News
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Court Reviews Limitation Periods for Issue of Third-Party Notices
On December 19 2006 Deemster Doyle handed down judgment in a case dealing with the limitation period for the issue of a third-party notice where the primary limitation period between the plaintiff and defendant had expired.
Facts
The plaintiff and the defendant had agreed to extend the three-year limitation period for commencing a personal injury action. By consent of both parties proceedings were issued one year and two days after the expiry of that limitation period.
As the proceedings were commenced outside the usual limitation period, by agreement with the plaintiff the defendant did not plead the defence of limitation. Interlocutory judgment (but not in respect of quantum) between the plaintiff and the defendant was agreed by consent without prejudice to the defendant's right to claim a contribution against another party and without any assessment of the amount.
Both the agreement to extend the limitation period and the subsequent interlocutory consent order took place without the knowledge or consent of the third party. Third-party proceedings were commenced and the third party applied to the court for an order to strike out the third-party notice on the grounds that, because the primary limitation period between the plaintiff and the defendant had expired, the proceedings against it by way of contribution notice were jurisdictionally flawed.
Decision
The court analyzed the Manx provisions in respect of limitation periods and claims of contribution (ie, the Limitation Act 1984 and the Civil Liability (Contribution) Act 1981). It heard submissions in respect of the proper interpretation to put on the relevant statutory provision and reviewed English case law on the analogous statutory regime in England (in particular, the UK Court of Appeal decision in Aer Lingus Plc v Gildacroft ([2006] 2 All ER 290) and the dicta of Lord Justice Rix).
Although the deemster recognized that the interpretation of the relevant provisions of the 1981 act was not without difficulties, the court held that the period within which a third-party notice may be issued does not start with the occurrence of the underlying damage, but rather runs for two years from the time at which the judgment or payment is given or agreed.
The court rejected submissions that an agreed extension of the primary limitation period between the plaintiff and the defendant (but without the consent of the third party) tainted the issue of the third-party notice. It did, however, recognize the third party's ability to challenge the issue of the notice on the grounds of the court's jurisdiction, both inherently and according to the Manx Rules of Court. These rules provide that, among other things, a third-party notice may be challenged on the grounds of prejudice and/or delay if an extension of the limitation period resulted in the passage of such a period of time before the contribution was sought by the third party that a fair trial was impossible.
However, such a challenge would need to be based on particular facts, rather than simply being a jurisdictional challenge to and statutory limitation argument against the validity of the issue of the third-party notice.
For further information please contact Christopher Arrowsmith by email: mail@simcocks.com
