As a business owner in a dispute, you may be considering commencing proceedings against another party for a “cause of action” that occurred in the past. However, you should check that you are still within the limitation period set by the relevant laws. Limitation periods prevent parties from bringing an action later than a given period. A “cause of action” refers to a legal right you may have to sue in court, and different causes of action will have different limitation periods. This article will set out the key points you should consider when dealing with limitation periods.
Why Do Limitation Periods Exist?
Limitation periods exist to protect the person with a claim against them, also known as the defendant. These periods operate under the principle that the longer it takes for an action to come before the courts, the less efficient the administration of justice becomes. This is because the defendant might have lost the evidence necessary to defend themselves.
Further, key witnesses might not be available, and documents might be lost or destroyed. The limitation also incentivises parties, such as your business, to pursue potential claims diligently and on time.
What Are Some Examples of Limitation Periods?
Limitation periods operate across various areas. If you attempt to bring a cause of action outside a limitation period, you will be prevented from doing so and will lose whatever rights you may be entitled to. As a result, you should take immediate steps to seek legal advice if you think you have a cause of action.
Before commencing legal proceedings, it is essential that you check the relevant laws to see if any limitation periods apply. Below are some examples of common limitation periods.
| Cause of Action | Limitation Period |
|---|---|
| General consumer claims | Six years from the date on which the cause of action accrues. |
| Consumer claims made to NCAT (NSW Civil and Administrative Tribunal) | 3 years from the date on which the cause of action accrues. You must have received the goods or services tied to that cause of action within 10 years. Claims made to NCAT can go up to $100,000 in value and will cover goods and services in NSW and motor vehicles. |
| General contractual claims | Six years from the date on which the cause of action accrues. |
| Misleading and deceptive conduct claims | Six years from the date on which the cause of action accrues. |
| Contractual claims concerning a deed | 12 years from the date on which the cause of action accrues. |
| Unfair dismissal claims | 21 days after the dismissal of the employee. |
| Negligence | Six years from the date on which the cause of action accrues. |
| Defamation | One year from the date of publication. |
For example, imagine that your supplier breaches their contract by failing to deliver the right products to you. In this case, you cannot wait ten years to bring a claim against them. If you try to file a Statement of Claim (a court document used to start a legal dispute) ten years after the failure, you will be “statute-barred”. This means your claim cannot proceed, and instead, you should have started legal action within six years of the date of the breach.
Continue reading this article below the formDoes the Court Have Discretion?
A court has the discretion to hear a case even if the limitation period has expired. In this case, a person may ask for a time extension and, in doing so, must prove that the limitation period should be extended. The court will need to decide whether it is necessary to increase the limitation period with regard to the person’s circumstances. Specifically, it will consider:
- whether it is possible to have a fair trial given the length of the delay;
- the reason for the delay;
- the length of the delay; and
- the disadvantages to the defendant.
However, the court will not grant an extension just because, for instance, you would have succeeded had they filed the claim within the limitation period. Instead, the court needs to examine why you did not file the claim earlier and whether a fair trial is still possible.
This guide provides key information on how to manage a business dispute as quickly and cost-effectively as possible.
Key Takeaways
Limitation periods exist to protect defendants from being sued for events that happened a long time ago. Importantly, they are unique to different areas of the law. Therefore, to ensure your claim is effective, know which one applies to your dispute before commencing legal proceedings.
If you would like assistance regarding limitation periods or have any further questions, contact LegalVision’s experienced litigation lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
You would have six years from the date on which the cause of action accrues. This means that if the conduct occurred more than six years ago, it is unlikely that you would have an action.
It is possible to ask for a time extension so that you can start proceedings after the limitation period ends. However, this is up to the discretion of the court, and you cannot guarantee a successful time extension. The court will consider factors such as the possibility of a fair trial and the reason for the delay.
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