OT Computers Ltd v Infineon Technologies Ag & Anor

Under section 32 of the Limitation Act 1980, reasonable diligence is assessed objectively by reference to the actual claimant and its circumstances at the relevant time. A company which has ceased trading and entered administration or liquidation need not be treated as continuing its former business. Its circumstances are not fixed at the date of the wrongdoing. Personal traits affecting diligence are disregarded.

The inquiry encompasses both reasonable attentiveness to information indicating a need to investigate and what a reasonably diligent investigation would reveal. Both stages depend on the evidence. Where a company has sold its business and its only remaining representatives are insolvency practitioners, discoverability depends on information those practitioners could acquire through reasonable diligence. Commercial benchmarks in earlier authorities provide contextual guidance rather than a separate statutory test.

OT Computers Ltd, a computer assembler and seller, purchased dynamic random access memory from Micron Europe Ltd and possibly Infineon Technologies AG. The manufacturers participated in a price-fixing cartel subsequently established by a European Commission decision. OT Computers entered administration and sold its business and assets in January 2002, before public information about the cartel began to emerge. It entered liquidation in February 2004.

OT Computers and the Granville Companies, other computer businesses affected by the cartel, commenced proceedings in May 2016. On preliminary limitation issues, Foxton J held in [2020] EWHC 415 (Comm) that the Granville Companies could have discovered sufficient information to plead claims before July 2005. Their claims were time-barred. OT Computers' claim was timely because a reasonably diligent insolvency practitioner would not have encountered sufficient information to trigger investigation earlier.

The manufacturers appealed the decision concerning OT Computers. They contended that reasonable diligence required treating it as a continuing computer business despite its insolvency and cessation of trading. The factual finding concerning reasonably diligent insolvency practitioners was outside the permitted appeal. A conditional respondent's notice challenged the finding that OT Computers would otherwise have been in the same position as the Granville Companies.

The appeals were dismissed unanimously. Males LJ delivered the judgment, with which Coulson and Peter Jackson LJJ agreed.

1. Section 32 of the Limitation Act 1980 required an objective inquiry into what the actual claimant could have discovered through reasonable diligence. Its purpose was to prevent a claimant being disadvantaged by ignorance resulting from fraud, concealment or mistake. That purpose qualified the general objective of finality in limitation legislation. The section required its natural, purposive interpretation, without a predisposition towards either a narrow or a broad construction (paras 19–25, 48–50, 57–61).

2. Reasonable diligence applied throughout a single statutory inquiry. At the first stage, the claimant had to be reasonably attentive to information which would indicate a need to investigate. At the second stage, it was taken to know what a reasonably diligent investigation would reveal. Both questions were factual. A trigger for investigation had to be established objectively rather than assumed: DSG Retail Ltd v Mastercard Inc, [2020] EWCA Civ 671, applied (paras 35, 47).

3. The claimant bore the burden of proving that it lacked knowledge and could not reasonably have discovered the wrongdoing from the outset. That burden did not fix its circumstances permanently at the date of the wrong. After OT Computers sold its business, information could reach it only through its administrators and subsequently its liquidators. Discoverability therefore depended on their reasonable diligence. Different considerations would arise if administrators continued the business while seeking to rescue the company (paras 52–53).

4. The commercial benchmark in Paragon Finance Plc v DB Thakerar & Co, [1999] 1 All ER 400, remained authoritative guidance. It created neither a special business test nor a requirement to assume continued trading in circumstances that the earlier cases had not considered. Personal traits such as indifference or inexperience were disregarded, but an objective standard did not require replacing the claimant with a hypothetical person or company. The analogous approach in Adams v Bracknell Forest Borough Council, [2004] UKHL 29, supported taking account of the actual claimant's situation (paras 38–39, 54–61).

5. The unchallenged factual finding concerning reasonably diligent insolvency practitioners therefore sustained the postponement of limitation. The precise discovery threshold discussed in Test Claimants in the FII Group Litigation v Revenue and Customs Commissioners, [2020] UKSC 47, was left open. The respondent's notice was unnecessary, although its conditional argument would have failed because the claimant had not discharged its burden on the assumed trading-company basis (paras 26–27, 62–67).

The preliminary decision that OT Computers' claim was not time-barred stood; other issues remained for determination. The appellants were ordered to pay the appeal costs, excluding costs occasioned by the respondent's notice, and were refused permission to appeal to the Supreme Court.

• Court of Appeal (Civil Division): In [2021] EWCA Civ 501 , dismissed the manufacturers' appeals and upheld the preliminary determination that OT Computers' claim was not time-barred. Permission to appeal to the Supreme Court was refused.
• High Court, Queen's Bench Division, Commercial Court: Foxton J, in [2020] EWHC 415 (Comm) , determined preliminary limitation issues. He held that the Granville Companies' claims were time-barred but OT Computers' claim was timely. He granted the manufacturers permission to appeal. The appeals also concerned the associated costs order.