England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION NEWPORT ISLE OF WIGHT
DISTRICT TREGISTRY
(Mr Justice Newman)

		Royal Courts of Justice Strand, London, WC2A 2LL Tuesday 20th February 2001

LORD JUSTICE POTTER:

INTRODUCTION

1. This appeal raises a question as to the interpretation of the word "deliberate" in s.32(2) of the Limitation Act 1980 and, in particular, whether the decision of this court in Brocklesby –v- Armitage & Guest [2001] 1 All ER 172 ("Brocklesby") is binding upon us. The defendants, a firm of solicitors, appeal from the judgment and order of Mr Justice Newman made on 17 February 2000, by which he resolved a preliminary issue as to limitation in favour of the claimant by deciding that the claimant is entitled to rely on s.32(2) of the 1980 Act to postpone the limitation date otherwise applicable to his claim. He held that the limitation period in respect of the defendant's alleged negligence and/or breach of contract when acting as the claimant's solicitors started to run at the earliest from February 1994, so that the writ in the present action, issued on 16 January 1998, was issued within the period of limitation.

THE BACKGROUND FACTS

2. In about February 1989 the claimant retained the defendants in connection with the sale of land at Ranalagh Works, Fishbourne, Isle of Wight ("the land"). The land was jointly owned by two limited companies, one a company controlled by the claimant and the other a company controlled by his friend, Mr Cooper. At all material times the defendants acted in the sale through Mr Colin Clark who was employed by them. Mr Clark was retained not only to sell the land but to prepare such documents as were necessary to ensure that the claimant and Mr Cooper separately acquired legally enforceable mooring rights for a period of a hundred years over the land being sold. The proposed purchasers of the land were a limited company called Hyde Securities Limited ("Hyde").
3. The relevant transactions took place in March 1989. In relation to the proposed mooring rights, as the judge found, Mr Clark was under a duty (i) to draft such a deed as was necessary to secure mooring rights in favour of the claimant which were legally enforceable for one hundred years and (ii) to register it. It was alleged that Mr Clark failed to do either. Instead of drafting a lease with ancillary easements, he drafted a simple mooring licence. He also failed to effect any registration of the deed which he drew up. In the event the licence drafted and executed by the necessary parties operated at best to confer mooring rights upon the claimant which were enforceable only as a personal obligation of Hyde.
4. In early 1984, Hyde went into liquidation and a Receiver was appointed. Between 1989 and 1994 the claimant had use of his mooring without any difficulty or reason to suspect any negligence on the defendants' part, until the existence of his mooring right was denied by Hyde's receivers, Grant Thornton, in February 1994.

THE JUDGMENT BELOW

5. The judge held that the alleged breaches of duty occurred in circumstances in which it was unlikely that they would be discovered in the sense that unless and until Mr Cave, who had received a copy of the licence agreement, had reason to subject it to the scrutiny of another solicitor in order to verify or question the work done by Mr Clark, it was unlikely that either the drafting error or the failure to register would be discovered. Such reason did not arise until February 1994.
6. Before the judge it was common ground that, unless the claimant could bring himself within the provisions of s.32 of the 1980 Act, his claim in contract was statute barred under s.5. Similarly, his claim in tort would have been barred by s.2 and, although subject to the latent damage provisions of s.14A, it was nonetheless time-barred because the action was not brought within the period of the latent damage extension. The claimant's re-amended reply raised pleas of deliberate concealment on either of two bases: (i) that the defendants did in fact knowingly and deliberately conceal the claimant's right of action without the necessity to rely on the terms of s.32(2) and (ii) that, even if they had no knowledge or intention of concealment, they were nonetheless guilty of deliberate concealment within the meaning of s.32(2) on the grounds that the defendants intentionally committed an act or omission which amounted to a breach of duty in circumstances in which it was unlikely to be discovered for some time. The factual issue in (i), which could only be resolved by evidence or upon agreed facts, was not before the judge and it is no longer pursued. However, issue (ii) was resolved in favour of the claimant, the judge holding that he was bound by the decision and reasoning in Brocklesby to which I will turn in more detail below.
7. S.32 of the 1980 Act so far as relevant, provides:

"(1) …where in the case of any action for which a period of limitation is prescribed by this Act, either – (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or (c) the action is for relief from the consequences of the mistake; the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment, or mistake (as the case may be) or could with reasonable diligence have discovered it ….

(2) For the purposes of sub-section (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty."

