Negligence — Limitation period — Latent damage — Whether plaintiffs lacked knowledge of factual elements of claim permitting extension to limitation period under section 14A of the Limitation Act 1980
On March 6 1984 the
defendant valuers inspected and made a report on ‘Gentians’, a house
constructed in or about 1956; the report raised no significant doubts about the
nature or condition of the house. Having seen the report the plaintiffs
obtained a mortgage and purchased the house. When proposing to sell it in 1988,
the plaintiffs were informed by their neighbours and from the building society,
which had instructed the defendants and advanced a loan to the plaintiffs, that
the property was of a ‘Woolaway’ construction. By a letter dated June 27 1988
the first plaintiff wrote to the building society stating that the method of
construction of the property was of concrete sections, and that the concrete
which was used for that type of building might be suspect, rendering the value
of the property at least £30,000 below its market value or worth only plot
value. The letter pointed out that the defendant’s valuation report did not
mention that the property was of the ‘Woolaway’ sectional construction method.
On June 28 1991 the plaintiffs issued their writ against the defendants in the
present action and the three-year period, which provides an extension to the
limitation period under section 14A of the Limitation Act 1980 in negligence
cases based on latent damage, expired one day after the letter of June 27 1988.
At the hearing of a preliminary issue in the county court, the recorder decided
that the letter showed that the plaintiffs had the knowledge that was required
of them by the Act. The plaintiffs appealed, contending that before June 28
1988 (the expiration of the three-year extension to the limitation period) they
did not have sufficient knowledge that the property was a Woolaway house, that
its construction might be defective and that they would be unable to sell at a
proper price. Further, the plaintiffs had insufficient knowledge of facts
mentioned in section 14A(8), namely the facts relevant to liability.
in unqualified terms and showed that the plaintiffs were in possession of the
essential factual material which they needed to seek legal advice and mount an
action if so advised. The plaintiffs had reasonable belief in the truth of the
matters which they were asserting in the letter and would have had sufficient
confidence to justify embarking on the preliminaries to the issue of a writ,
such as submitting a claim, taking legal and other advice and collecting
evidence. The facts relevant to liability mentioned in section 14A(8) of the
1980 Act, namely the failure of the defendants to observe and report the fact
that the plaintiffs’ was a Woolaway house and also that the defendants valued
the house at a level well above the appropriate value taking account of its
substandard Woolaway construction, were plainly appreciated by the plaintiffs
on June 27 1988; they fully appreciated the causal link. The defendants were
therefore entitled to rely on section 2 of the 1980 Act and the plaintiffs
could not defeat that defence by reliance on section 14A.
The following
cases are referred in this report.
Halford v Brookes [1991] 1 WLR 428; [1991] 3 All ER 559, CA
Nash v Eli Lilly & Co [1993] 1 WLR 782; [1993] 4 All ER 383,
CA
This was an
appeal from the decision of Mr Recorder Burgess in Taunton County Court who, on
the hearing of a preliminary issue, had dismissed the claim of the plaintiffs,
Brian John Spencer-Ward and Jacqueline Spencer-Ward, against the defendant
firm, Humberts.
Rupert Jackson
QC and Malcolm Stitcher (instructed by Winter-Taylors, of High Wycombe)
appeared for the appellants; Roger Hetherington (instructed by Batten & Co,
of Yeovil) represented the respondents.
Giving
judgment, Sir Thomas Bingham MR
said: The question in this appeal is whether on or before June 28 1988 the
plaintiffs had the knowledge required to start time running against them for
the purposes of section 14A of the Limitation Act 1980. The question is of
crucial importance to them. Their claim is against a firm of valuers and estate
agents, and they complain that these valuers and estate agents made a negligent
inspection, valuation or report of or on their house. The limitation period prima
facie applicable under section 2 of the 1980 Act was six years from the
date when their cause of action accrued, which was in March or April 1984.
