JD Wetherspoon Plc v Van De Berg & Co Ltd. & Ors

On summary applications, the court asks whether the claim has a realistic, rather than fanciful, prospect of success. It must avoid a mini-trial, consider evidence reasonably expected at trial, and exercise particular caution where fuller fact-finding may affect the result or the law is developing.

An agent may owe fiduciary duties of loyalty even without power to bind the principal. Those duties may include duties not to prefer third-party interests, create conflicts, or exploit the agency or confidential information without informed consent. Individuals may owe concurrent personal fiduciary duties where the facts establish a relationship of trust and confidence.

Silence may support deceit where a fiduciary duty of disclosure exists and the omission is dishonest. Deliberate concealment may postpone limitation where the breach was intentional and unlikely to be discovered for some time.

JD Wetherspoon engaged Van De Berg as a property finder and adviser. It alleged that Van De Berg and three directors had diverted property opportunities to associates or other clients, procured less favourable transactions for JD Wetherspoon, and concealed their interests.

Van De Berg and two directors applied to strike out the claims as statute-barred. The individual defendants also sought summary judgment on the basis that no viable personal causes of action were pleaded. The applications concerned breach of contract, negligence, deceit and breach of fiduciary duty. The claim against the fourth director was to proceed to trial.

The central issues were whether the pleaded facts disclosed arguable claims against the personal defendants and whether limitation defences could properly be determined summarily.

1. Summary judgment. The applications were summary applications. The court had to assess whether the claims had a realistic prospect of success, without conducting a mini-trial. It had to consider evidence already available and evidence reasonably expected at trial. Final determination should be avoided where fuller investigation might alter the evidence or outcome, particularly in a developing area of law.
2. Deceit. Although statements made only to third parties could not found a deceit claim based on reliance by JD Wetherspoon, the pleaded failure to disclose could be actionable if the defendant owed fiduciary obligations requiring disclosure and dishonestly withheld information. The pleaded facts were capable of establishing that cause of action. A director or employee could also be personally liable for deceit committed in the course of duties.
3. Fiduciary duties. An agency relationship may carry fiduciary duties even where the agent lacks authority to bind the principal. The pleaded duties included avoiding conflicts, not preferring third-party interests within the agency’s scope, and not exploiting the agency position or information without informed consent. The absence of an exclusive retainer did not defeat the claim because the complaint concerned the presentation of a less favourable transaction after JD Wetherspoon had been identified as the potential occupier.
4. Personal duties. The directors’ existing fiduciary duties to Van De Berg did not make personal duties to JD Wetherspoon legally impossible. A personal duty could arise if the alleged relationship of trust and confidence were proved. The claim against Messrs Braun and Harvey was therefore not bound to fail. The court also noted that relationships of trust and confidence might justify a greater willingness to pierce the corporate veil.
5. Limitation. The alleged appointment as agents preceded the breaches and was not impugned. The claims therefore fell within the first category of fiduciary liability identified in Paragon Finance plc v D B Thackerar & Co and Gwembe Valley Development Co Ltd v Koshy (No 3). Fraudulent breach could fall within section 21(1)(a) of the Limitation Act 1980, while deliberate and conscious breach alone was not necessarily fraud and was in principle subject to section 21(3).
6. Concealment. Intentional wrongdoing in circumstances where discovery was unlikely for some time could amount to deliberate concealment under section 32(2) of the Limitation Act 1980. The alleged secret diversion of transactions was capable of meeting that description. A later letter giving a materially false explanation of the transactions was also capable of constituting deliberate concealment. The relevant reasonable-diligence inquiry began when there was a proper trigger for investigation, and JD Wetherspoon’s conduct after its concerns arose could not be resolved summarily.
7. The applications to strike out and for summary judgment were dismissed. The claims against the applying defendants were to continue, and the claim against Mr Aldridge was to proceed to trial in any event.