I move that the Bill be now read a Second Time. The object of this Bill is the consolidation and amendment of various enactments relating to the limitation of legal actions and arbitrations. I propose to give a general survey of the law governing the limitation of actions and to indicate what the Bill sets out to do in the way of amending and tidying up of that law. To facilitate a study of the Bill which is in many respects a very technical one we decided to provide explanatory sidenotes indicating the existing statutory provisions and rules of law being consolidated, amended or repealed. On page 4 of the Bill Deputies will see a legend showing the short method by which each statute is referred to in the sidenotes. The provision for the first time of explanatory sidenotes is, we hope, an innovation which will be welcomed in Bills of this type where an easy reference to the existing law is very helpful in making up one's mind as to the desirability of the changes being made in the law and the necessity or otherwise for other changes. The sidenotes will not, of course, appear in the Act if and when it becomes law.
The policy of fixing a period of limitation for legal actions has, since the 17th century, been incorporated in the statute law and the rule of equity that people who sleep on their rights should be prevented from enforcing them is of very long standing. The purpose of prescribing limitation periods has been said to be the prevention of the rearing up of claims at great distances of time when evidence might very often be lost, the quieting of possession so that after a certain fixed period the possessor may know definitely that his title and right cannot be called into question, and, finally, the restriction of interminable litigation.
In this country reliance must often be placed on the law of limitation in order to vest the legal estate in the owner of land for the time being, particularly as people in many cases do not take out administration on the death of their predecessors in title. It is now generally considered that, though in some cases a statute of limitation may be used to defeat a perfectly just claim, where, say, a debt is clearly due, a plea of the statute is a meritorious one; and this is because the plaintiff must have been slow to enforce his rights, far slower, indeed, than the prudent man would be. A plea of the statute is not for this reason thought to be comparable with a plea of the Gaming Acts or even of the Statute of Frauds (which statute, like the Sale of Goods Act, demands evidence in writing in certain transactions). These latter enactments may be used to defeat plaintiffs who are not in default of any kind.
The term "the Statutes of Limitation", or the Statute of Limitations", or, more shortly, "the statute" is applicable primarily to various general Acts which deal with the limitation of the main classes of action. The most important of these Acts are, firstly, the Common Law Procedure Amendment Act (Ireland), 1853, which is concerned with what are called common law actions or actions for contract and tort and similar actions, and, secondly, the Real Property Limitation Acts, 1833 to 1874, which deal with actions relating to land or money charged upon land. It should be noted that, whereas the 1853 Act bars the remedy but leaves the right intact, the Acts of 1833 to 1874 bar both the remedy and the right. Hence a plaintiff who is owed a statute barred debt is fully entitled to it if he can obtain satisfaction otherwise than by legal proceedings, but where a plaintiff seeks to recover land his title to the land is extinguished after the expiration of the statutory period.
Where A owed B money on account of a number of debts some of which are statute barred and some not, and pays B money, which is not appropriated to any particular debt, B may appropriate the money to a statute barred debt. If, however, A is in undisturbed possession of B's land for 12 years B's title to the land is extinguished and he cannot recover it by any means. The distinction between barring the remedy and the right and barring only the remedy is an important one and has a significant result as regards procedure. In an action to recover land the defendant need not plead the Statute, it being sufficient to plead that he is in possession by himself; but in claims other than claims to recover land the Statute must be pleaded. In cases where the statutory period has apparently fully run the plaintiff may, nevertheless, succeed by proving that the right of action has been kept alive by acknowledgment or part payment by the defendant, or that the period must be extended in consequence of the plaintiff's disability by reason of infancy or lunacy or in consequence of concealed fraud on the part of the defendant.
The term "Statutes of Limitation" is also used to cover a great number of enactments scattered over the statute book which deal with special statutory classes of action. Such enactments are the Fatal Accidents Act, 1846 (now replaced by the Fatal Injuries Act, 1956) which deals with actions for the benefit of relatives of a deceased person killed by the wrongful act, neglect or default of another; the Landlord and Tenant Law Amendment Act, Ireland, 1860 (known as Deasy's Act), which deals with actions by an ejected tenant for restitution of possession; the Maritime Conventions Act, 1911, which deals with actions to enforce a claim or lien against a ship or the owners thereof; the Industrial and Commercial Property Act, 1927, which deals with actions for infringement of copyright, the Moneylenders Act, 1933, which deals with actions by moneylenders in respect of money lent; the Workmen's Compensation Act, 1934, which deals with actions by workmen for compensation for injuries arising out of and in the course of their employment; the Merchant Shipping Act, 1947, which deals with actions against carriers or ships for loss or damage, etc. One of the best known of these enactments concerned with special classes of action was the Public Authorities Protection Act, 1893, which was repealed by the Public Authorities (Judicial Proceedings) Act, 1954.
The Bill now before the House does not deal with any of the special classes of statutory actions I have mentioned. It is in fact confined to the general Statutes of Limitation which I dealt with at the beginning, the most important being, as I said, the Irish Common Law Procedure Act of 1853 and the Real Property Limitation Acts of 1833 to 1874.
I now propose to go through the Bill in some detail in order to explain to the House as well as I can the various provisions and the background of these provisions. The Bill covers a very large number of matters and is in many respects highly technical. I trust the House will bear with me while I attempt to give some indication of the proposals contained in the different sections and explain certain provisions which at first glance may not be clear to the layman or to a person studying for the first time the law as to the limitation of actions. Though the Statutes of Limitation impinge very much on the transactions of the general community, the law requires in a number of respects a specialised study in order to become fully conversant with its many ramifications and effects in particular cases.
