Cave v Robinson Jarvis & Rolf

The House of Lords considered the construction of section 32 of the Limitation Act 1980, in particular subsection (2). The court held that the phrase 'deliberate commission of a breach of duty' in section 32(2) requires that the defendant knew he was committing a breach of duty (or intended to commit it) — mere intentional conduct which is later found to be negligent does not suffice. Accordingly, section 32(2) does not convert every intentional act which turns out to be a breach of duty into deliberate concealment for the purposes of section 32(1)(b). The court criticised and disapproved the contrary construction in Brocklesby v Armitage & Guest and Liverpool Roman Catholic Archdiocese Trustees Inc v Goldberg, as subverting the policy of the Limitation Acts by denying an effective time bar to professionals who did not act dishonestly or with knowledge of their breach.

The claimant instructed solicitors to draft and complete a document granting long-term mooring rights. The transaction completed in March 1989. In February 1994 the claimant was informed by receivers that the mooring rights were no longer exercisable. After unsuccessful attempts to obtain answers from the solicitors during 1995-1996, the claimant issued proceedings in January 1998 alleging negligent drafting and failure to register rights.

The defendants pleaded limitation. The claimant relied on section 14A of the Limitation Act 1980 and, centrally for this appeal, on section 32(1)(b) and section 32(2) of the 1980 Act, pleading that the solicitors had 'deliberately' committed the negligent drafting in circumstances in which the breach was unlikely to be discovered and that, therefore, time did not begin to run until discovery.

The legal issue was the proper construction of section 32(2): whether 'deliberate commission of a breach of duty' means any intentional act which turns out to be a breach (so that lack of awareness that the act was legally wrongful is irrelevant), or whether it denotes a deliberate or intentional breach of duty in the sense that the actor knew or intended that he was committing a breach. The House applied the method of statutory construction endorsed in Sheldon v Outhwaite and concluded that the statutory language is clear: subsection (2) is directed to deliberate or intentional breaches known to the actor, not to inadvertent or merely negligent acts that were intentional in the physical sense.

The court therefore found the two-man Court of Appeal decision in Brocklesby (and the subsequent Goldberg decision which followed it) to have been wrongly construed to the extent that they treated any intentional act later found to be a breach as amounting to deliberate concealment. The consequence for the present pleadings was that the claimant's 'Brocklesby disclaimer' could not sustain a section 32(2) postponement. The House allowed the appeal on that point. The claimant nonetheless recovered an agreed sum under a conditional compromise reached between the parties, but less than would have followed had the Brocklesby construction been upheld.

Appeal allowed. The House held that section 32(2) of the Limitation Act 1980 must be read as requiring a deliberate commission of the breach of duty in the sense that the defendant knew or intended that he was committing the breach; mere intentional conduct which is later held to be negligent does not amount to 'deliberate concealment' under section 32(1)(b). The Court therefore disapproved the construction adopted in Brocklesby v Armitage & Guest and Liverpool Roman Catholic Archdiocese v Goldberg.

First instance: trial judge Newman J (High Court) held section 32(2) applied and dismissed the limitation defence. Court of Appeal (Potter, Sedley and Jonathan Parker LJJ) [2002] 1 WLR 581 upheld the claimant, treating itself as bound by Brocklesby v Armitage & Guest [2002] 1 WLR 598. The appeal to the House of Lords was allowed: [2002] UKHL 18.