Judge Says It’s “Clear” that Limitations Act, 2002 Has Removed Discretion to Provide Relief from Limitation Periods

Although the issue seems to be far from settled in the minds of some judges, Mr. Justice C. Stephen Glithero made the following unequivocal statement in Hughes v. Kennedy Automation Limited about the effect of s. 21(1) of the Limitations Act, 2002:

It is also clear that the enactment of the Limitations Act, 2002 removed any previously existing discretion on the part of the court to provide relief from limitation periods, and that instead the language of section 21(1) is mandatory and prohibits the commencement of a claim or the adding of new parties to an existing claim once a limitation period has expired.

Regular readers of this blawg will be aware that there have been quite a few cases decided since January 1, 2004 (when the Limitations Act, 2002 came into force), in which parties have been added as defendants after the expiry of the limitation period, based on the former “special circumstances” discretion. (See here, for example.) In most of those decisions, the judges and masters seem to have been unaware that s. 21(1) of the current Act provides that “[i]f a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.”

In a case in which our office was involved, Clark v. Reich, a motions judge held that it was not clear whether s. 21(1) had done away with the “special circumstances” power. She said, “despite the apparently unequivocal language of s. 21(2) [sic, should read “s. 21(1)”] of the Limitations Act, 2002, I am not persuaded that it is ‘plain and obvious’ that there could never be a discretionary extension of the Trustee Act time limit because of special circumstances”. In dismissing a motion for leave to appeal from that decision, another Superior Court justice was satisfied that it was not “plain and obvious that s. 21(1) removes the availability of the special circumstances doctrine”.

The matter certainly does seem to have been “plain and obvious” to Justice Glithero, making it rather difficult to sort out what the law actually is on this point.

However, the uncertainty should be dispelled by the Court of Appeal’s decision in Meady v. Greyhound. We understand that the appeal in that case has been argued and that a decision is pending. (Meady was one of the cases that has held that s. 21(1) has taken away the former “special circumstances” discretion.)

In Hughes, the plaintiff was trying to add as a defendant in a commercial case the law firm that acted for the vendor on a sale of shares. Justice Glithero dismissed the motion, finding that the claim was prescribed and that s. 21(1) had removed any judicial discretion to avoid the application of the limitation period.

The reasons for judgment do not suggest that Justice Glithero’s unequivocal interpretation of s. 21(1) was challenged by counsel for the plaintiff. Instead, the dispute revolved around whether or not the plaintiffs’ claim was saved by the discoverability principle.

The case involved a transaction which closed on July 30, 2005. It was not until November, 2007, that counsel for the plaintiffs first sought to join the law firm as a defendant. However, Justice Glithero was satisfied that the plaintiffs knew, by July, 2005, that they had not been paid what was owing to them. They also knew the identity of the solicitors for the vendor of the shares. His Honour said that “due diligence would have led them to seek legal advice as to any potential liability arising from those alleged shortcomings within a time frame well within the limitation period.”

Accordingly, the motion to add the law firm was dismissed.


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