Geoffrey Zelin successful in Arif -v- Sanger [2025] EWHC 1540 (KB)
Geoffrey Zelin secured the dismissal of this claim at the trial of a preliminary issue on the question of limitation.
The claimant alleged that he had been induced by various fraudulent misrepresentations to invest in a property development involving the former beer garden at the Widow’s Son pub in east London. Broadly speaking the alleged misrepresentations related to the potential of the site for development, the role of the defendant in the acquisition of the property and the structure of the corporate vehicle established to carry out the development. The claimant alleged that the representations were false and had been made fraudulently (or alternatively negligently) and that he had relied on them in acquiring shares in and becoming a director of the company. The cause of action was complete in 2012.
The claim was not issued until 2019, after the primary limitation period had expired. In pre action correspondence the claimant had claimed to be entitled to rely on s.32(1) of the Limitation Act 1980 and that he had issued the claim within 6 years of discovering the first of various facts that had led him on a train of enquiry. The original defence filed prior to Geoffrey’s involvement in the case did not plead limitation.
Geoffrey drafted an amended defence pleading limitation and alleging that the claimant could with reasonable diligence have discovered sufficient of the relevant facts.
The main point of legal interest was the relevance or otherwise of the fact that the claimant had become a director of the company and the rights and obligations that he had assumed in that capacity.
An application to have the claim summarily dismissed failed both before the master and on appeal. Although Bourne J observed that a “conscientious discharge of, for example, the section 174 [of the Companies Act 2006] duty might have led the Respondent to uncover relevant matters before 5 July 2013, he was not satisfied for the purposes of summary judgment that that was sufficient.
On the trial of the preliminary issue Stephen Gasztowicz KC sitting as a deputy High Court Judge held that in the circumstances of the case a person in the claimant’s position would have wanted to investigate what had happened and the claimant’s position as a director gave him the power to do so. He also held that it would have been reasonable for the claimant to make more enquiries before entering into the transaction.
The Court of Appeal has refused permission to appeal.
Full Judgment available below