Therefore, in the ordinary way the limitation period expired in March or April
1990. The plaintiffs’ writ was not, however, issued until June 28 1991.
Accordingly, the plaintiffs rely on section 14A of the 1980 Act which gives a
three-year extension in negligence cases based on latent damage — that is,
cases where the plaintiffs lacked knowledge of the factual elements of their
claim until a later date.
The first
statutory limitation periods known to English law had the effect of barring
actions at the end of the prescribed period whether the potential plaintiff
knew of his right to claim within that period or not. Over the years it came to
be recognised that this rule was capable of working injustice. Courts of equity
developed an exception, which has since become statutory, under which a
plaintiff gains an extension of time if his cause of action is based on the
defendant’s fraud or where his cause of action has been concealed by the
defendant’s wrongdoing. In a different situation extensions became available
where the defendant had made a part-payment or acknowledged his liability. Yet
another exception was introduced by statute to cover cases where a plaintiff
did not know that he had suffered personal injury until a time after the
accrual of his cause of action.
None of these
exceptions avails these plaintiffs. The exception on which they rely is the
latest of this series of exceptions to the general rule. It is an exception,
introduced by the Latent Damage Act 1986 following the 24th report of the Law
Reform Committee, which is to
appeal turns, and it is, I think, necessary to recite its full terms. The
heading of section 14A is: ‘Special time limit for negligence actions where
facts relevant to cause of action are not known at date of accrual’, and the
section reads as follows:
(1) This
section applies to any action for damages for negligence, other than one to
which section 11 of this Act applies, where the starting date for reckoning the
period of limitation under subsection (4)(b) below falls after the date
on which the cause of action accrued.
(2) Section 2
of this Act shall not apply to an action to which this section applies.
(3) An action
to which this section applies shall not be brought after the expiration of the
period applicable in accordance with subsection (4) below.
(4) That
period is either —
(a)
six years from the date on which the cause of action accrued; or
(b)
three years from the starting date as defined by subsection (5) below, if
that period expires later than the period mentioned in paragraph (a)
above.
(5) For the
purposes of this section, the starting date for reckoning the period of
limitation under subsection (4)(b) above is the earliest date on which
the plaintiff or any person in whom the cause of action was vested before him
first had both the knowledge required for bringing an action for damages in
respect of the relevant damage and a right to bring such an action.
(6) In
subsection (5) above ‘the knowledge required for bringing an action for damages
in respect of the relevant damage’ means knowledge both —
(a) of
the material facts about the damage in respect of which damages are claimed;
and
(b) of
the other facts relevant to the current action mentioned in subsection (8)
below.
(7) For the
purposes of subsection (6)(a) above, the material facts about the damage
are such facts about the damage as would lead a reasonable person who had
suffered such damage to consider it sufficiently serious to justify his
instituting proceedings for damages against a defendant who did not dispute
liability and was able to satisfy a judgment.
(8) The other
facts referred to in subsection (6)(b) above are —
(a)
that the damage was attributable in whole or in part to the act or omission
which is alleged to constitute negligence; and
(b)
the identify of the defendant; and
(c) if
it is alleged that the act or omission was that of a person other than the
defendant, the identity of that person and the additional facts supporting the
bringing of an action against the defendant.
(9) Knowledge
that any acts or omissions did or did not, as a matter of law, involve
negligence is irrelevant for the purposes of subsection (5) above.
(10) For the
purposes of this section a person’s knowledge includes knowledge which he might
reasonably have been expected to acquire —
(a)
from facts observable or ascertainable by him; or
(b)
from facts ascertainable by him with the help of appropriate expert advice
which it is reasonable for him to seek;
but a person
shall not be taken by virtue of this subsection to have knowledge of a fact
ascertainable only with the help of expert advice so long as he has taken all
reasonable steps to obtain (and, where appropriate, to act on) that advice.
That section,
as its terms make clear, has been carefully drafted to cover situations such as
the present and the language bears obvious echoes of section 14 of the Act, the
parallel section dealing with personal injuries.
