§ 5.10 p.m.
The Earl of Gowrie
rose to move, That the draft order laid before the House on 4th February be approved.
The noble Earl said: My Lords, limitation of actions is not the least technical branch of our law, nevertheless it is important not only to practising lawyers but to all whose business takes them into our civil courts. The main purpose of the law in this area is to prevent the bringing of stale actions and to relieve potential defendants of the burden of defending claims on which the dust has settled. The order implements almost all of the recommendations contained in the Law Reform Committee's final report on the law of limitation of actions and corresponds to the Limitation Amendment Act 1980 which introduced similar provisions for England and Wales.
If I may turn now to the content of the order, the House will be relieved to hear that I do not propose to describe each article in detail, but it might be helpful if 1 highlighted the more important changes in the law that this order brings about. Article 4 deals with the difficulty that has arisen in the law relating to the repayment of loans, particularly loans between members of a family or friends. The present law is that the lender's cause of action for recovery of the loan begins at the time when the loan is made, which means that he will lose his right to recover the money six years later. The effect of Article 4 is that time will not begin to run against the lender until he has made a written demand for repayment. This is a solution more appropriate to the relatively informal arrangements of the sort that prevail in some family circumstances.
Article 5 deals with the rights of the owner whose property is stolen. The present law is that an owner of goods loses his right to recover them from the thief six years after the property is stolen. There is no justification in principle for giving a thief good title, as it were, to the property as against the owner, at that or any other date.
The Earl of Gowrie
My Lords, I am glad to have that learned applause at this point. Article 5 remedies that injustice so that a thief can no longer set up a defence of limitation, but protects a subsequent purchaser for value who has acted in good faith.
Article 7 deals with that branch of land law known as adverse possession. In future, when determining whether occupation of land is adverse to the owner's rights, thereby leading to the extinguishment of his title, the courts will be obliged to look at the actual facts of the case before holding that an implied licence has been granted by the owner to occupy the land—such a licence would prevent extinguishment of his title. This article has been found necessary in order to clear up any misunderstandings there might have been due to recent decided cases. Article 9 provides that no acknowledgment or part payment made in respect of a claim after the expiry of the relevant limitation period shall operate to revive a remedy that has 1208 already become statute-barred. That will reverse the existing rule.
I come now to Article 14, which does not appear in the order as it was published as a proposal. Its inclusion arises as a result of representations made by members of the Northern Ireland judiciary and legal profession after the consultation period for the order had ended. It was represented to me that the limitation rule in respect of claims against the Land Registry insurance Fund (a fund designed to compensate persons who suffer loss as a result of mistakes in the registry) was such as was liable to cause injustice. Having examined the existing limitation period, which is that claims must be brought within six years of the date of the erroneous registration, I was persuaded that this can indeed lead to cases of injustice, for it can easily arise that the mistake might not come to light until after the expiry of the limitation period due to the length of time that may elapse between transactions in one piece of property. Accordingly, I have decided to insert Article 14 into the present order, which lays down a new principle in respect of claims against the Land Registry Insurance Fund. Time will not begin to run until the date when the claimant discovers the mistake or could with reasonable diligence have discovered it. I hope that your Lordships will agree that this is a more equitable rule which effectively means that the limitation period does not commence until the mistake is discovered.
Due to the need to reconsider the representations to which I have referred, and then to settle on the appropriate reformulation of the legislation, there has been, I am afraid, some little delay in the order coming before your Lordships' House. However, out of the delay has come a positive proposal which commands the support of the legal profession and which I believe has to some degree justified that delay. This order is an important piece of law reform legislation which introduces timely amendments and updates the law of limitation of actions. 1 beg to move.
Moved, That the draft order laid before the House on 4th February be approved.—(The Earl of Cowrie.)
§ Lord Blease
My Lords, I am advised by my friends that this is a very useful piece of law reform. I am aware of the consultations which the noble Earl the Minister entered into earlier, when he came to Northern Ireland, and of the amount of useful change he made to the original proposals. From this side of the House, we welcome the order.
§ Lord Elwyn-Jones
My Lords, I should like to echo what has been said by my noble friend Lord Blease. There is a certain air of familiarity about this; we have been working on this for some years and it is excellent that the initiative has been taken to extend the reform to Northern Ireland.
The Earl of Gowrie
My Lords, I am very grateful for the remarks made by the noble Lord, Lord Blease, and by his noble and learned friend Lord Elwyn-Jones.
On Question, Motion agreed to.