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Cite as: [1999] UR 163

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COURT OF APPEAL

 

30 September 1999

 

BEFORE: R C Southwell, QC (President)

The Hon. M J Beloff, QC, and J P C Sumption, QC

 

BetweenMargaret Milne BoydPlaintiff/APPELLANT

AndBarry Keith Pickersgill

And

David Eldon Le Cornu Defendants/RESPONDENTS

exercising the profession of Solicitor,

Advocate and Notaries Public under

the name and style of

Pickersgill & Le Cornu

The Plaintiff/APPELLANT on her own behalf

Advocate R J Michel for the Defendants/RESPONDENTS

Advocate P Matthews, Amicus Curiae

 

 

JUDGMENT

BELOFF, JA:

Introduction

1.The Appellant seeks to bring a claim in professional negligence or breach of contract against the Respondents for failure to advise her of a procedure known as an action "en licitation" which would, had she deployed it, so she asserts, have prevented the loss of her former matrimonial home Verdala, and the damaging consequences, financial, psychological or otherwise of that loss. The process of licitation was described by the Judicial Greffier in a letter dated 21st August 1989 to the Appellant where he says:

2.The order of justice was signed on 21st April 1997. In it the Appellant asserts:

She asserts that the consequence of the breach was:

3.In their answer filed on 2 May 1997, the Respondents pleaded, inter alia, prescription against the claims in both tort and contract, i.e. that they were time barred. The Respondents also disputed negligence or breach of contract (para.4]. (See further, a letter to the Jersey Law Review dated 1999 where they make explicit what is implicit in that pleading].

4.The prescriptive period in contract in Jersey is 10 years. (See Maynard -v- Public Services Committee (1995) JLR 65; (1996) JLR 343 CofA at 78 ("Maynard")]. Such period is assumed for the purposes of this appeal to run from breach as being the date when the cause of action arises (this is the English common law position Jackson and Powell on Professional Negligence (4th Ed’n) para.1-B4 97; Chitty on Contracts (27th Ed’n 1994 updated to 1997) para.28: p.201; Halsbury’s Laws of England (4^th Ed’n) Vol. 28: para.864: "In a simple breach of contract the cause of action is a relevant breach and not the time of damage, the breach of contract is actionable per se"]. It has not, however, been conclusively determined in Jersey that the date of breach as distinct from the date of when the breach is (reasonably) discovered is the date of accrual of the cause of action: see Public Services Committee -v- Maynard (1996) JLR 343 CofA at 356 ("the accrual point"), a matter upon which Mr. Southwell intends to expand.

5.It was conceded by the Appellant in para. 4 of her skeleton argument on the preliminary issues before the Royal Court, that the action in tort was necessarily statute barred since the prescription period in Jersey for an action in tort is 3 years following the occurrence of damage caused by the alleged tortious act (See Article 2 of the Law Reform (Miscellaneous Provisions) (Jersey) Law 1960]. The Appellant has not sought before us to disavow that position.

6.On 27 April 1998 the Deputy Bailiff ordered a preliminary hearing under the provisions of Rule 7/8 of the Royal Court Rules 1992, on the issue of whether, whatever might be the merits of her case, the Appellant would be met with an irresistible prescription defence, materially, whether "any claim which the Plaintiff might have had by reason of an alleged breach of contract by the defendant, which for the purposes only of the application relating to the said preliminary issues is admitted, was lost at the expiration of ten years from the date upon which it is alleged that proper advice failed to be given". His pragmatic purpose in so ordering reflected the philosophy encapsulated in the dictum of Blom-Cooper JA in Purdie -v- Bailhache (1989) JLR 111 CofA at 116:

While the aim was laudable, its achievement proved unattainable.

7.On 6 August 1998 [1998.167]the Deputy Bailiff determined that the Appellant's action in contract (additionally to that in tort) was prima facie statute barred; and that there was no basis for suspending the period of prescription so as to allow her claim to proceed.

8.It is against this decision that, with leave of the Deputy Bailiff, the Appellant appeals. We have had the assistance of the Appellant herself, Advocate Michel, the Bâtonnier, for the Respondents, and Advocate Matthews as an amicus curiae appointed by this Court. For their succinct and skilful arguments I am most grateful.

The Basic Material Facts

9.On 16 November 1974 the Appellant was married to a Mr Alsford from whom she has since been divorced. Their matrimonial house was Verdala, which was jointly owned.

10.On 28 February 1986 Barclays Bank ("the Bank") (with whom they banked) obtained a charge over Verdala because no satisfactory proposals had been made to discharge an overdraft in the sum of £29,220.03 owed to it by them.

