Oyesanya v Mid-Yorkshire Hospital NHS Trust (Rev 1)

A limitation defence does not affect the court’s jurisdiction to entertain a claim. It is a defence which the defendant must plead and prove. Where parties conduct an employment relationship in accordance with an unsigned written contract, its payment terms may nevertheless be implied from their conduct. If the employer is not in breach during employment, the cause of action for unpaid remuneration accrues when employment ends. A later promise to pay an existing debt does not create a fresh cause of action without consideration.

The appellant, an obstetrician and gynaecologist, worked as a locum consultant for the respondent’s predecessor in 2000. He remained unpaid and issued proceedings on 30 November 2006 for remuneration and interest. The Trust admitted that money was owed but pleaded that the claim was barred under section 5 of the Limitation Act 1980.

HH Judge Mitchell determined limitation before the appellant’s outstanding application to strike out the defence. He held that only the November salary was recoverable, assessed the claim at £3,269.22 net and ordered the appellant to pay the Trust’s costs. The appeal concerned the order of issues, accrual of the salary claim, an alleged promise to pay on 22 December 2000, tax deductions and interest.

Appeal allowed. The Court of Appeal unanimously held that the Trust had no limitation defence and that the appellant’s claim was in time.

1. Limitation was not a jurisdictional issue. It was a defence which the Trust had to plead and prove. Since striking out the defence would have removed the limitation issue, Judge Mitchell had erred in principle by determining limitation first. The Court did not finally decide whether the defence would have been struck out, although it considered the Trust’s disclosure response wholly inadequate and thought that a further, probably narrower, disclosure order and an adjournment were the likely consequences.
2. The parties had conducted themselves in accordance with the written employment terms despite the appellant’s failure to sign the draft contract. Payment by BACS, together with the need to provide bank details, was an implied term. The Trust was therefore not in breach merely because it did not make monthly payments while the employment continued. When the employment ended on 30 November 2000, the unpaid salary became a debt and the cause of action accrued. Proceedings brought on 30 November 2006 were consequently in time for the whole claim.
3. The alleged promise to pay on 22 December 2000 did not create a fresh agreement or cause of action. No agreement to pay by cheque had been made and the suggested variation was unsupported by consideration.
4. The court declined to adopt a generic tax and national insurance deduction. The appropriate net figure was to be agreed, or determined after written submissions. Interest was awarded on the net sum at an amount equivalent to 40 per cent; Christopher Clarke LJ expressed the calculation as eight years at 5 per cent, and Underhill LJ agreed. The costs order was to be revisited.

1. Court of Appeal (Civil Division): The appeal was allowed. The court held that the limitation defence failed, the whole salary claim was in time, and the costs and consequential monetary orders required revision.
2. Central London Civil Justice Centre: HH Judge Mitchell’s order of 30 July 2010 held that the claim was largely statute-barred, assessed the recoverable amount at £3,269.22 net and ordered the appellant to pay the respondent’s costs.