Limitation periods applicable to insolvency claims
Limitation periods applicable to insolvency claims

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Limitation periods applicable to insolvency claims
  • Relevance of limitation periods to insolvency claims
  • Limitation in relation to claims by insolvent companies and trustees in bankruptcy
  • When does the limitation period start to run?
  • Claims arising from insolvency law
  • Time periods applicable to reviewable transactions
  • Exceptions
  • Limitation periods in insolvency claims
  • Limitation in relation to claims against insolvent parties
  • Liquidation and bankruptcy
  • More...

Limitation periods applicable to insolvency claims

Relevance of limitation periods to insolvency claims

Limitation periods refer to the time during which a claim may be brought. If court proceedings are commenced after the relevant limitation period has expired, the claim will be time-barred and the defendant will have a complete defence, allowing it to apply to have the claim struck out.

The Supreme Court has held that where a cause of action accrues at midnight on a particular day, the first day of the limitation period starts the next day. If a cause of action accrues part way through a day, that day is excluded from the computation of time. For further information, see News Analysis: Have I issued my claim in time? Let me count the days (Matthew v Sedman).

For further reading on limitation generally, see Practice Note: Limitation Act 1980—general application.

The Limitation Act 1980 (LA 1980) prescribes different limitation periods for different categories of claim. In an insolvency context, claims are generally divided into the following three categories:

  1. actions based on a ‘speciality’ have a limitation period of twelve years. Speciality claims include those arising from a statutory cause of action and generally refer to claims to recover property (which would include setting aside a transaction in an insolvency context)

  2. claims to recover a sum of money under statute, which have a limitation period of six

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