Part I (Sections 1 to 9) is the preliminary and general part. Under Section 1 the new Act is to be entitled the Statute of Limitations, 1956, and the statute is designed to come into operation on 1st January, 1957. The expressions "Statute of Limitations" and "pleading the Statute of Limitations" have been used for a very long time and we propose that these expressions continue to be used. It may be necessary if and when we come to the Committee Stage to provide for the postponement of the date of commencement still further. The reason for allowing a fairly substantial period to intervene between the passing of the limitation legislation and the date of its coming into operation is to ensure that "anyone whose period of limitation otherwise might be shortened" will be "afforded time within which to start his action and safeguard his right".
Section 2 is the interpretation section. "Action" will include any proceeding in a court of law; the Bill will not apply to criminal proceedings. "Conventional rent", "rent-charge" and "rent" are being defined. Annuities payable to the Land Commission are rent-charges. "State authority" will mean any Minister of State, the Commissioners of Public Works, the Land Commission, etc. Deputies will note that provision is made for foreclosure in sub-section (2). Since the Bill was prepared, however, it has been drawn to our attention that because of a leading case in 1914 a reference to foreclosure is misleading in this country because foreclosure is, according to that decision, unknown in Ireland. The action here was and is an action claiming the sale of the land. It will accordingly be necessary at a later stage to have sub-section (2) of this section deleted and also to have certain changes made in that portion of the Bill dealing with mortgages.
Section 3 provides for the application of the Act to State authorities. At present State authorities are not bound by the ordinary Statutes of Limitation on the old common law doctrine that time does not run against the King. This means that whereas the State may and does in practice plead the Statute, the Statute may not be pleaded against the State. We considered that this was an unjust and inequitable principle and all the more so in a country which prides itself on being a democracy. In the case of land there was an exception to the common law rule provided for in what are known as the Nullum Tempus Acts which began in Ireland with the Crown Claims Limitation (Ireland) Act, 1808.
Under the Statutes the period of limitation of actions by the Crown (now the State) to recover lands was 60 years. Since the Crown Lands Act, 1906, the period of 60 years also applies in Ireland to quit rents or other perpetual rents. Annuities payable to the Land Commission are not, of course, quit rents or perpetual rents and the position in regard to all rents payable to the commission was doubtful until the 1939 Land Act, which in Section 6 provides that moneys payable to the Land Commission shall have, and save as regards tithe-rents, shall be always deemed to have had the like rights, privileges and priorities as are conferred on moneys to which Section 38 (2) of the Finance Act, 1924, applies. In other words, they have the like rights as moneys payable to the Crown formerly had and, accordingly, the Statutes of Limitation do not apply to them.
A similar provision is made for moneys payable to the Minister for Defence in Section 311 of the Defence Act, 1954. The relevant provisions of the Finance Act, 1924, the Land Act, 1939, and the Defence Act, 1954, are being repealed in so far as they are inconsistent with the proposed legislation. The Bill does not apply, however, to proceedings by the Revenue Commissioners for the recovery of taxes and duties or fines, etc., incurred in connection with such taxes or duties. In the case of customs duty there is already a period of limitation of three years laid down in Section 257 of the Customs Consolidation Act, 1876, and under the Excise Act, 1848 (Section 3), the period is six months for excise duty. There is now no period of limitation for income-tax.
Section 4 excludes proceedings in respect of the forfeiture of a ship. These proceedings were formerly governed by Section 76 of the Merchant Shipping Act, 1894, which did not prescribe any period of limitation, and the law has not been changed under Section 90 of the Mercantile Marine Act, 1955. Where, for example, a ship unduly assumes Irish character, or conceals Irish or assumes foreign character, or an unqualified person assumes ownership of the ship, the ship or the ownership therein, as the case may be, becomes liable to forfeiture to the State under Sections 13, 14, and 22 of the 1955 Act.
Section 5 which is a re-enactment of Section 27 of the Real Property Limitation Act, 1833, provides that nothing in the proposed legislation shall affect any equitable jurisdiction of the courts to grant relief on the ground of acquiescence or otherwise. Acquiescence means conduct from which a waiver of his rights will be attributed to a party or by which he will be estopped from taking proceedings later. In such a case the party will not be allowed to succeed even though the limitation period has not expired. The old courts of equity always refused aid where the party had slept upon his right and acquiesced for a great length of time. They also refused aid in a case where, though no period was applicable, it would have been inequitable to give relief after a long period of delay. This was known as the doctrine of laches. The provisions in Section 5 simply continue the application of the equitable doctrines in regard to acquiescence and laches to limitation cases.
Under Section 6 of the Bill, where a set-off or counter-claim is pleaded, the set-off or counter-claim shall be deemed to be a separate action for the purpose of fixing the limits of the limitation period applicable; and the date until which the Statute runs against such set-off or counter-claim will be the date of the beginning of the action in which the set-off or counter-claim is pleaded. At present the position, where the Statute is pleaded to a set-off or counter-claim, is that time runs against the set-off until the beginning of the action in which it is raised, but it runs against the counter-claim until the date when the counter-claim is pleaded. The section will, therefore, bring the law of limitation as to a counter-claim into line with the law as to set-off.
Section 7 provides a saving for other limitation enactments and thus the periods of limitation prescribed in these enactments (some of which I have already mentioned) are preserved. The section makes it specifically clear that the proposed legislation will not apply to any action coming within any of these enactments where a State authority is a party.