8. Mr Davidson QC for the defendants conceded before us that, subject to one particular point, the judge's decision was inevitable in the light of the decision in Brocklesby. In that case, the claimant purchased a property from a company with the aid of a building society loan in 1989. Three months later, he agreed to transfer the money back to the company in consideration for the company obtaining his release from his obligations to the building society. The defendant solicitors were instructed to act for both parties. The claimant executed the transfer, but thereafter the solicitors omitted to complete the transaction by procuring his release from the building society. The claimant did not become aware of this until mid-1992 when so informed by the building society, which later sued him for the balance of the loan. In 1997 the claimant sued the solicitors for negligence, relying on s.32(1)(b) of the 1980 Act and alleging that the solicitors had been guilty of 'deliberate commission of a breach of duty' within the meaning of s.32(2). The claimant did not allege, however, that the solicitors were aware that they were in breach of duty. The solicitors contended (as the defendants before us contend) that s.32(2), when relied on in amplification of s.32(1)(b), requires not only that the act or omission in question should be deliberate, but also that the person committing it should be aware that it amounted to a breach of duty.
9. In considering that submission, Morritt LJ approached the construction of s.32(2) as a straightforward question of statutory construction free of the previous statutory history and without regard to the equitable doctrine of 'fraudulent concealment' or the notion of 'unconscionable conduct'. He did so largely in reliance on a passage from the speech of Lord Browne-Wilkinson in Sheldon –v- RHM Outhwaite (Underwriting Agencies) Limited [1996] AC 102 at 145 where, commenting on the provisions of s.32(1)(b), he stated:

"Even if, contrary to my view, it is legitimate to look at the legislative history, the immediate predecessor of s.32 of the 1980 Act is not s.26 of the 1939 Act but s.7 of the Limitation Amendment Act 1980, an Act which was not drawn to the attention of the Court of Appeal but surfaced for the first time during the argument before Your Lordships. The Limitation Amendment Act 1980 inter alia substituted what is now s.32(1)(b) of the consolidating 1980 Act for the old s.26 of the 1939 Act, i.e. in an amending Act all references to concealment by fraud were deleted and there was substituted the concept of deliberate concealment of relevant facts. This was done deliberately because of the confused effects and misleading terminology of the old equitable doctrine of concealed fraud. In my judgment it is inconsistent with the plain Parliamentary intention lying behind the amendment of the 1939 Act to continue to construe the 1980 Act as if was still a statutory enactment of the equitable doctrine of concealed fraud. The 1980 Act is not. Section 26(1)(b) is a statutory provision setting out the circumstances in which the ordinary time limits will not apply and contains no reference to the old concealed fraud doctrine."

10. The reference to section 26(1)(b) in the last sentence should, as it seems to me, be a reference to section 32(1)(b).
11. The essential reasoning in the judgment of Morritt LJ appears at [2001] 1 All ER 180g-181b:

"When one turns to the terms of s.32 of the 1980 Act itself, under sub-s.(1) there is a clear contrast between the action based on fraud and para (b), the concealment of any fact relevant to the plaintiff's right of action being deliberate. The requirement is that the fact relevant to the cause of action has been deliberately concealed from him by the defendant. But sub-s.(2) amplifies what is meant by deliberate concealment and requires that for the purposes of sub-s.(1) deliberate commission of a breach of duty, etc, amounts to deliberate concealment of the facts involved in the breach of duty. Generally speaking, and I do not say that there may not be exceptions, the civil law and, so far as I know, the criminal law, does not require that a person should know the legal consequences of the act which he commits. Generally speaking, if he knows of the act and he intends the act, but is unaware of the legal consequences, his unawareness is immaterial for it is trite law that ignorance of the law is no defence. It appears to me that had Parliament intended in the case of a deliberate concealment under s.32(1)(b) of the 1980 Act, as amplified by sub-s.(2), that there should be both deliberate commission of an act in the sense of knowingly and intentionally committing the act and also knowledge that such commission gave rise to a particular legal consequence, then it required clearer words to spell that out than are to be found in sub-ss.(2) or (1).

Accordingly, the conclusion I reach is that it is not necessary for the purpose of extending the limitation period pursuant to s.32(1)(b) of the 1980 Act to demonstrate that the fact relevant to the claimant's right of action has been deliberately concealed in any sense greater than that the commission of the act was deliberate in the sense of being intentional and that that act or omission, as the case may be, did involve a breach of duty whether or not the actor appreciated the legal consequence."

