Four Fundamentals of Limitation Periods in Contract and Tort Claims
Carl Troman | 25 Oct 2018
By Carl Troman, Barrister and Mediator at 4 New Square
Four key points for the limitation period for contract and tort claims. Limitation is fiendishly complex – these are some fundamentals for an ‘all-or-nothing’ defence affecting every claim.
The six year limitation period for a claim for breach of contract begins to run when the breach of contract occurs regardless of whether any damage is suffered at that point and regardless of whether the innocent party knows there has been a breach of contract. By contrast the six year limitation period for a tortious claim begins to run not when the breach of duty is committed but when the innocent party suffers recoverable loss as a result of the breach of duty even if they do not know such damage has occurred.
Where a tortious claim is based on negligence there is an alternative three year limitation period which begins to run from the date the innocent party has knowledge of the damage they have suffered. This secondary period can extend the time within which a claim for negligence can be brought to up to 15 years from the negligence. It does not apply to claims for breach of contract and is limited to claims of negligence. The test for when the innocent party has the requisite knowledge can be complex and difficult to apply but the essential question is when did they know enough that a reasonable person in their position would have brought proceedings. Knowledge can be actual but also constructive in that people will be fixed with knowledge they might reasonably have been expected to acquire.
Regardless of the cause of action, a claim in respect of personal injuries must be brought within three years of the later of: (1) the date when the cause of action accrued and; (2) the date of knowledge of the person injured. However, the Court retains a discretion in personal injury cases to, in effect, extend indefinitely the limitation period for such claims if it considers that equitable. The Court will consider various factors prescribed by statute amongst all the circumstances of the case.
Limitation periods do not begin to run against persons under a disability on the date any cause of action accrues. In addition limitation periods do not begin to run in respect of claims for fraud or mistake or where a relevant fact has been deliberately concealed until those matters have been discovered (or ought reasonably to have been discovered) by the innocent party. Deliberate concealment involves the concealment of deliberate wrongdoing or taking active steps to conceal a breach of duty.
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.
© Carl Troman of 4 New Square, October 2018.