For limitation purposes, it is the action brought that must be considered rather than the date of findings of fact.
Time starts to run when the claimants recognise that a worthwhile claim arises but in the case of fraud it is when the claimants have discovered enough to plead their case, whether or not the claim will succeed.
In Saddiq Omar Abu Seedo v Fahmy El Gamal and Others [2023] EWCA Civ 330, the Court of Appeal has considered when limitation periods begin to run and the position when later lies are discovered.
The case concerned the ownership of a leasehold commercial property at Elgin Avenue, London, W9, the facts of which were disputed.
The trial judge decided that the third defendant solicitor had approached the claimant investor with a joint venture proposal to acquire the property. Having obtained funds from the claimant the third defendant then approached the first defendant investor to take over the purchase loaning him the funds obtained from the claimant.
The first defendant made the same contribution to the costs of acquisition as the claimant, raising the balance of funds by mortgage.
The property was acquired at auction and registered in the name of the first defendant in 2004. It was transferred to the second defendant in 2015. The parties subsequently fell out and proceedings ensued in 2016.
The judge decided the third defendant was neither honest nor reliable. He had lied to both the claimant and second defendant in 2004 and subsequently.
The property was held by the first and then second defendant on trust for the claimant and first defendant equally. He was in breach of duty to both the claimant and the first defendant as their solicitor and had made fraudulent misrepresentations in relation to both transactions.
He was ordered to indemnify the first and second defendants for the claimant’s claims. His appeal on the facts and the law failed. An appeal to the Court of Appeal on limitation also failed.
The third defendant had deliberately concealed his acts. The second defendant discovered in 2009 that he was not sole owner of the property but not until after issue of the claim, the lie about the source of the funds.
These were not separate causes of action but part of the same deceit designed to conceal the claimant’s involvement in the purchase so time started running in 2009 and was barred in 2015.
However, the third defendant was in gross breach of his duty to the second defendant as his solicitor to act in his best interests. This could not be discovered in 2009 so the claim for an indemnity was not statute-barred.
Louise Clark is a property law consultant and mediator