11.On 5 March 1986 the Bank made formal demand for repayment of the overdraft.

12.On 28 November 1986 the Royal Court ordered "dégrèvement" and "réalisation" of Verdala in favour of the Bank.

13.On 6 January 1987 the Bank accepted Verdala as "tenant après dégrèvement".

14.On 13 February 1987 ("the date of registration"), Verdala (Clos de la Rocque) Limited, a company owned by the Bank ("the company") was registered as a "tenant après dégrèvement", and shares in the company were sold in order to discharge the Bank's debts.

15.It is this process, by which the Bank enforced its rights as creditor, which the Appellant avers could have been prevented or mitigated by appropriate use of "licitation".

16.Advocate Le Cornu then acted for the Appellant from August 1984 until 13 April 1987 (the Respondents’ assertion) or 23 April 1987 (the Appellant’s assertion). From 23 April 1987 Advocate Le Quesne was appointed to act for the Appellant in lieu.

17.By a letter dated 21 August 1989 from the Judicial Greffier confirming earlier oral advice in the previous month, the Appellant was, she asserts, first made aware of her potential right of action against the Respondents.

18.On 21 April 1997 the Appellant’s proceedings against the Respondents for negligence or breach of contract were issued.

19.It is accepted by the Respondents, for the purpose of this appeal, that the latest date for licitation to be effective was the date of registration. Accordingly, on that hypothesis, any breach of contract by the Respondents must have taken place prior to 13 February 1987. Therefore, subject (i) to the accrual point (ii) to time not running, the Appellant’s action was clearly prescribed by about two months.

20.The Appellant’s case as to prescription, in a nutshell, is that she was, through the Respondents’ fault, ignorant of her possible cause of action against them until on or about the 21 August 1989, so that time did not run against her until then.

21.In her Reply dated 13 June 1997 she quotes the maxim "A qui est empesché d'agir la prescription ne court point" (in Latin "non valenti agere nulla currit praescriptio"] and asserts at para.3:

Procedure

22.Although in ordering a hearing on the preliminary issue, the Deputy Bailiff asserted that, for such purpose, there "are no disputed facts" (Judgment of 27 April 1998, p.2) it became clear that this was not the position. Indeed the Deputy Bailiff himself made certain findings which proved to be highly controversial, notably that "to argue that the prescription period began when the Appellant received the Greffier’s letter is to help the indolent in unexceptional circumstances" (Judgment of 6th August 1998, p.14). It is emphatically not common ground that the Appellant was indolent at any time.

23.It is unnecessary further to consider the procedural propriety of the Deputy Bailiff's making those findings (in the absence of Jurats), or the basis for them (in the absence of oral evidence), since all parties before us realistically accepted, at the outset of this hearing, that

(i)it was appropriate for the Court of Appeal to rule only on whether the Appellant was capable, on the facts upon which she seeks to rely, of procuring a suspension of the prescription period for her claim in contract;

(ii)if the Appellant was not so capable then, subject only to the accrual point, her action for breach of contract could not succeed;

(iii)if the Appellant was so capable, then whether on the facts she is entitled to such suspension, will fall to be ascertained among other issues, with which they will inevitably interrelate at trial by the Royal Court; and

(iv)it would be retrograde and contrary to the interests of both justice and convenience to remit the matter for investigation and ascertainment of those facts at a further interlocutory hearing devoted exclusively to the preliminary issue.

24.It is worth stressing that, as will appear from the balance of this judgment, the area of any factual investigation will be limited: subject again to the accrual point, the Appellant need only show a "practical impossibility" of instituting proceedings for breach of contract against the Respondents which subsisted up to 21st April 1987: i.e. ten years before such proceedings were actually instituted. What happened thereafter seems to me, for reasons I shall now endeavour to explain, immaterial in point of law.

Issues

25.The following issues of Jersey law therefore arise:

(i)Is a person to whom a lawyer in breach of contract fails to give appropriate advice able to assert that time does not run against him or her in respect of an action against the lawyer for such breach of contract, until such person can reasonably be expected to be made aware, or is in fact made aware, of the lawyer’s breach?

("prescription")

(ii)Is it relevant that such person does not institute proceedings promptly when he or she should have been or is aware of the lawyer’s breach of contract?

("promptness")

Prescription

26.In Maynard, this Court recognised that the maxim upon which the Appellant relies (para. 21 above) was part of the customary law of Jersey. A comprehensive analysis was made of such classic commentators as Terrien: (Commentaries du Droit Civil du Pays et Duché de Normande) and Poingdestre: (Les Lois et Coustumes des l'lle de Jersey). Southwell JA. said at p.354:

In those circumstances I see no reason, even were it open to us to do so, to review the authorities further. It is, however, to be noted that Terrien considers that the 10 year period could be suspended for "crainte, violence ou autre cause legitime empeschant de droit ou de faict" - (op.cit. Paris 1578, p.331) which states the relevant principle in highly pragmatic terms.

