Does the Limitation Act 1980 have any impact on the right of a judgment creditor to present a winding up petition/bankruptcy petition?
This was the question posed by Mummery LJ in the leading case on limitation and winding up/bankruptcy petitions, Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871 (‘Ridgeway’). In that case, the issue arose in the Court of Appeal whether a judgment creditor was prevented by s.24(1) of the Limitation Act 1980 from founding a winding up petition upon a judgment debt that was more than 6 years old. In particular, whether the winding up petition was ‘an action …upon any judgment…’, since s.24(1) prohibits any such action where the judgment debt has been enforceable for more than 6 years old.
This article will consider what, if any, limitation period[1]applies to winding up petitions and bankruptcy petitions.
Limitation Periods
Issues surrounding the application of limitation to causes of action are not unusual in civil litigation. Such limitation periods are part of statute law; they are not contained in the common law, and the Limitation Act 1980 is the governing act. As Mummery LJ said, in paragraph 2 of Ridgeway:
‘Limitation periods are prescribed by statute, not by the common law. The 1980 Act is the current statute of limitations.’
Limitation Act 1980 and Winding Up Petitions/Bankruptcy Petitions
The Limitation Act 1980 contains no express provisions as to winding up petitions/bankruptcy petitions. At paragraph, 2, Mummery LJ said in Ridgeway:
‘It does not contain any provisions specifically setting time limits for the commencement of winding up (or bankruptcy) proceedings by a creditor.’[2]
There is s.24(1) of Limitation Act 1980, a provision entitled ‘Time limit for actions to enforce judgments’, that could, on first blush, impose a time limit. That section reads:
‘An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.’
As will be apparent, any ‘...action …upon any judgment…’ commenced more than 6 years from the date the judgment debt became enforceable, is time-barred by this provision. Crucial therefore to understanding the application of this provision, is the exact meaning of the phrase ‘an action …upon any judgment…’.
In Ridgeway, Mummery LJ referred, at paragraph 29, to the House of Lords case of Lowsley v Forbes [1999] 1 AC 329, where it was unanimously held that the expression ‘an action…upon a judgment’ in section 24(1) ‘…has a special legal meaning derived from its legislative history.’ Thereafter Parliament itself has treated ‘an action…upon a judgment' as ‘…having the special or technical meaning of a “fresh action” brought upon a judgment in order to obtain a second judgment, which can be executed.’ In consequence, Mummery LJ said, at paragraph 29:
‘Insolvency proceedings, whether personal or corporate, do not fall within the scope of the special meaning of "an action ... upon a judgment". A winding up petition is neither (a) an action upon a judgment in the special sense of being designed to re-establish by legal proceedings the liability of the company to pay a judgment debt and obtain another judgment for it, nor (b) a process of execution of the judgment on which the petition is based. It is sui generis, being in the nature of a wider legal proceeding available for the collective enforcement of the admitted or proved debts of the company for the benefit of the general body of creditors on a pari passu basis: …Whatever its correct juristic classification may be, a winding up petition is not, according to authorities binding on this court, "an action upon a judgment" within section 24(1) and is not statute-barred.’
This approach is consistent with the policy lying behind the Limitation Act 1980, On this, Mummery LJ said, at paragraph 31, that there was ‘…much to be said for the submission of Mr Anthony Mann QC, appearing as counsel for the plaintiff judgment creditors in Lowsley v Forbes [1999]…’ (later Mr Justice Mann), where he said:
‘There are good policy reasons for distinguishing between action and execution. Limitation statutes are intended to prevent stale claims, to relieve a potential defendant of the uncertainty of a potential claim against [him] and to remove the injustice of increasing difficulties of proof as time goes by. These considerations do not apply to execution. If it is unfair to have a judgment debt outstanding with interest running at a high rate, the debtor has the remedy of paying the debt or taking out his own bankruptcy if he cannot pay it.’[3]
Adopting the tenor to the latter part of Mr Mann QC’s submission, Mummery LJ observed, at paragraph 33, that:
‘It was always open (and is still open) to [the judgment debtor] to avoid the consequences of this situation either by satisfying the judgment, if able to do so, or, if unable to do so, by taking other steps open to a company unable to pay its debts as and when they fall due for payment.’
