Period of limitation — Purchase of home after satisfactory surveyor’s report prepared for building society — Intention to sell — Plaintiffs told by neighbours that property of a particular construction rendering it below market value — Whether knowledge sufficient to enable time to run against the plaintiffs — Preliminary issue decided in favour of defendant surveyors — Plaintiffs’ appeal dismissed
In about 1956 a house, Gentians, was built at Staplehay, Taunton, Somerset. In March 1984 the defendants surveyed the house, on behalf of Cheltenham & Gloucester Building Society, for the plaintiffs who wished to buy subject to a satisfactory surveyors’ report. The plaintiffs obtained a £22,000 mortgage, advanced by the building society against a purchase price of £43,000. In 1988, they decided to sell their house. Estate agents valued the property at around £160,000.
They then talked to their neighbours, Mr and Mrs C, who said that they were having problems selling their house which was the same type of construction as that of the plaintiffs, namely of “Woolaway construction” and made of concrete sections. On June 27 1988, the plaintiffs wrote to the building society, setting out the position and stating that the surveyor’s valuation report had been inaccurate and misleading. There was no mention of the fact that it was of a Woolaway construction. They issued a writ on June 28 1991, ie three years and one day after their letter, setting out the particulars of negligence. The defendants relied on the Limitation Act 1980 while the plaintiffs relied on extension of time, ie six years, under the Latent Damage Act 1986, which introduced section 14A into the 1980 Act. At first instance on a preliminary issue, on the basis of the letter of June 27 1988, it was held that they had the requisite knowledge to start time running against them so that the three-year rule applied, with the cause of action accruing from that date. The plaintiffs appealed.
Held The plaintiffs’ appeal was dismissed.
1. For the purposes of establishing when a cause of action accrued under the Limitation Acts, the issues should be approached in a broad common-sense way. The question of the knowledge required for the purposes of the Limitation Acts arose when the person’s state of mind was sufficiently certain, or would have been had he acted reasonably to acquire knowledge from the facts, so that he was justified in taking preliminary steps for the institution of legal proceedings against the person responsible for the damage. That was to be judged from the factual context of the case and the subjective characteristics of the plaintiff. The knowledge was no more than knowing the essence of the act or omission to which the injury was attributable even though there was need for greater detail to prove negligence or breach of duty at a later stage: see Nash v Eli Lilly & Co [1993] 1 WLR 782; also Halford v Brookes [1991] 1 WLR 428.
2. In the present case, it was argued for the plaintiffs, inter alia, that when they wrote their letter they did not know for certain that their complaint was sound.
3. However, they did know enough to embark on preparations for a claim and at that stage had a reasonable belief in the truth of the matters that they asserted in their letter, ie they knew all the essentials that they needed to know in the context of the case.
Rupert Jackson QC and Malcolm Stitcher (instructed by Winter-Taylors, of High Wycombe) appeared for the plaintiffs; Roger Hetherington (instructed by Batten & Co, of Yeovil) appeared for the defendants.
