DEBORAH GIDDENS v BRIAN FROST & Ors.

For limitation purposes, a claimant has actual or constructive knowledge when the claimant knows, or could with reasonable diligence discover, enough to justify embarking on the preliminaries to proceedings. Under section 32 of the Limitation Act 1980, the standard is objective but informed by the position of the actual claimant. Under section 14A, knowledge concerns the damage, its attribution, the defendant’s identity and the essence of the complaint; knowledge that conduct was legally negligent is unnecessary.

The court must distinguish facts which merely show an apparent irregularity from facts which provide sufficient grounds to investigate fraud or negligent advice. The claimant bears the burden of establishing that the statutory postponement applies.

The claimant transferred pension benefits into a small self-administered pension scheme in 2012 and invested most of the resulting funds in a truffle plantation scheme. She claimed against the defendants in fraud and for defective advice.

The defendants contended that the claims were barred by the ordinary six-year limitation period under section 2 of the Limitation Act 1980. The claimant relied on sections 32 and 14A, saying that she first acquired sufficient knowledge of the fraud or negligent advice in November 2016. The court tried that limitation issue as a preliminary issue, without determining the merits of the underlying claims.

1. Preliminary issue. The answer was no. The claimant’s pleaded claims were not statute-barred.
2. Section 32. The claimant had to establish that she did not discover, and could not with reasonable diligence have discovered, the fraud or deliberate concealment earlier. The objective standard is informed by the position of the actual claimant. It asks when the claimant had enough knowledge to justify embarking on the preliminaries to proceedings. The burden lay on the claimant because section 32 is an exception to the ordinary limitation regime.
3. Section 14A. The claimant needed knowledge of the material damage, its attribution to the alleged act or omission, the defendant’s identity and the essence of the complaint. Knowledge that the conduct was legally negligent was unnecessary. Constructive knowledge depended on facts observable or ascertainable by the claimant, including through expert advice where it was reasonable to seek it.
4. The claimant should have accessed her Government Gateway account when she received the relevant login details in September 2013. However, the information displayed there showed only that the recorded investment value failed to reflect the cash payment she had received. It did not reveal, or provide sufficient grounds to investigate, the alleged fraud or negligent advice.
5. The claimant’s discovery of the online article concerning Wendy Smart in November 2016 was accepted as the point at which she first acquired the relevant knowledge. The court rejected the contention that reasonable diligence required her to discover it earlier.
6. The court was not persuaded that the claimant had deliberately deleted emails. The absence of expert evidence establishing that the deletion could not have occurred accidentally, the character of the November 2016 emails, and the judge’s assessment of the claimant’s evidence all supported that conclusion. The court therefore made no adverse inference sufficient to establish earlier knowledge.