Derek Arthur Richardson v Mark James Robertson & Ors

Neutral Citation Number: [2026] EWHC 2286 (Ch) Claim No: BL-2023-000527

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES BUSINESS LIST (ChD) Royal Courts of Justice 7, Rolls Building, Fetter Lane, London, EC4A 1NL Date: 9 September 2026 Before : RICHARD SPEARMAN K. C (sitting as a Deputy Judge of the Chancery Division) - - - - - - - - - - - - - - - - - - - - - Between :

DEREK ARTHUR RICHARDSON - and - Claimant (1) MARK JAMES ROBERTSON (2) HOTTINGER PRIVATE OFFICE

LIMITED (3) HOTTINGER & CO LIMITED (4) CHRISTOPHER JOHN HOLLAND - - - - - - - - - - - - - - - - - - - - - Defendants Tim Benham-Mirando (instructed by JMW Solicitors LLP) for the Claimant Shail Patel KC (instructed by Stewarts Law LLP) for the Defendant Hearing date: 9 July 2026 - - - - - - - - - - - - - - - - - - - - -

JUDGMENT This judgment was handed down remotely at 10.30am on 9 September 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives. Richard Spearman KC: 1.

INTRODUCTION AND NATURE OF THE HEARING 1. 2. 3.

4. The principal question raised by this hearing is: if a claimant gives a personal guarantee, unsecured on any personal property of the claimant, when does time begin to run for the purposes of a claim that the claimant was induced to enter into the guarantee by fraudulent misrepresentation? Is it when the claimant gives the guarantee? Or is it not until a call is made on the claimant as guarantor? It seems improbable that this point has not fallen for determination before. However, there appears to be no decided case on it. The proceedings were begun by a Claim Form that was issued on 6 April 2023. The hearing was listed to determine the Claimant’s application, made by notice dated 7 October 2025, for permission to amend his Re-Amended Claim Form and Particulars of Claim (i) to add three new causes of action, and (ii) to join Christopher John Holland (“Mr Holland”) as an additional defendant. The Defendants and Mr Holland consented to the amendments relating to two of the proposed new claims, in conspiracy and dishonest assistance, and to the joinder of Mr Holland. Accordingly, by a Consent Order dated 6 July 2026, I granted permission for those amendments, and for Mr Holland to be added as a defendant. I also made consequential directions, which included provision for service of a Re-Re-Amended Claim Form and Amended Particulars of Claim and for service of statements of case

in response. In the result, by the time of the hearing the only issue that remained outstanding was whether the Claimant should be granted permission to amend his case to add the third of his proposed new claims. This comprised a claim in deceit against both the First Defendant and the Second Defendant. Those Defendants resisted this aspect of the Claimant’s application on the sole ground that they had an arguable limitation defence and that the requirements of CPR 17.4 were not satisfied. The Claimant contended that, on the contrary: (i) there is no arguable limitation defence to the claim in deceit and (ii) even if there was an arguable limitation defence, permission to amend should be granted because, for the purposes of CPR 17.4(2), that claim arises out of the same or substantially the same facts as are already in issue on another claim in respect of which the Claimant is already claiming relief. As a fall-back position, in the event that neither of his principal points succeeded, the Claimant submitted that the amendments should be allowed on the “Mastercard” basis, so that they take effect from the date of his application notice, namely 7 October 2025. The Defendants expressed reservations about whether it would be appropriate to adopt this approach in the present case, and suggested that this was essentially a matter for the Court. On the one hand, reference was made to

Bright J’s review of the authorities in Davies v Ford [2026] EWHC 1531 (KB), and to his endorsement of the views of other judges to the effect that “the discretion must be exercised with caution” and that “a case where it is reasonably arguable that all the new causes of action for which amendments are sought are entirely time-barred is likely to be one where the court will be reluctant to adopt the Mastercard approach”. On the other hand, as the Defendants were primarily 2. concerned about losing a limitation defence, and a Mastercard order would avoid that, whether or not such an order was made was not a matter of major anxiety to them. At the conclusion of the hearing, I announced that I had decided the outstanding issue in favour of the Claimant, and that my reasons for that decision would follow. Although it was accepted that the merits of any proposed appeal against my decision could not be addressed until my reasons were available, I ordered that the directions contained in the Consent Order dated 6 July 2026 should be interpreted as providing for the Claimant’s case to be amended straight away to include all three of the new claims that he wished to bring, and for consequential statements of case addressing all of those claims to be served. I did this as I was concerned that a delay in taking those steps (i) might, due to its potential knock-on effects, jeopardise the

trial date, which had already been put back from June 2026, and (ii) would result in increased costs, in the event that there was no appeal, or there was an appeal that did not succeed, and there then needed to be a further round of statements of case dealing separately with the claim in deceit. Conversely, in the event that all the amendments took effect immediately, and an appeal against my decision was later made and met with success, it seemed to me that there would be no substantial waste of effort or costs, as in those circumstances: (i) the Claimant would bring fresh proceedings relying on the claim in deceit, and (ii) the work done on the amendments could be re-utilised when progressing those new proceedings. This judgment sets out my reasons for the decision I announced at the end of the hearing. 5. 6. 7.

8.

THE CLAIM IN OUTLINE 9.

10. In 2013, the Claimant purchased Moonstone Holdings Limited (“Moonstone”). Moonstone was a Maltese company which owned 98% of the shares in Wasps Holdings Limited (“WHL”), which was the owner of the Wasps rugby club. Between 2015 and 2017, the First and Second Defendants recommended to the Claimant that he restructure his holdings in Moonstone by using a Maltese structure known as a “SICAV”. On 10 April 2017, the Claimant exchanged his shares in Moonstone for “investor shares” in a sub-fund of a company called Jacaranda Special Situations Sicav Plc (“Jacaranda”). The Claimant complains that as a result of this transaction, and although he did not realise this, he lost the ability to control the corporate structure, as his “investor shares” did not have any voting rights. Legal ownership and control of Moonstone, and so of WHL, passed up to Jacaranda, which was controlled by Mr Alastair Hunter, an employee of the Second Defendant. The Claimant’s case is that he did not know he had lost control because he was repeatedly told by the First and Second Defendants that he was the ultimate beneficial owner, which (i) was untrue and (ii) they knew to be untrue. 3. 11.

12. On 27 September 2017, the First Defendant sent the Claimant a chart relating to the ownership structure of the companies in the group (“the Structure Chart”). This showed the Claimant at the top, along with the title “UBO” (short for “ultimate beneficial owner”). The Claimant contends that the Second Defendant is also liable for these acts. In around October 2018, AIB Group (UK) Limited (“AIB”) agreed to provide WHL with an overdraft. One of the conditions of the offer of an overdraft was that the Claimant should provide a personal guarantee in relation to that facility. On 29 October 2018, the Claimant entered into a guarantee and indemnity agreement with AIB (“the Guarantee”). The Claimant’s case is that, in doing this, he relied on the representations in the Structure Chart that he was in fact the ultimate beneficial owner of WHL.

13. The primary section of the Guarantee provided as follows: “In consideration of the Bank giving time credit banking facilities or other accommodation to [WHL] (“the Guarantor”) hereby guarantees payment to the Bank on demand of all present, future, actual and/or contingent liabilities whatsoever of the debtor to the Bank whether or not then due and payable and whether incurred solely severally and/or jointly and without limitation whether on account of moneys advanced or paid or in respect of bills, notes or other negotiable or non-negotiable securities or instruments, guarantees, indemnities or other liabilities or engagements, interest, commission, charges or otherwise together with all legal or other expenses (on a full indemnity basis) howsoever incurred by the Bank in connection therewith or in connection herewith and so that as against the Guarantor interest shall be deemed to continue to accrue and be a liability of the debtor hereby guaranteed notwithstanding that for any reason interest may have ceased to accrue against the Debtor. In the case of a contingent liability a demand may be made by the Bank at any time for an amount not exceeding the maximum possible amount (as determined by the Bank) of that liability. Provided further that the total amount recoverable under this Guarantee shall not exceed £2,500,000.00 (Two Million, Five Hundred Thousand

pounds) principal monies together with all liabilities of the Debtor to the Bank in excess of the said amount (whether or not then due or payable) in respect of interest commission charges and all legal and other expenses as aforesaid up to the date of demand by the Bank on the Guarantor. Any amount demanded under this Guarantee and for the time being unpaid shall bear interest (after as well as before judgement) from the date of that demand until receipt of that amount in full by the Bank in the case of Sterling liabilities of the Debtor at a rate calculated on a daily basis five per cent (5%) per annum above the Bank’s Base Rate from time to time or (if higher) calculated by 4. reference to the most recent rate of interest agreed between the Bank and the Debtor (“the Agreed Rate”) and in the case of liabilities of the Debtor which are in any currency other than Sterling at a rate per annum calculated on a daily basis equal to the cost to the Bank as certified by the Bank of funding the relevant amount of such currency plus five per cent (5%).” 14. Further material Clauses of the Guarantee provided as follows: (1) Clause 4, entitled “No security to be taken by Guarantor without Bank’s consent”, provided: “The Guarantor has not taken any security from the Debtor in connection with this Guarantee and will not do so without the Bank’s written consent. Any such security shall be