Against that
legislative background, I turn to the facts of this particular case. In about
1956 a house named ‘Gentians’ was built in Staplehay, Taunton. On March 6 1984
the defendants to this action, Humberts, inspected and made a report on that
property which the plaintiffs were proposing to buy and for which they were
seeking a mortgage. The inspection report, which is before us, is brief and
satisfactory, raising significant doubts about the nature or condition of the
house. Having seen the report, the plaintiffs obtained a mortgage and bought
the house. That took place on April 30 1984 and they at once moved into
occupation.
For personal
reasons relating to Mr Spencer-Ward’s profession the plaintiffs decided in
early 1988 to sell the house in order to reduce the burden of commuting to
London, which Mr Spencer-Ward was then doing. Their decision to sell the house
prompted some conversation with their neighbours living in an apparently
identical house, Mr and Mrs Clements. As described by Mr Spencer-Ward in his
affidavit, the facts were these:
In about May
1988 we learned from Mr and Mrs Clements, our neighbours, that they were having
problems selling their house. By about June 20th we had learned that they had
been told that their house was of Woolaway construction. Our knowledge was
acquired in the course of a few conversations over a period of a few weeks.
Although we were neighbours we had not had much contact before they told us
about their problems in selling. As ‘Gentians’ is a similar style of house to
the Clements’ house I decided to contact the Cheltenham and Gloucester Building
Society, which had lent £22,000 towards the initial purchase price. On Tuesday
21st June 1988 I met Mr Whitney, the branch manager. I had a short meeting in
the course of which Mr Whitney showed me the deeds to ‘The Gentians’ and I saw
a number of documents relating to Woolacon Properties Limited. Mr Whitney
suggested that I contact the Chief Valuer of the Cheltenham and said that he
would find out who had conducted the mortgage valuation inspection in 1984 … On
23rd June 1988 Mr Whitney wrote that the valuation had been carried out by Mr
Pawson of Humberts, something we had not known previously. We received the
letter on or about Friday 24th June 1988.
Later in his
affidavit Mr Spencer-Ward, addressing his remarks to the time at which he and
his wife acquired the knowledge necessary to found their claim against the
defendants, deposed:
We were aware
that the mortgage valuation did not mention that the house was a Woolaway and
that is why the letter refers to a ‘grossly misleading and inaccurate
statement’. The letter concluded by asking Mr Longmate to pursue the matter and
advise ‘before I take this matter any further’. However, we did not know
whether the house was in fact defective, rather than of a type where there had
been problems on some properties, or whether it was in the same condition as
that of Mr and Mrs Clements.
In the course
of her evidence given in the court below, Mrs Spencer-Ward was asked this
question:
Q. As far as
the Clements were concerned, there was not any question about it. Their house
was a Woolaway. That is what they were telling you.
A. They were
telling me their house was a Woolaway after the few conversations.
Q. And you
knew that your house was, for all intents and purposes, indistinguishable from
their house?
A. That is
true.
The reference
that I have read in the affidavit to a letter to Mr Longmate concerns a letter
which Mr Spencer-Ward wrote following receipt of the letter from the Cheltenham
& Gloucester Building Society dated June 23 and received on the 24th. Mr
Spencer-Ward wrote to the building society on June 27. The letter was drafted
by his wife and its terms are so crucial to this appeal that I should read it
in full. It said:
On Tuesday
the 21st June I had a meeting with Mr J Whitney, the manager of your Taunton
Branch to discuss a problem which has come to light concerning the valuation of
our property. This letter dated 23rd June instructed me to contact you for your
assistance. The problem is as follows.
We purchased
the above house some four years ago with a mortgage from your society following
a favourable report from your valuers who I understand was Humberts of Taunton.
Since the purchase of the property we have carried out all the recommendations
set out in the valuers’ report, we now wish to put the house on the market and
have had two local estate agents to give us some idea of the present day
valuation this being between £160,000 & £175,000. It was therefore quite a
shock to discover from our neighbour who owns the same type of property that
the house is of a Woolaway construction and made of concrete sections, the
concrete which was used for this type of building may be suspect, rendering the
property at least £30,000 below market value or only worth plot value.
