King v Victor Parsons & Company
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MEGAW,Mr. JUSTICE BRABIN |
| Judgment Date | 16 November 1972 |
| Judgment citation (vLex) | [1972] EWCA Civ J1116-1 |
| Date | 16 November 1972 |
| Court | Court of Appeal (Civil Division) |
[1972] EWCA Civ J1116-1
The Master of the Rolls (Lord Denning)
Lord Justice Megaw and
Mr. Justice Brabin
In The Supreme Court of Judicature
Court of Appeal
Mr. SIMON GOLDBLATT, Q.C., and Mr. IAN DAVIDSON (instructed by Messrs. Mackrell & Co.) appeared on behalf of the Appellant First Defendant.
Mr. ANTHONY CRIPPS, Q.C., and Mr. KEITH SIMPSON (instructed by Messrs. James R. White & Co.) appeared on behalf of the Respondent Plaintiff.
THE MASTER OF ROLLS: In December 1961, Mr. King agreed to buy a plot of land from Victor Parsons & Co. for £3,500. At that time the plot had on it the found at lone for a house. There was a layer of concrete on the site and two courses of brickwork. A written agreement I was made. on 6th December. 1961. By it Victor Parsons & Co. agreed that they would "before 50th March 1962, procure the erection on the plot of a semi-detached dwelling-house to the reasonable satisfaction of the purchaser in accordance with the plan and specification approved by the purchaser".
The house was completed. In March 1962, Mr. King went into occupation. In 1364, the house was conveyed to him.
In July 1968, when Mr. King and his wife were asleep in bed, they were awakened by a loud crack. It was the wall giving way. Later on more cracks appeared. Experts came and dug a trial hole. They found that the house had been built on as old chalk pit which had been filled with vegetable matter from a nearby nursery; and had afterwards been covered with chalk and hard matters so that it seemed firm on top, but was soft and slushy underneath. The house is so unsafe that it will have to be pulled down. It might be underpinned but that would be more expensive than pulling it down.
On 3rd April 1969 Mr. King brought an action for damages against Victor Parsons. The Judge found that it was an implied term of the contract of sale that the work which constituted the foundations was proper and workmanlike and that the foundations were reasonably fit for the dwelling. He relied on the case of Hancook v. Brazier (1966) 1 WLR page 1317. The defendants admit now that there was such an implied term.
The Judge also found that there was a breach of this implied term. He found that the subsidence was caused by the fact that the foundations of the dwelling were not suitable, having regard to thenature of the in-filling of the chalk pit.
The point at issue is the application of the Statute of Limitations. The defendants said that the cause of action arose either December 1961 (when the contract was signed) or in March 1962 (when Mr. King went into occupation). So more than six years had elapsed before the writ was issued on 3rd April, 1969.
The plaintiff sought to overcome that plea on the ground that the plaintiff's cause of action was concealed by the fraud of the defendants. He gave these particulars which the Judge found to be proved subject to the omission of the words in brackets:
"At all material times the first defendants who were estate agents, valuers and surveyors practising in the district (knew or) ought to have known that the said dwelling-house was to be built upon the site of a chalk pit or quarry, which had been used for many year as a (rubbish) dump and had been filled in (shortly) at some period such as 1954 before the erection of the said dwelling-house. In the premises the defendants (knew or) ought to have known the risk of subsidence of the said dwelling-house."
So the Judge's finding of fact was, not that the defendants knew but that they ought to have known, of the risk of subsidence. The Judge held that that was enough, on the cases, to make them guilty of concealed fraud, so they could not rely on the Statute. But, on the hearing of the appeal, the plaintiff found some difficulty in supporting the Judge's reasoning. So the plaintiff applied for leave to serve a counter-notice in order to allege that the defendants "did know". We gave leave. This means that we have had to examine the evidence: but, before doing so, I will try to summaries the law.
THE LAW
By Section 26(b) of the Limitations Act, 1939, when "the right of action is concealed by the frand of the defendant, or his agent, the period of limitation shall not begin to run until the plaintiff has discovered the fraud, or could with reasonable diligence have discovered it". By Section 31(7) "right of action" includes "cause of action".
The word "fraud" here is not used in the common-law sense. It is used in the equitable sense to denote conduct by the defendant or his agent such that it would be "against conscience" for him to avail himself of the lapse of time. The cases show that, if a man knowingly commits a wrong (such as digging underground another man's coal); or a breach of contract (such as putting in bad foundations to a house), in such circumstances that it is unlikely to be found out for many a long day, he cannot rely on the statute of Limitations as a bar to the claim - see Bulli Coal Mining Cc. v. Osborne (1899) A.C. 351Applegate v. Moss (1971) 1 Q.B. 406. In order to show that he "concealed" the right of action "by fraud" it is not necessary to show that he took active steps to conceal his wrong-doing or his breach of contract. It is sufficient that he knowingly committed it and did not tell the owner anything about it. He did the wrong or committed the breach secretly. By saying nothing he keeps it secret. He conceals the right of action. He conceals it by "fraud" as those words have been interpreted in the cases. To this word "knowingly" there must be added "recklessly": see Beaman v. ARTS (1949) 1 K.B. 550 at pages 365/6. Like the man who turns a blind eye. He is aware that what he is doing may well be a wrong, or a breach of contracts but he takes the risk of it being so. He refrains from further inquiry lest it should prove to be correct and says nothing about it. The Court will not alloy him to get away with conduct of that kind. It may be that he has no dishonest motives but that does not matter. He has keptplaintiff out of the knowledge of his right of action: end that is enough— see Kitchen v. Royal Air Force Association (1958) 1 WLR 563. If the defendant was, however, quite unaware that he was committing a wrong or a breach of contract, it would be different. So if, by an honest blunder, he unwittingly commits a wrong (by digging another man's coal), or a breach of contract (by putting in an insufficient foundation) then he could avail himself of the Statute of Limitations.