In reaching the conclusion that ‘an action…upon a judgment…’ did not include a winding up petition, the Court of Appeal had to discount the sense otherwise indicated by s.38(1) to the Limitation Act 1980, as to the correct meaning of ‘action’ in that phrase. Section 38 is entitled ‘Interpretation’ and reads (to the extent relevant):
‘(1) In this Act, unless the context otherwise requires -
“action” includes any proceeding in a court of law, including an ecclesiastical court’
…
(11) References in this Act to an action do not include any method of recovery of a sum recoverable under-
(a) Part 3 of the Social Security Administration Act 1992,
(b) section 127(c) of the Social Security Contributions and Benefits Act 1992, or
(c) Part 1 of the Tax Credits Act 2002,
other than a proceeding in a court of law.’
At first blush, this definition of ‘action’ would seem to catch a winding up petition, since a winding up petition would appear to come within ‘any proceeding in a court of law’. However, the Court of Appeal in Ridgeway were driven from this conclusion by the context in which Parliament enacted s.24(1). That context included ‘…statements by the Law Reform Committee Report as to what the law was understood to be, on whose report Parliament based the amendment to section 2(4) of the 1939 Act’ (paragraph 32). Principally, this was that s.24(1)’s predecessor in the Limitation Act 1939, s.2(4) contained the same phrase, ‘an action…upon any judgment’[4]and that had been construed in W T Lamb & Sons v Rider [1948] 2 KB 331 (‘Lamb’) ‘…as applying only to suing for a judgment upon a judgment. It did not apply to execution of a judgment.’ (paragraph 10). Mummery LJ in Ridgeway summarized the conclusion reached by the Court of Appeal in Lamb, at paragraph 12:
‘…the Court of Appeal…concluded that the…limitation period set in the 1939 Act…dealt only with the "substantive right to sue for and obtain a judgment, and with that alone"; the period did not apply to the "procedural machinery for enforcing a judgment when obtained". The broad definition of "action" in the 1939 Act did not have the effect of merging what had formerly been the two "quite independent and distinct" subjects of (a) the substantive right to sue for and obtain a judgment and (b) the procedural machinery for enforcing a judgment when obtained…’[5]
When the Law Reform Committee reviewed the law, it ‘…did not question the interpretation of section 2(4) laid down in W T Lamb & Sons v Rider [1948] 2 KB 331 drawing a distinction between suing upon a judgment by a fresh action for another judgment and executing an existing judgment…’ (paragraph 18)
Parliament then enacted s.24(1), amending it only in reducing the period from 12 years to 6 years, in light of this understanding as to what ‘an action…upon a judgment’ meant. [6]
Bankruptcy Petitions
The case of Ridgeway involved a company judgment debtor facing a winding up petition. Strictly speaking therefore, the ratio of Ridgeway relates to winding up petitions and comments about s.24(1)’s application to bankruptcy petitions are obiter. The scope of the decision in Ridgeway was made clear when Mummery LJ said, at paragraph 35:
‘The only ruling necessary for the disposal of this appeal is that the presentation of a winding up petition by a judgment creditor is not subject to the six-year limitation period applicable to bringing an action upon a judgment within section 24(1).’
