Booker & Anor v RT Financial Services UK Ltd

On an application based on limitation, strike out may be appropriate before disclosure or a defence where the relevant facts are sufficiently clear and the issue can fairly be determined summarily. Under Limitation Act 1980, section 14A, knowledge concerns the primary facts, including the defendant’s identity and the real possibility that the defendant’s acts caused the loss. Knowledge of the correct legal inference is unnecessary. Section 32 is construed narrowly. Deliberate concealment must concern a fact relevant to the claimant’s right of action, not a fact which merely improves the prospects of success or affects a legal conclusion. A claimant who knows the primary facts cannot render them concealed by later misunderstanding responsibility or being encouraged to pursue another party.

The claimants brought proceedings against a financial services company alleging negligent advice, breach of contract and breach of statutory duty concerning Japanese yen mortgage transactions and related investments made in 2007. The defendant applied for summary judgment under Part 24 of the CPR or, alternatively, to strike out the claim under rule 3.4, relying principally on limitation.

The claimants argued that sections 14A and 32 of the Limitation Act 1980 postponed or extended time, and that the application was premature because pleadings were incomplete and disclosure had not occurred. The central issues were whether the claimants had the knowledge required by section 14A before 9 March 2012 and whether facts had been deliberately concealed for the purposes of section 32.

1. Disposition. The application to strike out succeeded because the claim was barred by limitation. The court did not separately determine the Part 24 summary judgment application.
2. Prematurity. Under rule 3.4 of the CPR, the court assumed that the pleaded facts could be proved. Nevertheless, limitation was capable of being decided fairly at this stage. The evidence and issues were within a relatively small compass, and the claim was simpler than the financial-product claim considered in Kays Hotel Limited v Barclays Bank [2014] EWHC 1927 (Comm). That case and Iron Trade Mutual Insurance Co Limited & Ors v JK Buckenham Limited [1990] 1 All ER 808 established that the appropriateness of summary determination in a limitation case is fact-sensitive; the present case was sufficiently clear.
3. Section 14A. The relevant question was when the claimants first knew the primary facts sufficient to justify investigating a claim, not when they formed the correct legal view. Applying Haward v Fawcetts [2006] 1 WLR 682 and Shore v Sedgwick Financial Services Limited [2009] BLR 42, knowledge required awareness of the material damage, the acts or omissions forming the basis of the complaint, the defendant’s identity, and a real possibility that those acts caused the damage.
4. The claimants knew by March 2012, and materially earlier, that losses had occurred, that the defendant had advised them, and that the transactions were the source of the losses. Their uncertainty about the legal responsibility of the defendant did not postpone time. Section 14A therefore did not assist them.
5. Section 32. Following Arcadia Group Brands Limited v Visa Inc [2015] BLR 1362 and the principles derived from Johnson v Chief Constable of Surrey, section 32(1)(b) was narrowly construed. A relevant fact was one without which the cause of action was incomplete. The claimants knew who had advised them, what advice had been given, their reliance, and their loss. Any mistaken legal inference about whom to sue was not a concealed primary fact.
6. The reasoning in Parkin v Alba Proteins Limited [2013] EWHC 2036 (QB) was distinguishable because that case concerned concealment of the defendant’s identity as a necessary primary fact. Sheldon v Outhwaite [1995] 2 All ER 558, applied in Bocardo SA v Star Energy [2008] EWHC 1756 (Ch), established that known primary facts cannot become unknown through later concealment. JD Wetherspoon plc v Van Der Berg & Co Limited [2007] EWHC 1044 (Ch) was distinguishable because it involved concealment of a fiduciary’s undisclosed connection with property sellers.
7. The fraud limb of section 32(1)(a) could not apply because the claim was not itself based on fraud. Permission to appeal was refused, although the claimants remained free to seek permission from the appellate court.