Laches; Limitation; Undue Influence: Azaz v (1) Denton (2) Self Realization Meditation Healing Centre

Judgment in the above case was handed down on 21st July 2009 ([2009] EWHC 1759 (QB)).  The claimant alleged undue influence by the defendants (D and S).  S was a healing centre which had been established by D who was its spiritual leader attributed with the status of 'guru'.  S's activities included teaching meditation and healing and it operated as a residence for those who wished to participate in communal living.  X had left his career as a medical doctor and he and his wife became resident at S, earning their keep through teaching meditation and healing activities.  Upon joining, X transferred all his assets, both in cash and property, to S.  X later left the centre and requested the return of his assets.  When that did not happen he issued proceedings against D and S alleging inter alia that D, as his spiritual leader, had exercised undue influence over him as a result of which he had handed over and allowed the use of all his personal possessions, worked for D and S without receiving proper remuneration and developed episodes of severe dissociative mental illness (personal injury claim).  X sought equitable compensation or damages or both.  D and S in defence alleged that X's equitable claim was barred by the doctrine of laches and that the other claims were statute barred pursuant to the Limitation Act 1980.  The court ordered the trial of preliminary issues concerning whether all or any part of X's claim was an action for personal injuries within section 11 of the Limitation Act 1980 and, if so, whether the primary limitation period had expired when the claim was issued and the court should exercise its discretion to disapply the primary limitation period under section 33; whether all or any part of X's claim was otherwise statute barred; whether X was entitled to rely upon section 32; whether all or any part of X's claim for equitable relief was barred by the equitable defence of laches.  X made a later claim for delivery up of the possessions on the ground that they had been provided to D and S on a long-term loan and it was common ground between the parties that that claim was not susceptible to a defence of limitation or laches.

The Court held that part of X's claim amounted to a personal injury claim which had been issued after the expiry period.  In multiple claims, the effect of section 11(1) was to render claims which were not for damages for personal injury vulnerable to limitation defences to which they would not be vulnerable but for being packaged with the personal injury claim.  Subject to the effect of section 33, the personal injury claim and the other claims should be dismissed as statute barred. 

There was no satisfactory reason why X had not issued his claim form prior to the expiry of the limitation period relevant to the personal injury claim and no explanation at all for the delay between the expiry of that limitation period and the issue of the claim form.  The provisions of section 33(3)(b) required attention to be given to the impact of the passage of time since the expiry of the limitation period on the quality of the evidence available to each of the claimant and the defendants.  In the circumstances it was not appropriate for the court to exercise its discretion under section 33(1) in favour of X. 

The alleged exercise of undue influence was irrelevant to the question whether the conditions set out in section 32(1), concerning fraudulent concealment, were satisfied.  It was implicit in the analysis that the person the subject of the undue influence was aware of the relevant facts, but was dissuaded by the influence from doing anything in consequence of that knowledge.  Whether that was so or not, there was no connection in logic between the exercise of undue influence and knowledge, or ignorance, of facts relevant to a cause of action.  It followed that X was not entitled to rely on section 32. 

In addressing the issue of laches what had to be considered was whether, having regard to the acts of the parties in the period between the transaction sought to be avoided and the date upon which the claim for relief was made by commencement of proceedings, and the delay between those two events, it would be unjust to grant a remedy.  The significance of the delay was whether it had been such as to induce the other party, in a case of alleged undue influence, to suppose that a challengeable transaction would not in fact be challenged.  In the circumstances, the period of delay had made it unfair to D and S to permit X to pursue the cash and possession claims. 

Whilst X would face considerable difficulty in establishing the facts alleged to found the later possessions claim, that action remained live and was transferred to the county court for determination.  All of X's other claims were dismissed.

Nicholas Yell appeared for the defendants instructed by Carter-Ruck.