However he went on to say ‘The same ruling applies to the presentation of a bankruptcy petition.' While this comment might be obiter, it is very likely to be upheld as a correct statement of the law, especially following some observations made in Mittal v RP Capital Explorer Master Fund [2014] BPIR 1537 (‘Mittal’) and Revenue and Customs Commissioners v Morris [2008] BPIR 391 (‘Morris’). Firstly, in Mittal, Deputy Registrar Briggs noted the ratio of Ridgeway and said, at paragraph 51:
‘Mummery LJ noted that it was not suggested in the course of the hearing (and hinted that even if it was the suggestion would not be accepted) that there is any relevant difference between a bankruptcy petition and a winding up petition in this context. The Court of Appeal held that a petition of this nature is a proceeding in a court of law and not an execution on judgment or a process of execution of the judgment.’
Secondly, parallels between winding up proceedings and bankruptcy proceedings, as insolvency proceedings, were made by HHJ Pelling QC sitting as a judge of the High Court in Morris. After referring to Ridgeway, and winding up proceedings being sui generis rather than, strictly speaking, a process of execution[7], the judge in Morris said, at paragraph 32 said:
In my judgment, there is no reason for distinguishing between bankruptcy petitions on the one hand and winding up petitions on the other, or for the orders made pursuant to each….Insolvency proceedings, there winding up, but in my judgment equally individual bankruptcy petitions, are legal proceedings and are legal proceedings for the collective enforcement of admitted or proved debts….’
Non-Judgment Creditors, Limitation and Petitions/Statutory Demands
It is important to keep in mind the distinction between, on the one hand, judgment creditors, and on the other hand, cause of action holders/ordinary (non-judgment) creditors (adopting the labeling in Ridgeway, these are called ‘ordinary creditors’). Ridgeway was concerned only with judgment debts and not causes of action/ordinary debts. In a bid to avoid any confusion arising as to the application of the decision in Ridgeway, Mummery LJ emphasized the above distinction and opted to give guidance as to how the law applies to this alternative, ordinary creditor scenario. Mummery LJ said, at paragraph 35(1):
‘Ordinary creditors. This case is not concerned with the position of an ordinary creditor who has not established his debt by a judgment. Section 24(1) does not apply, as there is no judgment on which to bring an action, let alone base a petition. It does not follow, however, that a person owed a debt by a company under a contract is entitled to present a petition after the expiration of six years from the accrual of his cause of action. If the debt is statute-barred at the time of the presentation of the winding up petition, the petitioner is not at that date a "creditor" of the company and has no standing under section 124 of the Insolvency Act 1986 to present a petition in that capacity…’.
In Mittal, Deputy Registrar Briggs quoted the above passage from Ridgeway, and held, at paragraph 53, that it applies ‘…equally to bankruptcy petitions.’, and to statutory demands. The Deputy Registrar in Mittal held, at paragraph 58, that ‘…demands can only be made on a debt that is enforceable in law and only by a party who is a creditor.’ The editors of Muir Hunter on Personal Insolvency, summarized the position, at 3-315, as ‘A statutory demand for a statute-barred debt must be set aside, and any petition founded on it must be dismissed.’ Deputy Registrar Briggs in Mittal gave the rationale, at paragraph 58, as ‘…otherwise statutory demands could be made for unenforceable claims of all types for no obvious purposes or made by parties who were not in law creditors. Further there would be no point in pursuing a statutory demand when a petition based on such a demand would be immediately dismissed in accordance with Court of Appeal authority.’
Judgment Creditors and Proving in a Liquidation/Bankruptcy
Returning to judgment creditors, a judgment creditor is able to petition on a judgment debt enforceable for more than 6 years, and in the event that the judgment debtor enters liquidation/bankruptcy, the judgment creditor will be a ‘creditor’ to the judgment debtor, in the normal way, for the purposes entitlement to lodge a proof of debt and receive any dividend distribution qua member of an eligible creditor class, pari passu. In Ridgeway, Mummery LJ said, at paragraph 35(2):
‘The judgment creditor is still a "creditor" of the company and the debt owing is still one of the "liabilities" of the company, even after the expiration of six years from the date when his judgment became enforceable. The judgment creditor does not cease to be a creditor as a result of section 24(1) applying to prevent him from bringing an action on the judgment for a second judgment.’
