Buckler v J F Finnegan Ltd

LORD JUSTICE POTTER: This is an appeal from the judgment of Her Honour Judge Carr QC, sitting in the Sheffield County Court, on 15 December 2003 upon a preliminary issue on limitation. By her order made on the same date, she directed that the claim do proceed against the second defendant, Sheffield City Council ("the council"), pursuant to Section 33 of the Limitation Act 1980. The costs were ordered to be costs in the case and permission to appeal was refused. Such permission was granted by Lord Justice Scott Baker on 4 February 2004.

The background and underlying facts are as follows. The claim as originally pleaded in the particulars of claim asserted that between 1969 and 1970 the claimant was employed by J F Finnegan Ltd ("Finnegan"), the first defendant, as a joiner. Thereafter, between 1970 and 1974, he was employed as a joiner by the council. The particulars of claim alleged, as the claimant stated in evidence before the judge, that during those periods he was at various times in his employment exposed to asbestos dust which he absorbed. After 1974 the claimant left the employment of the council for a time but returned in late 1975 when he was appointed to the post of asbestos assessor. He became an asbestos surveyor for the council in 1987 in which post, it appears, he has remained until today. He attended an asbestos awareness course in April 1987 and agreed in evidence that he was fully aware of the dangers of exposure to asbestos.

Since 1987, the claimant has been regularly screened by Dr Brennan, a consultant chest physician, for signs of lung disease. In April 1991, having examined the claimant and his chest x-ray, Dr Brennan by letter notified Dr Ruck, the claimant's general practitioner, that there was some "left basal pleural thickening" and that, having reassured the claimant, he had warned him that there was a risk of lung cancer and the best the claimant could do to help himself was to stop smoking. Dr Brennan said that he had informed the claimant that he could not get a DSS pension for this as it was too mild, but that he could make a civil claim against his employer of 15 years ago. Later examinations of the claimant and letters addressed to Dr Ruck in February 1993, June 1995, June 1997, May 1999 and May 2001 confirmed that the pleural thickening was unchanged and the lung function normal. There was also a letter from Dr Brennan direct to the claimant dated 6 October 1995 informing him of "no significant change in the pleural thickening on the left side".

The references in the letters of Dr Brennan to Dr Ruck over the period, including that of 3 May 2001, were to "pleural thickening". The claimant himself in evidence stated that he was told, or in any event understood, that that meant "slight scarring". He also stated that the 1999 x-ray results referred for the first time to the presence of "pleural plaques". As explained by the claimant in evidence, although Dr Ruck had informed him in 1991 that a civil claim could be made in respect of his asbestos exposure, he did not think at the time that his injury was sufficiently serious to warrant a claim for compensation. However, following receipt of the x-ray results, he was advised by his doctor to seek legal advice and did so (i.e., in 1999). This was because the new reference to "pleural plaques" led him to think that his condition had deteriorated. He did not at that time realise what is now common ground between the parties, namely that the condition described as "pleural plaques" was the same as that diagnosed in 1991, the plaques referred to being the same phenomenon as "pleural thickening" and "slight scarring".

In the event the claim was not issued until 2 May 2003, i.e., over three years after the first mention of pleural plaques. In evidence before the judge the claimant stated for the first time that, at the time Dr Brennan advised him of the possibility of a claim in 1991, Dr Brennan had informed him that any claim which he made would have to be a "one-off" claim, i.e., a claim for damages made once and for all, rather than upon an interim basis with opportunity for a subsequent claim should lung disease become evident later. This was vigorously challenged in cross-examination for the council. That was because no mention of such advice appeared in the report of Dr Brennan relied on by the claimant, Dr Brennan not being called as a witness; nor was it mentioned in the pleadings; nor in the claimant's witness statement.

Dr Brennan eventually delivered a formal report to the claimant's solicitors, dated 17 January 2002, which was in evidence before the judge. It summed up the position as follows:

The judge felt unable to resolve the issue of whether or not Dr Brennan had told the claimant that he would only have a one-off claim. Her relevant findings were as follows. She found that the relevant "knowledge" of the claimant for the purposes of Section 11 and Section 14 of the Limitation Act 1980 was April 1991 and that limitation therefore expired in 1994. She observed that the medical notes made it clear that the claimant had been advised by Dr Brennan that he had a claim in April 1991 but that he had done nothing about it. The only issue was whether or not the injury was "significant" for the purpose of Section 14 (1 (a) and Section 14 (2), the latter of which provides:

The judge held that, in the light of the claimant's background and knowledge and Dr Brennan's specific advice that he had a claim, the claimant had actual knowledge of the significance of the injury for the purpose of the test set out in Section 14 (2).