27.In Maynard it was also said at p.351 "The maxim can be applied to new circumstances, but only when they are consonant with the underlying principle, and not otherwise." This again, is consonant with the breadth of Terrien's approach.

28.In my view, the epithet "practical" deployed in Maynard softens rather than strengthens the concept of impossibility. It requires a consideration of what is in fact, not in theory, possible. While ignorance of a cause of action does not per se trigger a suspension of the limitation period, it may, in appropriate circumstances, constitute or create a relevant impediment. The issue before us is of what those circumstances may consist.

29.The test, as it seems to me, is whether the ignorance of the cause of action is reasonable in all the circumstances, reasonable that is both in respect of the facts giving rise to the cause of action and that a cause of action arises in such circumstances. While ordinary cases of professional negligence, as in this case, may be against a lawyer for advice unconnected with court proceedings, it is difficult to see how it could ever be reasonable to assert that one was unaware that a lawyer owed obligations in contract. There may be cases, however, where the law is uncertain e.g. in respect of an advocate’s conduct connected in some way with court proceedings, where ignorance even of the possibility of a cause of action may be reasonable.

30.Reasonableness as a test to distinguish between relevant and irrelevant for this purpose seems to me to be appropriate; it engages a much deployed legal standard; it satisfies the requirement of perceived public policy; it gives appropriate latitude to the potential claimant without too seriously undermining the rationale of prescription periods. As Poingdestre said, "un home ayant esté empesché d'agir, et n'estant coulpable d'aucune negligence, il n'y auroit pas de raison de la punir pour une faute supposée, de lquelle il ne seyoit pas coulpable" op.cit. It is, most importantly, inherent in, although not exhaustive of, the test of "practical impossibility" laid down in Maynard.

31.In Cartledge -v- E Jopling & Sons Ltd [1963] AC 758 (a personal injury case) Lord Pearce said at p.782 "Past cases have been decided on the basis that the time runs from the accrual of the cause of action, whether known or unknown and no case has been cited in which the plaintiff’s lack of knowledge has prevented the time from running where that lack of knowledge has not been induced by the defendant". This suggests that, at least where a defendant bears responsibility for a plaintiff’s lack of knowledge, time may for limitation purposes stand still.

32.It may well not be practically possible for a layman to evaluate legal advice given by a lawyer. It is certainly prima facie practically impossible for a layman to identify that he or she has not been given appropriate legal advice. Nor would it be reasonable, in ordinary circumstances, to expect him or her to do so. As a matter of policy it may indeed be asked, as the amicus put it, why a lawyer should be excluded from contractual liability for a hidden vice (i.e. failing to give advice) which manifests itself later? The lawyer would become the author of his own good fortune. As the Appellant observed, equally pithily:

33.Under English law an action for simple breach of contract must generally be brought within six years of the date of breach. Although, however, time may be extended under various statutory heads, it is not extended merely because the breach has not been discovered until after the expiry of those years. Thus in D.W. Moore & Co. Limited -v- Ferrier & Others [1988] 1 All ER 400 CA the Plaintiff’s action was time barred under the English Limitation Act prior to the date upon which they became aware that their lawyers had been negligent. Bingham LJ (as he then was) called that a "wholly unreasonable result" (p.411). In England the solution was found in statute: s.1 of the Latent Damage Act 1986. In Jersey the customary law permits a judicial solution.

34.Such solution is, I note, to be encouraged by the approach taken by the High Court of Australia in Hawkins -v- Clayton [1984] 664 CLR 539 (another solicitor’s negligence case), where it held that the limitation period should exclude any period when the wrongful act which had inflicted the injury had at the same time effectively precluded the bringing of an action for damages. As was trenchantly stated, by Deane J at p.590, to decide otherwise would "be a travesty of justice and common sense". I agree (see also R.J. Reynolds Tobacco Co. -v- E.B. Hudson 314 Federal Reporter (2nd series) pp.776-788).

35.Both principle and precedent, therefore, seem to me to be capable of opening the door to the Appellant to establish an initial suspension of the running of time from the accrual of the cause of action on the assumed date of no later than 13^th February 1987, at any rate until after 21^st April 1987.