On the other hand, and this is the basis for the distinction, an ordinary creditor ceases to be a ‘creditor’ in the relevant sense, upon the liability becoming time-barred. Mummery LJ said, at paragraph 35(2):
‘This is different from the position of the ordinary creditor whose cause of action for non-payment of a contract debt is barred after the expiration of six years from the date of the accrual of his cause of action: he is no longer a creditor of the company and is neither entitled to present a winding up petition nor to prove for the statute-barred debt in the liquidation…’
Conclusion
The Limitation Act 1980 does not impose a limitation period for winding up petitions founded upon judgment debts. A winding up petition is not ‘an action…upon any judgment’ within the meaning of this phrase in s.24(1) of the Limitation Act 1980. It is very likely that bankruptcy petitions do not fall within s.24(1) either. The absence of a limitation period is consistent with the policy behind the Limitation Act 1980, that is, to prevent stale causes of action being litigated, rather than to inhibit enforcement of judgments, including (sui generis[8]) winding up and bankruptcy petitions.
Update
See:
(1) Emmott v Michael Wilson & Partners Ltd [2022] EWHC 2682 (Ch)('Emmott'), a decision of deputy ICC Judge Kyriakides on 24.10.22, paragraphs 32 to 35. In Emmott, an application to set aside a (personal insolvency) statutory demand on the basis of section 24 of the Limitation Act 1980, failed. The court relied on: (1) Bailey v Hill [2003] EWHC 2646 (which established at paragraph 16 that section 24 of the Limitation Act 1980 has no application to a statutory demand, since a demand is not an action) and (2) Ridgeway. Note the statutory demand was set aside for other reasons.
(2) Re A Company [2024] EWHC 1070 (Ch), where Deputy ICC Judge Jones considered an application to restrain presentation of a winding-up petition based on a money judgment obtained in a Lebanese Court ("the Lebanese judgment")(paragraph 1), where one of the 5 reasons (paragraph 13) put forward for acceding to the application was, it was said, that the judgment debt was time-barred (a limitation defence). Deputy ICC Judge Jones dealt with this point, at paragraphs 40 to 69[9], concluding that the applicant for the restraining injunction/debtor did not have a limitation defence to a winding-up petition (paragraph 69).
SIMON HILL © 2018
BARRISTER
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.
[1] This article does not consider the inherent jurisdiction of the Court to prevent an abuse of its own legal procedure. The case of Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871 did not consider this aspect either. In Ridgeway, at paragraph 2, Mummery LJ said ‘The company does not invoke the inherent jurisdiction to prevent an abuse of legal procedure. It relies solely on section 24 of the 1980 Act…’
[2] As stated in footnote 1 above, Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871 did not concern or consider the Court’s inherent jurisdiction to prevent abuse of its own legal process.
[3] In addition, on the jurisprudence behind the Limitation Act 1980, Mummery LJ adopted, at paragraph 30 of Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871, the summary given in Halsbury's Laws of England, 4th ed Reissue, Vol 28, (1997), paragraph 805:
‘The courts have expressed at least three differing reasons supporting the existence of statutes of limitation, namely (1) that long dormant claims have more of cruelty than justice in them; (2) that a defendant might have lost the evidence to disprove a stale claim; and (3) that persons with good causes of action should pursue them with reasonable diligence.’
[4] Section 2(4) of Limitation Act 1939 (now obsolete) read:
‘An action shall not be brought upon any judgment after the expiration of twelve years from the date on which the judgment became enforceable…’
[5] Further, in Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] 1 WLR 2871, Mummery LJ said, at paragraph 14 ‘…W T Lamb & Sons v Rider [1948] 2 KB 331 is authority for the proposition that the limitation period set by section 2(4) only applied to an action brought by a judgment creditor suing upon his existing judgment for another judgment. For limitation purposes an action brought upon a judgment to obtain another substantive judgment was distinct from the procedural steps taken to execute an existing judgment.’
