On statutory construction, there is an argument that if a statute gives a right to one party he should, unless obviously vulnerable, etc, be implicitly entitled to waive it in the same way as a common law right. On a slightly different topic, but still relevant here, is The Cape Bari [2016] UKPC 20 five years ago, on contractual prewaiver by a shipowner of his right to limit. Exactly the same argument was raised by the shipowner: the merchant shipping legislation gave him the right to limit and didn't say anything about contracting out, so the right was mandatory law. It failed. This seems to me tolerably good sense. -A

I'd see this as solely a matter of statutory construction. 

Does the Limitation Act expressly or by implication permit that the rule it sets down may be contracted out of? 

No.

There is a large difference between parties to proceedings deciding, at the time, not to plead or rely upon a statutory (or common law) right, and their agreeing in advance not to do so. The mere fact that the Act creates a defence that must be pleaded by the defendant doesn't answer the construction point any differently.

Does that mean that the contract between the parties not to apply the limitation period is a nullity? Which is again a matter of statutory construction, and again the answer is no.

So, for myself, I think the old English authorities saying that are right. And now, the High Court will have to work out which cases (like Neil's employment contract example) are ones where the "public policy" of the statute is weighty enough so as not to permit contracting out.

R

---

From: Tettenborn A.M. <a.m.tettenborn@swansea.ac.uk>
Sent: 23 June 2021 06:00
To: Neil Foster <neil.foster@newcastle.edu.au>; obligations@uwo.ca <obligations@uwo.ca>
Subject: Re: ODG: HCA on waiver of limitation period in mortgage contract

 

My instinct would be for some ststutory longstop here, say 50 years. It must be contrary to public policy to have courts clogged up with ancient history.

On June 23, 2021 3:37:32 AM Neil Foster <neil.foster@newcastle.edu.au> wrote:

Dear Colleagues;

While contract law is not my area, I thought the decision of the High Court of Australia today in Price v Spoor [2021] HCA 20 

(23 June 2021) https://eresources.hcourt.gov.au/downloadPdf/2021/HCA/20 might be of interest. The 5-member bench (KIEFEL CJ, GAGELER, GORDON, EDELMAN AND STEWARD JJ) agree that a contractual waiver of the right to rely on limitations legislation is valid (not contrary to public policy) and in this case enforceable, meaning that an assignee of a mortgagee could sue on a mortgage debt (and for possession of land) despite the original debt having been due some 17 years before the action was commenced.

The argument that the clause was unenforceable was based on the general proposition that limitations provisions are in the “public interest”. While conceding this was true, the members of the court said the fact the such laws have always been able to be waived at trial by a defendant, pointed to the fact that they could be waived beforehand in a contractual provision. There were three separate judgements (Kiefel CJ & Edelman J; Gageler & Gordon JJ; and Steward J) coming to the same view, and on a quick read I didn’t see any major differences. K & E do spend some time noting the comments of Mason CJ in The Commonwealth v Verwayen (1990) 170 CLR 394 on the general issue of whether statutory rights can be waived, at [15]:

 

“whether a statutory right is capable of waiver, or abandonment by other means, is not whether the provisions in question are beneficial to the public, but rather whether they are "not for the benefit of any individuals or body of individuals, but for considerations of State”. The "critical question", he said, "is whether the benefit is personal or private or whether it rests upon public policy or expediency". 

 

They note that these comments were not essential for resolution of the issues in Verwayen but say at [18] that:

 

“what was said by Mason CJ in Verwayen on the subject was no "mere passing remark, or a statement or assumption on some matter that has not been argued". It was a considered judgment on a point argued by the parties, one which fulfils Sir Robert Megarry's description as having "a weight nearer" to ratio decidendi than an obiter dictum.”

 

I then expected a footnote to Farah v Say-Dee or similar cases reminding lower courts that they should follow “seriously considered dicta” of the High Court, but there was none. Interestingly Steward J did not rely on the “weighty dicta” from Verwayen, but did note a number of earlier English and Australian cases where limitations provisions had been waived by contract (see [89]-]95]).

On the wider question, the judgments generally accept that there are some cases where a contractual provision waiving rights could be invalid. For example, it would seem pretty clear to me that if any employer was foolish enough to include a clause in an employment contract saying that “the employee will not sue for any acts of racial discrimination”, that such a clause would be unenforceable. But as to the limits of this doctrine, probably not much more could be said than the quote from Mason CJ noted above.

Regards

Neil

 

 

NEIL FOSTER

Associate Professor, Newcastle Law School

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