NOTES ON LIMITATION (AMENDMENT) BILL

Section 1

1. The purpose of the amendments to the Limitation Act, 1969, is to clarify the effect of provisions of that Act, so as to ensure that the effect of them accords with the intent of the legislation. The amendments are retrospective to the commencement of that Act. The Limitation Act, 1969, was proclaimed to commence on the first day of January, 1971 (Government Gazette No. 106 of 21st August, 1970).

Section 2 (a)

2. No comment is necessary.

Section 2 (b)

3. Section 2 (b) substitutes a new section 6 for section 6 as enacted by the Limitation Act, 1969. The substantial difference between those sections is that -the substituted section omits the provision that the section is subject to section 26 and directly provides that the section does not apply to a cause of action for contribution to which section 26 applies (see paras. 8, 11 and 12 of this report).

Sections 2 (c), 2 (d)

4. Paragraphs (c) and (d) of section 2 amend section 26 of the Limitation Act, 1969, by incorporating in that section specific provisions in respect of contribution actions under section 5 (1) of the Law Reform (Miscellaneous Provisions) Act, 1946, where, immediately before the commencement of the Act, the cause of action was not already statute-barred. The effect of these amendments is that a person who has, at the commencement of the Limitation Act, 1969, a cause of action for contribution under section 5 (1) of the Law Reform (Miscellaneous Provisions) Act, 1946, cannot be prejudiced, in suing upon the cause of action, by the coming into operation of the Limitation Act, 1969.

5. Section 26 of the Limitation Act, 1969, as originally enacted or as amended if our proposal is implemented, does not, except for its own purposes, alter the date of accrual of a cause of action for contribution. This requires explanation. On the present state of judicial decisions it is uncertain whether contribution under section 5 (1) of the Law Reform (Miscellaneous Provisions) Act, 1946, is recoverable only by a tortfeasor whose liability has been ascertained by judgment in an action against him (see paras. 155 and 157 of Appendix C to our first report). The question whether a tortfeasor whose liability has been established by arbitral award, or who has agreed to make payment in settlement of the claim against him, can recover contribution under that section, is not finally resolved (Brambles Constructions Pty Ltd v. Heimers (1966) 114 C.L.R. 213: George Wimpey & Co. Ltd v. British Overseas Airways Corporation [19551 A.C. 169: Bitumen and Oil Refineries (Australia) Ltd v. Commissioner for Government Transport (1955 (92) C.L.R. 200 at 211). Section 26 (2) of the Limitation Act, 1969, provides (inter alia) that the cause of action accrues, for the purposes of the two year limitation period provided by section 26 (1) (a), on the date of the making of such an arbitral award or, as the case may be, such a settlement agreement. This, however, does not alter the accrual date for other purposes. Resolution of the question whether a tortfeasor, whose liability has been established by arbitral award or who has agreed to make payment in settlement, can recover contribution, under section 5 (1) of the Law Reform (Miscellaneous Provisions) Act, 1946, falls outside the reference to us. Accordingly section 26 (4) of the Limitation Act, 1969, provides that nothing in the section affects the construction of section 5 of the Law Reform (Miscellaneous Provisions) Act, 1946. If the courts finally resolve the question by deciding that on the proper construction of that section, an arbitral award or settlement agreement can found a cause of action for contribution, the date of accrual of the cause of action will, for the purposes of section 26, be as provided by section 26 (2) of the Limitation Act, 1969. It is unlikely that, on that construction, the courts would arrive at an accrual date which differs from that provided by section 26 (2) of the Limitation Act, 1969. Section 26 (2), however, leaves no room for doubt as to what is, on that construction, the accrual date for the purposes of the section. The court may, on the other hand, finally determine that an arbitral award or settlement agreement cannot found a cause of action for contribution under section 5 (1) of the Act of 1946. In that event the references in section 26 (2) to arbitral award and settlement agreement are otiose. Section 26 (2) does not create any new cause of action; and it is expressly provided by section 26 (4) that nothing in section 26 affects the construction of section 5 of the Law Reform(Miscellaneous Provisions) Act, 1946.

