Analysis
In 1998 the appellant solicitor transferred $1.2m without his clients’ knowledge and authority and in breach of fiduciary duty to the respondents. Proceedings were issued in 2012. The appellant argued the claim was statute-barred pursuant to s21(3) Limitation Act 1980. The respondents relied upon a letter written by the appellant in 2006 as constituting an acknowledgement of the claim for the purposes of s29(5) of the Act, which provides:
‘where any right of action has accrued to recover… any debt or other liquidated pecuniary claim… and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it the right shall be treated as having accrued on and not before the date of the acknowledgment or payment.’
At first instance David Richards J held that a claim for an amount paid out in breach of fiduciary duty, being an amount known or capable of straightforward calculation on the evidence, was a ‘liquidated pecuniary claim’ for the purposes of s29(5), and that the 2006 letter amounted to an acknowledgement such that the cause of action accrued afresh on the date of the letter.
The following questions arose on the appellant’s appeal:
- A.Was a claim for monies paid away in breach of fiduciary duty a ‘liquidated pecuniary claim’ such that s29(5)(a) applied?
- B.If so, did the 2006 letter constitute an acknowledgement within the meaning of that section?
Held
1) By Etherton MR and Sales LJ in the majority, that the expression ‘liquidated pecuniary claim’ in s29(5)(a) includes claims against trustees for the recovery of trust money which was wrongly paid away or for compensation in respect of other trust assets wrongly misapplied [48]. s29(5) replicated s23(4) Limitation Act 1939, which was itself a consolidating statute and could not be understood as altering the previous position under s8(1)(b) Trustee Act 1888, by which all actions or other proceedings against trustees to recover money or other property were subject to the same provisions regarding limitation as were then applicable to actions in debt for money had and received. Re Somerset [1894] 1 Ch 231, clarified. In determining whether s29(5)(a) applies to an equitable claim, the test is whether the claim in question is sufficiently analogous to an action at law falling within that provision. A claim against a trustee for monies improperly paid away is such a claim, being restitutionary in nature.
2) By Patten LJ, dissenting, that the Limitation Act 1939 in not repeating the analogy with actions for monies had and received, must be taken as removing actions against trustees from the class of actions to which the provisions on acknowledgement can apply, which was limited to claims which could previously be brought as actions in indebitus assumpsit.
3) However, all three agreeing, that in the particular facts of this case, the claim to equitable compensation for monies paid away without authority by a solicitor was most analogous to a claim for breach of contract for failure to exercise due care and skill, and could not be considered a ‘liquidated pecuniary claim’ for the purposes of s29(5).
4) The second issue did not, therefore, arise.
Appeal allowed.
JUDGMENT PATTEN LJ [1] This is an appeal by the defendant, Mr Stuart Creggy, against an order of David Richards J dated 29 January 2015. The judge ordered Mr Creggy to pay to the claimants the sum of $2,305,795.68 including interest as equitable compensation for his breach of fiduciary duty in transferring in 1998 approximately …Continue reading "Creggy v Barnett & anr [2018] WTLR 35"