Levy v Watt

SUPREME COURT OF VICTORIA
COURT OF APPEAL

S APCI 2012 0234

FRANK ERNEST WILLIAM LEVY	Appellant
	v
MAXWELL JAMES WATT & MICHAEL IAN WATT	Respondents

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JUDGES	WARREN CJ, TATE and SANTAMARIA JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	8 October 2013
DATE OF JUDGMENT	14 May 2014
MEDIUM NEUTRAL CITATION	[2014] VSCA 60
JUDGMENT APPEALED FROM	[2012] VSC 539 (Habersberger J)

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LIMITATION OF ACTION – Limitation period – Actions founded on tort – Cause of action in respect of conversion – Postponement of limitation periods in case of fraud or mistake – Whether action based on the fraud of the defendant or his agent or any person through whom he claims or his agent – Whether right of action concealed by fraud of any such person as aforesaid – Valuable painting stolen in 1991 – Fact of theft known but identity of thief not known – Painting searched for by owner and, after his death, by his executors – Painting comes into possession of third party – Painting transmitted to appellant under the will of third party – Painting seized by police in 2010 – Respondents are the executors and residuary beneficiaries of owner – Respondents did not learn of whereabouts of the painting until police seized the painting – Police initiate interpleader under s 125 of the Police Regulation Act 1958 – Order that the painting be returned to the respondents pending determination of ownership – Appellant claimed his possessory title was superior to respondents’ documentary title – Appellant claimed that title of respondents had been extinguished by expiration of limitation period – Whether right of action for conversion concealed by fraud – Whether appellant proved that third party acquired the painting as a bona fide purchaser for value without notice – Limitation of Actions Act 1958 (Vic) ss 3(4), 5(1), 5(1AAA), 6, 23B, 27(a) and 27(b) – Bulli Coal Mining Co v Osborne [1899] AC 351 – Beaman v A.R.T.S. Limited [1949] 1 KB 550 – RB Policies at Lloyd’s v Butler [1950] 1 KB 76 – Kitchen v Royal Air Force Association [1958] 1 WLR 563 – Bartlett v Barclays Bank Trust Co Ltd (No 1) [1980] Ch 515.

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Appearances:	Counsel	Solicitors
For the Appellant	Mr D A Klempfner with Mr S T Pitt	Sackville Wilks Lawyers
For the Respondents	Mr M A Robins QC	Rigby Cooke Lawyers

WARREN CJ:

I have had the benefit of reading in draft form the reasons for judgment of Santamaria JA. Essentially for the reasons given by his Honour, I agree that the appeal should be dismissed.

TATE JA:

I agree with Santamaria JA, for the reasons his Honour gives, that the appeal should be dismissed.

SANTAMARIA JA:

Summary

The appellant, who was the plaintiff below, is a solicitor who had been left a painting by a grateful client. He was unaware that the painting had been stolen some years previously, and had been searched for by the previous owner and, after that owner’s death, by his executors, who are the respondents to this appeal and who were the defendants below. In 2010, information was handed to the police which led to their seizing the painting at the home of the appellant. The appellant only learnt that the painting had been stolen when it was seized by the police. There was no evidence to suggest that his client had been involved in, or even knew about, the theft.

Pursuant to an interpleader summons, a magistrate ordered that the painting be placed in the possession of the respondents. The appellant commenced the present proceeding seeking a declaration that the respondents’ proprietary rights in the painting had been extinguished and an order that the painting be returned to him. The case involved the application of the Limitation of Actions Act 1958 (Vic) (sometimes ‘the Act’). It was accepted that the previous owner and, then, the respondents as his executors had a claim in conversion. Subject to s 27, s 5(1) of the

Act bars actions founded on tort (which includes a claim in conversion) after the expiry of six years; s 6 (which applies expressly to any cause of action in respect of conversion) operates, among other things, to extinguish title to a chattel when claims in relation to it have been barred. The case turned upon s 27 which provides for the postponement of limitation periods in cases of fraud, fraudulent concealment or mistake. Section 27 is itself subject to a proviso that protects the title of a purchaser of a chattel for valuable consideration without notice of the fraud, fraudulent concealment or mistake. The trial judge held that s 27(a) (which applies where an action is based on ‘fraud’) had no application as a claim in conversion was not an ‘action (that) is based upon the fraud’ of the defendant or persons who claim through the defendant. However, the trial judge held that s 27(b) operated to postpone the commencement of the limitation period as the right of action (in conversion) had been concealed by the fraud of the original thief through whom the appellant was claiming the painting. The trial judge held that the proviso did not avail the appellant as he had been given the painting and had not established that his client was a bona fide purchaser of the painting for value without notice. The proceeding was dismissed.[1]

[1]Levy v Watt [2012] VSC 539 (‘Reasons’).

The appellant now appeals the ruling on s 27(b) (fraudulent concealment). He has not sought to impeach the trial judge’s findings on the operation of the proviso to s 27. The respondents have served a notice of contention in respect of the ruling on s 27(a) (fraud).

For the reasons that follow, in my opinion, the rulings on s 27(a) and s 27(b) should be affirmed. In these circumstances, the appeal should be dismissed.

The facts

The principal facts were not in dispute. The following account of them is taken from the judgment of the trial judge.

Rupert Bunny was an Australian impressionist painter who died in 1947.[2] His paintings have been increasingly sought after and are increasingly valuable. On 18 November 1953, James Watt purchased a Rupert Bunny oil painting.
Over the years, the painting was referred to in several catalogues and other documents under different names.[3] Between 1953 and 1972, James Watt resided in several apartments in South Yarra where he put the painting on prominent display. In 1972, he moved to live permanently in Blairgowrie. He displayed the painting prominently there. On 11 April 1991, his house at Blairgowrie was broken into, and the painting was stolen. He reported the theft immediately to the police. The police investigation was unproductive. The theft was reported in The Age, and it was advertised in newspapers on the Peninsula. Various efforts to secure its recovery failed. On 11 April 1993, James Watt died. Under his will, he appointed his nephews (Maxwell James Watt and Michael Ian Watt) as his executors. On 28 July 1993, probate of his last will was granted to them. The executors maintained their uncle’s efforts to locate the painting. They kept up contact with the police responsible for the investigation; they circulated galleries and art dealers and offered a substantial reward for information leading to the recovery of the painting. They engaged a professional investigator. Their efforts were unsuccessful. Early in 2010, the executors became aware that a major Rupert Bunny retrospective exhibition was to be held in the National Gallery of Victoria. They renewed their efforts to publicise the theft. They were contacted by an informant who told them that he believed that he had seen the painting about 2 years ago, but that he would only disclose its location to the relevant authorities. In April 2010, the matter was reported to the police who undertook further investigation. On 4 May 2010, a search warrant was executed at the house of the appellant (Mr Levy). The painting was there, hanging in the dining room. It was seized by the police.
[2]See entry on Bunny, Rupert Charles Wulsten in Alan McCulloch, Susan McCulloch and Emily McCulloch Childs, The New McCulloch’s Encyclopaedia of Australian Art (Aus Art Editions, 4^th ed, 2006) 293-294.
[3]The trial judge has noted the various descriptions under which the painting has been known: eg the painting was described as ‘White Umbrella’, on a receipt in the handwriting of Mr James Watt; Reasons [2]. The handwritten words ’Girl in Sunlight’ appear faintly on the back of the painting; Reasons [2]. In a book on Rupert Bunny published by David Thomas in 1970, the painting is described in the catalogue as ‘[O154] Girl in Sunlight, c1913? Inscr: Rupert C.W. Bunny … Coll: A.J. Watt Esq., Melbourne, Vic’; Reasons [3].

The appellant had been the solicitor of a Mr Peter Rand (Rand). Rand had been an acquaintance of James Watt. There was evidence that Rand had visited James Watt at his apartments in South Yarra and that Rand had occupied residences close to those of James Watt in Melbourne. Rand also owned a house in Sorrento.

According to the appellant, Rand had appreciated advice given to him by the appellant from time to time. He had told the appellant that he wanted to leave him his house in Sorrento. The appellant discouraged him from doing so.

Between 1992 and the date of his death, Rand prepared several wills. The will dated 18 May 1992 made no mention of the painting. A will dated 2 November 1994 referred to the painting, and left it to the appellant. His last will was dated 8 September 1997. Under clause 6(a) of that will, Rand bequeathed to the appellant his ‘Painting by Rupert Bunny of a woman sitting on the ground’.

Evidence was adduced during the trial that Rand had shown the painting to various people. He had had the painting included in a valuation by McCann’s Antique, Estate and Decorative Arts Auctions of the contents of his house dated 22 August 1994. The valuation contained reference to a painting described as ‘Rupert Bunny Oil – (3’x 2’) “Female Reading in Sun”’. It was valued at $100,000. The McCann’s valuation was apparently ‘viewed’ by a representative of an insurance company in 1994 and 1996. A valuation by Leonard Joel included reference to a ‘R. Bunny Oil Painting’ and valued it at $150,000. A revised valuation placed it at $125,000.

On 7 October 1997, Rand died. On 31 March 1999, probate of his last will was granted to the executors named therein which included the appellant. The administration of his estate was beset by long-running litigation by the Harpurs concerning the beneficial ownership of numerous assets including the painting.

In 1997, the executors secured a valuation of the content of the estate, including the painting. The painting was valued at $150,000. The painting was also referred to in an insurance policy issued in August 2003.

The litigation with the Harpurs was concluded in late 2007. The appellant removed the painting to his own house.