In all these instances when I speak of the defendant, I include, of course, his agents for the statute expressly mentions him. If a defendant employs a contractor to do something for him — and one or other knows that it may well be a wrong or a breach of contract — and keeps quiet about it, then the right of action is concealed by fraud and the defendant cannot avail himself of the Statute. The time does not begin to run until the plaintiff knows of the right of action or could with reasonable diligence have discovered it.
FACTS
This brings me to the facts of this case. Narly in 1961, Victor Parsons themselves surveyed the site. They discovered that it was on the location of an old chalk pit which had been filled in in 1954. They took advice of an architect about its suitability. The architect told them that, If they were to build on the made-up part of the site, it would be necessary to have a reinforced concrete raft which was properly designed for the site: or, alternatively, there would have to be a series of piles driven into the ground and connected by reinforced concrete ground beams.
Victor Parsons did not act on that advice. They employed a builder — Mr. Moore — to do the work. They gave him a plan. It provided only for concrete to be spread over the site as an under-lay for the floor, but not as part of the foundations. It did not provide for a reinforced concrete raft & nor for piles driven into the ground.Mr. Moore inspected the site and made enquiries of local people. They told him that the old chalk pit had been used as a tip. He realized that it was most unsuitable ground to build on He approached Victor Parsons and told them it was unsuitable. Mr. Moore suggested to them that some reinforcement should be put in. With their approval, Mr. Moore did put some makeshift reinforcement into the concrete flooring: but he did not make a concrete raft. Victor Parsons knew what he was doing. Their Colonel Parsons made periodic inspections. Later on, however, Mr. Moore got into financial difficulties and gave up the work. Then Victor Parsons employed one of his men, a Mr. Thompson, to complete the building, and he did so.
Mr. King did not see the site until the foundations had been laid. The floors were already covered with concrete. He assumed, quite reasonably, that the foundations were sound and sufficient. He first became aware of their insufficiency in July 1968, when the big cracks appeared. He could not, with reasonable diligence, have discovered it earlier. By that time more than six years had elapsed. If the Statute of limitations applies, it means that he had lost his cause of action before he knew of its existence
On those facts. I think the Judge put it too low when he said that the defendants "ought to have known" there was a risk of subsidence. The correct finding would have been that the defendants knew there was a risk of subsidence (because the proper precautions had not been taken), and nevertheless they took their chance on it. They did not say a word to Mr. King about it. They let him think that the foundations were properly constructed and sufficient for the purpose. I call that a reckless disregard of their obligations. It is unconscionable conduct...
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Brian Deane v Coutts & Company
...They derive this approach to agency from two cases that arise in the field of construction – Applegate v Moss [1971] 1 QB 406 and King v Victor Parsons & Co [1973] 1 WLR 29. The facts in each case are quite similar. In Applegate v Moss the defendant developer agreed to build a house for the......
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Primeo Fund (in Official Liquidation) v Bank of Bermuda (Cayman) Ltd and HSBC Securities Services (Luxembourg) Sa
...25; [2013] 1 A.C. 450; [2012] 3 W.L.R. 1008; [2012] I.C.R. 1408, dictum of Lord Sumption approved. (54)King v. Victor Parsons & Co., [1973] 1 W.L.R. 29; [1973] 1 All E.R. 206; [1973] 1 Lloyd’s Rep. 189, distinguished. (55)Latin American Invs. Ltd. v. Maroil Trading Inc., [2017] EWHC 1254 (C......
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Primeo Fund v Bank of Bermuda (Cayman) Ltd
...of the English Court of Appeal on which Primeo relied and which R2 sought to distinguish. Applegate v Moss [1971] 1 QB 406 and King v Victor Parsons [1973] 1 WLR 29 involved land which a developer had sold to the plaintiff contracting that “he” would erect a house on it which the develope......
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Woolaston (Leo Hugh) and Others v Aubrey George Brown and Others
...the cause of action arose. 53. Mr. Piper also prayed in aid the concept of concealed fraud, as expounded by Lord Denning M.R. in King v Victor Parsons & Co [1973] 1 W.L.R. 29, 33G in order to say that the claimant did not know of his right to bring a claim and it was concealed by the fraud......
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Table of Cases
...547, 565, 572 King v. Hoare (1844) 13 M & W 495…………………............….…….....……423 King v. Victor Parsons & Co. (a firm) (1973) 1 All E.R. 206........................... 399 King v. Wandsworth Justices Ex parte Road (1942) 1 K. B. 281..................…465 Kingman v. Seager (1938) 1 K.B. 397…......
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EQUITABLE FRAUD
...in agreement with the Judge that the defendant cannot rely on the Statue of Limitation". In King v. Victor Parsons & Co. (a firm) (1973) 1 All E.R. 206, Lord Denning at page 209 observed: "The word fraud here is not used in the common law sense. It is used in the equitable sense to deno......