Clifford Chance

The final instalment of this limitation mini-series explores how limitation periods can be suspended in group proceedings and class action claims in Australia.

Limitation in civil claims

In Australia, there are no special limitation periods for bringing a class action. The limitation period depends on the specific legislation that gives rise to the cause of action. Otherwise, the relevant limitation legislation applies.^[1]

Generally, civil claims have limitation periods ranging from 1 to 6 years. For example, section 14 of the Limitation Act 1969 (NSW) provides a 6-year limitation period for actions founded on: (a) contract, (b) tort, (c) enforcing a recognisance, and (d) recovering money by virtue of an enactment.

Fraud or concealment

Similar to English law, if a fact relevant to a cause of action is deliberately concealed, the limitation period may be extended. For instance, pursuant to section 53 of the Limitation Act 1969 (NSW), where there is a cause of action based on fraud or deceit, or the cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed, the limitation period does not start until the fraud or concealment is discovered, or may with reasonable diligence be discovered. The elapsed time before this discovery is not counted in calculating the limitation period for taking legal action.

This means that the limitation period may be paused or extended in cases of fraud or concealment.

Determination vs Discontinuance

Importantly, section 33ZE of the Federal Court of Australia Act 1976 (Cth) provides that upon commencement of a class action, the running of any limitation period that applies to the claim of a group member to which the proceeding relates is suspended. The limitation period does not begin to run again unless either the member opts out of the proceeding, or the proceeding is finally determined.

There is some ambiguity as to whether a discontinuance of a class action is considered a "determination" under section 33ZE(2) of the Federal Court of Australia Act 1976 (Cth). Section 33ZE(2) provides that a limitation period does not begin to run again unless either the member opts out of the proceeding under section 33J or the proceeding, and any appeals arising from the proceeding, are determined without finally disposing of the group member's claim.

In Turner v TESA Mining (NSW) Pty Ltd (No 2) [2022] FCA 435, Justice Murphy held that the meaning of "determined" under section 33ZE(2) should be properly understood as referring to a judicial resolution of a group member’s claim.

Justice Murphy however noted there is difficulty with that construction as there is a risk of real unfairness to the respondent to a class action. The respondent will be left in the position that the limitation period will remain suspended leaving it forever exposed to the risk of claims by group members. His Honour noted it is unlikely that the legislature intended such a result and, to mitigate this risk, considered it was appropriate to order, in this instance, that the suspension of the limitation period would continue for a further 60 days.

However, the Victorian Supreme Court in Moira Shire Council v JLT Risk Solutions [2024] VSC 4 recently diverged from the Federal Court, instead finding that the word "determined" (in the equivalent provision under the Supreme Court Act 1986 (Vic)) should be given the meaning of "to come to an end" or "terminate" for the purpose of section 33ZE(2). Justice Lyons considered that "determined" does not require judicial resolution of group members’ claims, and that no such requirement arises by the language of the Act; nor is it supported by the statutory context and purpose.

However, his Honour found that because discontinuance of a group proceeding necessitates court approval, any such requirement for the purpose of section 33ZE(2) is met if such approval is given. On this construction of the word "determined", the limitation period would resume upon the filing of the notice of discontinuance as a result of the decision of the court in approving the discontinuance. As such, regardless of which interpretation is adopted, the limitation period will resume upon filing of the notice of discontinuance.

His Honour stated that this outcome is commendable for group members as it avoids a situation whereby a judgment is handed down and group members are informed after-the-fact that the limitation period applicable to their claims has resumed. As such, Justice Lyons concluded that upon filing of the notice of discontinuance a group proceeding is "determined" for the purpose of section 33ZE(2).

These judgments bring some clarity for both respondents and group members in class actions as to the interpretation of section 33ZE(2). A discontinuance of a class action is likely to result in the recommencement of the running of the limitation period. In particular, respondents can take comfort that a discontinued class action will likely not result in limitless exposure to potential class action claims.

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[1] See: Limitation Act 1969 (NSW); Limitation of Actions Act 1958 (Vic); Limitation of Actions Act 1974 (Qld); Limitation of Actions Act 1936 (SA); Limitation Act 1981 (NT); Limitation Act 2005 (WA); Limitation Act 1974 (Tas); and Limitation Act 1985 (ACT).