The appellant and his wife invited various people to inspect the painting. In February 2008, Mrs Levy had the painting valued. The valuer told her that a Mr David Thomas was cataloguing Rupert Bunny’s work, and would be interested in seeing the painting. In March 2008, Mrs Levy rang Mr Thomas who came and inspected the painting at her house. In preparing his catalogue, Mr Thomas described the painting as ‘Girl in Sunlight c 1915’. In his catalogue, he acceded to Mrs Levy’s request for privacy by giving the provenance of the painting simply as ‘Private collection, Melbourne’.

There was no evidence that Rand was connected with the theft, or that he was ever suspected of, or investigated by the police in relation to the theft of the painting. After the painting was seized from their house, the appellant and his wife cooperated with the police in their investigations.

After they had seized the painting, the police commenced a proceeding under s 125 of the Police Regulation Act 1958 (Vic) (‘the PRA’). After a hearing, the magistrate ordered that the painting be returned to the respondents on the basis that they jointly and severally keep the painting until such time as ownership was determined by a court or the matter of ownership was not pursued for a limited period of six months. The respondents were required to insure the painting.[4]
[4]Reasons [27].

On 29 September 2010, the appellant commenced the proceeding seeking a declaration that the executor respondents’ proprietary rights in the painting had been extinguished and that he was the owner of it. He also sought an order that the painting be returned to him.

At trial, the appellant relied on his possessory title.

For their part, the executor respondents relied on their documentary title and their right of action in conversion.[5] They said that the period of limitation had not begun to run on 11 April 1991 as the limitation period had been postponed by operation of s 27.
[5]At trial, the respondents mounted an alternative argument based on s 125 of the PRA. By reason of the order of the magistrate on the interpleader, the painting came into their possession. At trial, they contended that their current possession of the painting was sufficient to defeat the appellant’s prior possession unless he could show that he had a documentary title. The trial judge rejected the argument. The ruling is not the subject of the respondents’ notice of contention. Thus, no issue as to the meaning and operation of s 125 of the PRA arises on this appeal.

First, they contended that s 27(a) of the Act operated to prevent time running: the action (in conversion) was based on the fraud of the person through whom the appellant claimed.

In relation to s 27(b), the respondents contended that ‘the right of action had been concealed’ by the stealing and concealment of the painting by the thief, and that the thief was the person ‘through whom’ Rand and, thus, the appellant, had claimed either directly or indirectly. In doing so, the respondents relied upon several decisions of the Court, including Martinus v Kidd[6] and Skrijel v Mengler.[7]
[6][1982] VR 807.
[7][1998] VSC 71.

The appellant contended that any documentary title in either Mr James Watt or in his executors had been barred because the claim in conversion had accrued when the painting was stolen on 11 April 1991, that that claim had been barred upon the expiration of the limitation period on 11 April 1997, and that any documentary title in the respondents had been extinguished by reason of s 6 of the Act. He contended that neither s 27(a) nor s 27(b) had any application. Section 27(a) did not apply because the action in conversion was not based upon fraud; s 27(b) did not apply as there had been no concealment of the right of action. Mr Watt had known he had a right or action in conversion since the day the painting was stolen. It was irrelevant that he did not know the identity of the relevant defendant. The appellant relied principally on the decision of Streatfeild J in RB Policies at Lloyd’s v Butler[8] which has been taken to stand for the proposition that time begins to run against the owner of a stolen chattel from the date of the theft, even though the owner does not know the identity of the thief or the whereabouts of the chattel.[9]
[8][1950] 1 KB 76; [1949] 2 All ER 226.
[9]The material referred to by the trial judge is collected at footnote 91 below. The rule in RB Policies at Lloyd’s v Butler is also referred to in Halsbury’s Laws of England (Butterworth & Co, 3^rd ed, 1958) Volume 24 at 195(c) and 223(q); Michael Franks, Limitation of Actions (Sweet & Maxwell Ltd, 1959) 205; Newson GH and Abel-Smith L, Preston and Newsom on Limitation of Actions (Solicitors’ Law Stationery Society, 3^rd ed, 1953) 251.

The trial judge held that s 27(a) was not applicable because, as fraud was not a necessary element in an action for conversion, any such action was not an action ‘based on the fraud of the defendant or his agent or any person through whom he claims or his agent.’ In doing so, he relied upon Beaman v A.R.T.S. Limited.[10]
[10][1949] 1 KB 550.

With respect to s 27(b), the trial judge held that ‘concealing the right of action by fraud logically should also include concealing the identity of the tortfeasor’.[11] He chose not to follow RB Policies at Lloyd’s v Butler.[12] The trial judge also dismissed an argument based on the circumstance that cognate provisions in other Australian jurisdictions expressly provide that time ‘does not commence to run where the identity of the person against whom a cause of action lies is fraudulently concealed’.[13]
[11]Reasons [75].
[12][1950] 1 KB 76; [1949] 2 All ER 226.
[13]Reasons [78]-[79].

Finally, the trial judge addressed the question whether the proviso to s 27 operated to prevent the postponement provided for by s 27(b). Resolution of that question depended upon whether the appellant had proved that (to use the colloquial form) Rand had purchased the painting bona fide for valuable consideration and without notice. Notwithstanding the evidence adduced by the respondents at trial, the trial judge was not prepared to find that, when he came into possession of it, Rand knew that James Watt was the true owner of the painting.[14] However, he found that the appellant had failed to discharge the onus on him to establish that Rand was a purchaser of the painting for valuable consideration.[15]
[14]Reasons [91].
[15]Reasons [100].

In the event, the trial judge upheld the executor respondents’ contention that s 27(b) operated to postpone the commencement of the limitation period. Orders were made dismissing the action with the result that the respondents’ documentary title prevailed over the appellant’s possessory title.

Notice of Appeal

The appellant says that the trial judge erred in holding that s 27(b) prevented time from beginning to run from the time that the painting was stolen and that he should have followed RB Policies at Lloyd’s v Butler[16] and decided that time begins to run against the owner of a stolen chattel from the time of the theft, even though the owner does not know the identity of the thief or the whereabouts of the chattel.
[16][1950] 1 KB 76; [1949] 2 All ER 226.

Notice of contention

The respondents contend that the trial judge erred in holding that s 27(a) was confined in its operation to fraud in the nature of common law fraud or deceit and that he should have found that s 27(a) operates to include causes of action that involved elements of moral turpitude or dishonesty such as conversion by theft, as well as causes of action based on common law fraud and unconscionability.

Alternatives

A person may be unaware of the occurrence of a tort or aware of a tort but unaware of the (identity of the) tortfeasor. So, the owner of the fee simple in Blackacre may be unaware of the tortious entry of another person under the subsoil of Blackacre. Similarly, a coin collector may be unaware that a precious coin has been stolen if the thief has substituted for that coin a convincing, but worthless, substitute. In both cases, the tortfeasor has concealed the occurrence of the tort from the putative plaintiff. In the present case, the appellant contends that s 27(b) operates only to postpone the running of time against the tortfeasor where he has concealed his tortious conduct from the plaintiff. But, where the existence of the tort is known, but the identity of the tortfeasor unknown (as happens where an owner knows that his chattel has been stolen), the appellant says that s 27(b) does not avail the owner, and time begins to run in favour of the tortfeasor and those who derive title through him from the moment the occurrence of the tort is known. The distinction which the appellant draws seems unattractive. Is it one which is drawn in the Act?

Relevant provisions of the Limitation of Actions Act 1958

The relevant provisions of the Limitation of Actions Act 1958 (Vic) are as follows:

3(4)A person shall be deemed to claim through another person if he became entitled by, through, under, or by the act of that other person to the right claimed:
Provided that a person becoming entitled to any estate or interest by virtue of a special power of appointment shall not be deemed to claim through the appointor.

…
5(1)The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued-
(a) … actions founded on tort …

…
6(1) Where-
(a)any cause of action in respect of the conversion or wrongful detention of a chattel has accrued to any person; and
(b)before he recovers possession of the chattel, a further conversion or wrongful detention takes place-

no action shall be brought in respect of the further conversion or detention after the expiration of six years from the accrual of the cause of action in respect of the original conversion or detention.

(2) Where-
(a) any such cause of action has accrued to any person; and
(b)the period prescribed for bringing that action and for bringing any action in respect of such a further conversion or wrongful detention as aforesaid has expired; and
(c)he has not during that period recovered possession of the chattel-

his title to the chattel shall be extinguished.

…
27Where, in the case of any action for which a period of limitation is prescribed by this Act-
(a)the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or
(b)the right of action is concealed by the fraud of any such person as aforesaid; or

(c) the action is for relief from the consequences of a mistake-
the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:
Provided that nothing in this section shall enable any action to be brought to recover or enforce any charge against or set aside any transaction affecting any property which-
(i)in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that any fraud had been committed; or
(ii)in the case of mistake, has been purchased for valuable consideration, subsequently to the transaction in which the mistake was made by a person who did not know or have reason to believe that the mistake had been made.

Certain features of the legislation should be noted.

Section 5(1)(a) bars actions ‘founded on tort’ after ‘the expiration of six years from the date on which the cause of action accrued’.

Section 6(1) applies to successive conversions or wrongful detention of a chattel. Time runs from the accrual of the original cause of action, and does not recommence on the happening of any successive conversion or wrongful detention.

Section 6(2) operates to extinguish any title a person has to a chattel if possession has not been recovered during the periods prescribed for the bringing of an action founded upon conversion or wrongful detention.

Section 6(2) does not operate to confer on a person any title to a chattel.

Section 27 operates to postpone the commencement of the period of limitation in cases of fraud, concealment by fraud or mistake.

Section 27 is itself subject to a proviso which prevents the postponement operating where the property the subject of the proceeding has been ‘purchased for valuable consideration’ by a person who, at the time of the purchase, did not know or had no reason to know of the fraud or of the mistake.

