Munroe K Ltd & Anor v Bank of Scotland Plc

For limitation purposes, a claimant need not identify every particular of an alleged breach before time begins to run. The relevant question is when the claimant knew facts showing that the damage was attributable to the act or omission alleged to constitute negligence. A later-discovered evidential detail does not postpone limitation where the claimant already knew of the material breach and damage. A contractual standstill covering claims connected with specified sales does not ordinarily extend to claims concerning a later cancellation or partial termination.

The claimants alleged that the defendant bank negligently advised them about three interest rate swaps and failed to disclose its potential future exposure calculation. The bank sought summary judgment or strike-out on the ground that the limitation period had expired.

A separate issue concerned claims arising from a 2010 reduction of the swaps. The parties’ 2015 Standstill Agreement covered claims arising out of or in connection with specified 2006 and 2008 sales. The court had to determine when limitation began and whether the 2010 reduction fell within the contractual standstill.

1. The Bank was entitled to summary judgment on part of the claim.

2. Under Limitation Act 1980, section 14A, relevant knowledge concerns the material facts about the damage and the facts showing that the damage was attributable to the act or omission alleged to constitute negligence. By 2009 the claimants knew that they had a significant liability under the swaps and that they had not been advised or informed of that potential liability.

3. The alleged breach was the failure to advise or inform the claimants of their potential liability when the swaps were sold. The PFE Calculation was merely one means by which that liability might have been explained. Its later discovery did not create a new cause of action or postpone limitation. Section 14A did not extend the limitation period until every last particular of breach had been identified, consistently with Haward v Fawcetts [2006] 1 WLR 682.

4. The claim concerning the 2010 reduction fell outside the Standstill Agreement. Although “in connection with” was broad, the relevant claims had to be connected with the sales themselves. The cancellation and partial termination in 2010 were not sales.

First-instance decision. No prior or appellate decision is stated in the judgment.