Chancery Division
Published January 23, 2007
Cattley and Another v Pollard and Another
Before Mr Richard Sheldon, QC
Judgment December 7, 2006

The exception to the normal period of limitation for actions in respect of trust property in section 21(1)(a) of the Limitation Act 1980, only applied to breach of a trust by an express trustee and did not apply to a claim brought against a defendant alleging that she had dishonestly and knowingly assisted in the fraudulent breach of the trust.

Mr Richard Sheldon, QC, sitting as a deputy Chancery Division judge, so held in determining preliminary issues concerning limitation of a claim by Frank Cattley and Liam O'Malley, trustees of an estate, against the second defendant, Linda Pollard.

The first defendant, Nigel Pollard, was the solicitor who dealt with the administration of the estate. The second defendant was his wife.

Between 1987 and 1996, Mr Pollard misappropriated some £317,000 of estate assets. In June 2003, the trustees brought proceedings against the defendants for replacement of £317,457, alternatively, for damages arising from Mr Pollard's fraudulent breaches of trust. In January 2004, judgment was entered against him.

On November 7, 2005, the trustees brought new proceedings against Mrs Pollard alone for damages or equitable compensation arising from her knowingly and dishonestly assisting her husband in the breaches of trust.

Mrs Pollard denied the allegations of dishonesty and asserted that the claims against her were time barred by the Limitation Act 1980.

The trustees asserted that no limitation period applied, by virtue of section 21(1)(a) of the 1980 Act, which provided that no period of limitation applied to an action “in respect of any fraud or fraudulent breach of trust to which the trustee was party”.



Mr Nigel Godsmark, QC for the trustees; Mr David Halpern, QC, for Mrs Pollard.

HIS LORDSHIP said that the terms “breach of trust” and “trustee” in section 21(1)(a) applied only to claims against express trustees or someone treated as an express trustee, even though not appointed as such. The section did not apply to the dishonest assistance claim against Mrs Pollard.

In general, fraud claims were subject to a primary limitation period of six years. It was logical therefore that that limitation period should apply to the dishonest assistance claim, with the result that the claim was subject to six years limitation from the date the cause of action accrued.

However, section 21(3) of the 1980 Act applied to postpone the running of the primary period of limitation in relation to beneficiaries with future interests in the estate and an action by a beneficiary under that section included, at least by analogy, actions brought exclusively on their behalf by trustees who had no personal interest in the outcome.

Additionally, section 32 also applied to postpone the running of the primary period of limitation until after November 7, 1999, being the date on which the trustees could with reasonable diligence have discovered Mrs Pollard's dishonest participation in the fraud, with the consequence that the second proceedings against her were not time barred.



Solicitors: Nelsons, Nottingham; Max Engel & Co, Northampton.

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