Freddie Freed & Anor v Saffron Management Limited & Ors
[2023] EWHC 1919 (Ch)
In Media Trust SPA (A company incorporated under the laws of Italy) as Trustee for the Jacaranda Trust v BGB Weston Limited & Ors
16 October 2023
[2023] EWHC 1491 (KB)
High Court
A trust lost a lot of money due to bad investments. They sued the investment company, but the court found the trust had initially lied about a contract to get a court order freezing the company's assets. The court still let them sue, but made them pay for the initial lie.
Key Facts
- •In Media Trust SPA (IMT) sought to amend its particulars of claim against BGB Weston Limited, Lorenzo Gallucci, and Gennaro Pinto.
- •The original claim by Private Trustees Limited (PTL) alleged conspiracy to deceive and misrepresent investments, leading to an €8 million loss.
- •The defendants applied to strike out the claim due to alleged abuse of process and lack of merit.
- •The proposed amendments included claims for breach of contract, first conspiracy (deceitful investment), and second conspiracy (concealing losses).
- •A key issue was the backdating of an investment management agreement (IMA) from January 2018 to November 2014, used in the original claim.
- •The defendants claimed that the claimant’s reliance on the backdated IMA constituted an abuse of process.
- •Forgery of Interactive Brokers statements by Pinto to conceal losses was a central point of contention.
- •Limitation issues were crucial, with the defendants arguing that the amendments introduced new claims statute-barred under the Limitation Act 1980.
- •The claimant argued that Section 32 of the Limitation Act 1980, relating to fraud and concealment, extended the limitation period.
Legal Principles
Power to amend statement of case.
Civil Procedure Rule 17.1(2)(b)
Overriding objective of Civil Procedure Rules.
Civil Procedure Rule 1.1
Amendment only permitted if new claim arises out of the same facts or substantially the same facts.
Civil Procedure Rule 17.4(2)
Postponement of limitation period in case of fraud, concealment, or mistake.
Section 32 of the Limitation Act 1980
New claims in pending actions are deemed to have been commenced on the same date as the original action.
Section 35 of the Limitation Act 1980
Test for real prospects of success in amendment applications.
Various case laws (e.g., Cameron Taylor v BDW, DR Jones v Drayton, etc.)
Court's approach to proving fraud in civil litigation.
Various case laws (e.g., Fiona Trust & Holding Corp v Privalov, etc.)
Jurisdiction to strike out a claim for abuse of process.
CPR 3.4(2), inherent jurisdiction, various case laws (Arrow v Blackledge, Masood v Zahoor, Summers v Fairclough Homes)
Outcomes
Permission to amend granted.
The claimant demonstrated real prospects of success on the amended claims, and the limitation period was not clearly expired due to alleged fraud and concealment under Section 32 of the Limitation Act 1980.
Claim not struck out.
While a serious abuse of process was found due to the claimant’s misleading statements regarding the IMA's date, striking out was deemed disproportionate, given the merits of the amended claims and the impact on the beneficiaries.
Claimant to pay defendants’ costs of the abuse application.
To compensate the defendants for the costs incurred in establishing the abuse of process.
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