I have a question on the effect of CCJs on the 6 year period 'Limitation Act 1980' period for unsecured debts.

As I understand it if a debt is over 6 years old (from the last payment, acknowledgement or when it was due for repayment) then a creditor cannot get a judgement on it due to the Limitation Act 1980.

However if the creditor obtains a CCJ then the Limitation Act cannot be used.

My question is what happens to the limit if that CCJ is set aside. If the judgement was in the second year of the the debt, will the debt be 'cancelled' after 4 years if that CCJ is set aside (ie it is as if the CCj didn't exist?)

Any help on this would really be appreciated....

-- (lyndhurst_04@yahoo.co.uk), September 27, 2004

Answers

If a judgment is set aside, then the parties are put in exactly the same position as if the judgment was never there. If, using your case, a judgment was given in the second year of a six year limitation period on a contract not under seal, and judgment was set aside 4 years later (i.e. outside of the six year limitation period) then on re-issue of the summons, the defendant would be able to claim that there was no case due to the six years limitation period having been exceeded.

That having been said, it would be extremely difficult to persuade a judge to set aside a judgment 4 years after it was made, and clearly the judge would be open to suggestion by the claimant that this was a ruse to prevent a "reclaim" because of the limitation act.

A wise judge would perhaps allow the defendant to file a late defence and base the outcome (i.e. leaving the judgment as is, or quashing it) on the subsequent trial.

Two prime factors would be, is there a proper defence which needs to be tried, and secondly, is there a good reason as to why the defendant did not know about the summons and subsequent judgment until 4 years later?

-- David J Button (davidjohnbutton@supanet.com), September 28, 2004.

I am afraid that I do not agree with what David has said.

If a claim was issued within the limitation period and a judgment entered which is then set aside, it is correct to say that the parties are put back in the position as if no judgment was entered. But this does not strike out the claim. The claim still exists and as it was (originally) issued within the limitation period, there is no limitation defence. If a judgment is set aside it is not necessary for a new claim to be issued. The case proceeds on the origanal claim.

If a claim is struck out it is an entirely different matter. A new claim would have to be issued and it would be statute barred if this is more than 6 years since the last acknowledgment or payment (see Tupper v Hopkinson and cases cited there).

Re set asides - if a judgment was entered in default, it can be set aside if there is a reasonable chance of successfully defending the claim and the defendant acted promptly, e.g. soon after s/he became aware of the judgment (See CPR part 13 PART 13). In practice, the judgment should be set aside if it would be a miscarriage of justice not to do so. There is lots of case law to support this view and it is in line with the 'Overriding Objective' (CPR 1) of dealing with cases justly. There have been lots of possession orders set aside many years after they were made when it was discovered subsequently that the secured CCA agreement upon which they were based was unenforceable, so I don't think that a delay of four years would necessarily be fatal.

But, in any event, I think that a set aside in this case is academic for the reasons that I have seen above.

All the best

Guy

-- Guy Skipwith (guy@skipwith107.freeserve.co.uk), September 28, 2004.

I now concur wioth whay Guy has said. I missed the fact that on a judgment being set aside, it does not automatically invalidate the issued summons which was still within the limitation period.

Only if the claim was struck out and a fresh summons has to be served outside of a limitation period would my answer have been correct.

Sorry - even I can get it wrong sometimes, not often though!!!!

-- David J. Button (davidjohnbutton@supanet.com), September 29, 2004.