Section 2 (e)

7. See paras. 37-41 of this report.

Section 2 (f)

8. Section 2 (f) inserts a new section, section 68A, in the Limitation Act, 1969. As to this section see paras. 13-30 of this report.

9. Section 68A (1) provides that a party to judicial proceedings must, if he is to have the benefit of the extinction, plead or otherwise specifically rely upon it. In most courts, the rules of pleading or procedure of the court will require that the extinction be pleaded or at least that notice of intention to rely upon the extinction be given. Where rules of pleading or procedure do not require a party to take such a course, the party will not have the benefit of the extinction unless he specifically claims, in the proceedings, that the relevant right or title has been extinguished. He may choose not to do so.

10. Section 68A (2) gives an extended meaning to “judicial proceedings”. This is necessary because it is not always clear in law whether a tribunal is a court; and also because it is desirable to extend the operation of section 68A (1) to proceedings before such a person as an arbitrator who is not a court, but who is empowered, pursuant to the arbitration agreement, to determine the relevant question by his award.

11. The consequences of a party to judicial proceedings not specifically relying upon the extinction may extend to persons other than the parties. Judgment in court proceedings, or an award in arbitral proceedings (Fidelitas Shipping v. VIO Exportchleb Co. Ltd [1965] 2 All E.R. 4), and any estoppel arising from the proceedings (Jackson v. Goldsmith (1950) 8t C.L.R. 446: Mraz v. The Queen [No. 2] (1956) 96 C.L.R. 62: Somodai v. Australian Iron and Steel Ltd.[1961] S.R. 305) bind not only the parties but their “privies”. But successors in title are not necessarily “privies” for this purpose.

“In order that a judgment may be conclusive against a person as privy in estate to a party litigant it is necessary to show (apart from his taking with a notice of a pending action) that he derives title under the latter by act or operation of law subsequent to the recovery of the judgment, or at least to the commencement of the proceedings, and that the judgment was one affecting the property to which title is derived. Purchasers of land are not estopped by proceedings commenced after the purchase; and a judgment obtained against the mortgagor of land after completion of the mortgage, setting aside his purchase of the land on the ground of fraud, is not even evidence against the mortgagee who was not a party to the action.” (Halsbury's Laws of England, 3rd edn. (1956), Vol. 15 at 198).

12. A case tried in a foreign court may be so connected with New South Wales that, applying the common law principles of the conflict of laws, the court would determine the rights of the parties in accordance with the substantive law of New South Wales (lex causae). The question could then arise whether the foreign court would apply section 68A. This would depend upon whether section 68A is construed as creating a substantive qualification of the extinction of right and title--even though it refers to matters of procedure. If it is a substantive qualification, the qualification would be applied by the foreign court-because (he qualification is part of the substantive law of New South Wales (lex causae). If it is not a substantive qualification but is merely a provision as to procedure, the foreign court would not apply section 68A. It would apply its own rule's of procedure. The law is in so confused a state as to the principles for determining whether a provision is substantive or merely procedural that the question cannot be answered with confidence (see generally Dicey and Morris, The Conflict of Laws, 8th edn. (1967), at 1089-1109: Nygh, Conflict of Laws in Australia (1968), at 239-257: Pedersen v. Young (1964) 110 C.L.R. 162). However, if a person having a cause of action chooses to sue in a foreign court, it is he who raises the question. The question does not arise if he sues in a court of New South Wales.

Section 3

13. Section 75 of the District Courts Act, 1912, provides (inter alia) that-

“(1) No defendant in a District Court shall-

(c) be allowed to set up by way of defence, and to claim, and have the benefit of...

(iv) any Statute of Limitations...


unless notice of such defence, as directed by the rules of court, is given to the registrar.”

Some doubt as to whether this provision is adequate to require notice to be given of statutory extinguishment of right or title arises from dicta in cases concerning the Imperial Real Property Limitation Act 1833 which suggests that the extinction is not a matter of “defence” as the plaintiff has the onus of proving a title which has not been extinguished. Section 3 would amend section 75 of the District Courts Act, 1912, so as to remove any doubt as to the necessity of giving the notice.