Dan Stacey in solicitors' negligence decision that clarifies important aspects of Limitation Act 1980 and CPR Part 7
October 2011 - In the recent case of Page v Hewetts [2011] EWHC 2449 (Ch), Susan Prevezer QC sitting as a Deputy High Court Judge (Chancery Division) has held that a claim brought against a legal executive (and the firm of solicitors he worked for) is statute barred.
The case has clarified the law on the deemed date of service of a Claim Form, and the application of ss. 21 and 32 of the Limitation Act 1980.
The claim was for both negligence/breach of contract and the recovery of a secret profit alleged to have been made by the legal executive. Dan Stacey of Hailsham Chambers acted for the successful respondents.
Held, both the common law and equitable claims were statute-barred.
There were three key issues: (1) when the Claim Form was deemed to have been issued; (2) whether any limitation period applied to the equitable claims; (3) on the footing that there had been deliberate concealment, when the Claimant's date of knowledge arose?
First, as to deemed issue of the Claim Form, the decision is of some relevance to all practitioners dealing with the Practice Direction to Part 7 (in particular, CPR 7APD5.1). The scope of the rule (which provides for deemed date of issue to be the date of receipt by the court, if earlier than date of issue) has been clarified. It is not applicable to situations where the Claim Form has been lost but to the standard situation where the Claim Form is brought to court at the last minute, and the court is closed or not in operation because of unforeseeable circumstances such as a strike or bomb threat. The wording "as issued" indicates that it has to be the same document that was received (subsequent issue of a different Claim Form is not covered by the Practice Direction).
Second, the judgment has clarified in what circumstances a fiduciary/solicitor can rely upon s 21(3) of the Limitation Act 1980, the court holding that the subsection does not apply to fiduciaries, such as the legal executive in the present case, which are deemed to be "category two" constructive trustees. It is only a party bringing proceedings against a "category one" trustee who can invoke s 21(1)(b) to the effect that no limitation period applies. The court analysed the case law and the application of the recent Sinclair v Versailles Court of Appeal decision in some detail.
Third, in respect of the date of knowledge issue, the judge held that the Kriti Palm test applied (the question to ask was when the claimants had sufficient knowledge to make out a prima facie case). Applying that test, the date of knowledge for each of the claims (common law and equitable) arose more than 6 years before the date of the issue of the Claim Form.
In the circumstances, the claim was statute-barred.
If you would like any further information in respect of the case and its application, please contact Hailsham Chambers' clerking team T: 020 7643 5000
Read the full Judgment online
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