Webster v Cooper & Burnett

For limitation purposes, a claimant may have constructive knowledge of facts observable or ascertainable from a straightforward document which she might reasonably have been expected to read. A person of ordinary intelligence who signs such a document cannot ordinarily avoid responsibility for its contents by choosing not to read it, absent misleading or concealment. Earlier inadequate legal advice does not remove responsibility to read a later clear acknowledgement. The negligence action was therefore statute-barred under section 14A(10) of the Limitation Act 1980.

Caroline Rose Webster sued Cooper & Burnett for professional negligence arising from advice allegedly given, or not given, when she executed an all-moneys mortgage in favour of the National Westminster Bank on 1 December 1983. Carnwath J found that the solicitor had failed adequately to advise her that the charge was wider than required for the Marbella loan, but held that the claim was statute-barred because she had constructive knowledge from an acknowledgement signed on 14 December 1987.

The negligence finding was not challenged on appeal. The issue was whether the 1987 acknowledgement gave Mrs Webster constructive knowledge under section 14A of the Limitation Act 1980, despite her failure to read it and her reliance on the earlier position.

1. Appeal dismissed. The respondent’s challenge to the negligence finding had been abandoned, leaving only limitation for determination.
2. Under section 14A(10) of the Limitation Act 1980, the question was whether Mrs Webster might reasonably have been expected to acquire knowledge that the mortgage secured all present and future borrowings from facts observable or ascertainable by her.
3. The 14 December 1987 acknowledgement was a straightforward bank document. Its terms clearly showed that the mortgage secured facilities and collateral liabilities beyond the Marbella loan. A customer receiving such a document could reasonably be expected to read it. Had Mrs Webster read it, she would have understood the all-moneys nature of the charge and acquired the requisite knowledge.
4. The earlier failure to draw the wider scope of the mortgage to her attention did not make it reasonable for her to ignore the later document. Reliance on her husband for business matters did not diminish her responsibility towards third parties.
5. The judge was entitled, and right, to find constructive knowledge from the 1987 acknowledgement. The action was statute-barred. Lord Justice Waller and Mr Justice Jonathan Parker agreed with Lord Justice Swinton Thomas. The order included a section 18 order against the legal aid fund with nil contribution.

• Court of Appeal (Civil Division): Appeal dismissed.
• High Court of Justice, Chancery Division: Carnwath J dismissed the professional-negligence action as statute-barred, having found negligence but constructive knowledge from the 1987 acknowledgement.