The judge went on to find that, in addition to actual knowledge under Section 14 (2), the claimant's condition had not materially changed since diagnosis in 1991 and at that time he would in any event have had constructive knowledge under Section 14 (3), which provides:

The judge held that such constructive knowledge existed because, having received the information which he had from his medical advisers, the claimant continued to see them for the purposes of screening without consulting a lawyer, or his union representative, when there was nothing preventing him from doing so if he wished to pursue an action or obtain further (legal) advice.

In those circumstances, the judge moved on to consider the exercise of discretion under Section 33 of the 1980 Act which provides as follows:

Having made reference to the necessity to bear in mind all the circumstances of the case and in particular paragraph (a) of sub-section (3), the judge said this:

The judge then turned to paragraph (b) of sub-section (3), upon which the council had principally relied, asserting prejudice to the council by reason of the claimant's delay and its effect upon the cogency of the evidence. In that respect the position was as follows.

At the beginning of the action there had been two defendants in the frame, namely Finnegan and the council, each of which was alleged to have exposed the claimant to asbestos in the period 1969 to 1974. A straight apportionment of liability upon a time basis, taking the periods of exposure pleaded in the claim, might have led to an apportionment of any damages in a ratio of 2 (Finnegan) to 5 (council). When the claimant's case summary was delivered to the council on the Friday before the Monday morning hearing it was revealed for the first time that the claim against Finnegan had been settled and thus Finnegan were not present at the hearing. In opening, the claimant disclosed the terms of the settlement, namely that Finnegan would pay £900 by way of provisional damages, plus costs, plus an order for assessment in the event of deterioration.

Paragraph 2 of the schedule to the Tomlin order proposed as between the claimant and Finnegan provided that -

The claimant also served upon the council, again immediately before the hearing, Replies to a Request for Further Information from the council pursuant to CPR 18 in which the allegation of exposure to asbestos by the council was reduced from the period of five years to 2 to 3 years, i.e., "1972/1974" for "2/3 days per month". In addition, the Replies identified two foreman joiners who might have had a knowledge relevant to the claimant's claim. It is to be noted that each of those joiners was in his late 70s and had retired, the council being unaware whether either could still be found.

It is finally to be noted that in reply to the council's request to state why the action had not been commenced within three years of Dr Brennan's advice in 1991, the claimant replied, "I was not informed about the three-year limitation period and still did not know about it in 2001 when I proceeded with the claim."

The council submitted (rightly) before the judge that, in the light of the existence of the contribution notice, the settlement of the claim against Finnegan did not determine the claim for contribution by Finnegan against the council or vice versa. The contributions between the two would have to be determined at a later date in the action according to the extent of exposure during employment. Thus, it was submitted, each of the defendants had suffered potential prejudice in terms of assessing the periods of exposure and the consequent appropriate apportionment as to which a fair trial was no longer possible. In this connection, the chief witness for Finnegan, Mr Allen, had died in 2000. The two employees of the council identified in the Replies might not be capable of being traced; the memories of any remaining witnesses would have dimmed considerably as demonstrated by the vagueness of, and changes in, the claimant's own case; and what surviving records there may have been in 1974 would have been destroyed by 2003. As to that, the judge said:

As to paragraphs (c) and (d) of sub-section (3), the judge briefly stated:

Upon that basis the judge exercised her discretion under Section 33 in favour of the claimant.

In this court, Mr Jackson for the council submits that she was wrong to do so. He submits that (1) having held that there was no realistic issue as to the liability of the claimant, she wrongly ignored the effect of the delay upon the cogency of the evidence of the parties. (2) The judge wrongly failed to take properly into account the claimant's failure to act promptly and reasonably for the whole period since 1991 when he first knew of both of his condition and his remedy. In this respect Mr Jackson points out that the evidence of the claimant was almost entirely directed, and certainly dealt with by the judge in relation, to the question why the claimant decided to sue in 2003 and not to why he had failed to sue or at any rate to take further legal advice before 1999. (3) The judge wrongly failed to give any weight to the fact that the claimant's condition had in fact not materially changed over the entire period. (4) Having expressed her reluctance to accept the claimant's evidence on the issue as to whether Dr Brennan did or did not advise him that his claim was a one-off claim, the judge tacitly determined the issue in favour of the claimant in relation to Section 33 by reversing the ordinary burden of proof which lies upon the claimant to show that in the particular circumstances of the case it would be equitable to make an exception: see Thompson v Brown [1981] 1 WLR 744, 752 per Lord Diplock.

