When Dinah Washington sang “What a difference a day makes” it seems unlikely that she had in mind the limitation period in an accountant’s negligence case. However, the difference that a day makes, was precisely the issue in Matthew v Sedman. The Supreme Court found, as had the Court of Appeal and HHJ Hodge QC before it, that where a cause of action accrues at the stroke of midnight the whole of the day after midnight falls to be included in the computation of time for limitation purposes.
Clare Dixon KC and Nicholas Broomfield of 4 New Square Chambers (instructed by Mills & Reeve LLP) represented the successful Defendants. The decision of the Supreme Court is considered below.
The Claimants are the current trustees and beneficiaries of the Evelyn Hammond Will Trust (“the Claimants”). The Defendants were accountants and the former trustees of the Trust, having retired in August 2014. The main assets of the Trust were shares in a company called Cattles plc (“Cattles”), which had acquired Welcome Finance Services Limited (“Welcome”) in 1994.
In 2007 Cattles published an annual report. Information in that report was included in a rights issue prospectus which was released to potential investors in April 2008. The FSA subsequently held that the information contained in both the 2007 annual report and the 2008 prospectus had been misleading. In April 2009 trading in Cattles shares was suspended and in December 2010 both Cattles and Welcome commenced proceedings for court-sanctioned schemes of arrangement. Only the scheme of arrangement for Welcome (“the Welcome Scheme”) is relevant to the appeal.
The Court approved the Welcome Scheme on 28 February 2011. The Welcome Scheme included provision for claims to be made by shareholders. Any such claims had to be made “on or prior to the Bar Date”, which was 2 June 2011. Accordingly, to be made in time, a claim under the Welcome Scheme had to be made up to midnight (at the end of the day) on Thursday 2 June 2011. A claim made by a shareholder on 3 June 2011 was too late.
The Defendants failed to submit a claim before the end of the Bar Date, thereby preventing the Claimants from claiming under the Welcome Scheme. The Claimants accordingly brought proceedings against the Defendants (for this and a related matter concerning the claim in the Cattles Scheme) alleging negligence and breach of trust. The Claimants issued proceedings on Monday 5 June 2017.
The Defendants applied for summary judgment and/or to strike out this part of the Claimants’ claim on the grounds that it was time barred under the Limitation Act 1980 (“LA 1980”) (“the Application”). The relevant limitation periods under the LA 1980 relied upon in the Application and considered by the Supreme Court are in almost identical terms for the relevant causes of action:
- Section 2 provides that a time limit for actions founded on tort: “An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
- Section 5 makes provision for claims founded on simple contract: “An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
- Section 21(3) makes provision for claims in respect of trust property: “… an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued.”
Judgment of HHJ Hodge QC  EWHC 3527 (Ch)
It was common ground before the Judge that, if the last day for issuing proceedings was 3 June 2017 (a Saturday), then following Pritam Kaur v S Russell & Sons Ltd  QB 226 the claim was in time because it would have been issued on the next working day, namely Monday 5 June 2017. However, if the last date for issuing proceedings was Friday 2 June 2017 (when the court office was open), then the Claim Form should have been issued on that day and was, therefore, out of time.
It was also common ground that if the Claimants’ cause of action had accrued part way through a day then that day (i.e. the day of accrual) should be excluded when calculating the relevant time period for the purposes of limitation because the law does not recognise fractions, or fragments, of individual days.
The Judge formulated the issue for determination in the following terms: “The question is this: 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 six years’ limitation period or does it fall to be excluded? More pertinently for present purposes, if a cause of action accrued at the very first moment of Friday 3rd June 2011, is a claim issued after Friday 2nd June 2017 brought after the expiration of six years from the date on which the cause of action first accrued?”
The Judge found that the cause of action had accrued at the very first moment of 3 June 2011 and that this day should be included for the purposes of computing the relevant limitation periods. In reaching that conclusion, the Judge placed reliance upon the judgment of Mr Justice Channell in Gelmini v Moriggia  2 KB 549. Gelmini was concerned with a promissory note, time for payment of which expired on 22 September 1906. Proceedings were issued on 23 September 1912, which Channell J found to be out of time because the cause of action was complete at the beginning of 23 September 1906 and so the relevant period of limitation expired six years later at the end of 22 September 1912.
Applying Gelmini to the instant facts, the Claimants could have issued their Claim Form at any time on 3 June 2011 (i.e. the day after the Bar Date). They therefore had six years from, and including, 3 June 2011 to issue proceedings. That six-year period ended on Friday 2 June 2017.
