Solicitor’s negligence — Limitation period for bringing claim — Date upon which claimants had relevant knowledge to start time running for purpose of negligence claim — Section 14A of Limitation Act 1980 — Claim time-barred
The claimants were part of the same group of companies. They brought a claim against the defendant solicitor for negligent breach of duty when acting for them in the assignment of certain leases from the first to the second claimant. As a result of that negligence, the second claimant did not obtain the benefit of break clauses that were contained in the leases. It was common ground that the defendant had been negligent, but the latter disputed its liability on the ground that the claim had not been brought within three years of the “starting date”, as required by section 14A of the Limitation Act 1980.
A preliminary issue was tried on the limitation point. The central question was when the claimants had had the necessary knowledge to start time running. The defendant contended for a date upon which certain responsible individuals within the claimants’ organisation had known two of the relevant facts, namely that the break clauses were personal to the original tenant and that an assignment had taken place so that the leases were no longer vested in the original tenant. It argued that it was immaterial that no single person had possessed both pieces of knowledge. The claimants submitted that no cumulation of individual knowledge would suffice, for the purposes of section 14A, to attribute to the company a form of knowledge that had not been enjoyed by any single individual within it.
The defendant also put forward an alternative date, upon which the member of the claimants’ legal department who had dealt with the assignment deed had been aware that, as matters stood, the break option was personal to the original tenant.
Held: The court ruled in favour of the defendant.
1. The claimants had had the relevant knowledge on the second of the two dates, and their claim was accordingly time-barred. At that date, the member of their legal department must have appreciated that the assignment would cause the loss of the break option unless some remedial action were taken, and, he haSolicitorsd been under a duty to report the defect to his employers.
2. The claimants’ contention as to the first date was too sweeping; it was consistent with section 14A for separate pieces of individual knowledge to be attributed to a corporate claimant if, in the particular context, it was reasonable to suppose that the relevant information would have been aggregated within the organisation. However, another reason arose as to why the defendant could not establish that the claimants had the necessary knowledge on that date: the latter had not known, through anyone whose knowledge was attributable to them, that the “damage” consisting of the loss of the break option had occurred. The damage-creating legal consequences of the other facts were a relevant “fact” for the purposes of section 14A. Such knowledge could not be presumed in the instant case, since the loss of the option was not an inevitable legal consequence of the other two facts. The claimants were, prima facie, entitled to assume that the defendant had been acting with due care and skill. If it were legally possible for the assignments to have taken place without occasioning the damage, the claimants were entitled to assume that the defendant had done what was legally possible to avoid that damage. They were not presumed to know that the defendant had not done what it would necessarily have done had it been doing its job properly: Oakes v Hopcroft [2000] Lloyds Rep Med 394 applied; HF Pension Trustees Ltd v Ellison [1999] Lloyds Rep PN 489 distinguished.
Stephen Hofmeyr QC (instructed by Simmons & Simmons) appeared for the claimants; Christopher Nugee QC (instructed by Barlow Lyde & Gilbert) appeared for the defendant.
Sally Dobson, barrister
