In Media Trust SPA (A company incorporated under the laws of Italy) as Trustee for the Jacaranda Trust v BGB Weston Limited & Ors

Permission to amend a statement of case should ordinarily be granted where the proposed case is properly pleaded, has a real prospect of success and does not obtain an impermissible limitation advantage. Where limitation has prima facie expired, the claimant must show that the limitation defence is not reasonably arguable, unless the new claim arises from the same or substantially the same facts.

Under section 32 of the Limitation Act 1980, a claimant cannot forget a fact already discovered. However, a defendant’s subsequent concealment may affect what further investigation amounts to reasonable diligence and what that investigation would reveal. A professional claimant may reasonably rely on a regulated professional who provides apparently convincing but fraudulent explanations and documents.

Abuse of process requires a proportionate response. Serious dishonesty does not automatically require striking out where the abuse is confined, the trial remains fair and costs sanctions adequately protect the court’s process.

The claimant, originally Private Trustees Limited and later substituted by In Media Trust SPA, sought to amend proceedings concerning the loss of trust assets invested through BGB Weston Limited, Lorenzo Gallucci and Gennaro Pinto.

The original claim relied substantially on an investment management agreement said to have been made and signed in November 2014. It was later accepted that the document had been created and signed in January 2018 and backdated. The proposed amendments advanced a contract claim and two unlawful-means conspiracy claims, alleging investment in high-risk products, concealment of losses and the use of fabricated Interactive Brokers documents.

BGB and Mr Gallucci sought strike-out or reverse summary judgment and opposed amendment on limitation and abuse-of-process grounds. The central issues were whether the amended claims had a real prospect of success, whether limitation was postponed under section 32 of the Limitation Act 1980, and whether the backdating and use of the 2014 date justified striking out the claim.

1. Permission to amend. The amended particulars were imperfect and the contract case was thin, but the claims passed the real-prospect-of-success threshold. The evidence gave rise to an arguable case that Mr Pinto had ostensible authority to communicate and contract for BGB, that BGB had acted as an adviser or manager to the trust, and that contractual obligations concerning investment risk might be established. The conspiracy claims also had real prospects, although the allegations against Mr Gallucci were particularly weak and depended on proving his fraudulent participation.
2. Contract formation and implication. An express contract requires objective mutual intention to create legal relations, sufficient certainty of terms and consideration. An implied contract arising from conduct is not lightly inferred. Necessity is required. The fact that a bank also managed or held the assets did not preclude a separate contractual relationship between BGB and the trustee.
3. Limitation. The proposed claims were new claims and did not arise from the same or substantially the same facts as the original claim. The claimant therefore had to show that the limitation defence was not reasonably arguable. Mr Pinto was held out by BGB as its investment manager and agent. The fabricated Interactive Brokers statements and related assurances deliberately concealed both the losses and the high-risk investments. That concealment was attributable to BGB for section 32 purposes.
4. Section 32. A claimant retains knowledge of a fact actually discovered, even if later persuaded that the fact is untrue. However, a defendant’s conduct may make it unreasonable to pursue further enquiries and may prevent the claimant from discovering additional key facts. Dr Panico and the trustee acted with reasonable diligence by repeatedly asking the apparent regulated fund manager for an explanation and relying on apparently genuine supporting documents. It was not reasonably arguable that they could have discovered the key breaches before the relevant date. Section 32 therefore prevented a limitation bar to amendment. The fraud-based conspiracy claims also benefited from section 32(1)(a).
5. Abuse of process. The backdating and inaccurate presentation of the investment agreement were a very serious abuse, involving dishonest statements in proceedings and in support of a without-notice freezing injunction. Nevertheless, the agreement itself was genuine, the abuse was confined to its date and the fairness of a future trial was not materially compromised. The claim was not struck out. The claimant was ordered to pay BGB’s and Mr Gallucci’s costs of the abuse application, with further costs consequences reserved.

Not an appellate decision. The judgment determined interlocutory applications in the High Court proceedings.