When the Clock Strikes Midnight

5 April 2019
When a cause of action is completely constituted at the very first moment of a particular day, does that day fall to be included when calculating the applicable limitation period or excluded?

In a short but important decision regarding limitation periods, the Court of Appeal in Matthew and others v Sedman and others[1]  considered when limitation periods run from (and therefore expire) in the context of a negligence claim against trustees for failing to submit a claim form for entitlement under a scheme of arrangement before the midnight expiry of what was known as a “Bar Date” (2 June 2011).

The Court was asked to consider whether:

  • the day immediately after the Bar Date fell to be counted when calculating the limitation period, which meant that claims would need to be issued by Friday 2 June 2017; or
  • because in practice any action could not be brought until the next day, that day should be excluded from the calculation and limitation would start to run from the following day. In that case the limitation period would expire on Saturday 3 June 2017, which meant that the final day to issue the claim would be the next day the courts were open, namely on Monday 5 June 2017

This was a crucial issue to determine, as the claim against the trustees had in fact been issued on 5 June 2017, so that it would be out of time on the first analysis but in time on the second.

The Court of Appeal ruled that although the date a cause of action accrues is normally excluded for the purposes of calculating limitation periods – a position that is well established in the authorities – “midnight deadline” cases are different. In such cases, the cause of action accrues at precise moment of midnight, not on the following day; as put by Underhill LJ, “I would not have accepted that in such a case there is even a “nano-moment” after midnight when the cause of action is not in being […] The cause of action arises at, not after, midnight”. Accordingly, in “midnight deadline” cases, the following day is to be counted for limitation purposes. Here, the claimants were out of time.

This decision, in which the Court of Appeal has ruled on a small but technically complex and important issue, provides vital guidance and clarification for litigants and their advisors dealing with claims arising out of failures to meet midnight deadlines.


[1] [2019] EWCA Civ 475


 

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