Under Section 8 any action barred before the operative date (the 1st January, 1957) will continue to be barred except in so far as it may be revived by acknowledgment or part payment. The new Act will also not affect any action (or the title to any property involved in any action) commenced before the operative date.
Section 9 is the repeals section. The existing statutory enactments, stretching back over 200 years, which govern the general law of limitation and which are listed in the Schedule are being repealed.
Part II of the Bill—Sections 10 to 37 —sets out the various periods for different classes of action and proposes, as far as is considered desirable, to prescribe uniform periods for all similar classes of action.
Section 10 provides that this part of the Bill is to be subject to the later provisions in Part III, relating to the extension of the limitation periods in case of disability, acknowledgment, part payment, fraud and mistake.
Section 11 deals with what are called common law actions, namely, contract and tort actions and other similar actions. Under sub-section (1) the period for all simple contract actions will be six years as at present; for actions on recognisances, and actions to recover any sum (other than a sum by way of penalty or forfeiture) recoverable by virtue of any enactment the period will also be six years whereas it is 20 years at present. In tort actions, other than personal injuries and slander actions, the period will, under sub-section (2) (a), be six years.
Six years is now the period in all tort actions except actions for assault, menace, battery, wounding, and imprisonment which have a limitation period of four years, and actions for slander per se where the period is two years. Sub-section (2) (b) provides that personal injuries actions for negligence, nuisance or breach of duty shall have a limitation period of three years only instead of the present four years, not six years, by the way, as is stated in the sidenote. This is a fairly important change of the law.
Roughly half of all actions coming for trial are personal injuries actions. The period of three years will apply whether or not the action is against a State or other public authority, whereas before the repeal of the Public Authorities Act, 1893, the period was six months from the act, neglect or default of the public authority and is at present four years from the date the cause of action arises irrespective of the date of such act, neglect or default. Deputies will have noted that the period in fatal cases arising under the Fatal Injuries Act is also three years.
All slander actions will have a limitation period of two years whether actionable per se or not—sub section (2) (c)—whereas at present in slander other than slander actionable per se, that is, slander which requires proof of special damage, the period is six years. We considered that there should be a uniform period for all types of slander but that it should be a shorter period than that provided for in libel and other torts. I might mention that in Britain the period for all types of slander is now six years. We felt, however, that this precedent ought not to be followed. It must be very seldom, indeed, that slander actions are brought after two years. Further, a person's recollection of the exact words spoken in a particular instance is likely to be uncertain as time goes on: in the case of libel there is a permanent record.
Sub-section (3) deals with actions for an account, and the present period of six years is not being altered. In an action on an instrument under seal a period of 12 years is proposed instead of the present 20 years—sub-section (4) —and 12 years as at present (with six years in the case of interest) is also to be the period in actions upon judgments—sub-section (5). Actions for penalties (other than fines) will, under sub-section (6), continue to have a period of two years. As penalties for the non-payment of duties and taxes under the care and management of the Revenue Commissioners do not come within the Bill and as the non-payment of such duties are in reality criminal offences, the only field of operation of sub-section (6) will be penalties recoverable by the person known as the common informer. Section 11 will not apply to admiralty actions where the jurisdiction of the High Court is enforceable in rem or against the ship, but it will apply to ordinary actions to recover seamen's wages—sub-section (7). The section will also not apply to actions claiming equitable relief such as specific performance and injunction, but the court may apply the section by analogy in the same way as Statutes of Limitation are at present applied.
In former times, the old courts of equity might act in obedience to a Limitation Act in which they were not expressly mentioned, and, when an equitable proceeding was closely analogous to one at common law, the courts of equity held themselves bound by the Act. Courts of equity might also act by analogy to the Limitation Act, and, in such cases, though the Act did not absolutely bind these courts, they adopted it "as a rule to assist their discretion". Thus, in some cases, where there was a close analogy, the courts of equity acted in express obedience to the Act, whereas, in other cases, where there was merely an analogy, they acted in obedience simply. The inclusion in the Bill of cases not formerly within any limitation enactment (for example, cases against constructive trustees such as executors and administrators) means that, where a court formerly acted in obedience to a Statute of Limitation, it will in future have to act in express obedience to it.
Section 12 of the Bill deals with the limitation of actions in the case of successive conversions and is a new provision in the law. The section proposes, in sub-section (1), to amend the law by providing that, in the case of a further conversion or detention, no action may be brought in respect of such further conversion or detention after the expiration of six years from the accrual of the cause of action in respect of the original wrongful conversion or detention. At present, when the same chattel is the subject of separate acts of conversion or detention, the fact that the Statute has run in favour of the first wrongdoer does not bar an action against a second or subsequent wrongdoer.
Sub-section (2) also amends the law, so that, where the limitation period for bringing an action for conversion or wrongful detention has expired, the title to the chattel concerned shall be extinguished: under the existing law only the right of action is barred. Conversion is an unauthorised act which deprives another of his property permanently or for an indefinite time, and the action is one for damages. Wrongful detention arises where one person detains the property of another, and the action is one for restitution of the property. The right of action for conversion arises on the doing of the unauthorised act, whereas the right of action for wrongful detention arises when a demand of the owner has been wrongfully refused.
Section 13 of the Bill deals with the limitation periods in actions to recover land by a State authority and by a person other than a State authority. In actions to recover land, except foreshore, the period of limitation for a State authority is to be 40 years instead of 60 years as at present, but in the case of actions by an ordinary person the period will continue to be 12 years. I might mention here that the period in Britain in the case of the Crown is 30 years since 1940, but there since 1926 a vendor of land on an open contract is obliged to show only 30 years' title, whereas here under Section 1 of the Vendor and Purchaser Act, 1874, he must show 40 years' title. Prior to 1874 the period was 60 years in both countries, hence the period of 60 years under the Nullum Tempus Acts in actions by the Crown to recover land. We now propose to reduce this latter period to 40 years so as to equate it with the period laid down in the 1874 Act for open contracts of sale of land.