[6] During this exercise of statutory construction, the Court was able to take account of the Law Reform committee’s recommendations. Mummery LJ in said, at paragraph 16:
‘In interpreting section 24(1) the court is not entitled to take into account the committee's recommendations acted on by Parliament in the subsequent legislation, but it is entitled to have regard to the statements contained in the report of the mischief aimed at and of the state of the law as it was then understood to be by the committee: Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591.’
[7] The question for the judge in Revenue and Customs Commissioners v Morris [2008] BPIR 391 was ‘…whether the bankruptcy petition can be said to be an enforcement proceeding within themeaning of the Regulations…’ (paragraph 31). The ‘Regulations’ being referred to were the Recovery of Duties and Taxes Etc. Due in Other Member States (Corresponding UK Claims, Procedure and Supplementary) Regulations 2004. The judge in Morris, at paragraphs 31 and 32, answered the question:
‘In my judgment, it is. It was held in Ridgeway v ALTS Limited [2005] 1 WLR 2871 that whilst a winding up petition was not a process of execution, it was, and here I quote from the judgment of Mummery LJ at page 2879 at letter H:
“… sui generis, being in the nature of a wider legal proceeding available for the collective enforcement of the admitted or proved debts of the company for the benefit of the general body of creditors on a pari passu basis: see, for example, In re Lines Bros Ltd [1983] Ch 1, 20.”
[8] Sui generis is Latin and means, of its own kind or class; in a class of its own, unique.
[9] Re A Company [2024] EWHC 1070 (Ch), Deputy ICC Judge Jones said, under the heading 'Limitation' at paragraphs 40 to 69:
'40. The Applicant asserts that s5 Limitation Act 1980 ("the 1980 Act ") applies to this debt. The Respondent says that this is a judgment and that s24(1) of the 1980 Act would apply were this not proceedings under the Insolvency Act 1986 ("1986 Act "), by reason of the decision of the Court of Appeal in Ridgeway Motors ( Isleworth ) Ltd v ALTS Ltd [2005] EWCA Civ 92.
5. Time limit for actions founded on simple contract.
An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.
24.- Time limit for actions to enforce judgments.
(1) An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.
41. "Action" is defined in s38(1) 1980 Act as:
Interpretation
(1) In this Act, unless the context otherwise requires-
"action" includes any proceeding in a court of law, including an ecclesiastical court …
42. Ridgeway Motors concerned a winding up petition based on a judgment debt which was more than six years old. The Company sought to have it dismissed on the basis that s24(1) 1980 precluded an action on a judgment when more than six years had passed. The Court of Appeal, in a wide-ranging and carefully explained judgment, considering the earlier case of Lowsley v Forbes (trading as LE Design Services) [1999] 1 AC 329, concluded that the term "action on a judgment" did not apply to bankruptcy or winding up proceedings based on judgment debts. The term applies only to a fresh action to obtain a second judgment based on the first. A winding-up petition is neither designed to re-establish the liability of the company nor a process of execution of the judgment [@para 29]. As a consequence, s24(1) 1980 Act does not apply in insolvency proceedings.
43. Mummery LJ noted that the 1980 Act contains no provisions relating to the commencement of winding up proceedings and that there is therefore no specific limitation bar. Any limitation has to be drawn by reference to the nature of the debt.
44. Clearly, if a foreign judgment is of the same nature as an English judgment, then s24(1) is disapplied and there are no other limitation issues for the Respondent save for a bar on interest for longer than six years. The Applicant, however, asserts that by reason of the quasi-contractual nature of a foreign judgment, it falls into s5 1980 Act - and relies for support on Ridgeway itself. There is obiter discussion in Ridgeway of the position of an "ordinary creditor" without a judgment @ 2881 B-C::
(1) Ordinary creditors. This case is not concerned with the position of an ordinary creditor who has not established his debt by a judgment. Section 24(1) does not apply, as there is no judgment on which to bring an action, let alone base a petition. It does not follow, however, that a person owed a debt by a company under a contract is entitled to present a petition after the expiration of six years from the accrual of his cause of action. If the debt is statute-barred at the time of the presentation of the winding up petition, the petitioner is not at that date a creditor of the company and has no standing under section 124 of the Insolvency Act 1986 to present a petition in that capacity: see, for example, the judgments of the majority in the High Court of Australia in Motor Terms Co Pty Ltd v Liberty Insurance Ltd (1967) 116 CLR 177.