Background to the 1958 Act

The Limitation of Actions Act 1958 (Vic)[17] was originally enacted as part of the general consolidation that took place in that year. Section 2 of the 1958 Act repealed the Limitation of Actions Act 1955 (Vic) (‘the 1955 Act’).[18] The 1955 Act followed on from a series of reports[19] that recommended the incorporation into Victorian law of the provisions of the Limitation Act 1939 (Eng),[20] which was the first general English statute dealing with limitation. Section 26(a) of the English statute provided for the postponement of the limitation period where the action was ‘based upon the fraud of the defendant or his agent’ and s 26(b) provided for postponement where ‘the right of action is concealed by the fraud of any such person’. (Those provisions corresponded to s 27(a) and s 27(b) of the 1955 Act, and correspond to s 27(a) and s 27(b) of the present Act.)
[17]No. 6295 of 1958.
[18]No. 5914 of 1955.
[19]Those reports included a report of a special sub-committee set up by the Chief Justice’s Committee on Law Reform to consider the subject of the limitation of actions. As a result of the deliberations of that sub-committee, a bill was prepared entitled ‘a Bill to consolidate and amend the Law relating to the Limitation of Time for commencing Actions and Arbitrations’. That bill was introduced into the Legislative Assembly on 9 June 1948. Eventually, it was referred to the Statute Law Revision Committee whose report was ordered to be printed on 5 April 1949.
[20]2 & 3 Geo 6, c 21.

The English Act was enacted after the publication by the Law Revision Committee of its ‘Fifth Interim Report (Statutes of Limitation)’ 1936.[21] An examination of the report of the Law Revision Committee shows that the origins of s 26(a) and s 26(b) of the English Act lie in the manner in which fraud and fraudulent concealment were treated in courts of equity. In Beaman v A.R.T.S. Limited,[22] the Court of Appeal (Eng) held that one of the purposes of s 26 of the English Act was to ensure that the principles that had developed in equity with respect to postponement were to have general application.
[21]Cmd. 5334.
[22][1949] 1 KB 550.

Statutes of limitation were administered differently in courts of law from the way they were administered in courts of equity. Generally speaking, where an action had been brought in the common law courts, it was no answer to a plea of the Statute of Limitations that the cause of action had been concealed by fraud.[23] However, the presence of fraud or fraudulent concealment would prevent time running in equity until the plaintiff was fully cognisant of his or her rights: a plaintiff would be barred by limitation only if there had been ‘undue delay’ or acquiescence. The situation became complicated with the enactment of the Judicature Act of 1873.
[23]Imperial Gas Light and Coke Co. v London Gas Light Co. (1854) 10 Ex 39; Lynn v Bamber [1930] 2 K.B. 72, 74-75 (McCardie J).

Concealment in equity

The way in which equity dealt with concealment may be illustrated by Trevelyan v Charter.[24] In that case, Trevelyan had retained Charter, his solicitor, to arrange for the sale of two pieces of land. Trevelyan provided a valuation of the two parcels to Charter. In 1788, Charter arranged for the sale of the two parcels but disguised from Trevelyan the price he was able to obtain (which exceeded Trevelyan’s valuation) and the fact that he became the ultimate purchaser of one of them. In 1827, the executors of Trevelyan’s estate learned that Charter had been the true purchaser of the land. The executors brought proceedings against the estate of Charter to have the conveyances set aside. The defendants argued that the proceeding should be dismissed due to lapse of time. Pepys MR said:

Thomas Charter died in 1810, but that forms no reason that Sir John Trevelyan had any suspicion of the true nature of the transaction; the documents prove the contrary; and this removes the objection of time. The Court, in such a case, is anxious to look into the circumstances of the case. In cases of fraud, time is no bar, otherwise justice would be defeated, not because the case was not a proper one for the interference of the Court, but because the deception was continued by the author of the fraud so long as to enable himself to reap the benefit of it.
It is fitting that those who thus appropriate the property of others, should be assured, that in this court no time will secure to them the fruits of their dishonesty, but that their children’s children will be compelled to restore the property of which their ancestors have fraudulently possessed themselves. Time is no bar, except the party, having full information of his injuries and rights, allows time to elapse, without seeking relief.[25]

[24](1835) 4 LJ (NS) (Chancery) 209.

[25]Ibid 214. In December 1839, the executors of the estate of Charter presented a petition for leave to file a bill of review. In 1840, that petition was dismissed. In 1842, the executors of Charter appealed the earlier decree. The appeal was heard in 1842 and was dismissed in 1844. In Charter v Trevelyan (1844) 11 Cl & Fin 712; 8 ER 1273, Lord Cottenham LC (as Pepys MR had become) (at Cl & Fin 739; ER 1283) abided by his earlier opinion on the question whether the claim was barred by lapse of time. Lord Campbell agreed. He said (at Cl & Fin 740; ER 1283):

The only doubt which I have had, has been with regard to the lapse of time and acquiescence, and certainly it is of the last importance that there should be a limitation to inquiries of this sort; but for the reasons which have been stated so very lucidly by my noble and learned friend the Lord Chancellor, I am obliged to come to the conclusion that the remedy in this case is not barred by lapse of time, and that the parties have never, with a knowledge of the facts, done anything which can be considered as an acquiescence in the matter complained of.

In Rolfe v Gregory,[26] a wife and her infant children brought proceedings against trustees and others for the purpose of restoring part of a trust fund which had been fraudulently diverted by a trustee to a knowing recipient. The defendants pleaded laches and acquiescence. Lord Westbury LC said:

As the remedy is given on the ground of fraud, it is governed by this important principle, that the right of the party defrauded is not affected by lapse of time, or, generally speaking, by anything done or omitted to be done, so long as he remains, without any fault of his own, in ignorance of the fraud that has been committed.[27]

[26](1865) 4 De G.J. & S. 576; 46 ER 1042.

[27](1864) 4 De G.J. & S. 576, 577; 46 ER 1042, 1044.

In Trevelyan v Charter,[28] the remedy was not barred save in the case of a plaintiff ‘having full information of his injuries and rights, allows time to elapse, without seeking relief’;[29] it was not barred where ‘the parties have never, with a knowledge of the facts, done anything which can be considered as an acquiescence in the matter complained of’.[30] In Rolfe v Gregory,[31] the plaintiff’s remedy was not barred ‘so long as he remains, without any fault of his own, in ignorance of the fraud that has been committed’.[32]
[28](1835) 4 LJ (NS) (Chancery) 209.
[29]Ibid 214.
[30]Cl & Fin 740; ER 1283.
[31](1865) 4 De G.J. & S. 576; 46 ER 1042.
[32](1864) 4 De G.J. & S. 576, 577; 46 ER 1042, 1044.

Bulli Coal Mining Co v Osborne

In 1899, the Judicial Committee decided the influential case of Bulli Coal Mining Co v Osborne.[33] Before analysing the facts of this case, certain aspects of it should be noted. First, although the claim was for damages for trespass,[34] the claim was brought in the equitable jurisdiction of the Supreme Court of New South Wales.[35] Second, the decision of the Judicial Committee was later referred to by the Law Revision Committee Report, particularly in its treatment of the availability of the equitable doctrine of concealed fraud in courts of law after the Judicature Acts. Third, the decision would prove influential in establishing the principle that the doctrine of ‘fraudulent concealment’ applied not only to conduct subsequent to the commission of a tort that was designed to conceal it from a putative plaintiff but also to the very manner in which the tort itself was committed. Finally, Bulli Coal Mining Co v Osborne was relied upon by the Court of Appeal (Eng) in Beaman v A.R.T.S. Limited[36] which was the first authoritative construction of the provisions dealing with fraud and fraudulent concealment in the Limitation Act 1939 (Eng).
[33][1899] AC 351.
[34]The case came originally before Owen CJ in Eq; see (1896) 17 NSWLR (in Eq) 242; and, on appeal (1897) NSWLR (in Eq) 146.
[35]At that time, in New South Wales, equity was still administered separately from law. New South Wales did not introduce the Judicature system until 1972. See Supreme Court (Amendment) Act1972 (NSW).
[36][1949] 1 KB 550.

In Bulli Coal Mining Co v Osborne,[37] the appellant was a mining company which was working coal near Bulli, Illawarra, New South Wales. The company realised that the workings were approaching the boundary of the adjacent land. The company began negotiations with the respondents who were the owners of that land with a view to obtaining a lease over it. The negotiations fell through. But, the mining company proceeded secretly on its workings and managed to extract a large proportion of the coal under that land. It had been found that a trespass had been ‘committed underground, and committed wilfully.’[38] It was also found that the owners of the adjacent land from which the coal had been recovered ‘were ignorant of the [mining company’s] wrongful working, and had no reason to suspect that any had occurred’.[39] The Court held that no laches could be attributed to the respondents. The appellant argued that the claim was barred by the Statute of Limitations.[40] The Judicial Committee classified the case as one of concealed fraud. It said:

The Statute of Limitations has really no application to a case such as this. Courts of equity are not within the words of the statute, which only apply to certain legal remedies, though they are, as it has been said, within its spirit and meaning. The way in which the statute came to be applied in proceedings in equity is explained by Lord Camden in his judgment in Smith v Clay….. A court of equity, he says, ‘which is never active in relief against conscience or public convenience’ always refused its aid to stale demands. As, however, it had no legislative authority, it could not define exactly the time of bar. It was governed by circumstances. But as often as Parliament prescribed a limit to proceedings at law the Court of Chancery adopted that rule and applied it to similar cases in equity. ‘For’, he adds, ‘when the Legislature had fixed the time at law it would have been preposterous for equity, which by its own proper authority always maintained a limitation, to countenance laches beyond the period that law had been confined to by Parliament.’ Now it has always been a principle of equity that no length of time is a bar to relief in the case of fraud, in the absence of laches on the part of the person defrauded. There is, therefore, no room for the application of the statute in the case of concealed fraud, so long as the party defrauded remains in ignorance without any fault of his own.[41]

[37][1899] AC 351.

