Blakemores LDP ((in Administration)) v Carole Ann Scott and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Vos,Lord Justice Underhill,Lord Justice Moore-Bick |
| Judgment Date | 07 October 2015 |
| Neutral Citation | [2015] EWCA Civ 999 |
| Docket Number | Case No: A2/2014/1602 & 1601 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 October 2015 |
[2015] EWCA Civ 999
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
HIS HONOUR JUDGE SIMON BROWN QC
Claim Numbers 3BM90009 and 3YU23681
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Moore-Bick
Lord Justice Underhill
and
Lord Justice Vos
Case No: A2/2014/1602 & 1601
Mr Mike O'Brien QC (instructed by Newhall Solicitors LLP) for the Appellants
Mr John de Waal QC (instructed by Sydney Mitchell LLP) for the Respondents
Introduction
The central issue in this case is whether the judge was right to grant summary judgment striking down the first and third appellants' negligence claims against their solicitors on the grounds that they were issued more than 3 years after they acquired "the knowledge required for bringing an action for damages in respect of the relevant damage" within the meaning of sections 14A(5) and (6) of the Limitation Act 1980.
Blakemores LDP ("the firm") was a firm of solicitors, which is now in administration. Two solicitors acting for the firm are relevant to the issues in the case: a Mr Geoffrey Barrett, who was an expert in the manorial law relevant to the appellants' case ("Mr Barrett"), and a Mr Michael Baxendale, a solicitor specialising in litigation ("Mr Baxendale"). Mr Baxendale still acts for the appellants but he is now with a different firm.
The firm acted for the appellants, who are three unrelated villagers in Ireby, Lancashire, between March 2005 and some time in 2012. Each appellant has a different procedural position that will need to be carefully distinguished. The appellants are Ms Carole Scott ("Ms Scott"), Mr Eric Walker ("Mr Walker") and Mr Christopher Balchin ("Mr Balchin").
The appellants instructed the firm in relation to the issues concerning two Land Registry titles numbered LA945262 (the title relating to the Lordship of the Manor of Ireby — the "Lordship title") and LAN6249 (the title relating to an area of some 360 acres of moorland overlooking the village of Ireby, known as Ireby Fell — the "Ireby Fell title"). Mr Peter Burton and Mrs Susan Burton (née Bamford) ("Mr and Mrs Burton") were registered as the proprietors of these titles respectively as from 10 th October 2004 and as from 21 st February 2005.
On 9 th May 2007 the appellants and other villagers applied to alter the register by closing off both the Lordship title and the Ireby Fell title so as to correct a mistake under paragraph 5(a) of schedule 4 to the Land Registration Act 2002 (the " LRA"). When they ran out of money to fund the litigation, the appellants entered into a conditional fee agreement with the firm dated 27 th April 2009. On 10 th December 2010, Mr Simon Brilliant, Deputy Adjudicator, directed that the Lordship title should be closed but refused, as a matter of discretion, the application to close the Ireby Fell title. Mr Jeremy Cousins QC sitting as a deputy judge of the Chancery Division dismissed the appellants' appeal from the Deputy Adjudicator on 17 th April 2012. On 14 th October 2013, the Court of Appeal (Mummery, Jackson and McCombe LJJ) dismissed a further appeal (see Walker v. Burton [2013] EWCA Civ 1228, [2014] 1 P&CR 9, which provides a useful summary of the interesting history of the case).
On 11 th December 2012, the firm issued a claim form against the appellants in respect of some £635,530.78 claimed for work done under the conditional fee agreement (claim number 3BM90009 – the "first action"). On 5 th February 2013, the firm entered judgment in default against Mr Balchin.
Ms Scott's and Mr Walker's defence and counterclaim in the first action
On 8 th February 2013, Ms Scott and Mr Walker served a defence and counterclaim, drafted by Mr Baxendale, in which they pleaded that Mr Barrett had been negligent in failing to advise them that, unless they filed an objection to the registration of the titles before the deadline of 21 st April 2005 (the "deadline"), then even if they later proved that the registrations had been mistaken, a statutory discretion arose in the Adjudicator to HM Land Registry as to whether or not to close the registration of Ireby Fell in the names of Mr and Mrs Burton. The defence and counterclaim did not expressly claim damages for negligence, but did plead, in effect, that the firm was estopped by the events which had occurred from claiming its fees.
