Neutral Citation Number: [2014] EW Misc B44
Claim No. 2YN11435
IN THE LIVERPOOL COUNTY COURT

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35 Vernon Street
Liverpool
Date: Monday, 17th February 2014
Before:
DEPUTY DISTRICT JUDGE SMITH
Between:
PATRICIA GRAVES
Claimant
-v- 
BRADFORD & BINGLEY PLC
Defendant
Counsel for the Claimant:	MR. ANDREW McGEE
instructed by Wixted & Co Limited
Counsel for the Defendant:	MR. JAMES MACDONALD
instructed by Squire Sanders (UK) LLP
JUDGMENT APPROVED BY THE COURT
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APPROVED JUDGMENT
1.	
B

THE DEPUTY DISTRICT JUDGE: This is an application by the defendant for a summary judgment on the basis that the claimant has no real prospects of success in this action. In the alternative, it is an application under CPR 3.4(2) on the basis that it is alleged that the claim fails to disclose any reasonable grounds for bringing the claim or is an abuse of process.
2.	
C

The brief factual background to this dispute is largely uncontested. The claimant brings a claim against Bradford & Bingley plc for alleged misrepresentation, breach of statutory duty and negligence. The claim arises out of the selling by the defendant to the claimant of an RSA with profits bond that subsequently became “Phoenix Life Limited” with profits bond in April 1999. The claimant invested £10,000 with the defendant through its Liverpool branch and encashed the bond on 28th April 2009, realising the sum of £11,936. That is a profit of £1,936 over ten years.
3.	
D

In essence, the claimant’s complaint is that she was mis-sold this policy; she wanted a five year low risk policy, whereas in the event she has been sold a ten year high risk policy and she claims damages estimated to be in the region of £5,000 to £10,000 according to the statement of case. The essence of the defence is that the claim is statute-barred and/or it is an abuse of process in that, in particular, a reasonable offer had been made prior to proceedings being issued and the action has proceeded simply for the purpose of pursuing a claim for costs. That is alleged to be sufficient to constitute abuse of process. (See the decisions in Jameel -v- Dow Jones & Co and Binns -v- Firstplus Financial Group Plc).
4.	
E

In this application before the court today there are two issues for the court to decide; first, the limitation point and, secondly, whether the action as a matter of law is an abuse of process anyway in the light of what is said to be a reasonable offer having been made to the claimant prior to commencement of proceedings.

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5.	The relevant periods for each of the alleged causes of action are six years from the

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specific date on which the action occurred (see ss .2,5 and 9 of the Limitation Act 1980). So far as the limitation point in relation to any purely contractual claims is concerned, it is conceded by the claimant that this part of the claim is time-barred. This is expressly conceded in the witness statement of Timothy Hampson dated 10th February 2014. The claimant, nonetheless, seeks to circumvent that difficulty and raises three additional points. What the claimant says is that a later limitation period should be applied in relation to any tortious claims and what is said and advanced on behalf of the claimant is that her loss was not suffered in 1999 but at a later date and that her loss was only contingent until that stage. This, in my view, is incorrect in law and is contrary to a number of leading authorities, in particular, the cases of SHORE v. SEDGWICK FINANCIAL SERVICES LIMITED and PEGASUS MANAGEMENT HOLDINGS LIMITED v. ERNST & YOUNG. From those authorities, it is clear that the client sustains damage when the transaction takes place; in other words, any mis-selling occurs at the point of actual investment in any mis-sold transaction.

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The second argument advanced on behalf of the claimant is that the claim is still not statute-barred because the defendant had an alleged ongoing duty towards the claimant during the lifetime of the Bond in the sense of reviewing the investment and advising as time passed. On the facts of this case there is no evidence before the court that there was an ongoing duty on the part of the defendant. There is nothing in the documentation in the bundles before me or in any of the witness statements and, in particular, there is no evidence that the defendant was acting as any form of investment manager. The Conduct of Business Rules and/or Conduct of Business Sourcebook are for guidance only and would only be relevant where a firm advises a client on a continuing basis or acts as “investment manager”. In the absence of any evidence that the Defendant undertook and form of ongoing advisory duty I see no substance in this argument and I reject it entirely.
7.	The claimant, finally, relies upon section 14A of the Limitation Act. What is said, quite candidly, in the claimant’s witness statement is that she visited the defendant’s office in Liverpool in April 2004 for the purpose of withdrawing something from her investment but she was advised and only then appreciated that the money was locked up in the sense that she had purchased a ten year bond and could not make any withdrawals from it. She then encashed the bond some ten years later, that is on 28th April 2009.
Although disappointed at the performance, it appears that she was not unduly concerned according to her evidence and it was not until approximately mid to late 2011, having read a number of newspaper articles about the mis-selling of investment products, that she came to have real concerns and was “completely shocked”, to use her words.
8.	In applying section 14A it seems clear to me that the court is entitled to take into account not only actual knowledge but also constructive knowledge, and I take into account the visitation to the branch in April 2004. Even if alarm bells had not been set running at that stage on the part of the claimant, when she received a return of only about two per cent on 28th April 2009 that, in my view, would be sufficient to require a reasonable person to dig deeper, and, in particular, to ask such enquiries and, if appropriate, to take appropriate advice. I do not accept that it was reasonable for an investor to wait some two years later that is until 2011, to take advice from solicitors and to review matters simply by the publications in newspapers. At each of the above stages, sufficient facts would have been available to a person acting reasonably to make it clear that the product sold was not a cautious 5-year product but a higher-risk 10-year Bond.
9.	The view I take, therefore, is that, as confirmed to some extent by the judgment of Mr. Recorder Davies in the Ginn -v- Firstplus Financial Group Plc case in Birmingham. The claimant, in my view, should reasonably have been aware of all material facts at the very latest at the time when she encashed the bond in April 2009 and should have taken appropriate advice at that stage. The court is entitled to adopt a common sense approach and apply the test of constructive knowledge. I do not accept the claimant’s attempt to rely upon the special time limit under S.14A of the Limitation Act 1980 in relation to any claim in tort. It is clear from S.14A(9) that it is irrelevant that the Claimant may not have immediately realised that she may have a cause of action in negligence. Under S14A, the relevant limitation period would have expired in April 2012 even on the most generous interpretation. In the event, proceedings were not issued until 6th November 2012.

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10.	The secondary point upon which the application to strike out is brought is that this

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action constitutes an abuse of process. The defendants rely in particular upon an offer which was made on 11th September 2012 in the sum of £4,836.94 by the FOS. That offer was not accepted and it is not clear what happened after it had been made. What is said by the defendant’s counsel is that it is an abuse of process, the action has simply been brought to pursue questions of costs. That may or may not be right but in the light of my determination on the limitation points it is unnecessary for me to address this secondary argument any further at this stage. To be clear, I am striking the action out on the basis that any contractual or tortious claims are statute-barred, in my judgment. I make no further comment or finding in relation to the argument that this action constitutes an abuse of process.

B

(End of Judgment)

C

(Discussions/proceedings follow relating to costs)

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