Solicitor failing to effect transfer of property from claimant to company – Claimant discovering failure on repossession of property by building society – Primary limitation period expiring – Whether limitation period running from discovery of failure to effect transfer – Claimant claiming defendant deliberately concealed facts – Whether claimant required in strike out proceedings to state all facts relied upon – Limitation Act 1980 section 32(1)(b) – Appeal allowed
In 1989 the defendant firm of solicitors acted for the claimant, and for a company, in the sale of commercial premises to the claimant. The purchase price of £155,400 was funded by a mortgage from a building society. The claimant became ill and he and the company agreed to have the transaction effectively reversed, by the transfer of the premises back to the company, upon the latter procuring the release of the claimant from the mortgage. The defendant was instructed to carry through the transaction. Accordingly, the defendant prepared a contract and a transfer that was signed by the company and the claimant. However, nothing further was done and the premises remained in the ownership of the claimant. In 1992 the building society complained of instalment arrears and the claimant discovered that the premises had not been transferred. The premises were repossessed and sold, resulting in a claim against the claimant in the sum of £212,895.51, which was compromised.
In June 1997 the claimant issued proceedings against the defendant. The defendant took out a summons to have the claim struck out under RSC Ord 18 r 19 on the basis that the primary limitation period had expired. The claimant sought to rely on section 32(1)(b) of the Limitation Act 1980, which provided that, where any fact relevant to the claimant’s right had been “deliberately concealed from him by the defendant”, time did not run until the claimant had discovered the concealment or could, with reasonable diligence, have discovered it. The district judge ordered that unless the claimant served a reply in a form that stated, inter alia, all specific facts, documents or overt acts upon which he intended to rely in support of his allegation of deliberate concealment, the defendant’s application would be allowed. The claimant appealed contending that the judge had misconstrued section 32(1)(b) of the Act and that the claimant was only required to plead the breaches of duty relied upon and the circumstances in which it was unlikely that the breaches would be discovered for some time.
Held: The appeal was allowed.
1. The defendant’s submission, that an action that had been “deliberately concealed” within section 32(1)(b) required deliberate commission and knowledge that the commission of the action could result in legal consequences, was to be rejected. Had that been parliament’s intention, the Act would have so stated. It was unnecessary for the claimant to plead any more than that he had not had any knowledge of the defendant’s act, that the act had been deliberate and that it amounted to a breach of duty. It did not matter whether or not the defendant had been aware of the breach. The claimant had pleaded sufficient information in order to rely on section 32(1)(b) of the Act.
2. It was inappropriate to refer to the Law Reform Committee’s report on Limitation of Action (Cmd 6923) in order to construe section 32 of the Act, because it was plain that, in enacting section 32, parliament had not adopted the committee’s formulation. It was also inappropriate to refer to cases dealing with the equitable doctrine of fraud.
Matthew Caswell (instructed by Lester Morrill, of Leeds) appeared for the claimant; Spike Charlwood (instructed by Beachcroft Wansbroughs, of Leeds) appeared for the defendant.
Thomas Elliott, barrister