12. In a full and carefully reasoned Skeleton Argument, Mr Davidson QC for the defendants has mounted a powerful attack upon the reasoning of the court in Brocklesby. His primary submission has been that the words in s.32(2) fall to be taken at face value i.e. that the use of the word 'deliberate' was itself deliberate, to connote intention or awareness as opposed to mere negligence or inadvertence, and that the expression 'breach of duty' was again a deliberate choice of words rather than a simple shorthand for an act or omission amounting to a breach of duty. Mr Davidson argues that the Brocklesby construction of s.32(2) is not a natural one. It involves reading words into the sub-section which are not there and are not necessary to make sense of the section. Thus 'the deliberate commission of a breach of duty' must be read as 'the deliberate commission or omission of an act amounting to a breach of duty'. Alternatively, it renders otiose the use of the word 'deliberate' in relation to 'breach of duty'. He further submits that the wording of s.32(2) is readily understandable if it is read as denoting an element of unconscionable conduct, that element which Parliament and the courts have always been concerned in the past to ensure should not work in the favour of a defendant who raises a plea of limitation.
13. In this connection, Mr Davidson submits that, at the very least, the use of the word 'deliberate' in conjunction with 'breach of duty' in s.32(2) raises an ambiguity which renders it legitimate and useful to have regard to the statutory history and previous decisions in relation to limitation. In this respect, he points out that in Sheldon –v- Outhwaite the court was concerned with a different problem in relation to s.32 and, in particular, was concerned with the interpretation of s.32(1)(b) in respect of which no ambiguity argument was tenable: see p.144H and 145G-H. Insofar as Lord Browne-Wilkinson's view that it was not 'legitimate' to look at the legislative history was based on the fact that the 1980 Act is a consolidating Act, he expressly recognised an exception to that principle in the case of ambiguity (p.144E). Furthermore, although Lord Browne-Wilkinson expressed the view that the tangled legislative history did not assist in the construction of s.32(1)(b), he referred to the 'underlying rationale' of s.32 as being that the defendants should not be entitled to benefit from their own unconscionable behaviour by deliberately concealing the facts relevant to the plaintiff's cause of action (p.145H). Lord Nicholls, similarly appears to have regarded the 1980 Act as an act aimed at 'counteracting improper conduct' in the sense of deliberate concealment rather than mere oversight (see p.153H). Certainly, the members of the Court of Appeal whose majority decision was reversed on the question of whether the wording of s.32(1)(b) was wide enough to cover delayed rather than contemporaneous concealment, appear to have regarded the presence of a degree of unconscionable conduct on the part of the defendant as essential: see [1996] AC 115F-G per Sir Thomas Bingham M.R.
14. Mr Davidson also cited to us a number of reasoned first instance decisions in construction cases which have proceeded upon the basis of the construction for which he contends, none of which was cited in Brocklesby. These were Kalizewska –v- John Clague (1984) 5 Con LR 62 at p.85-7; E. Clarke & Sons (Coaches) Limited –v- Axtell Yates Halley (1989) 30 Con LR 123 at 132-4; British Steel plc –v- Wyvern Structures Limited (1996) 52 Con LR 67 at 77-8; Birmingham Midshires Building Society –v- Infields (1999) 66 Con LR 20 at 33-4. He has also referred us to dicta of Ralph Gibson LJ in F. -v- Wirral Borough Council [1991] FAM 69 at 102A-B, referring to the need for 'deliberate commission ... of a breach of duty to the plaintiff as contrasted with ordinary error or breach of duty'. See also the law as stated in the current editions of the following textbooks prior to the decision (but not cited) in Brocklesby: Chitty on Contracts (28^th ed) Vol 1 para 29-085; Charlesworth and Percy on Negligence (9^th ed) para 3-164; Goff & Jones: the Law of Restitution (5^th ed) at p.858-9.
15. Mr Davidson has advanced a further argument of construction, internal to the 1980 Act, which it does not appear was advanced in Brocklesby, namely that the court's interpretation of s.32(2) in that case leads to a curious overlap (if not actual inconsistency) with the limitation regime in cases of latent damage provided for in ss.14A and 14B of the 1980 Act, which sections were enacted for the purpose of ameliorating the position of claimants in cases where the ordinary limitation period expires before the loss (whether property damage or economic loss) can reasonably be discovered, but which nonetheless impose a 'longstop' limitation period of 15 years. As a result of the interpretation in Brocklesby, this longstop will now disappear, not simply in respect of deliberate wrongdoers at whom the provisions of s.32 appear to be aimed, but in virtually all instances of professional negligence where, at the time, the lay client has no reason himself to appreciate that error may have occurred or to go elsewhere for a second opinion.
16. On the basis of those arguments, Mr Davidson has invited us to hold that Brocklesby was wrongly decided and that we should not follow or apply it to the facts of this case. In this respect he seeks to avoid the general rule pronounced in Young –v- Bristol Aeroplane Company Limited [1944] KB 718 at 729 that this court is bound to follow its own previous decisions, by relying upon the exception identified in Boys –v- Chaplin [1968] 2 QB 1, when overruling Machado –v- Fontes [1896] 2 QB 231, namely that the full Court of Appeal is not precluded by its own rule of stare decisis in respect of final decisions from overruling an interlocutory decision of two Lords Justices which the court considers to be wrong. In justification of this departure from the rule of binding precedent, Diplock LJ stated:

