Bell v Peter Browne & Company

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE NICHOLLS,LORD JUSTICE BELDAM,LORD JUSTICE MUSTILL
Judgment Date11 Apr 1990
Judgment citation (vLex)[1990] EWCA Civ J0411-8
Docket Number90/0360

[1990] EWCA Civ J0411-8

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(MR JUSTICE AULD)

Royal Courts of Justice

Before:

Lord Justice Mustill

Lord Justice Nicholls

Lord Justice Beldam

90/0360

Barry Bell
and
Peter Browne & Co. (a firm)

MR P.W. SMITH, instructed by Messrs Hyde Mahon Bridges, London agents for Messrs Croftons (Manchester) appeared for the Appellant (Plaintiff).

MR PAUL REES, instructed by Messrs Willey Hargrave, London agents for Messrs Wansbroughs (Bristol) appeared for the Respondent (Defendant).

LORD JUSTICE NICHOLLS
1

This appeal raises some short points concerning the date of accrual of the plaintiff's causes of action, for breach of contract and in tort, arising out of his solicitors' alleged negligence. The facts as pleaded lie in a very small compass. In October 1977 Mr Barry Bell consulted the defendant firm regarding the breakdown of his marriage. One of the points he discussed with his solicitors concerned what was to happen to the matrimonial home, 60 Lower High Street, Shirehampton, Bristol. The house was registered in the joint names of himself and his wife Sandra. It was worth about £12, 000, and subject to a mortgage for about £8, 000. So if the house had then been sold, Mr Bell would have received about £2, 000: that is, about one-sixth of the gross proceeds. Mr Bell was agreeable to the house not being sold for the time being, but he was to receive one-sixth of whatever might be the gross proceeds when a sale did take place. Meanwhile the house would be transferred into the sole name of his wife. This would help Mr Bell to obtain a mortgage to buy other accommodation for himself. His continuing interest in 60 Lower High Street would be protected by a trust deed or a mortgage.

2

These arrangements were agreed between Mr and Mrs Bell and their respective solicitors. On 1st September 1978 Mr Bell executed a transfer of the house into his wife's sole name. But no steps were taken by Mr Bell's solicitors to protect his one-sixth share in the proceeds of sale. No declaration of trust or mortgage was prepared or executed. No caution was registered at the Land Registry. The parties were divorced in the following year.

3

In December 1986 Mr Bell learned from his former wife that she had sold the property in July 1986 for £33, 000. That is, almost eight years after the property had been transferred into her sole name. She had spent all the proceeds. Thus Mr Bell had lost his one-sixth interest in the proceeds of sale.

4

So Mr Bell brought this action against his former solicitors for damages for professional negligence. The writ was issued on 20th August 1987. The sole question arising on this appeal is whether the action is bound to fail because it is statute-barred.

5

The claim for breach of contract

6

It was common ground before us that, on the pleaded facts, Mr Bell has or had claims against his former solicitors in contract and also in tort. I shall consider the two claims in that order. The basic limitation provision regarding claims founded on contract appears now in section 5 of the Limitation Act 1980. That section precludes the bringing of an action founded on simple contract after the expiration of six years from the date on which the cause of action accrued. Ascertaining that date involves identifying the relevant terms of the contract and also the date on which the breach relied on occurred. In the present case there is no difficulty under either head. Mr Bell's solicitor was retained to take all those steps which a reasonably careful solicitor would take in respect of the agreed arrangements for the transfer of the house to Mr Bell and the retention by him of a beneficial interest in a one-sixth share. He was to see to the preparation and execution of a formal declaration of trust or other suitable instrument. He was also to see that Mr Bell's interest would be protected when Mrs Bell came to sell the house. Under the agreed arrangements she was to become the sole registered proprietor. By causing appropriate entries to be made on the land register, such as a caution against dealings, Mr Bell's solicitor was to ensure that on a sale of the house Mr Bell would receive his share of the proceeds.

