Summary

The appellants were allowed to pursue the claim, brought outside the six year time limit, by virtue of s21(1)(b) Limitation Act 1980, which was wide enough to include circumstances where the relevant transfer was to a company directly or indirectly controlled by the trustee.

The Facts

  • The appellant (the Company) sought to overturn the summary judgment that its claim against its former directors was time-barred. The claim related to the distribution of the Company’s 30% shareholding in one of its subsidiaries, which occurred on 12 October 2007
  • The Company then went into administration, and on 15 October 2013 brought proceedings against the former directors
  • It was not disputed that the claim was issued more than six years after 12 October 2007
  • The Company argued that the claim was exempt from the six year limitation period because at least one of sections 21(1)(a); 21(1)(b); and/or 32(1)(b) Limitation Act 1980, applied.

Decision

The appeal was allowed on the grounds that no period of limitation applied by virtue of s21(1)(b), which provided that ‘no period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee‘.

This included circumstances where the relevant transfer was to a company directly or indirectly controlled by the trustee. Alternatively, the issue as to whether a postponed limitation period might be available under s32(1)(b) because the right of action had been concealed from the plaintiff by the defendant, was not one capable of being determined on an application for summary judgment.

Burnden Holdings (UK) Ltd (in liquidation) v Fielding and another [2016] EWCA Civ 557