UK Supreme Court: Canada Square Operations Ltd v Potter
The UK Supreme Court ('UKSC') has handed down its judgment in Canada Square Operations Ltd v Potter [2023] UKSC 41.
The hearing took place on 14 and 15 June 2022, with the judgment being delivered on 15 November 2023.
It is available here on the National Archives website.
In summary, the UKSC was asked to consider the meaning of "deliberately concealed" in s32(1)(b) of the Limitation Act 1980, and the meaning of "deliberate commission of a breach of duty", in s32(2) of the same Act. Subsections 32(1) and (2) provide:
32.— Postponement of limitation period in case of fraud, concealment or mistake.
(1) Subject to subsections (3), (4A) and (4B) below, 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 a 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. References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.
(2) For the purposes of subsection (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.
The decision of the 5 Judges was unanimous, with Lord Reed delivering the judgment.
The factual background involved the non-disclosure of commission received by the defendant on the sale of a payment protection insurance ('PPI') policy to the claimant. Whilst the primary limitation period had expired, the claimant sought to rely on both s32(1)(b) and s32(2) Limitation Act 1980 to postpone the running of time for bringing her claim.
After conducting a thorough review of the preceding case law and the history surrounding the enactment of the statutory provisions, Lord Reed summarised at [94] and [95] the fact that s32 had been given an embellished interpretation in previous cases, that, "reads far more into the provision than Parliament enacted, in a situation where the provision makes good sense without elaboration."
"ConcealED"
The UKSC held at [98] that “conceal” means to keep something secret, either by taking active steps to hide it, or by failing to disclose it. It involves either a positive act of hiding a fact relevant to the claimant's right of action, or a withholding of information, such as (on these facts) a failure to tell the claimant about the commission.
There is no requirement for there to be a duty on the defendant to disclose. Ordinary language examples of concealment with no duty to disclose were given by Lord Reed of the positive acts of (i) a lady who conceals her pearls from potential burglars although there is no duty to reveal their whereabouts, and (ii) a person who uses cosmetic concealer to cover-up blemishes without being obliged to reveal them. In addition, examples of concealment by omission were given, such as someone not sharing with anyone the fact that they have been diagnosed with an illness - there being no obligation to share that information.
There is also no requirement for the defendant to know - or be reckless to the possibility - that the concealed fact was relevant to the right of action (or a potential right of action) - [105]. There was no support for this interpretation within the statutory language itself.
"Deliberately"
The UKSC further held that "deliberately" in s32(1)(b) and in s32(2) does not mean or include "recklessly" - [108] and [153]. The defendant must have considered whether to inform the claimant of the relevant fact and decided not to - [108]. Previous case law from the Court of Appeal represented a "wrong turning in the law" - [109]. Instead, what is required under s32(1)(b) is:
- a fact relevant to the claimant’s right of action,
- the concealment of that fact from [the claimant] by the defendant, either by a positive act of concealment or by a withholding of the relevant information, and
- an intention on the part of the defendant to conceal the fact or facts in question - at [109].
"Deliberate commission of a breach of duty"
The UKSC went on to consider deliberate commission of a breach of duty under s32(2), holding that deliberate breach of duty "required knowledge that what was done was in breach of duty" - [133]. There must be intentionality or knowledge on the part of the person, that what they are doing is in breach of duty - [153]. Recklessness is not sufficient to amount to, or the same as, deliberateness.
OUTCOME
In dismissing the appeal, the outcome was that:
- The defendant had not deliberately committed a breach of duty, because although the non-disclosure of the commission could be regarded as a breach of duty within the meaning of s32(2), it could not be shown that the defendant had known that it was committing such a breach, or intended to do so.
- The defendant, it was held, had deliberately concealed a fact relevant to the claimant's right of action, such that the claimant could rely on s32(1)(b) to postpone the running of time. The defendant had "consciously decided not to disclose the commission" - at [154]. The claim was therefore not time-barred.
COMMENT
The UKSC has taken a 'back to basics' approach to interpreting the statutory language, which was considered to make "good sense" on its own. Eschewing the somewhat tortured interpretations and embellishments which have heretofore been applied to the relevant words, the UKSC has replaced those with a statutory construction which aims to "[give] clear language its ordinary meaning" (see paragraphs [58] and [95]). As well as the decision simplifying the tests for "deliberate concealment" and "deliberate commission of a breach of duty", the long-standing distinction between deliberateness and recklessness as separate and different legal concepts has also been affirmed.
The phrase in s32, "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" was not considered in this appeal. It had not been suggested that the claimant could with reasonable diligence have discovered the concealment any earlier - at [154]. The case law on "reasonable diligence" therefore remains good law.
The press summary of the judgment is available here.
This case summary was composed by 25 Canada Square Chambers Member Chris McGeever.