held in trust for the Bank and as security for the Guarantor’s liability hereunder and shall be deposited with the Bank for that purpose.” (2) Clause 5, entitled “Bank’s right of set-off and right to lien”, provided: “In addition to any other lien, right of set-off or other right to which the Bank may at any time be entitled (whether by agreement, operation of law or otherwise) (a) in respect of the Guarantor’s liability hereunder the Bank shall have a lien on all securities, documents or other property of the Guarantor at any time held by the Bank whether for safe custody, collection or otherwise and (b) the Bank may at any time (both before and after any demand hereunder and without prior notice) set-off any liability of the Debtor to the Bank (whether or not then due and payable) against any credit balance in any currency in any account of the Guarantor with any office of the Bank (whether current or otherwise or subject to notice or not), and if the liability or any part thereof is in different currency from a credit balance against which the Bank seeks to set it off the Bank shall be entitled to utilise currency of the account in credit for the purchase of an amount in the currency of the liability not exceeding the amount of such liability and also to pay out of the credit balance any additional sum which the United Kingdom Government may require the Bank to pay for

such currency.” (3) Clause 6, entitled “No exercise of rights by the Guarantor until Debtor’s liabilities to the Bank discharged”, provided: “This Guarantee shall apply to all monies owing by the Debtor to the Bank and until this Guarantee has been determined and all such monies have been paid in full (a) the Guarantor shall not be entitled to share in any security held or money received by the Bank on account of that balance or to stand in the place of the Bank in respect of any security or money nor (b) shall the Guarantor take any step to enforce any right or claim against the Debtor in respect of any amount 5. paid by the Guarantor to the Bank hereunder or have or exercise any rights as surety in competition with the Bank.” (4) Clause 12, entitled “Subordination of debts due to the Guarantor by the Debtor”, provided: “Any present or future indebtedness of the Debtor to the Guarantor is hereby subordinated to any present or future, actual or contingent, liability of the Debtor to the Bank. If a notice of determination of this Guarantee is given by the Guarantor or a demand is made by the Bank hereunder any such indebtedness of the Debtor to the Guarantor shall be collected, enforced, received or recovered by the Guarantor if (and only if) so required by the Bank. Any such indebtedness which is collected, enforced, received or recovered by the Guarantor after such notice or

demand shall be collected, enforced, received or recovered by the Guarantor as trustee for the Bank and shall immediately be paid over to the Bank on account of the liability of the Debtor to the Bank but without in any way discharging, affecting or reducing the Guarantor's liability under this Guarantee.” 15. On 3 August 2022, AIB sent a letter of demand to the Claimant under the Guarantee. 16. 17.

18. On 29 April 2025, AIB issued a claim against the Claimant. By a Defence filed on 30 July 2025, the Claimant has sought to defend that claim, and to contend that the Guarantee should be rescinded, on the basis that the misrepresentations by the First and Second Defendants in the Structure Chart were misrepresentations which AIB had notice or knowledge of, alternatively were misrepresentations that were made by AIB. The Claimant’s case is that he was prompted to introduce the proposed additional claim for deceit in relation to the Structure Chart against the First and Second Defendants by the initiation of proceedings by AIB against him on 29 April 2025. By this new additional claim the Claimant seeks to protect against the eventuality that his defence to the claim by AIB in reliance on the Guarantee does not succeed, or that, even if that defence succeeds, he will incur legal costs that he will be unable to recover from AIB. In addition, the Claimant contends that it became clear from the disclosure by the Defendants that the First and Second Defendants knew that the representations regarding the Claimant’s “UBO” status were false, or they were at the very least reckless as to this. Specifically, the Claimant contends that (i) the disclosure revealed that shortly before the Structure Chart was created and sent by the First Defendant, he had been told by another employee of the Second Defendant that requests to show the Claimant at the top of a structure chart would “prove something that isn’t the case”, and (ii) this provided cogent evidence of fraudulent misrepresentations. This is a further reason why the Claimant seeks to amend his claim to introduce a new claim in deceit at this time. 6. 19.

20. It goes without saying that the above summary is of the briefest kind, and that nothing in what is said above should be taken as definitive, or uncontested by the Defendants. It is also right to mention that the Defendants contend that the timing of the Claimant’s application dated 7 October 2025 was unfortunate. On that date, the claims that were in existence related to the First to Third Defendants alone, and the trial of those claims was due to begin on 2 June 2026. Those Defendants had been intending to call Mr Holland as a witness. However, among other things, the Claimant’s application sought to join Mr Holland as (i) a party to an alleged unlawful means conspiracy involving (in addition) the First to Third Defendants and (ii) someone allegedly liable for dishonest assistance in breaches of fiduciary duty alleged against other Defendants, in essence, and in very brief summary, in respect of an alleged attempt to wrest the ownership and control of the group of companies away from the Claimant in or around 2022. This led to Mr Holland seeking independent legal advice, and rendered his participation in a trial in June 2026 impracticable. The Defendants contend that they were therefore reluctantly compelled to agree to the vacation of the trial date, and to a fresh raft of directions.

LEGAL FRAMEWORK 21. The Limitation Act 1980, s35 provides as follows: “New claims in pending actions: rules of court. (1) For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced— (a) in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and (b) in the case of any other new claim, on the same date as the original action. (2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either— (a) the addition or substitution of a new cause of action; or (b) the addition or substitution of a new party; and “third party proceedings” means any proceedings brought in the course of any action by any party to the action against a person not previously a party to the action, other than proceedings brought by joining any such person as defendant to any claim already made in the original action by the party bringing the proceedings. (3) Except as provided by section 33 of this Act or by rules of court, neither the High Court nor the county court shall allow a new claim within subsection 7. (1)(b) above, other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Act which would affect a new action to enforce that

claim. For the purposes of this subsection, a claim is an original set-off or an original counterclaim if it is a claim made by way of set-off or (as the case may be) by way of counterclaim by a party who has not previously made any claim in the action. (4) Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose. (5) The conditions referred to in subsection (4) above are the following— (a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action; and (b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action.” 22. CPR 17.4 provides as follows: “(1) This rule applies where – (a) a party applies to amend their statement of case in one of the ways mentioned in this rule; and (b) a period of limitation has expired under – (i) the Limitation Act 1980; (ii) the Foreign Limitation Periods Act 1984; or (iii) any other enactment which allows such an amendment, or under which such an amendment is allowed. (2) The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as are already in issue on a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.” 8.

23. It was common ground between Mr Benham-Mirando, who appeared for the Claimant, and Mr Patel KC, who appeared for the Defendants, that the correct approach to the issues that arise in the present case is set out in Note 17.4.2 in the White Book: “(1) Is it reasonably arguable that the opposed amendments are outside the applicable limitation period? If so, proceed to the next question; if not, then r.17.4 does not apply and the amendment may be allowed under r.17.1(2). (2) If so, do the proposed amendments seek to add or substitute a new cause of action? If so, proceed to the next question; if not r.17.4 does not apply and the amendment may be allowed under r.17.1(2). (3) If so, does the new cause of action arise out of the same or substantially the same facts as are already in issue in the existing claim? If so, then proceed to the last question; if not then the court has no power to grant permission for the proposed amendment, save by way of the “Mastercard” approach discussed in Advanced Control Systems Inc v Efacec Engenharia e Sistemas S. A. [2021] EWHC 914 (TCC). (4) Should the court exercise its discretion to allow the amendment?” 24. In addition, Mr Patel relied upon the following additional Note in the White Book: “A new claim under s.35(3) is not made until the statement of case is actually amended, which, by definition, cannot be earlier than the date upon

which permission to make specific amendments is given. Unless the case falls within one of the exceptions, such permission cannot be given after the relevant limitation period has expired. It is immaterial that the limitation period had not expired on the date the application to amend was made (Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409; [1994] 4 All ER 10, CA).” 25. It was also common ground that the proposed claim in deceit is a “new claim”.

26. Accordingly, the key issues in dispute related to the questions asked in Note 17.4.2 at (1) and (3) respectively. These are as follows. First, whether it is reasonably arguable that the proposed amendments to plead a claim in deceit are outside the applicable limitation period? Second, whether the admittedly new claim in deceit arises out of the same or substantially the same facts as are already in issue in the existing claim?

27. As to the first of those questions, Counsel agreed the law is correctly stated in Ballinger v Mercer Ltd [2014] EWCA Civ 996, [2014] 1 WLR 3597, Tomlinson LJ at [27]: “Working from first principles, however, it is plain that, provided the defendant can show a prima facie defence of limitation, the burden must be on the claimant to show that the defence is not in fact reasonably arguable. The claimant is after 9. all in effect inviting the court to make a summary determination that the defence of limitation is unavailable. If the availability of the defence of limitation depends upon the resolution of factual issues which are seriously in dispute, it cannot be determined summarily but must go to trial. Hence it can only be appropriate at the interlocutory stage to deprive a defendant of a prima facie defence of limitation if the claimant can demonstrate that the defence is not reasonably arguable.” Accordingly, it was common ground that the principles relating to summary judgment applied by analogy. In this regard, Mr Benham-Mirando emphasised that, as stated by Lewison J in Easyair v Opal Telecom [2009] EWHC 339 (Ch), at [15(7)]: “… it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that

the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it.” For his part, Mr Patel submitted that the relevant threshold is “not a high one”. The question is whether there is a “real prospect of a limitation defence being prejudiced”. See Viegas v Cutrale [2025] 1 WLR 1467, at [40]. This is because the Claimant can always issue a fresh claim form, whereas the Defendant will “lose the chance ever to rely on the limitation period having expired” (ibid.). There is a practice encouraged by the Court of Appeal in Chandra v Brooke North [2013] EWCA Civ 1559 (at [69]) in these circumstances for a claimant to issue protective proceedings. With regard to the principles relating to summary determination of issues, Mr Patel placed particular emphasis on three propositions: (i) this is not appropriate if there is factual controversy, (ii) this is not generally appropriate on assumed facts in an area of developing jurisprudence, and (iii) decisions as to novel points of law should be based on actual findings of fact. See Begum v Maram Ltd [2021] EWCA Civ 326, Coulson LJ at [23]. In light of the conclusion that I reached with regard to the first question identified in [26] above, it is not necessary to say much about the second question identified there. It is sufficient to note that Mr Benham-Mirando submitted that a claim can arise out

