The
Limitation Act 1980, which can destroy a perfectly good legal claim merely
because it is not started soon enough, has come in for its share of criticism.
In mitigation, it may be pointed out that, since 1986, the harshness of that
statute has been alleviated by the introduction of a new three-year period for
negligence cases (other than personal injury), beginning when the plaintiff
first had knowledge of his rights. Two recent decisions of the Court of Appeal
shed some light on the Act’s operation and, more particularly, on what
‘knowledge’ on the plaintiff’s part will be enough to trigger the limitation
clock.
Campbell v Meacocks [1995] EGCS 143 concerned an allegedly negligent
mortgage valuation which was carried out in December 1984, just before the plaintiffs
purchased a semi-detached house in Middlesex. In July 1986 the plaintiffs
received a letter from a firm of loss adjusters, stating that the other half of
the semi (with which the plaintiffs’ house shared a concrete raft foundation)
was suffering from subsidence and asking whether their own house had at any
time been underpinned. This letter did not suggest that the plaintiffs’
property was damaged, nor were there any observable signs of subsidence in that
property; consequently the plaintiffs, who of course had the defendants’ recent
mortgage valuation report to reassure them that their property was in good
order, took no action at this time.
In May 1991,
the plaintiffs learned from a structural engineer that their house was indeed
suffering from subsidence and in July 1992 they issued a writ against the
valuers alleging negligence. The valuers (who continued to deny that they had
been negligent at all) took the preliminary point that the plaintiffs were out
of time, since they had acquired the necessary knowledge not in 1991, but in
1986.
At first
instance, the defendants argued that the ‘latent damage’ rules did not apply at
all to cases of negligent advice; however, this was rejected by the judge and
the defendants did not contest it further. What they did contest was the
trial judge’s ruling that the loss adjusters’ letter was insufficient to give
the plaintiffs the necessary knowledge to start time running. But the
defendants were again unsuccessful; the Court of Appeal agreed that that letter
did not point sufficiently strongly to the possibility of negligence by the
defendants to amount to ‘knowledge’ and so the writ had been issued in time.
The second
case, Wilson v Le Fevre Wood & Royle Independent,
October 12 1995, was an action by a houseowner against the architects who had
supervised the rebuilding of his property in the early 1980s after it had been
damaged. The plaintiff moved back into the house in 1983 and discovered damp.
Believing that this was rising damp and that it was caused by defects in the
design of the rebuilding works, the plaintiff complained to the defendants;
they, however, stated that the problem was simply one of condensation and that
the property would dry out in time. Thus reassured, the plaintiff did nothing
until April 1987, when he made a fresh complaint and, on receiving a flat
rejection, consulted solicitors. They consulted an expert, who reported on July
16 1987 that the damp was indeed the defendants’ fault, and a writ against the
defendants was eventually issued on July 16 1990.
The trial
judge concluded that the plaintiff acquired the necessary ‘knowledge’ for
limitation purposes only when he received the expert’s report; his writ,
therefore, was issued (just) in time. However, the Court of Appeal disagreed.
Although the mere fact of consulting a solicitor would not always demonstrate
the plaintiff’s ‘knowledge’ of the material facts, the evidence in this case
showed that the plaintiff had finally rejected the defendant’s explanations by
May 1987. It was accordingly from that time that the three-year period started
to run, and so the writ came a little too late.
For a
statutory provision which was supposed to simplify the law and to avoid
disputes, section 2 of the Law of Property (Miscellaneous Provisions) Act 1989
has generated a fair amount of litigation! That the Act has, nevertheless,
largely succeeded in its aim is thanks to a robust judicial response to
technical arguments and a firm resolve to ensure that the intricacies of the
old regime governing contracts for the sale of land are not reintroduced by the
back door.
The most
recent Court of Appeal decision in this field, First Post Homes Ltd v Johnson
(shortly to be reported in Estates Gazette), illustrates this. Here the
plaintiff was seeking to enforce an alleged contract for the purchase of 15.5
acres of land. One of its directors, a Mr Hale, had reached an oral agreement
with the owner, a Mrs Fletcher. He had then drafted a letter encapsulating this
agreement with which a plan of the land was enclosed. He signed the plan and
Mrs Fletcher signed both the letter and the plan. One month later Mrs Fletcher
died and Mr Hale’s company sought to enforce the agreement. This was being
resisted by Mrs Fletcher’s personal representative on the basis that there was
no contract to enforce.
It is well
settled that the new statutory regime requires all the terms expressly agreed
by the parties to be contained in a single document signed by each of them.
Where the terms are contained in more than one document, there must be a
primary document which is signed by the parties and this document must then
refer to any other document(s) in which other terms are to be found. (The only
other alternative permitted by the statute, namely the exchange of identical documents,
each of which contain all the terms of the agreement and each of which is
signed by one of the parties, was manifestly not applicable in this case.) The
defendant’s main argument was that, here, there were two documents, the letter
and the plan, and that the primary one, the letter, was signed only by the
vendor. Not surprisingly, the plaintiff contended that the letter and plan were
a single document which was signed by both parties.
Although
Balcombe LJ acknowledged that: ‘Like the proverbial elephant, a document may be
difficult to define’ both he and Peter Gibson LJ were quite satisfied that the
letter and the plan were two separate documents. The letter expressly referred
to ‘the enclosed plan’ and the natural way of construing this language was to
treat the letter as incorporating a separate document, the plan, by reference.
This meant that the requirements of section 2 could be satisfied only if the
plaintiff could be treated as having signed the letter.
However, the
plaintiff then claimed that there was authority for the view that a document
can be regarded as having been signed by a party where that party has
caused his name to be typed into the document and where the document does not
overtly require that party to sign the document, eg by leaving a space for a
signature. Although the present case seemed to fall within this principle — the
plaintiff’s name and address had been typed at the head of the letter (which
had been prepared by Mr Hale) and the letter was in a form which required only
Mrs Fletcher to sign — the argument was rejected by the court. Both Peter
Gibson and Balcombe LJJ were adamant that the new statutory regime should not
be encumbered with the ‘ancient baggage’ of the former regime. The mere naming
of a party as an addressee of a letter did not satisfy the requirements of
section 2; in this context ‘signed’ should be given ‘a meaning which the
ordinary man would understand it to have’.
Although
this is one of the very few post-1989 cases in which a court has ruled that
there was not a contract, it is firmly in lime with the general approach
which has been adopted to the section. This is, that it should be interpreted
sensibly and as a radically different regime which was designed to, and should
be allowed to, leave the deficiencies of the old law behind.
