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Session 2001- 02
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| Judgments - Cave (Respondent) v. Robinson Jarvis & Rolf (A Firm) (Appellants)
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HOUSE OF LORDSLord Slynn of Hadley Lord Mackay of Clashfern Lord Hobhouse of Wood-borough Lord Millett Lord Scott of Foscote OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENTIN THE CAUSECAVE (RESPONDENT) v. ROBINSON JARVIS & ROLF (A FIRM) (APPELLANTS) ON 25 APRIL 2002 [2002] UKHL 18 LORD SLYNN OF HADLEY My Lords, 1. I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Scott of Foscote. I agree with him for the reasons he gives that the appeal should be allowed. LORD MACKAY OF CLASHFERN My Lords, 2. I have had the advantage of reading in draft the speeches prepared by my noble and learned friends Lord Millett and Lord Scott of Foscote. I agree that this appeal should be allowed for the reasons which they have given. LORD HOBHOUSE OF WOODBOROUGH My Lords, 3. I agree that this appeal should be allowed for the reasons to be given by my noble and learned friends Lord Millett and Lord Scott of Foscote whose opinion I have read in draft. LORD MILLETT My Lords, 4. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Scott of Foscote. I gratefully adopt his narrative of the facts and the procedural history of these proceedings. 5. The limitation of actions is entirely statutory. The first statute was The Limitations Act 1623 (21 Jac 1, c 16). For almost four centuries, therefore, it has been the policy of the legislature that legal proceedings should be brought, if at all, within a prescribed period from the accrual of the cause of action. The statutes of limitation have been described as "statutes of peace". They are regarded as beneficial enactments and are construed liberally. 6. The underlying policy to which they give effect is that a defendant should be spared the injustice of having to face a stale claim, that is to say one with which he never expected to have to deal: see Donovan v Gwentoys Ltd [1990] 1 WLR 472, 479A per Lord Griffiths. As Best CJ observed nearly 200 years ago, long dormant claims have often more of cruelty than of justice in them: see A'Court v Cross (1825) 3 Bing 329, 332-333. With the passage of time cases become more difficult to try and the evidence which might have enabled the defendant to rebut the claim may no longer be available. It is in the public interest that a person with a good cause of action should pursue it within a reasonable period. 7. But this assumes that the plaintiff knows or ought to know that he has a cause of action. In common justice a plaintiff ought not to find that his action is statute-barred before he has had a reasonable opportunity to bring it. To this end the Limitation Acts contain provisions which extend, suspend or postpone the commencement of the limitation period in prescribed circumstances. The particular provision with which your Lordships are concerned is contained in section 32(2) of the Limitation Act 1980. 8. Section 32(1)(b) of the 1980 Act postpones the commencement of the limitation period where
In such a case the period of limitation does not begin to run until the plaintiff discovers the concealment or could with reasonable diligence discover it. The rationale for this provision is plain: if the defendant is not sued earlier, he has only himself to blame. 9. Section 32(2) provides:
The rationale for this is less clear, but becomes apparent from the case law on earlier statutes. 10. In Brocklesby v Armitage & Guest (Note) [2002] 1 WLR 598 the plaintiff claimed that the defendants, who were a firm of solicitors, had negligently failed to procure his release from his mortgage obligations. The defendants were not accused of any impropriety or deliberate wrongdoing or of having deliberately concealed anything from the plaintiff. They denied that the plaintiff was their client or that they owed him any duty of care, and denied that they had been negligent in any event. They also pleaded that the action was statute-barred. In his reply the plaintiff sought to rely on section 32(2) of the Act, but he did not and could not allege that the defendants were aware of the fact that they had been negligent. 11. Despite the absence of any allegation of deliberate wrongdoing, a two-man Court of Appeal held that the plaintiff had sufficiently pleaded a "deliberate commission of a breach of duty" within the meaning of section 32(2) of the 1980 Act. In the course of an extempore judgment Morritt LJ held that ignorance of the law is no defence, and that it is sufficient to bring the case within the subsection that the defendant should have known that he was acting (or presumably failing to act); it was not necessary that he should also have known that his act (or failure to act) gave rise to a breach of duty. It was sufficient that (at p 605G)
