Super Fast Trading Limited v The Governor and Company of the Bank of Ireland & Anor

On an application for summary judgment concerning limitation under Limitation Act 1980, reasonable diligence is a single statutory inquiry. It applies both to whether a reasonably attentive claimant should have become aware of a need to investigate and to what a reasonably diligent investigation would have revealed. The inquiry is fact-sensitive and concerns the actual claimant in its factual context.

For fraud, discovery occurs when the claimant has sufficient knowledge to plead a complete cause of action, including facts supporting an inference that the representation was false and dishonestly made. A possible earlier mistake or negligence does not necessarily establish discoverable fraud. Where further factual or expert evidence could affect the limitation issue, and the claimant has a real prospect of establishing that fraud could not reasonably have been discovered earlier, summary judgment should be refused.

The defendants applied under CPR Part 24 for summary judgment on a claim assigned to Super Fast Trading Limited. The claim concerned alleged fraudulent misrepresentations made in 2008 about the value and rental income of a property portfolio acquired by Grindale Limited in 2009.

The primary limitation period had expired. The claimant relied on section 32 of the Limitation Act 1980, contending that the alleged fraud was not discovered, and could not with reasonable diligence have been discovered, until after a chance meeting in December 2017 and subsequent investigations.

The central issues were when any investigative trigger arose and whether a reasonably diligent investigation before December 2017 would have produced sufficient facts to plead fraud.

1. Application refused. The claimant had a real prospect of establishing that the fraud could not reasonably have been discovered before December 2017. The alternative strike-out application was no longer pursued.
2. Section 32 involves one statutory issue: whether the claimant could, with reasonable diligence, have discovered the fraud. The analysis may involve two stages. First, whether a reasonably attentive person in the claimant’s position would have become aware of something requiring investigation. Secondly, what a reasonably diligent investigation would have revealed. Both stages are questions of fact.
3. A trigger does not require notice specifically of a possible fraud. It requires something that would cause a reasonably attentive and diligent person to ask questions. The court cannot define the trigger abstractly. The assessment must reflect the actual claimant’s circumstances, including its relationship with the relevant bank and employee.
4. The applicable standard is objective but informed by the position of the actual claimant. Personal characteristics such as naivety or lack of curiosity are irrelevant, but the claimant is not to be replaced by a hypothetical person with different circumstances.
5. For fraud under section 32(1)(a), the court applied the statement-of-claim test. Time begins when the claimant has discovered enough to plead a complete cause of action, including a representation, its falsity and facts from which dishonesty is more likely than innocence or negligence. Mere evidence of a valuation problem or possible negligence is insufficient.
6. The evidence concerning the properties, rental income, legal advice obtained in 2011, the administrators’ apparent lack of fraud concerns, and the later disclosure process required fuller investigation and potentially expert evidence. It was therefore not fanciful that the claimant could establish that no earlier reasonable investigation would have supplied the necessary factual basis for pleading fraud.