Judgments - Cave (Respondent) v. Robinson Jarvis & Rolf (A Firm) (Appellants)

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    40. The statutory predecessor of section 32 of the 1980 Act was (via section 7 of the Limitation Amendment Act 1980) section 26 of the Limitation Act 1939. The wording of section 26 was not the same as the wording of section 32 and, in particular, section 26 had no provision comparable to section 32(2). Nonetheless it was generally believed that the broad effect of section 26 had been continued under section 32. Paragraph 31-19 of Clerk & Lindsell on Torts, 17th ed (1995), p 1593 (18th ed (2000), para 33-25, p 1723) said that section 32(2)

    "preserves and confirms the case law on section 26 of the Limitation Act 1939, according to which the start of the limitation period is postponed whenever the defendant has committed the wrong, knowingly or recklessly, in circumstances such as to prevent the plaintiff coming to know of his cause of action"

(cited by Janet O'Sullivan in her article "Intentional acts, breaches of duty and the Limitation Act - a warning for negligent professionals" [2000] Professional Negligence 241, 242, n 4).

    41. The case law on section 26 of the 1939 Act had established that a merely negligent act was insufficient to enable the benefit of the section to be claimed: see, for example, Kitchen v Royal Air Force Association [1958] 1 WLR 563. In King v Victor Parsons & Co [1973] 1 WLR 29, Lord Denning MR emphasised that if the benefit of section 26 was to be available there must be something more than mere negligence. He said, at p 34:

    "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".

    42. It is clear, therefore, that, under the pre 1980 law, a pleading on the lines of paragraph 3.A of the re-amended reply would have been unsustainable. The pleader would have had to have alleged something more than an intentional but negligent act or omission in order to claim the benefit of section 26.

    43. The approach to construction of section 32 was considered by this House in Sheldon v R H M Outhwaite (Underwriting Agencies) Ltd [1996] AC 102. The case was concerned not with section 32(2) but with section 32(1). Deliberate concealment of relevant facts (see section 32(1)(b)) had been relied on by the plaintiffs in their pleaded reply to the defendants' Limitation Act defence and was based on acts or omissions by the defendants which had taken place after the date on which the plaintiffs' cause of action had accrued. The question was whether the deliberate concealment merely suspended the running of time for Limitation Act purposes until the date when the plaintiffs could reasonably have discovered the relevant facts or whether a complete new limitation period, three years or six years as the case might be, would start afresh from that date. This is not a point which arises in the present case, nor did it arise in Brocklesby, but it is the guidance given by the House to the approach to construction of section 32 that is in point.

    44. Lord Browne-Wilkinson, noting that the 1980 Act was a consolidating Act, said, at p 144, that:

    "unless there is an ambiguity, it is not permissible to construe consolidating Acts in the light of their statutory history"

and that

    "much of the difficulty in this case is raised by the investigation of the statutory history and the decisions of the courts on earlier statutes"

He held, at p 145, that:

    "Section 32 of the Act of 1980 is not ambiguous. On the plain meaning of the words any deliberate concealment of relevant facts falls within section 32(1)(b) with the consequence that, in applying the statutory time limits, time does not begin to run until the concealment is discovered."

Lord Keith of Kinkel expressed himself in much the same terms. He said, at p 140, that:

    "Recourse to the antecedents of a consolidation statute should only be had where there is a real difficulty or ambiguity incapable of being resolved by classical methods of construction: Farrell v Alexander [1977] AC 59, 73, per Lord Wilberforce .… there is no such difficulty or ambiguity here."

    45. Lord Lloyd of Berwick, however, with whose opinion Lord Mustill, at p 146, agreed, thought that "Parliament has left a gap" and that in order to try to fill the gap recourse to the history of the legislation was necessary and, therefore, legitimate: see at pp 146D and 151H-152A. Lord Nicholls of Birkenhead, too, at p 153E-F, discerned an ambiguity in section 32(1) but he joined Lord Keith and Lord Browne-Wilkinson in the result.

