Blakemores LDP v Scott & Anor

For the purposes of section 14A of the Limitation Act 1980, knowledge of a negligent act or omission does not necessarily amount to knowledge of the material facts about the damage. The claimant must know enough about the consequences to lead a reasonable person to regard the damage as sufficiently serious to justify proceedings.

On a summary judgment application, the court may analyse witness evidence but should not reject it without cross-examination merely by preferring a contested interpretation of the pleadings. A default judgment may be set aside despite serious delay where the defendant has a real prospect of defending the claim and the delay is reasonably explained in the context of all the circumstances.

The appellants retained a firm of solicitors in proceedings concerning the registration of land. They alleged that the firm negligently failed to advise them to object to the registration before the applicable deadline. That omission exposed their later application to close the title to a statutory discretion under Schedule 4 to the Land Registration Act 2002.

The firm subsequently claimed substantial unpaid fees. Two appellants brought negligence claims, while a default judgment was entered against the third. The High Court granted summary judgment on the basis that the negligence claims were time-barred under section 14A of the Limitation Act 1980 and refused to set aside the default judgment.

The appeals concerned the permissible assessment of disputed evidence on summary judgment, the knowledge needed to start the section 14A limitation period, the admission of further evidence and the setting aside of the default judgment.

1. The appeals were allowed unanimously. The orders granting summary judgment against the first and third appellants were set aside. The default judgment against the second appellant was also set aside.

2. The judge had misunderstood the pleading by treating a meeting between two solicitors as a meeting involving the appellants. The subsequent witness statement was not inconsistent with the pleading. Although evidence may sometimes be rejected on summary judgment where it is flatly contradicted by unchallenged contemporaneous documents, the court should not conduct a detailed evaluation designed to reject selected evidence without cross-examination. The judge's approach went beyond the proper limits of summary judgment.

3. Under sections 14A(5), 14A(6)(a) and 14A(7) of the Limitation Act 1980, knowledge that the firm had negligently failed to advise that an objection should be filed was not by itself knowledge of the material facts about the damage. The appellants needed to know the consequence of that omission: it exposed their application concerning the land title to an adverse discretionary decision. Without that knowledge, a reasonable person might have no reason to regard the damage as sufficiently serious to justify proceedings.

   The appellants were not experts in the relevant areas of law and could not be assumed to understand those consequences. It was also likely, although the point had not been argued, that section 14A(10) prevented the attribution of knowledge of facts ascertainable only through expert advice because reasonable steps had been taken to obtain such advice. A trial was required to determine when the necessary knowledge had actually been acquired.

4. The additional evidence explaining the second appellant's 36-day delay was admissible. The point had not specifically been raised below, so the approach in Ladd v Marshall was not directly applicable. In any event, the evidence was potentially important, apparently credible and could not reasonably have been directed to an issue which had not then arisen.

5. Under Part 13.3 of the Civil Procedure Rules 1998, the second appellant had a real prospect of successfully defending the substantial fees claim. Applying the three-stage Denton analysis, the delay was serious, but there was a reasonable explanation. Considering all the circumstances, including efficient and proportionate litigation and compliance with the rules, it would be unjust to maintain judgment against him while his co-defendants could pursue the same defence.

1. Court of Appeal (Civil Division): By [2015] EWCA Civ 999, unanimously allowed both appeals, set aside the summary judgments in both actions and set aside the default judgment.

2. High Court, Queen’s Bench Division, Birmingham District Registry: HHJ Simon Brown QC granted summary judgment on the basis that the negligence claims were statute-barred and refused to set aside the default judgment.