Bowie v Southorns (A Firm)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nelson |
| Judgment Date | 09 July 2002 |
| Neutral Citation | [2002] EWHC 1389 (QB) |
| Docket Number | Case No: 02/TLQ/0068 |
| Court | Queen's Bench Division |
| Date | 09 July 2002 |
[2002] EWHC 1389 (QB)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
The Honourable Mr Justice Nelson
Case No: 02/TLQ/0068
Lindsay Boswell QC (instructed by Richard Wilson & Co) for the Claimant
Patrick Lawrence (instructed by Henmans) for the Defendant
Hearing date: Tuesday 12th March 2002
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
………………………..
Mr Justice Nelson
This is a preliminary hearing of a limitation issue in a solicitor's negligence action. It has been agreed between the parties that, for the purposes of the hearing at first instance, the primary limitation period in tort had expired before the issue of the claim form on the 25th May 2001, in view of the decision in Forster v Outred [1982] 1 WLR 86. The Claimant has reserved the right to argue at Appellate level that 'actual damage' was incurred at a date within the limitation period.
The issue which arises for determination therefore is whether or not the claim was brought within 3 years of the Claimant acquiring the relevant knowledge under section 14A of the Limitation Act 1980. This provision enables an action to be commenced 3 years from the starting date, which is defined as the earliest date on which the plaintiff first had the knowledge required for bringing an action for damages and a right to bring such an action. The relevant parts of the section are as follows:—
"14A …
(5)For the purposes of this section, the starting date for reckoning the period of limitation under subsection (4)(b) above is the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action.
(6) In subsection (5) above "the knowledge required for bringing an action for damages in respect of the relevant damage" means knowledge both —
(a) of the material facts about the damage in respect of which damages are claimed; and
(b)of the other facts relevant to the current action mentioned in subsection (8) below.
(7) For the purposes of subsection (6)(a) above, the material facts about the damage are such facts about the damage as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.
(8) The other facts referred to in subsection (6)(b) above are —
(a) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and
(b) the identity of the defendant; and
(c) if it alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.
(9) Knowledge that any acts or omissions did or did not, as a matter of law, involve negligence is irrelevant for the purposes of subsection (5) above.
(10) For the purposes of this section a person's knowledge includes knowledge which he might reasonably have been expected to acquire —
(a) from facts observable or ascertainable by him; or
(b) from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek;
but a person shall not be taken by virtue of this subsection to have knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice."
Section 14B provides a final long stop of 15 years irrespective of the operation of 14A.
The issues which arise on the facts of this particular case are when did Mrs Bowie know the identity of the defendant, Southorns, (14A(8)(b)) and when did she know the material facts about the damage in respect of which damages are claimed, and that that damage was attributable in whole or in part to the omissions alleged to constitute negligence (section 14A(8)(a) and section 14A(6).)
The Facts.
Mrs Bowie's action in solicitor's negligence arises out of a legal charge over her home jointly executed with her husband on the 17th March 1988 in favour of Lloyds Bank plc. The charge secured repayment on demand of all money and liabilities of her husband, John David Bowie, in respect of his business as a garage owner. He operated two businesses, Cody Car Sales and Binfield Garages Limited, which he owned jointly with Michael Smith.
Mrs Bowie's signature on the charge was witnessed by a solicitor, Mr Nicholas Burrows, a partner of Southorns. The attestation, inserted in manuscript by the bank, stated that the document had been explained by Mr Burrows to Mrs Bowie before she had signed it. But it had not been fully explained, Mrs Bowie alleges, so that she still believed, as she had been told by her husband, that she was executing a fixed charge limited to £40,000, the then business debt of her husband's company, Cody Car Sales. She understood that the £40,000 was split between herself, her husband, Mr Smith and his wife.
