In Media Trust SpA v BGB Weston Ltd & OrsE [2024] EWHC 3277 (KB) (19 December 2024)
Judgment was handed down by Martin Spencer J in an appeal in a fraud claim concerning the proper operation of s.32 Limitation Act 1980. At first instance, and after a 10-day hearing spread across three sittings, the Master allowed amendments made at a time which, but for the operation of s.32, would have been after the expiration of the limitation period. In doing so the Master effectively summarily determined the issue of limitation against the defendants. He did so primarily on the bases that:
(1) The principle that a victim cannot have re-concealed from them a fact which they have previously discovered only applied to actual knowledge or discovery, and did not apply to facts which they could with reasonable diligence have discovered. Thus, he considered, where a victim could have discovered a fact with reasonable diligence but is persuaded not to investigate further by a fraudster’s further concealment, the victim may still rely on s.32.
(2) On the facts as he understood them, it was not reasonable diligence for the trustee of a family trust which held investments to investigate losses to those investments beyond asking the fund manager what the position was (where that person was, in that scenario, the wrongdoer). The victim was entitled to rely on what they were being told.
(3) He found (but only for the basis of the application) that the third defendant (alleged to be the primary wrongdoer) was the ostensible agent of the first and second defendants, such that they were affected by the ongoing concealment and could not rely on limitation defences.
The first and second defendants’ appeal was allowed. The Judge concluded that the Master had misdirected himself as to the correct approach to be taken in relation to the application of s.32 LA 1980, and reached the wrong decision. In particular, the Master:
(1) Was wrong to seek to distinguish between actual and constructive knowledge in relation to the question of whether a discoverable fact could be subsequently concealed (and misunderstood the authorities on this point).
(2) Wrongly focused on the issue of what the trustee should have done, rather than what it could have done. Had he adopted the correct approach, he ought to have concluded that the defendants’ limitation defence was at the very least reasonably arguably and therefore refused permission to amend.
(3) Was wrong to summarily determine that the third defendant was the ostensible agent of the first and second defendants beyond reasonable argument to the contrary.
To read the full judgment please click here.
Hugh Miall was instructed by Tim Peun and Mark Rostron of Morgan Rose Solicitors for the First and Second Defendants/Appellants.
