Graham Frank Davy v 01000654 Ltd (Formerly Heather Moor & Edgecomb Ltd)
| Jurisdiction | England & Wales |
| Judge | Russen |
| Judgment Date | 09 March 2018 |
| Neutral Citation | [2018] EWHC 353 (QB) |
| Docket Number | Case No: B40BS025 |
| Court | Queen's Bench Division |
| Date | 09 March 2018 |
[2018] EWHC 353 (QB)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
CIRCUIT COMMERCIAL COURT
Bristol Civil & Family Justice Centre
2 Redcliff Street
Bristol BS1 6GR
HH JUDGE Russen QC
(sitting as a Judge of the High Court)
Case No: B40BS025
Simon Howarth (instructed by Clarke Willmott LLP, Bath) for the Claimant
Guy Adams (instructed by Capital Law LLP, Cardiff) for the Defendant
Hearing date: 1 February 2018
Judgment Approved
HH Judge Russen QC:
Introduction
By a Claim Form issued on 16 January 2015 the Claimant (“Mr Davy”) seeks damages for negligence or breach of contract, or for alleged breaches of duty that are said to be actionable under the provisions of the Financial Services and Markets Act 2000, for losses which are said to have arisen as a result of him making a switch of pensions in late 2001. He seeks to hold the Defendant (“the Company”) liable for those damages on the basis that, in the course of its business as an authorised independent financial adviser and acting through its Managing Director (Mr Pickering who had provided Mr Davy with financial over many years previously), it gave advice which led to that switch of pensions.
Mr Davy's claim is for losses allegedly suffered as a result of the Company's advice which led him to transfer out of his occupational pension scheme with British Airways (a defined benefit scheme) into a personal pension scheme with Skandia Life. The transfer took place on 2 November 2001 and the Company's advice which preceded it is reflected in the terms of Mr Pickering's lengthy letter dated 26 September 2001, referring to a 6 hour meeting with Mr Davy on 18 September 2001. Mr Davy had been employed by BA for many years and on 19 October 2001, and therefore between the date of that advice and the date of the transfer and at the age of 51, he took early retirement from his position as a senior flight engineer office (his normal retirement date at the age of 55 would have been 20 th October 2004). A letter from Skandia Life dated 6 November 2001 showed the total transfer value to have been £610,398.84 (reflecting the then actuarial transfer value of his entitlements under the BA scheme) and confirmed that Mr Davy was, on the basis of that figure, able to take a tax-free cash sum of £146,068 and the minimum and maximum amounts of annual withdrawals. The Particulars of Claim state that in fact the sum of £484,378.55 was invested in the Skandia Life pension, £52,000 in a Sun Life Bond and £74,020.29 retained in cash.
On the application before me on which I now give judgment I am not concerned with the merits of Mr Davy's Claim that he was negligently advised by the Company in relation to the transfer of his pension. It can, however, immediately be seen that this Claim of 2015 is a very stale one when seen in the context of advice given by the Company in September 2001 (or even its later advice of August 2006 also referred to in the Particulars of Claim). Its staleness is illustrated by the Company's present, numerical style which is a reflection of the fact that, on 20 March 2012 and before Mr Davy issued his Claim, the Company – until then incorporated under the name of Heather Moor & Edgecomb Limited – was dissolved, having previously been struck off the Register of Companies. As I understand the position, the Company had ceased to carry on business at some point before 2012 as is illustrated by the fact that in 2011 Mr Davy was given advice (which I mention below) by a representative of a different company which had taken over its client base.
The Company was restored to the Register, on the application of Mr Davy, with effect from 15 July 2014 by an Order made in the Cardiff District Registry. Two days later, by a Standstill Agreement dated 17 July 2014 (“the Standstill Agreement”), Mr Davy and the Company agreed to suspend the further running of the limitation period for a claim by Mr Davy until the earlier of three alternative specified events (together serving to define “the Period” of standstill under the agreement), the last of which was the expiration of 6 months from the date of the agreement.
It will be noted that the Claim was issued at the very end of that 6 month period provided for by the Standstill Agreement.