The effect of sub-section (3) is to allow a person to prescribe (that is, to acquire title by exclusive user) against the State in respect of a period before the 6th December, 1922, or the 29th December, 1937. Thus, where a person remains in possession of land belonging to the State, as successors to the Crown, from, say, 1910, he may reckon the period from 1910 for the purpose of acquiring title by prescription. The position in law is somewhat doubtful at present. We think it only fair, however, that, where a person has been in exclusive and uninterrupted possession of former Crown land for 20 or 30 years before 1922, he should get the benefit of the interest he has acquired up to 1922. Deputies will remember that a provision in the State Property Bill, 1954, providing that a person could not prescribe against State property for any period before the 6th December, 1922, was deleted by Government amendment in the Seanad and the deletion was subsequently agreed to by this House. The period in the case of actions by the State to recover foreshore will continue to be 60 years.
Sections 14 to 17 deal with the date when the right of action to recover land is to be deemed to accrue in various types of cases such as present interests in land, future interests in land, etc. In other words, the sections lay down what is to be taken as the earliest date in each case when an action may be brought, and it is from this date that time is to run. The sections consolidate existing statutory provisions.
Section 18 provides that time is only to run where there is what is called "adverse possession," and the meaning of this term is defined to cover all cases of possession (against the owner) of some person in whose favour the period of limitation can run. Sub-sections (1), (2) and (3) put existing rules of law into statutory form. Sub-section (4) (a) makes non-payment of the rent by a person in possession of land subject to a rent-charge adverse possession of the rent-charge: and under sub-section (4) (b) receipt of rent by a person wrongfully claiming the reversion of land under a lease with an annual rental of not less than £1 shall be deemed to be adverse possession of the land. Both provisions alter the existing law.
Section 19, which is a rather technical section, provides for the cure of all defective disentailing assurances, and extends the provisions of Section 6 of the Real Property Limitation Act, 1874, which section replaced Section 23 of the Act of 1833. The existing statutory provisions are confined to cases where the purported disentail fails only to bar the interests of the remaindermen taking effect after the estate tail.
An example will illustrate what the object of the section in the Bill is. Where land is granted to A (usually designated the Protector of the Settlement) for life, then to B and his issue in tail, with remainder to C and his issue on the failure of B's heirs, B, with the consent of A, may, under the Irish Fines and Recoveries Act, 1834, by a deed enrolled in the High Court bar his own heirs and the remaindermen, C and his issue. When A dies, B will then get an estate in fee simple, and before A dies he can dispose of his interest to X who, when A dies, will then get the free simple. If, however, B does not get the consent of A, the deed simply bars B's heirs but not the remaindermen, C and his heirs, so that on failure of B's heirs, C and his heirs will obtain the estate. In such a case the deed creates what is known as a base fee. By reason of Section 7 of the 1874 Act, when such a fee is created, if B disposes of his interest in the land to X, and X enters into possession and remains in possession for 12 years after A's death, the title of X becomes absolute against any person claiming the estate as a remainderman. Therefore, after the 12 years, C or his heirs cannot in any circumstances oust X. But if B does not enrol the deed in the High Court his heirs are not barred, and Section 7 of the 1874 Act does not protect his disposition or assurance of the land to X, as the section only applies where a base fee properly so called has been created.
At one time it was thought that any defective disentailing assurance was protected, but the courts decided otherwise. The section of the Bill will apply, however, to any defective disentailing assurance made by a person capable of disentailing, not only where a base fee is created barring the issue but not the remaindermen but also where the assurance is ineffective to bar either the issue or the remaindermen. In other words the section proposes to protect X's interest in all cases where he has been in possession for 12 years after A's death.
It is to be noted that, under Section 42 (2), the operation of Section 19 may be excluded by an acknowledgment. Where X, the person in possession, acknowledges the title of the person to whom the right of action accrues (that is, within 12 years of A's death, admits that B's issue or the remaindermen (C and his issue), as the case may be, are entitled to the land because the disentailing assurance has not barred them) Section 19 does not apply. Where this happens, the acknowledgment revives the cause of action and the 12-year period runs against the person whose title is acknowledged from the date of the acknowledgment.
Section 20 which provides that no right of action is to be preserved in respect of formal entry on or continual claim to any land, Section 21 which provides that possession of one joint-tenant, etc., of land is not to be deemed possession of the others, Section 22 which prevents possession of a younger brother, etc., of land being deemed possession of the heir, and Section 23, which provides that administration shall date back to the death of the owner, reproduce existing statutory provisions.
Section 24, which also reproduces an existing statutory provision, is an important section in that it provides that, in the case of land (which includes a rent-charge on land), the title to the land shall be extinguished after the expiration of the period of limitation. Thus, where land is concerned, the right is extinguished when the remedy is barred. In other cases, such as in actions to recover ordinary debts, only the remedy is barred. I dealt with this matter earlier on, and I mention it again because I want to stress that it is very necessary to keep it in mind in examining the provisions of the Bill.
