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700 KING S BENCH DIVISION. [1949]C. A.1949

HARRISv.ROWLEY.

E V E R S H E D M.R. I also agree. As I follow the case ofPickford v. Mace (1), the effectiveness of the certificate whichrelates to the nature of the work to be done is not affected bythe circumstance that there is at the time a particular manwhois doing it, who had ceased to be doing it when the case camebefore the court, and when some other individual is thenabout to do it. The work to be done remains the same,and the effect of the certificate was to saythat that workwas,within the terms of the paragraph, necessary for the properworking 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.1949June 15.

Lord GoddardCJ.Tucker andSingleton L.JJ.

JONES v. BELLGROVE PROPERTIES LD.Limitation of actionAction for debt due to shareholder bypublic limitedliability companyDefence, debt did not accrue within six yearsbefore action broughtReply that written acknowledgment of debtsigned byagent of company made toplaintiff within those six yearsAcknowledgment contained in balance sheet: "To sundry creditors" 7,638/. 8s. lod."Balance sheet presented atannual general meetingof the company and signed by accountants as agents of companyPlaintiff present at meeting as a shareholderOral evidencegiven by accountant that debt due to plaintiff was included in thatfigureLimitation Act, 1939 (2 3 Geo. 6, c. 21), s. 2 ; s. 23,subs. 4 ; s. 24,sub-ss. 1and 2.

A balance sheet presented to the shareholders at an annualgeneral meeting of a limited liability company signed bycharteredaccountants, the agents of the company and by twodirectors,contained thestatement: "Tosundry creditors 7,638/. 6s. lod."The plaintiff attended that meeting as a shareholder.The company owed theplaintiff 1,807/., *nebalance of moneyslent to it by him. This debt did not accrue within sixyearsof an action brought by the plaintiff against the company torecover thedebt. Theannual general meeting was held withinthat period. Atthe hearing of the action a witness from the firmof chartered accountants which had signed the balance sheettestified that the debt of 1,807/. owed by the company to theplaintiff was included in thesum of 7,638/. 8s.lod. stated in thebalance sheet to bedue to sundry creditors.

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2 K. B. KING'S BENCH DIVISION. 7PiHeld, that the balance sheet contained an acknowledgment c. A.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 9

remained unpaid and due to the plaintiff. Accordingly, by JONESvirtue of ss. 23 and 24 of the Limitation Act, 1939, the debt was v.recoverable. BELLGRQVEIn reAtlantic andPacific Fibre Importing Co.Ld. [1928] Ch. 836, PROPERTIESapproved.

A P P E A L from Birkett J.The plaintiff's claim was for the repayment of 1,807/., thebalance of moneys lent by the plaintiff to the defendantcompany between September, 1936, and May, 1937. Thewrit was issued on October 20, 1947. By their defence thecompany pleaded that thedebt did notaccrue within sixyearsbefore action brought and t h a t the claim wasbarred by s. 2of the Limitation Act, 1939. Theplaintiff replied that withinsix years before action brought the company made anacknowledgment in writing signed by their agents (Messrs.J . Al t m a n & Co.,chartered accountants) to theplaintiff, t h a tthe debt remained unpaid and due to him.Birket t J. found that the plaintiff, who wasbo t h a share-holder and a director of the company, had advanced the sumclaimed to thedefendant company, as and at the t ime pleaded,a n d t ha t it had never been repaid. It wasproved that at theirannual general meeting held on December 31, 1946, thecompany presented to the shareholders the balance sheets ofthe company as at May21, 1939, 1940, 1941, 1942, 1943 and1945. Contained in their balance sheets was the figure :" To sundry creditors 7,638/. 8s. 10^." The balance sheetswere signed byMessrs.J. Altman &Co.,chartered accountants,agents of the company, and by twodirectors of the company.The plaintiff was present at the meeting as a shareholder.Evidence was given by one Morton, an accountant , who inDecember, 1946,wasconnected with the firm of J. Altman &Co. He s ta ted that he wasresponsible for the balance sheetsfrom 1939to1945 andproduced hisworking pap ers. Birk ett J.found on that evidence that the figure of 7,638/. 8s. lod." to sundry creditors " included the debt of 1,807/. due andowing to the plaintiff; and he held that the company hadm a de an acknowledgment in writing signed by their agents tothe plaintiff that the debt remained unpaid and due to himon December 31, 1946. He gave judgment for the plaintifffor 1,807/.VOL. II. 1949. 3 A 2

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76$ K I N G ' S B E N C H D I V I S I O N . [ 1 949 ]C. A. The company appealed.1949 Gerald G ardiner K.C. and Stephen Terrell for the company.

