Frontiers Capital I Limited Partnership v Thomas Flohr

For limitation purposes under Limitation Act 1980, time begins to run in a deliberate-concealment case when the claimant knows enough to justify investigating and commencing a worthwhile claim. The claimant need not know every detail or possess evidence sufficient to prove the case.

On restoration of a dissolved company, the question is factual: what would have happened if it had remained in existence? The claimant bears the burden of showing that it could not, with reasonable diligence, have discovered the relevant facts.

A new fraud claim cannot generally be added after limitation where the allegation of dishonest intent gives the existing facts a substantially different character. Summary judgment is appropriate where the evidence and pleaded case show no realistic prospect of overcoming limitation.

The claimant, a dissolved limited partnership acting through its restored former general partner, sued the defendant over events occurring principally between 2002 and 2005. It alleged breaches of contractual and fiduciary duties, misuse of company resources, and concealment of dealings involving parallel Comprendium companies.

The defendant sought strike-out or summary judgment, principally on limitation grounds under section 32 of the Limitation Act 1980. The claimant sought permission to amend to plead fraudulent misrepresentation. The court also considered challenges to the pleading of competition, frustration of the company’s business, implied good faith and fiduciary duties.

1. Summary judgment and pleading. The competition allegations were not hopeless merely because the parallel companies were not shown to compete directly with Comprendium UK. The pleaded misuse of Comprendium UK’s assets and personnel disclosed an arguable claim.
2. The allegation that the defendant breached duties by failing to procure €10–20m of business for Comprendium UK was struck out. It was not coherently pleaded as a contractual claim, estoppel, or breach of a duty of good faith or fiduciary duty. Those duties did not, on the pleaded facts, impose the alleged positive obligation.
3. The existence of implied duties of good faith and fiduciary duties could not be determined summarily. The contractual documents, the parties’ relationship, their representations, trust and confidence, and the alleged use of company resources gave the claim a realistic prospect of success at trial.
4. Limitation. Applying the worthwhile-claim test in Gemalto Holding BV v Infineon Technologies AG and FII Test Claimants in the FII Group Litigation v Revenue and Customs Comrs, Mr Horlick knew by November 2013 the essential facts underlying the pleaded claims. His knowledge was sufficient to justify commencing the preliminaries to proceedings, even if he lacked chapter-and-verse detail. Continued attempts to conceal facts could not postpone limitation once the underlying facts were known.
5. For a restored company, the relevant inquiry was what would probably have happened if it had remained in existence. The claimant had to show that it could not then have discovered the relevant facts with reasonable diligence. The claimant produced no sufficient evidential basis for that conclusion. The 2013 correspondence would have triggered investigation whether FCGPL had a director or was supervised by a liquidator.
6. Summary judgment was not granted in respect of the period before 2013 because the limited documentary record, the parties’ close relationship, alleged dishonesty and the possibility of disclosure and cross-examination left a realistic factual issue.
7. Amendment. The proposed fraudulent-misrepresentation claim was a new cause of action. Under section 35 of the Limitation Act 1980 and CPR r 17.4, it did not arise out of the same or substantially the same facts. Alleging fraudulent intent added a substantially different factual character and would require significant further investigation. Permission to amend, including on a Mastercard or ACS basis, was refused.
8. The defendant’s application succeeded on limitation grounds. The claim was dismissed and the claimant’s amendment application was dismissed.

The judgment records an earlier interlocutory decision concerning authority: [2023] EWHC 2723 (Ch), followed by an appeal decision at [2024] EWCA Civ 1385. Those issues were not before the court for determination in this judgment.