12. On this footing a person who sets out conscientiously to perform his duty but does so in a way which is subsequently found to have been negligent, thus constituting a breach of his duty of care, is liable to be sued without limit of time even where he denies that his conduct was negligent. 13.Brocklesby v Armitage & Guest was followed in Liverpool Roman Catholic Archdiocese Trustees Inc v Goldberg [2001] 1 All ER 182, where the plaintiff alleged that the defendant had given it negligent tax advice. The defendant denied that his advice had been wrong, let alone negligently wrong. Following the decision in the Brocklesby case, Laddie J held that it was sufficient to bring the case within section 32(2) that the defendant had intentionally given the advice in question and that (if negligent) it amounted to a breach of duty; it was not necessary that he should have appreciated that his advice was wrong or that he had been negligent. Even if all the facts are known to a plaintiff, the judge held, the intentional commission of a breach of duty in circumstances where the breach is unlikely to be discovered for some time results in a legal fiction, namely that the facts are unknown. 14. In the present case counsel for Mr Cave has found himself unable to support this reasoning. He points out that the legal fiction, if any, is not that the facts are unknown to the plaintiff, but that they have been deliberately concealed from him by the defendant. In such circumstances, however, the start of the limitation period is postponed only until the plaintiff discovers the concealment or could with reasonable diligence have discovered it. If the relevant facts are already known to him, counsel concedes, treating them as deliberately concealed from him is of no effect. The start of the limitation period is not postponed even momentarily, for the facts which are deemed to be concealed from the plaintiff are at once discovered. 15. For my own part, I do not accept that all the facts were known to the plaintiff in the Goldberg case, for it did not know that the advice was wrong. But neither did the defendant. Nor will that fact be known to either party until the case is tried on the merits. The effect of Brocklesby v Armitage & Guest is to deprive a professional man, charged with having given negligent advice and who denies that his advice was wrong let alone negligent, of any effective limitation defence. However stale the claim, he must defend the action on the merits, for he will not have the benefit of a limitation defence unless he can show that his advice was not negligent. This subverts the whole purpose of the Limitation Acts. The harshness of the rule is evident. In the absence of any intentional wrongdoing on his part, it is neither just nor consistent with the policy of the Limitation Acts to expose a professional man to a claim for negligence long after he has retired from practice and has ceased to be covered by indemnity insurance. 16. The decision in the Brocklesby case has been the subject of much criticism, not least by the Law Commission. In the present case a full Court of Appeal [2002] 1 WLR 581 expressed strong reservations about the decision but considered themselves bound by it. They noted, at p 589, that it was an unreserved judgment in a case in which numerous authorities both judicial and textbook were not cited: 17. The question is whether the words "deliberate commission of a breach of duty" in section 32(2) of the 1980 Act mean "deliberate commission of [an act or omission, being an act or omission which gives rise to] a breach of duty" or simply mean "deliberate breach of duty". If the latter, then they refer only to a breach of duty which has been committed intentionally. The distinction is between intentional wrongdoing on the one hand and negligence or inadvertent wrongdoing on the other. 18. In a vigorous defence of the decision in the Brocklesby case counsel for Mr Cave conducted a sustained analysis of the relationship between section 32(1)(b) and section 32(2). He submitted that, on the defendants' construction, section 32(2) is otiose. If it is limited to deliberate wrongdoing of which the defendant was aware but the plaintiff was not, then this must be the result of deliberate concealment which is already covered by section 32(1)(b). "Concealment" means "keeping secret", and (he said) the pre-1980 case law showed that it covered non-disclosure as well as active concealment. 19. A defendant was formerly unable to take advantage of the Limitation Acts if he had been guilty of "concealed fraud". This equitable doctrine was given statutory effect by section 26(b) of the Limitation Act 1939, which postponed the start of the limitation period where the plaintiff's right of action had been "concealed by the fraud of [the defendant or his agent]". This was an inapt and inelegant expression which caused much difficulty. It put the emphasis on the fraud rather than the concealment. Section 32(1)(b) and section 32(2) of the 1980 Act were designed to clarify and, if necessary, change the law by removing all reference to fraud and substituting the more appropriate concept of "deliberate concealment". In such circumstances reference to the antecedent statute and case law is of limited value, since there can be no assumption that the later statute merely reproduced the pre-existing law. But in my opinion it can be referred to if it helps either to identify the mischief which the later statute set out to remedy or to explain why Parliament chose to adopt the particular language or drafting technique which it did when enacting the later statute. 20. Lord Denning MR explained the meaning of the expression "concealed by the fraud of [the defendant or his agent]" in King v Victor Parsons & Co [1973] 1 WLR 29, 33-34 as follows:
