Wife signing legal charge – Solicitor failing to advise wife as to effect of legal charge – Bank subsequently threatening to enforce charge – Wife commencing proceedings against solicitor for failure to properly advise – Date of wife’s knowledge for purposes of section 14A of the Limitation Act 1980 – Judge finding action time-barred – Appeal dismissed
The appellant (F) married in 1986 and thereafter she did not work and was dependent on her husband, G. G started a business and incorporated a company naming both F and G as directors: G held 99 shares and F held one share in the company. F left the running of the company to G and never questioned him when she signed company documents.
In February 1986 G told F that he had arranged for a short-term loan and that they would have to see a solicitor in order for her to sign the relevant documentation. On 21 August 1987 they went to see the respondent firm of solicitors and they both signed a legal charge over the matrimonial home securing the liabilities of the business to the National Westminster Bank plc. F did not read the legal document and the respondent did not explain its nature or consequences. In May 1991 the marriage broke up and shortly afterwards the business failed and went into liquidation. In late 1992 and again in early 1993 the bank informed F that it might enforce the charge to meet the liabilities of the company and that in the absence of payment, proceedings for possession of the property might be commenced. On 8 December 1993 F went to see a solicitor and was advised as to the effect of signing the legal charge and that she might have a claim against the respondent.
On 5 December 1996 F commenced proceedings against the respondent. F contended that although the limitation period in relation to the respondent’s negligence had expired in August 1993, six years after she had seen the respondent, she had not had the requisite knowledge for the purposes of section 14A of the Limitation Act 1980 until 8 December 1993. It was submitted that as proceedings had been issued within three years of that date, they were not statute-barred. The judge dismissed her claim, holding that it was time-barred because F had actual knowledge in 1992 or early 1993 that her loss was attributable to the signing of the charge, and that all she had learnt in December 1993 was that the respondent’s failure to advise might have been negligent. F appealed.
Held: The appeal was dismissed.
F had known by late 1992 or early 1993 that the charge she had executed over her home was the cause of the damage she had suffered and she also knew that she had not been advised as to the effect or consequences of the signing the charge. She claimed that she would not have signed the charge if she had been properly advised and thus it followed that she knew by at least early 1993 that her loss resulted in part from the respondent’s omission to properly advise her. That was sufficient knowledge for the purposes of the Act. The only thing F had not known until 8 December 1993 was that the respondent should have advised her as a matter of law about the effect of the charge, which was irrelevant by virtue of section 14A(9) of the Act. There was no requirement that a claimant must know that an act or omission constituted a breach of legal duty for the purposes of limitation. Accordingly, F had had notice by late 1992 or early 1993 when the bank had informed her of the effect of the charge. Broadley v Guy Clapham & Co [1994] 4 All ER 439, applied.
Ian Foster (instructed by Linder Myers, of Manchester) appeared for the appellant; Justin Fenwick QC (instructed by Henmans, of Oxford) appeared for the respondent.
Thomas Elliott, barrister