"But in Young's case it was only final judgments of the Court of Appeal which were under consideration. Machado –v- Fontes was an appeal from an interlocutory order of a Judge in Chambers, and the order made by the Court of Appeal was an interlocutory, not a final, judgment. In interlocutory appeals the Court of Appeal does not usually have the benefit of a reasoned judgment by the judge against whose order the appeal is brought. The statute constituting the Court of Appeal treats interlocutory appeals as being in a lower category than final appeals; the appeal may be heard by two Lords Justices, as Machado –v- Fontes was, instead of by three. In practice lengthy and detailed argument in interlocutory appeals is discouraged. Machado –v- Fontes, which raised a question of fundamental importance in the then almost untilled field of conflict of laws, was argued and disposed of by extempore judgments within a single day. In practice, too, appeals to the House of Lords from interlocutory orders of the Court of Appeal are discouraged and leave to pursue them is seldom obtained. These differences in practice in interlocutory and final appeals to the Court of Appeal detract from the weight to be attached to the reasons given for an interlocutory order of the Court of Appeal. Young's case, which I loyally, if regretfully, accept as binding upon me, does not, as I think, preclude this court from declining to follow the ratio decidendi of a previous interlocutory order of the court of Appeal if this court thinks that the ratio decidendi was wrong. In the present state of juristic opinion, I would not extend the doctrine of stare decisis any further."

17. That state of juristic opinion was subsequently resoundingly confirmed in Davis –v- Johnson [1979] AC 264 which affirmed the rule laid down in Young –v- Bristol Aeroplane Company Limited without referring to, and thus leaving intact, the decision in Boys –v- Chaplin. The survival of that exception has been acknowledged in a number of reported decisions of this court and most recently, as it appears, in the observation of Lord Bingham CJ when giving the judgment of the court in Arthur J.S. Hall –v- Simon [1999] 3 WLR 873 at 902H where he observed in respect of a case which had been cited to the court:

"Since this was an interlocutory decision of two Lords Justices refusing leave to appeal, the strict doctrine of stare decisis does not apply to it: see Boys –v- Chaplin [1968] 2 QB 1."

18. For a rare example of the application of the exception in Boys –v- Chaplin one need only turn to Welsh Development Agency –v- Redpath Dorman Long [1994] WLR 1409 in which Glidewell LJ, giving the judgment of the court (which consisted also of Simon Brown and Peter Gibson LJJ) refused to follow the decision in Kennett –v- Brown [1988] 1 WLR 582 and said:

"We are able to do so because that was the decision of the court consisting of two Lords Justices in an interlocutory matter, in extempore judgment …. . That we have the power to disagree with, and overrule, a previous decision of a court of two Lords Justices in an interlocutory appeal is clear from the decision of this court in Boys –v- Chaplin …"

19. As to the manner in which such power should be exercised however, it was earlier stated in Langley –v- North West Water Authority [1991] 1 WLR 697 at 710E-H by Lord Donaldson MR (Woolf and Mann LJJ agreeing):

"It may be convenient to mention, admittedly both paranthetically and obiter, that I think that the decision in Boys –v- Chaplin [1968] 2 QB 1 has been misunderstood. As this court pointed out in Williams –v- Fawcett [1986] QB 604, 615-617, the rule of stare decisis laid down in Young –v- Bristol Aeroplane Company Limited … permits of exceptions, although they will be rare. In Williams –v- Fawcett … the exceptional circumstance was that more than one decision of the court was manifestly wrong and there was no realistic possibility of an appeal to the House of Lords to correct it. This was one of the considerations relied upon by Diplock LJ in Boys –v- Chaplin .. . Another relied upon by Lord Denning MR at p.23 and by Diplock LJ at p35 was the summary nature of the argument under the then existing practice in the case of interlocutory appeals heard by two judge courts. Under the present practice the division of work between two judge and three judge courts is not determined by whether there will be no need for other than brief argument or the point is of minimal importance other than to the immediate parties. The authority of a two-judge court should be regarded as being the same as that of a three-judge court. It was so treated in Williams –v Fawcett .., and of the decisions which we then declined to follow, three were by two judge courts and one by a three-judge court. Any departure from previous decisions of this court is in principle undesirable and should only be considered if the previous decision is manifestly wrong. Even then it will be necessary to take account of whether the decision purports to be one of general application and whether there is any other way of remedying the error, for example by encouraging an appeal to the House of Lords." (emphasis added)