Section 25 deals with equitable estates in land and land held in trust. Sub-section (1) applies the provisions of the Bill in regard to legal estates to equitable estates. The sub-section is, however, to be read subject to Section 37 which prevents any period of limitation applying to an action by a beneficiary to recover trust property or the proceeds thereof in the possession of the trustee. Trustee in possession, because they hold the property for the benefit of and not adversely to the beneficiaries, cannot plead the Statute against the beneficiaries and we propose to continue that position. Sub-section (2) deals with the case of a stranger taking possession of land held by a trustee for another person. The stranger will be entitled to plead the Statute when he has been in possession for 12 years as his possession is adverse possession. Where the period of limitation for bringing an action by the trustee against such stranger has expired, sub-section (3), which is new to our law, provides that the estate of the trustee shall not be extinguished so long as any action of any beneficiary has not accrued or been barred. Then sub-section (4), which is also new, goes on to provide that the trustee may bring an action against the stranger on behalf of any beneficiary whose right of action has not been barred, notwithstanding that the ordinary right of action of the trustee himself has been barred.
The effect of the sub-sections, (3) and (4), is to suspend the operation of Section 24, so long as the right of action of any person entitled to a beneficial interest in the land or the proceeds of sale either has not accrued or has not been barred. Thus, where one beneficiary (A) is an infact at the time a stranger takes possession of the land, the right of action of such beneficiary does not accrue until he reaches the age of 21 years. The stranger by that time may have obtained a perfectly good title against the other beneficiaries due to the expiration of the 12-year period. The trustee may, however, still recover the land on behalf of A and, when he recovers it, he will hold it upon trust for A and the stranger, because the latter has acquired the interest of the other beneficiaries by lapse of time.
At present, a stranger obtains the legal estate subject to the interests of the beneficiaries except in the case of a trust for sale where, when the trustee's estate goes, the trust apparently goes also. We now propose that in all cases the estate remain in the trustee as long as there are any beneficiaries not barred, but this is only for the purpose of allowing the trustee to sue and recover the property on behalf of the beneficiaries who are not barred, but not on behalf of the other beneficiaries who, being barred by lapse of time, lose their title to the stranger.
Sub-section (5) prevents any kind of possession of land by one beneficiary under the Settled Land Act, 1882, or under any trust for sale from being adverse to the trustees or to the co-beneficiaries. In other words, a beneficiaries cannot acquire a title against the trustees or against the other beneficiaries by mere lapse of time, no matter whether the possession might under existing law be deemed adverse. At present, if the beneficiary can prove that he entered adversely to the trustees, time will run in his favour. One of the objects of the Bill is to ensure that a trustee or beneficiary in possession may not successfully plead the Statute against the beneficiaries not in possession in any type of case. The relationship established by a trust is a particular type of relationship and should receive particular treatment. A trustee or beneficiary has a specialised position which would allow him to take unfair advantage of other persons who have interests in the property if the law did not give those other persons proper protection.
Section 26 retains in sub-section (1) the existing period of six years in actions to recover arrears of a rent-charge but the term "action" here does not include proceedings under the Land Act, 1927, which are proceedings by the Land Commission to obtain from the sheriff possession of a holding which they have put up for sale and not sold. The Land Commission, as Deputies may be aware, have the powers of sale of a mortgagee and, where they are entitled to sell land or where land which they are entitled to sell has not been sold, they may be put in possession of the land. Sub-section (2) corresponds to a similar sub-section in Section 25, and its object is to ensure that the right of action of the beneficiary to secure payment of arrears of a rent-charge where the land is vested in the trustee shall be deemed to have first accrued at and not before the date the land is conveyed to a purchaser for valuable consideration and then only against the purchaser. The right of action never accrues against the trustee which means that he cannot ever pelad the Statute.
Under Section 27 the period for arrears of a conventional rent is also to be six years in every case. At present, if there is a lease under seal the person to whom the rent is owed can sue on the indenture and recover 20 years' arrears. Section 28 prevents the Land Commission from recovering more than six years' arrears of annuities on a warrant issued by them under the Land Act, 1933. This warrant is issued to the county registrar or sheriff. The warrant will, under the Bill, remain in force for six years and no longer.
Section 29 deals with actions to recover arrears of dower or damages in respect thereof and continues the existing period of six years. The right of dower is the right of the widow, where the husband dies intestate, to a third part of the husband's real estate for her life. Section 30 to 34 deal with actions in respect of mortgages.
The intention of Section 30 was to provide that an action claiming foreclosure was to be deemed an action to recover the land and not an action for the recovery of the money which it was at one time thought to be. As I mentioned earlier when dealing with Section 2, it has now come to our notice that legally there is no such thing as foreclosure in Ireland. So we propose, when Committee Stage is reached, to have Section 30 deleted and a new section inserted providing for an action by a mortgagee of land claiming the sale of the land as this is the type of action resorted to in this country.
Section 31 provides for a period of 12 years in a redemption action by a mortgagor where the mortgagee has been in possession of the land: at the expiration of the 12 years, the mortgagor's title is extinguished. This is the existing law under the Real Property Limitation Acts.
In Section 32 the period is also 12 years in an action to recover a principal sum secured by a mortgage or charge on land or personal property. There is at present no limitation period in the case of personal property. In the case of interest payable in respect of a principal sum secured by a mortgage or charge the period is six years under Section 33, and this is the period whether the money is charged on land or personal property. Future interests and insurance policies receive special treatment in both Sections 32 and 33 so that, where a sum is charged on, say, an insurance policy, the period of limitation will not begin to run until the policy matures.