45. Is a foreign judgement of the same nature as an English judgment, or the same nature as a simple debt under a contract, or something different entirely?
46. Counsel for the Applicant has brought Grant v Easton (1883) 12 QBD 302 to my attention, in particular the passage that states that the liability of the defendant for a debt under a foreign judgment arises from an implied contract. Grant was a case involving the recognition of a foreign judgment by way of writ and summary judgment. It was not assessing the nature of a foreign judgment generally nor did it touch on limitation or what limitation might apply. It predates all modern limitation provisions and insolvency acts, in particular the 1986 Act and its changes to the landscape of insolvency.
47. The same can be said of In re Flynn No 2 [1969] 2 Ch 403, which re-iterates the contractual nature of the foreign judgment in reliance on Grant. Flynn contains an analysis of s23(4) of the Limitation Act 1939, dealing with rights of action for debts or other pecuniary claims in the personal estate of a deceased person. It is not directed towards the status of a foreign judgment, but towards the issue of acknowledgement of debts. Again, it does not deal with insolvency and, even if it had, would not have been helpful because of the step-change in IA 1986 described carefully in Ridgeway and in [Drelle v Servis-Terminal LLC, [2024] EWHC 521 (Ch)].
48. The case of Van Heeren v Cooper [2014] EWHC 4797 (Ch) is relied upon for the passage @ para 13:
"a judgment debt is entitled to the same treatment as any other debt is that the liability of a defendant in an action brought on a foreign judgment is an action which proceeds on the basis of an implied contract to pay, on the part of the party, against whom the judgement has been recovered."
49. On analysis, however, Van Heeren does not say that a foreign judgment is subject to s5 of the 1980 Act as a consequence of its asserted nature as an implied contract. It concerns New Zealand judgments which were used as the basis for statutory demands. These were set aside by the District Judge and a Part 7 claim was brought under the common law to claim the amounts under the foreign judgments. There was then an appeal against the District Judge's order setting aside the statutory demands, which was listed to be heard with the Part 7 claim. The basis on which the District Judge had set aside the statutory demands was that the effect of s24(1) of the 1980 Act was to render the debts unenforceable and non-provable because they were time-barred.
50. The critical issue for the court in Van Heeren was whether s29(5) of the 1980 Act extended to s24(1) of the 1980 Act by reason of acknowledgement of the debt. The District Judge had held that it did not. The Defendant asserted this on the basis that s29(5) of the 1980 Act did not apply to claims on a judgment that had already established the liability as opposed to a claim in simple contract where liability had not been established.
51. In Van Heeren, the judge found that s29(5) of the 1980 Act applied both to ordinary contract claims and judgment debts. Nowhere in that judgment is there any statement or finding that s5 of the 1980 Act applies to foreign judgments for the purposes of limitation. On the contrary, the judgment is focussed on the interaction between s24(1) and s29(5) of the 1980 Act. That analysis would not have been necessary if the court had taken the view that s5 applied to the foreign judgment because it has never been in doubt that s29(5) applies to s5 of the 1980 Act.
52. Jamal v Christiansen [2016] EWHC 2261 (Ch) relies on a number of authorities which are said to found the notion that a foreign judgment is a debt in simple contract. The very old case of Dupleix v De Roven [1705] 23 ER 950 is quoted, together with Grant, Re Flynn and Van Heeren. The parties in Jamal appear to have proceeded on the unargued basis that s5 of the 1980 Act applied, despite the fact that the section (or its precursors) is not directly mentioned as being applicable in any of the cases relied upon, and that upon proper analysis of Van Heeren it is clear that the court had s24(1) in contemplation rather than s5 of the 1980 Act.