36.Consonant with the above analysis, I conclude that while the Appellant was instructing the Respondents, there was prima facie no practical possibility of her appreciating any failure of the Respondents to advise her of the licitation procedure; and Advocate Michel, the Bâtonnier, for the Respondents realistically accepted that, if that were so, between 13^th April 1987 (when, on their case, they ceased to act) and 21^st April 1987 she could not prima facie be expected to have become aware of such failure, or, in consequence of a right of action against the Respondent, however acute or diligent any substitute lawyer might have been. In a valiant endeavour to uphold the judgment of the Royal Court, Advocate Michel did not concede that there was no practical possibility at either stage of the Appellant becoming privy, from some other source, of her potential cause of action. His determined arguments seemed to me only to emphasise the distinction between the practical and the theoretical.

37.Whether particular circumstances exist which dislodge that prima facie conclusion and show that the Appellant could reasonably have become aware (or even did become aware) of her right to sue the Respondents for breach of contract and the basis for such action more than 10 years before she instituted such proceedings will, I repeat, fall to be investigated, if at all, at any trial.

Promptness

38.The Respondents originally submitted in the Skeleton para.17 "... as found by the Royal Court the fact that the Plaintiff was ignorant of a possible cause of action to 21^st August 1989 was not sufficient to prevent time running against her especially as she had 8½ years from the date upon which she was made aware of her possible claim in which she commenced proceedings and she did not". Advocate Michel upon reflection, albeit with understandable regret, abandoned that contention before us.

39.The Deputy Bailiff had asked the question: "What prevented Miss Boyd in August 1989 from bringing an action in negligence?" and answered"Nothing at all" (Judgment: 7^th August 1998, p.13). The question appears to me to be misconceived and the conclusion (even if well founded) irrelevant. A person who instituted proceedings for breach of contract within ten years is not prescribed because he or she was aware of her or his rights throughout until institution of proceedings, but, for whatever reason, chose not to exercise them until then. The effect of a period of time being validly suspended is to exclude that time from counting towards the 10 year period (see e.g. Domat: Les Loix Civiles, Paris (1777) at p.236). If the Appellant is correct in her submission and time up to 21^st August 1989 should not run against her, she is no less entitled to the 10 year period than any other person. As she put it, the effect of the Royal Court’s approach is to grant the Island population a ten year prescription period and to grant the Appellant only the unexpired 7½ years.

Conclusion

40.For my part, therefore, I would allow the Appeal and hold that the Appellant ought not to be shut out from contending at the trial of the action that her claim in breach of contract is not time barred. I express the fervent hope that, given the considerable passage of time since the material events occurred, and the disadvantage to both parties inherent in such delay, such trial is not long postponed, and that the Royal Court will be invited to, and will give, appropriate directions to that end.

SOUTHWELL JA: I agree and have only a few points that I wish to add. In the judgment of this Court which I delivered in Maynard, two aspects of Jersey Law relevant to the questions of prescription arising in that case and also in the present case were considered and distinguished. Logically, the first question is: when did the cause of action arise, a date which in the ordinary way fixes the point at which the period of prescription starts to run. It has long been assumed that under Jersey Law the date when a cause of action in contract arises is the date on which the relevant breach of contract occurs; and the date when a cause of action in the tort of negligence arises is when the damage caused by the breach of the duty of care occurs. This assumption has been made even though in cases such as Maynard, the causes of action would accordingly arise at times when the victim of the breach of contract or the tort could not know that he had any cause of action. In the second part of the judgment in Maynard (1996) JLR pp.356-359 this Court considered obiter whether that assumption should continue to prevail or whether the Law of Jersey should be developed on the lines of, for example, the decisions in GD Searle & Co -v- Gunn [1996] 2 NZLR 129 (NZ Court of Appeal], and in Invercargill City Council -v- Hamlin [1996] AC 624 a decision of the Privy Council on appeal from New Zealand with the result that causes of action would arise only when the victim knew or ought reasonably to have known of the existence of the facts giving rise to the cause of action (the reasonable discoverability test).

This Court in Maynard did not reach a conclusion as to whether the Law of Jersey should be developed in this way in relation to causes of action in contract or in tort. But this Court did state some fairly cogent reasons why in a later case it might be thought right for this to be argued more fully and then decided.

I have referred to this second aspect of the Maynard judgment because so far in the present case it seems to have been assumed that Miss Boyd’s causes of action in contract and in the tort of negligence arose at the dates of the breach of contract and of the occurrence of damage respectively and without reference to this aspect of the Maynard judgment.

As Miss Boyd is a litigant in person it is therefore of relevance that she should know that whatever the result of her case in relation to the principles of "empêchement de fait" which were discussed and decided by this Court in the first part of its Maynard judgment there may be available to her this second way of putting her case on prescription, though she may not in the end either need or wish to pursue this second point.

