The doctrine of laches is based on the maxim “equity aids the vigilant and not those who slumber on their rights”. It is an equitable defence that aims to protect a party against unreasonable delay in bringing a case against them.
If a party fails to assert their rights in a timely way, their claim may be “barred by laches”.
Laches is different from the statute of limitation, which sets a specific period within which a claim must be made. It is a defence available over and above statutory limitations.
Delay alone is not sufficient to prevent a person from claiming relief; the consequence of the delay must be that it would be unfair to grant relief. It focuses on the conduct of the plaintiff. In Streeter v Western Areas Exploration Pty Ltd (No 2) (2011) 278 ALR 291, McLure P explained:
“The doctrine of laches comprehends two themes. One is delay implying not just quiescence, but rather acquiescence and assent, and the other is delay involving prejudicial change of circumstances.” [1]
The Law Reform Commission of Western Australia noted that: “When a defence of laches is raised, it is important to consider the length of the delay and the nature of the acts done during the period of delay which may affect either party. In general, the longer the delay, the easier it will be to infer acquiescence, and the more likely it will be that the defendant has suffered prejudice.” [2]
The party asserting laches bears the burden of proving the doctrine applies. Equity will consider reasonable causes for a delay, such as illness or force majeure.
In 1966, widowed Baburin was persuaded to transfer voting control of her company to her two sons. In 1985, she commenced legal action to set aside the transfer on several grounds, including fraud, undue influence and unconscionable dealing, and for damages.
The Supreme Court ruled that although Baburin succeeded in establishing that the dealing was unconscionable, she ultimately failed by reason of laches. In dismissing her action, Kelly SPJ stated:
“Whilst mere delay did not constitute laches, during the delay of nineteen years in the present case there had been a loss of relevant documents, the death and the impairment of recollection of witnesses, alteration in the nature of the rights attached to the shares and the transfer of an interest in the shares to an innocent third party. There was also no explanation of the delay. In these circumstances, the delay was unreasonable, and the consequences were such that it would be unjust to grant the relief sought by the plaintiff.” [3]
In 1970, Crago commenced legal action for a declaration that a voluntary deed of settlement and power of attorney he executed in 1935 were void. A defence of laches succeeded because the court held a different conclusion may have been reached “if all of the witnesses, including the doctors, who could have given first-hand accounts of the plaintiff’s behaviour, and of other relevant circumstances, had been available to be called as witnesses”. [4]
This High Court case involved a disputed alleged trust. Hourigan did not commence proceedings against executors of his mother’s will until about 15 years after her death, 37 years after the conveyance of the property in question and 42 years after he had reached adult age. The court ruled Mr Hourigan’s mother did not hold the property on trust for her sons, and even if there had been a trust, Hourigan’s claim would have been barred by laches. In obiter dicta, Rich J explained the concept of laches:
“If a party in a position to claim an equitable right which is not undisputed lies by and acts in such a way as to lead to the belief that he has no such claim, or will not set it up, and thus encourages the party in possession to so deal with his own affairs that it would be unfair to him and to others claiming under him to tear up the transactions and go back to the position which might originally have obtained, the court of equity will not, even where the claim is that an express trust is created, disregard the election of the party not to institute his claim and treat as unimportant the length of time during which he has slept upon his rights and induced the common assumption that he does not possess any…” [5]
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