Goldtrail Travel Ltd v Grumbridge

The claimant sought to pursue a claim in dishonest assistance against the defendant arising from a 2010 transaction said to involve a secret payment (the "Viking Agreement"). The defendant applied to strike out and for summary judgment under CPR 24.2 on limitation grounds, relying on the expiry of the primary limitation period and that the claimant could not bring itself within section 32(1)(b) of the Limitation Act 1980. The court applied the "statement of claim" test: a fact "relevant to the plaintiff's right of action" must be an essential fact without which the cause of action is incomplete and not merely evidence that improves prospects of success. The claimant had not pleaded any positive case under section 32(1)(b) explaining which essential facts were concealed, when discovery occurred, or why facts available within the primary limitation period were insufficient to plead dishonest assistance. Applying CPR 24.2, the defendant showed that the claimant had no real prospect of success on limitation grounds and there was no other compelling reason for trial. Summary judgment was entered for the defendant and the claim dismissed.

Background and parties:

• The claimant, Goldtrail Travel Limited (in liquidation), pursued a claim for dishonest assistance against Mr Grumbridge relating to events in 2010 and relied on findings made in an earlier first claim decided by Rose J ([2014] EWHC 1587 (Ch)).
• The defendant was not a party to the first claim. The claimant issued proceedings against him on 24 June 2019. The defendant applied on 18 February 2020 to strike out and/or for summary judgment under CPR 24.2 on the ground that the claim was time-barred and that the claimant could not rely on section 32(1) of the Limitation Act 1980 to postpone the limitation period.

Nature of the application and relief sought:

• The defendant sought dismissal of the claim by strike out and/or summary judgment (CPR 24.2) on limitation grounds. The claimant sought permission to amend its particulars of claim (an application contingent on the defendant's application failing).

Issues framed by the court:

1. Whether the claimant identified any "fact relevant to the plaintiff's right of action" that had been deliberately concealed by the defendant within the meaning of section 32(1)(b) of the Limitation Act 1980.
2. If so, whether the claimant could, with reasonable diligence, have discovered that fact earlier (constructive knowledge was addressed but not necessary to determine).
3. Whether the claim should be summarily disposed of under CPR 24.2 because the claimant had no real prospect of success on limitation grounds and there was no other compelling reason for trial.

Court's reasoning and conclusions:

• The court applied the statement-of-claim test as explained in authority (notably Arcadia Group Brands Ltd v Visa Inc and The Kriti Palm): a fact relevant to a right of action is one without which the cause of action is incomplete; mere evidence that strengthens a case is insufficient.
• The claimant had not pleaded any positive case under section 32(1)(b): the particulars of claim did not specify which essential facts were said to have been concealed, when the claimant discovered them, or why facts available during the primary limitation period were inadequate to plead dishonest assistance against Mr Grumbridge.
• The evidential burden fell on the claimant once the primary limitation period was shown to have expired. The claimant failed to show even a modest evidential basis that it had a real prospect of establishing concealment of a fact essential to its cause of action.
• The court found that, on the limited material the claimant chose to disclose, there was sufficient information earlier to enable an adequate pleading against Mr Grumbridge; the claimant could have joined him in the first claim and pleaded dishonesty by inference to the necessary level.
• As a result, the court did not need to decide whether the facts could have been discovered with reasonable diligence; summary judgment was appropriate and judgment entered for the defendant.

Subsidiary findings: the court observed the claimant's schedule of allegedly undisclosed documents was inaccurate, that numerous documents had in fact been disclosed in the first claim, and that the absence of any pleaded limitation case was fatal.

The court entered judgment for the defendant and dismissed the claimant's claim. The court held that the primary limitation period had expired and the claimant had failed to establish any positive case under section 32(1)(b) Limitation Act 1980 that an essential fact relevant to the right of action had been deliberately concealed; accordingly, applying CPR 24.2 the claimant had no real prospect of success and there was no other compelling reason for a trial.