Trilogy Management Ltd v Harcus Sinclair (A Firm)

On an application under CPR r 3.4 and CPR r 24.2, the court must decide whether the claim has a realistic prospect of success without conducting a mini-trial. It may determine a short point of law where the evidence is sufficient, but should allow a trial where fuller factual investigation could affect the outcome.

Deliberate concealment under section 32(2) of the Limitation Act 1980 requires a deliberate breach committed in circumstances in which discovery is unlikely for some time. A failure to highlight or draw attention to a change in documents does not meet that test where the change was available to the claimant and its advisers. Constructive knowledge under section 14A includes knowledge reasonably obtainable from observable facts and appropriate expert advice.

The defendant solicitors applied to strike out the claimant’s amended pleadings or obtain reverse summary judgment. The claim alleged that the defendant had inserted words into a company’s articles without its client’s instructions, causing loss to trusts associated with the claimant.

The defendant argued that no relevant duty of care was owed and that the claim was statute barred. The court addressed limitation first. It considered whether sections 32 and 14A of the Limitation Act 1980 postponed or extended the limitation period, having regard to when the claimant could reasonably have discovered the alleged lack of instructions.

1. Application and summary judgment test. The application was determined under CPR r 3.4(2)(a) and CPR r 24.2(a)(i). Applying the principles in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), the court considered whether the claim was realistic rather than fanciful, avoided a mini-trial, considered evidence reasonably expected at trial, and recognised that a short legal or construction point may be decided summarily where the evidence and opportunity for argument are sufficient.
2. Section 32. Under section 32(2) of the Limitation Act 1980, deliberate commission of a breach in circumstances unlikely to lead to discovery for some time may amount to deliberate concealment. Following IT Human Resources plc v David Land [2014] EWHC 3812 (Ch), the relevant circumstances are those surrounding the alleged breach itself. Later failures to answer enquiries do not constitute concealment of that earlier breach.
3. The alleged insertion was visible in a draft circulated to numerous lawyers and was available before the documents were signed. The claimant’s representatives could have identified it and asked the relevant directors about instructions. The court held that there was no realistic prospect of proving deliberate concealment under section 32(1)(b), as extended by section 32(2).
4. Section 14A. The claimant knew of the damage by September or December 2004. It could reasonably have discovered the alleged lack of instructions earlier through the draft documents, discussions with the directors, and documents disclosed in 2011. Constructive knowledge therefore arose before the period relied upon by the claimant. The court considered the approach in Kays Hotels Ltd (t/a Claydon Country House Hotel) v Barclays Bank plc [2014] EWHC 1927 (Comm), but found that the evidence here left no factual issue requiring trial.
5. The claim was statute barred. Summary judgment was entered for the defendant. The court did not need to decide whether the pleaded duty of care existed.