Boyse (International) Ltd v Natwest Markets Plc & Anor

For limitation purposes, discovery of fraud means knowledge of the essential facts constituting the precise deceit alleged. General awareness that something may have gone wrong is insufficient by itself.

Under section 32(1) of the Limitation Act 1980, reasonable diligence is an objective inquiry applied throughout. The claimant must be reasonably attentive to matters which a reasonably attentive person in its position would learn, and must then pursue a reasonably diligent investigation. A trigger may consist of a series of events rather than one isolated occurrence. Summary judgment is appropriate where the evidence leaves no real prospect of showing that the fraud could not have been discovered with reasonable diligence.

Boyse appealed, with permission, against the Chief Master’s order dismissing its application to amend, striking out certain claims and granting summary judgment to the Bank on its LIBOR misrepresentation claim.

The claim alleged fraudulent misrepresentations concerning manipulation of LIBOR in connection with interest-rate hedging products entered into in 2007 and 2008. The Chief Master held that the claim was time-barred under sections 2 and 32(1)(a) of the Limitation Act 1980, because Boyse could with reasonable diligence have discovered the fraud by the publication of the FSA Final Notice on 6 February 2013, more than six years before proceedings were issued.

The appeal concerned whether that conclusion was wrong in law or fact, including whether there had been a sufficient trigger before publication of the Final Notice and whether discovery required exceptional measures.

1. Appeal dismissed. The Chief Master was entitled to grant summary judgment for the Bank. Boyse had no real prospect of establishing at trial that it could not with reasonable diligence have discovered the alleged fraud before 19 February 2013.
2. Section 2 of the Limitation Act 1980 imposed a six-year limitation period for the tort claim. Section 32(1)(a) postponed commencement until Boyse discovered the fraud, or could with reasonable diligence have discovered it.
3. Discovery required knowledge of the essential facts constituting the precise deceit alleged. Awareness of fraud in a general sense was insufficient. The court accepted that the Final Notice, together with the surrounding publicity and facts already known to Boyse, contained enough information to enable the pleaded fraudulent misrepresentation claim to be advanced.
4. Reasonable diligence was objective but had to be assessed by reference to the actual claimant’s position. It applied throughout the inquiry. The court should consider both whether circumstances put the claimant on notice of a need to investigate and what a reasonably diligent investigation would then reveal. The word trigger should not obscure that discovery may result from a series of events.
5. The relevant circumstances included Boyse’s knowledge of LIBOR and its function, the Bank’s representations about LIBOR, the importance of those representations to the transactions, the substantial losses caused by the hedging products and the contemporaneous widespread publicity about LIBOR and the Bank’s conduct. Together they meant that a reasonably diligent person in Boyse’s position would have been alert to the available material before 6 February 2013.
6. The issue was sufficiently clear for summary judgment. A trial was unnecessary and unjustified.

• High Court (Chancery Division): appeal against the Chief Master’s order of 14 July 2020, following his judgment of 27 May 2020. The appeal was dismissed.