Unfortunately, Mr Bowie's business failed. Lloyds brought possession proceedings under the charge in December 1991. A suspended possession order with liberty to apply to set aside was made on the 10th November 1992. Mrs Bowie consulted solicitors and a draft defence and counterclaim was filed in the possession proceedings on the 9th December 1992. The essence of the defence was that Lloyds had failed to take reasonable steps to give a full and fair explanation of the security document before signature, or advise her to take independent advice before signing in circumstances where a presumption of undue influence by her husband arose. Mrs Bowie was advised by counsel that in the circumstances she had reasonable prospects of succeeding in a defence in accordance with the case of Barclays Bank plc v O'Brien [1994] 1 FLR 1, on the grounds that she had an equity to set aside the transaction as against Lloyds.
Mrs Bowie was at that time being advised by Miss Tierney, from Haye and Reid and counsel Mr Richard Scarratt. She was clearly advised by Miss Tierney in May 1992 that the legal charge which she and her husband had signed was to cover all monies owed by Mr Bowie to the bank. When counsel was instructed to advise in November 1992 he was informed that Mrs Bowie accepted that she had signed the deed in presence of a solicitor and that she acknowledged that she understood that it was an unlimited mortgage but thought that it was to provide security for the debts of Cody Car Sales alone. Had she been advised that it extended to any other business venture set up by her husband she would not have agreed to sign it. A conference with counsel took place on the 13 th November 1992. Mrs Bowie attended that conference.
On the 6th May 1993 the possession proceedings were adjourned generally with liberty to restore. On 24th July 1995 Mr Bowie died and on the 1st August 1997 Lloyds restored the possession proceedings. No advice was given by counsel or solicitors to Mrs Bowie that Southorns or Mr Burrows should be brought into the action by way of third party proceedings. The action was heard on the 25th May 2000 and possession given to Lloyds. The defence was rejected upon the basis that, by checking that the document had been duly signed and attested in the terms which the bank itself had altered in manuscript to say that the document had been explained to Mrs Bowie, the bank had discharged their duty to enquire. The judge said that Mrs Bowie did not get the advice which she should have got and that he felt sympathy for her as she had unwittingly entered into a transaction which meant that she was going to lose her home. He was however obliged to make the possession order. The order was made on the basis of the judgment in the Court of Appeal in Royal Bank of Scotland plc v Etridge (No 2) [1998] 4 AER 705.
Mr Burrows said in his witness statement in the possession action that he acted for Cody Car Sales. The District Judge found that he had a duty to advise Mrs Bowie but had not given her the appropriate advice. Mr Burrows disputes that he failed to advise Mrs Bowie. As far as Mrs Bowie was concerned Mr Burrows was at all times acting on behalf of Cody Car Sales. She was never informed to the contrary by Mr Burrows, or the solicitors acting on her behalf subsequently, and hence it did not occur to her that Mr Burrows might at any time have been acting on her behalf or owed her any duty. It was only when the possession action brought against her by Lloyds, was heard before District Judge Mildred on the 25th May 2000, that she learned Mr Burrows may in fact have been acting on her behalf before she signed the legal charge.
The evidence of Mrs Bowie before me was that Mr Burrows had given her no real explanation of the mortgage when she saw him in 1988 and that if he had explained it to her she would not have executed it. She had taken legal advice from Miss Tierney in the Spring of 1992 and was sure that by the time she saw counsel in conference on the 13th November 1992 she had looked at the mortgage. She knew by then that what Mr Burrows had signed, stating that he had explained the document to her, was false because he had not explained the contents of the document to her.
Mrs Bowie never regarded Mr Burrows as her solicitor as she thought that he was at all times acting for Cody Car Sales. It never entered her head to think that she had some sort of claim against him or Southorns for failing to give her...
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Geoffrey Boycott Obe v Perrins Guy Williams (A Firm)and Others
...including Dobbie v Medway Health Authoritysupra, Smith v West Lancashire Health Authority [1995] PIQR P514 (CA: Russell LJ and Wall J), Bowie v Southorns [2003] PNLR 7 (Nelson J), and Fennonsupra Miss O'Sullivan concluded in two short passages in that article as follows at pages 238 and 242......