20. Thus it is plain that Lord Donaldson was indicating that where the main constituents of the rationale for the Boys –v- Chaplin exception were absent, namely the summary nature of the procedure, the brevity of the argument and the unlikelihood of appeal (rather than the fact that two judges only were involved), a departure from a previous decision of this court is highly undesirable and should in any event only be considered if the previous decision is 'manifestly wrong'.
21. The current state of the authorities was recently summarised in Limb –v- Union Jack Removals Limited (in liquidation) [1998] 1 WLR 1354 by Brooke LJ (sitting with Mummery LJ and Sir John Balcombe). In delivering the judgment of the court Brooke LJ stated:

"34. From these authorities the following five principles can be derived. (1) Where the court has considered a statute or a rule having the force of a statute its decision stands on the same footing as any other decision on a point of law. (2) A decision of a two-judge Court of Appeal on a substantive appeal (as opposed to an application for leave) has the same authority as a decision of a three-judge or a five-judge Court of Appeal. (3) The doctrine of per incuriam applies only where another division of the court has reached a decision in ignorance or forgetfulness of a decision binding upon it or of an inconsistent statutory provision, and in either case it must be shown that if the court had had this material in mind it must have reached a contrary decision. (4) The doctrine does not extend to a case where, if different arguments had been placed before the court or if different material had been placed before it, it might have reached a different conclusion. (5) Any departure from a previous decision of the court is in principle undesirable and should only be considered if the previous decision is manifestly wrong. Even then it will be necessary to take account of whether the decision purports to be one of general application and whether there is any other way of remedying the error, for example by encouraging an appeal to the House of Lords.

35. It appears that, in commenting on the authority of decisions of a two-judge division of this court in an interlocutory matter in modern conditions in the Welsh Development Agency case[1994] 1 WLR 1409, 1423 Glidewell L.J. did not have his attention drawn to the judgment of Lord Donaldson of Lymington M.R. in Langley –v- North West Water Authority [1991] 1 WLR 697."

22. By referring in paragraph 35 to 'modern conditions', it seems that Brooke LJ was referring to the then practice of the court identified by Lord Donaldson in Langley, and still current at the time of the decision in the Welsh Development Agency case, whereby, although the distinction between 'interlocutory' and 'final' appeals existed, the division of work as between two-judge and three-judge courts was no longer determined by, nor determinative of, the need for brief argument or swift decision at a lesser level of consideration in relation to interlocutory matters than that given by a three-judge court to the issues in a 'final' appeal.
23. That is equally true of the practice now followed in relation to appeals under the Civil Procedure Rules ("CPR"), with the additional consideration that the former distinction between interlocutory and final appeals has been abolished. S.54 of the Supreme Court Act 1981 formerly provided for the jurisdiction of the Court of Appeal to be exercised by a constitution consisting of an uneven number of judges, not less than three (s.54(2)), subject to a number of exceptions permitting the court to sit in constitutions of two for purposes which included the hearing and determining of any appeal against an interlocutory order or interlocutory judgment (s.54(4)). However, it is now the position under s.59 of the Access to Justice Act 1999 that:

"(2) Subject as follows, a court shall be duly constituted for the purpose of exercising any of its jurisdictions if it consists of one or more judges.

(3) The Master of the Rolls may, with the concurrence of the Lord Chancellor, give (or vary or revoke) directions about the minimum number of judges of which a court must consist if it is to be duly constituted for the purpose of any description of proceedings.

(4) The Master of the Rolls or any Lord Justice of Appeal designated by him, may (subject to any directions under sub-section (3) determine the number of judges of which a court is to consist for the purpose of any particular proceedings"

