Saddiq Omar Abu Seedo v Fahmy El Gamal
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee,Lord Justice Birss,Lord Justice Bean |
| Judgment Date | 30 March 2023 |
| Neutral Citation | [2023] EWCA Civ 330 |
| Docket Number | Case No: CA-2022-001387 |
| Court | Court of Appeal (Civil Division) |
[2023] EWCA Civ 330
Lord Justice Bean
Lord Justice Nugee
and
Lord Justice Birss
Case No: CA-2022-001387
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
APPEALS (ChD)
Mrs Justice Falk
[2022] EWHC 1712 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Joshua Munro (instructed by Caytons Law LLP) for the Appellant
Faisal Saifee (instructed by TKD Solicitors) for the Respondents
Hearing date: 22 February 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 30 March 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This second appeal concerns the question whether the claims of the 1 st and 2 nd Defendants against the 3 rd Defendant are barred by limitation. It raises at least two questions of general interest on limitation in deceit claims.
Where an action is based on the fraud of the defendant, s. 32(1)(a) of the Limitation Act 1980 ( “ LA 1980”) provides that the period of limitation does not begin to run until the claimant has discovered, or could with reasonable diligence have discovered, the fraud. That means that in a claim based on the tort of deceit, where the limitation period is 6 years, the claimant has 6 years from when he discovered, or could have discovered, the fraud to bring an action.
The first question is whether for these purposes “the fraud” means the fraud as formulated by the claimant in his pleading, or the fraud as found by the judge after a trial. Where, as often happens, the question of limitation is raised by the defendant before trial by way of an application for summary judgment or to strike out the claim, the question necessarily has to be assessed by reference to the pleaded case as at that stage there have been no facts found. But is it different if the question of limitation arises after a trial when the facts have by then been found? In the judgment under appeal Falk J (as she then was) said that limitation was still to be assessed against the pleaded case. That was challenged on appeal (and this contention was the point which merited a second appeal), but in the result, as set out below, we heard no adverse argument on it, counsel being agreed that in such a case the question of limitation should be assessed against the facts as found.
The second question, which only really emerged clearly in the course of the oral argument, is this. Where the defendant has deceived the claimant into entering into a transaction by telling more than one lie, what happens if the claimant discovers that one lie is untrue but does not then bring a claim, and then some years later discovers that a second lie is untrue? Is his claim barred by limitation 6 years after he discovers the first lie, or can he bring a claim based on the second lie up to 6 years after discovering that to be untrue? This question, on which we were not shown any clear authority, is not entirely straightforward.
The appeal arises out of a trial concerning the ownership of a property which was heard in November and December 2020 by HHJ Dight in the County Court at Central London. The property had been acquired in the name of the 1 st Defendant, Mr El Gamal, and subsequently transferred into the name of the 2 nd Defendant, El Gamal and Co Ltd (“ EGC”), a company of Mr El Gamal's. In a judgment delivered on 14 January 2021 HHJ Dight held that the property was held first by Mr El Gamal, and then by EGC, on trust as to 50% for the Claimant, Mr Seedo, and ordered various accounts against Mr El Gamal and EGC. Mr El Gamal and EGC had claimed over against the 3 rd Defendant, Mr Salfiti. HHJ Dight upheld their claims and ordered him to indemnify them against Mr Seedo's claims and their own costs. In an addendum to his judgment added when approving the transcript he rejected a submission on behalf of Mr Salfiti that the claims against him by Mr El Gamal and EGC were barred by limitation.
Mr Salfiti appealed to the High Court on a number of grounds, one of which concerned the limitation point. The appeal was heard by Falk J. She dismissed the appeal on all grounds for reasons given in a judgment delivered on 24 June 2022 at [2022] EWHC 1712 (Ch).
Mr Salfiti now appeals to this Court solely on the question of limitation. Permission for a second appeal was granted by me on 20 September 2022.
Facts
There were many disputes of fact at trial but HHJ Dight in the course of a long and detailed judgment resolved such of them as he considered were needed to decide the claims that had been brought. Mr Salfiti challenged HHJ Dight's central factual findings in his appeal to the High Court, but Falk J dismissed all his grounds of appeal, and Mr Salfiti is now bound by the factual findings made at trial, as Mr Joshua Munro, who appeared for him, accepted. On that basis the facts are as follows (references in this, and the next two, sections to numbers in square brackets being to paragraphs of HHJ Dight's judgment).
