Saddiq Omar Abu Seedo v Fahmy El Gamal

In a deceit claim determined after trial, limitation under section 32(1)(a) of the Limitation Act 1980 is assessed by reference to the fraud found proved, rather than allegations which were pleaded but failed. Time begins when the claimant knows enough to plead that fraud.

Where several lies induce one transaction, each lie creates a separately postponed cause of action only if it amounts to a distinct deceit. Related lies forming one package and concealing the same matter constitute a single cause of action. Discovery of enough facts to plead that overall deceit starts time running, although the claimant does not yet know every lie or detail.

A solicitor induced his client to purchase a property by representing that the client would be its sole beneficial owner and that part of the purchase money was a repayable loan from the solicitor. The solicitor had instead used another investor’s money and arranged for the property to be held equally for that investor and the client.

The client learned in 2009 that an equal beneficial interest was asserted, but did not then discover the source of the money or the solicitor’s undisclosed personal interest. In subsequent proceedings, the trial judge ordered the solicitor to indemnify the client. The High Court dismissed an appeal in [2022] EWHC 1712 (Ch).

The second appeal concerned whether the indemnity claims were barred by limitation, including whether the relevant fraud was the fraud pleaded or that found at trial, and whether the two lies generated separate causes of action.

1. The appeal was dismissed. Where limitation under section 32(1)(a) of the Limitation Act 1980 is decided after findings on the merits, the court asks when the claimant discovered, or could with reasonable diligence have discovered, the essential facts of the fraud found proved. The pleaded case necessarily governs a preliminary limitation inquiry before findings have been made, but allegations which ultimately fail should not determine limitation after trial.

2. In a fraud case, time starts when the claimant has discovered enough to plead the claim. The claimant need not know whether the claim will succeed. In 2009 the client knew that he was said to hold only a 50% beneficial interest and faced a breach-of-trust claim. He therefore knew enough to plead that he had been deceived into buying on the false basis that he would be sole owner.

3. Limitation bars individual causes of action. Distinct and unconnected lies inducing the same transaction can constitute separate deceits, each with its own postponed limitation period. Related lies do not do so where they form one overall deceit and are designed to conceal the same matter.

   Here, the representations about sole ownership, the source of the purchase money and the supposed loan were a package of related lies. They concealed the investor’s involvement and induced purchase on the false basis of sole ownership. Discovery of the ownership fraud in 2009 started time for that entire deceit, although the lie about the money was discovered later. The deceit claim was consequently time-barred.

4. Facts concealed for section 32(1)(b) must be facts without which the cause of action is incomplete. Concealment of evidence which merely strengthens the claim or supplies details does not postpone limitation. The 2009 correspondence also disclosed enough to reveal failures to advise about the trust and beneficial ownership.

5. The indemnity nevertheless remained valid. A solicitor acting as a fiduciary must disclose fully any personal interest in the transaction. The correspondence did not disclose the solicitor’s personal interest or his failure to reveal it. That breach was not time-barred and, because proper disclosure would have prevented the client from entering the transaction and incurring liability, it independently sustained the indemnity.

6. It was too late to raise for the first time on a second appeal the absence of a pleaded reply relying on deliberate concealment. The court also observed, without deciding a point not argued below or on appeal, that a 100% contribution under section 1 of the Civil Liability (Contribution) Act 1978 might have provided another route to the same result.

1. Court of Appeal (Civil Division): The appeal in [2023] EWCA Civ 330 was dismissed. The indemnity was upheld on the basis of the solicitor’s undisclosed personal interest, although the deceit claim and several other retainer-based complaints were time-barred.
2. High Court, Business and Property Courts: Falk J dismissed the appeal on all grounds in [2022] EWHC 1712 (Ch). Her conclusion that post-trial limitation should still be assessed against the pleaded fraud was held to be erroneous, but the indemnity was ultimately upheld on another basis.
3. County Court at Central London: HHJ Dight found fraudulent misrepresentation and breaches of the solicitor’s retainer, rejected the limitation defence and ordered the solicitor to indemnify the client and his company against liabilities and costs arising from the property claim.