700

C. A.
1949
HARRIS

KING S BENCH DIVISION.

[1949]

v.
ROWLEY.

EVERSHED M.R. I also agree. As I follow the case of Pickford v. Mace (1), the effectiveness of the certificate which relates to the nature of the work to be done is not affected by the circumstance that there is at the time a particular man who is doing it, who had ceased to be doing it when the case came before the court, and when some other individual is then about to do it. The work to be done remains the same, and the effect of the certificate was to say that that work was, within the terms of the paragraph, necessary for the proper working of the holding. I agree that the appeal fails.

Appeal dismissed. Solicitors : W. H. Thompson; Ellis and Fairbairn.

(1) [1943] K. B. 623.

B. A. B.

C. A.

JONES v. BELLGROVE PROPERTIES LD.

Limitation of actionAction for debt due to shareholder by public limited liability companyDefence, debt did not accrue within six years before action broughtReply that written acknowledgment of debt signed by agent of company made to plaintiff within those six years Acknowledgment contained in balance sheet: "To sundry creditors " 7,638/. 8s. lod."Balance sheet presented at annual general meeting of the company and signed by accountants as agents of company Plaintiff present at meeting as a shareholderOral evidence given by accountant that debt due to plaintiff was included in that figureLimitation Act, 1939 (2 <> 3 Geo. 6, c. 21), s. 2 ; s. 23, S subs. 4 ; s. 24, sub-ss. 1 and 2.

1949

June 15.
Lord Goddard CJ. Tucker and Singleton L.JJ.

A balance sheet presented to the shareholders at an annual general meeting of a limited liability company signed by chartered accountants, the agents of the company and by two directors, contained the statement: " T o sundry creditors 7,638/. 6s. lod." The plaintiff attended that meeting as a shareholder. The company owed the plaintiff 1,807/., * n e balance of moneys lent to it by him. This debt did not accrue within six years of an action brought by the plaintiff against the company to recover the debt. The annual general meeting was held within that period. At the hearing of the action a witness from the firm of chartered accountants which had signed the balance sheet testified that the debt of 1,807/. owed by the company to the plaintiff was included in the sum of 7,638/. 8s. lod. stated in the balance sheet to be due to sundry creditors.

2 K. B.

KING'S BENCH DIVISION. c. A.

7Pi

Held, that the balance sheet contained an acknowledgment to the plaintiff, in writing, signed by the agents of the company, that the debt of 1,807/. at the date of the annual general meeting remained unpaid and due to the plaintiff. Accordingly, by virtue of ss. 23 and 24 of the Limitation Act, 1939, the debt was
recoverable.

9 JONES v.
BELLGRQVE

In re Atlantic and Pacific Fibre Importing Co. Ld. [1928] Ch. 836, PROPERTIES approved.

from Birkett J. The plaintiff's claim was for the repayment of 1,807/., the balance of moneys lent by the plaintiff to the defendant company between September, 1936, and May, 1937. The writ was issued on October 20, 1947. By their defence the company pleaded that the debt did not accrue within six years before action brought and that the claim was barred by s. 2 of the Limitation Act, 1939. The plaintiff replied that within six years before action brought the company made an acknowledgment in writing signed by their agents (Messrs. J. Altman & Co., chartered accountants) to the plaintiff, that the debt remained unpaid and due to him. Birkett J. found that the plaintiff, who was both a shareholder and a director of the company, had advanced the sum claimed to the defendant company, as and at the time pleaded, and that it had never been repaid. It was proved that at their annual general meeting held on December 31, 1946, the company presented to the shareholders the balance sheets of the company as at May 21, 1939, 1940, 1941, 1942, 1943 and 1945. Contained in their balance sheets was the figure : " To sundry creditors 7,638/. 8s. 10^." The balance sheets were signed by Messrs. J. Altman & Co., chartered accountants, agents of the company, and by two directors of the company. The plaintiff was present at the meeting as a shareholder. Evidence was given by one Morton, an accountant, who in December, 1946, was connected with the firm of J. Altman & Co. He stated that he was responsible for the balance sheets from 1939 to 1945 and produced his working papers. Birkett J. found on that evidence that the figure of 7,638/. 8s. lod. " to sundry creditors " included the debt of 1,807/. due and owing to the plaintiff; and he held that the company had made an acknowledgment in writing signed by their agents to the plaintiff that the debt remained unpaid and due to him on December 31, 1946. He gave judgment for the plaintiff for 1,807/.
APPEAL
VOL.

