Cave v. Robinson Jarvis & Rolf [2002] UKHL 18

House of Lords
Between
CaveAppellantRobinson Jarvis & RolfRespondent
Before
Lord Slynn of HadleyLord Mackay of ClashfernLord Hobhouse of WoodboroughLord MillettLord Scott of FoscoteDate 25 April 2002
[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 "any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant". 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: For the purposes of subsection (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." 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) "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."[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:
"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 Co v Osborne [1899] AC 351 and Applegate v Moss [1971] 1 QB 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 wrongdoing or 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 Ltd [1949] 1 KB 550, 565-566. 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 contract, but he takes the risk of it being so. He refrains from further inquiry least it should prove to be correct: and says nothing about it. The court will not allow him to get away with conduct of that kind. It may be that he has no dishonest motive: but that does not matter. He has kept the plaintiff out of the knowledge of his right of action: and 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"
(emphasis added).[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:
"3.A Further, the negligent drafting by the defendant of an agreement which did not confer on the claimant the rights which it ought to have conferred was (i) an intentional act (although, for the avoidance of doubt, it is not alleged that it was done in the knowledge that it was a breach of duty); and (ii) done in circumstances in which the breach of duty was unlikely to be discovered for some time. In the premises, pursuant to section 32(1) and (2) of the Limitation Act 1980, time did not begin to run until the claimant discovered or could with the exercise of reasonable diligence have discovered the breach. Even on the defendant's case, that date was not before February 1994. Accordingly the proceedings were issued within the primary limitation period."
Paragraph 3.A raises the Brocklesby point. The Brocklesby point[39]Section 32 of the Act provides, so far as relevant:
"(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 a 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 subsection (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. …. (5) Sections 14A and 14B of this Act shall not apply to any action to which subsection (1)(b) above applies (and accordingly the period of limitation referred to in that sub-section, in any case to which either of those sections would otherwise apply, is the period applicable under section 2 of this Act)."
[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 vRHM 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 vRHM 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.[68]I would allow the appeal accordingly. © 2002 Crown Copyright

Cited in 66 later judgments

and 41 more of the most senior

Showing the 50 most senior of 66.