This came to
light when the neighbours’ property was surveyed for mortgage purposes, the
effect being that initially keen purchasers have withdrawn their offers as they
are unable to get a mortgage on this type of property. Where we were under the
impression our neighbours’ house was sold they now inform us that the house has
had to be withdrawn from the market.
As you will
see from your file copy the report and valuation for mortgage document that you
received from your valuers there is no mention under item 5 — Construction
(walls & roof) that the house is of a Woolaway sectional construction.
It is
therefore a grossly misleading and inaccurate statement that your
would pursue this matter with some urgency and advise before I take this matter
any further.
The three-year
period before the issue of the writ expired, as it happened, one day after that
letter was written. There followed a series of transactions and events into
which it is unnecessary to go in detail, and on June 28 1991 the plaintiffs
issued their writ against the defendants. I should draw attention to para 9 of
the statement of claim indorsed on the writ in which the particulars of
negligence are set out. In that paragraph it is pleaded that:
the Defendant
was negligent in inspecting and/or reporting on and/or valuing the Property.
In the usual
way particulars of that complaint were pleaded. It was said:
The Defendant:
(a) failed to
observe and/or report that the gables to first floor ceiling level and the rear
wall are constructed of ‘Woolaway’ vertical reinforced concrete columns
connected by beams to which are bolted reinforced concrete panels;
(b) failed to
observe and/or report the following matters and the fact that each of them
indicated a non-standard construction: …
(c) failed to
take any or any sufficient steps to identify the precise nature of the wall and
gable construction …
(d) failed to
recommend a full survey or a specialist report from a structural engineer as to
the wall and gable construction …
(e) failed to
report that remedial works were necessary or recommend [a retention from] the
mortgage advance …
(f) failed to
take any or any sufficient steps to ascertain the cost of remedial works to the
wall and gables of the Property;
(g) in the
light of the defects above, negligently overvalued the property at £43,500.
In para 10 of
their defence to that claim the defendants relied on the Limitation Act 1980
and in para 2 of their reply the plaintiffs relied on section 14A.
It was then
very sensibly decided that the limitation issue should be tried as a
preliminary issue and that came before Mr Recorder Burgess, sitting in Taunton
County Court on September 16 1993. He decided that issue against the plaintiffs
and in favour of the defendants. The plaintiffs now appeal against his
decision.
The learned
recorder founded his decision primarily on the letter of June 27 which I have
already read. He said this at p6A of the transcript of his judgment:
It [the
letter] shows that on that day [27th June] Mr and Mrs Spencer-Ward were aware
that Humberts had prepared the report, that the report was wrong in essence, that
it did not disclose that the house was of a Woolaway construction and made of
concrete sections and that the concrete might be suspect. They were also aware
at that date that the property might be at least £30,000 below its market
value. This had come to light because their neighbours’ purchasers had fallen
away.
I am
satisfied on the basis of that letter that the submissions made by Mr
Hetherington this morning are correct. In those circumstances I am satisfied
that under the Act the plaintiffs had the knowledge that is required of them.
They were aware that this had happened and it behoved them to issue proceedings
within three years of that date.
I refer to
the case of Nash v Eli Lilly & Co [1993] 1 WLR 782 and accept
entirely the statement at page 792 where it is said:
‘In applying
the section to the facts of these cases we shall proceed on the basis that
knowledge is a condition of mind which imports a degree of certainty and that
the degree of certainty which is appropriate for this purpose is that which,
for the particular plaintiff, may reasonably be regarded as sufficient to
justify embarking upon the preliminaries to the making of a claim for
compensation such as the taking of legal or other advice.’