[38]Ibid 360.

[39]Ibid.

[40]None of the reports identify which statute was being referred to. However, the report of the argument before Owen CJ in Eq suggests (by the authorities there cited) that the reference was to s 26 of the Real Property Limitation Act 1833. See (1896) 17 NSWLR (in Eq) 242, 261.

[41][1899] AC 351, 363 (citations omitted).

The appellant contended that the real cause of action had been in trespass and that claims in trespass were now barred. It argued that ‘trespass, not its secrecy, is the real cause of action, and that commenced fifteen years ago. Mere non-disclosure of a trespass does not raise any equity to avoid the statute. To effect that result requires wilful and aggressive and calculated concealment’.[42] In other words, the respondents could only avail themselves of the statute if they could show that, the trespass having been committed, the appellant had, thereafter, taken active steps to conceal its discovery. The Judicial Committee said:

The contention on behalf of the appellants that the statute is a bar unless the wrongdoer is proved to have taken active measures in order to prevent detection is opposed to common sense as well as to the principles of equity. Two men, acting independently, steal a neighbour’s coal. One is so clumsy in his operations, or so incautious, that he has to do something more in order to conceal his fraud. The other chooses his opportunity so wisely, and acts so warily, that he can safely calculate on not being found out for many a long day. Why is the one to go scot-free at the end of a limited period rather than the other? It would be something of a mockery for courts of equity to denounce fraud as “a secret thing,” and to profess to punish it sooner or later, and then to hold out a reward for the cunning that makes detection difficult or remote.[43]

[42]Ibid 356.

[43]Ibid 363-364.

As is clear, the Judicial Committee considered that the very circumstances in which the tort was committed, if they were surreptitious, could themselves amount to its fraudulent concealment.

Judicature Acts

In the 1870s, the Judicature system was introduced into England as a result of which law and equity came to be administered concurrently.[44] In 1884, that system was introduced into Victoria.[45] Fundamental to it is the rule that, if there is ‘a conflict or variance between the rules of equity and the rules of the common law concerning the same matter, the rules of equity prevail’.[46] Accordingly, the courts had to work out how to resolve the different approaches of law and equity to limitation. In particular, the question arose whether, and, if so, how the equitable principles in respect of fraud and fraudulent concealment and the related concepts of ‘undue delay’ or acquiescence were to apply to actions at law. That resolution had not proceeded in a straight line and, by 1930, was marked by a degree of confusion. There were inconsistent decisions.[47] In England and Australia, the situation remained unresolved at the time that consideration was given to replacing the myriad provisions in different enactments with a single comprehensive limitation statute.[48]
[44]See Supreme Court of Judicature Act 1873 (Eng) (36 & 37 Vict c. 66); Supreme Court of Judicature Act 1875 (Eng) (38 & 39 Vict c. 77).
[45]See Judicature Act 1883 (Vic).
[46]Supreme Court of Judicature Act 1873 (Eng) s 25 (11); see also Judicature Act 1883 (Vic) s 9(11). Now see Supreme Court Act1986 (Vic) s 29(1).
[47]See Gibbs v Guild (1882) 9 QBD 59 (equitable doctrine of fraudulent concealment could be pleaded where jurisdiction in equity would have been available to the common law claim that had been pleaded); Armstrong v Milburn (1885) 54 L.T. 247 (Divisional Court), 723 (Court of Appeal) (an action for negligence by a solicitor barred by limitation as there was no concealment by fraud, but it seems that there would have been no bar if there had been concealment by fraud); In re McCallum [1901] 1 Ch 143 (concealed fraud under the Real Property Limitation Act 1833 could only be pleaded against the person who was responsible for the fraud and not against a transferee who was an innocent volunteer); Lynn v Bamber [1930] 2 KB 72 (by reason of the Judicature Acts, pleas of fraud or fraudulent concealment were available to defeat claims of limitation in actions which before that Act would have been within the exclusive jurisdiction of the courts of law). See also Clark v Clark (1882) 8 VLR (E) 303 (Full Court); Montgomerie’s Brewery Co Ltd v Blyth (1901) 27 VLR 175; Crown v McNeil (1922) 31 CLR 76, 99-100 (Isaacs J).
[48]When it was enacted, s 34 of the Limitation Act 1939 (Eng) repealed limitation provisions in 21 earlier statutes. When it was enacted, s 2 of the Limitation of Actions Act 1955 (Vic) repealed limitation provisions in 43 earlier statutes.

Law Revision Committee 1936

In 1936, the Law Revision Committee published its report entitled ‘Fifth Interim Report (Statutes of Limitation)’.[49] Under the heading ‘The Effect of Concealed Fraud’, the Committee commenced its analysis as follows:
[49]Cmd. 5334.

As a general rule it is no answer to a plea of the Statutes of Limitation to say that the plaintiff was unaware of the existence of his cause of action until after the expiration of the statutory period. But cases may occur in which such ignorance on the part of the plaintiff is brought about by the fraudulent conduct of the defendant. Either the cause of action may spring from the fraud of the defendant or else the existence of a cause of action untainted in its origin by fraud may have been concealed from the plaintiff by the fraudulent conduct of the defendant. It is obviously unjust that a defendant should be permitted to rely upon a lapse of time created by his own misconduct, but the present state of the law is so obscure and pregnant with difficulties that it must be regarded as uncertain whether a fraudulent defendant can in all cases be prevented from setting up the plea that the action has been brought out of time.[50]

The Committee then surveyed the confusion that had afflicted the law since the introduction of the Judicature system.[51] It concluded:

We think that it is undesirable that this state of obscurity and uncertainty should continue particularly because the actions which are chiefly affected fall within the important category of actions to recover unliquidated damages for a breach of contract or a tort. We are of opinion that a defendant should not be permitted to set up lapse of time which is due to his fraudulent conduct.[52]
[50]Ibid 22.
[51]See [50] above.
[52]Cmd. 5334. 22.

The relevant recommendation of the Law Revision Committee is in the following terms:
We desire, accordingly, to make the following recommendation:-
(a) that in all cases to which the Statutes of Limitation apply or are applied by analogy, where a cause of action is founded on fraud, committed by the defendant or his agent, or some person through whom he claims, or where a cause of action unconnected with fraud is fraudulently concealed from the plaintiff by the defendant or his agent, or someone through whom he claims, the right of the plaintiff to sue shall be deemed to have first accrued at the time when he discovered such fraud or could with reasonable diligence have discovered it …[53]
[53]Ibid.
The Law Revision Committee had drawn a distinction between cases where:
(a) the cause of action may spring from the fraud of the defendant; and
(b)a cause of action, untainted in its origin by fraud, that may have been concealed by the fraudulent conduct of the defendant.
That distinction can be seen reflected in s 27(a) and s 27(b) of the 1958 Act. In drawing the distinction, the Committee was identifying two species of a broader genus: ‘cases in which ignorance on the part of the plaintiff is brought about by the fraudulent conduct of the defendant’. While this case must turn upon the proper meaning of the statutory words in the 1958 Act rather than upon the intentions of the Law Revision Committee, it seems unlikely that the Committee did not intend to embrace in its genus those cases in which ignorance on the part of the plaintiff had been caused by the defendant concealing from the plaintiff that he was responsible for the tort.
Limitation Act 1939 (Eng)

Soon after the publication of the Report of the Law Revision Committee, the Limitation Act 1939 (Eng) was enacted. Section 2 imposed limitation periods of six years in ‘actions founded on simple contract or on tort’ and s 3 operated to extinguish the title of an owner of goods after the expiry of the limitation periods in detinue and conversion. Part II of the Act was entitled ‘Extension of Limitation Periods in case of Disability, Acknowledgement, Part Payment, Fraud and Mistake’. Section 26 was in Part II. It was headed ‘Fraud and Mistake’; it postponed the limitation period where the action ‘is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent’[54] or where ‘the right of action is concealed by the fraud of any such person as aforesaid’.[55] The section was subject to a proviso that protected the bona fide purchaser for valuable consideration without notice.[56]
[54]Section s 26(a).
[55]Section s 26(b).
[56]Section 26 of the English Act of 1939 was largely in the same form as is s 27 of the Limitation of Actions Act1958 (Vic).

Decisions since enactment of 1939 Act

In Beaman v A.R.T.S. Limited,[57] the Court of Appeal (Eng) interpreted s 26 of the English Act of 1939. Three matters should be noted immediately. First, the Court gave a narrow interpretation to the word ‘fraud’ in s 26(a): it decided that ‘fraud’ in s 26(a) applied only where fraud was an essential element in the cause of action. Second, it gave a liberal interpretation to the phrase ‘concealed by the fraud of any such person’ in s 26(b): it decided that the concept of ‘fraudulent concealment’ contained in s 26(b) took its meaning from the old authorities in equity. Third, Beaman v A.R.T.S. Limited was not referred to either in argument before or in the reasons of Streatfeild J in RB Policies at Lloyd’s v Butler,[58] the principal authority upon which the present appellant relies.
[57][1949] 1 KB 550. As was the practice at the time, the judgments of the Court of Appeal make no reference to the Report of the Law Revision Committee.
[58][1950] 1 KB 76; [1949] 2 All ER 226.

