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Can the defense arguments of the party being sued be statute-barred under the Prescription Law?

13.12.20 | 10:12  

A limitation of actions plea is a defense argument which is usually heard from the defendant, who seeks to block the plaintiff and repulse the claim.

However, what is the legal position when the situation is reversed - that is, the plaintiff is the one wishing to assert that a defense submission pleaded by the party being sued is statute-barred? We shall highlight the difficulties that arise when such a quandary occurs, and present our position in relation to the desired legal situation.

The limitation of actions rules, are set out in the Prescription Law, 5718-1958 (hereinafter: "the Prescription Law"). Additional, specific statute-barring arrangements are delineated in various enactments but these shall not be addressed in this summary.   

In general, the Prescription Law specifies different provisions and conditions for a variety of situations.

The main dichotomy in the Law is between "real estate" claims for which the limitation period is twenty-five years and "non-real estate" claims, which become statute-barred after seven years.

The limitation of actions under the Prescription Law is procedural, that is, it blocks the plaintiff's path to the court and precludes him from claiming his right, but does not nullify the right (section 2 of the Prescription Law).

As aforesaid, limitation of actions is a defense plea and therefore, normally speaking, it is heard from the defendant. However, situations may arise in which the plaintiff is the one seeking to rely on a limitation of actions claim.

To illustrate the matter, we shall bring the example of a case in which X has unlawful possession of land (hereinafter: "the holder"). Y has been registered as proprietor of the land (hereinafter: "the proprietor"), for the past 26 years.

The proprietor files an eviction claim against the holder, claiming that he is the registered owner, that all the rights in the land, including the right of possession, belong to him, and that the holder has possession of the land without having any legal right to do so.

The holder defends himself with only one submission, which is that is that the proprietor was unlawfully registered as owner of the land and that he, the holder, is the true owner of the rights.

We shall not deal here with all the questions arising and which may arise and with all the possible reciprocal submissions of the parties, but only with the narrow area as we have defined it above.

Since we are dealing with a "real estate" claim and since the limitation of actions period in real estate disputes is 25 years, then had the holder filed a claim for a declaration of his rights and/or for the rectification of the register, the claim would have been dismissed for prescription, which, in effect, would have ended the dispute between the parties.

Under the Prescription Law, the court will not hear an action if the claim on which it is based is statute-barred (section 2 of the Prescription Law). "Action" is defined in section 1 of the Prescription Law, as: "any civil proceeding before a court."

Therefore, should the holder choose not to file a claim, but holds the land by force, without having a contractual right, then if the owner files a claim against him, the expiry of the limitation period shall not prima facie preclude the pleading of submissions against owner's rights and against the propriety of the registration, as defense arguments. This is because doing so does not constitute an "action" as defined in the Prescription Law.

In such a case, it seems that if the defendant/holder is able to prove his assertions, then he would win and the claim against him would be dismissed.

The question which arises, is whether the designation of prescription as a purely procedural barrier achieves the underlying purpose of the limitation of action laws.

The rationale underlying the Prescription Law was explained by Her Honor Justice Procaccia stated in her judgment in CA 10192/07 Pisgat Ashdod Civil Engineering and Infrastructures Ltd v. Chen Gal Investments and Trading Ltd (published in the Nevo legal database):


"The purpose of the prescription institution is to balance the interest of the potential defendant with the interest of the potential plaintiff, while protecting the interest of the general public. While the defendant's interest required a limitation to be placed on the period during which he shall be exposed to claims and compelled to preserve his evidence, the plaintiff's interest is intended to give him sufficient time to prepare for filing his lawsuit, and to allow time to find out-of-court solutions to the dispute. The public interest also justifies limiting the length of time for filing claims, in order not to flood the court system with lawsuits based on obsolete matters and to free the courts to deal with current affairs."

It seems that the main consideration underlying the prescription laws is the protection of the potential defendant's interest by limiting his exposure to claims and avoiding the imposition of an unreasonable burden of preserving the evidence, for extended periods of time.

The limitation of actions period is therefore the point on balance between this interest of the defendant and the interest of the plaintiff in having sufficient time to protect his right to prepare for the lawsuit and to find out-of-court solutions. At the same time, the public interest in the efficacy of the judicial system and preventing it from being flooded with obsolete claims instead of dealing with current affairs, is also represented.

Against this background, with regard to limitation of actions, it is difficult not to wonder whether differentiating between the filing of a claim (which shall be subject to prescription) and the pleading of a defense argument in the very same matter (which shall not be subject to prescription) can be justified. If there is an interest in limiting the defendant's exposure to claims, then why should it be possible to plead the same claims as defense arguments, after the prescription period has expired?

In both cases, the person against whom the claim is made will have to contend with the legal argument after a long time has elapsed. In both cases, the claims will be heard and adjudicated in the same way and therefore in both cases preserving the evidence is essential (and taxing). The same holds true regarding the public interest in preventing the litigation of obsolete matters.

It also appears that to a large degree what differentiates between a person who would be detrimentally affected by the pleading of statute-barred submissions as defense arguments and another who would not, are completely arbitrary circumstances, such as whether the defendant can enforce his right against the plaintiff, despite the statute-barring, or not (as in the above example).

It seems that examining this issue and checking whether the prescription laws need updating, so that statute-barring in civil matters shall be a substantive rather than procedural, and so that pleading a defense argument after the limitation period has expired shall also be precluded, is certainly warranted.