Recently the High Court of Australia (Court)
held that parties may validly contract out of statutory limitation
periods. This decision will
likely have broad application and impact on clauses in contracts
moving forward. Care should still be taken when drafting
contractual clauses that seek to exclude statutory limitation
periods as the decision may not apply to certain types of contracts
or limitation periods set out in some statutes.
Facts
The proceedings first commenced in the Supreme Court of
Queensland where the respondents, as mortgagees, claimed $4 million
as monies owing under two secured mortgages and the recovery of
possession of the land the subject of the mortgages. The appellants
alleged that the respondents were statute barred from bringing the
action under the Limitation of Actions Act 1974
(Qld) (Act) and therefore the Court did not have
jurisdiction to hear the matter.
