Cave v Robinson Jarvis & Rolf
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE POTTER |
| Judgment Date | 20 February 2001 |
| Neutral Citation | [2001] EWCA Civ 245 |
| Docket Number | Case No: A2/2000/0465 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 February 2001 |
[2001] EWCA Civ 245
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION NEWPORT ISLE OF WIGHT
DISTRICT TREGISTRY
(Mr Justice Newman)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Potter
Lord Justice Sedley and
Lord Justice Jonathan Parker
Case No: A2/2000/0465
Nicholas Davidson QC and David Drake Esquire (instructed by Beachcroft Wansbroughs, Bristol, for the appellant)
Patrick Lawrence Esquire (instructed by Roach Pittis, Isle of Wight, for the respondent)
INTRODUCTION
This appeal raises a question as to the interpretation of the word "deliberate" in s.32(2) of the Limitation Act 1980 and, in particular, whether the decision of this court in Brocklesby –vArmitage & Guest [2001] 1 All ER 172 (" Brocklesby") is binding upon us. The defendants, a firm of solicitors, appeal from the judgment and order of Mr Justice Newman made on 17 February 2000, by which he resolved a preliminary issue as to limitation in favour of the claimant by deciding that the claimant is entitled to rely on s.32(2) of the 1980 Act to postpone the limitation date otherwise applicable to his claim. He held that the limitation period in respect of the defendant's alleged negligence and/or breach of contract when acting as the claimant's solicitors started to run at the earliest from February 1994, so that the writ in the present action, issued on 16 January 1998, was issued within the period of limitation.
THE BACKGROUND FACTS
In about February 1989 the claimant retained the defendants in connection with the sale of land at Ranalagh Works, Fishbourne, Isle of Wight ("the land"). The land was jointly owned by two limited companies, one a company controlled by the claimant and the other a company controlled by his friend, Mr Cooper. At all material times the defendants acted in the sale through Mr Colin Clark who was employed by them. Mr Clark was retained not only to sell the land but to prepare such documents as were necessary to ensure that the claimant and Mr Cooper separately acquired legally enforceable mooring rights for a period of a hundred years over the land being sold. The proposed purchasers of the land were a limited company called Hyde Securities Limited ("Hyde").
The relevant transactions took place in March 1989. In relation to the proposed mooring rights, as the judge found, Mr Clark was under a duty (i) to draft such a deed as was necessary to secure mooring rights in favour of the claimant which were legally enforceable for one hundred years and (ii) to register it. It was alleged that Mr Clark failed to do either. Instead of drafting a lease with ancillary easements, he drafted a simple mooring licence. He also failed to effect any registration of the deed which he drew up. In the event the licence drafted and executed by the necessary parties operated at best to confer mooring rights upon the claimant which were enforceable only as a personal obligation of Hyde.
In early 1984, Hyde went into liquidation and a Receiver was appointed. Between 1989 and 1994 the claimant had use of his mooring without any difficulty or reason to suspect any negligence on the defendants' part, until the existence of his mooring right was denied by Hyde's receivers, Grant Thornton, in February 1994.
THE JUDGMENT BELOW
The judge held that the alleged breaches of duty occurred in circumstances in which it was unlikely that they would be discovered in the sense that unless and until Mr Cave, who had received a copy of the licence agreement, had reason to subject it to the scrutiny of another solicitor in order to verify or question the work done by Mr Clark, it was unlikely that either the drafting error or the failure to register would be discovered. Such reason did not arise until February 1994.
