Hornsey Local Board v Monarch Investment Building Society: CA 1889

The local authority had incurred expense in paving a street. They were entitled to apportion those expenses amongst the owners of the properties fronting onto that street and summarily to recover from the respective owners the amounts so apportioned. In addition statute provided that such expenses should be charged on the premises in respect of which they were incurred with interest thereon at the rate of 5% until payment. It was not necessary for the amount due to be ascertained on the sale of a house before the Society had a right to receive it. The charge was imposed when the paving works were completed in 1875. The expenses were not apportioned until 1885. In 1887 a demand for payment was made on the defendant and in 1888 the local board sought to enforce the statutory charge against the defendant. The county court judge granted the order, but the Queen’s Bench Division reversed him.
Held: The appeal failed. The limitation period for a local authority to recover paving expenses ran from the time of imposition even though the charge had not yet been apportioned between the frontagers. The right to receive payment had arisen even though it could not yet enforce payment.
Lord Esher MR ‘It was strongly argued that the words ‘present right to receive the same’ in this section are equivalent to ‘present right to enforce payment of the same’. If there were some overwhelming reason why that construction should be given to the words; if that were the only construction that would render the procedure sensible, I think possibly the words might receive that construction, but I do not think it would be their ordinary meaning in the English language. A present right to receive is not in ordinary English the same as a present right to enforce payment. Then is there any overwhelming reason why we should read the words otherwise than in their natural sense? So far from that, I think that in the present case to read the words in the way suggested for the plaintiffs would raise insuperable difficulties, whereas to read them in their natural sense makes the whole legislation sensible and easier application. The difficulty that arises on the plaintiffs’ construction has been pointed out, viz., that the Board, who have to receive the money, and also to apportion the amount, would have the power to delay the application of the Statute of Limitation for any time they please. When that difficulty was presented, the plaintiffs’ Counsel endeavoured to meet it by the ingenious suggestion that, if the apportionment were not made within a reasonable time, the making of it might be enforced by mandamus; and other modes were suggested of meeting the difficulty. But why should we embark on such questions and invent means of overcoming this difficulty, when by reading the words in their ordinary sense no such difficulty arises? . . .
‘The charge exists, though the exact amount charged may not be ascertained. It is suggested that a person in whose favour a charge is imposed cannot be entitled to receive an amount which is not ascertained. I do not see why this should be so. A sum may be offered to him, which the person offering it thinks to be the right sum, and which he may also think to be the right sum, although the actual calculation of the exact amount has not been made. What is there in law, or reason, or business, to shew that he is not entitled to receive the sum when so offered to him? I cannot see any difficulty in saying that there is a present right to receive the expenses. In the case where a person has only a reversionary right to receive money, or for some other reason the time when he is entitled to receive the money has not yet arrived, it would be different, and there would be no present right to receive the money. . .
So, reading the words of the section in their ordinary sense, it seems to me that in the present case the Local Board were a body of persons in whose favour a charge existed for a sum of money, who were entitled to receive it, and who were capable of giving a receipt or discharge for it . . . It seems to me therefore that the case comes within the words of the section read in their ordinary sense and that there is no reason for giving them any other construction. Consequently the claim of the plaintiffs is barred by the Statute of Limitations.’
Lindley LJ said that expression, a ‘present right to receive’ was ‘a little ambiguous’, but agreed with Lord Esher: ‘. . . and as distinguishable, as apparently it is meant to be, from ‘present right to sue’, everything works out harmoniously; the moment the time of the coming into existence of the charge is ascertained, the period of limitation will begin to run: whereas, if the opposite construction is adopted, we are at once landed in the curious anomaly that the creditor, that is to say, the person who is entitled to the charge, can by his own act postpone his right to sue indefinitely . . .
The section is dealing with charges on land, and it must be borne in mind that such charges are present charges and future charges, reversionary charges, charges in remainder, and such like. One general form of expression is used to include the whole, and that expression is ‘present right to receive.’ It seems to me clear that the meaning is that in each case the moment to be looked to is the moment when the charge comes into present operation; for instance, when reversionary charges are being dealt with, the moment to be looked to is the moment when the reversion falls in and the charge takes effect in possession.’
Lopes LJ said that the right to receive what was secured by a charge arose concurrently with the charge: ‘When, then, does the right accrue to the person or persons in whose favour the charge is imposed to receive the amount secured by the charge? It appears to me that it accrues the moment the charge is imposed on the premises by the statute, that is when the expenses have been incurred and the works completed. It may be that certain things have to be done before the right can be enforced, but the right to receive what is secured by the charge arises concurrently with the charge. The words are ‘present right to receive’ not ‘present right to recover’. The right to receive may exist though the definite sum to be received has not yet been ascertained. There are cases where the legislature requires a notice to be given before an action can be maintained. The right of action however exists as soon as an actionable wrong has been committed, though it cannot be successfully enforced until the statutory requirements are complied with.’

Lord Esher MR, Lopes LJ, Lindley LJ
[1889] 24 QBD 1
Real Property Limitation Act 1874 8
England and Wales
CitedFarran v Beresford HL 30-Aug-1843
The House considered the nature of scire facias, and in particular whether scire facias created a new right, or whether it only operated as a continuation of the original judgment. ‘The present right to receive the same’ was understood by Tindal . .
CitedEarle v Bellingham 24-Jul-1857
The right to receive legacies charged on a reversionary legacy payable under the will of another was not a present right to receive them until the reversionary legacy fell into possession on the death of the life tenant. . .

Cited by:
CitedThe Royal Borough of Kensington and Chelsea v Amanullah Khan and The Wellcome Trust ChD 13-Jun-2001
The authority had served notices on the second defendant, requiring him to execute works to bring a property up to a habitable condition. Eventually the authority executed the works themselves, and sought repayment from him of the costs. He resisted . .
CitedWilkinson and Another v West Bromwich Building Society CA 30-Jul-2004
The Society had repossessed and sold the mortgagors’ house in 1990. It knew then that there was a shortfall, but took no further recovery proceedings until 2002. What was the date from which the relevant limitation period began to run? Though the . .
DistingusihedGreen and others v Gaul and Another; In re Loftus deceased ChD 18-Mar-2005
The claimants began an action in January 2003 to seek to set aside the appointment of an administrator from December 1991, and to have set aside transfers of property made within the estate.
Held: The limitation period against a personal . .
CitedWest Bromwich Building Society v Wilkinson HL 30-Jun-2005
The Society had taken possession of a property in 1989. It located the defendants many years later and sought payment of the excess after deduction of the proceeds of sale, and for interest. The borrowers claimed the debt was expired by limitation . .
CitedDoodes v Gotham, Perry ChD 17-Nov-2005
The trustee in bankruptcy had taken a charge on the property in 1992 to support the bankruptcy in 1988. He sought to enforce it in 2005. The chargor appealed an order which denied he was protected by limitation.
Held: The appeal succeeded. . .
CitedGotham v Doodes CA 25-Jul-2006
The former bankrupt resisted sale of his property by the trustee, saying that enforcement was barred by limitation. He and his wife bought the property in early 1988, and he was made bankrupt in October 1988. He was dischaged from bankruptcy in . .

Lists of cited by and citing cases may be incomplete.

Limitation, Local Government

Updated: 22 January 2022; Ref: scu.182787