Rachel Sleeman and Zachary Kell successfully resist High Court appeal in relation to limitation in deceit claims

21st December 2021

Rachel Sleeman and Zachary Kell acted for the Claimant in Arif v Sanger [2021] EWHC 3475 (QB) a claim for deceit/fraudulent misrepresentation in relation to a purported property development venture in East London. The Defendant applied for summary judgment on the basis that the claim was statute barred under the Limitation Act 1980 and that the Claimant had no real prospect of successfully relying upon ss. 32(1)(a) (actions based upon the fraud) and 32(1)(b) (where any relevant fact has been deliberately concealed).

Following the dismissal of the Defendant’s application by Senior Master Fontaine ([2021] EWHC 1183 (QB)), the Defendant appealed.

On 21 December 2021, the Honourable Mr Justice Bourne handed down judgment dismissing the appeal after considering the recent developments in the law on s.32 (including the Court of Appeal’s decision in OT Computers Ltd v Infineon Technologies AG [2021] 3 WLR 6). This judgment is important in further developing our understanding of what constitutes “reasonable diligence” and what factors may be relevant to the court when applying that test.

In particular, the Appellant argued that because the Respondent was a director and therefore subject to the general duties of a director set out in ss.171-177 of the Companies Act 2006, the Respondent was legally obliged to make enquiries which would have uncovered the fraud. However, this argument failed because the relevant sections of the Companies Act 2006 and the Limitation Act 1980 have different purposes.

A copy of the judgment can be found here.