Imran Arif v Dalbir Singh Sanger

For limitation purposes, a claimant relying on fraud or deliberate concealment must show that the facts could not have been discovered earlier through reasonable diligence. The inquiry is objective but concerns the actual claimant and all relevant circumstances, including their knowledge, abilities, role in the transaction and available powers of investigation.

A “trigger” is shorthand for something which puts the claimant on notice of a matter meriting investigation. A separate triggering event is unnecessary where the circumstances themselves require reasonable enquiries. In a substantial investment or joint venture, reasonable diligence may require inspection of the property, title, ownership, transaction documents, planning material and corporate information. The burden remains on the claimant to show that discovery required exceptional measures which could not reasonably have been expected.

The claimant brought proceedings alleging fraudulent or negligent misrepresentations which induced him to invest in a property-development joint venture. The defendant relied on the six-year limitation period under the Limitation Act 1980.

The claimant accepted that the causes of action were complete by February or March 2012, whereas the claim form was issued on 5 July 2019. He relied on section 32 of the Act, alleging fraud and deliberate concealment.

The court divided the allegations into three causes of action: concealment concerning the defendant’s involvement in acquiring the pub and land and fixing the price; representations about the ease of development; and representations about the joint venture’s membership structure. The central issue was whether the claimant could, with reasonable diligence, have discovered the relevant facts in time.

1. The limitation defence succeeded. The claimant could not overcome the limitation defence. Each of the three causes of action could have been discovered, sufficiently to plead fraud or negligent misrepresentation, outside the limitation period.
2. Under section 32 of the Limitation Act 1980, “concealment” includes keeping a fact secret by active concealment or non-disclosure. “Deliberate” requires intentional non-disclosure; recklessness is insufficient. A relevant fact is one without which the cause of action is incomplete.
3. For fraud, the applicable discovery threshold remained the statement-of-claim test: limitation began when the claimant had discovered enough to plead the case. For deliberate concealment, the court applied the formulation requiring knowledge sufficient to justify embarking on the preliminaries to proceedings, while recognising that the distinction will often make little practical difference.
4. Reasonable diligence applies throughout the inquiry. “Trigger” is shorthand for notice of something meriting investigation, not necessarily a distinct event. The question concerns what the actual claimant could have discovered, judged objectively in light of the transaction, the person involved and all surrounding circumstances.
5. The claimant’s status as a director, his knowledge of the Companies Act 2006 and the company’s articles, his ability to obtain company and third-party information, his business education, property experience and substantial investment were relevant circumstances. Those matters did not impose a separate duty to investigate every possible fraud, but they affected what reasonable diligence required.
6. In relation to the hidden-seller and price allegations, reasonable enquiries would have revealed the connected acquisition of the pub and land, the price allocation, ownership and restrictive covenants. In relation to development feasibility, inspection of the site, title material, the listed status of the pub and planning information would have revealed the relevant matters. In relation to the corporate structure, enquiries of the other proposed participant and Companies House searches would have revealed the altered directorship and membership structure.
7. The claim was therefore statute-barred. The judgment determined the preliminary issue in favour of the defendant.