In reaching this conclusion, the Judge drew a distinction between cases where the cause of action was complete at (or by) the beginning of a day and cases where the cause of action accrued during the course of a day (e.g. like Pritam Kaur in which an accident occurred in the workplace). As noted above, it was common ground that in the latter case the whole day was excluded from the computation of time for limitation purposes. However, in the former case:
“[Where] it is absolutely clear that the cause of action arises at the very beginning of a particular day, that day should not be excluded from the calculation for Limitation Act purposes. At any moment during that day the claimant can bring a claim; and to exclude that day from the calculation for Limitation Act purposes would have the effect of giving him an extra day over and above the statutory limitation period for bringing a claim. I therefore accept Miss Dixon’s argument that where the cause of action is complete at the very beginning of a particular day, you exclude that day for the purposes of calculating the limitation period. On that footing, the limitation period in the present case being on 3rd June 2011 and expired at the very end of 2nd June 2017. On that basis, the last day for issuing the claim form was Friday 2nd June 2017, and this claim is out of time.”
The Judge, having described the case as “interesting and not unimportant”, granted the Claimants permission to appeal to the Court of Appeal.
Judgment of the Court of Appeal  EWCA Civ 475;  Ch. 85
Lord Justices Irwin and Underhill dismissed the Claimants’ appeal, although Irwin LJ stated that he had not found the issues easy to decide. The Court of Appeal’s reasoning adopted a two-stage approach, first identifying when the relevant cause of action arose and secondly determining whether the 3 June 2011 fell to be included within the computation of time or not.
When did the relevant cause of action accrue?
The Claimants case in the Court of Appeal was that the cause of action could not accrue on the stroke of midnight, but at a ‘nanomoment’ thereafter. As a result, the Claimants did not have the whole of the 3 June 2011 to bring their claim. The Defendants’ case was that there was no moment in time, however small, in which the Claimants could not pursue a claim on 3 June 2011.
The Court of Appeal concluded that where there was a “midnight deadline”, it was wrong to attribute the accrual of the cause of action to the day after the expiry of the midnight deadline. Underhill LJ explained at  that in such cases “there is [not] even a ‘nanomoment’ after midnight when the cause of action is not in being”, concurring with Irwin LJ’s statement at  that: “it appears to me that Miss Dixon is correct. A ‘midnight deadline’ case is different from others in the sense that the deadline provides a categorical indication that the action accrued by that point in time, rather than accruing on the day following midnight.”
The reckoning of time in “midnight deadline” cases
In the Court of Appeal it remained common ground that where a cause of action accrued part way through a day then the whole day should be excluded for the purposes of calculating the relevant limitation period under the LA 1980. However, the Claimants argued that this principle applied to all cases (including “midnight deadline” cases) and consequently Gelmini had either been wrongly decided or had subsequently been departed from in Marren v Dawson Bentley & Co Ltd  2 QB 135, the reasoning in which had been approved in Pritam Kaur. The result was that the 3 June 2011 should be excluded from the reckoning of time.
The Defendants maintained the conceptual distinction between “midnight deadline” cases and cases in which causes of action accrue part way through a day. In “midnight deadline” cases the claimant does not lose even a “fragment” of a day because, as the Judge had found and as Channell J had concluded in Gelmini, the cause of action accrued at (or by) the beginning of the day following the midnight deadline. The claimant in “midnight deadline” cases therefore has the whole of that day to pursue their claim. Further, the distinction drawn by the Judge was supported by McGee on Limitation Periods and Chitty on Contracts and avoided interfering with the wording of the LA 1980 by extending limitation beyond the clearly defined six years. Finally, the Defendants argued that Gelmini remained good law as neither Marren nor Pritam Kaur had concerned “midnight deadlines” and any judicial comments about Gelmini were therefore obiter.
Irwin LJ and Underhill LJ both held that Gelmini remained good law and upheld the distinction between “midnight deadline” cases and cases in which a cause of action accrues part way through a day. Irwin LJ, at , and Underhill LJ, at , agreed that no fractions of a day arise in “midnight deadline” cases because the relevant cause of action has already accrued “by” the first moment of the day after midnight “rather than accruing on the day following midnight”.
The Court of Appeal accordingly upheld the Judge’s decision. However, as the Supreme Court observed at , it did so on the basis that the relevant cause of action had accrued by 3 June 2011 whereas the Judge had found that it accrued “on” 3 June 2011, albeit at the very beginning of that day. The Court of Appeal, having concluded that limitation expired on Friday 2 June 2017, found that the claim was out of time and dismissed the appeal.
The Supreme Court granted the Claimants’ permission to appeal.
