IMRAN ARIF v DALBIR SINGH SANGER

For limitation purposes under Limitation Act 1980, reasonable diligence requires consideration of what a real claimant could have discovered in the circumstances, not what a hypothetical claimant might have done. The claimant must first have been put objectively on notice of the need to investigate fraud or deliberate concealment. The inquiry is fact-sensitive and must account for the claimant’s actual circumstances, resources and business context, while disregarding merely personal characteristics such as naivety or lack of curiosity. On a summary judgment application, the court should not finally determine the issue where oral evidence may clarify when the trigger arose or what further inquiries could reasonably have been expected. A real prospect of success is sufficient to require a trial, even where the limitation case is difficult.

The claimant alleged that the defendant induced him to enter a property joint venture by fraudulent and negligent misrepresentations. The claim was issued more than six years after completion, and the defendant applied for summary judgment on limitation grounds under sections 2 and 32 of the Limitation Act 1980.

The Senior Master dismissed the application, holding that the claimant had a real prospect of showing that fraud or deliberate concealment could not reasonably have been discovered before the relevant date. The defendant appealed. The central issues were whether there had been an objective trigger requiring investigation, what inquiries reasonable diligence required, and whether those questions could properly be resolved without oral evidence.

1. Appeal dismissed. The claimant had a real prospect of establishing that section 32 extended the limitation period. The limitation issue could not properly be finally determined on the summary judgment evidence.
2. Section 32 requires the court to ask what the claimant could have discovered by reasonable diligence in response to something which objectively put him on notice of the need to investigate possible fraud or concealment. The trigger is a question of fact. Reasonable diligence is distinct from exceptional measures which the claimant could not reasonably have been expected to take.
3. The assessment is fact-sensitive. The court must consider the claimant as a real participant in the relevant commercial activity, with moderate intelligence, adequate but limited resources, a desire to discover fraud, and a reasonable but not excessive sense of urgency. Personal characteristics such as naivety, shyness or lack of curiosity are not relevant. The claimant’s statutory duties as a director under the Companies Act 2006 do not automatically define the scope of diligence under the Limitation Act 1980, because the statutes pursue different purposes.
4. There was uncertainty about when the claimant was put on notice. Oral evidence might establish what he was told about the planning application in early 2013 and when a reasonably diligent investor would have made independent inquiries. It could not be assumed without further evidence that inquiries of solicitors, the Land Registry or Companies House would have revealed the essential facts of the alleged fraud.
5. The outcomes under section 32(1)(a) and section 32(1)(b) would be the same, and it was unnecessary to decide whether deliberate concealment occurred. The Senior Master’s 15 per cent reduction in costs was within her discretion, so the costs cross-appeal was dismissed. Further case-management directions were left for written submissions.

• High Court (Queen’s Bench Division): appeal from the Senior Master’s dismissal of the defendant’s summary judgment application dismissed. The cross-appeal concerning the costs reduction was also dismissed.