Libyan Investment Authority & Ors v Warwick Street (KS) LLP & Ors

For an amendment to add a new cause of action after limitation has expired, the claimant must show that it arises from the same or substantially the same facts as an existing claim. The inquiry is primarily one of analysis and evaluation. Similarity of facts is insufficient if the amendment would require investigation of matters outside the factual ambit of the existing claim.

On summary judgment, the court must not conduct a mini-trial. It may nevertheless examine contemporaneous documents to determine whether the pleaded case is realistic. A claim should proceed where it has a real, rather than fanciful, prospect of success, even if it appears weak.

The claimants alleged that a report prepared by King Sturge induced them to invest £10.5 million in a property joint venture. They claimed deceit and breach of fiduciary duty against King Sturge, and conspiracy and inducing or procuring breach of fiduciary duty against the other defendants.

The claimants sought permission to reamend their particulars of claim to allege that King Sturge was a co-conspirator. The second to seventh defendants applied to strike out the reamended claim or obtain summary judgment. The central issues were whether the proposed conspiracy claim arose from the same or substantially the same facts as the existing claims, and whether the claims had a realistic prospect of success.

1. Amendment. The court permitted the claimants to reamend the particulars of claim and, if required, the claim form. Under section 35(5) of the Limitation Act 1980 and CPR 17.4(2), the relevant question was whether the proposed unlawful means conspiracy arose from the same or substantially the same facts as an existing claim. The inquiry was principally analytical and evaluative; “same” was not synonymous with “similar”.
2. The existing allegations of deceit and intentional breach of fiduciary duty already put in issue King Sturge’s relationship, communications, dealings and motivation in relation to the other defendants. Adding the conspiracy claim would not require investigation of matters completely outside the factual ambit of the existing claims.
3. Summary judgment principles. Under CPR 3.4(2)(a) and CPR 24.2, the court could strike out or summarily determine a claim only where it was bound to fail or had no real prospect of success and there was no compelling reason for trial. The court could consider contemporaneous documents to test whether the pleaded case was realistic, but should not conduct a mini-trial. Serious allegations or judicial disquiet alone did not constitute a compelling reason for trial.
4. Application to King Sturge. The contemporaneous documents were consistent with King Sturge undertaking genuine work to form an opinion. The report, read as a whole, expressed an enterprise value and not a property valuation, and was heavily qualified. The pleaded case of deceit, falsity, dishonest intention and reliance was therefore unrealistic. The claim against King Sturge was dismissed.
5. The court left open the possibility that the claims against the second to seventh defendants might be reformulated on the basis that King Sturge had been deceived rather than acting dishonestly. As presently pleaded, however, the reamended particulars of claim disclosed no case against those defendants with a real prospect of success.

No appellate history is stated in the judgment.