53. In Jamal, the main focus of the court was on the unenforceability of a foreign judgment. The judgment appears to confuse the limitation provisions of the 1933 Act with those of a judgment not registrable under the 1933 Act. Chitty on Contracts [32nd Edition paras 28-16] was quoted:
"A foreign judgment of a court of competent jurisdiction gives rise to an implied contract to pay the amount of the judgment, and the six-year period for actions founded on simple contract applies to an action upon such a judgment."
There are references to a number of authorities, going back to Dupleix v De Roven [1705] 23 ER 950, where it was said:
"If a man recovers a judgment or sentence in France for money due to him, the debt must be considered here only as a debt on simple contract, and the statute of limitations will run upon it."
54. Dupleix v De Roven also states:
"It is plausible and reasonable, that the statute of limitations should not take place, nor the six years be running, until the parties come within the cognizance of the laws of England; but that must be left to the legislature."
55. The judgment is fragmentary and unreasoned. It is the judgment of a single judge. It is by no means definitive of the status of a foreign judgment in 2024 given the progress of English law, international law and diplomacy in the intervening 300 years.
56. Neither Van Heeren nor Jamal made any reference to Tasarruf Mevduati Sigorta Fonu v Demirel and another [2007] EWCA Civ 799. In that case, the Court of Appeal, which heard arguments from both sides, proceeded throughout on the assumption that s24 1980 Act applied to foreign judgments [@ para 41].
41 The present position is that TMSF has a valid Turkish judgment in a large sum against Mr Demirel. The judgment is dated 20 November 2001 and we infer that it became enforceable at about that time. By section 24 of the Limitation Act 1980 an action shall not be brought after the expiration of six years from the date on which the judgment became enforceable. Thus an action to enforce the judgment will be time-barred in England in late 2007 or perhaps early 2008. If this appeal is allowed no action can be brought in the future because it will be time-barred and Mr Demirel will be able to bring funds to London free of a risk of execution. It is common ground that, if this appeal succeeds, the proceedings will be set aside. The continued existence of the action seems to me to be of potential benefit to TMSF.
57. It is clear that Fonu involved an action on a judgment, so the six year limitation period in 24(1) of 1980 Act would be effective. The important point is that it was simply not in dispute that s24(1) of the 1980 Act was the correct category in which to place a foreign judgment.
58. There is a conflict between Jamal and Fonu. One takes it for granted that s5 of the 1980 Act applies, the other that s24(1) of the 1980 Act applies. Although neither grapples with the underlying reasons for applicability, both decisions are potentially binding on this court [ Coral Reef Ltd v Silverbond Enterprises Ltd and another [2016] EWHC 3844 (Ch) [2018] 4 WLR 104 ] as is Dupleix v De Roven.
59. It seems to me that, in the absence of any other assistance from previous decisions, I am bound to follow the Court of Appeal rather than the High Court. There is another factor which I consider to be important and that is the nature of the debt created by a foreign judgment as opposed to a contractual debt.
60. In Lenkor Energy Trading DMCC v Puri [2021] EWCA Civ 770, the Court of Appeal stated that a foreign judgment is unimpeachable in the absence of contrary public policy grounds. At para 40, the court stated:
"There are sound justifications for taking a different approach to substantive claims and enforcement claims, reflecting the different role performed by the court in each circumstance: RBRG Trading (UK) Ltd v Sinocore International Co Ltd [2018] EWCA Civ 838; [2018] 1 CLC 874 [26] (3). The judgment of a foreign court of competent jurisdiction creates an obligation to pay the judgment sum enforceable in this jurisdiction as a debt, irrespective of the underlying cause of action: Williams v Jones (1845) 13 M & W 628, 633; Adams v Cape Industries plc [1990] Ch 433.
