Blog post by Tim Retallack
A recent WA Supreme Court decision provides a reminder relating to Commercial Litigation Time Limits For Debts Repayable On Demand.
In the case of Blenkinsop v Blenkinsop Nominees Pty Ltd  WASC 254 (delivered 20 July 2015), the Court gave the defendant leave to defend a claim for repayment of loans that had been made in 1986 and 1988 respectively – the potentially available defence being that because no time for repayment had been specified, the common law implied that the loans were repayable immediately upon being advanced (Central City Pty Ltd v Montevento Holdings Pty Ltd  WASCA 5).
In those circumstances, the plaintiff’s cause of action would have accrued more than 6 years prior to commencement of the claim, and would be time-barred by virtue of section 38 of the Limitation Act 1935 (WA).
Interestingly, the judge noted that under the provisions of the Limitation Act 2005 (WA), a different position would apply, because under section 59 of that Act, a cause of action for the repayment of debt repayable on demand accrues when there is a failure to comply with a demand for repayment. There are no equivalent provisions in the 1935 Act, which applies if the cause of action accrues prior to commencement of the 2005 Act.
Commercial Litigation Time Limits For Debts Repayable On Demand was a point of interest when confirmation that (even under the 1935 Act) an old debt can be ‘revived’ and recovered within six years of a written acknowledgement of the debt by the debtor (section 44, Limitation Act 1935), and further that such written acknowledgement can be constituted by more than one document, and could include acknowledgement in financial statements (including a balance sheet) where they have been received by the creditor who sues in reliance on them (Stage Club Ltd v Millers Hotels Pty Ltd  HCA 71).
The case provides a useful reminder of some of the technical issues that can impact upon a debt recovery action.
If you have any questions about debt recovery, or commercial litigation, contact Tim Retallack or Charles Clifton.