    46. The importance of Sheldon for present purposes is that it insists that if the language of section 32 is clear, effect must be given to that language without regard to the section's legislative history. This was the point taken up in Brocklesby.

    47. For the purpose of establishing an important point of principle on the construction and effect of section 32, Brocklesby is, in my opinion, a very unsatisfactory vehicle. It was an interlocutory appeal on a pleading point, and heard by a two-man Court of Appeal. The case was completed within the day and one extempore judgment, by Morritt LJ, was delivered. The issue in the case was whether sufficient particulars of a pleaded allegation of deliberate concealment had been given. The case was, like the present, a solicitors' negligence case. The transaction in respect of which it was alleged that the solicitors had been negligent was a conveyancing transaction. In January 1989 a company in which Mr Brocklesby held a minority interest had sold some commercial premises to him. He had obtained a building society advance secured on the premises and repayable by instalments over 25 years. The defendant solicitors had acted for all three parties, i e, the seller, the buyer and the building society. A few months later it was agreed between Mr Brocklesby and the company that the company would repurchase the premises from Mr Brocklesby on terms that it would procure the release of Mr Brocklesby from his obligations to the building society. The solicitors who had acted on the previous transaction were instructed to act on this transaction for Mr Brocklesby and the company. Mr Brocklesby signed a contract, executed a transfer of the property to the company, went out of possession of the premises and stopped paying the mortgage instalments to the building society. The company took over the payment of the mortgage instalments. But the solicitors took no steps to procure the release of Mr Brocklesby from his mortgage obligations. In November 1990 the company stopped paying the mortgage instalments and went into compulsory liquidation. The building society sold the premises and sued Mr Brocklesby for the balance due to them. Mr Brocklesby sued the solicitors for negligence. His action was commenced in June 1997, more than six years after his cause of action had accrued. The solicitors pleaded in their defence that the action was time-barred and applied to strike it out. Mr Brocklesby served a reply in which it was pleaded that the solicitors' breaches of duty had been deliberately committed in circumstances in which they had been unlikely to be discovered and had not in fact been discovered until mid-1982. Such particulars as were given relating to these allegations indicated that Mr Brocklesby's case was that the solicitors had known that the re-sale to the company would not be completed but had failed to inform him of this.

    48. Morritt LJ [2002] 1 WLR 598, 602 summarised Mr Brocklesby's case thus:

    "Mr Brocklesby relies on paragraph (b) of section 32(1) [of the 1980 Act] as expanded by subsection (2). He contends that there were three breaches of duty, that is the failure to take steps to procure Mr Brocklesby's release from the obligations to the building society; the failure to do anything with the executed contract/transfer; and the failure to inform Mr Brocklesby of either of the first or second breaches of duty. He suggests that each of them was deliberate in the sense of being intentional and each was committed in circumstances where, by their nature, they were unlikely to be discovered for some time."

    49. After referring to Sheldon v R H M Outhwaite (Underwriting Agencies) Ltd [1996] AC 102 and King v Victor Parsons & Co [1973] 1 WLR 29 and to paragraph 2.9 of the Law Reform Committee's Final Report on Limitation of Actions (1977) (Cmnd 6923) that had preceded the 1980 Act, Morritt LJ expressed his conclusions in the following passage, at p 605:

    "When one turns to the terms of section 32 [of the 1980 Act] itself, under subsection (1) there is a clear contrast between the action based on fraud and paragraph (b), the concealment of any fact relevant to the plaintiff's right of action being deliberate. The requirement is that the fact relevant to the cause of action has been deliberately concealed from him by the defendant. But subsection (2) amplifies what is meant by deliberate concealment and requires that for the purposes of subsection (1) deliberate commission of a breach of duty, etc, amounts to deliberate concealment of the facts involved in the breach of duty. Generally speaking, and I do not say that there may not be exceptions, the civil law, and, so far as I know, the criminal law, does not require that a person should know the legal consequences of the act which he commits. Generally speaking, if he knows of the act and he intends the act, but is unaware of the legal consequences, his unawareness is immaterial, for it is trite law that ignorance of the law is no defence. It appears to me that had Parliament intended in the case of a deliberate concealment under section 32(1)(b) [of the 1980 Act], as amplified by subsection (2), that there should be both deliberate commission of an act in the sense of knowingly and intentionally committing the act and also knowledge that such commission gave rise to a particular legal consequence, then it required clearer words to spell that out than are to be found in subsection (2) or subsection (1).