In Beaman v A.R.T.S. Limited,[59] the plaintiff, before departing for Turkey, deposited five packages with the defendant for safekeeping with the instructions that they were to be sent to her when she gave notice requiring it. After one package had been sent, changes in regulations and the outbreak of the war meant that the remaining packages could not be sent. When Italy entered the war, the business of the defendant was taken over by the custodian of enemy property who set about winding it up. Officers of the defendant opened the packages, decided that their contents were of little value, and handed them over to the Salvation Army. No effort was made to inform the plaintiff of what had happened. On her return to England after the war, she had difficulty working out what had happened to the packages. On learning the truth, she commenced proceedings claiming damages for conversion. The defendant set up the defence of limitation under s 3 of the English Act of 1939. In reply, the plaintiff contended that time had not commenced to run by reason of either fraud[60] or fraudulent concealment.[61]
[59][1949] 1 KB 550.
[60]Limitation Act 1939 (Eng) s 26(a); cf Limitation of Actions Act 1958 (Vic) s 27(a).
[61]Limitation Act 1939 (Eng) s 26(b); cf Limitation of Actions Act 1958 (Vic) s 27(b).

At first instance,[62] Denning J considered that, even though fraud was not an essential element of the cause of action for conversion, s 26(a) (‘fraud’) would defeat a claim of limitation if the conversion had occurred in fraudulent circumstances.[63] Similarly, he held that, for s 26(b) (’fraudulent concealment’) to defeat a claim of limitation, there had to be evidence of ‘some dishonesty, some element of moral turpitude’.[64] Accepting that the conduct of the officers of the defendant had been prompted by the exigencies of war, Denning J refused to find the conduct of the defendant, both in giving the packages to the Salvation Army and, then, in failing to inform the plaintiff of what they had done, either immoral or dishonest.
[62][1948] 2 All ER 89.
[63]In doing so, he referred to Bulli Coal Mining Co v Osborne [1899] AC 351, 364.
[64][1948] 2 All ER 89, 94H.

The Court of Appeal allowed an appeal by the plaintiff. It held that reliance upon the time bars in the Limitation Act was prevented, not because of fraud, but because there had been fraudulent concealment.

As to the issue of fraud, the Court held that s 26(a) operated only where it was necessary to allege fraud as an essential element of the cause of action. Lord Greene MR said:

… the plaintiff’s argument under para. (a) fails on the ground … that the action is not based on fraud. It must be borne in mind that s. 26 is a section of general application. It applies to every sort of action which is affected by the Act. Of these many can properly be said to be based upon fraud: for example, an action for damages for deceit and an action claiming rescission of a transaction brought about by fraud. In all such cases fraud is a necessary allegation in order to constitute the cause of action. In other actions covered by the Act fraud is not a necessary allegation at all and the action of conversion is one of them.[65]

[65][1949] 1 KB 550, 558. See also 567 (Somervell LJ), 571 (Singleton LJ).

As to the issue of fraudulent concealment, the issue was seen to be whether the phrase ‘concealed by the fraud of any such person’ referred only to steps taken by a tortfeasor subsequent to the tortious conduct in order to conceal it or whether such concealment could be ‘implicit in the technique adopted in committing the tort, and therefore contemporaneous with it’.[66] The Court held that the very circumstances in which the property had been converted could themselves amount to fraudulent concealment.
[66]Ibid 560 (Lord Greene MR).

Each of the judges in the Court of Appeal considered that the concept of ‘fraudulent concealment’ in the Act was informed by equity. Referring to Bulli Coal Mining Co v Osborne,[67] Lord Greene MR said:

But there may, in my opinion, be fraudulent concealment of a cause of action which is not subsequent to the act which gives rise to the cause of action; it may acquire its character as such from the very manner in which that act is performed. It is not, I think a right construction of the statute to confine “fraudulent concealment” to what [counsel for the defendants] described as “fraud in the ordinary sense.” This, as far as I understood him, meant fraud which, in its nature, is sufficient to give rise to an independent cause of action. This definition would exclude the wide range of conduct which before the statute was regarded in equity as so dishonest as to prevent the Statute of Limitations (or its analogous application in equity) from coming into operation. As this is an amending statute it would, of course, have been open to the legislature to effect so sweeping a change in the law. If it had done so a striking result would have followed. Provided an action was not based on fraud and provided there was not any subsequent active concealment of a fraudulent nature, the wrongdoer would have obtained the benefit of the statute, however furtively or surreptitiously the act complained of was committed.[68]

[67][1899] AC 351.

[68][1949] 1 KB 550, 559. Somervell LJ also considered that (at 567) the reference to ‘fraud’ in the phrase ‘concealed by fraud’ ‘should have the same meaning as “fraud” in the Real Property Limitation Act, 1833, and in the general equitable principles on which this section of the Act is based and which it extends. Where a word has been construed judicially in a certain legal area, it is, I think, right to give it the same meaning if it occurs in a statute dealing with the same general subject-matter unless the context makes it clear that the word must have a different construction’. See also 572 (Singleton LJ).

Lord Greene MR focused on the fiduciary duties owed by a bailee to a bailor. Rather than be faithful to the confidence reposed in them, the ‘real determining object which led the defendants to act in flagrant disregard of their duties to the plaintiff’[69] was their belief that they were ‘entitled to disembarrass themselves of all obligations of safe custody in respect of chattels which might interfere with the closing down of the business provided that he considered their value or lack of value to be such as to make it “not worth while to keep them.”’[70] The defendants had contended that the goods were valueless, or had been damaged or that it was impossible to communicate with the plaintiff or that the goods had been rejected by her or that storage fees might not be paid. Given their ‘real determining object’ in disposing of the packages, Lord Greene MR said that these contentions were ‘self deceptive’. He concluded:

I am of opinion that the conduct of the defendants, by the very manner in which they converted the plaintiff’s chattels in breach of the confidence reposed in them, and in circumstances calculated to keep her in ignorance of the wrong that they had committed amounted to a fraudulent concealment of the cause of action. When she came to claim her goods she expected to find them waiting for her. The fact that she did so expect was due to the manner in which the defendants had chosen to act. This, in the circumstances, can, in my opinion, only be descried as furtive and surreptitious.[71]

[69]Ibid 562.

[70]Ibid 563.

[71]Ibid 566.

In Kitchen v Royal Air Force Association,[72] a firm of solicitors, who had been retained by the plaintiff to investigate possible claims against an electricity company arising out of the electrocution of her husband, passed on to her a gratuitous payment made by the electricity company which had imposed the condition that it be passed on to her anonymously. The manner in which the payment was transmitted to her by the solicitors disguised from her that she may have a possible claim against them for their negligence. Eventually, the plaintiff brought a claim against the solicitors for negligent breach of retainer. They pleaded the claim was barred under the Limitation Act 1939 (Eng). In reply, the plaintiff relied on s 26(b). Lord Evershed MR said:

If then the solicitors were acting, as I think they were, for the plaintiff, what was the effect of the concealment from her of this payment? It is all very well now to justify their having done so on the ground that otherwise she possibly, or probably, would have got nothing from [the electricity company], but I cannot accept that as a satisfactory answer. If the appellants were, as I hold they were, acting as solicitors for the plaintiff, they clearly should have informed her of what [the electricity company], were proposing and, indeed, [the senior partner of the solicitors] himself so stated. A necessary consequence of the concealment was, as they must, if they had given any thought to the matter at all, have realized, was a concealment also from the plaintiff of the real effect of their having thrown away—and I use that word deliberately—any case which she might have possessed under the Fatal Accidents Acts in the previous May. Does, however, that concealment amount to fraud? I repeat that there is no finding and no justification for any finding of dishonesty as that word is ordinarily understood. But it is now clear that the word "fraud" in the section which I have read, is by no means limited to common law fraud or deceit. Equally, it is clear, having regard to the decision in Beaman v. A.R.T.S. Ltd. that no degree of moral turpitude is necessary to establish fraud within the section. What is covered by equitable fraud is a matter which Lord Hardwicke did not attempt to define 200 years ago, and I certainly shall not attempt to do so now, but it is, I think, clear that the phrase covers conduct which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for the one to do towards the other.[73]
[72][1958] 1 WLR 563; [1958] 2 All ER 241. See also King v Victor Parsons & Co [1973] 1 WLR 29, 33-34 (Lord Denning MR), 36 (Megaw LJ), 41 (Brabin J).
[73][1958] 1 WLR 563, 572-573; 576 (Parker LJ); 578-579 (Sellers LJ); [1958] 2 All ER 241, 249; 251-252 (Parker LJ); 253-254 (citations omitted).

The application of fraudulent concealment

By adopting the principles that equity had developed with respect to ‘fraudulent concealment’, the Court of Appeal (Eng), in Beaman v A.R.T.S. Limited,[74] essayed a broad interpretation of the phrase ‘concealed by the fraud of any such person’ in s 26(b).
[74][1949] 1 KB 550.

It also needs to be borne in mind that ‘(w)here money has been stolen, it is trust money in the hands of the thief, and he cannot divest it of that character’.[75] Bearing in mind the decisions in courts of equity before the English Act of 1939, it seems unlikely that equity would have had much patience with the distinction that the appellant seeks to draw in this case, namely that a thief has not engaged in fraudulent concealment such as to lose the benefit of limitation because, though he has not revealed his identity, he has nonetheless not disguised from his victim that his goods have been converted. The failure of a thief to disclose his or her identity to the true owner of stolen property so as to frustrate the ability of the owner to vindicate their rights in respect of what has become trust property in the hands of the thief is plainly unconscionable, and such a failure, in my opinion, amounts to fraudulent concealment.
[75]Black v S. Freedman & Co (1910) 12 CLR 105, 110 (O’Connor J); Creak v James Moore & Sons Pty Ltd (1912) 15 CLR 426. ‘These cases, and the principle that a thief holds stolen property in trust for the victim, have been treated as settled law. The proposition that a thief is a trustee of the stolen property is also accepted by leading Australian text writers.’; see Kenneth Handley, ‘The Black v Freedman Trust: Vindicating Proprietary Rights or Remedying Wrongs’ in Elise Bant and Michael Bryan (eds), Principles of Proprietary Remedies (Lawbook, 2013) 117, 118. See also Alistair Hudson, Equity and Trusts (Routledge-Cavendish, 6^th ed, 2010) 12.4.3 (‘Profits from Theft’).