24. No directions have yet been given under s.54(3) of the 1981 Act as amended. However, the position is that the number of judges sitting in a two-judge or three-judge constitution of the Court of Appeal is not determined according to whether the appeal is interlocutory or final in character (indeed the word 'interlocutory' is not to be found in the CPR). The number sitting is determined upon the basis of the nature, weight and importance of the particular point to be argued before the court, whether the order appealed from is procedural in nature or finally dispositive. In a broad sense, the modern equivalent of the Boys –v- Chaplin paradigm of a decision reached under time constraints and on the basis of brief argument is the decision of a Lord Justice or Lords Justices upon an oral application for leave to appeal. In that respect, the court recognises that such a decision is not to be regarded as authority binding on the court in relation to substantive appeals (or indeed later applications for leave): see Clark –v- University of Lincolnshire and Humberside [2000] 3 All ER 752 at 761-2. It is presumably for that reason that, in his statement of the position in paragraph 34(2) of the judgment in Limb –v- Union Jack Removals (see paragraph 20 above), Brooke LJ spoke not of the distinction between interlocutory and final appeals, to which the authorities he had cited referred, but of the distinction to be drawn between a 'substantive' appeal and an 'application for leave'. When in relation to substantive appeals he made clear that the decision of a two-judge Court of Appeal has the same authority as the decision of a three-judge Court of Appeal, it is not clear what remaining weight he attached to the decision in Boys –v- Chaplin, to which by implication he referred in paragraph 34(5) when reserving the possibility for a three-judge court to reject the decision of a two-judge court in a case where the previous decision is 'manifestly wrong'.
25. I do not think it necessary for the purposes of this case to resolve the conundrum posed by any attempt to apply the exception to the rule of stare decisis enunciated in Boys –v- Chaplin to the listing criteria which now govern business in the Court of Appeal. One can envisage that in the future, the court may wish to deploy or adjust the reasoning in Boys –v- Chaplin in order to avoid the need to follow a previous decision which it is satisfied is 'manifestly wrong'. However, while I see great force in the arguments deployed by Mr Davidson, I do not consider that Brocklesby is such a decision. Although apparently extempore, the judgment of Morritt LJ (with which Wilson J agreed) was plainly carefully considered and no doubt the oral argument before the court had been the subject of careful skeleton arguments, properly submitted in advance. It is also right to note that the approach of Morritt LJ to the construction of s.32 has recently been followed and reinforced by the decision of Laddie J in Liverpool Roman Catholic Archdiocese Trustees Incorporated –v- Goldberg [2001] 1 All ER 182, in which he applied that construction to a case where the plaintiff expressly conceded that the defendant did not know at any time that he was committing a breach of duty.
26. It remains only to mention the 'one particular point' referred to at paragraph 8 above, on the basis of which Mr Davidson, and his junior Mr Drake who argued the point before us, submit that, even accepting the reasoning in Brocklesby, the plaintiff is entitled to succeed. Put shortly the point was this. Time starts to run under s.32(1) from the moment when the claimant does, or could with reasonable diligence, discover the concealment. Under the reasoning in Brocklesby as to the meaning of s.32(2), the concealment relates merely to the deliberate nature of the relevant act or omission and not to the fact that it constitutes a breach of duty. That being so, the deliberate commission of the act (i.e. the drafting of the deed in terms there to be read and the fact that such terms were intentionally drafted), would have been known at once to the claimant and time would begin to run, it being irrelevant whether or not the defendant knew that the form of the deed drafted constituted a breach of duty.
27. If I have understood the point correctly, it does not seem to me to be one which avoids the thrust of the reasoning in Brocklesby. Quite apart from the fact that the point relates only to the drafting of the document and does not assist the defendants in respect of their failure to register it, it does not seem to me a sound basis for distinguishing that decision. In this case, the fact relevant to the plaintiff's right of action which was concealed was not the content of the deed but the fact that such content was inadequate to achieve the claimant's purpose. Thus the breach of duty referred to in s.32(2) is not simply the act of drafting the licence but the failure to include in it terms appropriate to achieve that purpose. It is that omission which, in the circumstances, was unlikely to be discovered for some time and, on the reasoning in Brocklesby, amounted to deliberate concealment under 32(2); and it was that concealment which the claimant did not discover, nor could with reasonable diligence have discovered, prior to 1994.

CONCLUSION

28. Accordingly I consider that the reasoning in Brocklesby is binding upon us and must be applied in this case. The appeal will therefore be dismissed.

PERMISSION TO APPEAL

29. Mr Davidson indicated to us at the end of the argument that, if we considered ourselves bound by Brocklesby, he would seek leave to appeal to the House of Lords and we heard submissions in that respect. In the light of the arguments advanced before us by Mr Davidson and the widespread impact of the decision in Brocklesby (see in particular an article by Janet O'Sullivan in Professional Negligence Vol 16 No 4, 2000: 'Intentional Acts, Breaches of Duty and the Limitation Act – A Warning for Negligent Professionals', a copy of which has been placed before us) I would unhesitatingly have been disposed to grant permission to appeal in this case. However, Mr Davidson brought to our attention the fact that the House of Lords has recently refused the Petition for Leave to Appeal presented by the claimant in Brocklesby without referring the petition for hearing. Further, prior to judgment, he has also brought to our attention the fact that, by reason of an agreement reached between the claimant and the defendant, it may be that the defendant will be precluded from obtaining such leave on the ground that neither party would any longer have a genuine interest in the outcome of an appeal to the House of Lords. In those circumstances it seems to me that an application for permission (if pursued) would be more appropriately decided by their Lordships' House, having considered the additional arguments and material relied on before this court. For those reasons I would refuse permission to appeal.