    Accordingly, the conclusion I reach is that it is not necessary for the purpose of extending the limitation period pursuant to section 32(1)(b) to demonstrate that the fact relevant to the plaintiff's right of action has been deliberately concealed in any sense greater than that the commission of the act was deliberate in the sense of being intentional and that that act or omission, as the case may be, did involve a breach of duty whether or not the actor appreciated that legal consequence."

    50. The result of this interpretation of section 32(2) is that whenever there is an intentional act which constitutes, whether or not to the knowledge of the actor, a breach of duty in circumstances in which it, i e, the breach of duty, is unlikely to be discovered for some time, sub-section (2) comes into play. This interpretation reversed what previously had been believed to be the position, namely that mere negligence would never by itself be enough to bring about a section 32(1) postponement of time.

    51. Basing himself on the view of section 32(2) that I have described, Morritt LJ concluded that the pleaded particulars of Mr Brocklesby's case were sufficient to sustain his cause of action against the Limitation Act defence and to resist the strike out application.

    52. It is worth noting, however, that the Lord Justice then went on to give an alternative, uncontroversial and, if I may respectfully say so, plainly sound reason for coming to the same conclusion. He said, at p 606:

    "in addition. . .I am concerned that the judge imposed too high a standard of particularity for the reply to be served at the stage which the action had reached. Discovery of documents has not yet taken place. Most of the relevant facts were inevitably in the knowledge of the solicitors rather than Mr Brocklesby. There was no imminent trial such that an insufficiently particularised pleading might be embarrassing. . . .It may be that in the light of what is disclosed on discovery he will be able to supplement the particulars already given but without such supplementation I do not consider that his case as pleaded is so thin that the court is justified in, in effect, striking it out."

The other member of the court, Wilson J, simply agreed.

    53. The Brocklesby decision was followed by Laddie J in Liverpool Roman Catholic Archdiocese v Goldberg [2001] 1 All ER 182. The defendant, Mr David Goldberg QC, a well-known specialist in tax law, had given certain tax advice to the archdiocese. The archdiocese contended that the advice was wrong, had been negligently given and had caused the archdiocese financial loss. A negligence action was commenced. The problem was that the allegedly negligent advice had been given in 1989 and 1992 but the action was not commenced until 1997. Mr Goldberg pleaded that an action in respect of his 1989 advice was time barred. The archdiocese, in answer, sought to rely on the Brocklesby interpretation of section 32(2). They proposed to amend their pleading so as to allege, inter alia:

    "(a)  The acts and omissions pleaded in paragraph 14 of the statement of claim [ie in relation to the 1989 advice] constituted the deliberate commission of breach of duty within the meaning of section 32(2) of the Act in that they were intentional. For the avoidance of doubt it is not alleged that the defendant knew that he was thereby committing a breach of duty."

    54. The second sentence of the cited paragraph uses the same language as the passage in parenthesis in paragraph 3.A(i) of the re-amended reply in the present case. This pleading might now, I suppose, be called the Brocklesby disclaimer. Laddie J applied, as he had to, the interpretation of section 32(2) adopted in Brocklesby. He said, in paragraph 22 of his judgment, at pp 190-191:

    "'deliberate commission of a breach of duty' should be read consistently with the Brocklesby case. Any intentional act which amounts to a breach of duty amounts to a deliberate commission of a breach of duty and triggers section 32(2) of the 1980 Act. The fact that in the proposed amendment to the reply, the archdiocese concedes that Mr Goldberg did not know he was committing a breach of duty does not, therefore, exclude operation of the section. Mr Goldberg's advice was given intentionally. On the assumption, which I have to make for the purpose of this application, namely that it amounted to a breach of duty, that breach was committed deliberately within the meaning of the section."