Paragraph 29 of Ms Scott's and Mr Walker's defence and counterclaim said the following, after pleading that Mr Baxendale had consulted one of the firm's partners, Mr Peter Kelly, about whether he would authorise the firm to act for the appellants under a conditional fee agreement to set aside the registration of the titles:-
"In the course of a meeting in April 2009 Mr Baxendale explained, on a face-to-face basis, to Mr Kelly the following:-
(a) That in the opinion of Mr Baxendale, Mr Barrett's negligence had caused the current difficulty in which the Villagers [including the appellants] found themselves, namely that Ireby Fell had been registered by mistake in the name of [Mr and Mrs Burton] … because the relevant deadline had been missed by Mr Barrett.
(b) That the best way to try to mitigate that difficulty (and thus to mitigate the [firm's] potential liability) would be to continue to represent the Villagers in their action against [Mr and Mrs Burton]
(c) That there were strong prospects of the Villagers being successful …"
The defence and counterclaim continued as follows:-
"31. Mr Baxendale assured the [appellants] that [the firm] anticipated recovery of [the firm's] costs from [Mr and Mrs Burton], except possibly a small shortfall … but that no substantial shortfall would be enforced by [the firm] against the [appellants] …
32. The [appellants] placed full reliance upon the said Representations in continuing their Proceedings …
33. … Mr Baxendale explained (as he was professionally obliged to do) that he did consider that [the firm], through Mr Barrett, had been negligent in failing to advise that Objections should be filed in time, such that in reality any substantial shortfall ought not to be recoverable from [the appellants] should such arise."
It should be observed that it is not entirely clear from this pleading whether the term "Defendants" that I have shown above as "appellants" was intended to include the 2 nd defendant, Mr Balchin. The pleading was not filed on his behalf, because he could not at that time be found. It is best, I think, to assume that the term applied only to Ms Scott and Mr Walker on whose behalf the pleading was filed.
Further procedural events
On 1 st March 2013, the firm filed a reply and defence to Ms Scott's and Mr Walker's counterclaim. It pleaded at paragraph 24 that the firm understood the appellants' case to be that Mr Barrett was "negligent in failing to advise [the appellants] to object to Mr and Mrs Burton's original application for registration as proprietor of the [Ireby Fell title] before the latest date for doing so, 21 st April 2005, and that as a result of this Ms Scott and Mr Walker have suffered loss and damage, namely the loss caused by the fact that their Application to close the [Ireby Fell title] was dismissed by the Deputy Adjudicator and on appeal". In paragraphs 25 of the firm's pleading, it alleged that the negligence claim was statute barred under sections 2 and/or 5 of the Limitation Act 1980, the date of loss being 21 st April 2005 at which point the [appellants on their case] had a good cause of action" against the firm. Paragraph 26 indicated that the firm would rely on paragraph 33 of the Ms Scott's and Mr Walker's defence as showing that they had the requisite knowledge to bring the claim more than 3 years before this claim was commenced. Mr John de Waal QC, counsel for the firm, asked us to note that the firm's reply and defence to counterclaim also claimed that (a) the estoppel pleaded in paragraph 31 of the defence and counterclaim was inconsistent with the indemnity principle, (b) the firm intended to strike out or seek summary judgment in respect of both the estoppel defence and the negligence claim, and (c) that the defence and counterclaim had not at that stage been verified by a statement of truth. It is to be noted, however, that the firm has in fact never applied, save in respect of the limitation point, to strike out the defence and counterclaim or for summary judgment against the appellants on the merits. Mr de Waal's point was that Mr Baxendale's evidence, to which I shall shortly refer, has to be read in the light of the fact that his pleading on behalf of Ms Scott and Mr Walker was under challenge.
On 11 th March 2013, the Law Society intervened in the firm's practice, and the firm ceased to trade. On 27 th March 2013, an administrator was appointed in respect of the firm.
On 27 th August 2013, Ms Scott and Mr Walker issued an application notice seeking permission to amend their defence and counterclaim so as actually to raise a counterclaim for damages for negligence. Mr Baxendale explained in an accompanying witness statement that the claim had not been brought before because the Court of Appeal decision was awaited (as indeed it continued to be until 14 th October 2013). On 16 th October 2013, HH Judge McKenna accepted Mr Baxendale's undertaking to file the original...
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