JONES There are two cases on which a s ta tement in a balance sheetBELLGROVE has been held to be an acknowledgment of a debt so t h a t thePfeoPBRTiEs 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 notbefore 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 PacificFibre Importing and Manufacturing Co. Ld. (2) and Ledinghamand Others v. Bermejo Estancia Co. Ld.; Agar and Others v.Same (3). But there was no such acknowledgment in thisbalance sheet; there was here " a mere s ta tement of facts

" and not an acknowledgment of anything to a n y b o d y . "See the judgment of the Court of Appeal delivered by LordClauson 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 companythroughout is a mere s ta tement of facts and is not a docu-m e n t of such a character as can consti tute an acknowledgmentof a debt . If a balance sheet can include such an acknow-ledgment, there was none here, but merely a general s tatementof debt to unidentified creditors. A wri t ten s ta tement cannotbe subsequently made into an acknowledgment by the oralevidence of a witness saying such and such a debt was includedin the to ta l . There was no acknowledgment of the debt inwriting.

B y the terms of s. 24, sub-s. 2, of the Limitation Act, 1939,the acknowledgment must be m a d e to the creditor or hisagent. Here, the acknowledgment was made merely to theplaintiff as a shareholder, when he at tended the meeting, assuch, in December, 1946. A public limited liability company(1) Limitation Act, 1939, s. 23, " the acknowledgment. " Sub-sub-s . 4 : " Where any righ t section 2 : " Any such acknow-" of action has accrued to recover " ledgment . . . . as aforesaid" any debt . . . . and the person " may be made by the agent" liable or accountable therefor " of the person by whom it is" acknowledges the claim . . . . " required to be made under the" the righ t shall be deemed to " last foregoing section, and shall" have accrued on and not before " be made to the person or to" the date of the acknowledg- " an agent of the person, whose

" ment. . . . " " title or claim is beingSection 24, sub-s. 1 : " Every " acknowledged . . . . "" such acknowledgment as afore- (2) [1928] Ch. 836." said shall be in writing and (3) [1947] 1 All E. R. 749." signed by the person making (4) [1943] Ch. 104, 109.

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2 K . B . K I N G ' S B E N C H D I V I S I O N . 703m ust issue a balance sheet, yea r by yea r, showing its de bts C. A.and if this decision is upheld such a company can never plead IQthe statute against a shareholder creditor.[In re Coliseum (Barrow ) Ld. (1) and Hartley v. Wharton (2) J o * E Swere also mentioned.] BELLGROVEA. P. Marshall K.C. a n d / . H. Jacob for the plaintiff were P R 0 E Snot called on.

L O R D G O D D A R D C.J. I n m y opinion, this app eal fails.T he case m ay app ear to have some impo rtance as affectingthe power of companies to rely on the provisions of theLimitation Act, 1939; but I wish to make it clear that ourdecision is based on t he special facts of this case . A tvarious dates from September, 1936, to May, 1937, the plaintifflent to the defendant company, of which he was both a share-holder an d a director, sums of money th e balance of which, it isnow agreed, amounts in all to 1,807/. These loans were notrepaid, and in 1948, the plaintiff brought this action to recoverthe m . T he defendant com pany in their defence pleaded s. 2,sub-s. 1 (a ) of the Limitation Act, 1939, and contended that, asthe cause of action had accrued more than six years beforeaction brou ght, the claim was barred. T o th at contention theplaintiff replied that within six years before the action wasbrought the person liable or accountable for the claim, thedefendant 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 an d n ot" before th e date of the ack now ledgm ent." Evidenc e wasgiven th at a t the ann ual general mee ting of the defendantcompany on December 31, 1946, at which the plaintiff waspresent in his capacity as a shareholder of the company, theacco unts of the defenda nt com pany for the years 19 39 to 19 45inclusive were presented to the meeting. T hose acco unts weresigned by the company's accountants as agents for thedefendant company, and by two directors of the company.They showed that during each of those years 1939 to 1945,th e company owed moneys to " sundry creditors." N oparticular creditors were named in the accounts, but evidencewas 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 com pany to the plaintiff. T heplaintiff contended that the balance sheet presented to him