The present case: Newman J

    55. In the present case Newman J at first instance, applying Brocklesby and concluding on the facts that the solicitors' assumed breach of duty would have been unlikely to have been discovered for some time, held that section 32(2) applied and that the six-year limitation period did not begin to run until, at earliest, February 1994. So the action was commenced well within the six-year period.

    56. The judge held, also, that the three-year period prescribed by section 14A would have started to run from February 1994. It followed that Mr Cave was unable to rely on section 14A as a ground for resisting the solicitors' Limitation Act defence. Mr Cave did not appeal against this finding.

The Court of Appeal

    57. The bulk of the argument in the Court of Appeal (Potter, Sedley and Jonathan Parker LJJ) [2002] 1 WLR 581 appears to have centred on the question whether the court was bound by the decision of the two-man Court of Appeal in Brocklesby. They held that they were. That being so, the decision to dismiss the solicitors' appeal was inevitable. Jonathan Parker LJ, however, confessed to being uneasy about the decision in Brocklesby. He noted that in Sheldon both Lord Browne-Wilkinson and Lord Nicholls of Birkenhead had regarded unconscionability and impropriety as the "underlying rationale" of section 32 (see eg [1996] 1 AC at 145H). "Yet", observed Jonathan Parker LJ, "if Brocklesby is right, a wholly innocent act or omission may suffice to deprive a defendant of a limitation defence". That this may be so is demonstrated by the Goldberg case and, indeed, also the present case.

Was the Brocklesby construction of section 32(2) correct?

    58. In my opinion it was not. I would start by adopting the approach prescribed by Lord Browne-Wilkinson in Sheldon. Unless there is some ambiguity in the statutory language, recourse to legislative history is unnecessary and impermissible. The relevant words in section 32(2) are "deliberate commission of a breach of duty. . .amounts to deliberate concealment of the facts involved in that breach of duty." These are clear words of English. "Deliberate commission of a breach of duty" is to be contrasted with a commission of a breach of duty which is not deliberate, i e, a breach of duty which is inadvertent, accidental, unintended - there is a number of adjectives that can be chosen for the purpose of the contrast, and it does not matter which is chosen. Each would exclude a breach of duty that the actor was not aware he was committing.

    59. Mr Doctor QC, counsel for Mr Cave, the respondent, submitted that in order for a fact to be "deliberately concealed" for subsection (1)(b) purposes, the concealment must be an intended concealment. I would respectfully agree with that. He followed with the submission that in every case in which there was a deliberate commission of a breach of duty in circumstances in which the victim was unlikely to discover for some time that there had been a breach, there must have been a deliberate concealment for subsection (1)(b) purposes. In which case, he concluded, subsection (2) would add nothing to subsection (1)(b). But Parliament must have intended subsection (2) to add something of significance to subsection (1)(b) and the Brocklesby interpretation does add something to subsection (1)(b).