The parties are: Mr Seedo, a wealthy Jordanian, resident in Dubai and with many investments around the world, including property in London [2]; Mr El Gamal, a surveyor and estate agent, resident in the UK and based in Camden, who also has property investments in London; EGC, a company through which Mr El Gamal operates his estate agency business and which holds some of his property investments; and Mr Salfiti, an English solicitor who was known to both Mr Seedo and Mr El Gamal and who had acted for each of them in the past [3]. Between 1994 and 2006 he ran his own firm called Salfiti & Co [31].
The property in question is a registered long leasehold interest in commercial property at 306–308 Elgin Avenue London W9 ( “the Property”) [1]. On 2 June 2004 Mr Salfiti attended an auction and successfully bid for the Property at a price of £310,000 [4]. The purchase was completed on 8 August 2004 and registered in the name of Mr El Gamal [4]. In 2015 Mr El Gamal transferred the Property to EGC, in whose name it remained registered [5].
There was no dispute that £69,500 of the funds required for the purchase came from Mr Seedo, and another £69,500 came from Mr El Gamal, the balance being raised by Mr El Gamal on mortgage [4]. There was however a very lively dispute as to the arrangements agreed between the parties, specifically (1) as to what Mr Salfiti agreed with Mr Seedo; (2) as to what Mr Salfiti agreed with Mr El Gamal; and (3) as to whether Mr Seedo and Mr El Gamal knew anything about each other's participation. On the last point HHJ Dight found that they did not know each other, or of each other's existence, at the time of the purchase, Mr El Gamal first becoming aware of Mr Seedo's existence in 2009, and Mr Seedo not becoming aware of Mr El Gamal's existence until 2016 [23].
HHJ Dight had to resolve some stark inconsistencies in the rival versions of what happened and in general did so by preferring the evidence of both Mr Seedo and Mr El Gamal to that of Mr Salfiti. He described Mr Seedo as an open and frank witness [21], and said of Mr El Gamal that he gave evidence which he largely accepted (albeit “patchy in some places and problematic”) [29]. He therefore accepted the core evidence of both of them, which led him to reject the evidence of Mr Salfiti [30], which he described as neither honest nor reliable [31]. His overall conclusion was that Mr Salfiti had lied to both Mr Seedo and to Mr El Gamal in 2004 and for a number of years afterwards [23].
On this basis he found the arrangements agreed between Mr Seedo and Mr Salfiti to have been as follows. Mr Seedo wanted to make a new property investment in London. He intended to use Mr Salfiti for legal advice and conveyancing work. Mr Salfiti however proposed that they acquire the Property as a joint venture, and they ultimately agreed that they would each contribute 50% of the costs and would share rental income and profit on sale equally, with Mr Salfiti's firm collecting the rent and keeping Mr Seedo's share for him, the property to be held in their joint names or in the name of an offshore company [59]. Mr Salfiti's evidence was that his only role was to be as a solicitor, with Mr Seedo having originally agreed that his joint venture partner should be a Mr Bosheh, who was later replaced by Mr El Gamal [60], but HHJ Dight rejected that [61]. He found that Mr Salfiti told lies to Mr Seedo from the beginning, the essence of which was that he (Mr Salfiti) was to be the other joint venture partner [61]. He also found that such lies were never corrected, Mr Salfiti persisting in holding himself out to Mr Seedo as a joint owner of the investment as late as 2017 [62]. He specifically rejected as untrue Mr Salfiti's evidence that he had told Mr Seedo about the involvement of Mr El Gamal [64]. So far as Mr Seedo was concerned therefore, the purchase was held out by Mr Salfiti to him as a simple joint venture between him and Mr Salfiti with each contributing half the necessary funds [6].
Having reached this agreement with Mr Seedo, Mr Salfiti attended the auction on 2 June 2004 and successfully bid for the Property [65]. At the same auction he also successfully bid for some adjoining properties [4]. (There was no issue about these at trial, a separate dispute in relation to them having already been settled.) Mr Salfiti asked Mr Seedo for money for deposits for all the properties and on 8 July 2004 Mr Seedo transferred a sum of over £250,000 to Mr Salfiti's client account in respect of both the Property and the adjoining properties [68]. HHJ Dight found that those funds were held on trust for the purposes for which...
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Court Of Appeal Provides Further Clarification On The Limitation Period In Fraud Claims
...not start until the claimant discovered, or could with reasonable diligence have discovered, the fraud: Seedo v El Gamal and others [2023] EWCA Civ 330. The court held where the limitation issue is being considered at the trial, after a decision on the merits, the question for the court is ......