Guarantor's claim for paid debt allowed; Limitation Law applies 15-year bond rule via Contract Law s.98.

[*326] 1966 March 3

(VASSILIADES, MUNIR, JOSEPHIDES, JJ.)

APPELLATE JURISDICTION

Christodoulos Papageorghiou,

Appellant-Defendant,

v.

Adonis Charalambous,

Respondent–Plaintiff.

(Civil Appeal No.4558).

Contract - Bond in customary form - Guaranteed debt - Guarnator's claim of a sum paid by him for a guaranteed debt - Rights of guarantor - Applicability of the Limitation of Actions Law, Cap. 15 - Contract Law, Cap.149, section 98 and the Limitation of Actions Law, Cap.15? sections 3(1 )(a), 5 and 10(d).

Limitation of Actions - Bond in customary form - See under "Contract" above.

M. Kyprianou, for the Appellant-Defendant.

E. Odysseos, for the Respondent-Plaintiff.

JUDGMENT

VASSILIADES. J.: The first Judgment will be delivered by Mr. Justice Munir.

MUNIR. J.: This is an appeal from a judgment of the District Court of Nicosia, sitting at Morphou, which was delivered on the 8th December, 1965, and in which judgment was given for the Respondent-Plaintiff for the sum of £75.- and £32.600 mils costs. The Appellant-Defendant has now appealed against the said judgment. [*327]

The Respondent-Plaintiff by this action claimed from the Appellant-Defendant the sum of £75.–, being the sum paid by the Respondent-Plaintiff as the surety of the Appellant-Defendant on a bond in customary form, dated the 31st October, 1 953, which had matured on the following day, the 1st of November, 1953.

At the hearing of the action by the District Court counsel for the Appellant-Defendant had admitted that the Respondent-Plaintiff had paid to the creditor of the Appellant-Defendant, on the 22nd January, 1955, the sum of £75.- in respect of the capital and interest on the said bond, together with costs. The only defence of the Appellant- Defendant at the hearing before the District Court was that the action was statute-barred by virtue of the provisions of sections 5 and 10(d) of the Limitation of Actions Law, Cap.15, and the case was decided on this issue alone. The learned trial Judge came to the conclusion that, by virtue of section 98 of the Contract Law, Cap. 149, the relevant provisions of the Limitation of Actions Law, Cap. 15, which applied were not sections 5 and 10(d) as submitted by counsel for Appellant-Defendant, but were the provisions of section 3(1)(a) and, therefore, found that the action was not statute-barred and gave judgment for the Respondent-Plaintiff. Counsel for Appellant-Defendant has again submitted, on appeal that the section of the Limitation of Actions Law, Cap. 15, which is applicable to the facts of this Case is section 5, which provides that -

"No action shall be brought upon, for, or in respect of, any cause of action not expressly provided for in this Law, or expressly exempted [*328] from the operation of this Law, after the expiration of six years from the date when such cause of action accrued".

He based his argument on the contention that the action has not been brought upon, for or in respect of, a bond in customary form, and that, therefore, the provisions of section 3(1)(a) of Cap. 15 did not apply.

We have given careful consideration to the submissions made by learned counsel for Appellant-Defendant but we cannot agree with him that it is section

5 of Cap. 15 which is the section which is applicable to this case.

We did not consider it necessary to call upon counsel for Respondent-Plaintiff to address the Court, except to ask him whether he could cite any authorities on the point which might assist the Court in this case. He informed us that he was not aware of any Cyprus or other authority which would be of any assistance in deciding the issue now before the Court.

We are of the opinion that the way to approach this matter is to take as the starting point the provisions of section 98 of the Contract Law, Cap.

149 which reads as follows:-

"Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor".

Clearly, one of the rights with which the surety, "upon payment or

performance of all that he is liable for", [*329] is invested under the said section 98, is the right to bring an action

to recover the debt and we are, therefore, of the opinion that, by virtue of the operation of section 98 of the Contract Law, Cap. 149, the guarantor stepping, as he did, into the shoes of the creditor, is entitled to have the benefit of the provisions of section 3(l)(a) of the Limitation of Actions Law, Cap. 15, just in the same way as the creditor would have had, and that it is the provisions of section 3(1 )(a) which are applicable to this case and not sections 5 and 10(d) thereof.

Section 3(1)(a) of Cap. 15 reads as follows:-

"Subject to the provisions of this Law, no action shall be brought upon, for or in respect of –

(a) any bond in customary form or any mortgage, after the expiration of fifteen years from the date on which the cause of action accrued;".

We, therefore, agree with the conclusion reached by the trial Judge in his judgment that the action, which is the subject-matter of this appeal, is not statute-barred.

This appeal cannot, therefore, succeed and must be dismissed.

VASSILIADES, J.: I agree.

JOSEPHIDES, J.: I also agree.

VASSILIADES, J.: In the result, the appeal fails and is dismissed with costs.

Appeal dismissed

with costs.