Libyan Investment Authority & Ors v King & Ors

For limitation purposes, a proposed new claim may be added after expiry of the limitation period where it arises from the same or substantially the same facts as a claim already made. The assessment is qualitative. Some additional factual investigation does not automatically prevent amendment. The boundary is crossed where the new claim requires investigation wholly outside and unrelated to the facts previously investigated.

At the summary stage, each proposed cause of action need only have a realistic prospect of success. The court must avoid a mini-trial, while assessing documentary evidence and realistic inferences. A person who assumes responsibility for dealing with another’s affairs may arguably owe duties, including honesty, even where the parties are also commercial counterparties.

The claim arose from a failed joint venture under which the claimants paid £10.5 million for a 50 per cent interest in a proposed hotel and retail development and later invested a further £1.76 million.

Earlier proceedings against a surveying firm and other defendants had been struck out or dismissed, but the claimants were given an opportunity to reformulate claims against the present defendants. They sought permission to amend after the limitation period, relying on deceit, breach of duty, dishonest assistance and unlawful means conspiracy. The defendants opposed the amendments on limitation, abuse of process, sanctions and merits grounds.

The central issues were whether the proposed claims arose from the same or substantially the same facts, whether continuation would be abusive, whether the amendment order permitted later revisions, and whether each proposed cause of action had a realistic prospect of success.

1. Amendment and limitation. The proposed claims arose from the same or substantially the same facts as the earlier claims. The central events remained the disinstruction of Savills, the short-notice instruction of KS, preparation of the KS Letter, its presentation to the claimants, and the alleged involvement and states of mind of the defendants. The fact that the defendants had become the primary target did not alter that conclusion. Under Limitation Act 1980, s 35 and CPR r 17.4(2), the relevant question was the extent of any new investigation, viewed qualitatively. New or additional facts were not fatal. The boundary was crossed only where investigation would be completely outside and unrelated to the earlier investigation.
2. Abuse of process. Although the claimants could have formulated their case earlier, continuation was not unjust harassment. The court balanced the private and public interests, the defendants’ costs and reputational concerns, the prior costs orders, and the evidential concerns previously expressed about the defendants’ conduct. The claim did not amount to an abuse.
3. Merits threshold. Each head of claim had to be realistic rather than fanciful, carry some degree of conviction, and be assessed without conducting a mini-trial. The court could examine apparently authentic contemporaneous documents and realistic inferences. On that basis, the deceit, agency-duty, dishonest-assistance and conspiracy claims each had a realistic prospect of success.
4. Deceit. It was realistically arguable that the defendants had procured, adopted or approved representations that the joint venture had an enterprise value of £21 million, that the hotel site was worth £18 million, and that the relevant valuations were accurate and honestly believed. Their active role in selecting KS, revising the report and authorising its transmission could make them representors despite the report being issued in KS’s name.
5. Agency and honesty. It was realistically arguable that the defendants had assumed responsibility for acting for the claimants in instructing KS. The extent of any fiduciary obligations depended on the circumstances and the parties’ relationship. An unqualified duty of loyalty was not necessarily established, particularly because the parties were counterparties, but a duty to give honest instructions was realistically arguable.
6. Dishonest assistance and conspiracy. The pleaded chronology gave sufficient detail to identify the alleged assistance to Mr Layas and the alleged combination among Mr Layas, Mr King and Mr Merry. The documentary evidence provided a realistic basis for inferring coordinated conduct intended to procure the investment.
7. Later revisions. The 23 October 2018 order did not require relief from sanctions before the court could consider the later revisions. The revisions were within the permitted opportunity to reformulate the claim, were minor or narrowing in character, and were allowed.
8. Order. Permission was granted to re-amend the Amended Claim Form and to serve Re-Re-Amended Particulars of Claim in the form attached to the 28 May 2019 application.

This was a first-instance decision on applications for permission to amend and related objections. The judgment records an earlier order of the same court dated 23 October 2018, which struck out the then pleaded claims and allowed an opportunity to reformulate claims against the present defendants. Permission to appeal that order was refused on paper on 23 January 2019.