Section 32 of Limitation Act 1980 – Solicitor faced with conflict of interest – Defendant solicitors acting in claimants’ purchase of paddock – Paddock unusable without access right over adjacent property belonging to third party – Defendants allowing purchase to proceed despite inconclusive reply to inquiries as to access – Defendants subsequently acting for claimants in unsuccessful litigation with third party – Claimants bringing negligence claim nine years after purchase – Whether start of limitation period postponed because of defendants’ deliberate concealment of relevant facts – Whether necessary to show that defendants aware of consequences of concealment – Limitation defence rejected
For a period of two years before the events in dispute, the claimants rented a paddock from H, who also owned a cottage. The cottage and the paddock were separated by a farm that gave access to a road. The farm belonged to a company. In June 1987 the claimants instructed the defendant solicitors to act for them in the purchase of both the cottage and the paddock. In response to the defendants’ inquiry relating to access, H’s solicitors stated: “The Vendors believe that access from the road coloured brown [the farm] to the paddock is a public footpath”. In a letter dated 3 July 1987, the defendants informed the claimants that such access was available. Completion took place on 5 May 1988, following which the claimants built two stables on the paddock and began work on the construction of a barn.
In January 1992 the claimants informed the defendants that the company disputed their right to use the farm to access the paddock. The defendants, having learned from the council that no public right of way existed, advised the claimants that they had a strong case for claiming a private right of way based upon prescription or the assertion of a way of necessity. During February and March 1992, the defendants corresponded with the company’s solicitor, but failed to persuade it that such a claim could be asserted. On 7 May 1992 the defendants wrote to the claimants inviting them to consider instructing another solicitor should they have any qualms about the defendants continuing to act for them. In April 1993 the claimants, still using the defendant solicitors, brought proceedings against the company. In September 1994 the claimants consulted their present solicitor, who learned that the action against the company had been automatically struck out in the previous month for want of prosecution.
In March 1998 the claimants brought the instant proceedings for negligence and breach of contract, contending, inter alia, that any defence based upon the Limitation Act 1980 would founder on section 32 of the Act, which applies where “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant”. The defendants denied any such concealment.
Held: Judgment was given for the claimants.
1. Subject to any possible defence under the 1980 Act, the claimants had established that the defendants had failed to exercise proper skill and care when attending to the conveyance of the two properties.
2. The limitation defence failed. With regard to section 32 of the Act, it was no answer that, upon becoming aware of the adverse claim made by the company, the defendants had not appreciated the legal consequences of their conduct. By subsection (2) of section 32, the deliberate commission of a breach of duty in circumstances where it is unlikely to be discovered for some time “amounts to” deliberate concealment of the facts involved in that breach. So long as the acts amounting to such a breach were intentional, it was immaterial that the defendants were unaware of their legal consequences: see Brocklesby v Armitage & Guest [2001] 14 EG 150, as applied by Laddie J in Liverpool Roman Catholic Archdiocesan Trustees Inc v Goldberg (No 1) [2001] 1 All ER 182. Until the making of the claim by the company, the relevant breach was the failure to inform the claimants that the assumed right of access had not been properly investigated. Thereafter, the defendants, having discovered an act or omission that would justify a claim against them, had failed to advise the claimants, in breach of the duty to be found in para 13.04 of the Law Society’s Guide to the Professional Conduct of Solicitors (1990 ed), to seek independent advice, and to cease to act if the claimants refused to seek such advice.
The defendants derived no assistance from Foreman v O’Driscoll & Partners [2000] Lloyd’s Rep PN 720, which was distinguishable on the facts and, in parts, inconsistent with the greater weight of authority cited by the claimants: Sheldon v RHM Outhwaite (Underwriting Agencies) Ltd [1995] 2 All ER 558 considered.
Robert Denman (instructed by Stone Odell Frankson, of Banstead) appeared for the claimants; Graeme McPherson (instructed by Thomson Snell & Passmore, of Tonbridge) appeared for the defendants.
Alan Cooklin, barrister
