Response to Shortfall Statute Barred but interest not??

Troy,

Further to your above posting, here is a solicitor's view:

The general rule is that once a principal debt is statute barred, so is any interest that relates to it (Elder v Northcott [1930] 2Ch 422, Ch D). There are exceptions to this - one relates to action taken on a judgment, e.g. bankruptcy. In this situation, the judgment debt can be statute barred yet interest that relates to it recoverable if it accrued within the last 6 years (s24(2)LA '80). Another exception relates to contracts of guarantee which guarantee repayment of the principal debt and also specifically guarantee interest and charges. In this situation, a claim against the guarantor for repayment of the principal debt can be statute barred with interest that accrued within the last 6 years recoverable (Parr's Banking Co v Yates [1898] 2 Q.B. 460, CA).

I don't know of any other exceptions.

I agree entirely with the point that a separate limitation period of 6 years starts to run from the date of each accrual of interest, but this is subject to the general rule in Northcott. Even if interest accrued last week, it is not recoverable if the principal debt is statute barred. I don't think this is a controversial view, but would like to know the source of any advice to the contrary and the authority for it. I will need some convincing that this view is not correct.

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