Judgment of the Supreme Court  UKSC 19
In the Supreme Court, the Claimants’ primary argument was that the cause of action accrued on 3 June 2011 and it was therefore to be excluded from the computation of time for the purposes of limitation. This argument had two separate limbs:
- First, that the day on which the cause of action accrues is to be excluded in all cases, including those in which a cause of action had accrued part way through a day and “midnight deadline” cases. The Claimants submitted that there was a rule of general application to this effect that could be discerned from landmark decisions such as Mercer v Ogilvy (1796) 3 Pat App 434, Lester v Garland (1808) 15 Ves Jun 248, The Goldsmiths’ Co v The West Metropolitan Railway Co  1 KB 1 and Stewart v Chapman  2 KB 792.
- Second, that Gelmini was wrongly decided because it was inconsistent with Radcliffe v Bartholomew  1 QB 161 and was disapproved in both Marren and Pritam Kaur.
The Claimants also argued that both the Judge and the Court of Appeal had failed to pay proper heed to the wording of sections 2, 3 and 21(3) of the LA 1980. They placed reliance upon the key words “from”, “date” and “accrued” to make the following arguments:
- It was important to identify the “date” upon which cause of action accrued. In reliance upon Dodds v Walker (which had informed the decision of Irwin LJ in the Court of Appeal), it was argued that there was no metaphysical point where it was neither 2 June 2011 nor 3 June 2011. Therefore, as the cause of action can only have accrued after midnight on 2 June 2011, it must have accrued on 3 June 2011. It was further suggested that (contrary to the Defendants’ case), the expiry of 2 June 2011 and the Claimants’ loss could not have occurred simultaneously as the two events were incapable of co-existence.
- The word “from” indicated a period subsequent to the date upon which the cause of action accrued, thereby justifying the exclusion of the day upon which the cause of action accrues from the reckoning of time in all cases to which the LA 1980 applies.
- The statutory use of the word “accrue” indicated that the focus of the LA 1980 was not on the time of day at which the cause of action accrued, but the day itself. As a day is an indivisible unit of time, the whole day should be excluded from the reckoning of time for limitation purposes in all cases.
The Defendants approached the question on the basis that the Claimants’ case arose from an omission (namely the failure to submit a claim form in the Welcome Scheme prior to the expiry of 2 June 2011). Accordingly, two things simultaneously occurred at the very last moment of 2 June 2011: (a) the time for submitting the Welcome Claim which had elapsed through effluxion of time; and (b) the arising of the cause of action. Those two events were inextricably linked and it was therefore unnecessary to determine whether that single moment is “properly ascribed to 2 June 2011 or the very first moment of 3 June 2011” as one can “either look back and call it the end of 2 June 2011 or look forward and call it the beginning of 3 June 2011.” As a consequence there was no fraction of a day and the Claimants had the entirety of 3 June 2011 to commence proceedings. The outcome was therefore the same whether the cause of action arose at the end of the 2 June 2011 (as the Court of Appeal had concluded) or the very start of 3 June 2011 (as the Judge and (on one reading) Channell J in Gelmini had both concluded).
Further and in response to the Claimant’s case, the Defendants’ maintained their position adopted below that:
- Where a cause of action accrues part way through a day the whole day falls to be excluded from the computation of limitation. However, “midnight deadline” cases are not subject to the same rule because no fraction of a day arises and they are instead governed by the principles considered by Channell J in Gelmini and applied by both the Judge and the Court of Appeal.
- The judgment of Channell J in Gelmini had not been considered in a subsequent “midnight deadline” case prior to Matthew. To the extent it had been the subject of judicial commentary in Radcliffe, Marren or Kaur, it was in the context of cases in which the cause of action had accrued part way through a day.
- The exclusion of the day immediately after a missed midnight deadline would extend the relevant limitation period to six years and a day, which was contrary to the express language of the LA 1980.
- The draftsman’s use of the word “from” in the LA 1980 was far from conclusive. As Lord Mansfield had observed in Pugh et, Uxor v Duke of Leeds (1777) 2 Cowp 714, “from” could be either inclusive or exclusive. Further, the textual analysis of the LA 1980 risked engaging in the process criticised by Lord Denning MR in Trow v Ind Coope (West Midlands) Ltd  2 QB 899 at 915F.
The reasoning of the Supreme Court
Having set out the facts, the parties’ cases and the key findings of the Court below the Supreme Court (in a unanimous judgment) turned to consider the parties’ respective cases in detail, addressing the parties’ respective arguments at length before providing its full and comprehensive conclusions at  – .
At  –  the Court held that none of the cases relied upon by the Claimants for the purposes of establishing a general rule that the day on which the cause of action accrues is to be excluded in all cases had considered the position in relation to midnight deadlines. Well known cases such as Mercer, Lester, Goldsmith’s Co and Stewart established the principle that where there is a fraction of a day then the whole day is to be excluded. However, those cases neither considered nor addressed the position that arises in “midnight deadline” cases where in practical terms there is a complete, undivided, day. Following a detailed review of the case law, the Supreme Court concluded at  that “The only midnight deadline case is Gelmini v Moriggia, which the appellants submit was wrongly decided”.