Section 27(a)

In their notice of contention, the respondents contend that the trial judge should have held that the reference to fraud in s 27(a) was not limited to common law fraud or deceit but that it extended to, and operated to include, causes of action that involved elements of moral turpitude or dishonesty such as conversion by theft as well as causes of action based on common law fraud or dishonesty.

The respondents contend that the ‘weight of authority’ supports the proposition that, properly construed, s 27(a) contemplates ‘a wider concept of fraud, which focuses on the character of the defendant’s conduct and not merely on the strict characterisation of the cause of action itself, so as to include actions arising from equitable fraud or other dishonest conduct’. They refer to Kitchen v Royal Air Force Association,[76] Seymour v Seymour[77] and Skrijel v Mengler.[78] However, as indicated above, Kitchen v Royal Air Force Association concerned s 26(b) of the Limitation Act 1939 (Eng) which corresponds with s 27(b). Similarly, Seymour v Seymour involved the interpretation of s 55(1)(b) of the Limitation Act 1969 (NSW) which concerns fraudulent concealment rather than fraud.[79]
[76][1958] 2 All ER 241, 249 (Lord Evershed MR).
[77](1996) 40 NSWLR 358, 372 (Mahoney A-CJ).
[78][1998] VSC 71.
[79]See [84] below.

The respondents submit that there is controversy between single judge decisions in Victoria about whether the phrase ‘an action based upon the fraud of the defendant’ is confined to common law fraud, or whether its ambit is wider and extends to more general instances of dishonesty and elements of moral turpitude and equitable fraud based on unconscionability.

However, the controversy (if there is any controversy)[80] to which the respondents point is not relevant. In Beaman v A.R.T.S. Limited,[81] the examples given by Lord Greene MR (an action for damages for deceit or an action claiming rescission of a transaction brought about by fraud) show that he considered that the provision embraced both claims at law and in equity that were based on fraud. It is also necessary to bear in mind that, when, in 1955, the Victorian Parliament adopted the English Act of 1939, it had already been authoritatively construed by the Court of Appeal (Eng) in Beaman v A.R.T.S. Limited. It seems reasonable to presume that Parliament also intended to accept that construction.[82]
[80]The respondent referred to (1) Di Sante v Camando Nominees Pty Ltd [2000] VSC 211, [49] (Warren J); (2) CE Heath Underwriting & Insurance (Australia) Pty Ltd v Daraway Constructions Pty Ltd (Unreported, Supreme Court of Victoria, Batt J, 3 August 1995) BC9503848 (a case on s 27(b)); (3) Rasmussen v Rasmussen [1995] 1 VR 613, 635 (Coldrey J); (4) Reader v Fried [2001] VSC 495 (Pagone J) (both cases on s 21(1)). See also, Kitchen v Royal Air Force Association [1958] 2 All ER 241, 249 (Lord Evershed MR); and Seymour v Seymour (1996) 40 NSWLR 358, 374 (Mahoney A-CJ). Skrijel v Mengler [1998] VSC 71.
[81][1949] 1 KB 550.
[82]See DC Pearce and Robert Geddes, Statutory Interpretation in Australia (LexisNexis, 6^th ed, 2006) [3.43]. See eg Re Alcan Australia Limited; Ex Parte Federation of Industrial Manufacturing & Engineering Employees (1994) 181 CLR 96, 106: ‘There is abundant authority for the proposition that where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already "judicially attributed to [them]" Barras v Aberdeen Steam Trawling and Fishing Co. See also D'Emden v Pedder; Pillar v Arthur; Platz v Osborne, although the validity of that proposition has been questioned; Salvation Army (Victoria) Property Trust v Shire of Fern Tree Gully; Reg. v Reynhoudt; Flaherty v Girgis. But the presumption is considerably strengthened in the present case by the legislative history of the Act.’(citations omitted). The strength of the presumption is affected by the status of the court that provided the relevant construction before re-enactment; see Williams v Oataway (2005) 11 VR 529, 540 (Batt JA with whom Buchanan and Vincent JJA agreed). See also, the second reading speech on the Limitation of Actions Bill 1955, 7 September 1955, (Mr Rylah A-G).

In my opinion, the trial judge correctly dismissed the respondents’ argument based on s 27(a): a claim in conversion is not based upon the fraud of the defendant.

Section 27(b)

In upholding the respondents’ claim based on s 27(b), the trial judge decided not to follow the judgment of Streatfeild J in RB Policies at Lloyd’s v Butler.[83] In my opinion, he was right to do so.
[83][1950] 1 KB 76; [1949] 2 All ER 226.

In that case, the plaintiff’s car was stolen by an unknown person in June 1940. It was not discovered until January 1947 by which time it was found in the possession of the defendant who, the judge found, had ‘given good consideration for it without knowledge that it was a stolen car’.[84] Not only that, the judge also found that, between the day it was stolen and the day it was purchased by the defendant, it had passed through ‘a line of intermediate purchasers’. Nevertheless, the judge held that the cause of action accrued when the car was stolen and that the fact that the owners were unable to bring a claim for detinue (because they did not know who the thief was) was irrelevant.
[84][1950] 1 KB 76, 82; [1949] 2 All ER 226, 230.

Streatfeild J said of s 26:

The section was inserted to protect a plaintiff who was ignorant of his right of action in the special case of fraudulent concealment, and to overcome the difficulty that time would otherwise have been running against him, unknown to himself. But for the section, time would have run against him from the accrual of his right of action, for it is to be noted that the section, even in the case of fraudulent concealment, does not say that the cause of action shall not accrue until the fraud is discovered, but simply that "time shall not begin to run" until that event.
It is to be noted that s. 26 is the only provision in the Limitation Act 1939, in which a special exception of that nature is made. Nowhere is it to be found that where a person, who otherwise has a perfect cause of action, cannot pursue it because the defendant is unknown, time does not run. And it seems to me, therefore, that prima facie as soon as there is a cause of action (as there clearly was in the present case the moment the motor car was stolen) time begins to run notwithstanding the fact that the plaintiff is ignorant of the identity of the defendant.[85]

The explanation of why ignorance of the identity of the defendant did not matter was as follows:

It was, no doubt, a misfortune to the plaintiffs that they could not find a defendant whose name they could insert in a writ; but every other ingredient of the cause of action was present. The motor car had, in fact, been converted. A statement of claim could have been drawn without any difficulty; the only item missing being the name of the defendant.[86]

[85][1950] 1 KB 76, 80; [1949] 2 All ER 226, 229.

[86][1950] 1 KB 76, 79-80; [1949] 2 All ER 226, 228.

The facts that the defendant was an innocent purchaser for value and that there were several intermediate purchasers, all presumably innocent, made the operation of the proviso relevant. But Streatfeild J did not decide the case on that ground. He said:

Can it be said, therefore, that the cause of action being otherwise complete, the ignorance of the owner of the car of the identity of the person against whom he could bring an action was of itself sufficient to prevent the accrual of that cause of action? I think not, and I agree with the argument of [counsel for the defendant]. If that were so it would lead to appalling results. As [counsel for the defendant] suggested to me, if his watch were stolen, and he discovered it years later, in the pocket of a wholly innocent person who had bought it many years before, it would follow that, if the plaintiffs are right, he could bring an action for the recovery of his watch merely because he had not known who was the original thief. I cannot think that that is the policy of the Act, or that to construe its words in favour of the plaintiffs' argument would harmonize with the intention of the legislature.[87]

[87][1950] 1 KB 76, 81; [1949] 2 All ER 226, 229.

Finally, Streatfeild J described what he understood to be the policy underlying the Limitation Act 1939 (Eng). He accepted a submission ‘that it is a policy of the Limitation Acts that those who go to sleep upon their claims should not be assisted by the courts in recovering their property …’.[88] He also considered it to be another ‘equal policy’ behind the Act that ‘there shall be an end of litigation, and that protection shall be afforded against stale demands’.[89]
[88]Ibid.
[89]Ibid.

The trial judge gave several reasons for choosing not to follow RB Policies at Lloyd’s v Butler. He said:[90]

Although the writers of leading textbooks and learned articles appear to have accepted Butler as a good authority for the proposition that time begins to run against the owner of a stolen chattel, even though the owner does not know the identity of the thief or the whereabouts of the chattel,[91] I agree with the criticisms of the decision. First, it does not make sense, in my opinion, to say that time should begin to run because all of the ingredients of the cause of action are present and a statement of claim could be drawn, if the identity of the defendant is not known to the plaintiff and could not with reasonable diligence have been discovered by him or her.
Secondly, whilst there is good reason for protecting people against “stale demands”, the proviso to s 27 of the Limitation Act provides a mechanism for balancing the competing interests of the true owner of the chattel and the possessor of the chattel. Not even the true owner can recover the chattel where it has been purchased “for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that any fraud had been committed”. As stated previously, application of the proviso would have led to the same result in Butler.
Thirdly, the existence of the proviso means that the “appalling results” for innocent persons, which Streatfeild J feared would follow from holding that time did not run if the identity of the thief was not known, will not occur.
Finally, it seems to me that it is not relevant to talk about people “sleeping upon their claims” when the identity of the thief or subsequent converters is not known and could not with reasonable diligence have been discovered.
I therefore consider that I should not regard the decision in Butler as pre-empting the question of what s 27(b) means. It seems to me that concealing the right of action by fraud logically should also include concealing the identity of the tortfeasor. As I have said before, it seems to me to be incongruous that time can run against the owner of a chattel and that ownership rights can be lost when the owner does not know who he or she can sue to recover the chattel. It has been said that a cause of action accrues when all of the necessary facts have occurred and there exists both a competent plaintiff who can sue and a competent defendant who can be sued.[92] But if the identity of the potential defendant is not known how does one know that there is a competent defendant capable of being sued in existence? The thief may have died intestate in the period between the theft and the commencement of the proceeding and no grant of letters of administration may yet have been obtained,[93] or the wrongdoer may be entitled to diplomatic immunity at the time of the tort,[94] so that there is no defendant capable of being sued in existence. Even if there is a competent defendant in existence without these unusual impediments to being sued, how can he be capable of being sued if his identity is not known? I therefore agree with the suggestion by Michael Goodman that “the identity of the defendant is an integral part of the ‘cause of action’.”[95]

[90]Reasons [71]-[75].

