(1) WLADYSLAW BABICKI (2) IRENA BABICKI v ROWLANDS (a firm)

Under section 14A(7) of the Limitation Act 1980, the question is when the claimant had facts about the damage which would lead a reasonable person to consider proceedings sufficiently serious. The test is objective but fact-sensitive. Receipt of a defective document does not necessarily reveal separate defects or fix the limitation starting date. Actual knowledge and subsequent investigation of the loss are distinct matters. An appellate court should not disturb the judge’s factual conclusion unless the evidence was misapplied.

The claimants purchased premises intended to operate as a hotel and later sued their former solicitors for failing to discover defects in the fire certification, planning permission and building-regulation compliance. The proceedings were issued in August 1998, more than six years after the purchase. The defendants argued that the claim was statute-barred under section 14A of the Limitation Act 1980, relying particularly on the claimants’ receipt of the fire certificate. Holland J decided the preliminary limitation issue on 20 December 2000 and rejected that contention. The central issue was whether the claimants had the requisite knowledge of material facts about the damage at an earlier date.

Lord Woolf CJ delivered the judgment. Simon Brown LJ and Buxton LJ agreed. The appeal was dismissed, with costs subject to detailed assessment.

1. Section 14A(7) of the Limitation Act 1980 requires an objective assessment of whether the known facts about the damage would lead a reasonable person to regard it as sufficiently serious to justify proceedings. The court must reach a factual conclusion about the reasonable person’s reaction, applying the statutory language. The assumed defendant does not dispute liability and can satisfy a judgment.
2. Although the claimants should have read the fire certificate, its contents did not necessarily disclose the relevant damage. The certificate was only one factor. The vendor had represented that full certification existed, a liquor licence had been issued, and repeated fire-authority inspections had produced no adverse comment. In that context, a reasonable person might seek a proper or amended certificate rather than identify negligence and commence proceedings.
3. Knowledge of an inaccurate fire certificate did not necessarily put the claimants on inquiry as to separate defects in planning permission or building-regulation compliance. The judge was entitled to find that the relevant damage emerged only after the further investigations following November 1995.
4. The court declined to place a gloss on section 14A based on the guidance in North Essex District Health Authority v Spargo [1997] 8 Med LR 125, which concerned section 14 rather than section 14A. The statutory test was distinct from the later process of investigating and formulating the damage alleged.
5. There was one cause of action, despite different heads of damage. The claimants were therefore entitled to proceed with the whole claim or with no part of it. Holland J’s factual conclusion could not be challenged in the absence of a misapplication of the evidence.

1. Court of Appeal (Civil Division): Appeal against the preliminary limitation ruling dismissed with costs subject to detailed assessment.
2. High Court, Queen’s Bench Division: Holland J, on 20 December 2000, dismissed the defendants’ contention that the negligence claim was statute-barred.