Davy v 01000654 Ltd

On a summary judgment application, fact-sensitive limitation issues may be decided on paper where the evidence discloses no material dispute of primary fact and the claimant has no realistic prospect of success. In negligence claims concerning unsuitable investments, the cause of action ordinarily accrues when the claimant enters the flawed transaction, not when the loss is later quantified. Under section 14A of the Limitation Act 1980, knowledge requires sufficient awareness of the essential factual substance of the complaint and its attributable damage to make further investigation reasonable; knowledge that the conduct was legally negligent is unnecessary. Section 32 requires deliberate concealment, or deliberate breach in circumstances making discovery unlikely, and is not engaged by ordinary negligence alone. Delay will not ordinarily constitute abuse where the relevant procedural steps and stays were consensual or ordered by the court.

The claimant sought damages for alleged negligence, breach of contract and statutory breaches arising from advice given in 2001 which led him to transfer his British Airways occupational pension into a personal pension with Skandia Life. He also pleaded a loss-of-chance claim arising from further advice in 2006. The claim was issued in January 2015 after the defendant company had been dissolved and later restored to the register.

The defendant applied for strike-out under CPR 3.4 and summary judgment under CPR 24, relying principally on limitation. The issues were whether the claimant could rely on the alternative limitation period under section 14A or deliberate concealment under section 32 of the Limitation Act 1980, and whether the delay amounted to abuse of process.

1. Summary judgment procedure. The court could determine the application on paper. The evidence contained substantial contemporaneous documentation and no material dispute of primary fact concerning events capable of triggering section 14A knowledge. The court had to avoid a mini-trial, but should test whether the claimant’s case was realistic rather than fanciful.
2. Strike-out and abuse. The Particulars of Claim disclosed a viable cause of action. The delay did not constitute an abuse of process. Much of the post-issue delay resulted from consensual stays or court orders, and the claimant had not failed to comply with a relevant order. The defendant’s evidence established prejudice from fading memory, but did not adequately attribute that prejudice to culpable delay by the claimant.
3. Standstill Agreement. The agreement was capable of covering both the claim arising from the 2001 advice and the pleaded 2006 loss-of-chance claim, because the latter claim arose out of or was connected with the 2001 advice. Section 32 did not create a cause of action and therefore did not itself define the agreement’s scope.
4. Section 32. The claimant had to establish deliberate concealment of a fact necessary to plead the cause of action. Ordinary negligence, including a failure to take reasonable care of which the defendant was unaware, did not satisfy section 32(2). The alleged inference from another client’s complaint was impermissible, and the 2006 advice tended to draw attention to investment risk rather than conceal the earlier advice.
5. Section 14A and flawed transactions. The pension transfer was a flawed transaction: the complaint concerned the unsuitable characteristics and risks of the personal pension from inception. The cause of action therefore arose on the transfer date, although the extent of damage might be quantified later. The claimant’s pleaded case showed that, by August 2006 at the latest, he knew that the investment was materially exposed to equity risk, had suffered significant capital loss and was unsuitable for his alleged risk profile. He therefore had no real prospect of proving absence of section 14A knowledge before 17 July 2011.
6. Disposition. The claim was statute barred under both the primary and alternative limitation regimes. Summary judgment was granted for the defendant on the whole claim.

The judgment describes an earlier appeal concerning a limitation direction made during the proceedings, but gives no citation for that decision. This was a first-instance determination of the defendant’s strike-out and summary judgment application.