[91]See, for example, Anthony M Dugdale, Clerk & Lindsell on Torts (Sweet & Maxwell, 18^th ed, 2000) [33.16]; Norman Palmer, Palmer on Bailment (Sweet & Maxwell, 3^rd ed, 2009) [40-017]; Peter Handford, Limitation of Actions The Laws of Australia (Thomson Reuters, 3^rd ed, 2012) [5.10.450]; AT Kenyon, ‘Legal Issues and Recovery Processes: Australia’ (Paper presented at the Australian Institute of Criminology Art Crime Conference, Sydney, December 1999); AT Kenyon and S Mackenzie, ‘Recovering Stolen Art – Australian, English and US Law on Limitations of Action’ (Faculty of Law, University of Melbourne, Public Law and Legal Theory, Working Paper No. 23, 2002).

[92]Peter Handford, Limitation of Actions The Laws of Australia (Thomson Reuters, 3^rd ed, 2012) [5.10.450].

[93]Ibid.

[94]Musurus Bey v Gadban [1894] 2 QB 352.

[95]MJ Goodman, First Catch Your Defendant – Limitation and the Unknown Tortfeasor, (1966) 29 MLR 366, 369.

Subject to one significant reservation and a further observation, I have very little to add to these observations, which strike me as cogent.

My reservation is as follows: it should be noticed that Part I of the Act is headed ‘Periods of Limitation’ and Part II is headed ‘Extension of Limitation Periods’. Section 27 comprises Division 4 of Part II. Division 4 of Part II is headed ‘Fraud and mistake’. Section 27 provides that, in the circumstances that it describes, ‘the period of limitation shall not begin to run’. Thus, s 27 is premised on the hypothesis that, but for fraud, fraudulent concealment or mistake, the period of limitation has begun to run. Accordingly, in so far as the trial judge’s reasons may be read as suggesting that, in a case of conversion by theft, the cause of action does not accrue until the identity of the thief is known, I cannot agree with them.[96]
[96]In further written submissions addressed to the issue when the cause of action accrues, the respondents accepted that ‘the identity of the person so converting a chattel is not an essential element in terms of the completion of the accrual of the ‘cause of action’ in conversion.’ In summing up his reasons, the trial judge said (at [82]): ‘I have, therefore, concluded that time did not begin to run on 11 April 1991 in respect of the conversion of the Painting because the thief had fraudulently concealed Mr James Watt’s right of action by concealing his identity. That is, s 27(b) of the Limitation Act applies unless the proviso comes into operation.’ The respondents said that this conclusion shows that the judge rested his judgment, not on the issue of accrual of the cause of action, but on the issue of the postponement of time under s 27.

My further observation: in argument before Streatfeild J and in his reasons, no reference is made to the decision of the Court of Appeal (Eng) in Beaman v A.R.T.S. Limited.[97] As my analysis above attempts to demonstrate, when a thief converts property by stealing it, the very failure of the thief to disclose his or her identity to the true owner constitutes fraudulent concealment within 27(b).
[97][1949] 1 KB 550. Beaman v A.R.T.S. Limited was decided on 14 February 1949. RB Policies at Lloyd’s v Butler was argued on 23 June 1949, and decided the next day.

In his reasons, Streatfeild J made reference to a series of propositions that must be axiomatic:

(a) people who go to sleep on their rights should not be assisted by the courts;

(b) there should be an end to litigation; and

(c) there should be protection against stale demands.

However, in my opinion, the manner in which the Act relates those axioms to each other is different from the way suggested by Streatfeild J. By itself, the barring of actions satisfies each of the axioms. But, the Act effects other policies, and it does so by barring actions in a qualified way. One of the other policies is to withhold the benefits that the Act otherwise confers from those who have been guilty of fraud and from those who have been guilty of fraudulent concealment. The matter is complicated when third parties, who are not themselves parties to the fraud or to the fraudulent concealment, become involved. The Act confers its benefits on them if they are bona fide purchasers for value without notice; if not, they are to be in no better a position than those through whom they have derived their interest in the subject matter of the litigation.

There is another matter which, in my opinion, adds force to the conclusion reached by the trial judge. Section 27 provides that, in the cases to which it applies, ‘the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it’. Earlier in these reasons reference was made to cases in which a putative plaintiff may remain wholly ignorant of having a cause of action: the landowner who did not know that his land was being mined, or the numismatist who does not know that a thief has substituted worthless copies for valuable originals. One can also think of a purchaser of a work of art who has been sold a fake.[98] Although the phrase ‘or could with reasonable diligence have discovered it’ may have work to do in cases in which a person is wholly unaware that they have a cause of action, it seems that it has plain work to do in cases, such as the present, where the existence of the cause of action is known, but the identity of the person against whom the right of action exists is unknown.
[98]See [31] above.

With respect, the policies underlying the Limitation Act 1939 (Eng) may have been more subtle and complex than is suggested in RB Policies at Lloyd’s v Butler.[99]
[99]The appellant also referred to Frisby v Theodore Goddard & Co, The Times, 7 March 1984. In that case, the plaintiff did not contend that the cause of action had been concealed from him. Lord Donaldson MR (with whom Fox and Stephen Brown LJJ agreed) said ‘[h]is complaint is that certain evidence was concealed which, he says, would have supported his right of action. This is something wholly different. Having a right of action and knowing you have it is one thing. Being able to prove it is another. Bridging this gap, when all or an important part of the evidence is or may be in the hands of the defendants, is the function of discovery.’ See also Ag-Exports (Australia) Pty Ltd v Export Finance and Insurance Corporation [2003] NSWSC 175 (Simpson J).

The trial judge noted two obiter dicta in which judges of this Court appear to have accepted that the words of s 27 are ‘broad enough to include fraudulent concealment of the identify of the tortfeasor as well as of the occurrence of the tort itself’.[100]
[100]Reasons [79]. The trial judge referred to the observations of McInerney J in Martinus v Kidd [1982] VR 807, 812 and of Eames J in Skrijel v Mengler [1998] VSC 71, [60].

Other statutory provisions

The appellant considered it ‘noteworthy’ that other limitation enactments make express provision in relation to the identity of the tortfeasor. In New South Wales, for example, s 55(1)(b) of the Limitation Act 1969 speaks in terms of where ‘a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed’.[101] However, I agree with the observations of the trial judge that the technique of interpreting a provision in one Act by reference to a provision in another Act in another jurisdiction can be fraught with difficulty.[102] The explanation of the NSW provision is simple enough. There was no general limitation Act in that state before the enactment of the Limitation Act 1969. In enacting that legislation, Parliament adopted the recommendations contained in the Report of the Law Reform Commission on Limitation of Actions, October 1967. The Report dealt with the question of fraud and fraudulent concealment. Paragraph 270 notes that, under s 26 of the Limitation Act 1939 (Eng) ‘the fraudulent concealment of a cause of action does not extend to the fraudulent concealment of the identity of the defendant’. RB Policies at Lloyd’s v Butler is cited as authority for this proposition. The Report does not analyse or criticise the reasons for the decision.
[101]Reference was also made to Limitation Act 1981 (NT) s 42(1)(b). The appellant also referred to s 2 of the Limitation Act 1980 (Eng) which amended the 1939 Act to deal with cases of conversion by theft.
[102]Reasons [78]-[79].

Conclusion on ‘fraudulent concealment’

The trial judge was right not to follow RB Policies at Lloyd’s v Butler. In my opinion, that decision is inconsistent with Beaman v A.R.T.S. Limited which provided authoritative guidance on the interpretation of the concept of fraudulent concealment in s 27(b). In the latter case, the Court of Appeal (Eng) accepted that the principles developed in equity, including those explained in Bulli Coal Mining Co v Osborne, inform the proper interpretation of that provision. Subsequently, other courts have followed the approach in Beaman v A.R.T.S. Limited.Having canvassed the authorities that followed Beaman v A.R.T.S. Limited, in Bartlett v Barclays Bank Trust Co Ltd (No 1),[103] Brightman J said:

"Fraud," in the context of section 26(b), does not mean common law fraud or deceit. But it does seem to envisage conduct which, if not fraudulent in the more usual sense, is unconscionable having regard to the relationship between the parties: see Kitchen v Royal Air Force Association. "Fraud" is used in the equitable sense to denote conduct by the defendant or his agent such that it would be against conscience for him to avail himself of the lapse of time.[104]

In my opinion, were Mr Watt to have made a claim in conversion, it would have been ‘against conscience’ for the thief to have set up, as a defence to the claim, s 5 of the Limitation of Actions Act 1958 (Vic). That circumstance also affects those who claim through the thief even if not a party to the theft.

[103][1980] Ch 515.