Before the judge it was common ground that, unless the claimant could bring himself within the provisions of s.32 of the 1980 Act, his claim in contract was statute barred under s.5. Similarly, his claim in tort would have been barred by s.2 and, although subject to the latent damage provisions of s.14A, it was nonetheless time-barred because the action was not brought within the period of the latent damage extension. The claimant's re-amended reply raised pleas of deliberate concealment on either of two bases: (i) that the defendants did in fact knowingly and deliberately conceal the claimant's right of action without the necessity to rely on the terms of s.32(2) and (ii) that, even if they had no knowledge or intention of concealment, they were nonetheless guilty of deliberate concealment within the meaning of s.32(2) on the grounds that the defendants intentionally committed an act or omission which amounted to a breach of duty in circumstances in which it was unlikely to be discovered for some time. The factual issue in (i), which could only be resolved by evidence or upon agreed facts, was not before the judge and it is no longer pursued. However, issue (ii) was resolved in favour of the claimant, the judge holding that he was bound by the decision and reasoning in Brocklesby to which I will turn in more detail below.
S.32 of the 1980 Act so far as relevant, provides:
"(1) …where in the case of any action for which a period of limitation is prescribed by this Act, either – (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or (c) the action is for relief from the consequences of the mistake; the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment, or mistake (as the case may be) or could with reasonable diligence have discovered it ….
(2) For the purposes of sub-section (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty."
Mr Davidson QC for the defendants conceded before us that, subject to one particular point, the judge's decision was inevitable in the light of the decision in Brocklesby. In that case, the claimant purchased a property from a company with the aid of a building society loan in 1989. Three months later, he agreed to transfer the money back to the company in consideration for the company obtaining his release from his obligations to the building society. The defendant solicitors were instructed to act for both parties. The claimant executed the transfer, but thereafter the solicitors omitted to complete the transaction by procuring his release from the building society. The claimant did not become aware of this until mid-1992 when so informed by the building society, which later sued him for the balance of the loan. In 1997 the claimant sued the solicitors for negligence, relying on s.32(1)(b) of the 1980 Act and alleging that the solicitors had been guilty of 'deliberate commission of a breach of duty' within the meaning of s.32(2). The claimant did not allege, however, that the solicitors were aware that they were in breach of duty. The solicitors contended (as the defendants before us contend) that s.32(2), when relied on in amplification of s.32(1)(b), requires not only that the act or omission in question should be deliberate, but also that the person committing it should be aware that it amounted to a breach of duty.
In considering that submission, Morritt LJ approached the construction of s.32(2) as a straightforward question of statutory construction free of the previous statutory history and without regard to the equitable doctrine of 'fraudulent concealment' or the notion of 'unconscionable conduct'. He did so largely in reliance on a passage from the speech of Lord Browne-Wilkinson in Sheldon –vRHM Outhwaite (Underwriting Agencies) Limited [1996] AC 102 at 145 where, commenting on the provisions of s.32(1)(b), he stated:
"Even if, contrary to my view, it is legitimate to look at the legislative history, the immediate predecessor of s.32 of the 1980 Act is not s.26 of the 1939 Act but s.7 of the Limitation Amendment Act 1980, an Act which was not drawn to the attention of the Court of Appeal but surfaced for the first time during the argument before Your Lordships. The Limitation Amendment Act 1980 inter alia substituted what is now s.32(1)(b) of the consolidating 1980 Act for the old s.26 of the 1939 Act, i.e. in an amending Act all references to concealment by fraud were deleted and there was substituted the concept of deliberate concealment of relevant facts. This was done deliberately because of the confused effects and misleading terminology of the old equitable doctrine of concealed fraud. In my judgment it is inconsistent with the plain Parliamentary intention lying behind the amendment of the 1939 Act to continue to construe the 1980 Act as if was still a statutory enactment of the equitable doctrine of concealed fraud. The 1980 Act is not. Section 26(1)(b) is a statutory provision setting out the circumstances in which the ordinary time limits will not apply and contains no reference to the old concealed fraud doctrine."
The reference to section 26(1)(b) in the last sentence should, as it seems to me, be a reference to section 32(1)(b).
The essential reasoning in the judgment of Morritt LJ appears at [2001] 1 All ER 180g-181b:
"When one turns to the terms of s.32 of the 1980 Act itself, under sub-s.(1) there is a clear contrast between the action based on fraud and para (b), the concealment...
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