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Canada Square Operations Ltd v Potter
Factual and Procedural Background
In July 2006 the Claimant entered a regulated consumer loan with the Defendant, a lender that also acted as an insurance intermediary. The loan incorporated a payment-protection-insurance (“PPI”) premium of which more than 95 % constituted the Defendant’s undisclosed commission; only a small sum was remitted to the insurer.
The agreement was repaid early and ended in March 2010. After this court’s decision in Plevin (2014), which held that non-disclosure of a high commission could render a credit relationship “unfair” under section 140A of the Consumer Credit Act 1974, the Claimant consulted solicitors in November 2018 and learned of the commission.
On 14 December 2018 the Claimant began County Court proceedings seeking recovery of the PPI sums (less regulatory redress already received), relying on sections 140A–140B of the 1974 Act. The Defendant admitted non-disclosure but pleaded that the claim was out of time under section 9(1) of the Limitation Act 1980. The Claimant invoked section 32 to postpone limitation.
The County Court (Recorder Attorney Rosen QC) found for the Claimant, holding that the Defendant had deliberately concealed the commission. The High Court dismissed the Defendant’s appeal in part, finding section 32(2) applicable. The Court of Appeal also dismissed the appeal, ruling that both section 32(1)(b) and section 32(2) extended limitation, accepting “recklessness” as sufficient for “deliberate” concealment or breach. The Defendant appealed to the Supreme Court; the case is a test-case said to affect approximately 26,000 similar PPI claims.
Legal Issues Presented
- The proper construction of “deliberately concealed” in section 32(1)(b) of the Limitation Act 1980.
- The meaning of “deliberate commission of a breach of duty” in section 32(2) and whether recklessness satisfies that standard.
- Whether a duty to disclose is a prerequisite to “concealment” under section 32(1)(b).
- Whether the Defendant’s non-disclosure postponed the commencement of the limitation period for the Claimant’s section 140A claim.
Arguments of the Parties
Defendant’s Arguments
- Section 32(1)(b) requires breach of a legally recognised duty to disclose; no such duty existed.
- “Deliberate” in both subsections demands actual knowledge or wilful blindness, not mere recklessness.
- Under section 32(2) a breach is deliberate only if the Defendant knew the conduct was wrongful when committed.
Claimant’s Arguments
- The straightforward reading of section 32 makes any intentional non-disclosure of a relevant fact sufficient; no additional duty element is required.
- Alternatively, internal instructions and documentation amounted to “active” concealment.
- Even post-Plevin the Defendant knew of a duty (regulatory or “fairness”) to disclose yet chose not to, satisfying deliberate concealment.
- Recklessness—as defined in R v G—is enough to render a breach or concealment “deliberate.”
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 | Non-disclosure of high commission may render credit relationship unfair (Consumer Credit Act 1974 s.140A) | Forms factual backdrop; demonstrates relevance of undisclosed commission to unfair-relationship claim |
| AIC Ltd v ITS Testing Services (UK) Ltd (The Kriti Palm) [2006] EWCA Civ 1601 | Duty-to-disclose analysis under s.32(1)(b) | Approach criticised and disapproved; Supreme Court departs from requirement of pre-existing duty |
| Giles v Rhind (No 2) [2008] EWCA Civ 118 | “Breach of duty” in s.32(2) equates to actionable wrong | Accepted but limited; mental element clarified |
| Williams v Fanshaw Porter & Hazelhurst [2004] EWCA Civ 157 | Introduced recklessness into “deliberate” analysis | Supreme Court declines to follow its extension of recklessness |
| R v G [2003] UKHL 50 | Definition of criminal recklessness | Court holds this concept is not incorporated into “deliberate” in s.32 |
| Beaman v ARTS Ltd [1949] 1 KB 550 | Equitable “concealed fraud”; recklessness as wilful blindness | Historical context; not determinative of statutory wording |
| Bulli Coal Mining Co v Osborne [1899] AC 351 | Fraudulent concealment where breach unlikely to be discovered | Illustrates origins of s.32(2); supports intentional standard |
| Cave v Robinson Jarvis & Rolf [2002] UKHL 18 | “Deliberate” requires knowledge/intention; non-disclosure can be concealment | Primary authority relied on to restore ordinary meaning of “deliberate” |
| Arcadia Group v Visa Inc [2015] EWCA Civ 883 | “Relevant fact” must be essential to pleadable cause of action | Applied to show commission fact was essential |
Court's Reasoning and Analysis
Judge Reed, delivering the unanimous judgment, undertook a textual approach anchored in Cave and Sheldon. Key steps:
- Plain language prevails. “Concealed” means intentionally kept secret; it does not inherently require a legal duty to disclose.
- Dual pathways. Section 32(1)(b) covers both positive acts and omissions intended to hide a relevant fact. Section 32(2) is an additional, not alternative, ground for postponement where a breach is knowingly committed in circumstances unlikely to be discovered.
- Rejection of embellishments. Court of Appeal authorities that grafted a duty-to-disclose requirement and allowed recklessness to satisfy “deliberate” (“the wrong turning” in Williams and The Kriti Palm) are disapproved.
- Mental element clarified. “Deliberate” entails intention or actual knowledge; recklessness—even in the R v G sense—does not suffice in either subsection.
- Application to facts. The Defendant intentionally withheld the commission information during the currency of the agreement; thus section 32(1)(b) postpones limitation until the Claimant’s discovery in 2018. However, the Defendant did not knowingly commit a breach of duty, so section 32(2) is inapplicable.
Holding and Implications
APPEAL DISMISSED. The claim is not time-barred because section 32(1)(b) postponed the limitation period; section 32(2) does not apply.
Implications: the Supreme Court re-establishes a strict, intention-based test for “deliberate concealment” and “deliberate breach” under the Limitation Act 1980, overruling a line of Court of Appeal authority. The decision provides clarity for thousands of pending PPI and other latent-commission claims, and limits defendants’ exposure to stale litigation where only recklessness (rather than intention) can be shown.
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