In calculating the limitation period of when an action accrues, there is long-standing authority for the proposition that the day on which an action accrues is not counted for limitation. In Matthew v Sedman, the question before the Court of Appeal was “Does a cause of action accrue at midnight, or just after the midnight deadline expired and therefore during the day?”
The underlying proceedings at first instance concerned the calculation of the limitation period for a claim against trustees. The claimants were the current trustees and beneficiaries of a trust who brought proceedings against the trust’s former trustees for failure to claim under court-sanctioned schemes of arrangement (the Schemes). The Schemes included provisions for shareholders (of which the trust was one of them) to make claims. In summary, the relevant part of the Schemes stated:
- Claims under the Schemes had to be submitted “on or prior the Bar Date”.
- The Bar Date was defined as “the first business day falling three months after the Effective Date”, which was 2 March 2011.
- Consequently, the Bar Date was 2 June 2011. Therefore, to be made in time, a claim in the Schemes needs to be made by midnight of 2 June 2011.
The defendants failed to submit a claim on the claimants’ behalf before the end of the Bar Date, thereby preventing the claimants from claiming under the Schemes. Accordingly, the claimants commenced an action against the defendants for negligence by issuing proceedings on Monday, 5 June 2017. Justice Hodge held that the claimants’ claim was time-barred, being outside the 6-year limitation period for a claim of professional negligence and that the last day of the limitation period was Friday, 2 June 2017.The claimants appealed and argued that in a “midnight deadline” case, the claim does not accrue at midnight but after midnight (referred to by the claimants as the “nanomoment”) and thus (however shortly) into the day following midnight.
Ultimately, the Court of Appeal, having considered and distinguished a multitude of cases going back 100 years, rejected the claimants’ argument and confirmed that in cases where there was a midnight deadline for doing something, it was incorrect to attribute the accrual of the cause of action to the date after the expiry of the midnight deadline.