Where a deadline falls on midnight on a particular day, can action be validly taken on the next day? Cecilie Rezutka, Associate at CJC, reviews the UK Supreme Court’s judgment and what it means for shipping litigation.
Background
In Matthew and others (Appellants) v Sedman and others (Respondent)[1] the UK Supreme Court considered whether where a cause of action accrues at, or on the expiry of, midnight at the end of a day, the following day counts towards the calculation of the limitation period.
The terms of a scheme of arrangement, a Court-sanctioned agreement between a company and its creditors, provided for a valid claim to be made up to midnight (at the end of the day) on Thursday 2 June 2011. No valid claim was brought under the scheme before the deadline.
Under the English Limitation Act 1980, actions in tort, contract and breach of trust can no longer be brought after the expiry of six years from the date on which the cause of action accrued. The appellants commenced proceedings in negligence and breach of trust by a Claim Form issued on Monday 5 June 2017 and argued that the last day for issuing their claim was Saturday 3 June 2017. Since the Courts were closed on that day, following Pritam Kaur v S Russell & Sons Ltd,[2] the Claim Form was validly issued on the next working day, Monday 5 June 2017.
The question before the Court was whether Friday 3 June 2011, the day which commenced immediately after the expiry of the midnight deadline for bringing a claim under the scheme, should count towards the calculation of the six-year limitation period.
Decision
The UK Supreme Court dismissed the appeal and held that 3 June 2011 was included for the purposes of the limitation period meaning that the claim form should have been issued by 2 June 2017 and was therefore issued out of time. The Court affirmed the general rule that the day on which a cause of action accrues is excluded for limitation purposes but held that midnight deadline cases are an exception to that rule. The day following a midnight deadline was a “complete undivided day”. To hold otherwise would unfairly extend the statutory limitation period and “the limitation period would be six years and one complete day”.
Commentary
- Adopting a common-sense approach, the Court has brought welcome clarity on the question of midnight deadlines – in simple terms, midnight means midnight. If parties wish to provide otherwise, they need to clearly state so in their contract.
- Litigants should not leave it to the last minute to commence proceedings. In the case at hand, the appellants took no action for six years and then became entangled in protracted (and ultimately unnecessary) proceedings concerning the validity of their claim.
- To avoid such scenarios, is good practice to check and properly diarise deadlines as early as possible into a potential dispute and to watch out for any specific action required which may take time to arrange and therefore shorten the time available to the litigant. This can for instance include service by a particular means or at a particular place for which logistics need to be sorted beforehand. Deadlines should be centrally monitored and be managed independently of personnel changes. Where the situation is unclear, the earliest deadline should be diarised as a matter of precaution. Legal advice should be sought in case of doubt.
The full judgment can be accessed here.