Otherwise, the mortgagee who lends money on the strength of such a policy would in many cases be forced to realise the policy within the period of limitation or else lose his rights by default. Very often he would prefer to keep the policy alive until it matures for payment. Deputies will notice that in the case of mortgages, interest on which is payable into the Church Temporalities Fund, and in the case of charges on land under the Housing (Gaeltacht) Acts the period for recovery of the principal sum is 40 years instead of 12 years. This is in line with the policy of the Bill to provide a period of 40 years for the recovery of land or sums charged on land where the State is concerned.
Section 34 prevents the Agricultural Credit Corporation from recovering more than six years' arrears of interest due on foot of a chattel mortgage and the object of the section is similar to that of Section 28 in regard to the Land Commission. Sections 35 to 37 deal with actions in respect of trust property or the personal estate of deceased persons. Trustees (whether express or constructive) are brought within the Statute by Section 35 (1) and the definition of trustee in Section 2(1). At present, it is doubtful if constructive trustees are completely within the Trustee Act, 1888, and it has been held that an executor may plead the Statute even if he has retained the property, although an express trustee cannot. Where a period of limitation is not laid down in any other section, the period for a trustee is to be six years.
Section 36 provides a uniform period of 12 years in all actions to recover personal estate whether under a will or an intestacy, whereas at present the period is 12 years in the case of a legacy and 20 years in the case of an intestacy. In actions to recover arrears of interest in respect of a legacy, the period will continue to be six years.
Section 37 prevents any trustee relying on the Statute where the claim is founded on fraud or where, and this is very important, the trust property or the proceeds thereof are still retained by the trustee or previously received by him and converted to his own use. What the Bill seeks to do is to consolidate the existing relevant provisions of the Trustee Act, 1888, in regard to trustees and to apply them to all trustees.
Part III of the Bill provides for the extension of the limitation periods in the case of disability, acknowledgment, part payment, fraud and mistake. The provisions of the Bill in this respect are very comprehensive. Chapter I— Section 38—contains certain interpretation provisions; Chapter II—Sections 39 and 40—deals with disabilities; Chapter III—Sections 41 to 49—with acknowledgment; Chapter IV—Sections 50 to 57—with part payment; and Chapter V—Sections 58 and 59—with fraud and mistake.
Statutes of Limitation may sometimes cause hardship by preventing a person, entitled to sue, from suing by reason of the fact that during the period of limitation it is impossible or virtually impossible for him to initiate legal proceedings at the time when the cause of action arises. For instance, he may be subject to some legal incapacity, such as infancy or insanity, or the defendant may enjoy the benefit of diplomatic privilege, or the defendant may have gone abroad so as to place himself beyond the reach of legal process. In such cases the plaintiff is said to be under a "disability," and the policy of the law is to suspend the operation of the Statute for a fixed period or until the disability ceases.
The question of "disabilities" is complicated by the fact that the legal provisions governing the subject are for the most part scattered about in a number of enactments. Some Statutes of Limitation either contain no provision at all or else provide for disabilities of a special type. Section 20 of the Common Law Procedure Amendment Act (Ireland), 1853, lays down the periods of limitation applying in the majority of civil actions, and Section 22 of that Act sets out the various disabilities which arise. Those mentioned are: infancy, the position of a married woman, unsoundness of mind, absence of the plaintiff or the defendant beyond the seas. Coverture (or the position of a married woman under her husband's protection) and absence of the plaintiff beyond the seas ceased to be disabilities as a result of the Married Women's Property Act, 1882, and the Mercantile Law Amendment Act, 1856, respectively. Imprisonment was also a disability until it was abolished as such by the 1856 Act; but Section 8 of the Forfeiture Act, 1870, disables persons convicted of treason or felony, and sentenced to death or penal servitude, from bringing any action unless they are lawfully at large under licence or unless an administrator or curator of their property has been appointed.
The Bill proposes to make the law of disability uniform, and the disability of absence of the defendant beyond the seas is being abolished. We were of opinion that this latter type of disability is now of little practical value because defendants may be served with legal process outside the jurisdiction. Apart from this, the existence of the disability has given rise to difficulties of legal interpretation. It has, however, been represented to us since the Bill was circulated that we ought to reconsider the matter and this we are willing to do. By the way, a modern enactment which specifically provides for the disability is the Moneylenders Act, 1933, and the relevant provision in Section 19 of that Act is listed in the Schedule of Repeals to the Bill.
Section 39 sets out the three forms of disability which will apply in every case. These are infancy, insanity and conviction subject to the operation of the Forfeiture Act, 1870, where no curator or administrator has been appointed.
Section 40 provides in sub-section (1) that, where any person is under a disability when a right of action accrues to him, the action may be brought at any time within six years of the date when the disability ceased or the person died, subject to the proviso that no action to recover land shall be brought after the expiration of 30 years from the date on which the right of action accrued. Under sub-section (2) the period of limitation will not be suspended in the case of personal injuries actions (which must be brought within three years) if the person under the disability is in the custody of a parent at the time the right of action accrued to him: where he is not in the custody of a parent, he may take his action within three years of the ceasing of the disability. The reason for this provision is that personal injuries actions are actions which should be taken fairly soon after accrual in view of the danger of evidence being lost or becoming vague after a long lapse of time; and, where the person injured is in the custody of a parent, the parent may, after all, sue on his behalf. A similar rule is being applied in regard to slander actions.
