The normal primary limitation period of six years applies to claims against a dishonest accessory to a fraudulent breach of trust where the defendant is a stranger who dishonestly participates in the breach of trust and is unaffected by a pre-existing trust relationship. The exception to the normal period of limitation for actions in respect of trust property in s21(1)(a) Limitation Act 1980 only applies to a breach of a trust by an express trustee.
The first defendant, Nigel Pollard, was a solicitor who dealt with the administration of an estate. The second defendant was his wife. Between 1987 and 1996, Mr Pollard misappropriated about £317,000 of estate assets. The trustees brought proceedings against the defendants for this sum and entered judgment against Mr Pollard. They subsequently brought proceedings against Mrs Pollard for damages or equitable compensation arising from her knowingly and dishonestly assisting her husband in the breaches of trust.
The court rejected Mrs Pollard’s defence that the claim against her was time-barred. Whilst the general six year period for fraud applied to the claim against her, s21(3) Limitation Act applied to postpone the running of the primary period of limitation in relation to beneficiaries with future interests in the estate and an action by a beneficiary under that section included, at least by analogy, actions brought exclusively on their behalf by trustees who had no personal interest in the outcome. Additionally, s32 also applied to postpone the running of the primary period of limitation until after the date on which the trustees could with reasonable diligence have discovered Mrs Pollard's dishonest participation in the fraud.