The Application
By an Application Notice dated 12 January 2017 (“the Application”) the Company seeks, amongst other relief which is no longer needed, an order that:
“The Claimant's Particulars of Claim dated 14 January 2016 be struck out pursuant to CPR 3.4 because it discloses no reasonable grounds for bringing the claim and/or is an abuse of process of the court and/or summary judgment under CPR 24 on the whole of the claim or such parts as the court shall think fit (“strike out/summary judgment application”).”
It is common ground between the parties that, given the lapse of over 14 years between the pension switch and the commencement of these proceedings, the unqualified application of the primary 6 year limitation period under section 2 or section 5 of the Limitation Act 1980 would create no difficulty in determining the Application in the Company's favour. Instead, they recognise that the argument between them turns upon Mr Davy's ability to overcome a limitation defence by relying upon the alternative 3 year period under section 14A or to make out a case of deliberate concealment under section 32 of the Act. It is important to note that Mr Davy's position on both aspects embraces not just a complaint about allegedly negligent advice given by the Company in September 2001 but also further advice given by it in August 2006 (through its Mr Marston-Smith) which is also alleged to have been deficient. I address the nature of Mr Davy's case in relation to the 2006 advice, and the extent to which it is said to go beyond an alleged act of deliberate concealment of a claim over the earlier advice of 2001, in the context of analysing below the scope of the Standstill Agreement.
At the hearing of the Application before me on 1 February 2018 most of the submissions were devoted to the question of when it was that Mr Davy acquired the knowledge which triggered the starting date for the alternative 3 year period under section 14(A)(5). For the sake of convenience and the purposes of this judgment I will describe the state of knowledge required by the section as “section 14A knowledge”.
On a summary judgment application the onus is upon the Company, as applicant, to show that Mr Davy has no real prospect of establishing at any trial that he lacked that knowledge. As appears from the summary below of the principles governing both aspects of the limitation issue, the onus would be upon Mr Davy at any trial, or a trial of any preliminary issue on the point, to establish that he can take advantage of either section 14A or section 32 of the Limitation Act 1980 in surmounting the Company's obvious defence that, relying upon the primary limitation period of 6 years from the accrual of the cause of action in 2001, the Claim was well and truly statute barred by the time of its commencement and indeed by the time the parties entered into the Standstill Agreement in July 2014. Of course, on the abuse of process aspect of the Application the onus is firmly upon the Company to make out the grounds for summarily striking out the Claim. On that aspect the Application adopts the language of CPR 3.4(2)(a) and (b): no reasonable grounds for bringing the claim and/or abuse of process.
The Appropriateness of a Paper Determination
Mr Davy's counsel, Mr Simon Howarth, submitted that it was not appropriate to attempt to resolve the limitation issues on paper and that the court was incapable of deciding it properly without the benefit of hearing his client's testimony. In saying the Company had chosen the wrong procedural route, he had in mind the alternative of a trial of a preliminary issue of the kind that I see took place in some of the cases cited to me in connection with the issues under section 32 and/or section 14A (though I also note some others involved a summary determination on paper). To illustrate this general point, Mr Howarth highlighted some observations I had made during the earlier submissions of Mr Guy Adams, for the Company, as to what was perhaps to be read into certain items of contemporaneous correspondence (e.g. a letter dated 2 September 2003 from Mr Collyer of the Company which might perhaps have been read by Mr Davy at the time as an indication that his risk categorisation by the Company was other than “medium”). Mr Howarth said it would be wrong to draw debatable inferences against his client on this Application.
As for the abuse of process element of the Application, Mr Howarth submitted that this should be seen for what it was, namely (as he put it in his skeleton argument) a thinly disguised attempt to run a pale version of the limitation defence where none existed under statute. The suggested inappropriateness of the procedure adopted by the Company therefore carries through to that aspect of the Application to the extent there is any such overlap of argument. But Mr Howarth also submitted that, to the extent the abuse of process contention rested upon something more than the lapse of time prior to the commencement of the proceedings, it was without substance on the facts as those appeared on the written evidence on the Application.
The principles applicable to the suggested determination of a claim on paper, on a summary judgment application, are well-known. They were helpfully summarised by Lewison J as he then was in Easy Air Limited v Opal Telecom Limited [2009] EWHC 339 (Ch), at [15], who expressed himself in terms appropriate for applications by defendants....
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