of the same or substantially the same facts even if it depends upon new facts (see Mulalley v Martlet Homes [2022] EWCA Civ 32 at [71]-[81]), and, more generally, that the following summary was approved by the Court of Appeal in Geo-Minerals GT Ltd v Downing [2023] EWCA Civ 648, Males LJ at [28] (emphasis in the judgment): “(1) “Same or substantially the same” is not synonymous with “similar”. 28. 29. 30. 31. 32. 10. (2) Whilst in borderline cases, the answer to this question is or may be substantially a ‘matter of impression’, in others, it must be a question of analysis … (3) The purpose of the requirement at Stage 3 is to avoid placing the defendant in a position where he will be obliged, after the expiration of the limitation period, to investigate facts and obtain evidence of matters completely outside the ambit of and unrelated to the facts which he could reasonably be assumed to have investigated for the purpose of defending the unamended claim. (4) It is thus necessary to consider the extent to which the defendants would be required to embark upon an investigation of facts which they would not previously have been concerned to investigate … At Stage 3 the court is concerned at a much less abstract level than at Stage 2; it is a matter of considering the whole range of facts which are likely to be adduced at trial … (5) Finally, in considering what the relevant facts are

in the original pleading a material consideration [comprises] the factual matters raised in the defence.” 33. Mr Patel submitted that the enquiry as to whether the new claim arises out of the same or substantially the same facts as are “already in issue” must be directed at the pleadings. See Credit Suisse v Ivanishvili [2026] AC 533, Lord Leggatt at [230]: “[…] the exercise of deciding whether a new cause of action arises out of the same facts or substantially the same facts is generally to be determined by examination of the pleadings alone. In analysing the pleadings, it is the material facts necessary to formulate the cause of action (or, where relevant, a defence) that matter. Background facts and matters of evidence – which are pleaded all too often although this is contrary to good practice – have no part to play in the analysis.” 34. Mr Patel also referred to the guidance contained in [231] of the same case: “Further: “The selection of the material facts to define the cause of action must be made at the highest level of abstraction.” Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400, 405F (Millett LJ). Thus, as stated by Robert Walker LJ in Smith v Henniker-Major & Co [2002] EWCA Civ 762; [2003] Ch 182, para 96: “in identifying a new cause of action the bare minimum of essential facts abstracted from the original pleading is to be compared with the minimum as

it would be constituted under the amended pleading.” Or as David Richards J put it in Revenue and Customs Comrs v Begum [2010] EWHC 1799 (Ch), para 32: 11. “The exercise to be undertaken ... is therefore to compare the essential factual elements in a cause of action already pleaded with the essential factual elements in the cause of action as proposed.”” THE CLAIMANT’S SUBMISSIONS 35. In support of the Claimant’s case that there is no arguable limitation defence to the claim in deceit, Mr Benham-Mirando principally relied upon three decided cases, namely, in chronological order: (i) Wardley Australia v State of Western Australia (1992) 175 CLR 514 (“Wardley”); (ii) Law Society v Sephton [2006] 2 AC 543 (“Sephton”), and (iii) Axa Insurance v Akther & Darby [2009] EWCA Civ 1166 (“Axa”).

36. Mr Benham-Mirando’s core submissions were as follows: (i) in Wardley it was held by the High Court of Australia that the limitation period for a claim in misrepresentation that led to the claimant entering into an indemnity started only when the indemnity was called upon, (ii) in Sephton, the House of Lords unanimously approved the decision in Wardley, (iii) the effect of this approval of Wardley by the unanimous House of Lords in Sephton was explained by the Court of Appeal in Axa as meaning that if a claimant gave a personal guarantee, unsecured on any property of his, time would not begin to run for the purposes of any claim against his solicitor for negligent advice at the time he entered into the transaction until a call was made on him as guarantor, and (iv) applying the reasoning contained in these authorities, which are binding on this court, the limitation period in the present case only began when the demand under the Guarantee was made on 3 August 2022, and the amendments are therefore well in time.

37. Mr Benham-Mirando further submitted as follows: (i) time begins to run when all elements of the claim are present; (ii) the elements of the tort of deceit were summarised in The Kriti Palm [2007] 2 CLC 223, Buxton LJ at [398] (“The tort involves a perfectly general principle: where a defendant makes a false representation, knowing it to be untrue, or being reckless as to whether it is true, and intends that the claimant should act in reliance on it, then in so far as the latter does so and suffers loss the defendant is liable.”); (iii) damage is required to complete a cause of action in deceit, as confirmed by Lord Blackburn in Smith v Chadwick (1884) 9 App Cas 187 at 195 in a passage that was reaffirmed by the Supreme Court in Zurich v Hayward [2017] AC 142, Lord Clarke at [66] (including the propositions that “Fraud without damage, or damage without fraud, gives no cause of action, but where these two concur an action lies” and “Whatever difficulties there may be as to defining what is fraud and deceit, I think no one will venture to dispute that the plaintiff cannot recover unless he proves damage.”); and (iv) it is clear from Wardley and Sephton that a contingent liability under a guarantee or indemnity is not “damage” (or “loss”) for the purposes of a claim in tort.

38. In addition, Mr Benham-Mirando submitted that, in the present case: (i) the Claimant’s liability under the Guarantee in relation to the overdraft could not arise, at the earliest, until WHL’s liability had crystallised, which occurred on 30 June 2022, when AIB 12. terminated the overdraft; and (ii) in fact, the Claimant’s liability under the Guarantee arose later, when a demand was made on him on 3 August 2022, because unless and until a demand was made on him, he had nothing more than a contingent liability.

39. In support of the first of these propositions, Mr Benham-Mirando relied on the summary of the law provided by the authors of Andrews & Millett, The Law of Guarantees (7th ed.) (“Andrews & Millett”) at §7-004: “In principle, a demand on the borrower is necessary to terminate a bank overdraft facility and require repayment of the balance: Rouse v Bradford Banking Co [1894] AC 586; Cripps & Son Ltd v Wickenden [1973] 1 WLR 944 per Goff J at 954–955. Although the borrower has a direct liability to repay the bank, the amount he is liable to repay is neither ascertained nor ascertainable until the time for repayment arrives. The bank cannot sue him until his liability has crystallised.” “Thus, in the absence of any contractual provisions to the contrary, a valid demand cannot be made on a guarantor under a continuing guarantee of an overdraft unless and until the obligation on the part of the principal to make repayment has crystallised, which would normally require the termination of the account and a demand on the principal for repayment.” 40.

41. In support of the second of these propositions, Mr Benham-Mirando relied on the fact that the Guarantee provided for Mr Richardson to pay “on demand”, and the statement by Andrews & Millett at §7-005 that such a clause means that: “the creditor cannot sue him until after a demand has been made on him.” Acknowledging that, in AIB’s claim against the Claimant, AIB has contended that the Guarantee contains both guarantee and indemnity obligations, Mr Benham-Mirando submitted that if the Guarantee is construed as an indemnity, the same analysis applies. Unless and until the overdraft was terminated and WHL defaulted, AIB had not suffered an ascertained loss that the Claimant could indemnify. See Andrews & Millett at §7- 012: “In the case of an indemnity, time will run either from the date on which the creditor suffers loss (in an indemnity which is akin to a guarantee, this is usually the date of default by the principal), or from the date when he incurs a liability in respect of which the indemnity is given…” Further, when discussing conditions precedent for enforcing contracts of indemnity, the authors of O’Donovan & Phillips, The Modern Contract of Guarantee (4th ed.) explain at §10-142: “An express precondition for a demand contained in the contract will, however, be given effect.” 42. Mr Benham-Mirando submitted that, in the present case, the demand is not mere machinery.

On the contrary, it has a substantive effect on the amount for which the Claimant is liable once it was made. The Guarantee provides not only that he is liable for “principal monies” up to a limit of £2.5 million, but also (i) that he is liable for all “interest commission charges and all legal and other expenses as aforesaid up to the date 13. of demand” and (ii) that a specific rate of interest would then apply “from the date of that demand”. Accordingly, the demand fixes: (a) the relevant date for calculating the overdraft interest and legal expenses for which the Claimant is liable; and (b) the date from which the specific interest rate under the Guarantee would begin to run. Until the demand was made, the amount the Claimant was liable for could not be ascertained. These submissions were based on the primary section of the Guarantee (quoted above). 43.

44. Finally, Mr Benham-Mirando submitted that Shore v Sedgwick Financial Services Ltd [2008] EWCA Civ 863 (“Shore”), relied on in a letter from the First to Third Defendants’ solicitors dated 25 June 2026, does not support the contention that there is an arguable limitation defence in the present case, but in fact supports the contrary case. In Shore, the Claimant had been advised by financial advisers to transfer his pension from one scheme to another, which he did on 29 April 1997. The pension fell in value. The Claimant alleged that the Defendants ought to have advised him to remain in the previous scheme. The claim was held to be time-barred on the basis that the Claimant had first suffered loss when he invested in the new scheme, as, so far as his objectives were concerned, the investment was less advantageous from that point in time.

