Matthew & Ors v Sedman & Ors

Where a cause of action arises because a specified deadline expires at midnight, it arises at that midnight, not in a moment afterwards. The ordinary rule excluding the date of accrual applies where the cause arises part-way through a day, but does not extend a midnight deadline into an additional day. Gelmini v Moriggia [1913] 2 KB 549 was correctly decided on the midnight point. The general approval of Marren and Pritam Kaur is confined to daytime accrual. The six-year limitation period therefore expired at the end of 2 June 2017, and a claim issued on 5 June 2017 was out of time.

The trustees of trusts under Evelyn Hammond’s will claimed against former professional trustees for breach of trust and related relief. The claim arose from the alleged failure to submit a shareholder claim under the Welcome Financial Services Limited scheme of arrangement by the applicable Bar Date. HHJ Hodge QC held that the limitation period expired on 2 June 2017 and that the claim issued on 5 June 2017 was out of time: [2017] EWHC 3527 (Ch). On appeal, the appellants conceded the issue concerning the Bar Date, and an alternative damage argument was abandoned. The remaining issue was whether the cause of action accrued at midnight at the end of 2 June 2011 or during 3 June, and whether the day of accrual was excluded from the limitation calculation.

1. Appeal dismissed. Irwin LJ gave the principal judgment, with which Underhill LJ agreed. The appeal was confined to the computation of the six-year limitation period.
2. Midnight deadline. A cause of action arising from failure to act by a deadline expiring at midnight arises at that midnight. It does not arise in a subsequent nanomoment or during the following day. The court rejected metaphysical distinctions between the end of one day and the beginning of the next, relying on the approach in Dodds v Walker [1981] 1 WLR 1027. Gelmini v Moriggia [1913] 2 KB 549 was rightly decided on this issue and was followed.
3. Part-day accrual. The general rule is that, where a cause of action accrues part-way through a day, the day of accrual is excluded when computing limitation. This principle has long-standing support in Radcliffe v Bartholomew [1891] 1 QB 161 and was applied in the limitation context by Pritam Kaur v S Russell and Sons Ltd [1973] QB 336 (CA). Marren v Dawson Bentley & Co Ltd [1961] 2QB 135 and Pritam Kaur did not decide the distinct midnight situation. Their general approval therefore did not govern the appeal.
4. Unresolved issues and application. Irwin LJ observed that different questions might arise where a deadline fell at 9am, noon or another point during the day. The court did not decide how fractions of a day should be treated in such cases. Underhill LJ expressed a strong provisional view that no rational distinction could be drawn between different fractions, but confirmed that the point did not arise. Applying the midnight rule, the limitation period expired at the end of 2 June 2017. The claim issued on 5 June 2017 was out of time.

1. Court of Appeal (Civil Division): The appeal was dismissed. Ground 1 was conceded and an alternative ground concerning actionable damage was abandoned.
2. High Court, Chancery Division: HHJ Hodge QC held that the claim was out of time because limitation expired at the end of 2 June 2017: [2017] EWHC 3527 (Ch).