In my view it
is clear beyond peradventure that on 27th June 1988 Mr and Mrs Spencer-Ward had
(if I can use the term again) been struck by the motor car, and that time had
started to run for them from that date. That proceedings did not issue before
June 27 1991 may be a tragedy, I know not, but I am satisfied that this action
must be barred and I shall therefore so direct. The statement of claim will be
dismissed.
The learned
recorder’s reference to a motor car is a reference back to a passage earlier in
his judgment when he endeavoured to explain how the limitation provisions
worked. In that passage he said:
He [the
claimant] has to commence proceedings against the defendants within three years
of the date the knowledge came to him that he had a cause of action. By
‘knowledge’ I mean real knowledge. I do not mean a fanciful knowledge.
Knowledge sufficient that it can be checked and tested. It equates in these
proceedings, which is not a personal injury case, to the time at which a motor
car collided with a pedestrian. The pedestrian knows that he has been knocked
down. He does not know how badly he has been injured. He may not know the
injuries he sustained. But he is on notice forthwith that within three years of
that date he is to commence proceedings. And the same with these matters. Using
layman’s language, the plaintiffs had three years from knowing when the injury
had been committed against them to commence their proceedings — ample time, one
may think, to make findings of what defects are present and what the cost is to
remedy matters or how much loss has been suffered.
In the course
of the arguments on this appeal we have, in particular, been helpfully referred
to two decisions bearing on this question. Both were cases arising under
section 14 of the Act (not section 14A), but they are undoubtedly of value by
way of analogy. The first is Halford v Brookes [1991] 1 WLR 428.
The facts of that case were very different, since it was a civil claim against
the alleged murderer of the plaintiff’s teenage daughter. One refers to it,
therefore, for such light as is thrown on the correct approach in principle and
one derives help first from the judgment of Russell LJ at p434A, where he says:
Once the
plaintiff in this case realised that her daughter’s death was capable of being
attributed to the activities of the defendants or one or other of them, time
began to run and, subject to the provisions of section 33 of the Act, she had
three years thereafter in which to issue her proceedings. The period was
intended to enable the plaintiff to accumulate and marshal the necessary
evidence.
I would also
make reference to a passage in the judgment of Lord Donaldson of Lymington MR
at p443E when, having considered a number of authorities on the meaning of
‘knowledge’ in section 14, he said:
The word has
to be construed in the context of the purpose of the section which is to
determine a period of time within which a plaintiff can be required to start
any proceedings. In this context ‘knowledge’ clearly does not mean ‘know for
certain and beyond possibility of contradiction.’ It does, however, mean ‘know
with sufficient confidence to justify embarking on the preliminaries to the
issue of a writ, such as submitting a claim to the proposed defendant, taking
legal and other advice and collecting evidence.’ Suspicion, particularly if it
is vague and unsupported, will indeed not be enough, but reasonable belief will
normally suffice. It is probably only in an exceptional case such as Davis
v Ministry of Defence that it will not, because there is some other
countervailing factor.
The third
member of the court, Nourse LJ, at p438F agreed with both judgments. The
judgments in that case are, I think, a valuable reminder that we are
considering the date at which time starts to run. The plaintiff is not, of
course, shut out if he has failed to sue when the period begins. The start of
the period gives him three years to seek legal advice and get his tackle in
order before issuing proceedings. It is certainly not intended that time should
start to run before the plaintiff has been alerted to the factual rudiments of
his claim, but it is intended that time should start to run then.