Sedley LJ:

30. Agreeing as I do with the conclusions of Potter and Jonathan Parker LJJ, I will limit my remarks to two of the important topics which have been canvassed in argument.

Boys v Chaplin

31. The decision of this court in Boys v Chaplin [1968] 2 QB 1 can be seen from where we now stand as a short step on a long Chestertonian road. It is a road which, as Potter LJ demonstrates, has in recent years undergone an unplanned bifurcation in difficult terrain, but has latterly been brought back to a single course. The decision of this court in Limb v Union Jack Removals [1998] 1 WLR 1354, consolidating the culture of the Civil Procedure Rules, makes it plain enough that the solution which this court felt able to adopt in Boys v Chaplin would not be adopted in similar circumstances today. The decision in Machado v Fontes [1896] 2 QB 231 would be overset not because it was an interlocutory decision of a two-judge court, but either because this court was satisfied that it was outdated, unjust and incontestably wrong or because, this court having had to leave it standing, the House of Lords overruled it.

Brocklesby

32. Of these two solutions, I agree that only the second is a permissible option in the present case; so that we do not have to explore the propriety of the first, either in principle or in practice. It follows that major questions affecting a self-imposed system of binding precedent in an intermediate appellate court sitting in multiple divisions must await a suitable case for their resolution, in the light not only of the decisions mentioned by Potter LJ but of the judgment of Robert Goff LJ in R v Greater Manchester Coroner, ex parte Tal [1985] QB 67, 79-81.
33. While Mr Davidson's submissions make a powerful case against this court's decision in Brocklesby, the opposite argument, which Mr Lawrence has not needed to do more than sketch, may also be potent. It is at base that there is no sufficient reason to fix Parliament, when it enacted s.32(2), with the intention of perpetuating the equitable ground of turpitude on the part of a defendant rather than of introducing a new and equally moral ground of hardship upon a blameless claimant; and that syntactically this is what the provision at least appears to mean. As an essay in risk distribution it makes perfectly good sense; as an essay in the use of English, perhaps less so.
34. It is remarkable, at least with hindsight, that nobody seems to have seen this problem lurking in the Bill which first contained the formulation. What I, for my part, would not set great store by in resolving it is the body of opinion mentioned by Potter LJ in paragraph 14 above in favour of Mr Davidson's construction. If it is wrong, then it betokens no more than a common error which, contrary to received wisdom, does not necessarily make law.
35. As to Mr Davidson's shrewd point that Brocklesby seems to drain ss.14A and 14B of practical utility, it does not necessarily follow, especially in the light of the legislative history, that this sheds light on the construction of s.32. It may as readily be an unintended consequence of the latter.

Permission to appeal

36. These are no more than reflections on a problem which it is beyond this court's powers to resolve. Like the other members of the court, I consider that it is only their Lordships' decision not to grant leave to appeal in Brocklesby would inhibit the grant by us of leave to appeal in the present case, even if it were not the case that the issue may have become moot.

JONATHAN PARKER LJ:

37. I agree with my Lords that this court is bound by the decision of the two-judge court in Brocklesby v. Armitage & Guest [2001] 1 All ER 172.
38. The current position in relation to the operation of the doctrine of precedent in this court is as set out in the judgment of the court in Limb v. Union Jack Removals Ltd [1998] 1 WLR 1354. In paragraph 34 of that judgment five principles are stated, the second of which is in the following terms:

"A decision of a two-judge Court of Appeal on a substantive appeal (as opposed to an application for leave) has the same authority as a decision of a three-judge or five-judge Court of Appeal."

