Granville Technology Group Limited (in liquidation) & Ors v LG Display Co Limited & Anor

Equity does not provide a general power to award compound interest in support of a common-law damages claim. The established jurisdiction is confined to limited categories, including cases where money has been obtained and retained by fraud and cases involving fiduciary accountability for profits. Deliberate concealment of a wrong is not enough by itself. The concealment must be part of, or amount to, the relevant cause of action and must have caused a fund to be obtained and retained for the wrongdoer’s benefit. Where the issue is a short point of law requiring no factual investigation, the court may determine it summarily and strike out the unsustainable claim.

The claimants brought a follow-on damages action arising from the European Commission’s finding of an LCD panel cartel. They claimed compound pre-judgment interest both as damages and under the court’s equitable jurisdiction. The present application by LG concerned only the equitable claim. LG applied under CPR 3.4(2)(a) and CPR 24.2 to strike out or obtain summary judgment, arguing that the pleaded case did not fall within the established equitable jurisdiction. The claimants relied principally on alleged deliberate concealment of the cartel, which they said had delayed recovery. The central issue was whether that allegation was sufficient, or arguably sufficient, to engage equity’s jurisdiction so that the issue should proceed to trial.

1. Application granted. The pleaded claim for compound interest under the equitable jurisdiction disclosed no reasonable grounds and had no realistic prospect of success. The offending parts of the pleading were struck out, alternatively equivalent summary judgment was granted.
2. The court accepted that the summary judgment principles in Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) applied, with no material difference under CPR 3.4(2)(a), as recognised in Begum v Maran (UK) Ltd [2021] EWCA Civ 326. This was a short point of law for which the court had the necessary material. There was no compelling reason to defer determination until trial.
3. The equitable jurisdiction had to be approached through the established categories identified in President of India v La Pintada Compania Navigacion SA [1985] AC 104 and considered in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669. The first limb required money to have been obtained and retained by fraud. The fraud had to be the cause of action, or at least an element of it, and had to cause the money to be obtained and retained as a fund which the fraudster had, or was deemed to have, used for its own benefit.
4. The judge assumed, without deciding, that deliberate concealment might in an appropriate case amount to equitable fraud. That possibility did not dispense with the need to establish the required connection between the fraud and the obtained and retained fund. The claimants’ concealment allegation was not a cause of action or pleaded element of the cartel claim. It was pleaded for limitation purposes and as a factor said to have prevented recovery. It was not alleged to have caused LG to obtain and retain a fund for its own benefit.
5. The reasoning was consistent with Black v Davies [2005] EWCA Civ 531: it was insufficient merely to show that the wrong caused the claimants to lose money. A broader approach would improperly expand equity in a field addressed by statute, contrary to the warning in Westdeutsche against usurping Parliament’s function.