21. Concealment and non-disclosure are different concepts, but they have this much in common; they both require knowledge of the fact which is to be kept secret. A man cannot sensibly be said either to conceal or to fail to disclose something of which he is ignorant. In King v Victor Parsons & Co the Court of Appeal unanimously held that section 26(b) of the 1939 Act did not extend to the case where the defendant ought to have known but did not in fact know the relevant facts which constituted the cause of action against him. 22. In Beaman v ARTS Ltd [1949] 1 KB 550 active concealment was not alleged. But the defendants were guilty of conversion, an intentional tort, and had failed to inform the plaintiff of what they had done. Quoting, at pp 559-560, from the judgment of Lord James of Hereford in Bulli Coal Mining Co v Osborne [1899] AC 351 363-364 the Court of Appeal held that active concealment was not necessary if the defendant was accused of intentional wrongdoing in circumstances where he could "safely calculate on not being found out for many a long day." 23. As I have explained, in enacting the 1980 Act Parliament substituted "deliberate concealment" for "concealed fraud". This is a different and more appropriate concept. It cannot be assumed that the law remained the same. But reference to the old law explains why Parliament enacted section 32(2) and did not rely on section 32(1)(b) alone to cover the whole ground. With all reference to fraud or conscious impropriety omitted, there was an obvious risk that "deliberate concealment" might be construed in its natural sense as meaning "active concealment" and not as embracing mere non-disclosure. Section 32(2) was therefore enacted to cover cases where active concealment should not be required. But such cases were limited in two respects: first, the defendant must have been guilty of a deliberate commission of a breach of duty; and secondly, the circumstances must make it unlikely that the breach of duty will be discovered for some time. 24. Given that section 32(2) is (or at least may be) required to cover cases of non-disclosure rather than active concealment, the reason for limiting it to the deliberate commission of a breach of duty becomes clear. It is only where the defendant is aware of his own deliberate wrongdoing that it is appropriate to penalise him for failing to disclose it. 25. In my opinion, section 32 deprives a defendant of a limitation defence in two situations: (i) where he takes active steps to conceal his own breach of duty after he has become aware of it; and (ii) where he is guilty of deliberate wrongdoing and conceals or fails to disclose it in circumstances where it is unlikely to be discovered for some time. But it does not deprive a defendant of a limitation defence where he is charged with negligence if, being unaware of his error or that he has failed to take proper care, there has been nothing for him to disclose. 26. That this is the meaning of section 32(2) is supported by the text. In the first place, the subsection itself distinguishes between the breach of duty and the facts involved in the breach of duty. In the second place, where a defendant is charged with negligence, his breach of duty consists of his failure to take reasonable care. The tax adviser who inadvertently fails to take account of a provision in the latest Finance Act may well incur liability for negligence. But his breach of duty does not consist of giving the advice (which is deliberate and of which he is aware) or even of giving erroneous advice (which is not deliberate and of which he is unaware). It consists of his failure to take reasonable care, which is unlikely to be deliberate and of which he is unlikely to be aware. If he afterwards discovers the error and deliberately conceals it from the plaintiff, his conduct may come within section 32(1)(b); but while he remains ignorant of the error and of his own inadvertent breach of duty, there is nothing for him to disclose. In my opinion such conduct cannot be brought within section 32(2). 27. A further consideration is even more telling. There is no rational justification for depriving a defendant of a limitation defence where neither his original wrongdoing nor his failure to disclose it to the plaintiff was deliberate. If Brocklesby v Armitage & Guest (Note) [2002] 1 WLR 598 is correct, then a surgeon who negligently leaves a swab in a patient's stomach but does not realise that he has done so can plead a limitation defence; but a solicitor who gives his client negligent advice cannot plead such a defence because he knows what advice he has given, even though he does not realise that it was wrong. There is no sensible basis for such a distinction. 28. Another example will illustrate the anomalies to which the reasoning in the Brocklesby case gives rise. Take the case of the anaesthetist who negligently administers the wrong drug, with consequent harm to his patient. The anaesthetist's selection of the wrong drug may be variously explained. He may have administered the drug deliberately, knowing perfectly well what drug he was administering and intending to administer it, but having negligently overlooked the fact that in the particular circumstances of the case it was dangerous to use it. Or he may simply have picked up the wrong bottle, and negligently but inadvertently administered one drug when he intended to administer another. There can be no rational justification for distinguishing between the two cases by allowing the anaesthetist in the second case a limitation defence which is denied to the anaesthetist in the first. 