II. 1949.

3A

76$ C. A.
1949

KING'S BENCH DIVISION.

[1949]

The company appealed.

Gerald Gardiner K.C. and Stephen Terrell for the company. There are two cases on which a statement in a balance sheet has been held to be an acknowledgment of a debt so that the PfeoPBRTiEs r i g h t t Q t h e d e b t s h a l l b e deemed to have accrued on and not before the date of the acknowledgment. See, to-day, ss. 23, sub-s. 4 and s. 24, sub-ss. 1 and 2 of the Limitation Act, 1939 (1). The two cases are : In re Atlantic and Pacific Fibre Importing and Manufacturing Co. Ld. (2) and Ledingham and Others v. Bermejo Estancia Co. Ld.; Agar and Others v. Same (3). But there was no such acknowledgment in this balance sheet; there was here " a mere statement of facts " and not an acknowledgment of anything to anybody." See the judgment of the Court of Appeal delivered by Lord Clauson in Bowring-Hanbury's Trustee v. Bowring-Hanbury (4). The words relied on in the balance sheet are : " To sundry " creditors 7,638/. 8s. xod." A balance sheet of a company throughout is a mere statement of facts and is not a document of such a character as can constitute an acknowledgment of a debt. If a balance sheet can include such an acknowledgment, there was none here, but merely a general statement of debt to unidentified creditors. A written statement cannot be subsequently made into an acknowledgment by the oral evidence of a witness saying such and such a debt was included in the total. There was no acknowledgment of the debt in writing. By the terms of s. 24, sub-s. 2, of the Limitation Act, 1939, the acknowledgment must be made to the creditor or his agent. Here, the acknowledgment was made merely to the plaintiff as a shareholder, when he attended the meeting, as such, in December, 1946. A public limited liability company
JONES BELLGROVE (1) Limitation Act, 1939, s. 23, sub-s. 4 : " Where any right " of action has accrued to recover " any debt . . . . and the person " liable or accountable therefor " acknowledges the claim . . . . " the right shall be deemed to " have accrued on and not before " the date of the acknowledg" ment. . . . " Section 24, sub-s. 1 : " Every " such acknowledgment as afore" said shall be in writing and " signed by the person making " the acknowledgment." Subsection 2 : " Any such acknow" ledgment . . . . as aforesaid " may be made by the agent " of the person by whom it is " required to be made under the " last foregoing section, and shall " be made to the person or to " an agent of the person, whose " title or claim is being " acknowledged . . . . " (2) [1928] Ch. 836. (3) [1947] 1 All E. R. 749. (4) [1943] Ch. 104, 109.

2 K. B.

K I N G ' S BENCH DIVISION.

703

must issue a balance sheet, year by year, showing its debts C. A. and if this decision is upheld such a company can never plead IQ the statute against a shareholder creditor. Jo ES [In re Coliseum (Barrow) Ld. (1) and Hartley v. Wharton (2) * were also mentioned.] BELLGROVE A. P. Marshall K.C. and /. H. Jacob for the plaintiff were P R 0 E S not called on.
LORD GODDARD C.J. In my opinion, this appeal fails. The case may appear to have some importance as affecting the power of companies to rely on the provisions of the Limitation Act, 1939; but I wish to make it clear that our decision is based on the special facts of this case. At various dates from September, 1936, to May, 1937, the plaintiff lent to the defendant company, of which he was both a shareholder and a director, sums of money the balance of which, it is now agreed, amounts in all to 1,807/. These loans were not repaid, and in 1948, the plaintiff brought this action to recover them. The defendant company in their defence pleaded s. 2, sub-s. 1 (a) of the Limitation Act, 1939, and contended that, as the cause of action had accrued more than six years before action brought, the claim was barred. To that contention the plaintiff replied that within six years before the action was brought the person liable or accountable for the claim, the defendant company had acknowledged the claim and that, therefore, by reason of s. 23, sub-s. 4, of the Act of 1939, " the right shall be deemed to have accrued on and not " before the date of the acknowledgment." Evidence was given that at the annual general meeting of the defendant company on December 31, 1946, at which the plaintiff was present in his capacity as a shareholder of the company, the accounts of the defendant company for the years 1939 to 1945 inclusive were presented to the meeting. Those accounts were signed by the company's accountants as agents for the defendant company, and by two directors of the company. They showed that during each of those years 1939 to 1945, the company owed moneys to " sundry creditors." No particular creditors were named in the accounts, but evidence was given, and it was not really disputed, that the sum, shown as due to sundry creditors, included the sum of 1,807^. which was due by the defendant company to the plaintiff. The plaintiff contended that the balance sheet presented to him (1) [1930] 2 Ch. 44. 3 A2 (2) (1840) 11 Ad. & El. 934. 2

704 c. A.