    60. I hope I have done justice to the argument but, in my opinion, it cannot be accepted. I find it easy to accept that Mr Doctor's submissions as to the meaning of section 32(1)(b) are correct. I agree that deliberate concealment for section 32(1)(b) purposes may be brought about by an act or an omission and that, in either case, the result of the act or omission, i e, the concealment, must be an intended result. But I do not agree that that renders subsection (2) otiose. A claimant who proposes to invoke section 32(1)(b) in order to defeat a Limitation Act defence must prove the facts necessary to bring the case within the paragraph. He can do so if he can show that some fact relevant to his right of action has been concealed from him either by a positive act of concealment or by a withholding of relevant information, but, in either case, with the intention of concealing the fact or facts in question. In many cases the requisite proof of intention might be quite difficult to provide. The standard of proof would be the usual balance of probabilities standard and inferences could of course be drawn from suitable primary facts but, nonetheless, proof of intention, particularly where an omission rather than a positive act is relied on, is often very difficult. Subsection (2), however, provides an alternative route. The claimant need not concentrate on the allegedly concealed facts but can instead concentrate on the commission of the breach of duty. If the claimant can show that the defendant knew he was committing a breach of duty, or intended to commit the breach of duty - I can discern no difference between the two formulations; each would constitute, in my opinion, a deliberate commission of the breach - then, if the circumstances are such that the claimant is unlikely to discover for some time that the breach of duty has been committed, the facts involved in the breach are taken to have been deliberately concealed for subsection (1)(b) purposes. I do not agree with Mr Doctor that the subsection, thus construed, adds nothing. It provides an alternative, and in some cases what may well be an easier, means of establishing the facts necessary to bring the case within section 32(1)(b).

    61. Morritt LJ said, in a passage I have cited, that in general a person is assumed to know the legal consequences of his actions and that, therefore, if an act has been done intentionally, the actor's unawareness of its legal consequences would be immaterial and no defence. The premise is, in my opinion, much too wide to constitute a satisfactory approach to construction of a statutory provision such as section 32(2). A person may or may not know that an act of his or an omission to do or say something or other constitutes a breach of tortious or contractual duty. His knowledge or lack of it may well be immaterial to the question whether a cause of action for which he is liable has accrued to the person injured by the act or omission. But that is no reason at all why Parliament, in prescribing the circumstances in which the person injured by the act or omission can escape from a Limitation Act defence, should not distinguish between the case where the actor knows he is committing a breach of duty and the case where he does not. The clear words of section 32(2)— "deliberate commission of a breach of duty"— show that Parliament has made that distinction.

    62. It follows that, in my opinion, the construction of section 32(2) adopted in Brocklesby was wrong. I wish to make clear that I do not think the case was wrongly decided. As I have already said, Morritt LJ's alternative ground for reaching the same decision seems to me to have been sound.

    63. I do, however, think that the Goldberg case was wrongly decided. The Brocklesby disclaimer required, in my opinion, the conclusion that section 32(2) could not apply and that the archdiocese's claim in respect of the 1989 advice was time-barred.

    64. There is one further point I want to make on the construction of section 32(1)(b) and section 32(2). Mr Davidson QC, counsel for the appellants, submitted that some degree of unconscionability in the conduct of a defendant was necessary before the defendant could be deprived under section 32(1)(b), with or without the help of section 32(2), of a Limitation Act defence. This was, I think, based mainly on Lord Browne-Wilkinson's comment in Sheldon that "unconscionable behaviour by deliberately concealing the facts relevant to the plaintiffs' cause of action" was "the underlying rationale" of section 32.

    65. I respectfully agree that it is difficult to think of a case of deliberate concealment for section 32(1)(b) purposes that would not involve unconscionable behaviour and that most cases of deliberate commission of breach of duty for section 32(2) purposes would be in the same state. But the statutory language does not require that the behaviour of the defendant be unconscionable and its addition as a criterion to be satisfied before a case can be brought within section 32 is, in my opinion, unnecessary and unjustified. The plain words of the statutory requirements, "deliberately concealed" and "deliberate commission of a breach of duty" need no embellishment.

The authority of the Brocklesby decision

    66. Your Lordships have not heard any argument on the question whether the Court of Appeal in the present case was correct to hold itself bound by the Brocklesby decision and I do not wish to express any view on that issue.

The result

    67. In the present case the Brocklesby disclaimer in paragraph 3.A of the re-amended reply means that that paragraph of the reply cannot succeed. Mr Cave still has, however, his paragraph 3 point and, under a conditional compromise agreed between the parties after the Court of Appeal judgments but before the hearing in this House, Mr Cave is entitled to recover an agreed sum from the respondent solicitors, albeit less than the agreed sum he would have been entitled to recover had your Lordships upheld the Brocklesby construction.

    

 
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