29. The Court of Appeal justified the construction which it placed upon section 32(2) in the Brocklesby case by reference to the maxim that ignorance of the law is no defence. But the defendant solicitors in that case were not relying on their ignorance of the law. The negligent solicitor or tax adviser is well aware that he is subject to a duty of care and generally does not deny it. In the Brocklesby case itself the defendants denied that the plaintiff was their client; but they did not deny that, if he was, they owed him a duty of care. In cases of professional negligence the defendant is normally aware of his legal duty to take care but unaware of the fact that he has broken it. Of course, if he is giving legal advice he may have failed in his duty of care because he inadvertently overlooked the existence of a particular legal rule, but the fact that he has done so or otherwise misstated the law is as much a fact as any other, of which he may be or become aware or remain ignorant. The maxim that ignorance of the law is no defence does not operate to convert a lawyer's inadvertent want of care into an intentional tort. 30. In agreement with my noble and learned friend Lord Scott of Foscote, I too would allow the appeal. LORD SCOTT OF FOSCOTE My Lords, 31. This appeal comes to your Lordships' House on a preliminary point in a solicitors' negligence action. The point is whether the claim is barred by the Limitation Act 1980. The cause of action sued on accrued in March 1989. The action was not commenced until 16 January 1998. So unless the claimant is able to rely on one or other of the provisions of the 1980 Act extending time or postponing the running of time, his action is time-barred. 32. In his pleading the claimant put forward three grounds on which, he contended, his time for commencing the action was extended. For reasons that I will explain later, two of these do not raise issues that are live before your Lordships. It is the third ground that raises the issue your Lordships must decide. The issue is whether the claimant can take advantage of section 32(2) of the 1980 Act. The Court of Appeal, expressing some disquiet but regarding themselves as bound by the exposition of the meaning and effect of section 32(2) given by Morritt LJ (as he then was) in Brocklesby v Armitage & Guest (Note) [2002] 1 WLR 598, found in favour of the claimant. This appeal is, therefore, in effect an appeal against the construction of section 32(2) adopted in Brocklesby. The facts 33. The essential facts of the present case that are relevant to the section 32(2) issue can be shortly stated. 34. The claimant, Mr Cave, the respondent in this House, instructed a firm of solicitors, Robinson Jarvis & Rolf, the appellants, to act for him in connection with a transaction under which a company, Hyde Securities Ltd, was to grant him mooring rights for a period of 100 years over land of the company at Fishbourne, Isle of Wight. A Mr Clarke of Robinson Jarvis & Rolf acted for Mr Cave in the transaction. Mr Clarke drafted, or approved the drafting of, the document by which the mooring rights were to be granted and the transaction was completed in March 1989. 35. In January 1994 receivers of the company were appointed by the company's bank and in early February 1994 the receivers informed Mr Cave that his moorings rights were no longer exercisable. For a while Mr Cave did nothing about the information he had received but in November 1995 he wrote to Mr Clarke. Your Lordships have not seen the letter but, presumably, Mr Cave complained that the mooring rights he thought he had been granted were being challenged and asked for Mr Clarke's assistance in resisting the challenge or for an explanation as to what had gone wrong. Mr Cave received no answer to his letter. He wrote again on a number of occasions in 1996 but still did not receive any answer. He eventually consulted other solicitors and his writ claiming damages in negligence from the appellants was issued on 16 January 1998. The pleadings 36. Mr Cave's main pleaded complaints of negligence are, first, that the document drafted or approved by Mr Clarke granted him merely contractual rights instead of rights that would be enforceable both against the company and against its successors in title, and, secondly, that Mr Clarke failed to protect the rights by registration in the Land Registry. He also pleaded in his statement of claim, in reliance on section 14A of the 1980 Act, that he had not had the knowledge required for bringing his action until March 1996 when he received a letter from the Tunbridge Wells District Land Registry informing him that there was no entry on the register relating to his mooring rights. He contended that he had therefore had three years from March 1996 within which to bring his action (see section 14A(4)(b)). 37. The solicitors, in their defence, denied negligence but pleaded also that the action was time-barred. As to the section 14A point, they contended that, even if section 14A(4)(b) did apply, the three year limitation period would have run from February 1994, when Mr Cave had been told that his mooring rights were no longer exercisable, and would, therefore, have expired before the action had been commenced. 38. Mr Cave served a reply that, in its re-amended form, took two section 32 points. It was alleged, first, that the solicitors' failure to answer Mr Cave's letters in 1995 and 1996 constituted "deliberate concealment" for the purposes of section 32(1)(b). The second point was the section 32(2) point. The reply alleged:
Paragraph 3.A raises the Brocklesby point. The Brocklesby point 39. Section 32 of the Act provides, so far as relevant:
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