Claimant retaining defendant solicitor to sell land subject to legally enforceable mooring rights in favour of vendors – Defendant failing to draft necessary deed and register mooring rights – Purchaser going into liquidation – Receivers denying existence of mooring rights – Claimant issuing proceedings – Whether action time-barred – Interpretation of word “deliberate” in section 32(2) of Limitation Act 1980
In February 1989 the claimant retained the defendant firm of solicitors in connection with the sale of land at Ranalagh Works, Fishbourne, Isle of Wight. The land was owned by two companies, one controlled by the claimant and the other controlled by C. The defendant was retained not only to sell the land, but to prepare such documents as were necessary to ensure that the claimant and C separately acquired legally enforceable mooring rights over the land being sold for a period of 100 years. The proposed purchaser of the land was Hyde Securities Ltd (Hyde). The relevant transaction took place in March 1989.
In relation to the mooring rights, the defendant was under a duty: (i) to draft a deed to secure mooring rights in favour of the claimant, which were legally enforceable for 100 years; and (ii) to register the deed. It was alleged that the defendant had failed in both respects. Instead of drafting a lease with ancillary easements, the defendant had drafted a simple mooring licence, which he had failed to register. In the event, the licence operated at best to confer mooring rights upon the claimant that were enforceable only as a personal obligation of Hyde. Subsequently, Hyde went into liquidation and a receiver was appointed. Between 1989 and 1994 the claimant had use of his moorings without any difficulty. He had no reason to suspect any negligence on the defendant’s part until the existence of his mooring rights was denied by Hyde’s receivers in February 1994.
On 16 January 1998 the claimant issued proceedings alleging negligence and breach of contract. It was common ground that the claim was time-barred unless there had been “deliberate concealment” of the claimant’s right of action by the defendant, under section 32 of the Limitation Act 1980, with the effect that the period of limitation ran from the date upon which the claimant discovered the mistake, namely February 1994. The matter was heard as a preliminary issue. The judge held that he was bound by Brocklesby v Armitage & Guest [2001] 1 EGLR 67, which held that, for the purpose of extending the limitation period pursuant to section 32(1)(b) of the Act, it was necessary only to demonstrate that the commission of the act leading to the claimant’s right of action was deliberate, in the sense of being intentional, and that the act or omission involved a breach of duty, regardless of whether the actor appreciated the legal consequences. Accordingly, he found that the limitation period started to run at the earliest from February 1994, with the effect that the action was not time-barred. The defendant appealed, claiming that Brocklesby was wrongly decided and that the word “deliberate” in section 32(2) of the Act connoted intention or awareness, as opposed to mere negligence or inadvertence.
Held: The appeal was dismissed.
1. The general rule pronounced in Young v Bristol Aeroplane Co Ltd [1944] KB 718 was that the Court of Appeal was bound to follow its own decisions. Boys v Chaplin [1968] 2 QB 1 identified an exception, namely that, in respect of a final decision, a full Court of Appeal was not precluded by its own rule of stare decisis from overruling an interlocutory decision of two lord justices that the court considered to be wrong. However, where the main constituents of the rationale for that exception were absent, namely the summary nature of the procedure, the brevity of the argument and the unlikelihood of appeal, a departure from a previous decision of the court was highly undesirable and should only be considered if the previous decision was “manifestly wrong”: see Langley v North West Water Authority [1991] 1 WLR 697.
2. Brocklesby was not “manifestly wrong”. Although apparently ex tempore, the judgment was considered carefully, and the oral argument before the court had been the subject of careful skeleton arguments. It was also right to note that it had been recently followed and reinforced in Liverpool Roman Catholic Archdiocesean Trustees Inc v Goldberg [2001] 1 All ER 182.
3. The concealed fact that was relevant to the claimant’s right of action was not the content of the deed, but the fact that such content was inadequate to achieve the claimant’s purpose. Thus, the breach of duty referred to in section 32(2) of the Act was not simply the action of drafting the licence, but the failure to include in it terms appropriate to achieve that purpose. In the circumstances, that omission was unlikely to be discovered for some time, and, on the reasoning in Brocklesby, it amounted to deliberate concealment under section 32(2). Acting with reasonable diligence, the claimant did not, and could not, discover this concealment prior to 1994.
Patrick Lawrence (instructed by Roach Pittis, of Newport, Isle of Wight) appeared for the claimant; Nicholas Davidson QC and David Drake (instructed by Beachcroft Wansbroughs, of Bristol) appeared for the defendant.
Thomas Elliott, barrister
