Libyan Investment Authority & Ors v Roger Milner King & Ors

Claims in deceit, breach of agency duties, dishonest assistance and unlawful-means conspiracy require proof of the particular representation, breach, dishonesty, causation and loss alleged. A professional opinion is not converted into a representation of objective market value merely because it refers to value or investment returns. Where an agent assists a fiduciary, the agent’s liability depends on dishonesty assessed objectively against the facts known or believed. A party assisting with an alternative appraisal does not act dishonestly merely because the appraisal differs from an earlier valuation, unless the party knows or suspects that the fiduciary is acting against the principal’s interests and deliberately assists that conduct. The claims were dismissed.

The claimants invested £10.5 million for 50 per cent of a joint venture established by companies associated with the defendants to develop a hotel site and a proposed retail opportunity in Hertfordshire. They alleged that the defendants used the King Sturge letter and an earlier Strutt & Parker letter to misrepresent the value of the sites and joint venture.

The claimants also alleged that the defendants became their agents when assisting Rajab Layas, an executive director of LIA UK, to obtain alternative professional advice after Savills gave preliminary views materially below the agreed price. They alleged breach of agency duties, dishonest assistance of Mr Layas’s fiduciary breach and unlawful-means conspiracy. The central issues were whether actionable representations were made, whether Mr Layas breached fiduciary duties, whether the defendants acted dishonestly, and whether any breach caused the investment.

1. Deceit. The King Sturge letter represented that King Sturge considered an enterprise value of £21 million for the whole joint venture reasonable. It also implied that King Sturge genuinely held that opinion and knew of no reason making it unreliable. The letter did not amount to a formal market valuation of the sites. The Strutt & Parker letter likewise treated £18 million as an assumed site price in an investment model, not as a valuation. The representations were therefore opinions of the professional firms, not representations of the defendants’ beliefs or objective market value. They were not shown to be false, and reliance was not proved.
2. Fiduciary breach and agency. Mr Layas breached his fiduciary duties by failing to disclose Savills’ preliminary views to the LIA deal team and by giving a misleading explanation for ending Savills’ retainer. Mr King and Mr Merry nevertheless constituted themselves agents of LIA UK for the limited purpose of arranging the King Sturge advice. Their duties included honesty and compliance with the authority conferred.
3. Dishonesty. The defendants assisted Mr Layas in obtaining the King Sturge report, but the claimants failed to prove dishonesty. The defendants believed Mr Layas was acting as an honest representative of the LIA, believed that investment returns rather than formal market value were being sought, and believed King Sturge would express only its genuine professional opinion. The unusual two-stage instruction and suggested amendments did not establish dishonesty.
4. Conspiracy and causation. No agreement or combination to conceal Savills’ views was proved. Nor was an intention to injure established. Had the defendants’ alleged wrongs been proved, the court would have found that disclosure of Savills’ views probably would have led the LIA to renegotiate or abandon the transaction. That counterfactual did not arise because liability was not established.
5. The deceit, agency, dishonest-assistance and unlawful-means conspiracy claims were dismissed.