The second
leading authority to which reference has been made is Nash v Eli
Lilly & Co [1993] 1 WLR 782, a judgment of the Court of Appeal in a
case arising from the distribution of Opren, an allegedly harmful
pharmaceutical product. At p792C the court said:
We do not, of
course, intend to lay down a definition of the word ‘knowledge’ for the
purposes of a statute in which Parliament left the word to speak for itself. In
applying the section to the facts of these cases, we proceed on the basis that
knowledge is a condition of mind which imports a degree of certainty and that
the degree of certainty which is appropriate for this purpose is that which,
for the particular plaintiff, may reasonably be regarded as sufficient to
justify embarking upon the preliminaries to the making of a claim for
compensation such as the taking of legal or other advice. Whether or not a
state of mind for this purpose is properly to be treated by the court as
knowledge seems to us to depend, in the first place, upon the nature of the
information which the plaintiff has received, the extent to which he pays
attention to the information as affecting him, and his capacity to understand
it. There is a second stage at which the information, when received and
understood, is evaluated. It may be rejected as unbelievable. It may be
regarded as unreliable or uncertain. The court must assess the intelligence of
the plaintiff; consider and assess his assertions as to how he regarded such
information as he had; and determine whether he had knowledge of the facts by
reason of his understanding of the information. The section, it is to be
emphasised, attaches consequences to the having of knowledge which depends upon
information and understanding. It does not depend upon the character of the
plaintiff with reference, for example, to how vindictive or forgiving he may be
with reference to an injury done, nor whether he is acquisitive or
self-denying, or long suffering or self-pitying. Such attributes, when
demonstrated, may be of assistance in judging the probability of conduct or the
reliability of assertions but they do not determine whether a plaintiff has
knowledge.
There is a
further passage which is of relevance, but which I think I need not read in
extenso, beginning at p795F and going over to p796A, and a further passage
which I should quote, at p796E–H:
It is to be
noted that a firm belief held by the plaintiff that his injury was attributable
to the act or omission of the defendant, but in respect of which he thought it
necessary to obtain reassurance or confirmation from experts, medical or legal,
or others, would not be regarded as knowledge until the result of his inquiries
was known to him or, if he delayed in obtaining that confirmation, until the
time at which it was reasonable for him to have got it. If negative expert
advice is obtained, that fact must be considered in combination with all other
relevant facts in deciding when, if ever, the plaintiff had knowledge. If no
inquiries were made, then, if it were reasonable for such inquiries to have
been made, and if the failure to make them is not explained, constructive
knowledge within the terms of section 14(3) must be considered. If the
plaintiff held a firm belief which was of sufficient certainty to justify the
taking of the preliminary steps for proceedings by obtaining advice about
making a claim for compensation, then such belief is knowledge and the limitation
period would begin to run.
Last, I would
make reference to a single sentence at p799B where the court said:
What is
required is knowledge of the essence of the act or omission to which the injury
is attributable.
In arguing
this appeal for the plaintiffs Mr Rupert Jackson QC has founded his submissions
on two limbs. First, that the plaintiffs did not know the material facts about
the damage until after June 28 1988 and, second, that they did not know all the
facts mentioned in section 14A(8) until after June 28 1988. He submits, quite
correctly, that it is enough for him to succeed on either of these limbs.
So far as the
damage issue is concerned, Mr Jackson submits that the plaintiffs before June
28 1988 had no sufficient knowledge that ‘Gentians’ was a Woolaway house, that
by reason of its construction it was defective in that its rear walls and gable
walls were liable to fail prematurely and that they would be unable to sell at
a proper price. There was evidence, in particular given by Mrs Spencer-Ward, that
the plaintiffs’ house did not look like a Woolaway house and that she was
uncertain whether indeed it was a Woolaway house, that no defects were
apparent, that no expert advice had been given and that she and her husband
wished for expert examination because they needed to be sure that it was a
house of the type Mr and Mrs Clements had told them theirs was. It was further
urged that there had previously been no difficulty in selling houses of this
kind until the Clements’ unhappy experience in the market and at this stage —
ie in June 1988 — the plaintiffs did not know if they could sell at a good
price or not.
Mr Roger
Hetherington, for the defendants, submits that the answer to that submission
essentially rests on Mr Spencer-Ward’s letter of June 27. That letter asserted
that the house was of Woolaway construction. It mentioned that the
concrete might be suspect. It said that the effect of its construction was to
make it worth at least £30,000 below the going market rate and that their
neighbours had already had to withdraw their house from the market because they
were unable to sell at an acceptable price. The plaintiffs’ riposte is that the
letter was written in terms of somewhat exaggerated confidence, suggesting
certainty on matters about which in truth they felt uncertain in order to
provoke a response from the building society.
