Home Long Income Fund v Knight Frank LLP

Issuing proceedings to preserve limitation is abusive only where, at issue, the claimant lacks both a genuine intention to proceed and a reasonable basis enabling it to identify the essence of the claim and formulate particulars in due course. Particularity is not required at that stage.

Where the claimant can explain the essential factual and legal basis of the proposed causes of action, doubts about their ultimate viability should ordinarily be addressed through pleading followed by an application for summary judgment or strike out. Proceedings issued without formal authority may nevertheless be permissible where the circumstances do not make the issue abusive, including where required internal procedures are subsequently completed.

The claimant, an open-ended investment company, brought proposed negligence, procuring breach of contract and unlawful means conspiracy claims against its property valuer. The claim form was issued before the claimant had formally authorised the proceedings, but the authority was later ratified at an extraordinary general meeting.

The claimant applied for a stay or an extension until 31 December 2025 to investigate the claims and obtain documents. The defendant applied to strike out the claim on the grounds that the claims were not properly formulated, the claim form lacked authority when issued, and it failed to comply with Civil Procedure Rules 1998, rule 16.2(1)(a).

1. Strike out for abuse: The governing question was whether, when the claim form was issued, the claimant could identify the essence of each cause of action, had a reasonable basis for the allegations, and genuinely intended to prosecute the proceedings. The claimant did not need to plead the case with particularity. The approach in Nomura International plc v Granada Group Ltd was applied.
2. The claimant could explain the essential basis of the proposed claims: alleged knowledge of regulatory obligations, acceptance of valuation instructions involving external inspections, the alleged assistance of breaches of those obligations, and the alleged inference of negligent valuation. Although the judge expressed considerable scepticism about whether the claims would survive, that issue should be addressed after service of particulars, by reverse summary judgment or a further strike-out application. The issue of the claim form was therefore not abusive.
3. Authority: Issuing proceedings without authority may misuse the court’s process, but the relevant question remains abuse. Following Adams v Ford, the later ratification and the circumstances surrounding the claimant’s governance difficulties meant that the unauthorised issue was not abusive.
4. Pleading: The claim form was not materially defective under rule 16.2(1)(a). The strike-out application was dismissed.
5. Extension and stay: The claimant had delayed for almost eight months and was required to serve particulars promptly so that the defendant could assess the pleaded case. No stay was granted. The time for service was extended only by an unless order: unless particulars were served by 4 pm on 4 July 2025, the claim would be struck out.