Bentleys Stokes & Loweless v Eagle Major Ltd

At the strike-out or summary judgment stage, the court must not conduct a pre-trial trial or assess disputed evidence. A claim should proceed where it is more than fanciful and factual disputes may affect the construction of documents or the parties’ knowledge. Oral evidence should not ordinarily be rejected unless it plainly conflicts with clear documentary evidence or is hopelessly unreliable. The same approach applies when deciding whether a claimant had the knowledge required to invoke a secondary limitation period under Limitation Act 1980, section 14A. Where the parties’ discussions, instructions and understanding require oral evidence, the issue should normally be determined at trial.

The claimant alleged that its solicitors had been negligent and had breached contract when advising on a long lease of land used for a golf club. The dispute concerned a rent review clause which could permit rent to reflect improvements constructed at the claimant’s expense.

Deputy Master Behrens dismissed the defendants’ application to strike out the particulars of claim or obtain summary judgment, and held that the primary limitation period began when the lease was entered into. He granted permission to appeal and permitted a cross-appeal. The claimant abandoned its cross-appeal. The remaining issues were whether the claim was sustainable and whether it was statute-barred, including whether section 14A postponed limitation.

1. The appeal was dismissed. The Deputy Master had correctly refused to strike out the claim or grant summary judgment.
2. Under CPR rule 3.4(2)(b) and rule 24.2, the court was concerned only with whether the claim was abusive or had no reasonable prospect of success. The hearing was not a trial. The court should not assess evidence, resolve disputed factual issues or speculate about document construction where the documents required explanation by witnesses. The claim was entitled to proceed if it was more than fanciful, as explained in Wenlock v Maloney, [1965] 2 All ER 871, Swain v Hillman, [2001] 1 All ER 91, and Three Rivers DC v Bank of England (No. 3), [2001] 2 All ER 513.
3. The correspondence and attendance notes disclosed an arguable case that the rent review provision represented a radical departure from the claimant’s understanding of the bargain. The significance of the parties’ earlier negotiations, the advice given, and the claimant’s understanding could not fairly be determined without evidence at trial.
4. The limitation issue under Limitation Act 1980, section 14A, also depended on disputed questions concerning when the claimant acquired the necessary knowledge. The 1995 valuation and correspondence did not compel the conclusion that the claimant then possessed all material knowledge required to bring a negligence claim. The issue therefore required a full investigation at trial.
5. The authorities Boyce v Rendells, [1983] 268 EG 268, and County Personnel Ltd. v Alan R Pulver & Co., [1987] 1 WLR 916, supported the view that the adequacy and clarity of warnings could not be conclusively determined at this interlocutory stage.

1. High Court (Chancery Division): Bentleys Stokes & Loweless v Eagle Major Ltd, [2003] EWHC 41 (Ch). The defendants’ appeal was dismissed. The claimant’s cross-appeal had been abandoned.
2. Deputy Master Behrens: On 2 August 2002, the application to strike out the particulars of claim or obtain summary judgment was dismissed. The primary limitation period was held to begin when the lease was entered into.