Mr Radburn for the claimant, on the other hand, submits that the judge was fully entitled to come to the conclusion which he did in the exercise of a wide discretion under Section 33 of the 1980 Act. He rightly points out that, in investigating under Section 33 (3) (a) the reasons for the claimant's delay, the court is engaged in a subjective inquiry in the sense of ascertaining what the claimant knew and what reasons in fact acted upon his mind: see Coad v Cornwall and Isles of Scilly Health Authority [1997] 8 Med LR 154, 159. He emphasises in that respect that the judge accepted as genuine the claimant's statement that the reason for him pursuing the matter some nine years after first knowing of his condition was his genuine belief that his condition had deteriorated by reason of the reference to pleural plaques.

Mr Radburn relies upon the judge's finding, having heard the claimant in evidence, that for him as a layman there was a difference between "slight scarring" and "pleural plaques" and submits that it is implicit in that finding that the judge considered in a broad sense the claimant had good reason not to proceed before use of that phrase had occurred.

Finally Mr Radburn points out that the judge adverted in her judgment to all the considerations to which she was directed to have regard by Section 33 (3), reasoning that the prejudice to the claimant in being debarred from pursuing his claim outweighed any disadvantage or prejudice to the council in respect of the evidence available to deal with the issue of contribution as between defendants. In this last respect, it is of course pertinent to point out that, in the light of the settlement reached with Finnegan, the striking out of the claim against the second defendant would not deprive the claimant entirely of remedy in respect of any future illness which developed, but simply of that element which was not recoverable from Finnegan under the terms of the settlement reached prior to the hearing before the judge.

The law in respect of cases of this kind is clear so far as the exercise of discretion under Section 33 is concerned, and the parties are not at odds in that respect. The discretion of the court is unfettered in deciding applications under Section 33. Overall account should be taken of all the circumstances of the case, to decide whether it is equitable to disapply the limitation provisions having regard to the prejudice potentially caused to the parties, taking into consideration the factors set out in the check list at Section 33 (3): see Nash v Eli Lilly & Co [1993] 1 WLR 782. The burden of showing that it is equitable to disallow the limitation period lies on the claimant. While the test to be applied under Section 33 (3) (a) to the reasons for the claimant's delay is a subjective test (in the sense referred to in Coad), what constitutes an acceptable delay is a matter for the court's judgment in the individual case. The longer the period, the heavier the burden on the claimant to provide an adequate explanation: see KR v Bryn Allen Community (Holdings) Ltd (in Liquidation) v Royal Sun Alliance plc [2003] EWCA Civ 85.

In this connection Mr Radburn has placed emphasis on the words of Lord Justice Ward in Coad when he stated in respect of Section 33 (3) (a) as follows:

Finally, as made clear in Nash v Eli Lilly, it is established that although the burden of proof that it is equitable to disallow the limitation period lies upon the claimant, and although it is a heavy one, if a judge has taken into account all the circumstances and exercised his or her discretion judicially, then the Court of Appeal will be reluctant to interfere. As stated in Margolis v Imperial Tobacco Ltd [2000] MLC 204, the Court of Appeal:

In relation to that last observation, I am bound to say that, as a matter of first impression, it appears to me that the result in this case was a surprising one. The question which faced the judge upon the evidence before her was whether a claimant who, in 1991, (1) had knowledge of a significant injury, its true extent and possible future effects, (2) was aware of his right to sue in respect of it, and (3) made a conscious decision not to do so, should nonetheless be permitted to bring an action against the defendant twelve years after the acquisition of such knowledge and nine years after the expiry of the limitation period, on the basis of a mistaken belief that his condition had since deteriorated.

Upon examination of the facts, it seems to me clear that such a surprising outcome in large measure resulted from the judge's misunderstanding of the effect of Section 33 (3) (e), or at least a misapplication of it to the facts of the case. It seems clear to me from the passages in her judgment which I have quoted, that the judge treated the starting point for the delay to be taken into account under that paragraph as the year 2002, i.e., the date of Dr Brennan's report to the solicitors, when it should in fact have been 1991. As attested by the report of Dr Brennan and the evidence of the claimant himself, the claimant plainly knew in 1991 that the acts or omissions of the defendants were "capable of giving rise to a claim" (see the words of paragraph (e)). Insofar as the claimant advanced any reasons for not proceeding at the time, it was on the basis that he was told he had a one-off claim only. The judge was not prepared to make a finding in that respect, but what she did do was to find that, if that was what the claimant had been told by his doctor, he should in any event have consulted a lawyer or union representative to seek advice on the question.

