(B) RESTITUTION FOR WRONGS
(i) Restitutionary Claims Founded on the Commission of Tort or Breach of Contract
By sections 2 and 5 of the 1980 Limitation Act, actions which are founded on tort and contract respectively are subject to a six-year limitation period. It follows that, where a restitutionary claim is founded on tort or breach of contract, the limitation period should be six years. This is because the underlying cause of action for the claim is the tort or the breach of contract and so the limitation period for those causes of action should apply even where the claimant seeks a restitutionary remedy. If the wrong is statute-barred then there is no longer a cause of action on which the restitutionary claim can be based.[1]
Unfortunately, this simple analysis has not been reflected in the cases. The most important decision is Chesworth v Farrar,[2] where the claimant brought an action for money had and received to recover the proceeds of sale of converted goods. The question for the court was whether this was a cause of action in tort, for, if it was, a limitation period of six months was applicable, this being the limitation period in respect of tortious actions against the estate of a deceased tortfeasor.[3] The court adopted a purposive construction of the legislation to determine whether the tort limitation period applied to a restitutionary claim and concluded that it did not. Rather, because the claimant’s action was analogous to a contractual action, a limitation period of six years applied, although the judge did recognize that it was crucial for the claimant’s restitutionary claim that he established that the tort of conversion had been committed. But, if the claim depended on proof of the commission of a tort, surely the limitation period for that tort was applicable. This is because the purpose of a limitation period is to bar the cause of action rather than the remedy. If the cause of action is barred it follows that the claimant cannot obtain any remedy, regardless of the type of remedy which he or she seeks. The decision in Chesworth v Farrar must be wrong.
That this is the proper conclusion is supported by section 23 of the Limitation Act 1980 which states that, where the claimant seeks the remedy of account, the relevant limitation period is that of the underlying cause of action. In other words, this provision acknowledges that the limitation period is determined by the underlying cause of action and not the remedy sought. Consequently, if the claimant seeks an account of profits following the infringement of a copyright, the limitation period for the account is the same as that for the infringement of copyright.[4]
Where the claim is founded on tort or breach of contract the cause of action accrues from the date the wrong was committed. The date for the commencement of the limitation period will, however, be delayed if any of the particular statutory provisions under the Limitation Act are applicable. For example, where the claimant is the victim of fraud, as will be the case where the defendant has committed the tort of deceit, the limitation period is postponed until the claimant has discovered the fraud or could have discovered it with reasonable diligence.[5] Similarly, where the claim is dependent on proof of a mistake, as will be the case where the claimant sues in respect of a misrepresentation, the limitation period begins to run only once the claimant has or should reasonably have discovered the mistake.41
- [1] Beaman v ARTS Ltd [1948] 2 All ER89, 92-3 (DenningJ). 2 [1967] 1 QB 407.
- [2] 38 Such a limitation period no longer exists. 4 Nelson v Rye [1996] 1 WLR 1378, 1389 (Laddie J).
- [3] 40 Limitation Act 1980, s 32(1)(a). 41 Ibid, s 32(1)(c). 42 Ibid, s 21(3).
- [4] 43 Ibid, s 21(1)(a). ‘Trustee’ includes resulting and constructive trustees: Trustee Act 1925, s 68(17),
- [5] incorporated by Limitation Act 1980, s 38.