45. Dyson LJ, giving the judgment of the Court of Appeal, explained at [27]: “A clear distinction has been drawn in the authorities between transactions which give rise to pure contingent liabilities (“the contingent liability cases”) and transactions (“the transaction cases”) in respect of which, to use the words of Lord Hoffmann in Sephton at [22]: “…. The plaintiff had paid money, transferred property, incurred liabilities or suffered diminution in the value of an asset and in return obtained less than he should have got. But these authorities have no relevance to a case in which a purely contingent obligation has been incurred.”” 46. Dyson LJ said at [32]: “… the present case is not a pure contingent liability case. There is no sense in which Mr Shore was exposed by the [new] scheme to a contingent liability or indeed any liability. The scheme gave him certain rights including the right to withdraw income. But it imposed no liability on him.” 47. Dyson LJ said at [37] and [48] respectively (emphasis as contained in the judgment): “In other words, from Mr Shore’s point of view, [the new scheme] was less advantageous and caused him detriment. If he had wanted a more insecure income than that provided by the [previous] scheme, then he would have got what he wanted and would have suffered no detriment. In the event, however, 14. he made a risky investment with an uncertain

income stream instead of a safe investment with a fixed and certain income stream which is what he wanted.” “The [new] scheme was a different kind of transaction from the advance of a loan on the security of a mortgage on property. It was a transaction under which Mr Shore obtained a bundle of rights which, from the outset, were less advantageous to him than the benefits that he enjoyed under the [previous] scheme. On the facts of this case, it was not necessary to wait to see what happened to determine whether Mr Shore was financially worse off in the [new] scheme than he would have been in the [previous] scheme. For these reasons, I would hold in relation to the primary claim that Mr Shore first suffered loss on 28 April 1997.” 48. Accordingly, Mr Benham-Mirando submitted that Shore is in a different category to cases like Wardley and Sephton, in each of which the court considered contingent liabilities, and held that damage was not suffered until those liabilities were called upon: indeed, Shore merely confirms that the Defendants do not have a reasonably arguable limitation defence in the present case, because it is a contingent liability case. THE DEFENDANTS’ SUBMISSIONS 49. Mr Patel began by pointing out, uncontroversially, that fraudulent misrepresentation is a claim in tort and thus that primary limitation arises under s2 of the Limitation Act 1980. This provides for 6 years from the date on which the cause of action “accrues”.

50. As to when the cause of action “accrues”, Mr Patel cited Briess v Woolley [1954] AC 333, Lord Tucker at 353: “The tort of fraudulent misrepresentation is not complete when the representation is made. It becomes complete when the misrepresentation not having been corrected in the meantime is acted upon by the representee. Damage giving rise to a claim for damages may not follow or may not result until a later date, but once the misrepresentation is acted upon by the representee the tortious act is complete provided that the representation is false at that date”.

51. Mr Patel further cited Shore, in which Dyson LJ referred to Moore (DW) v Ferrier [1988] 1 WLR 267 (a case concerning a negligently drafted restrictive covenant, in which time for the negligence claim against the solicitor was held to run from the date the covenant was entered into) and Bell v Peter Browne [1990] 2 QB 495 (a case concerning the disposal of a property without certain protections for the transferor against his wife) and said at [42]: “… the essence of the reasoning in those cases is that the fact that the risk to which the claimant was exposed by the defendant’s negligence might not eventuate did not mean that the claimant did not suffer loss as a result of being 15. exposed to that risk. In Moore, it was possible that the director would not leave the plaintiffs’ employment or that, if he did, he would not act in breach of the covenant. In Bell, it was possible that the former wife would not deny the plaintiff his one-sixth share in the proceeds of the matrimonial home. So too in the present case, the fact that the financial benefits accruing to Mr Shore from the [new] scheme might not be less than those accruing to him from the [previous] scheme did not mean that he did not suffer loss when he invested in the scheme and was then and there exposed to the risk that they might be less. It is the possibility of actual financial harm that constitutes the loss.

That possibility is present even if there also the possibility that the claimant will be financially better off as a result of being exposed to the risk.” 52. Mr Patel submitted that these principles are commonly applied, including in cases involving contributions to arrangements where tax benefits are expected, and where future taxation liabilities are uncertain and contingent, because the claimant is “locked in” to a risk of financial loss. He cited Halsall v Champion Consulting [2017] PNLR 32, in which HHJ Moulder (as she then was) found that primary limitation had begun when the transaction was entered into, saying at [227]: “It seems to me that it was the point at which the claimants entered into the planning that they suffered damage. When they contracted to purchase the shares, they suffered damage, not because the shares were then worth less than the claimants paid for them, but because the purchase of the shares would not give the claimants the result that the defendants had assured the claimants would result i.e. the tax relief. It was not inevitable at that point that they would be denied the tax relief and they may have been financially better off as a result of being exposed to the risk, but it was at that point that they were tied into the ‘commercial straitjacket’.” 53. Mr Patel submitted that the application of these principles to the present case

was straightforward, or at the very least reasonably arguable: (i) the tort of fraudulent misrepresentation was complete when the Claimant entered into the Guarantee allegedly in reliance upon the representations complained of; (ii) the Claimant suffered a detriment or loss at that time, because on his own case he entered into a transaction on 29 October 2018 under which he became potentially liable for up to £2.5m, along with other encumbrances and obligations; (iii) primary limitation therefore expired in October 2024, and (iv) enabling the claim for fraudulent misrepresentation to “relate back” to a Claim Form issued on 6 April 2023 would therefore bring that claim within the primary limitation period, and thus prejudice the Defendants’ limitation defence. 54.

55. As to Sephton, Mr Patel submitted that there are plainly realistic arguments about the applicability of that case to the present case. In summary, Mr Patel argued as follows. First, whether relevant damage has accrued is a question of fact in every case. Such questions need to be investigated bearing in mind the actual position of the claimant, 16. and the effect of the specific transaction at hand, including its incidents. Putting aside any pure contingency, there may be immediate detriment on entering a particular transaction. In the present case, there is clearly immediate detriment under the Guarantee which the Claimant executed. By way of example: (1) (2) Under Clause 12, any present or future indebtedness of the debtor companies to the Claimant was immediately subordinated to any future, actual (i.e. present) or contingent liability of the debtor companies to AIB. This was a significant and material impingement on the Claimant’s actual rights as at the date of the Guarantee. By 2022, the group owed the Claimant around £20m, which debt was subordinated to AIB’s rights up to the amount of the Guarantee. The effect was to encumber an existing asset of the Claimant, namely his present choses in action, much as the claimant in Forster v Outred & Co [1982] 1 WLR 86 was held to have encumbered her property, subject to a contingent obligation to pay her son’s debts. The

Claimant’s choses in action were also encumbered by further obligations within Clause 12 to hold monies on trust (and so forth) upon demand. Clauses 4, 5 and 6 created a similar series of immediate obligations not referable to a default by the debtor companies. Clause 4 restricted the Claimant’s ability to take any security from any debtor. Clause 5 granted security (a contractual lien) over any additional assets or property, which the Claimant had with AIB, and entitled AIB to set off any liability owed by the debtor to AIB “whether or not due and payable” against “any credit balance in any account” of the Claimant with “any office of [AIB]”. Pending disclosure the extent of the monetary impact of those detriments is unknown, but plainly they constitute a detriment and loss in comparison to the position where no Guarantee was entered into. (3) Under the primary clause, the Guarantee is in respect of all of the debtor’s debts “whether or not then due and payable”. There is no requirement for default on the part of the debtors, but there is instead an immediate obligation which on any basis is a current liability and detriment.

56. Second, the facts of Sephton were highly unusual. The Law Society did not enter into any transaction in reliance on the relevant accountant’s report. It simply did nothing. It was exposed to liability under a statutory scheme which already existed. Therefore there was no disadvantageous transaction to set time running at all. The Law Society argued that its legal position and liability position were entirely unaffected by misappropriations. The Court of Appeal has since noted that “the contingent liability was unusual” because normally a person’s legal position changes when they incur a contingent liability: see Axa, Arden LJ at [10] and [24]. The decision in Sephton has not been applied on facts comparable to those of the present case. It is also unclear how it could apply in a deceit case consistently with the decision of the House of Lords in Briess v Woolley. There is therefore (at least) a reasonably arguable case that Sephton 17. 57. 58. can be distinguished from a case of fraudulent misrepresentation which results in a manifestly disadvantageous transaction being entered into. Third, Sephton was decided by the House of Lords adopting a principle from Wardley which distinguished cases involving a “pure contingency”. Since then, the Courts have taken a narrow approach to identifying claims as involving a “pure contingency” and declined to determine limitation on that

basis: see Shore; Pegasus Management v Ernst & Young [2010] PNLR 23; Holt v Holley & Steer [2020] 1 WLR 4638; McLean v Thornhill [2022] EWHC 457 (Ch). The statements in Sephton to the effect that a person giving a pure personal guarantee would be subject to a “pure contingency” whereas a person who has granted security over property in respect of a third party’s obligations (as in Forster v Outred & Co) is not are problematic. In Axa, Arden LJ said at [28]: “it is difficult to see why an unsecured guarantor should be in a better position than a guarantor who grants security over his property … Sephton might also conceivably lead to a distinction being drawn between the guarantor who can point to a diminution in value of his rights of contribution and subordination as a result of the alleged wrong and one who cannot do so. Moreover it appears that a diminution in the value of a particular asset or assets is different from a diminution in the value of one’s total net worth. These distinctions are difficult to rationalise. … I would treat any invitation to extend that distinction with considerable caution.” The notion that future obligations under a guarantee were pure contingencies was further confined by the Court of Appeal in Elliott v Hattens Solicitors [2021] PNLR 25, which concerned a failure to provide for guarantees in favour of the claimant, where the loss was found to be

immediate and not contingent on whether the guarantees were needed or called upon. Fourth, in Sephton “pure contingency” cases were distinguished from those which were “bilateral” in the sense that the claimant incurred a liability but also obtained a benefit. In Wardley the claimant obtained nothing in exchange for its indemnity. In Axa, Arden LJ said at [57]: “the principle that the incurring of a purely contingent liability is not itself damage does not apply where the claimant acquires a contingent liability as part of a package of rights under a bilateral transaction and the value of that package has been diminished by the negligence of the defendant”. In the present case, the Guarantee is expressed (in the first line) to be “In consideration of the Bank giving time credit banking facilities or other accommodation to [the debtor companies]”. It is bilateral in a sense that the guarantee in Wardley was not. A second point of distinction is that AIB then made monies available to the debtors, of which the Claimant was (on the Defendants’ case) the UBO and from which the Claimant therefore benefitted. On the face of it, there is a bilateral transaction from which the Claimant also benefitted, and which (on his case) is less advantageous than the transaction which he claims he should have had. As to the point at which loss is suffered in such cases, Nykredit (No 2) [1997] 1 WLR