39. Mr Davidson QC's argument that Brocklesby is not binding on us is based on the decision of this court in Boys v. Chaplin [1968] 2 QB 1. Mr Davidson submits that that decision establishes an additional exception to the general principle stated by this court in Young v. Bristol Aeroplane Co Ltd [1944] KB 718 to the effect that the Court of Appeal is bound by its own decisions; the additional exception being that a three-judge Court of Appeal is not bound by the decision of a two-judge Court of Appeal on an interlocutory appeal where it is satisfied that the decision of the two-judge court is manifestly wrong.
40. Brocklesby was a decision by a two-judge Court of Appeal on an interlocutory appeal, and it is Mr Davidson's submission that it was manifestly wrong. He accordingly submits that we are not bound by it, and he invites us to reach a decision which directly conflicts with it and on that basis to allow the appeal.
41. In my judgment it is doubtful whether, even prior to the reforms introduced by the Access to Justice Act 1999, Boys v. Chaplin had the effect for which Mr Davidson contends. It is noteworthy, for example, that in Davis v. Johnson [1979] AC 264 Lord Diplock (who was a member of the court in Boys v. Chaplin) said, at page 323H of the report, that the operation of the doctrine of precedent in the Court of Appeal so far as civil matters were concerned had been "clear and unassailable" for more than 30 years. Later in his judgment, after quoting from the judgment of Lord Greene MR in Young v. Bristol Aeroplane, he continued (at page 324D):

"The rule as expounded in the Bristol Aeroplane case was not new in 1944. It had been acted upon on numerous occasions and had, as recently as the previous year, received the express confirmation of this House of Viscount Simon LC, with whose speech Lord Atkin agreed: see Perrin –v- Morgan .... Although prior to 1944 there had been an occasional deviation from the rule, which was why a court of six was brought together to consider it, there has been none since. It has been uniformly acted upon by the Court of Appeal and re-affirmed, notably by a Court of Appeal of five, of which Lord Denning as Denning LJ was a member, in Morelle –v- Wakeling .... The rule was also been uniformly accepted by this House as being correct. Because until recently it has never been questioned, the acceptance of the rule has generally been tacit in the course of recounting the circumstances which have rendered necessary an appeal to your Lordships' House."

42. As Mr Davidson points out, Boys v. Chaplin is not mentioned in any of the speeches in Davis v. Johnson; indeed, the report of the case indicates that it was not cited either in the House of Lords or in the Court of Appeal. Nevertheless it is difficult to believe that Lord Diplock did not have the decision in Boys v. Chaplin in mind when referring to the doctrine of precedent in the passage quoted above.
43. But whether or not Boys v. Chaplin had the effect for which Mr Davidson contends prior to the civil justice reforms introduced by the Access to Justice Act 1999, in my judgment it cannot have continued to do so after the introduction of those reforms. The distinction between final appeals and interlocutory appeals has for all practical purposes been consigned to history (and few, I suggest, would mourn its passing). The relevant distinction for the purposes of the CPR, as recognised in Limb, is that between substantive appeals and applications for permission to appeal.
44. For those reasons, and in agreement with my Lords, I reject Mr Davidson's submissions on this aspect of the case.
45. Mr Drake tried valiantly to mount an argument to the effect that, even if Brocklesby is to be treated as binding, time nevertheless started to run for the purposes of section 32(1) on or shortly after the completion of the transaction in question, with the result that the claim is in any event statute-barred – even on what I may call a "Brocklesby basis". He submits that in a case where a "deliberate commission of a breach of duty" is relied on, and accepting Brocklesby as correct, the word "it" at the end of section 32(1) – and, by parity of reasoning, in the expression "in circumstances in which it is unlikely to be discovered for some time" in section 32(2) – must logically refer to the act or omission which constitutes the breach of duty and not to the fact that it is a breach of duty. However, quite apart from the fact that such an interpretation would, as I see it, lead to very considerable difficulties of application, I can see no warrant for construing the word "it" in that sense. In my judgment, the word "it" in section 32(2) plainly refers (on the Brocklesby basis) to the fact that the deliberate act (or omission) was a breach of duty.
46. For those reasons I too would dismiss this appeal.
47. However, I confess to being uneasy about the decision in Brocklesby. In particular, I find the reasoning and the decision difficult to reconcile with the observations of Lord Browne-Wilkinson and Lord Nicholls in Sheldon v. Outhwaite [1996] 1 AC 102 to the effect that section 32 is concerned with unconscionability and impropriety. At page 145H, for example, Lord Browne-Wilkinson refers to the "underlying rationale of the section", i.e. section 32, as being that defendants should not be "entitled to benefit from their own alleged unconscionable behaviour by deliberately concealing the facts relevant to the plaintiffs' cause of action". Yet if Brocklesby is right, a wholly innocent act or omission may suffice to deprive a defendant of a limitation defence.
48. I am also concerned that the effect of the decision in Brocklesby, as I understand it, is to render the word "deliberate" in section 32(2) more or less otiose.
49. In the light of these concerns, I would have been disposed to grant permission to appeal to the House of Lords were it not for that fact that their Lordships refused permission in Brocklesby itself. In the circumstances, I agree with my Lords that permission to appeal should be refused.

ORDER: appeal dismissed; no order as to costs.

(Order does not form part of approved Judgment)