KING'S BENCH DIVISION.

[1949]

at the meeting constituted an acknowledgment of the debt within the meaning of s. 24, sub-s. 2, of the Limitation Act, 1939, notwithstanding that it was presented to him in his ^ES capacity as a shareholder, and not as a creditor, and that, BEIXGROVE therefore, his claim was not barred. By s. 23, sub-s. 4, of the PROPERTIES ^ . . ,, ^/^ere any right of action has accrued to recover any " debt or other liquidated pecuniary claim . . . . and the 01 c.j. M " person liable or accountable therefor acknowledges the " claim . . . . the right shall be deemed to have accrued " on and not before the date of the acknowledgment . . . ." Then by s. 24, sub-s. 1 : " Every such acknowledgment as " aforesaid shall be in writing and signed by the person " making the acknowledgment," and by sub-s. 2 : " Any such " acknowledgment . . . . as aforesaid may be made by the " agent of the person by whom it is required to be made under " the last foregoing section and shall be made to the person " or to an agent of the person, whose title or claim is being " acknowledged . . . ." In the case where the debtor is a limited liability company, the acknowledgment can only be signed by the company's agents. For the defendant company it was contended that a balance sheet is not such a document as can contain or amount to an acknowledgment within the meaning of ss. 23 and 24 of the Limitation Act, 1939. I do not see why that is so. Whether a document is or is not an acknowledgment must depend on what the document states ; and a balance sheet presented to a shareholder creditor at a meeting of the company, as these balance sheets were presented to the plaintiff, fulfils all the requirements of ss. 23 and 24 of the Limitation Act, 1939. That statute does not extinguish debts : it merely bars the right to recover them after the lapse of the specified time from the accrual of the cause of action. If a claim is made for payment of a debt many years after it has been incurred, there may be difficulty in proving that the debt ever was in fact incurred or that it has not already been paid and so forth. That is why the law bars the right of action after a certain period has elapsed from the accrual of the cause of action, but then if there is an acknowledgment of the debt within the terms of ss. 23 and 24 of the Act, the right shall be deemed to have accrued on and not before the date of that acknowledgment. I can see no reason why a balance sheet should not contain a good acknowledgment within the meaning of the Act. The acknowledgment was only of a sum due to a number of unnamed persons ; but the

2K. B.

KING'S BENCH DIVISION.

C. A. 1949

705

plaintiff established by evidence that he was one of the sundry creditors and that his debt of 1,807/. w a s included in the total sum acknowledged to be due to those creditors. In my view, therefore, the claim was not barred. This case is in accordance with the decision in In re Atlantic and Pacific Fibre Importing and Manufacturing Co. Ld. (1). In that case a company issued debentures at various dates between 1890 and 1902 payable within two years. The company paid no part of the principal or interest. The plaintiff in 1928 sued the company on behalf of himself and all other debenture holders for principal and interest and proved that the company's published accounts habitually referred to the debenture debt as outstanding and that in 1925 the accounts which were signed by two directors and the secretary stated the amount of the arrears of interest. It was held that the statement in the accounts was a written acknowledgment of the debt within the meaning of s. 5 of the Civil Procedure Act, 1833, and that the action to recover the principal and interest was not barred by the twenty years period of limitation fixed by s. 3 of that Act. The case of In re the Coliseum (Barrow) Ld. (2) is distinguishable. In that case Maugham J. held that the balance sheet of a company which showed that fees were due to the directors and which was signed by those directors did not amount to an " acknowledgment " by the company of the debt since the directors had no authority in such circumstances to bind the company. But Maugham J. said in that case (3) : " Had the statement been made in the " balance sheet that the company owed a specified sum to " a shareholder to whom the balance sheet was sent in the " usual way that would have amounted, I think, to a sufficient " acknowledgment within the authorities."
TUCKER

JONES

v.
BELLGROVE PROPERTIES LD. Lord Goddaid C.J.

L.J.

I agree. I agree. Appeal dismissed.

SINGLETON

L.J.

Solicitors for the defendant company: Kenneth Brown, Baker, Baker. Solicitors for the plaintiff : Harold Miller & Fraser, for Weigall and Inch, Margate.
(1) [1928] Ch. 836. (2) [1930] 2 C h - 44(3) Ibid. 47.

C. G. M.