Limitation periods protect the rights of defendants by facilitating a resolution within a ‘reasonable’ amount of time. Importantly they prevent the Court from having to preside over cases that are unlikely to succeed.
The limitation periods after which legal action for civil causes of action cannot be brought are legislated by the Limitation Act 1969 (NSW).
For breaches of contract, claims must be brought within 6 years of the breach. However, applications to extend the limitation period may be made.
Background
Ida Wolff loaned her nephew Ronald Binetter $1 million in September 2010. In May 2018, she commenced proceedings by her tutor, to recover the loan. Steven Binetter, as legal representative of her estate, continued the proceedings following Ida’s death in September 2018.
The six-year limitation period for the recovery of debts expired in September 2016 under ss 14 and 63 of the Limitation Act 1969 (NSW). However, her estate submitted that as Ida had been under a disability for some years before commencing proceedings the running of the limitation period had been suspended under s 52(1)(d) for the duration of her disability,
Three categories of evidence were relied on to prove that Ida had suffered disabling confusion and delusions:
• contemporaneous evidence of Suzanne Binetter, a trusted member of the family, who spent significant time with Ida during the decade before her death.
• medical and hospital reports available concerning Ida’s treatment for various ailments in the same period before her death; and
• a report by a rehabilitation physician, prepared for the proceedings.
The decision
At first instance the Court accepted that Ida had made a loan to Ronald which had not been repaid however the evidence did not establish that Ida was incapable of, or substantially impeded in, managing her affairs concerning the recovery of the loan.
On appeal, the Court held that Ida would have been under a disability as defined by s 11(3)(b) of the Limitation Act 1969 if
(i) her physical or mental condition was impaired,
(ii) the impairment was for a continuous period of at least 28 days, and
(iii) the incapacity or substantial impediment related to the commencement of legal proceedings for recovery of the debt.
The rehabilitation physician’s report did not specifically address Ida’s capacity to give instructions about commencing these legal proceedings. Finding that Ida would have had a hindered understanding of “complex legal issues” did not assist because the legal issues involved in recovering the loan were not complex.
Suzanne’s evidence also supported the findings at first instance that, between 2010 and 2016, Ida could give instructions to recover the loan as she had asked about its repayment and sought legal advice about the loan.
The Court of Appeal held that the primary judge did not err in finding that the evidence, in its entirety, did not prove that Ida was under such a relevant and sufficient disability; the limitation period had expired.
Although the evidence showed that Ida had suffered bouts of confusion, forgetfulness and delirium and physical impairments, it did not establish that she was incapable of, or substantially impeded in, managing her affairs concerning the recovery of the loan.
