Robert Lee & Ors v James Hay Administration Company & Ors

Summary judgment is inappropriate where limitation, concealment, knowledge, assignment and abuse-of-process issues substantially depend on state of mind, disclosure and oral evidence. An equitable assignment does not automatically make proceedings abusive where the claimant was uncertain of title and the defect was promptly cured. Under the Limitation Act 1980, the relevant inquiry concerns facts completing the cause of action and the claimant’s actual or reasonably obtainable knowledge. Claims should not be fragmented artificially to restrict the pleaded case. Relief from sanctions may be granted where a serious breach caused by legal representatives has been remedied and maintaining strike-out would be disproportionate, applying the Denton criteria.

The judgment determined two applications in claims by former professional footballers concerning losses on investments made through self-invested personal pensions. The Standard Life defendants sought strike-out or reverse summary judgment of Stephen Sedgley’s claim, alleging assignment of the cause of action to the Financial Services Compensation Scheme, limitation, absence of duties owed by the tenth defendant, and inadequate pleading.

The James Hay and AJ Bell defendants opposed relief from sanctions sought by four claimants whose claims had been struck out after failure to pay costs required by unless orders. The central issues were whether the claims were abusive or time-barred, whether the tenth defendant owed arguable analogous duties, and whether relief should restore the struck-out claims.

1. Applications allowed in substance. The court declined to strike out Mr Sedgley’s claim or enter reverse summary judgment, and granted the first, fourth, sixth and seventh claimants relief from sanctions, revoking the strike-out of their claims.
2. The assignments to the FSCS were at least arguably equitable because the formal requirements of section 136 of the Law of Property Act 1925 had not been met. Starting proceedings with knowledge that the cause of action belonged to another may be abusive, but Pickthall v Hill Dickinson LLP recognises an exception where the claimant is uncertain of title. On the evidence, these unsophisticated claimants had a real prospect of establishing uncertainty. The defect was also arguably cured swiftly by re-assignment before the strike-out application.
3. The limitation issues under sections 32 and 14A of the Limitation Act 1980 required findings about concealment, actual knowledge and constructive knowledge. The alleged valuation and custodian breaches, the misleading valuations and the later discovery that the Fortress Fund was worthless provided a real prospect of establishing postponement of limitation. Disclosure and oral evidence could materially affect the result, so the issues were unsuitable for summary determination.
4. The court rejected the contention that section 32 or section 14A confined the claim to particular duties. Those provisions refer to the action or right of action as a whole and do not require artificial slicing of the pleaded claim.
5. The tenth defendant’s status as trustee and custodian, and its role in opening the portfolio, made it reasonably arguable that contractual or tortious duties arose by analogy with the regulatory standards, even though COBS did not directly apply.
6. Applying the three-stage Denton criteria, the costs breach was serious and had no good reason, but it was attributable to the claimants’ advisers, had been remedied, and had not affected a trial timetable. Maintaining strike-out for non-payment of costs under £20,000 would be disproportionate. The bankruptcy standing point was also curable and did not justify strike-out.
7. The post-judgment request for editorial corrections was properly refused where it sought to re-argue the case rather than clarify the judgment.