Goldtrail Travel Ltd v Grumbridge

For limitation purposes under Limitation Act 1980, a concealed fact is relevant to the claimant’s right of action only if the cause of action is incomplete without it. Facts that merely improve the prospects of success, or provide evidence for an otherwise viable claim, do not postpone limitation under section 32(1)(b). In a dishonest-assistance claim, the relevant question is whether the claimant possessed sufficient primary facts to plead a viable case, including knowledge and dishonesty, rather than whether it had the best available evidence. On a summary-judgment application, once expiry of the primary limitation period is clear, the claimant must identify the concealed essential facts and show a real prospect of bringing itself within section 32(1)(b).

The claimant, a company in liquidation, brought a dishonest-assistance claim against a former director of an investment company in relation to a 2010 transaction. The claim followed earlier proceedings in which the claimant had obtained judgment against other defendants, but the defendant had not been joined. The claimant relied on documents and information obtained after the investment company entered liquidation.

The defendant applied under CPR 24.2 for summary judgment, contending that the primary limitation period had expired and that the claimant could not rely on section 32(1)(b) of the Limitation Act 1980. The central issues were whether any fact relevant to the claimant’s right of action had been deliberately concealed and whether the claimant had a real prospect of establishing postponed limitation.

1. Application granted. Judgment was entered for the defendant. The claimant had not pleaded or otherwise advanced a positive case identifying the facts allegedly concealed, explaining their relevance to its right of action, or stating when limitation should have begun to run.
2. Section 32(1)(b) requires a narrow approach. Applying the statement-of-claim test in Arcadia Group Brands Ltd v Visa Inc [2015] EWCA Civ 883 and The Kriti Palm [2006] EWCA Civ 1601, the concealed fact must be one without which the cause of action is incomplete. Evidence that strengthens an existing claim, or facts bearing only on a defence, are insufficient.
3. For dishonest assistance, the relevant inquiry is whether the claimant had sufficient facts to plead a viable case that the defendant assisted the breach and acted dishonestly. The claimant need not possess all the primary evidence or plead facts that are only consistent with dishonesty. The interlocutory question is whether the available primary facts justify the plea, not whether the evidence would ultimately prove dishonesty at trial. The reasoning in JSC Bank Moscow v Kekhman and others [2015] EWHC 3073 (Comm), drawing on Three Rivers District Council v Bank of England [2001] UKHL 16, assisted in resolving that distinction.
4. Under CPR 24.2, where expiry of the primary limitation period is beyond doubt, the evidential burden passes to the claimant to show a real prospect of success on section 32(1)(b). It is insufficient merely to answer the defendant’s evidence. The claimant must identify the case on limitation on which it relies.
5. Even on the limited material disclosed, the claimant had possessed sufficient information during the primary limitation period to plead a non-strike-outable case against the defendant. His position as a director and alleged beneficial owner of the relevant company, its control of the transaction, and the substantial financial implications provided a sufficient factual basis for pleading knowledge and dishonesty by inference.
6. It was unnecessary to decide reasonable diligence. The proposed amendment therefore did not arise for consideration.