(1) [19 30] 2 Ch. 4 4 . (2) (1840) 11 A d. & El . 9 34 .3 A 2 2

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704 KIN G'S BEN CH DIVISIO N . [1949]c. A. at the me eting con stituted an acknowledgmen t of the debtwithin the meaning of s. 24, sub-s. 2, of the Limitation Act,1939, notwithstanding that it was presented to him in his^ E S capacity as a shareholder, and not as a creditor, and that,

BEIXGROVE therefore, his claim was no t barred . By s. 23, sub-s. 4 , of th ePROPERTIES ^ . . ,, ^/^e re an y right of action has accrued to recover any" debt or other l iquidated pecuniary cla im . . . . and the01 c.j. M " person liable or acc oun table therefor acknowledges th e" claim . . . . the right shall be deemed to have accrued" on and n ot before the d ate of the acknow ledgment . . . ."T hen by s. 24, sub-s. 1 : " Ev ery such acknowledgment as" aforesaid shall be in w riting a nd signed by th e p erson" making the acknowledgment," and by sub-s. 2 : " Any such" acknowledgment . . . . as a foresa id m ay 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 . . . ." I n th e case where th e d eb tor is alimited liability company, the acknowledgment can only besigned by the company's agents.For the defendant company it was contended that a balancesheet is not such a document as can contain or amount toan acknowledgment within the meaning of ss. 23 and 24 ofthe Limitation Act, 19 39. I do not see why tha t is so.Whether a document is or is not an acknowledgment mustdepend on what the document states ; and a balance sheetpresented to a shareholder creditor at a meeting of thecompany, as these balance sheets were presented to theplaintiff, fulfils all the requirements of ss. 23 and 24 of theLimitation Act, 19 39. T ha t statu te does not extinguishdeb ts : it merely bars the right t o recover them after the lapseof the specified time from the accrual of the cause of action.If a claim is made for payment of a debt many years afterit has been incurred, there may be difficulty in proving thatthe debt ever was in fact incurred or that it has not alreadybeen paid and so forth. T ha t is why the law bars the right ofaction after a certain period has elapsed from the accrual ofthe cause of action, but then if there is an acknowledgmentof the debt within the terms of ss. 23 and 24 of the Act, theright shall be deemed to have accrued on and not before theda te of th a t acknow ledgment. I can see no reason why abalance sheet should not contain a good acknowledgmentwithin the mean ing of the A ct. T he acknowledgm ent wasonly of a sum due to a num ber of unn am ed persons ; bu t the

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2K. B. K I N G ' S BENCH D I V I S I O N . 705plaintiff established by evidence that he was one of the sundrycreditors and that his debt of 1,807/. w a s included in the totalsum acknowledged to be due to those creditors. In myview, therefore, the claim was not barred. This case is inaccordance with the decision in In re Atlantic and PacificFibre Importing and Manufacturing Co. Ld. (1). In that casea company issued debentures at various dates between 1890and 1902 payable within two years. The company paid nopart of the principal or interest. The plaintiff in 1928 suedthe company on behalf of himself and all other debentureholders for principal and interest and proved that thecompany's published accounts habitually referred to thedebenture debt as outstanding and that in 1925 the accountswhich were signed by two directors and the secretary statedthe amount of the arrears of interest. It was held that thestatement in the accounts was a written acknowledgment ofthe debt within the meaning of s. 5 of the Civil ProcedureAct, 1833, and that the action to recover the principal andinterest was not barred by the twenty years period of limitationfixed 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 thatfees were due to the directors and which was signed by thosedirectors did not amount to an " acknowledgment " by thecompany of the debt since the directors had no authorityin 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."

T U C K E R L.J. I agree.S I N G L E T O N L.J. I agree.

Appeal dismissed.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. (3) Ibid. 47.(2) [1930] 2 Ch- 44-

C. G. M.

C. A.1949

JONESv.BELLGROVEPROPERTIESL D .Lord GoddaidC.J.