7

Clearly, all those steps needed to be taken at the time of the transfer or, in the case of lodging a caution, as soon as reasonably practicable thereafter. When the solicitor failed to take those steps in 1978 he was, thereupon, in breach of contract. This was so even though the breach, so far as it related to lodging a caution, remained remediable for many years. Indeed, it remained remediable until Mr Bell's former wife sold the house. Thus the six-year limitation period began to run from the date of the breach, in September 1978, and it expired long before the writ was issued nearly nine years later, in August 1987. Accordingly, in my view, Auld J. was correct in holding that the claim based on breach of contract is statute-barred.

8

It is, of course, true that the solicitor's breach of contract in 1978 did not discharge his obligations. Had Mr Bell learned, a year or two later, of what had happened, he would still have been entitled to go back to his former solicitor and require him to carry out, belatedly, his contractual obligations so far as they could still be performed. For example, lodging a caution. Despite this, it was in 1978 that the breach occurred. Failure thereafter to make good the omission did not constitute a further breach. The position after 1978 was simply that, in breach of contract, the solicitor had failed to do what he ought to have done in 1978 and, year after year, that breach remained unremedied. Nor would the position have been different if in, say, 1980 Mr Bell's solicitor had been asked to remedy his breach of contract and he had failed to do so. His failure to make good his existing breach of contract on request would not have constituted a further breach of contract: it would not have set a new six-year limitation period running. Once again, the position would have been simply that the solicitor remained in breach. Nor, finally, is the position any different because, in respect of lodging a caution, the breach remained remediable until 1986 when the house was sold. A remediable breach is just as much a breach of contract when it occurs as an irremediable breach, although the practical consequences are likely to be less serious if the breach comes to light in time to take remedial action. Were the law otherwise, in any of these instances, the effect would be to frustrate the purpose of the statutes of limitation, for it would mean that breaches of contract would never become statute-barred unless the innocent party chose to accept the defaulting party's conduct as a repudiation or, perhaps, performance ceased to be possible.

9

For completeness I add that the above observations are directed at the normal case where a contract provides for something to be done, and the defaulting party fails to fulfil his contractual obligation in that regard at the time when performance is due under the contract. In such a case there is a single breach of contract. By way of contrast are the exceptional cases where, on the true construction of the contract, the defaulting party's obligation is a continuing contractual obligation. In such cases the obligation is not breached once and for all, but it is a contractual obligation which arises anew for performance day after day, so that on each successive day there is a fresh breach. A familiar example of this is the usual form of repairing clause in a tenancy agreement. Non-repair for six years does not result in the repairing obligation becoming statute-barred while the tenancy still subsists. The obligation of the tenant or the landlord to keep the property in repair is broken afresh every day the property is out of repair, as Baron Bramwell observed in Spoor v. Green (1874) L.R. 9 Ex. 99, 111.

10

We were much pressed with the decision of Oliver J., as he then was, in Midland Bank Trust Co. Ltd v. Hett, Stubbs & Kemp [1979] Ch. 384. That case may be distinguishable on its facts. There the defendant firm of solicitors never treated themselves as functi officio in relation to the option. They continued to have dealings with their client in respect of the unregistered option, as summarised at page 438D-F. The instant case stands in marked contrast. There is no suggestion that Peter Browne & Co. had any further contact with Mr Bell or his affairs after the conclusion of the divorce proceedings. That was more than six years before the writ was issued. The amended statement of claim, indeed, alleges that the solicitors owed a "continuing duty" to protect Mr Bell's one-sixth beneficial interest until that duty could no longer be fulfilled or Mr Bell accepted the solicitors' breach as repudiation. But this alleged continuing duty is not founded on any facts other than the initial retainer I have mentioned. This allegation takes Mr Bell's case no further.

11

The claim in tort

12

One might have expected that parallel professional negligence claims based on contract and the tort of negligence would have a common starting date for the running of the six-year limitation periods applicable in most cases under the 1980 Act. But this is not so, because a cause of action based on negligence does not accrue until damage is suffered. It is from that date, not the date on which the negligent act or omission occurred, that the six-year limitation period prescribed by section 2 of the Limitation Act 1980 runs.

13

The question of damage and the limitation period in negligence claims has been a troublesome one for some years. Most...

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