I would
readily accept that the plaintiffs had no motive to understate their complaint
in any way or to minimise their grievance. The fact, however, is that the
letter was written in unqualified terms and shows that the plaintiffs were in
possession of the essential factual material which they needed to seek legal
advice and mount an action if so advised. Of course it may be that for the
purpose of the action the plaintiffs would have needed expert evidence to show
that theirs was a Woolaway house, and no doubt they would also have needed
expert evidence to show why Woolaway houses fetched less than the market price.
The plaintiffs did, however, have the hard evidence of their neighbours’
experience in trying to sell a house which was apparently indistinguishable
from their own. Bearing in mind the test propounded by Lord Donaldson of
Lymington MR in the passage which I quoted at p443E of his judgment in Halford
v Brookes, the plaintiffs did not ‘know for certain and beyond
possibility of contradiction’ that their complaint was sound, but they did
‘know with sufficient confidence to justify embarking on the preliminaries to
the issue of a writ, such as submitting a claim to the proposed defendant,
taking legal and other advice and collecting evidence’. The proof of that is
that their letter of June 27 to the Cheltenham & Gloucester Building
Society did give an outline of their claim and can almost be read as making a
claim against the society as the employers of the allegedly negligent valuers.
Certainly in my judgment, again applying the language of Lord Donaldson, the
plaintiffs at that stage had a ‘reasonable belief’ in the truth of the matters
which they were asserting in the letter.
It is then
argued — and this is Mr Jackson’s second limb — that the plaintiffs had
insufficient knowledge of the facts mentioned in section 14A(8), ie the facts
relevant to liability. There is, of course, no doubt but that before June 28
the plaintiffs knew the identity of the defendants because they had been given
that information in the letter of June 23, which was received the following
day. Did they therefore know that the damage was attributable in whole or in
part to an act or omission on the part of the defendants alleged to constitute
negligence? The act or omission alleged to constitute negligence was the
failure to observe and report the fact that the plaintiffs’ was a Woolaway
house and also a complaint that the defendants valued the house at a level well
above the appropriate value taking account of its substandard Woolaway
construction. This was plainly appreciated by the plaintiffs on June 27 when
they wrote their letter, because this was the subject of express reference in
the letter. Plainly the damage which the plaintiffs believed themselves to have
suffered was attributable to that. They fully appreciated the causal link and
the basis of their complaint really was that, if the report had exposed the
fact that this was a Woolaway house and disclosed its depreciated value in the
market, the plaintiffs would either not have bought at all or, if they had
bought, would have bought at a very much reduced price and in either of those
events they would have suffered no loss. In my judgment, therefore, the
plaintiffs knew by June 28 1988 all the essentials they needed to know.
Mr
Hetherington submits that in essence this is a simple, straightforward case and
that the learned recorder was right to treat it as such. I agree. It is, I
think, necessary that issues on this section should be approached in a broad
common-sense way, bearing in mind the object of the section and the injustice
that it was intended to mitigate. There is a danger of being too clever and it
would usually be possible to find some fact of which a plaintiff did not become
sure until later. It would be a pity if a desire to be indulgent to plaintiffs
led the court to be unfair to defendants. In my judgment, the plaintiffs’
letter of June 27 shows that they knew all the facts they needed to know to
take advice and put proceedings in train. I therefore conclude that the
defendants are entitled to rely on section 2 of the 1980 Act and that the
plaintiffs cannot defeat that defence by reliance on section 14A.
It follows
that I would dismiss this appeal.
Agreeing, Leggatt LJ said: I add only my
tribute to the argument of Mr Hetherington for the respondents. In this court
preciseness such as his is as effective as nowadays it is rare.
Waite LJ also
agreed and did not add anything.
Appeal dismissed.