1627 concerned the position of lenders who advanced funds secured against properties based on negligent valuations. The limitation question turned on (among other things) the value of the borrower’s covenant over time. If that were the correct approach here (which is at least reasonably arguable) the equivalent issue concerns the 18. 59. debtor’s ability to service the obligations which were being guaranteed, in circumstances where the Defendants contend that the group was constantly in need of funds from 2015 onwards, and, indeed, that raising funds was a goal of the SICAV transaction in 2017. The issue of the group’s financial position is a substantial factual issue which will be the subject of expert evidence in accordance with existing directions. The question of whether the Claimant suffered a loss because of the financial position of the debtor companies in 2018 is not one that is amenable to summary determination. Fifth, Sephton and other cases distinguish between “no transaction” and “alternative transaction” cases, with a suggestion that in the former case the approach is different. As a matter of law, the relevance of the distinction is rather uncertain. While the Claimant pleads that he entered the Guarantee in reliance on the alleged representations, it is unclear at this stage how that works in circumstances where AIB would not have made the facility available to

the group. It was a bilateral transaction with benefits as well as obligations (see above). Further, and while the impact of the absence of those monies for WHL in the counterfactual would need to be worked through (assuming that will be the Claimant’s case initially), there is a realistic prospect that the Claimant will end up alleging that some different form of transaction would have been available as compared with that which was entered into. Otherwise his counterfactual risks destroying the value of the company for which he claims £70m. In that scenario the immediate detriment would be the difference between his position under the Guarantee as compared with his position under that alternative arrangement, on an “alternative transaction” basis.

60. In the circumstances there is plainly (at its lowest) a reasonably arguable limitation defence which the Defendants should have the opportunity to argue properly, at trial. The principle applicable in the context of summary judgment applications also applies here: “[where] an application involves prolonged serious argument, the court should, as a rule, decline to proceed to the argument…” (Partco v Wragg [2004] BCC 782, at [28]). WARDLEY, SEPHTON AND AXA 61. The facts of Wardley were summarised in Sephton by Lord Hoffmann at [16] as follows: “The State of Western Australia sued under a statute creating liability for misleading conduct, claiming that on 26 October 1987 it had been induced by the defendant’s misrepresentation to indemnify a bank against loss on a loan to a company in difficulties. The indemnity was called in November 1988 and the State paid $22.5m in December 1989. Proceedings were commenced on 24 October 1990, within the three year limitation period provided by the statute, but the State applied on 14 January 1991 to amend to plead an additional misrepresentation on 25 October 1987. This was more than 3 years after the 19. execution of the indemnity but less than three years after it had been called and paid. The High Court decided that the State suffered no damage while its obligation under the guarantee remained contingent. Damage occurred only when it was

called.” 62. One important point which the High Court of Australia considered in Wardley concerned the ambit of the decision of the Court of Appeal in Forster v Outred & Co [1982] 1 WLR 86. That case was summarised by Lord Hoffmann in Sephton at [11] as follows: “On 8 February 1973 Mrs Forster signed a mortgage by which she charged her farm to secure money which her son was borrowing to buy an hotel. The business was a failure and on 21 January 1975 Mrs Forster was called upon to pay about £70,000, which she paid on 29 August 1975. In March 1980 she issued a writ against the solicitors who had advised her in connection with the mortgage, alleging negligence in not explaining the transaction. The question was whether the action was statute barred and that depended upon whether she suffered damage when she executed the deed (more than six years before the writ) or when she was called upon to pay.” 63. As Lord Hoffmann explained in Sephton at [12]-[15], the judgments of Stephenson and Dunn LJJ in Forster v Outred & Co gave rise to an ambiguity as to (i) whether they meant only that damage was sustained when the mortgage was entered into because the mortgage, although the liability which it secured was contingent, had the immediate effect of depressing the value of Mrs Forster’s farm, or (ii) whether they should be interpreted as meaning that incurring a possible future liability (for example, by giving a guarantee or indemnity unsecured upon any property) counted as immediate damage.

64. At [16] in Sephton, Lord Hoffmann explained that the broader interpretation of Forster v Outred & Co was unanimously rejected by the High Court of Australia in Wardley.

65. At [17] in Sephton, Lord Hoffman summarised the reasoning in Wardley as follows: “The High Court said, at pp 529, 531, 532, that Forster v Outred & Co was explicable: “by reference to the immediate effect of the execution of the mortgage on the value of the plaintiff’s equity of redemption …. It has been contended that the principle underlying the English decisions extends to the point that a plaintiff sustains loss on entry into an agreement notwithstanding that the loss to which the plaintiff is subjected by the agreement is a loss upon a contingency. For our part, we doubt that the decisions travel so far. Rather, it seems to us, the decisions in cases which involve contingent loss were decisions which turned on the plaintiff sustaining measurable loss at an earlier time, quite apart from the contingent loss which threatened at a later date…. If…the English 20. decisions properly understood support the proposition that where, as a result of the defendant’s negligent representation, the plaintiff enters into a contract which exposes him or her to a contingent loss or liability, the plaintiff first suffers loss or damage on entry into the contract, we do not agree with them. In our opinion, in such a case, the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and may never be incurred.”” 66.

67. At [18] in Sephton, Lord Hoffmann expressed “complete agreement with this analysis”. Lord Hoffmann also said that this analysis provided the answer to the appeal in Sephton (which, so far as material, was an appeal by the defendant firm of solicitors against the decision of the Court of Appeal, which held by a majority that the Law Society’s claim against the firm was not time-barred) on the following basis: “By virtue of the terms of the Solicitors’ Compensation Fund Rules 1995, Mr Payne’s misappropriations gave rise to the possibility of a liability to pay a grant out of the Fund, contingent upon the misappropriation not being otherwise made good and a claim in proper form being made. Such a liability would be enforceable only in public law, by judicial review, but would still in my opinion count as damage. But until a claim was actually made, no loss or damage was sustained by the Fund.” 68. In order to make sense of that conclusion, it is necessary to know the facts of Sephton. So far as material, these were summarised in Axa by Arden LJ at [10]-[11] as follows: “10. Sephton concerned the accrual of a cause of action when a breach of the duty of care has resulted in a party being subject to a contingent liability. The contingent liability was unusual. The claimant was the Law Society and the liability in question was its liability to pay claims out of its compensation

fund. I take the description of its obligations from Lord Hoffmann’s speech: “By section 36 of the Solicitors Act 1974 the Society is required to maintain and administer a Compensation Fund for the purpose of making grants for, among other things, the relief of loss caused by dishonesty on the part of a solicitor. The Society has power to make rules about the Fund and the Solicitors’ Compensation Fund Rules 1995 contain “guidelines” which explain the circumstances in which grants will ordinarily be made. General principle (a) says that the “basic object of the Fund is to replace ‘client’s money’ misappropriated by a solicitor”. General principle (b) emphasises that grants are wholly at the discretion of the Council and that “no person has a right to a grant enforceable at law” but that the intention of the Council is to “seek to 21. administer the Fund in an even-handed and consistent manner”. Claims must be made in a form prescribed by the Society (Rule 5) and delivered to the Society within six months after the loss has come to the knowledge of the applicant (Rule 6).