The claimant's assertion before the judge that in 2002 he thought his position had worsened, satisfied the judge that that was why he subsequently started an action which he had not previously thought was worthwhile. However it did not affect the fact that, for 11 years before 2002, he had the knowledge that the acts and omissions of the defendants might be capable of giving rise to an action for damages. Indeed, he had been told that they did.

In such a case, as it seems to me, the approach properly to be applied by a judge, bearing in mind the burden of proof upon the claimant, is whether or not circumstances (including in particular the condition of the claimant), or the claimant's knowledge of such circumstances, have changed to an extent which makes it equitable for the claimant to be permitted to proceed, in a situation where he has previously consciously and deliberately decided not to proceed: see the observations of Stuart Smith LJ in Forbes v Wandsworth [1957] QB 402, 412. In that case, when dealing with the considerations arising under Section 14 (3) in respect of a claimant who had done nothing to seek legal advice in circumstances in which it was plainly open to, and reasonable for, him to do so, Stuart Smith LJ said:

It seems to me that, in relation to the exercise of the judge's discretion under Section 33 in a case of this kind, similar considerations come into play in relation to paragraph (a) of sub-section (3). Here there has been no significant change in the claimant's medical circumstances, nor in his knowledge of those circumstances, simply by reason of his misunderstanding of the effect of Dr Brennan's reference to "pleural plaques". That phrase was no more than a different medical expression referring to the phenomenon observed, and the diagnosis earlier made, of "pleural thickening", which were the words used in the report of 1991, or "slight scarring", which was the expression recalled by the claimant. It does not seem to me that a simple misunderstanding or change of perception of that kind is capable of amounting to a relevant change of circumstance which explains or excuses a deliberate earlier decision not to sue in respect of a medical position and right of action of which the claimant was well aware.

It is plain to me that the delay to which the judge should have had regard under paragraph (e) was a delay of nine years, and not two, in the context of a situation where, if two potential defendants were to be pursued and the full award of damages was to be justly apportioned between defendants, a full examination of the position of each defendant and the degree of the claimant's exposure while in their employment would be called for, on the basis of evidence from witnesses and such relevant documentary records as existed. Because of that error, it is also clear to me that the exercise of the judge's discretion was flawed and it is open to this court to consider the matter afresh.

In addition, in my view, not only did the judge effectively disregard the relevant period of the delay but she also failed properly to take account of the question of potential prejudice to the council in relation to the contribution proceedings. I do not suggest that the judge was in error in regarding the likelihood of a finding of liability on the part of the council as having been effectively conceded, or in proceeding on that basis. However, I do consider that she was wrong to treat that conclusion as if it effectively disposed of any questions of prejudice which might arise as between the defendants in relation to apportionment.

There is no reason to doubt that the principal witness for Finnegan was dead. Indeed this may have been a material factor in Finnegan's decision to settle. If, had the action been brought promptly, that witness would have been available at trial of the contribution proceedings, it does not seem to me that the fact that he was a Finnegan witness precludes an assertion by the council of possible prejudice in relation to a fair trial of the contribution proceedings. That is because the outcome of those proceedings must depend upon the judge's assessment of the relative responsibility of the defendants in the light of all the evidence available. By reason of the passage of time, it is very likely that the council would find itself in difficulty in tracing relevant witnesses. What is certain is that, in any event, the recollection of such witnesses as may be called is bound to have faded so far as the details of the claimant's employment and his exposure to asbestos are concerned. Again there is no reason to doubt - indeed I think it was conceded in argument - that the relevant records are no longer available. In my view this was a case where the claimant failed to demonstrate any sufficient or satisfactory reason for his delay in taking proceedings. Further, on the evidence and findings of the judge, if the claimant had understood the position properly, namely that he stood no greater risk of future disease than originally contemplated in 1999, it is unlikely he would have proceeded against the council to this day.

