Home Information Cases Trilogy Management Ltd v Harcus Sinclair (2017)

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Trilogy Management Ltd v Harcus Sinclair (2017)

Summary

The claimant, which was alleging negligence on the part of the defendant solicitors in relation to amendments made to a company's articles of association in 2004, had no prospect of defeating the solicitors' reliance on the expiry of the limitation period.

Facts

The defendant firm of solicitors applied to strike out the claimant's statements of case or for summary judgment on the claimant's claim for breach of duty of care.

The defendant had been instructed in probate proceedings in Jersey to act for a company (C1), which was the trustee of a family charitable foundation, in respect of a dispute over the terms of bequests to the foundation of shares in C1 and another company (C2). In 2004, negotiations resulted in an agreement to amend C2's articles of association to provide for a distribution of profits to eight new charitable sub-funds, each of which had one of the sons or daughters of the foundation's settlor as its guardian. Three of the daughters appointed the claimant to act as trustee for their sub-trusts. The claimant began the instant proceedings, claiming that the defendant had inserted certain additional wording into the articles of association which had resulted in a reduced distribution to the sub-funds. The claimant's case was that the additional words were inserted into the articles by the relevant solicitor (B) at his own instigation and without instructions from his client, C1. The defendant admitted adding the alleged wording but claimed that it reflected the settlement that had been reached. The defendant also asserted that the proceedings were time-barred as they had been issued more than six years after the articles had been amended. The claimant relied on the Limitation Act 1980 s.32 and s.14A as defeating the defendant's reliance on the expiry of the limitation period. As to s.32, the claimant's case was that B's breach of duty had been "deliberately concealed" from it because it was committed in circumstances in which it was unlikely to be discovered for some time; the breach was only discovered in October 2013 in the course of proceedings in Jersey. The claimant maintained that October 2013 was also the date when it acquired "knowledge" for the purposes of s.14A.

Held

(1) Having regard to the evidence and the contemporaneous documents, it was impossible to envisage how the court at the trial might find that the alleged breach by the defendant was committed in circumstances where "it was unlikely to be discovered for some time". On the contrary, it was overwhelmingly likely that it would have been discovered immediately or at any rate well within a year or so of its commission. Accordingly, even if, which was denied, there was a deliberate breach by B of the alleged duty to the claimant by the insertion of the additional words, there was no prospect of the claimant establishing at trial that the commencement of the limitation period for that breach was postponed by the operation of s.32(1)(b) as extended by s.32(2) (see paras 51, 54 of judgment).

(2) As to s.14A, it was not arguable that the claimant could not have acquired the knowledge that the insertion of the additional words was instigated by the defendant without C1's instructions at an early stage. The whole issue of how the additional words came to be incorporated was the subject of close scrutiny from September 2004 onwards. Knowledge of the fact, if it was a fact, that B had acted without instructions could have been discovered during the course of that scrutiny. There was no prospect of the court finding that the claimant could not reasonably have been expected to acquire the knowledge that the additional words were inserted without instructions long before October 2013. The claimant's claim was undoubtedly time-barred (paras 58, 61, 63-64).

Application granted

Chancery Division
Rose J
Judgment date
19 May 2017
References