[104]Ibid 537 (citation omitted). In Tito v Waddell (No. 2) [1977] 1 Ch 106, Megarry VC said (at 244-245):

The term “concealed fraud” is still often used to describe this head. This is misleading, in that it suggests that this head applies only when it is fraud that is concealed, and that any process of concealment suffices, whereas in fact the head applies whatever the right of action, though not unless the process of concealing the right of action is shown to be fraudulent. “Fraudulent concealment” thus seems to me to be the preferable term. For most purposes it is a sufficiently accurate description of the words in section 26(b) of the Act of 1939: “the right of action is concealed by the fraud” of the persons in question, namely, “of the defendant or his agent or of any person through whom he claims or his agent”: see section 26(a). As I have indicated, the word “fraud” is here used in a sense which embraces conduct or inactivity which falls far short of fraud at common law: see, e.g., Kitchen v Royal Air Force Association; King v Victor Parsons & Co. Indeed, as the authorities stand, it can be said that in the ordinary use of language not only does “fraud” not mean “fraud” but also “concealed” does not mean “concealed,” since any unconscionable failure to reveal is enough.

‘(T)he defendant or his agent or of any person through whom he claims or his agent’

There is no suggestion that the appellant has himself engaged in any fraudulent concealment; until the painting was seized by the police, he was unaware that it had been stolen from Mr Watt. However, that circumstance does not avail him, because his claim to the painting is based on the fraudulent concealment of the thief.

Section 27(a) uses the expression ‘the defendant or his agent or of any person through whom he claims or his agent’. Section 27(b) uses the expression ‘any such person as aforesaid’. The persons ‘as aforesaid’ in the latter provision are the persons described in the former.[105]
[105]It seems that, in the way that it fixes donees with the fraudulent concealment of their donors, the Act has departed from the way in which s 26 of the Real Property Limitation Act 1833 was interpreted. Section 26 seems to have been the prototype for s 26(b) of the Limitation Act 1939 (Eng) . See In re McCallum [1901] 1 Ch 143; supra [50].

The expression ‘based upon the fraud of the defendant or his agent or any person through whom he claims or his agent’ (in s 27(a)) identifies several people whose fraud (or fraudulent concealment) will trigger the operation of the section. Thus:
(a)       the defendant himself.
(b)      the agent of the defendant.
(c)       any person through whom he (ie the defendant) claims.
(d)      the agent of any person through whom the defendant claims.
The first two categories are straightforward. The third category is of present relevance. The meaning of the expression ‘any person through whom he claims’ is supplemented by s 3(4) of the Act. In so far as the painting was stolen from James Watt and eventually came into his possession, the appellant claims through the thief. This becomes clear when the facts of the present case are transposed on the assumption that the executor respondents had brought a claim in conversion and had named the appellant as the defendant. The appellant would have pleaded that the claim was barred by s 5(1) of the Act. The respondents would have replied by pleading s 27, alleging that s 5(1) did not avail the appellant, not because the appellant had committed any fraud or had been a knowing party to any concealment, but because the appellant would trace his title to Rand, and Rand’s title would be traced (proximately or remotely) to the thief. Thus, the thief is a person through whom the appellant claims. The trial judge appears to have understood the provisions to operate in this way.[106]
[106]Reasons [65]. In Eddis v Chichester Constable [1969] 2 Ch 345 a tenant for life under a family settlement (a brigadier) sold a Caravaggio to a consortium of art dealers. The consortium sold the painting to an art gallery in the United States. The trustees of the estate had not given any permission to the brigadier to sell the painting. When the trustees discovered the sale, they sought damages from the estate of the brigadier for breach of trust and from the art consortium for conversion. Both defendants pleaded the Limitation Act 1939. A question arose whether the brigadier was a ‘person through whom’ the defendants ‘claim’. Section 31(4) of the 1939 Act was in the same form as s 3(4) of the Victorian Act. The Court held that the art consortium claimed through the brigadier. Lord Denning MR said (at 356-357):
I read that as meaning that a person is deemed to claim property through another person, if he derives his title to the property from that person … In my opinion, the brigadier was a person through whom the defendants claim. If you should ask the defendants: “From whom do you derive your title to this picture?” they would be bound to say: “From the brigadier.” That question and answer show that they claim through him. They had, through him, a title which was valid against all the world except the trustees of the settlement.

The appellant also contended that, even if concealment of the identity of the tortfeasor triggers the operation of s 27(b) of the Act, the limitation period must commence once there is no longer any concealment of the tortfeasor’s identity. The appellant also pointed out that the trial judge held that ‘Mr Rand did not conceal the fact that he had gained possession of the Painting’. However, whatever evidence there was to the effect that Rand and the appellant had not concealed the painting, there was no suggestion that its location and possession were ever disclosed to Mr Watt or to his executors; and, there was evidence of the steps taken by the latter of all they had done to locate it.

Defamation provisions

During oral argument, reference was made to the operation of s 5(1AAA) and s 23B of Limitation of Actions Act 1958 (Vic). In large part, these submissions were premised upon the trial judge having decided that, in tort, the cause of action does not accrue until the identity of the tortfeasor is known.[107] As already indicated, if that proposition did form a part of his reasons for decision, it was in error. Some of the appellant’s contentions give further reason for holding that such a proposition is erroneous.[108] Further, as indicated above, the respondents accepted that ‘the identity of the person so converting a chattel is not an essential element in terms of the completion of the accrual of the ‘cause of action’ in conversion.’
[107]Reasons [75].
[108]In defamation, the cause of action accrues when the defamatory material is published. Section 5(1AAA) bars proceedings in defamation ‘after the expiration of 1 year from the date of the publication of the matter complained of’. If the identity of the tortfeasor is part of the cause of action, anonymous publication may cause such accrual to be postponed. The appellant gave the following as an example of the anomalous consequence of such a proposition: ‘D anonymously publishes a letter defamatory of P on 1 January 2012. Even though P knows of the letter’s publication on 1 January 2012, P is unable to discover D’s identity until 1 February 2013’. Thus, the limitation period would expire before the cause of action has accrued.

Section 5(1AAA) and s 23B were included as part of those amendments that followed the introduction of the Defamation Act 2005 (Vic). That Act was introduced as part of a Commonwealth-State legislative program to bring uniformity to defamation legislation throughout Australia.[109] The amendments to the Act set out specific and separate rules relating to defamation proceedings.
[109]See the Explanatory Memorandum, Defamation Bill 2005 (Vic) cl 1.

Section 5(1AAA) sets out the time limit for filing a claim in defamation:
An action for defamation must not be brought after the expiration of 1 year from the date of the publication of the matter complained of.
Section 23B explains the circumstances in which time for filing a claim in defamation may be extended:
(1)A person claiming to have a cause of action for defamation may apply to a court for an order extending the limitation period for the cause of action.
(2)A court, on an application under subsection (1), must, if satisfied that it was not reasonable in the circumstances for the plaintiff to have commenced an action in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period mentioned in section 5(1AAA) to a period of up to 3 years from the date of the publication.
(3)A court may not order the extension of the limitation period for a cause of action for defamation other than in the circumstances specified in subsection (2).
(4)If a court orders the extension of a period of limitation applicable to a cause of action under this section, that period of limitation is accordingly extended for the purposes of an action brought by the applicant in that court on the cause of action that the applicant claims to have.
(5)An order for the extension of a limitation period, and an application for such an order, may be made under this section even though the limitation period has already expired.
Pursuant to an invitation from the Court, the parties filed further written submissions that addressed these matters.

The appellant said that the trial judge’s interpretation of s 27(b) of the Act runs counter to the special provisions relating to an extension of time for defamation claims under s 23B. He argued that the orthodox approach would consider that the s 23B considerations sit separately and distinct from the s 27 considerations as defamation is not an action ‘based on fraud’ and nor can the cause of action be considered to be concealed by fraud as publication is a pre-requisite to a claim being brought. However, the appellant said the interpretation given by the trial judge to s 27(b) would contradict the purpose of s 23B. Where a plaintiff wishes to sue in defamation but does not know the identity of the defendant author, the plaintiff could rely on s 27(b) to extend time, avoiding, thereby, the far more restrictive test in s 23B.

The respondents contended, however, that ss 5(1AAA) and 23B effectively excise defamation from the rest of the provisions in the Act. Therefore, plaintiffs in defamation actions cannot use the general provisions in s 27 to extend the time to file a claim. First, they rely on the wording of s 23B. They contend that s 23B(3) makes it clear that a court can only extend time ‘for a cause of action for defamation’ under the circumstances set out in sub-section (2).

Secondly, they say that a purposive interpretation of the two provisions leads to the same result. They submitted that the Court should interpret s 23B in light of its legislative background, which, they contend, leads to two separate regimes: one dealing with defamation and one with other causes of action.

Thirdly, the respondents argue that, if the Court was not minded to look at the legislative intent of the amendments to the Act, the maxim generalia specialibus non derogant would apply to s 23B. Section 23B, they say, is a specific provision regarding defamation that must prevail over the general provision in s 27.

In my opinion, s 23B is sui generis. It is not affected by other provisions in the Act; nor, in its turn, does it affect them. Section 23B of the Act makes it clear that the only circumstances in which time can be extended to file a claim for defamation is under the regime set out in s 23B. Section 27 has no application when assessing whether an extension of time in defamation should be granted by the court.[110] Further, even if it was thought that the various provisions created some ambiguity, the legislative intent points towards a separate regime governing the extension of time in defamation matters.
[110]Section 23B of the Act confers a discretion on the court to extend the limitation period mentioned in s 5(1AAA) to a period of up to 3 years from the date of publication. The learning on s 26(b) with respect to fraudulent concealment may be a consideration relevant analogously to the exercise of that discretion.

Conclusion

For these reasons, the appeal should be dismissed.

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[2014] VSCA 60

14 May 2014