations were invariably conclusive. Surrendra Overseas Ltd v Government of Sri Lanka [1977] 2 All ER 481 supported, at most, the proposition that a payment clearly referable to an admitted part of a debt acknowledged that liability only.
3. The only debt owed by Mr Ashcroft to the claimant was the mortgage debt. The monthly payments were therefore referable to the whole debt. The complaint about an undervalue was unquantified and had not been advanced by a pleaded defence or counterclaim. Payment in December 2000 was consequently sufficient to restart time, and it was unnecessary to decide whether the forms or correspondence also amounted to acknowledgment. Dungate v Dungate [1965] 1 WLR 1477 supported consideration of extrinsic evidence in deciding whether payment related to the whole debt or only part.
4. The court noted, without deciding, that the payment arrangement might possibly have constituted a binding compromise preventing the claim. That issue was unnecessary to the limitation decision.

The order dismissing the claim as statute-barred was not made. The appeal was dismissed.

1. Court of Appeal (Civil Division): dismissed the appeal and upheld the conclusion that the claim was not statute-barred.
2. Sheffield County Court: on 15 July 2009, Mr Recorder Oldham held that the claim was not statute-barred and granted permission to appeal.