Chapter III (Sections 41 to 49) of Part III of the Bill is designed to ensure that the law as to acknowledgment will be the same in all types of case. The doctrine that a right of action upon a simple contract debt might be revived by acknowledgment was purely judge-made and the decisions of the courts were directed to what has been called "the task of decorously disregarding an Act of Parliament". The doctrine first received statutory recognition in the Statute of Frauds Amendment Act, 1828, known as Lord Tenterden's Act, which provided that only an acknowledgment in writing, should take the case out of the Statute. In 1856, the Mercantile Law Amendment Act made acknowledgment by an agent as effective as one by his principal. It was judicially decided that an acknowledgment did not revive a debt unless it contained, expressly or impliedly, a fresh promise to pay and this continues to be the material element necessary to take a case out of the Statute where a simple contract debt is involved. Under Section 23 of the Irish Common Law Procedure Amendment Act, 1853, an action upon a speciality debt may be brought within 20 years after an acknowledgment has been made—the acknowledgment need not involve a fresh promise to pay and means merely an admission that the debt is due. Under the Bill, this rule in regard to acknowledgment of speciality debts is being adopted for all debts. Acknowledgment in the case of actions to recover land or money charged thereon is provided for in the Real Property Limitation Acts. The acknowledgment must be in writing and there is no need to have an express or implied promise to pay.
Sections 42 to 46 of the Bill more or less consolidate the law as to acknowledgment in the different classes of case where it can arise. Section 45, however, reverses the rule with which I have already dealt, that acknowledgment is ineffective in the case of simple contract debts unless it involves an express or implied promise to pay. We propose on Committee Stage to delete Section 43 and substitute a new section covering an action by a mortgagee claiming sale. As I have already explained foreclosure is unknown in Ireland.
Section 47 lays down the formal requirements for acknowledgment. The acknowledgment must be in writing and may be made by an agent or to an agent. At present, an acknowledgment by an agent is not effective against the principal in possession or the mortgagee in possession in the case of land or a rent-charge: to be effective it must be given by the principal or mortgagee. Also, an acknowledgment of a speciality debt made to a third party appears to be sufficient under the existing law.
Section 48 deals with the effect of acknowledgment on persons other than the acknowledgor or recipient. Sub-section (1) lays down the general principal that an acknowledgment of title to any land or mortgaged personalty by a person in possession thereof shall bind all other persons in possession during the ensuing period of limitation. Sub-section (2) provides that an acknowledgment by one of two or more mortgagees shall only bind the acknowledgor and his successors.
Sub-section (3), however, is to the effect that, where there are two or more mortgagors, acknowledgment to one shall be acknowledgment to all. Sub-sections (2) and (3) repeat the relevant provisions of Section 7 of the Real Property Limitation Act, 1874, and extend them to all mortgaged property whether land or personality. Sub-section (4) (a) makes the acknowledgment of a debt binding on the acknowledgor and his successor but not on any other person. This provision will clear up a point which has given rise to some difficulty. It would appear that under the existing law an acknowledgment of a specialty debt binds the co-debtors, whereas an acknowledgment of a simple contract debt does not.
Paragraph (b) of sub-section (4) provides for an exception to paragraph (a) in that an acknowledgment made after the period of limitation has expired will not bind any successor of the acknowledgor on whom the liability devolves on the determination of a preceding estate or interest in property under a settlement taking effect before the date of the acknowledgment. The type of case covered by this exception is as follows: Land, already subject to a mortgage, is settled on A for life, with remainder to B. Once the period of 12 years has elapsed without an acknowledgment, an acknowledgment by A will not revive the mortgagee's rights against B. The exception is already recognised under existing legal decisions, and the Bill will simply give statutory form to the legal rule to be deduced from these decisions.
Sub-section (5) also gives statutory form to an existing legal rule which says that acknowledgment by one of several executors or administrators of any claim to the personal estate of a deceased person shall bind the estate, though it will not involve the other executors or administrators in any personal liability. It is to be noted that an acknowledgment made after the period of limitation has run will only, as at present, be effective where, though the remedy is barred, the right is not extinguished. In actions to recover land the title is, under Section 24, extinguished after the expiration of the period of limitation, and acknowledgment will, therefore, have no effect in such cases.
Chapter IV of Part III of the Bill provides for part payment. Part payment is really a form of acknowledgment where the right of action is in respect of a debt, and the law is more or less the same as that of acknowledgment.
Sections 51 to 54 cover part payment in the various cases in which it can arise. It will be necessary, of course, to amend Section 51 so as to omit references to foreclosure. Section 53 reverses as regards simple contract debts the rule that part payment is not effective unless there is an express or implied promise to pay.
Section 55 lays down the formal provisions as to part payment. Payment may be made by a principal or agent to a principal or agent.
Section 56 deals with the effect of part payment on persons other than the maker. Sub-section (1), which corresponds to sub-section (1) of Section 48 in regard to acknowledgment, provides that a part payment of a mortgage debt by the mortgagor or any person in possession shall bind all persons in possession during the ensuing period of limitation. Under sub-section (2) (a) a part payment of a debt or other liquidated pecuniary claim will bind all persons liable in respect thereof. As I explained when dealing with acknowledgment, an acknowledgment will only bind the acknowledgor and his successors, Section 48 (4) (a). The ground for this distinction between part payment and acknowledgment is that a part payment operates for the benefit of all persons bound, there being a diminution of the total of the liability of all the co-debtors on part payment by one of them; and if they take the benefit they should take it with its accompanying disadvantages. No such consideration applies in the case of acknowledgment by one of the persons bound. At present a part payment does not affect a co-debtor in any case, whereas an acknowledgment of a specialty debt would appear to bind a co-debtor.
Sub-section (2) (b) deals with part payments made after the period of limitation has expired, and the effect will be the same as in the case of similarly made acknowledgments, which are provided for in sub-section (4) (b) of Section 48. A part payment by one of several personal representatives binds the personal estate of the deceased under sub-section (3) in the same way as an acknowledgment.