61. The Court of Appeal in that case did not find that that the obligation to pay arose out of a fictional contract as a substantive claim, but as an obligation giving rise to an enforcement claim.
62. S5 of the 1980 Act does not specifically state that it applies to foreign judgments as one might expect. It applies only to simple contracts. A simple contract is not, in its essential nature, unimpeachable save on public policy grounds. A foreign judgment (subject only to the competence of the foreign court) is unimpeachable. The debts are of a very different nature. In my view, despite the sometimes ancient and largely obiter comments regarding the nature of a foreign judgment, it cannot be equated with a simple contract. It may be a fictional quasi-contract for the purpose of bringing an action on a foreign judgment, although even that seems dubious, but it is not a simple contract for the purposes of the 1980 Act.
63. Does it, then, equate to an English/Welsh judgment or is it of a nature which is itself sui generis ? Certainly, the references to s24 of the 1980 Act in some of the authorities seem to point to a foreign judgment being of the same nature as an English/ Welsh judgment for the purposes of limitation. There is no indication in the 1980 Act that the words "action on a judgment" are limited to English/Welsh judgments and no indication that the analysis in Ridgeway, tracing the evolution of the term "action on a judgment" is disapplied for a foreign judgment.
64. If one takes Ridgeway, Fonu and Re Drelle together the result is:
a. An unregistered/unrecognised foreign judgment is final and conclusive and amounts to a debt for the purposes of IA 1986;
b. A foreign judgment falls into the same category as an English/Welsh judgment for the purposes of limitation and not into the same category as a simple contract;
c. That category is s24 of the 1980 Act.
d. Insolvency proceedings are not an "action on a judgment" and s24(1) of the 1980 Act has no effect;
e. There is no statutory limitation period to be applied to a petition based on a judgment and no limitation in common law.
65. Does this mean that a foreign judgment which cannot be registered has a greater advantage than a registered foreign judgment?
66. A 1920 Act judgment must be registered within twelve months of its handing down [s1] but will not registered if the debtor satisfies the court that an appeal is pending or that he is entitled and intends to appeal the judgment. If the judgment is not registered, it may still be enforced by way of common law and would be treated in the same way as the Lebanese judgment. If registered, it is treated as an English/Welsh judgment, subject to 24(1) of the 1980 Act but, so far as bringing insolvency proceedings, is governed by the decision in Ridgeway that the 1980 Act does not apply at all.
67. A 1933 Act judgment must be registered within six years of the handing down of the judgment or, where there have been appeals, six years after the final judgment is given. Registration can be set aside or suspended if there is a genuine appeal on foot [s5(1)] and a further application can be made following an appeal [5(2)]. Thereafter, it is treated as an English/ Welsh Judgment [s2(2)]. There is reference in commentaries to there then being a further six year limitation period, but this is not contained in the 1933 Act itself and there is nothing in the 1980 Act which distinguishes it from other judgments. Again, therefore, a 1933 Act judgment on which a petition is founded is not subject to s24(1) of the 1980 Act in insolvency proceedings by reason of Ridgeway.
68. A question that has troubled me is that the 1933 Act does not allow proceedings for the recovery of sums payable on judgments subject to the Act to be pursued other than by way of registration. This would seem at first blush to put 1933 Act foreign judgments at a disadvantage in comparison with non-registerable judgments but I have concluded that, in fact, it is likely that a 1933 Act foreign judgment would be caught by the decision in Drelle, as a petition does not amount to being "proceedings for recovery" and as set out by Richards J at paragraph 35 above.
69. In any event, the 1933 Act predates the changes to the insolvency regime in 1986 and, if there is any unintended disadvantage as a result, it is for Parliament to enact the appropriate changes to the legislation.
70. It is my finding that the Applicant does not have a limitation defence to a winding-up petition.'