I have also referred to the second aspect of the Maynard judgment because (i) the legal and policy considerations underlying the cause of action point and the "empêchement de fait" point are very similar; and (ii) the arguments put well and succinctly by Advocate Michel for the Defendants and Advocate Matthews as amicus curiae at times seemed to link the two points together, whereas I emphasise they are separate points both of which Miss Boyd can pursue if she so wishes.

Dealing next with the first part of the judgment in Maynard this Court there stated the test of an "empêchement de fait" to be whether the potential plaintiff was prevented by a practical impossibility from exercising his right to bring legal proceedings (see the summary which Mr. Beloff has already quoted). I wish only to emphasise two points on this test: first, the words "practical impossibility" are used in contra-distinction to a "theoretical impossibility". The difference is, as Mr. Beloff has indicated, a substantial one. Secondly, the test is to be applied objectively to a reasonable person in the particular circumstances in which the plaintiff was placed. It is not a subjective test.

Finally, I wish to emphasise that Miss Boyd, having taken so long to start these proceedings, is now obliged to take these proceedings to trial with due speed. No further delay should be permitted.

SUMPTION JA: I agree with the judgment which Mr. Beloff has given. I add only two points, both of which are designed to draw attention to the limits of what we have decided. The first is this: in my judgment ignorance may suspend the running of a prescription period in cases where the law regards that ignorance as reasonable. What ignorance the law regards as reasonable is a matter of legal policy, the precise limits of which will need to be explored from case to case. I am satisfied that the law regards ignorance as reasonable as a matter of legal policy where there was no means by which the particular plaintiff could reasonably have been expected to discover the facts on which her cause of action was based. I do not accept that policy requires us to apply the same principle in a case where the plaintiff is ignorant not of the facts upon which her cause of action is based, but of the existence of a legal remedy against the defendant arising out of those facts. There seems to me to be an important distinction to be made between those two cases and nothing that has been decided today bears upon the latter one.

Secondly, I should prefer to leave to an occasion when it arises that the question when a cause of action arises in contract. As at present advised I am not convinced that the law of England on this point is either unsatisfactory or different from the law of Jersey.

Authorities

Maynard -v- Public Services Committee (1995) JLR 65; (1996) JLR 343 CofA.

Morton -v- Paint (1996) Guernsey Unreported Judgment.

Law Reform (Miscellaneous Provisions) (Jersey) Law, 1960: Article 2.

Royal Court Rules 1992: Article 7/8.

Purdie -v- Bailhache (1980) JLR 111 CofA.

Hawkins -v- Clayton (1984) 664 CLR 539.

RJ Reynolds Tobacco Co -v- EB Hudson 314 Federal Reporter (2^nd series) pp.776-788.

Cartledge -v- E Jopling & Sons Ltd [1963] AC 758.

Chitty on Contracts: General Principle (27^th Ed’n) para: 28-201: p.1334.

Jackson & Powell on Professional Negligence (4^th Ed’n) para: 1-134: p.74.

Ampthill Peerage [1976] 2 All ER 411 at 423.

Domat: Les Loix Civiles, (Nouvelle Ed’n, Paris, 1777): Tome Premier: Des causes qui empêchent la prescription: section V: pp.235-236.

Dr. W. Strachan, Translation, London (1722).

4 Halsbury 28 para: 864.

Terrien: Commentaries du Droit Civil du Pays et Duché de Normandie (Paris, 1578): pp.316-21; 331-2; 334-8.

Poingdestre: Les Lois et Coustumes des l’Ile de Jersey (Jersey 1928): pp.48-54; le temps où la prescription ne court point: pp.63-66: de la prescription de dix ans.

DW Moore & Co Ltd & Anor -v- Ferrier & Ors [1988] 1 All ER 400.

Latent Damage Act 1986.

Extinctive Prescription on the Limitation of Actions (Kluwer Law International]: Reports to the XIVth Congress of the International Academy of Comparative Law: General Report: pp.1-25; EW Hondius (Professor of Law University of Utrecht);

Australia: Barbara McDonald: pp.29-40;

Canada: (Common Law Provinces): Nathalie Des Rosiers: pp.93-113;

Denmark: Bernhard Gomard and Martin Simonsen: pp.117-130;

England: Andrew McGee: pp.135-143;

Israel: Israel Gilead: pp.209-228;

United States: Patty Gerstenblith: pp.359-369.

GD Searle & Co -v- Gunn [1996] 2 NZLR 129 (NZ Court of Appeal].

Invercargill City Council -v- Hamlin [1996] AC 624.