11. The defendant accountant had certified to the Law Society that certain accounts of his practice complied with the Solicitors’ Accounts Rules. The defendant had negligently failed to identify that the solicitor had misappropriated monies belonging to his clients. The solicitor’s clients in due course made claims against the Solicitors’ Compensation Fund. The Law Society sued the accountant, who raised a limitation defence. The question that had to be decided was whether the loss suffered by the Law Society occurred when the solicitor had originally committed the fraud, thereby exposing the fund to potential claims, or when the claims were actually made against the fund. The House of Lords unanimously held that, until a claim was actually made, no loss or damage had been sustained by the fund and no cause of action had accrued.” 69. At [21] and [22] in Sephton, Lord Hoffmann examined some other decisions of the Court of Appeal but held that they did not concern “purely contingent liabilities”. At [22] he said: “Thus cases like Bell v Peter Browne & Co [1990] 2 QB 495 and Knapp v Ecclesiastical Insurance Group plc [1998] PNLR 172 are readily explicable as cases in which the damage was the difference between the plaintiff’s position as it was and as it would have been if the defendant had performed his duty and in which it was possible to infer that the plaintiff’s failure to

get what he should have got from a bilateral transaction was quantifiable damage, even though further damage which might result from the flaw in the transaction was still contingent. The plaintiff had paid money, transferred property, incurred liabilities or suffered diminution in the value of an asset and in return obtained less than he should have got. But these authorities have no relevance to a case in which a purely contingent obligation has been incurred.” 70. At [17] in Axa, Arden LJ summarised this part of Lord Hoffmann’s speech as follows: “Thus, if a claimant gave a personal guarantee, unsecured on any property of his, time would not begin to run for the purposes of any claim against his solicitor for negligent advice at the time he entered into the transaction until a call was made on him as guarantor.” 71. Lord Hoffmann summarised his conclusion in Sephton at [30]-[31]: “30. In my opinion, therefore, the question must be decided on principle. A contingent liability is not as such damage until the contingency occurs. The existence of a contingent liability may depress the value of other property, as 22. in Forster v Outred & Co [1982] 1 WLR 86, or it may mean that a party to a bilateral transaction has received less than he should have done, or is worse off than if he had not entered into the transaction (according to which is the appropriate measure of damages in

the circumstances). But, standing alone as in this case, the contingency is not damage. 31. … I would prefer to put my decision on the simple basis that the possibility of an obligation to pay money in the future is not in itself damage.” 72. Lord Scott agreed with the speeches of Lord Hoffmann, Lord Walker and Lord Mance. In particular, Lord Scott (i) agreed that the analysis of and comments about English law expressed by Mason CJ in Wardley “provides the answer to this appeal” and (ii) agreed with Lord Mance’s conclusions that a cause of action in tort did not accrue in the Law Society’s favour against the accountant until the Law Society first received a claim on the Compensation Fund from a client of the solicitor’s firm whose money had been misappropriated. See [33]-[35].

73. Lord Rodger agreed with the speeches of Lord Hoffmann, Lord Walker, and Lord Mance (see [36]).

74. The speeches of Lord Walker and Lord Mance were also analysed by Arden LJ in Axa.

75. Arden LJ discussed Lord Walker’s speech at [19]-[21] as follows: “19. At [44] of his speech, Lord Walker reviewed a number of authorities and cited an important passage from the judgment of Saville LJ in First National Commercial Bank plc v Humberts [1995] 2 All ER 673, 679: “At the hearing and in the judgment much reliance was placed on the cases where the claimant entered into a transaction which through a breach of duty owed to the claimant provided the claimant with less rights than should have been secured, or imposed liabilities or obligations on the claimant which should not have been imposed. Examples of these cases are: Forster v Outred & Co [1982] 1 WLR 86, Iron Trade Mutual Insurance Co Ltd v J K Buckenham Ltd [1990] 1 All ER 808, and Bell v Peter Browne & Co. [1990] 2 QB 495. In all those cases, however, the court was able to conclude that the transaction then and there caused the claimant loss, on the basis that if the injured party had been put in the position he would have occupied but for the breach of duty, the transaction in question would have provided greater rights, or imposed lesser liabilities or obligations than was the case; and that the difference between these two states of affairs could be quantified in money terms at the date of the transaction.” 20. As the next paragraph in Lord Walker’s speech makes clear, Lord Walker accepted that, in an

action against a professional adviser for negligence, time 23. will begin to run from the time of entry into a transaction where the advice results in the client receiving a less valuable bundle of rights: “45. The three cases cited by Saville LJ in this passage were all cases where the client had through the negligence of his professional adviser ended up with a package of rights less valuable than he was entitled to expect - damaged or defective goods, to pursue the metaphor, rather than the undamaged and serviceable goods which he should have got. In Forster v Outred & Co [1982] 1 WLR 86 it was a mortgage (securing the existing and future liabilities of the claimant’s son, who later went bankrupt) burdening the claimant’s previously unencumbered freehold property…” 21. Lord Walker expressed his overall conclusion in [48] of his speech: “48. In all these cases the claimant has as a result of professional negligence suffered a diminution (sometimes immediately quantifiable, often not yet quantifiable) in the value of an existing asset of his, or has been disappointed (as against what he was entitled to expect) in an asset which he acquires, whether it is a house, a business arrangement, an insurance policy, or a claim for damages. Your Lordships have not, I think, been shown any case in which the imposition on a claimant of a purely personal and wholly contingent liability,

unsecured by a charge on any of the claimant’s assets, has been treated as actual loss. That would have been the position if the claimant in the Forster case [1982] 1 WLR 86 had given a personal covenant guaranteeing her son’s debts (which she seems not to have done - she paid them simply to prevent enforcement of the security on her farm) and if she had not given any security over any of her own assets.” 22. Thus, in common with Lord Hoffmann, Lord Walker considered that, where a person gave an unsecured guarantee, time would not run against him for the purposes of any claim against a professional adviser for advice in connection with the guarantee until a demand was made under the guarantee.” 76. Arden LJ discussed Lord Mance’s speech at [23]-[25] as follows: “23. At [70] of his speech, Lord Mance deals with the case where a party enters into a transaction which he would not otherwise have entered into and, as a result, his property suffers a diminution in value: “70. In all these cases except Forster v Outred & Co [1982] 1 WLR 86 the defendant failed to preserve or procure for the claimant an asset (including a particular chose in action) which could and should have been preserved or protected by proper performance of the defendant's 24. duty in relation to the transaction affecting the claimant’s legal position. In Forster v Outred & Co the claimant’s case was that, but for

the defendant’s negligence, she would never have entered into the transaction at all. But in that case, by doing so, she clearly depreciated the value of her house in a measurable way. However, while a defendant’s failure to preserve or protect a particular asset by proper performance of his duty in relation to a particular transaction may readily be seen to have caused measurable loss, negligence causing a claimant to enter into a transaction which he would not otherwise have entered may not immediately, or indeed ever, cause measurable loss to any particular asset." 24. Lord Mance’s conclusion on the application of the authorities to the particular case adopts the approach that the critical point is that the legal position of the Law Society was not changed until at least a claim was received. That supports the view that Sephton was a most unusual case since normally the legal position of a person, whether he is a natural person or a corporation, is changed when he incurs a contingent liability. Lord Mance held: “76. Whether or not that is, however, accepted, no English authority indicates and I do not consider that the society’s present cause of action should be regarded as accruing before any change in its legal position occurred and it received any claim on the fund. First and foremost, the society’s legal position remained unchanged, even in public law, at least until

after it received a claim. Second, it was not possible until after a claim was received for anyone to know which client(s) of Payne & Co might suffer what loss, whether any of them might be able, and choose, to assert that they had as a result suffered hardship justifying a grant out of the fund and what the circumstances were in which the society would have to exercise its discretion to make or refuse a grant. Third, in this situation, it is not appropriate to talk of the fund or any other specific asset of the society as having suffered any loss at least until after a hardship claim was made on the society.” 25. No specific mention is made here of the person who executes an unsecured guarantee, but in the following passage Lord Mance goes on to give two cumulative conditions for time starting to run in the case of a purely contingent liability which would mean that he too would hold that time does not start to run with respect to a claim brought against a professional adviser in connection with advice given to the claimant regarding entry into an unsecured guarantee: “77. It may be that, if the facts had been known contemporaneously, some statistical or experience-based assessment could have been made of the likelihood of a claim or claims emerging, and of the fund having eventually to make payments, as a result of Mr Payne being able to 25. continue his scheme of fraud. A

similar assessment might be made of the risk of future loss of a physical asset (deeds or valuables) of which a solicitor was failing to take reasonable care, but which had not yet been lost or stolen. But I do not consider that the law should treat purely contingent loss assessed on so remote a basis as sufficiently measurable, in the absence of any change in the claimant’s legal position and of any diminution in value of any particular asset. Even where negligence brings about a specific transaction and thus a change in the claimant’s legal position, Lord Nicholls observed in the Nykredit (No 2) case [1997] 1 WLR 1627, 1631c-d in the passage cited in [73] above, that the mere entry into the transaction under which “Financial loss is possible, but not certain” is not sufficient detriment.

78. Looking at the matter more generally, I also see no particular reason to accelerate the accrual of a cause of action where there has been no transaction changing the claimant’s legal position and no diminution in value of any particular asset. Where such factors are present the English authorities considered in [67]-[70] above take a clear-cut, though perhaps strict, view. The House has not been asked to review such authorities, nor would I think it appropriate to do so in the light of the way that they and the English legislation have developed. But where such factors are not present, I see attraction in the approach taken by the Australian High Court in the Wardley case 175 CLR 514, the effect of which is that unless and until a remote contingency eventuates the claimant is not expected to issue proceedings which he would not normally issue or wish to issue unless and until that point arrives.” 77. Arden LJ concluded her analysis of the speeches in Sephton at [26]-[27] as follows: “26. In summary, the Law Society came under a liability to provide compensation out of the compensation fund when section 36 of the Solicitors Act 1974 came into force, and the Law Society no doubt raised a provision in its own financial statements to reflect claims incurred but not reported. However, so far as the liability to the clients of the solicitor in that case was concerned, that did not crystallise until the conditions of liability, including the delivery of a claim in the prescribed form, were fulfilled. Until that point in time, the loss was not “measurable” for the purpose of establishing whether damage had occurred and whether the commencement of the limitation period had begun.

