Article by Harry Owen

On 15 November 2023 – after months of anticipation – the Supreme Court finally handed down its judgment in Canada Square Operations Ltd (Appellant) v Potter (Respondent) [2023] UKSC 41.

The judgment affirms the decision of the Court of Appeal on the issue of deliberate concealment; however the Supreme Court rejected the Court of Appeal’s finding that “deliberately” can also mean “recklessly” in the context of this case.

Background

The case involved a loan and an associated payment protection insurance policy (“PPI Policy”), taken out with Canada Square, by Mrs Potter in July 2006. Mrs Potter was not advised by Canada Square that they would be paid over 95% of the premium for the PPI Policy by way of commission.

In December 2018, Mrs Potter issued proceedings against Canada Square, seeking recovery of the sums paid by her, under the terms of the PPI Policy. In defending the claim, Canada Square argued that the claim was statute barred, as the limitation period of 6 years imposed by section 9 of the Limitation Act 1980, had expired.

Mrs Potter sought to rely on section 32 of the Limitation Act 1980, arguing that the six year limitation period did not begin to run until she had discovered the commission being paid to Canada Square. Mrs Potter had become aware of the commission in 2018.

The County Court decided that section 32 of the Limitation Act 1980 applied and ordered Canada Square to pay Mrs Potter £7,953.00. Canada Square appealed, unsuccessfully, to both the High Court and to the Court of Appeal. Canada Square finally appealed to the Supreme Court.

Issue

The Limitation Act 1980 sets out the limitation periods for bringing different kinds of legal claims.

Section 32(1)(b) postpones the commencement of the ordinary limitation period where any fact relevant to the Claimant’s right of action has been “deliberately concealed” from them by the Defendant.

Section 32(2) provides that, for the purposes of section 32(1), “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.”

In deciding whether Mrs Potter’s claim was statute barred, the Supreme Court clarified the terms “deliberately concealed” in section 32(1)(b) and “deliberate commission of a breach of duty” in section 32(2).

Judgment

The Supreme Court dismissed the appeal, deciding that Mrs Potter’s claim was not statute barred, on the basis that section 32(1)(b) of the 1980 Act postponed the commencement of the six-year limitation period until Mrs Potter was advised that the premium was likely to have included substantial commission, which occurred in November 2018.

A Claimant relying on section 32(1)(b) to postpone the start of the limitation period imposed by the Limitation Act, must prove that a fact relevant to the Claimant’s right of action was deliberately concealed by the Defendant.  The Supreme Court clarified the meaning of the words “deliberately” and “concealed” in this context.  In relation to the meaning of “concealed”, the Supreme Court held that a fact will have been concealed if the Defendant has kept it secret from the Claimant, either by taking active steps to hide it or by failing to disclose it. The only requirement is that the Defendant deliberately ensures that the Claimant does not know about the fact in question and so cannot bring proceedings.

On the meaning of “deliberately”, the Supreme Court held that the Defendant’s concealment of a relevant fact will be deliberate only if the Defendant intended to conceal that fact.

Effect

It is not clear at present, how many cases will be affected by the Supreme Court’s decision in refusing the Defendant’s appeal in this case.  While there is clarification of “deliberate concealment”, it is notable that the Supreme Court did not consider the “reasonable diligence” limb of s.32(1)(b) as it did not form the subject of the creditor’s defence or appeal at any stage.

It appears likely that the upholding of the Court of Appeal’s decision and the clarification provided by the Supreme Court of “deliberate concealment” will do little to resolve the ongoing issues of limitation raised between parties in PPI commission claims which remain unaffected by the Supreme Court’s decision in Smith and another (Appellants) v. Royal Bank of Scotland plc (Respondent) [2023] EWCA Civ 1832. See article by Katie Wilkinson here.