Ashcroft v Bradford & Bingley Plc [2010] EWCA Civ 223
Mr Ashcroft purchased a property with the aid of a mortgage from Bradford & Bingley in 1990. He failed to make a single payment and an SPO was obtained in April 1991. He breached the terms of the suspension and the property was subsequently sold by the building society in 1992. The proceeds of sale left a shortfall of c.£30,000.
In 1995 (i.e. 3 years later), the society wrote to Mr Ashcroft to ask how he proposed to pay the shortfall. Mr Ashcroft responded with “indignation at the time it had taken the building society to make the demand” but – in Oct 2000 – and at the suggestion of the society, agreed to make payments of £10 pcm. These stopped in 2004.
In 2008, the society issued proceedings. Mr Ashcroft contended that they were statute barred. He argued that, by s.20, Limitation Act 1980, the society had 12 years to recover the mortgage loan. On any view, the claim was issued more than 12 years after the right to recover the monies arose. However (argued the society), by s.29(5), time starts to run again from the date when the debtor acknowledges the claim.
The Recorder held that the claim was not statute barred, but granted permission to appeal. The appeal was dismissed. The problem for Mr Ashcroft was that he had made the £10 payments, the effect of which was to bring him within the scope of s.29(5), 1980 Act, and start time running all over again.
I’m not sure if the suggestion by the society that Mr Ashcroft pay £10 pcm was a stroke of genius or not. On the one hand, by acknowledging the debt, it got them out of a potentially tricky limitation period. On the other (as Sedley LJ points out in his judgment), they were potentially giving rise to a binding compromise that would leave Mr Ashcroft paying the debt until 2402 (!) but with a defence to any proceedings (such as the present) so long as he made his payments.