On the stroke of midnight
In Matthew & Ors v Sedman & Ors [2021] UKSC 19, the Supreme Court found that where a cause of action occurs at the stroke of midnight at the end of the day, the entirety of the following day is counted for the purposes of calculating the limitation period. This is in contrast to causes of action that accrue at other times of day, where the date is deemed not to count towards the calculation of the limitation period.
Background
From 1952 to 2014, the Defendants/Respondents were the trustees of a trust established under a will (the Trust). The Claimants/Appellants are the trustees who replaced the Defendants upon their retirement, and the beneficiaries of the Trust.
The principle asset of the Trust had been shares in a single company, Cattles plc, which had subsequently acquired Welcome Financial Services Ltd. In 2009, trading in Cattles’s shares was suspended and both Cattles and Welcome became the subject of court-sanctioned schemes of arrangement. The Trust had claims under both schemes.
The deadline for a claim in the Welcome scheme was midnight (at the end of the day) on 2 June 2011. The Defendants (the trustees at the time) failed to make a claim under the Welcome scheme before this deadline.
On 5 June 2017, the Claimants commenced proceedings against the Defendants, inter alia, for their failure to make a claim under the Welcome scheme, the cause of action having accrued on 3 June 2011 (the Claim).
The Defendants applied for summary judgment / strike out of this part of the claim, on the grounds that the six-year limitation period had elapsed.
The issue was whether Friday 3 June 2011, the date on which the cause of action had accrued, at or immediately after midnight, counted for the purposes of calculating the six-year limitation period.
It was common ground that if 3 June 2011 was excluded, then the limitation period expired on Saturday 3 June 2017, and that as the court office was shut at the weekend, the final day for issuing the claim against the Defendants would have been 5 June 2017 (per Pritam Kaur v S Russel & Sons [1973] QB 336), meaning that the Claim would have been within the limitation period.
Principles
The long-standing rule is that the day a cause of action accrues is excluded from the calculation of the limitation period as, “the law rejects a fraction of a day” (Mercer v Ogilvy (1796) 3 Pat App 434; Lester v Garland (1808) 15 Ves Jun 248 (33 ER 748)). Lord Stephens’s decision notes that the rationale behind this rule is to prevent part of a day from being counted as a whole day which would otherwise prejudice the claimant, when calculating the limitation period.
Decision
Lord Stephens, with whom the other Lords unanimously agreed, found that to pretend that “the stroke of midnight or some infinitesimal division of a second after midnight” constituted a fraction of day, would “transcend practical reality” and that for such day to be prevented from being counted from the purposes of limitation effectively create a limitation period of six years and one complete day. This would distort the six-year limitation period laid down by Parliament and would prejudice a defendant by lengthening the limitation period by a day.
As a result, because 3 June 2011 was a whole day, the Supreme Court held that it should be included in the calculation of the limitation period. The proceedings were therefore brought outside the six-year limitation period and were time barred. The Claimants’ appeal was therefore dismissed.
The author would like to thank Ishtiaq Shafiq for his assistance in preparing this post.