27. The speeches in Sephton draw a distinction between contingent liabilities which affect particular assets of the person subject to the liability as well as his legal position, and contingent liabilities which have little or no effect on his legal position or assets. Sephton was an example of the latter. The contingent liabilities were imposed by statute subject to certain conditions being satisfied 26. by the person claiming to enforce the liability, and those conditions had not yet been satisfied. This distinction does not deal with at least one group of cases, namely the group of cases where the assumption of a contingent liability alters a person’s legal position but does not affect particular assets. An example of such a case is the mere execution of an unsecured guarantee by a third party who is not a party to the transaction under which the liabilities guaranteed arise. Both Lord Hoffmann and Lord Walker expressly held that in such a case, time did not start to run until the guarantee was called. They each refer to a change in the position (rather than “the legal position”) of the claimant only in the context of a claim arising as a result of entry into a bilateral transaction under which the claimant did not get what he should have got.” 78. Arden LJ explained the central reasoning of Sephton as follows at [32]-[35]: “32. … the concept on which all the members of the House agreed was that there had to be measurable loss before time began to be run, that is to say, loss which is additional to the incurring of a purely contingent liability … the basic rule which is clearly established in Sephton [is] that a pure contingent liability is not damage.

33. In my judgment, the central idea in Sephton is that there has to be loss additional to that resulting from the incurring of a purely contingent liability. This reflects the formulation in Wardley with which Lord Hoffmann expressly agreed. That passage in particular held: “Rather, it seems to us, the decisions in cases which involve contingent loss were decisions which turned on the plaintiff sustaining measurable loss at an earlier time, quite apart from the contingent loss which threatened at a later date … If … the English decisions properly understood support the proposition that where, as a result of the defendant’s negligent misrepresentation, the plaintiff enters into a contract which exposes him or her to a contingent loss or liability, the plaintiff first suffers loss or damage on entry into the contract, we do not agree with them.” 34. The central idea which I have identified is also consistent with the “simple basis” on which Lord Hoffmann puts his decision at the end of paragraph [31] of his speech: “...the possibility of an obligation to pay money in the future is not in itself damage” (emphasis added). Lord Walker expressly agreed with the passage cited in the last paragraph from Wardley. In addition, Lord Walker cited with approval a passage from the judgment of Saville LJ in Humberts (see the passage cited in paragraph [19] above). This concentrated on the

requirement for incurring of loss rather than the acquisition of less valuable rights under a bilateral transaction, which is the particular situation with which Lord Walker deals in paragraph [45] of his judgment. I do not read Lord Walker as rejecting 27. any part of what Saville LJ had held. On this basis the acquisition of less valuable rights is to be regarded as a species of loss and not as describing the whole genus of loss. Lord Mance spoke of the necessity for a change in legal position and a diminution in value of a particular asset (see paragraphs [77] and [78] of his judgment). This also appears to be an acceptance of a requirement for additional loss, though arguably limited to damage to a particular asset. However, as Lord Mance agreed with Lord Hoffmann and Lord Walker I do not consider that his speech should be read as ruling out the incurring of additional loss in other ways.

35. In my judgment, the true ratio of Sephton is that there has to be measurable loss as defined in Wardley for time to begin to run for limitation purposes. On this basis what has to be shown is additional loss, and that loss does not have to be of a kind previously considered in the case law. Types of damage considered in the case law thus far include damage to existing property (my damaged asset rule) or a failure to obtain the hoped-for benefits under a bilateral transaction (my package of rights rule).” 79. Longmore LJ, who agreed with the judgment of Arden LJ, said at [70] that Sephton: “… has made it clear that “damage” for the purpose of the accrual of a cause of action in the tort of negligence will not be constituted by a mere contingent liability. Another way of making the same point is to say that a contingent liability does not “of itself” constitute “damage”. There must be something more.” 80. Lloyd LJ delivered a dissenting judgment, and said at [121], [128] and [129]: “121. The decision of the House of Lords [in Sephton] therefore endorsed Wardley and, as regards the English cases, affirmed the correctness of Forster v Outred & Co as a decision, but limited the width of the observations made in that case, so that if Mrs Forster had entered into a personal unsecured guarantee of her son’s debts, no loss would have accrued unless and until a call was made on the

guarantee. … 128. As Lord Hoffmann said in Sephton at [22], the claimant may pay money, transfer property, incur liabilities or suffer diminution in the value of an asset, and in return obtain less than he should have done. In such a case entry into the transaction can be seen to give rise to quantifiable damage, even though further damage might arise later. But he distinguished these cases from those in which purely contingent obligations are incurred. At [30] he recognised that a contingent liability may depress the value of property, as it did in Forster v Outred & Co, or it may mean that a party to a bilateral transaction has received less than he should have done, or is worse off than if he had not entered into the transaction. In [31] he also recognised that, for reasons such as these, a party to 28. a bilateral transaction who incurs contingent liabilities under the transaction will often suffer loss on entry into the transaction. … True, Sephton was not concerned with a bilateral transaction, but Wardley was, and the House of Lords not only approved Wardley, but did so on the basis of the statement of principle, that a contingent liability is not as such damage until the contingency occurs, and that the possibility of an obligation to pay money in the future is not damage in itself.

129. What Lord Mance said in the latter part of [75] … is also inconsistent with a conclusion that coming under a contingent monetary liability, not affecting any particular asset, is of itself damage. At [77] he referred to the need for a change in the claimant’s legal position and of the diminution of value of a particular asset if contingent loss is to be regarded as sufficiently measurable as to give rise to a cause of action. The first sentence of [78] is to the same effect. As I read it, those requirements are cumulative. To incur a contingent liability is itself (in almost all cases - the Law Society’s position was exceptional) a change in the legal position of the person under the liability, but that is not enough of itself, according to Sephton.” 81. 82.

83. In the result, the Court of Appeal in Axa upheld the decision of Flaux J at first instance as to when the primary limitation period begins in respect of entry into a policy of insurance which gives rise to an unsecured contingent liability on the part of the insurer. The contingent liability in Axa was the contingent liability of the insurer under policies of “after the event” (“ATE”) insurance (i.e. insurance which is taken out after the occurrence of the event which is the subject of a claim in legal proceedings to cover some or all of the potential costs and liabilities in those proceedings). The essential background was that National Insurance and Guarantee Corporation (“NI”) issued ATE policies to clients of certain solicitors at the request of those solicitors. It was contended that those solicitors were negligent in the initiation of those policies (“vetting claims”) and in the conduct of the litigation on the client’s behalf, or the failure to notify NI when the prospects of success fell below 50% (“conduct claims”) pursuant to the terms of a funded solicitors’ agreement entered into with NI’s agent. The book of business turned out to be disastrous. NI assigned its rights to Axa, which sought to pursue the vetting and conduct claims against a large number of firms of solicitors (“the panel solicitors”). The time of the occurrence of the damage was important because

some of the relevant policies were taken out more than 6 years before the claim was commenced and claims against the panel solicitors arising out of those policies amounted to around £19m. The panel solicitors contended that time started to run for the vetting claims at the inception of the policies, and, for the conduct claims, when the failure to notify resulted in the prospects for success being reduced to below 50% or (where the breach consisted of the failure to take some step in the management of the claim) when the claim became liable 29. to be struck out. Axa contended that time only began to run in the case of both the vetting breaches and the conduct breaches at the time when the claim could have been made under the policy, essentially on the basis that NI’s liability under the ATE insurance was no more than an unsecured contingent liability of NI until that occurred. Flaux J held that loss was suffered on entry into the policy. Axa’s appeal against that decision was dismissed by the Court of Appeal (Arden LJ and Longmore LJ, Lloyd LJ dissenting).

84. The reasoning of the majority in Axa included that, in the circumstances of that case: (1) When an insurer underwrites a risk in exchange for a premium he receives a premium which is intended to be retained by him (subject to expenses) to meet that liability if called upon to do so, and (i) in economic terms the premiums are worth less to him, and (ii) he suffers loss in law in the event that the liabilities under the ATE policies are greater than they should have been (see Arden LJ at [60]). (2) Per Arden LJ at [61]: “The panel solicitors’ case is that there was indeed no profitable ATE business to be underwritten and that accordingly in the computation of any damage NI should give credit for all the premiums which it ever received on this book of business. That book of business carried liabilities as soon as the respective policies were underwritten, and so the panel solicitors’ case in this regard serves to underscore that if, as NI alleges, it incurred liabilities in excess of those which would have been incurred if the vetting breaches had not occurred, loss was suffered at that point in time. In some cases the vetting breaches did not lead to any loss: in those cases there is no cause of action. Where it is not known whether or not NI will have to pay a claim, the cause of action will have already accrued even though NI does not yet know the amount it will have to

pay. That uncertainty is merely a factor to be taken into account in quantifying the loss which was incurred. If as a result of the vetting breaches the policy results in a loss to the insurer, it carried that risk from inception and thus (using hindsight as a valuer is entitled and bound to do) a valuation of the policy on inception would always have reflected that inherent risk.” (3) Per Arden LJ at [62], it was correct to treat NI as incurring loss and therefore as suffering damage for the purposes of the accrual of its causes of action in tort as soon as it issued ATE insurance even if the measure of damage in the case is properly to be approached on a “no transaction” basis, as: “The measure of loss is then the difference between its financial position having issued the policies and its financial position if it had not issued them. The fact that it had incurred loss is relevant to the first part of that equation. The additional loss was the fact that the liabilities under those policies to policyholders were more burdensome, and the package of rights which they 30. acquired under the policies was less valuable, than they should have been if the vetting breaches had not occurred. This was measurable loss additional to the incurring of purely contingent liabilities under the policies of insurance. The liabilities arose at the date of the issue of the policies and can be

valued as at the date of the issue of the policies.” (4) In respect of conduct breaches: “damage occurs at the time when the conduct breach takes place if and in so far as NI is thereby exposed to larger liabilities than it would have been but for the conduct breaches consisting of a failure to notify” (see Arden LJ at [66]). (5) Per Longmore LJ at [82]: “The most that can be said in the present case is that the loss suffered by the claimant insurers is contingent upon the claim, which is (ex hypothesi) likely to fail, actually failing. But that does not make the case a case of a “mere contingent liability” because the claimants have entered into a flawed transaction which they ought not to have entered into. To my mind that is the damage which the claimants have suffered and that occurred at the time of the inception of the policies. It is true that the insurers are not immediately worse off as a result of entering into the ATE policies because they receive the premiums up front and it will be a short time before they are “on balance worse off” to use Lord Hoffmann's phrase in [20] of Sephton, but that will be well before the underlying claim has “failed” which is the time argued for by [Axa]. In this context it is important to appreciate that the alleged negligence is that the defendant solicitors were negligent in selecting claims which had less than a 51% chance of success.

