Lee Witcomb v J Keith Park Solicitors
[2023] EWCA Civ 326
Saddiq Omar Abu Seedo v Fahmy El Gamal
30 March 2023
[2023] EWCA Civ 330
Court of Appeal
A solicitor defrauded two clients in a property deal. One client found out about some of the lies within six years, but not all of them. The court ruled that he discovered enough to start the clock on his legal claim. However, a separate part of the claim related to the solicitor's misconduct and this was allowed.
Key Facts
- •Mr. Seedo, a Jordanian investor, and Mr. El Gamal, a surveyor, each contributed £69,500 towards the purchase of a property, with the balance financed by a mortgage.
- •Mr. Salfiti, a solicitor, acted for all parties, making misrepresentations to both Mr. Seedo and Mr. El Gamal regarding the ownership and funding arrangements.
- •Mr. Salfiti misrepresented to Mr. El Gamal that he would be the sole owner and that the £69,500 was a loan from Mr. Salfiti.
- •A Deed of Trust was created, stating equal ownership between Mr. Seedo and Mr. El Gamal, though Mr. El Gamal disputed signing it.
- •In 2009, Mr. El Gamal received correspondence revealing the trust arrangement, and subsequently, Mr. Seedo's claims were initiated.
- •Mr. El Gamal and EGC counterclaimed against Mr. Salfiti for indemnity/contribution, based on negligence, breach of contract, and fraudulent misrepresentation.
Legal Principles
In deceit claims, the limitation period under s. 32(1)(a) of the Limitation Act 1980 begins when the claimant discovers, or could with reasonable diligence have discovered, the fraud.
Limitation Act 1980, s. 32(1)(a)
For limitation purposes in fraud cases, the assessment is based on the facts as found by the judge, not solely on the pleaded case.
FII Group Litigation v HMRC [2020] UKSC 47; Gemalto Holding BV v Infineon Technologies AG [2022] EWCA Civ 782
Where multiple lies contribute to a single deceit, the limitation period runs from the discovery of the first lie that would allow a claimant to reasonably plead their case.
This case's judgement
A claim for contribution under s. 1 of the Civil Liability (Contribution) Act 1978 has a 2-year limitation period from the date of judgment against the claimant.
Civil Liability (Contribution) Act 1978, s. 1; Limitation Act 1980, s. 10
For deliberate concealment under s. 32(1)(b) LA 1980, the concealed fact must be essential to the cause of action, not merely supportive evidence.
Johnson v Chief Constable of Surrey (CA, 19 October 1992); AIC Ltd v ITS Testing Services (UK) Ltd, The Kriti Palm [2006] EWCA Civ 1601
Outcomes
The appeal was dismissed.
While the lower court erred in considering only the pleaded case for limitation, the 2009 correspondence provided Mr. El Gamal with sufficient knowledge of the primary fraud to trigger the limitation period.
Mr. El Gamal's claim against Mr. Salfiti for breach of solicitor's duty (failure to disclose conflict of interest) was not time-barred.
The 2009 correspondence did not reveal Mr. Salfiti's conflict of interest, delaying the discovery of this specific breach.
The indemnity claim against Mr. Salfiti was upheld, based on his breach of solicitor's duty.
The breach of duty caused Mr. El Gamal's liability to Mr. Seedo, justifying the indemnity.