Professional negligence – Solicitor – Limitation – Appellants failing in application to close recently registered title to land – Appellants bringing claim in negligence against respondent solicitor for failure to advise of need to object to original application for registration by relevant deadline – Summary judgment entered for respondent on ground that appellants’ claim time-barred under section 14A of Limitation Act 1980 – Date when appellants having necessary knowledge to bring claim – Whether having such knowledge when informed of respondent’s failure or on later date when learning of consequences of that failure – Appeal allowed
The appellants were three residents of the village of Ireby, Lancashire, who in March 2005 had instructed the respondent firm of solicitors to act for them on an application to alter the land register to correct a mistake pursuant to para 5(a) of schedule 4 to the Land Registration Act 2002. By that application, they challenged the registration of title to the lordship of the manor of Ireby, together with title to 362 acres of moorland on Ireby Fell, in the names of a couple who had recently moved to the village.
In a decision issued in December 2012, the deputy registrar found that the registration had been a mistake, ordered the closure of the title to the lordship but, as a matter of discretion, declined to make such an order in respect of the title to the fell. In reaching that decision, he took into account that the appellants had not objected to the original application for registration despite having notice of it. The deputy adjudicator’s decision was subsequently upheld in the courts: see Walker v Burton [2013] EWCA Civ 1228; [2013] 3 EGLR 129.12
In December 2012, the respondent issued a claim against the respondents for unpaid fees of £635,530.78 for work done under a conditional fee agreement in relation to the appellants’ application. Judgment in default was entered against the second appellant. The respondent subsequently went into administration. The appellants issued separate proceedings, by way of a counterclaim for damages, contending that the respondent had negligently failed to advise them that a failure to file an objection to the original registration of title before the applicable deadline of April 2005 would result in the deputy registrar having a statutory discretion not the close the titles even if their registration was proved to be mistaken.
The respondent applied successfully to strike out the counterclaim as time-barred under section 14A of the Limitation Act 1980, having been brought more than three years after the appellants acquired the knowledge necessary for bringing the action within the meaning of section 14A(5) and (6). The judge found that the appellants had first acquired the necessary knowledge in April 2009, when the first appellant was told that the respondent had been negligent in failing to register an objection in time.
The appellants appealed. They contended that they had not had the relevant knowledge to bring the claim until December 2012, when the deputy adjudicator issued his decision.
Held: The appeal was allowed.
The judge’s finding that April 2009 was the starting date for the limitation period was based on a mistaken foundation. He had erred in rejecting contrary evidence advanced by the appellants as being inconsistent with their pleaded defence and counterclaim. The only pleading in relation to the appellants being told of the negligence did not say precisely when that happened or precisely who was told.
Had the judge approached the evidence properly, it would still have been theoretically open to him to decide on all the evidence that, as a matter of law, the starting date for limitation purposes, at least for the first appellant, was in April 2009. However, his conclusion on that matter was wrong in the light of what he had actually decided. He had been wrong to hold that the relevant start date was the date when the appellants first knew that the respondent had been negligent in failing to file an objection. Under section 14A, time started to run on the earliest date when the appellants had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action. The required knowledge included knowledge of the material facts about the damage in respect of which damages were claimed, namely such facts about the damage as would lead a reasonable person who had suffered it to consider it sufficiently serious as to justify the issue of proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment. For that purpose, the “material fact about the damage” which the appellants needed to know was not merely the respondent’s failure to file the objection before the deadline, but also that the effect of the failure to file the objection was to allow a discretionary decision to be made against them in relation to the Ireby Fell title. None of the appellants had been aware in April 2009 of the possible consequences of the respondent’s failure. Those consequences became apparent when the deputy registrar’s decision became available in December 2010. Given that neither party was contending for a start date other than April 2009 or December 2010, it was irrelevant whether the appellants could have known of those consequences earlier than the actual decision.
There were two reasons why the material fact about the damage could not just be the negligent advice or the failure to file the objection before the deadline. First, the appellants were not experts in land registration or manorial law and could not be taken to have known the obscure consequences of a failure to file an objection in time without being told what they were. It was likely that the consequences of the non-filing of the objection by the deadline were a fact only ascertainable with the help of expert advice. Second, the mere knowledge of the respondent’s failure to file an objection would not necessarily lead a reasonable person to consider the matter sufficiently serious to justify instituting proceedings for damages against a solvent firm which did not dispute liability. When the first appellant was informed of the respondent’s failure, she had no reason to think that she would be worse off. She had understood that the appellants’ application would be successful and that the costs would be covered by the firm and not reclaimed from her, and, most crucially, she had been unaware that the respondent’s negligence had turned a clear right to have the Ireby Fell title closed into a matter for the discretion of the adjudicator. It followed that the judge had erred in determining, on the facts pleaded in the defence and counterclaim, the starting date for limitation purposes had to be April 2009. A trial of the facts would be needed before that question could be properly decided.
The order for summary judgment in favour of the respondent should therefore be set aside. A judgment in default entered against the second appellant at an earlier stage should also be set aside pursuant to CPR 13.3. It was just to set aside that order notwithstanding that the second appellant had left it more than a year after that judgment before seeking relief. He had a real prospect of the defending the respondent’s claim and it would be unjust to deprive him of the right to defend the claim when his co-villagers were able to do so. In light of evidence that he had only become aware of the respondent’s proceedings in February 2014, since he was no longer resident at the address where those proceedings had been served, he had a reasonable excuse for his delay up to the date when he finally learned of the proceedings and, taking into account various matters including personal difficulties which he was experiencing at that date, his delay of 26 days thereafter was also explicable and excusable: Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3926 applied.
Mike O’Brien QC (instructed by Newhall Solicitors LLP, of Birmingham) appeared for the appellants; John de Waal QC (instructed by Sydney Mitchell LLP, of Birmingham) appeared for the respondent.
Sally Dobson, barrister
Read a transcript of Blakemores LDP (in administration) v Scott and others here