Section 57, which repeats existing statutory provisions, provides that no endorsement or memorandum of any payment written upon any bill of exchange or promissory note by or on behalf of the creditor shall be deemed to be evidence of such payment.
Chapter V of Part III of the Bill, which deals with fraud and mistake, clears up a number of anomalies in the existing law. The doctrine of fraud is a doctrine of the old courts of equity, and the effect of fraud was to postpone the running of time until the person injured thereby had discovered the fraud or ought to have discovered it. In equity, the cause of action springs from the fraud of the defendant or else the existence of the cause of action may have been concealed from the plaintiff by the fraudulent conduct of the defendant. In other words, there may either be fraud or what is called "concealed fraud". It is obviously unjust that a defendant should be permitted to rely upon a lapse of time caused by his own misconduct.
Unfortunately, the existing state of the law is far from clear, and it is uncertain in many cases whether a fraudulent defendant may or may not be able successfully to plead the Statute. The Real Property Limitation Act, 1833, provided in Section 26 that the right to bring a suit in equity for the recovery of land was to be deemed to accrue in the case of concealed fraud only when the fraud was, or could with reasonable diligence have been, discovered. To come within this provision, concealed fraud has to be fraud by which the claimant or his predecessors were deprived of the land or rent.
At common law, neither fraud as part of a cause of action nor the fraudulent concealment of a cause of action was a ground for postponing the running of the period of limitation. Though the Irish Judicature Act of 1877 would seem to have put an end to the difference between the rules of the common law and the rules of equity by enacting that the rules of equity should always prevail, these latter rules would not appear to prevail in cases formerly exclusively within the jurisdiction of courts of law, e.g., the common law action of deceit. A somewhat similar position arises in cases where relief is sought from the consequence of mistake, e.g., when money is paid or property transferred under a mistake. The equitable rule is that time should only run from the time at which the mistake was, or could with reasonable diligence have been, discovered, but this rule does not apply in cases formerly within the exclusive cognisance of a court of law. The Bill proposes to resolve the conflict between law and equity as regards fraud and mistake and the equitable doctrines of fraud and mistake are extended to cover all actions.
Section 58 provides that, where an action, for which a period of limitation is fixed by the Statute, is based on the fraud of the defendant or the right of action is concealed by his fraud, the period of limitation shall not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it. Sub-section (2), which follows the proviso to Section 26 of the Real Property Limitation Act, 1833, makes an exception in favour of a bona fide purchaser for value and, where the property has been purchased by such a person, it will not be affected by fraud or concealed fraud under sub-section (1).
Section 59 provides, similarly, that, where in the case of any action for which a period of limitation is fixed by the Statute, the action is for relief from the consequence of mistake, the period of limitation shall not run until the plaintiff has discovered the mistake or ought with reasonable diligence to have discovered it—sub-section (1). Sub-section (2) then goes on to make an exception in favour of a bona fide purchaser for value.
Part IV (Sections 60 to 67) applies the proposed legislation to arbitrations and simply re-enacts the existing provisions of the Arbitration Act, 1954. The relevant sections of the 1954 Act (which are being repealed in the Schedule to the Bill) are more proper to a Limitation Act.
Perhaps in going into the Bill in the detail which I thought to be necessary, there is a danger that Deputies who are not familiar with the subject have found themselves somewhat at sea in trying to keep the general picture in mind. May I, therefore, state very briefly the main objects of the Bill?
First of all, the Bill proposes to prescribe general and uniform periods of limitation in the case of actions and arbitrations. The Bill applies to all actions whether in equity or law, but Section 5 contains a saving for "any equitable jurisdiction to refuse relief on the grounds of acquiescence or otherwise". The Bill will apply to the State and State authorities but will not apply to the recovery of taxes and duties under the care and management of the Revenue Commissioners.
Secondly, the Bill sets out the various limitation periods for different classes of actions. In ordinary common law actions of contract and tort the period will be six years in all cases except (a) actions on documents under seal, where the period will be 12 years; (b) actions for personal injuries where the period will be three years; and (c) actions for slander where the period will be two years in all cases. In actions to recover land the period will be 12 years, but in actions by a State authority the period will be 40 years instead of 60 years as at present. In actions to recover rent arrears, interest on mortgages, etc., the period will be six years. The Statute will apply to constructive trustees in the same way as it now applies to express trustees. In every case where the court formerly acted in obedience, though not in express obedience, to the Statute it will now act in express obedience.
Thirdly, the Bill provides for the extension of the general periods of limitation in cases of disability, acknowledgment and part payment, and fraud and mistake. These extensions are common to all actions comprised in Part II with some small exceptions contained in Section 40 in regard to disability. The provisions are designed to replace by a single code the various and inconsistent provisions in existing Acts. They apply to cases where under the present law the period of limitation is not subject to any extension at all. Acknowledgment or part payment need not imply a promise to pay in any type of case. Acknowledgment will not bind co-debtors or co-contractors whereas part payment will. The differences between the rules of common law and the rules of equity in regard to fraud and mistake are resolved.
Finally, the provisions of the Arbitration Act, 1954, applying the provisions of the Statutes of Limitation to arbitrations are being repealed and re-enacted.
There has for many years been need for a modern Act to deal with the limitation of legal actions. As a legal writer has recently remarked:
"The Irish law concerning the limitation of actions is far from satisfactory. In some particulars it stands in need of reform, on numerous points it needs to be clarifield, and it would undoubtedly be a benefit both to the layman and the lawyer if it were codified."
The present Bill is designed to provide the proper remedy.