In these circumstances it is unnecessary for me to deal with the additional point on delay raised by the council, namely that the claimant in fact gave no evidence or proper explanation why, after the reference to pleural plaques in 1999 rang alarm bells in his mind and made him decide to take legal advice, proceedings were still not issued until three-and-a-half years later. In my view, the heavy burden upon a claimant to provide an adequate explanation for his failure to start proceedings in a case of such long delay has not been discharged in this case.

I would therefore allow the appeal.

LORD JUSTICE MAY: I agree with my Lord, Lord Justice Potter, that this appeal should be allowed and for the reasons which he has given. I gratefully adopt his account of the facts and circumstances of the appeal.

I agree, in short, that the judge did not adequately address the length of delay in the context both of Section 33 (3) (e) and also sub-subsection (a) of the Limitation Act 1980. Although the evidence was that the claimant was advised in terms of his having "pleural plaques" in 1999, much of the discussion seems to have concentrated on the year 2001 and early 2002 when Dr Brennan wrote his formal medical report for the court. The claimant's condition in 2001 was no more serious than it had been in 1991. This is not therefore a case such as in the example given by Lord Justice Stuart-Smith in Forbes v Wandsworth Health Authority [1997] QB 402, 413. The judge in the present case found that the claimant's subjective appreciation of the seriousness of his condition was enhanced in 1999 and 2001, and that this was understandable from the difference between what he was told in 1991 and the use of the expression "pleural plaques" in 1999.

There is, in my judgment, no content in the expression "pleural plaques" taken by itself which is capable of sustaining objectively any enhanced appreciation of the risk inherent in the claimant's condition which was more serious than that which was described to him in 1991 as a risk of lung cancer such that he should give up smoking (see Dr Brennan's contemporary letter to this effect of 4 April 1991). The claimant plainly was told this then since he did give up smoking. He was also then told that he could have a claim against his former employers. No doubt "the reasons for the delay" in Section 33 (3) (a) of the 1980 Act are the reasons given by the claimant and, insofar as these are reasons in his own mind, they are his subjective reasons.

The judge may have had a fair degree of sympathy with the claimant's situation and that he had a real and substantial basis for doing nothing. But it seems to me that there was no proper basis for any finding that the claimant had any real reason for supposing that his condition in 2001 was significantly worse than it had been in 1991. The reason in his mind was, in my view, a weak reason. The statute requires the court to take the claimant's reasons into account, but in this case they do not seem to me to weigh heavily in the balance. They certainly do not eliminate from the balance, as Mr Radburn submitted, the length of delay between 1991 or 1994 and 2001 and the then further delay of nearly two years before the proceedings were started on 2 May 2003. The delay from the first use of the expression "pleural plaques" in 1999 was about four years. I do not regard this latter period as having been explained by unparticularised reference to "taking union and legal advice". In particular, there seems to me to have been no proper explanation of the delay between Dr Brennan's report of 9 January 2002, addressed to the court and plainly prepared for the purpose of the claim, and the issue of proceedings on 2 May 2003.

In these circumstances this is, in my view, a case in which the claimant chose not to bring proceedings within three years of his date of knowledge in 1991 although the possibility of bringing proceedings was then explicitly brought to his attention. When he did bring proceedings some 12 years later his condition and the advice he was receiving in relation to it were not materially different. There was no compelling or convincing reason for this long delay.

Under Section 33 of the 1980 Act the court has to make a judgment as to whether it would be equitable to allow the action to proceed having regard to the balance of prejudice to which Section 33 (1) refers. The court has to have regard to all the circumstances in the case and in particular to the matters referred to in Section 33. As I said in Margolis v Imperial Tobacco [2000] MLR 204, the Court of Appeal would not interfere with the judge's discretion in this matter unless it was exercised on wrong principles by reference to irrelevant matters or in disregard of matters which ought to have been taken into account or unless it was plainly wrong.

I agree with my Lord, Lord Justice Potter, that this is a case which comes quite close to being one in which the judge's decision was plainly wrong. Even if it was not however, I agree with Lord Justice Potter that, for the reasons which he has given, the judge in the present case misapplied the factors in sub-subsection (e) of Section 33. I also consider that she misapplied sub-subsection (a) because she concentrated mainly on the claimant's reason for his delay without giving sufficient weight to its length.

This means that this court has to consider the balancing judgment afresh. In doing so, I agree with my Lord that the balance does not fall in favour of allowing the action against the second defendant to proceed.

LORD JUSTICE BROOKE: I agree with both judgments. The appeal is therefore allowed.