Matthew & Ors v Sedman & Ors [2021] UKSC 19

Trustees failed to submit a claim in a financial scheme by the midnight deadline of 2 June 2011. Beneficiaries sued on 5 June 2017. The Supreme Court held that in midnight deadline cases, the day following midnight counts as a complete day for limitation purposes, meaning the claim was statute-barred.

Facts

The respondents were professional trustees of a trust established under the 1948 will of Mrs Evelyn Hammond. The trust held shares in Cattles plc, which underwent a scheme of arrangement following financial difficulties. Under the Welcome Scheme rules, claims had to be submitted on or before the ‘Bar Date’ of Thursday 2 June 2011. The respondents failed to submit a claim by this deadline. The appellants (replacement trustees and beneficiaries) commenced proceedings on Monday 5 June 2017, claiming breach of trust and negligence.

The Limitation Question

The central issue was whether Friday 3 June 2011 should be included or excluded when calculating the six-year limitation period under sections 2, 5 and 21(3) of the Limitation Act 1980. If included, the limitation period expired on 2 June 2017, making the claim statute-barred. If excluded, the period expired on 3 June 2017 (a Saturday), extending the deadline to Monday 5 June 2017.

Issues

Whether in a ‘midnight deadline’ case, the day immediately following the midnight hour at which the cause of action accrued should be included or excluded from the calculation of the limitation period.

Judgment

The Supreme Court unanimously dismissed the appeal. Lord Stephens, delivering the judgment, held that Friday 3 June 2011 should be included in the calculation.

The General Rule and Its Rationale

Lord Stephens acknowledged the general rule that where a cause of action accrues part-way through a day, that day is excluded from the reckoning of time. He explained:

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 a fraction of a day.

The Midnight Deadline Exception

However, Lord Stephens held that this rationale does not apply to midnight deadline cases where there is a complete, undivided day available to commence proceedings:

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.

He endorsed the decision in Gelmini v Moriggia [1913] 2 KB 549 as establishing an exception to the general rule for midnight deadline cases, stating:

I consider that Gelmini is an exception to the general rule so that any part of a day (but not a whole day) happening after the cause of action accrues is excluded from the calculation of the limitation period for the purposes of the provisions of the Limitation Act with which this appeal is concerned.

Policy Considerations

Lord Stephens noted that excluding 3 June 2011 would effectively extend the limitation period to six years and one complete day, which 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.

Implications

This judgment clarifies the computation of limitation periods in ‘midnight deadline’ cases under the Limitation Act 1980. It establishes that where a cause of action accrues at or immediately after midnight, the following day counts as the first day of the limitation period because it represents a complete, undivided day during which proceedings could be commenced. The decision distinguishes such cases from those where the cause of action accrues part-way through a day, where that day is excluded to prevent prejudice to claimants who would otherwise lose a fraction of their limitation period. The ruling has significant practical implications for calculating limitation deadlines, particularly in cases involving contractual deadlines or statutory time limits that expire at midnight.

Verdict: Appeal dismissed. The Welcome Claim was statute-barred as the six-year limitation period expired on 2 June 2017, having commenced on 3 June 2011 which was included in the calculation as a complete undivided day.

Source: Matthew & Ors v Sedman & Ors [2021] UKSC 19