The Supreme Court then turned to consider the second-limb of the Claimants’ first argument. Following consideration of the judicial treatment of Gelmini in Radcliffe, Marren and Pritam Kaur the Court rejected the Claimants’ argument that Gelmini was either inconsistent with earlier authority or had been subsequently disproved:
- At  the Supreme Court held that Gelmini was consistent with Marren on the grounds that: “the principle in Gelmini is an exception to the general rule applicable in midnight deadline cases”.
- At  –  the Supreme Court held that whilst Gelmini had attracted judicial comment in Radcliffe, Marren and Pritam Kaur, none of them were “midnight deadline” cases and there had been no analysis of whether the day of accrual of the cause of action would be included in the computation of time when the day was a complete undivided day as it was in Gelmini. Consequently, Gelmini had not been considered in its proper context and therefore had neither been disproved nor departed from.
Finally, the Court considered and rejected the Claimants’ second argument arising from the wording of the LA 1980. At  the Supreme Court acknowledged that this textual approach had formed part of Megarry J’s reasoning in Pritam Kaur, but after referring to Lord Mansfield’s review of the authorities in Pugh held that it would be “inappropriate to decide the present case purely on a textual analysis of the meaning of the word “from”.
Following consideration of the parties’ arguments, the Supreme Court set out its own conclusion at  in the following terms:
“I consider that the reason for the general rule which directs that the day of accrual of the cause of action should be excluded from the reckoning of time is that the law rejects fractions of a day. The justification for that rule is straightforward; it is intended to prevent part of a day being counted as a whole day for the purposes of limitation, thereby prejudicing the claimant and interfering with the time periods stipulated in the Limitation Act 1980. However, in this case it was, in my opinion correctly, submitted that in a midnight deadline case even if the cause of action accrued at the very start of the day following midnight, that day was a complete undivided day. I consider that it would impermissibly transcend practical reality if the stroke of midnight or some infinitesimal division of a second after midnight, led to the conclusion that the concept of an undivided day was no longer appropriate. In that sense this would not only be impermissible metaphysics but also, in this context, such a minimum period of time does not the threshold as capable of being recognised by the law. Whether the issue is framed in terms of metaphysics, which the common law eschews, or of the principle that the law does not concern itself with trifling matters, the conclusion is the same: realistically, there is no fraction of a day. That being so, the justification in relation to fractions of a day does not apply in a midnight deadline case. During oral submissions Mr Cousins QC, in answer to an enquiry from Lady Arden seeking to identify the rational justification for excluding a whole indivisible day from the calculation of the reckoning of time, sought to do so based on continuing the application of the rule, as he submitted it had been understood since the 18th century, so that in relation to something as important as limitation there should be continuity of interpretation. I reject the premise to that submission. As I have indicated, there is no longstanding authority which excluded a whole indivisible day. Furthermore, I consider that the premise is undermined by the decision of Channell J in Gelmini. So, I reject this argument as a sufficient justification for excluding a whole day from the reckoning of time in midnight deadline cases. Rather, I prefer to consider the impact of holding that a full undivided day in a midnight deadline case is to be excluded from the reckoning of time. If that day were excluded from the computation of time then the limitation period would be six years and one complete day. I consider that would unduly distort the six-year limitation period laid down by Parliament and would prejudice the defendant by lengthening the statutory limitation period by a complete day. (emphasis added)
It is clear from , and in particular the first passage emphasised above, that in “midnight deadline” cases no fraction of a day arises. As a result, “midnight deadline” cases such as Gelmini and Matthew are distinct from cases where the cause of action accrues part way through a day and different principles apply. As a consequence 3 June 2011 fell to be included in the computation of the limitation period and this part of the action was out of time.
This decision in Matthews clears up any confusion as to: (a) when the cause of action accrues when a midnight deadline is missed and (b) how, in those circumstances, the limitation period is computed. In short, when a litigation lawyer is dealing with a case where the time for doing something expires at the end of a day then they need to include the whole of the following when working out what the very last moment for issuing proceedings is.
In some cases, it turns out, those “24 little hours” really do matter.
Disclaimer: this article is not to be relied upon as legal advice. The circumstances of each case differ and legal advice specific to the individual case should always be sought.
© Clare Dixon KC and Nicholas Broomfield of 4 New Square, May 2021.
 By the time the case reached the Supreme Court, the Claimants also claimed that the Defendants had acted in breach of contract: see paragraph 12 of the Supreme Court’s judgment.