Last year the Supreme Court and the Privy Council were asked to interpret the meaning of the words "deliberately concealed" (and "deliberate concealment") for the purposes of section 32 of the Limitations Act 1980 ("the Act").
This section is of importance because it postpones the date from which the ordinary limitation period begins to run (i.e. the time during which a person can pursue a claim). Section 32 is relevant to cases where (1) the action is based upon the fraud of the Defendant, (2) the right of action has been deliberately concealed by the Defendant, or (3) relief is sought from the consequences of a mistake.
The two decisions are crucial for understanding how the English and Commonwealth Courts are likely to approach cases where a claim is issued outside of the usual six-year time period due to deliberate concealment. In this article we consider the cases before the Supreme Court and Privy Council and the impact of the decisions.
Canada Square – factual summary:
In Canada Square Operations Ltd v Potter [2023] UKSC 41 ("Canada Square") Mrs Potter entered into a loan agreement ("Agreement") with Canada Square Operations Ltd on 26 July 2006. At the same time Mrs Potter also took out a Payment Protection Insurance Policy ("PPI Policy"). Mrs Potter paid premiums for the PPI Policy which Canada Square organised. However, Mrs Potter was unaware that 95% of the premiums she paid were taken as commission by Canada Square.
The Agreement ended on 8 March 2010. Mrs Potter did not issue her claim until 14 December 2018, more than 8 years after the end of the agreement. Under ordinary circumstances, and pursuant to the Limitation Act, Mrs Potter should have issued her claim by 8 March 2016. However, she sought to rely on sections 32(1)(b) and (2) of the Act on the basis that Canada Square failed to disclose the substantial amount of commission it charged thus making the PPI Policy unfair.
Canada Square appealed to the Supreme Court against the findings in the County Court, High Court, and Court of Appeal that s.32 applied to Mrs Potter.
Primeo Fund – factual summary:
On the same day as judgment was handed down by the Supreme Court in Canada Square, the Privy Council, constituted with the same members as decided Canada Square, handed down judgment in Primeo Fund v Bank of Bermuda (Cayman) Ltd [2023] UKPC 40 ("Primeo Fund"). This considered the meaning of "deliberate commission of breach of duty" pursuant to section 37(2) of the Cayman Islands' Limitation Act ("the Cayman Islands' Act") (as well as a separate issue in respect of the application of section 37(1)(b) of the same Act).
In Primeo Fund, the Claimant suffered losses because of the Ponzi scheme operated by Bernard Madoff. Primeo was an investment fund incorporated in the Cayman Islands, which invested funds into Bernard L Madoff Investment Securities LLC (BLMIS). Primeo went in voluntary liquidation 2009.
On 20 February 2013, Primeo brought claims against the Respondents for breach of their contractual duties. Amongst other issues, the Privy Council was asked to consider whether the claim was time-barred pursuant to section 37 of the Cayman Islands' Act. The Privy Council considered "since section 37 of the Limitation Act is identical in all material respects to section 32 of the English Limitation Act 1980, the Board will treat the English authorities on the construction of the latter provision as relevant also to the construction of the Cayman provision."
Analysis
Whilst the facts of the two cases above differ, the Supreme Court and the Privy Council were both concerned with clarifying the meaning of "deliberately" and "concealed". The Supreme Court methodically reviewed the previous case law and predecessors of the Act. However, the decisions hinged on a return to a simpler approach, based upon the ordinary meaning of the words .
Meaning of deliberately
In Canada Square the Court of Appeal had determined that where it was not possible to show that the defendant knew that it was under a duty to disclose the information in question, it would be sufficient, for the purposes of establishing that the information had been 'deliberately concealed', to show that the defendant was reckless as to the breach of a duty of disclosure.
The Supreme Court rejected this reasoning, and in particular the contention that "deliberate" in this context could mean "reckless", by applying the ordinary meaning of the words with reference to the Concise Oxford Dictionary. Deliberate is defined as meaning "done consciously and intentionally" whereas reckless means "without thought or care for the consequences of an action." The word deliberate therefore carries with it an intent that recklessness does not.
Meaning of concealed
In various Court of Appeal authorities, “concealed” has been construed as requiring (1) at least in cases of non-disclosure as opposed to active concealment, a duty to disclose the relevant fact or facts, comprising either a legal obligation or an obligation arising from a combination of utility and morality, and (2) knowledge that the fact concealed is relevant to the claimant’s right of action or to a potential right of action, or recklessness as to its relevance to such a right of action.
The Supreme Court consider that the Court of Appeal's approach represented a wrong turn in the law in this area. By applying the ordinary meaning of the word, the Supreme Court determined that "concealed" simply means to keep something secret, either by taking active steps to hide it, or by failing to disclose it.
By reading the two words in conjunction as "deliberately concealed" for the purposes of s.32(1)(b) and "deliberate concealment" for the purposes of s.32(2), the Supreme Court held that the concealment must be intended by either taking positive steps or withholding information.
Conclusion
One impact of the Supreme Court's decision is that it has made clear that PPI claimants can potentially rely on s.32(1)(b). The Supreme Court found that Canada Square had deliberately concealed the amount the commission earned, information the court considered crucial in order for Mrs Potter to pursue her claim. It determined that the claim was not time barred, because, as a result of the deliberate concealment, section32(1)(b) applied. However, it did not consider that Canada Square's conduct amount to "deliberate commission of a breach of duty" for the purposes of s.32(2).
Similarly, Primeo was unable to show that the Respondents deliberately breached the duties they owed, meaning that those rights of action where it relied upon the provisions of s37 (2) of the Cayman Islands Act were indeed time barred. However, Maddoff investments had acted fraudulently and deliberately concealed relevant facts. Given the agency relationship to the respondent, HSBC, this postponed the limitation period pursuant to section 37(1)(b) of the Cayman Islands Act.
While the outcomes in Canada Square and Primeo favoured the respective Claimants, the impact of the interpretation of the wording of the Act is not of itself Claimant friendly. The courts' clear interpretation of words based on their ordinary meaning has resulted in the door being closed for claimants to argue recklessness in terms of concealment under sections 32(1)(b) and 32(2).
These findings represent a re-adjustment of the court's approach to the interpretation of deliberate concealment and provide both greater certainty and uniformity in an often disputed area. This is significant to Claimants and demonstrates how Courts in the UK and Commonwealth should approach cases engaging these provisions of the Limitation Act moving forward.
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