The loss to insurers was therefore in the natural order of things bound to occur. I therefore agree with Arden LJ ([61]) that there was measurable relevant loss on the inception of the policies in that any valuation of the policies at that time would have to take into account the assumed fact that there had been no proper vetting. I also agree with her in relation to what have been called the “conduct breaches”.”

DISCUSSION AND CONCLUSION 85. So far as material to the present case, the heart of the analysis in Wardley is that where, as a result of the defendant’s misrepresentation, the claimant enters into a contract which exposes the claimant to a contingent loss or liability, the claimant does not first suffer loss or damage on entry into the contract. On the contrary, in such a case, the claimant sustains no actual damage until the contingency is fulfilled and the loss becomes actual.

86. That is the essence of the passage from Wardley that was cited by Lord Hoffmann in Sephton at [17] and with which he said he was in “complete agreement” at [18]. 31.

87. Lord Hoffmann expressed the same point in his own words in Sephton at [30]-[31], saying that (i) as a matter of principle “A contingent liability is not as such damage until the contingency occurs”; (ii) “standing alone” a contingent liability “is not damage”; and (iii) “the possibility of an obligation to pay money in the future is not in itself damage.” 88. Lord Walker’s speech in Sephton was to the same effect. 89. 90. 91.

92. Lord Mance expressed himself differently in Sephton, but held at [77] that a purely contingent liability would not give rise to loss that is “sufficiently measurable” to count as damage so as to start time running for the purposes of a claim in tort unless two conditions are satisfied, namely (i) “any change in the claimant’s legal position” and (ii) “any diminution in value of any particular asset”. The second requirement should not be read as ruling out the incurring of additional loss in other ways: see Axa, Arden LJ at [34]. These conditions are cumulative: see Axa, Arden LJ at [25], Lloyd LJ at [129]. In the result, as all the members of the House of Lords agreed with one another, it is possible to extract a single ratio from Sephton, namely “that there has to be measurable loss as defined in Wardley [i.e. loss which is additional to the incurring of a purely contingent liability] for time to begin to run for limitation purposes … what has to be shown is additional loss, [although] that loss does not have to be of a kind previously considered in the case law”: see Arden LJ in Axa at [32], [33] and [35]. The same point was made by Longmore LJ in Axa at [70], when he said that Sephton “has made it clear that “damage” for the purpose of the accrual of a cause of action in the tort of negligence [and, I would add, deceit] will not be constituted by a mere contingent

liability. Another way of making the same point is to say that a contingent liability does not “of itself” constitute “damage”. There must be something more.” Further, on this point Lloyd LJ agreed with Arden LJ and Longmore LJ, saying that the House of Lords in Sephton (i) endorsed a statement of principle that “a contingent liability is not as such damage until the contingency occurs, and … the possibility of an obligation to pay money in the future is not damage in itself”, and (ii) made clear that although “[t]o incur a contingent liability is itself … a change in the legal position of the person under the liability, … that is not enough of itself” (see Axa at [128]-[129]).

93. Although Sephton did not concern the execution of a guarantee such as the Guarantee that the Claimant entered into in the present case, as Arden LJ explained in Axa: (1) At [22]: “in common with Lord Hoffmann, Lord Walker considered that, where a person gave an unsecured guarantee, time would not run against him for the purposes of any claim against a professional adviser for advice in connection with the guarantee until a demand was made under the guarantee.” (2) At [27]: “[Sephton does not deal] with the group of cases where the assumption of a contingent liability alters a person’s legal position but does not affect particular 32. assets. An example of such a case is the mere execution of an unsecured guarantee by a third party who is not a party to the transaction under which the liabilities guaranteed arise. Both Lord Hoffmann and Lord Walker expressly held that in such a case, time did not start to run until the guarantee was called.” (3) At [25]: “No specific mention is made [by Lord Mance] of the person who executes an unsecured guarantee, but … Lord Mance goes on to give two cumulative conditions for time starting to run in the case of a purely contingent liability which would mean that he too would hold that time does not start to run with respect to a claim brought against a professional adviser in connection with advice given to the claimant regarding entry into an unsecured guarantee.” 94. 95. 96. 97.

98. The references in these passages to “a claim brought against a professional adviser for advice” apply with equal force to a claim for deceit which induces entry into a guarantee. Applying that reasoning to the facts of the present case, what falls to be determined is (i) whether the Claimant sustained “measurable loss” or “actual damage” in addition to the incurring of a purely contingent liability, when he entered into the Guarantee, or (ii) whether, on the contrary, he only sustained damage when a demand was made under it. In my judgment, those questions admit of only one answer, namely that the Claimant did not sustain damage (or loss) until a demand was made of him under the Guarantee. As Lord Walker observed in Sephton at [48], there appears be no case “in which the imposition on a claimant of a purely personal and wholly contingent liability, unsecured by a charge on any of the claimant’s assets, has been treated as actual loss”. Accordingly, in my judgment, the proposed new claim in deceit is clearly within the applicable limitation period; and the converse proposition is not reasonably arguable. Although I have expressed my conclusion in my own words, in essence I accept Mr Benham-Mirando’s submissions concerning Wardley, Sephton and Axa. I also accept his submissions based on extracts from Andrews & Millett and O’Donovan & Phillips, The Modern Contract of Guarantee, and his analysis of Shore.

99. With regard to the submissions of Mr Patel: (1) I agree that the Guarantee, including as a result of the primary section and of Clauses 4, 5, 6 and 12, has an immediate effect on the Claimant’s legal position. Further, I consider that it is at least arguable that the effect is to his detriment. However, I do not consider that it is necessary to investigate the extent of that effect on the Claimant, in order to establish whether damage accrued to him at the time he entered into the Guarantee. In accordance with Sephton and Axa, there has to be loss that is measurable, or that is additional to the incurring of a purely contingent liability, for time to begin to run for limitation purposes. In my judgment, whatever the effect of 33. these provisions on the Claimant may transpire to be, it does not constitute such loss. (2) It is correct that the facts of Sephton were unusual, and, further, that there does not appear to be any reported case in which the reasoning in Sephton has been applied on facts comparable to those of the present case. In my judgment, however, what matters is whether it is clear how that reasoning applies to the present case. In my view, that is clear. See, in particular, the passages from Axa cited in [93] above. (3) Whether the applicability of the concept of “pure contingency” may be unclear in some cases, and whether the courts have adopted a narrow

approach to that concept since Sephton was decided, are not matters which lead to uncertainty concerning the applicability of the reasoning in Sephton to the facts of the present case. Although in Axa Arden LJ said at [28] that “Sephton might also conceivably lead to a distinction being drawn between the guarantor who can point to a diminution in value of his rights of contribution and subordination as a result of the alleged wrong and one who cannot do so”, that “conceivable distinction” is not reflected in any distillation of the effect of the speeches in Sephton, as appears from [90]-[93] above. (4) The fact that the Guarantee in the present case is expressed to be “In consideration of the Bank giving time credit banking facilities or other accommodation to [WHL]” does not mean that it is a “bilateral transaction” for purposes of the discussion contained in the speeches in Sephton (i.e. a transaction involving a “package of rights” in which the claimant did not obtain the hoped-for benefits). On the contrary, in my judgment, it is plain that the Guarantee falls within the class of transaction (i.e. “the mere execution of an unsecured guarantee by a third party who is not a party to the transaction under which the liabilities guaranteed arise”) in respect of which Sephton, most clearly in the speeches of Lord Hoffmann and Lord Walker, holds that “time [does] not start to run

until the guarantee [is] called.” See [93(2)] above. (5) In my judgment, whether AIB made monies available to WHL or the group, and whether there are or may be factual issues concerning the group’s financial position and as to whether the Claimant suffered a loss because of the financial position of the debtor companies in 2018, are not relevant to the date of accrual of the cause of action in deceit. This depends instead solely on the questions identified above. (6) If the Claimant was to end up alleging that some different form of transaction would have been available instead of the Guarantee, this would become an “alternative transaction” case in which the Claimant may have suffered immediate loss or damage based on the difference between his position under the Guarantee and his position as it would have been in accordance with that alternative arrangement. However, this forms no part of the Claimant’s current case. I do not consider it right 34. to hold that this possible future change of case gives rise to a reasonably arguable limitation defence which the Defendants should be allowed to argue at trial.

100. I ask Counsel to agree any further Order which may be required in light of this judgment. If any issues remain outstanding, such as costs and permission to appeal, my present intention would be to determine those matters on the basis of written submissions to be filed by the parties within 14 days of the date when judgment is formally handed down. 35.