A barrister borrowed 1,000 pounds for two months in 1910 but did not repay it. In 1915 the creditor pressed for payment and the debtor wrote to acknowledge the debt but asked for more time. The creditor ‘stayed his hand’. When proceedings were commenced in 1920, the debtor pleaded the statute of limitations. There had to be not only an acknowledgement but also an inference of a promise to pay. The issue before the House was whether such a promise could be inferred. It was not suggested that the letters might be excluded as written in the course of negotiations.
Held: The letters were sufficient to lift the time bar. It was unjust for a debtor to request time to pay an acknowledged debt and then plead the statute. Counsel for the creditor said ‘the debtor . . was asking for an indulgence, and by means of those letters he obtained the indulgence which enabled him to set up the statute.’
Lord Sumner: ‘as a rule the debtor who writes such letters has no intention to bind himself further than he is bound already, no intention of paying so long as he can avoid payment, and nothing before his mind but a desire, somehow or other, to gain time and avert pressure.’
Judges:
Viscount Cave, Lord Sumner
Citations:
[1922] 2 AC 507
Jurisdiction:
England and Wales
Cited by:
Cited – Bradford and Bingley Plc v Rashid HL 12-Jul-2006
Disapplication of Without Prejudice Rules
The House was asked whether a letter sent during without prejudice negotiations which acknowledged a debt was admissible to restart the limitation period. An advice centre, acting for the borrower had written, in answer to a claim by the lender for . .
Applied – Dungate v Dungate CA 1965
A claim was made against the widow and administratrix of the deceased’s estate by his surviving brother. The widow wrote to the creditor: ‘Keep a check on totals and amounts I owe you and we will have account now and then . . .Sorry I cannot do you . .
Lists of cited by and citing cases may be incomplete.
Limitation
Updated: 21 July 2022; Ref: scu.243099